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Greeks Reject Bailout Terms

nytimes.com

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Re: Greeks Reject Bailout Terms

#381

Post by Ntrails »

Lazare wrote: post #380
bitmapbrother wrote: post #371

Earlier quoted context omitted.

>First, a minor point: The biggest holders of Greek debt were French banks by far I was under the impression that the German banks were the biggest holders of Greek debt followed by France and Italy.

No. Back in 2012, French banks had about €30 billion in exposure, with UK banks holding €6.4b and German banks less than €5b ([1]). BNP Paribas alone lost almost as much as every German bank combined started with, to put it in perspective. After the disaster that was the bond swap (more than 50% of face value removed, and swapped for bonds with 30 year terms, AND the interest rate slashed to almost nothing), most of…

Why did the Uk/German holdings increase? When you say they now hold 10b I assume you mean face (redemption) value rather than market?

Re: Greeks Reject Bailout Terms

#382

Post by imaginenore »

quonn wrote: post #36
imaginenore wrote: post #28

Earlier quoted context omitted.

"They run a primary budget surplus" if you don't count the payments on all the loans. Sorry, but if I borrow a million dollars, build some business that generates profits which are less than the payments on the loan, it's not a surplus. It's called default.

> if you don't count the payments on all the loans. That's the definition of primary surplus. > but if I loan a million dollars, build some business that generates profits which are less than the payments on the loan, it's not a surplus Greece does not get the loans now - that money is already gone. The key insight from the "primary surplus" is that a haircut would work, because Greece could be self-sufficient once t…

It's semantics, at the end of the day Greece owes money, and you simply cherry-picked a term that doesn't contain that debt.

> The key insight from the "primary surplus" is that a haircut would work, because Greece could be self-sufficient once the debt burden is gone.

And so would my hypothetical business that can't even cover the monthly payments on the loan. If we magically erase the debt, just like that, I got a profitable business I can brag about.

> Greece does not get the loans now - that money is already gone

Wow, just wow.

Re: Greeks Reject Bailout Terms

#383

Post by peterfirefly »

sooheon wrote: post #367
peterfirefly wrote: post #269

Earlier quoted context omitted.

And nobody sane would give Greece Yet Another Debt Restructuring without seeing reforms actually implemented first.

It's really tail chasing all the way down. Because according to the IMF, the reforms that they have demanded have done more harm then good, and have further hurt the chances of creditors seeing their money ever again.

Not quite what they said/wrote, actually. It was more like "given the lack of implemented reforms and privatizations, the current debt has become close to unsustainable and definitely will be unsustainable if they continue to not implement long promised reforms and privatizations".

Re: Greeks Reject Bailout Terms

#384

Post by PythonicAlpha »

Lazare wrote: post #331
PythonicAlpha wrote: post #57

After 5 years of "rescuing" that did lead the country into ruins, no wonder! It is a widespread knowledge (at least the US has it), that forceful saving in a crisis, will deepen the crisis. As a German, I know that Germany got a dept-cut after the second World war, that the German nation could rise from misery. We should have allowed the Greek the same luxury. Instead, the governments cared only for the banks.

That...couldn't be more wrong. Back in 2012 it was determined that Greek debt was unsustainable, and a large haircut was needed. But because the EU governments were unable/unwilling to accept any haircut on their holdings of Greek debt, that write down was borne entirely by private sector lenders. > Instead, the governments cared only for the banks. The banks lost 75%+ of their loans. The governments lost 0%. There's…

The question is, when the banks "lost 75% of their loans". To my knowledge, this happened much later, when the banks that initially where in danger already got rid of the most toxic loans. Those loans either went to the EU "Rescue Umbrella" or where sold (with discounts).

When those sold loans later where haircut, than the lost value of 75% was on papers, but the value that those holders really lost very likely much smaller (if any), because they bought the loans with huge discounts.

Re: Greeks Reject Bailout Terms

#385

Post by PythonicAlpha »

peterfirefly wrote: post #293
PythonicAlpha wrote: post #57

After 5 years of "rescuing" that did lead the country into ruins, no wonder! It is a widespread knowledge (at least the US has it), that forceful saving in a crisis, will deepen the crisis. As a German, I know that Germany got a dept-cut after the second World war, that the German nation could rise from misery. We should have allowed the Greek the same luxury. Instead, the governments cared only for the banks.

Greece already got a haircut. In fact, it was one of the biggest haircuts ever in history.

I am not aware, that it was the "biggest ever in history" -- I even doubt that since, the Greek economy is not so big. I would like to compare that with the haircut Germany got after the war ... but in inflation-adjusted numbers (many haircuts can be the biggest, when you don't care about inflation).

Re: Greeks Reject Bailout Terms

#386

Post by atmosx »

woodpanel wrote: post #260
calibraxis wrote: post #170

Earlier quoted context omitted.

I’m from the US and say hell yes, we should pay Greek debt. We supported their authoritarian governments post-WWII. ( https://en.wikipedia.org/wiki/Greek_military_junta_of_1967%E... ) As for Germany... as Piketty told Die Zeit, Germany never repaid its debts and has "no standing to lecture other nations." They're hilariously wagging their fingers at far more responsible people. ( https://medium.com/@gavinschalliol/th…

If reason fails, wing out the Nazi-Bat. I think the history is full of misinterpreted debts, especially Germany's (Versailles > WWII...) But I think one basic understanding of debt should not be discredited: There's a difference between ... - A debt that was agreed upon by both parties in a free market (Greece defaulted on that in 2012) - A debt that was agreed upon by both parties's representatives as an act of embe…

I hope you don't need subtitles: https://en.wikipedia.org/wiki/Axis_occupation_of_Greece#Econ...

Enjoy the reading. Oh feel free to share the take-away.

Re: Greeks Reject Bailout Terms

#387

Post by cpach »

cperciva wrote: post #318
tptacek wrote: post #164

Earlier quoted context omitted.

No, but then my country is not part of a decades-long effort to unify the continent it resides on under a single financial and regulatory regime; we finished doing that roughly 150 years ago. As a result, we don't have to "bail out" Mississippi so much as continually pay for its mismanagement. And so, again, isn't "paying for mismanagement" part of what you sign up for when you try to unify Europe?

No, but then my country is not part of a decades-long effort to unify the continent it resides on under a single financial and regulatory regime; we finished doing that roughly 150 years ago. No, you tried to do that 203 years ago, but we burnt down your White House. I'll give you that you unified somewhat less than half of the continent though. ;-)

Touché! :D

Re: Greeks Reject Bailout Terms

#388

Post by Lazare »

Ntrails wrote: post #381
Lazare wrote: post #380

Earlier quoted context omitted.

No. Back in 2012, French banks had about €30 billion in exposure, with UK banks holding €6.4b and German banks less than €5b ([1]). BNP Paribas alone lost almost as much as every German bank combined started with, to put it in perspective. After the disaster that was the bond swap (more than 50% of face value removed, and swapped for bonds with 30 year terms, AND the interest rate slashed to almost nothing), most of…

Why did the Uk/German holdings increase? When you say they now hold 10b I assume you mean face (redemption) value rather than market?

I don't really know. Some mixture of betting that Greece won't default and banks acting as a dumping ground for bad debts (someone has to end up owning it), I guess.

And yes, all numbers are face value. The market value of all that greek debt is...well, VERY much an open question right now. :)

Re: Greeks Reject Bailout Terms

#389

Post by Paradigma11 »

arrrg wrote: post #18
yc1010 wrote: post #3

Fairplay to them, the whole point of the EU project was to make us all "Europeans" and to prevent constant disastrous fighting between states and people of the continent. Sometime in the last 10 years many people and the media in the "core" countries got all smug and uppity towards those lazy "peripherals" and so on forgetting exactly why the project was started, overnight we stopped being "Europeans" and became "und…

The point was rather to give the fighting appropriate and effective political venues for resolving conflicts and finding effective solutions. There will never be no fighting because that is not possible or at least quite unhealthy. After all, isn’t the point of politics to solve conflicts – which are quite normal and will always be everywhere – in a non-violent way? (Tools for solving conflicts between nations in a n…

Greek people withdrawing money (and mostly getting it out of the country) show a lack of support to their country. This excerbates the problems of their financial system. It also begs the question why the rest of europe should schow solidarity with a country if its own people dont.

Voting against austerity and restructuring policies is not standing behind your goverment/nation. Trusting it with your money is.

Re: Greeks Reject Bailout Terms

#390

Post by JonoW »

sooheon wrote: post #364
JumpCrisscross wrote: post #177

Earlier quoted context omitted.

> Your money went mainly to your Banks, via Greece. Suppose you have a €500 credit card bill. That bill represents euros you have spent (plus interest). If I pay that bill for you it frees €500, which would have previously serviced debt, for other things. It would be disingenuous to say "I gave the money to the bank, so it only helped them and not you." French and German banks did get bailed out of their bad credit d…

But you did not pay it for me for charity, you still want me to pay it back, just to you, not the bank, no?

At a better interest rate, with a haircut to the original debt and saving you from defaulting on that original debt (by delaying payment deadlines). So yes, there is a benefit to you
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