The title of the letter in the German newspaper was (translated) 'fiscal water-boarding'.
If I recall correctly, that's the favorite phrase of the new minister of finance.
Open letter to German readers: What you were never told about Greece
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Re: Open letter to German readers: What you were never told about Greece
#52The thing that seems to be often missed about the 'Greek bailout'is it wasn't about bailing out Greece, it was more about bailing out the German bankers who'd lent Greece more money than they should have. The Greek people were shafted by the EU, IMF etc. because they didn't want to see the German bankers take the pain. We see a similar problem with the current round of Quantitive Easing that the ECB are undertaking -…
"Give the money to the people". The US did this in the form of tax credits for housing. Germany did something similar in the form of credits for car purchases. This form of giving goes directly toward an industry in need. I'm not sure how giving a blanket check helps. If the problem is consumer spending and IF this is an important driver for your economy it may have some impact but I think the problems the EU were facing were not this. So giving money to the people just sounds like dangerous populism and an action that makes little attempt to rebalance some ailment in the economic system.
Re: Open letter to German readers: What you were never told about Greece
#53Tsipras' spoken english is very limited, it is unlikely he wrote this himself.
No politician ever writes their own Op-Eds, for any publication. That's what their staff, freelance ghostwriters, and political think tanks are there for.
I doubt that every country works on the same political scale as the US…
Re: Open letter to German readers: What you were never told about Greece
#54I am German and have had a very negative opinion of Tsipras. He makes some very good points in this letter and his view seems to be consistent. I can understand his position and my opinion of him has improved a bit after reading the letter.
Nevertheless I see no solution, only 3 possible bad outcomes:
1. Europe loans more money to Greece and we can be pretty certain that they can't pay it back.
2. Europe gifts money to Greece (forgive some of the debt) to temporarily reduce their debt and after a few years we are in the same situation again
3. Greece defaults on its debt (and maybe exits the Euro) and can't borrow money for the foreseeable future.
None of these options looks particularly desirable and imo Tsipras doesn't help the situation when he says to hell with it; let's rehire all these public servant. We don't have the money for that but it wont matter much regardless which possible outcome becomes reality
Re: Open letter to German readers: What you were never told about Greece
#55Sure. I agree that (morally) the EU shouldn't have bailed out Greece. Greece cooked its books and Greek debt holders at the time of the bail out were suffering the consequences of lending to a fiscally irresponsible state. That being said, the world was uncertain as to how much economic damage had yet to be done, and by shoring up Greece it assuaged investor confidence across the western world. Personally I think tha…
What I don't understand about this type of logic is the refusal to acknowledge the damage being done by the forced depression. It's like a 19th century leech therapy, keep sucking out blood until they get better. If Greece's economy is allowed to recover everybody will be better off, the banks, the politics, the people living in Greece and even the German taxpayer.
It's economics as morality play:
http://krugman.blogs.nytimes.com/2010/09/28/economics-is-not...
Re: Open letter to German readers: What you were never told about Greece
#56Earlier quoted context omitted.
It doesn't seem like Tsipras is trying to get debt forgiveness paid for by the Germans, though. He wants to use the threat of default to force Greek's creditors to give them a haircut -- reduce principal or interest or both. That will reduce the amount of Greek debt repayment but it wouldn't increase the ability of Greece to incur more debtedness.
Are you sure? I thought the private creditors were already "haircutted", most of the Greek debts is to EU states and IMF.
I will preface this by saying that I am totally not sure, but my impression was that the EU and IMF loans were to enable Greece to repay creditors in full or close to.
Re: Open letter to German readers: What you were never told about Greece
#57Sure. I agree that (morally) the EU shouldn't have bailed out Greece. Greece cooked its books and Greek debt holders at the time of the bail out were suffering the consequences of lending to a fiscally irresponsible state. That being said, the world was uncertain as to how much economic damage had yet to be done, and by shoring up Greece it assuaged investor confidence across the western world. Personally I think tha…
> populist clowns
Calling a dissenting party clowns is not helpful. It's also wrong, since they argue their points well and their economics are backed by such people as Paul Krugman. Now you might disagree with him, but would you call him a clown, too?
Re: Open letter to German readers: What you were never told about Greece
#58Sure. I agree that (morally) the EU shouldn't have bailed out Greece. Greece cooked its books and Greek debt holders at the time of the bail out were suffering the consequences of lending to a fiscally irresponsible state. That being said, the world was uncertain as to how much economic damage had yet to be done, and by shoring up Greece it assuaged investor confidence across the western world. Personally I think tha…
Greece may have cooked the books but the rest of the EU is complicit in not doing their due-diligence in their haste to include Greece in their attempts to declare 'largest economy in the world'. It was a stupid pissing-match and the EU definitely carries a fair chunk of the blame here.
Re: Open letter to German readers: What you were never told about Greece
#59Most of you, dear Handesblatt readers, will have formed a preconception of what this article is about before you actually read it. [...] Prejudice was never a good guide, [...]
How does he not hear himself? Also, "Handelsblatt" is missing a letter. Anyway ...
I reject the premise of his letter. He seems to think the purpose of the money was to help the greek people, and offers a more productive way of doing so. That's all fine, but I'm pretty sure the sole purpose of the money was to save the Euro. Whether that's ethical is debatable, but I think it's important to remember that Greece has messed up quite a lot of things without considering how that might effect other EU member states; ignoring at least some of their responsibilities. But that's a different story entirely.
His tone is utterly disrespectful, if you ask me. I'm really not sure who he thinks he is or what he thinks he's doing, but I know for a fact that a lot of my fellow germans aren't gonna like being spoken to in this tone of voice. He mentions fear and anxiety a lot. I don't know what he means by that. We're quite calm, as far as I can tell, and I can imagine that scares him a little.
Germany is one of the riches countries on this planet. We will do almost anything to keep it that way. I appreciate that he needs to sell his own agency to his people, but if he actually believes he can control the fate of his country even so slightly, I'm afraid he's delusional.
Just for the record: I'm neither proud of nor happy about how we treated the greek people, but I'm tired of pretending this is about anything but money.
Re: Open letter to German readers: What you were never told about Greece
#60Some notes:
1. Greece is talking about Germany because it helps mobilize masses. Germany does not decide on it's on on this nor is the most agressive player. Most northern and eastern countries are more agressive in their opinion against Greece. But it helps to mobilize Greek masses with a simple enemy.
2. Greece has defaulted have a dozen times in modern times. This is the Greek way of doing things and will continue, whatever the EU, Germany or the IWF thinks and does.
3. People in Greece don't think of taxes as something you have to pay. Many Greeks stopped paying taxes the last months in anticipation of a new government. This will not change and is the main driver for Greek defaults.