Greece, a Financial Zombie State

Jun 12, 2015 · 320 comments
ejzim (21620)
If the patient refuses the surgery, the patient will die. The patient may die anyway, one way or the other. But, the only way to have the chance to survive is to have the surgery. So, the patient has some hard choices to make. Recovery will be very painful, and the patient should expect to have a severe limp for a while.
Andrej Pocivavsek (South Carolina)
When I will see Greek's helping Greeks I will help too, as long they are just demanding help (new loans, write offs..) I am against giving them a dime. And by the way program of Mr. Tsipras can't work as long as he keeps his aggressive bully style at negotiations.
bern (La La Land)
Let them impound the beaches and charge admission. Perhaps, then, folks there will go to work instead of going to the beach.
Elen Tek (Paris)
Get this camera out your eye a face reality.
Your country has helped wholeheartedly Greece downfall, but you are here complaining and misinformed as usual.. Greek are retaining later then Germains. Ok?
John T (NY)
Here's a question: If the ECB can create any amount of money it wants (which it can), and money creation does not cause inflation (which it doesn't), why do massive numbers of real people have to have their lives ruined?
Peisinoe (New York)
The ‘brutal austerity’ expected from Greece is due to a brutally expensive pension system the country could never afford, a brutally corrupt government and elite, and a brutally incompetent and ineffective set of fiscal and monetary policies.

Greece has been living way above its economic production and somehow they feel entitled to it - they even believe other people should pay for it!!

As Thatcher would say: ‘The problem with socialism is that you eventually run out of other people's money.’

Not surprised the NYT editorial, unlike most of the most serious economic journals, is so light-handed on Greece. It fails to note that Greece was already a financial zombie way BEFORE it joined the Euro. It was never able to afford its debt or pension system.
che (cambridge)
Why should Greeks be treated any better by their European peers than Irish, Spaniards or Portuguese who all went through gut-wrenching reforms to pay for their profligacy when the money flowed easily.
What Greeks, especially their leaders, need most now is a shock therapy. Greece by necessity, has to default on the loans that they can never be expected to repay in full. At some point, for lack of alternatives, a large portion of it will be forgiven. That would happen when and if those three other economies, along with of France's and Italy's are on firm footing.
Bringing back the Drachma isn't such a bad idea, though - it can be used alongside Euro. At the beginning of the Euro introduction, prices were written in two currencies all over Europe. Taxes and all the pubic services will have to be paid in Drachma, thereby creating the demand for the currency. The socialist government will still be able to pay the pension benefits with the same currency to whomever it thinks deserves it. But the government will be cut off from international credit market, so it will learn to live within its means. This will surely keep the government and its electorate more realistic.
The reintroduction of Drachma can bring the impetus for improving the competitiveness of the Greek economy vis-a-vis rest of Europe and world. But the process is not automatic. Licensing and permit process for business should be streamlined.
There is NO "political solution", Tzipra - IT'S ALL ABOUT ECONOMY STUPID.
jw bogey (ny)
That's a pretty tough sell, increase your losses now and somehow, some day they will come full circle, collect the taxes , fix the government, pay the creditors, etc. Awesome!!
Uzi Nogueira (Florianopolis, SC)
NYT " European officials need to produce a realistic plan to revive the country's devastated economy."

Wrong editorial. The Greek people and its political leadership --not European officials in Brussels -- must make up their minds about which country will re emerge from this financial mess.

Either take the opportunity for serious economic/political reforms or maintain the status quo and get out of the eurozone. Game is over to have the cake/euro and eat/spend it.
Daniel (Greece)
The most striking aspects of this editorial are the relatively mild reforms the Times urges Tsipras, Syriza, and Greece to undertake. Ending early retirement? Ending tax evasion? Streamlining business regulations (e.g. it takes 30 minutes to incorporate a business online in many parts of the world, it takes approximately a year in Greece, and the requirements are so onerous that many would-be entrepreneurs simply abandon their goals)? It would also be nice if the Greek government created a national land registry, which currently doesn't exist, so the government could know who owns what. As I said, mild reforms, which have been much discussed in Greece these past five years, and so far not enacted. Any wonder the European community is losing patience with Greece. The various governments have not acted in good faith, from the PM's to the legislature.
Richard (Wynnewood PA)
Under previous political leadership, Greece hid its debts and deficits while borrowing more than it could ever expect to repay. This was an unjustifiable deception. But Greece remains a democracy, and its people have elected a new government to negotiate a reasonable compromise of the country's unsustainable financial obligations. That government will fall if eurozone leaders insist on a resolution that the Greek people reject. The result could be an Argentina-type of Greek bankruptcy in which no one wins. Already, many of the best and brightest of Greek professionals are leaving for more attractive prospects in other countries. This may become a lost generation that could have contributed to the recovery of the Greek economy but will instead ensure its failure.
Peisinoe (New York)
The ‘brutal austerity’ expected from Greece is due to a brutally expensive pension system the country could never afford, a brutally corrupt government and elite, and a brutally incompetent and ineffective set of fiscal and monetary policies.

Greece has been living way above its economic production and somehow they feel entitled to it - they even believe other people should pay for it!!

As Thatcher would say: ‘The problem with socialism is that you eventually run out of other people's money.’

Not surprised the NYT editorial, unlike most of the most serious economic journals, is so light-handed on Greece. It fails to note that Greece was already a financial zombie way BEFORE it joined the Euro. It was never able to afford its debt or pension system.
N.G. Krishnan (Bangalore, India)
When Stiglitz, Piketty and other renowned economists demand end to Greek austerity, pleading for economic sanity and humanity, they are sending out a powerful message. They and thousands of others are reading aloud the Greek crisis's absurd parallel to Treaty of Versailles of 28 June 1919, at the end of World War I laying foundation to rise of Nazism.

Recall the clarion call of John Maynard Keyne's who was trying to prevent Germany's compensation payments being set so high it would traumatize innocent German people, damage the nation's ability to pay and sharply limit her ability to buy exports from other countries – thus hurting not just Germany's own economy but that of the wider world.

If the word Germany is removed and Greece is inserted the absurdity of WB and EU inability to comprehend the magnitude of current crisis will be apparent.

Sensible people will agree with current economists view on the route of austerity as remedy to Greece’s economic woes. “Austerity drastically reduces revenue from tax reform and restricts the space for change to make administration accountable and socially efficient.” ..“the constant concessions required by the government mean that Syriza is in danger of losing political support and thus its ability to create a program that will bring Greece out of the crisis.”

At stake, they say, is nothing less than the failure of Greek democracy and the rise of “much more radical and dysfunctional challenges, fundamentally hostile to the EU.”
Ayaz (Dover)
The Billions that have been shoveled into Greek government coffers could have saved and improved millions of lives, in other 3rd would countries. This amount of money, invested judiciously by the private sector, could have transformed a dozen economies. $360 billion wasted on Greece is equal to the total GDP of 20 African nations.

Have supporters of deadbeat Greece done the math? With 11 million people, that is $33,000 dollars for every man, woman and child of free money. And yet they are still poor, complaining, whining and demanding even more money.

The Greek State is addicted to free money, that is why they have not developed their economy to create real wealth. The giveaways and freebies that are hallmark of any popular democracy have crippled the productive economy. Its time to cut off the heroin. Its time the addict got cut off, learning to function without the toxic infusion. It will hurt, as any hard and fast detox session does.. there will be pain. However the only effective way is cold turkey, cut off all free money.

I have faith that the Greeks will rise again. Once the government goes broke and can't afford the vast bureaucratic thorn bush, people and companies will be freer to operate in a rational market (people) friendly manner. They will find ways to make money, export, create jobs, increase tax revenue and lift the destitute out of their miserable condition. But first, the corrupt/ineffective government has to be defunded by Troika.
Nick (Mid-Atlantic)
If I went crazy for a month and run up a hundred thousand dollars in credit card debt, there would be something to show for it. Unless I gambled the money away, there should be stuff I could return to the store.

Obviously, the Greek government didn't gamble the money away, not in the casino sense. I wonder if anyone tried to account for the origin of this debt - what did they buy, from whom? Where did the money go?
Ian Maitland (Wayzata)
Like so many pundits, the Times wrings its hands about the risks to Europe from Grexit, but it completely overlooks the risks to Europe from another bailout.

No one can be sure what the effects of "Grexit" would be. They would certainly be less dire than a year ago. The EU is in better shape to handle those consequences than before.

But a bailout could be far worse. First, there is a virtual certainty that it will fail. Second, and more ominous, caving in to Tsipras's blackmail on terms that are widely seen as a victory for intransigence, lying, corruption and vile xenophobic rhetoric. That risk can be summed up in one word: "Podemos."

Greece is just the first domino. A bailout of Greece will inflame populists across the continent who will emulate its tactics and demand the same concessions. It would mean that the greater a country's economic mismanagement, the greater would be its power to blackmail its neighbors.

It is time for the EU to show some backbone. It should demand that its most recent bailout proposal be put to a vote of the Greek people. If they don't approve it, then the EU should leave the Greeks to stew in their own home-made juices.
penna095 (pennsylvania)
Too bad the Western democracies can not prop up their own countries like they have propped up their Communist clients in The Peoples Republic of China since 1980.
Mary (Atlanta, GA)
Wait a minute. It is the European officials that are to revive Greece's economy? I thought Greece was a sovreighn country. When did Europe invade and take over the country? And now it's their responsibility to put Greece's 'shaky' finances in order? Wow.
Joseph John Amato (New York N. Y.)
June 12, 2015

Or, I would add to the maturing of Greece - and in light of this discussion: Reference today's article:
David Books "How adulthood Happens.

So my response to both articles of great considerations is equal to two quotes:
“Try not to become a man of success. Rather become a man of value.” ― Albert Einstein

Man is condemned to be free; because once thrown into the world, he is responsible for everything he does.
Jean-Paul Sartre

JJA Manhattan, N. Y.
Cody McCall (Tacoma)
From afar, some of these EU attitudes and actions toward Greece are redolent of how France and Britain treated Germany after WWI. And we all know where that led.
Eirini Oflioglu (brussels)
The real question is: How a country which has almost no industry and shares the same money with those highly industrial countries, revive its industry? An impossible task unless other members of the euro club organize special rules and assistance for Greece. To cut the red tape and crack down on tax evasion seems very easy tasks to achieve at the first sight; in reality these are traits engrained into the culture and time consuming to break. In summary the EU must organize a special economic program for Greece if they are serious about keeping her as a member of the euro club.
muezzin (Vernal, UT)
A Greek can retire 6 years earlier than a German, with a pension that is comparable to the average German pension - even though the GDP per head is 50% lower in Greece.

There is massive tax evasion. There is overemployment in the public sector - in some government agencies overstaffing is around 50 percent. Yet one in five departments does not have any employees apart from the department head. Yet somehow, this is all Germany's fault.
Bart (Upstate NY)
The current Greek economic situation is a window on all of our futures. The Times Editorial Board itself indicate Greece must "end early-retirement options" and yet those who are widely-read have seen articles recently indicating that Artificial Intelligence is already beginning to make blue- and white-collar jobs obsolete and make even very well-educated workers irrelevant to our economy. So what do all of these "irrelevant" workers do to eat? Dystopia just ahead on the right.
Navigator (Brooklyn)
This has really been a perfect European disaster. I do not understand how intelligent, advanced societies can be so stupid. If Greece defaults, there will be hungry European children begging for alms for the first time in generations. The rest of Europe will need to assist. One way or another the rich countries are going to have to incur losses to help the poorest among them. Germans do not seem to get that.
Brian R (Toronto)
Ireland and Portugal took similarly painful austerity measures insisted upon by European lenders and have now prevailed over the medium term. Benefits were cut, pensions modified and the labor force was disrupted. Whey did it work for them? They accepted accountability for the circumstance in which they found themselves. They took the medicine. The culture of "your fault, not mine" has become pervasive as people perceive themselves to be scapegoats.
Zalman Sandon (USA)
Most everyone seems rightfully concerned with the devastation the current situation is causing among the Greek people, except, apparently, most of the Greek people. A majority has voted in a government with the specific aim of sticking a thumb in every lender's eye. Greeks can still retire in conditions where they expect the practical contribution of other, poorer and older Europeans to their pensions. State assets used for pork-barrel sustenance of hordes of employees have not been privatized because prices just weren't quite high enough (and never will be). Not only is taxation a national joke but even now, in these times of crisis, Greeks are falling over themselves breaking all records of tax evasion. They have been granted forgiveness of substantial sums. They have been offered what practically amounts to interest-free loans. Still, all their lenders are considered rapacious exploiters, and the Greeks want more of what they have gotten used to: a continuing, comfortable subsidy, this one guaranteed to last forever. To complete the picture, they threaten to become the economic suicide bomber of the EU and bring the entire world economic edifice down unless they are paid off just right. A deserving cause indeed.
Peisinoe (New York)
The ‘brutal austerity’ expected from Greece is due to a brutally expensive pension system the country could never afford, a brutally corrupt government and elite, and a brutally incompetent and ineffective set of fiscal and monetary policies.

Greece has been living way above its economic production and somehow they feel entitled to it - they even believe other people should pay for it!!

As Thatcher would say: The problem with socialism is that you eventually run out of other people's money.

Not surprised the NYT editorial, unlike most of the most serious economic journals, is so light-handed on Greece. It fails to note that Greece was already a financial zombie way BEFORE it joined the Euro. It was never able to afford its debt or pension system.
Sequel (Boston)
What is happening in Greece is a repetition of the tragedy that brought about WWII. Under pressure form the inevitable economic collapse of the entire country, Greece has elected a radical government whose sole purpose is to fight back against Greece's oppressors. Syriza is incapable of governing or of negotiating this situation. The Greek people must renounce Syriza, and endorse a negotiated settlement.
Peisinoe (New York)
The ‘brutal austerity’ expected from Greece is due to a brutally expensive pension system the country could never afford, a brutally corrupt government and elite, and a brutally incompetent and ineffective set of fiscal and monetary policies.

Greece has been living way above its economic production and somehow they feel entitled to it - they even believe other people should pay for it!!

As Thatcher would say: ‘The problem with socialism is that you eventually run out of other people's money.’

Not surprised the NYT editorial, unlike most of the most serious economic journals, is so light-handed on Greece. It fails to note that Greece was already a financial zombie way BEFORE it joined the Euro. It was never able to afford its debt or pension system.
observer (PA)
Culture always trumps strategy.The changes required of Greece as a condition of further financing (increasing the tax base,reducing business regulatory burden and state pension obligations) will only happen with cultural change which is exactly what the current Government Does NOT stand for.Further,even if introduced,implementation would take years or worse.While Austerity may well be counterproductive,the measures outlined in this editorial are pure fiction.
PK (Lincoln)
If I owe the bank €100,000 then I have a problem.
If I owe the bank €500,000,000 then the BANK HAS A PROBLEM.
pete (new york)
Greece's economy is the same size as the state of Oregon's. Yet it gets headlines as if it were a major global economy. The Greeks built an unsustainable culture that rewards the folks that are not hard workers, the lazy and the corrupt. Get them out of the EU and let them re-invent their culture. They have experience in doing this as everyone knows. They are the original ancient culture.

They need to go bankrupt and start over from the ground up. In ten years they and the world will be better off.
Winthrop Staples (Newbury Park, CA)
Why is it up to the rest of Europe to save this infinity corrupt culture/society where almost no one pays enough, and what they legally owe, tax to fund needed services? Greek men and women in the street are continually quoted as saying this. Let them default, and starve in the streets (and absolutely do not let them mass migrate somewhere else) if that is what it takes to get this failed state's leaders and people to start acting like adults.
Ronald Cohen (Wilmington, N.C.)
Dear Mr. Staples:

Perhaps we should leave everyone in the holes they dug for themselves and then heaped the dirt back on their heads. Why don't we start with banksters and other profligate lenders who do not allow themselves to lose? After all, "are there no prisons? And the work houses are still in operation."
serban (Miller Place)
It is absurd to believe that the rest of Europe will be unaffected if Greece falls off a cliff. It is not just in Greece's interest to see that it does not happen but also in the interest of other European nations. It is stupid and inhumane to do nothing to help when you see your neighbor's children starving if it is within your power together with other neighbors to do anything to help. It will also cost you more to build a wall around all houses in the neighborhood to ensure he does not break into them in desperation. Letting your neighbor's family starve is a very blunt instrument to teach responsibility, the likely result is hatred. Helping does not mean feeding that family free of charge in perpetuity. Effective help is to provide the means to get out of their predicament.
K (NJ)
This level of callousness is pretty fascinating and frankly scary ("starve in the streets..."). Unfortunately, this is far from constructive and does not foster any good-will towards a real solution.
As most are likely aware, the "problem" is far more complicated and nuanced than just thievery and corruption. That's certainly a part of it (woefully inept tax collection, endless bureaucracy, etc), however, our "modern", predatory financial system has also played its part...
Whole-scale debt forgiveness is not the answer, however, significant/meaningful debt restructuring can have a real impact.
SW (San Francisco)
If any country's debt should be forgiven, it is a third world country's, not Greece's. It was a wealthy, tourist soaked country that everything going for it. Time to pay the piper for decades of excesses.
serban (Miller Place)
Third world countires have had their debts forgiven many times.
timoty (Finland)
You are absolutely right. But the third world countries are not members of the eurozone...
Peisinoe (New York)
Come on guys - Greece's debt has basically been forgiven - it is being rolled over in perpetuity - NO ONE in Europe really expects to see billions of its taxpayers money back!!

The real question is if they want to continue lending to a black hole of fiscal and monetary irresponsibility, and for pensions that are much more costly than the country's production capacity.
G.P. (Kingston, Ontario)
Agreed with Emmett/Boston got no skin in this game, however, the idiots will probably draw us in.
Meanwhile China with its credit card will keep going cha-ching. The ultimate get back.
jb (ok)
By far most American debt is owed to Americans. Social security not least. "In any event, Social Security owns about 16% of the debt followed by other federal government entities (13%), and the Federal Reserve (12%)." In terms of foreign debt, Japan is first in the list of our creditors, not China. China is a kind of boogie-man under the bed for many, but it's got problems too, big problems. So you might focus on other matters with regard to this situation in Europe, where austerity is crushing not only Greece, but other nations as well. We need to learn from this.
Neil Elliott (Evanston Ill.)
Germany still owes plenty reparations to Greece for World War II, let them pay it. As for all the predictions of disaster, the number of experts making such predictions has now reached critical mass, triggering Elliott's Rule: "If sufficient numbers f experts predict disaster, you can be sure NOTHING will happen. NOTHING."
AR (Pawtucket)
This NYT editorial is silly, but most of you know that.

Think of it, and other "Greece news" coverage, as evidence that the default meme has been proliferating, suggesting that we might be in for a big change in pubic mood. When the markets dry up, illiquidity will be blamed on something external, like "Greece" or "failed negotiations" or some other pretense. But they are merely symptoms of a change in public mood. The ebbs and flows of mass optimism are what drive history, and we have experienced a very big flow since the 1940s or so! Is it ebbing? Who knows. But let's hope it doesn't ebb for a while because what a breathtaking pile of debt the optimism has built!
Swans21 (Stamford, CT)
Why don't you explain why it's silly to us not-so-smart people ...
Scott Cole (Ashland, OR)
Those wishing to understand the historical roots of the Greek problem would do well to read Francis Fukuyama's recent work "Political Order and Political Decay." According to Fukuyama, Greece's problems, like its neighbor, southern Italy, aren't the results simply of a few years of bad decisions or crooked banksters or misguided socialist desire to help society. Greece's problems, like those of southern Italy, reflect centuries of political development. At the core are a deep-seated pathological mistrust of government, which makes it all but impossible to collect taxes, and a political order dependent on patronage and patrimonialism to function, which creates an ever-expanding state.

Why is this relevant in the US? Because we seem to be heading in the same direction: a political system that has been massively corrupted by money and patronage (legitimized by the Supreme court), and a conservative agenda that seeks to instill a deep mistrust of our government and aversion to paying taxes. Greece will likely muddle along somehow--we in the US should be more worried about our fundamental inability to reform our political system.
Steve (Jones)
In the U.S., both left and right give huge amounts to both parties to receive some of the trillions the government spends annually. This is a U.S. Problem, not a left or rights problem.
Jon Davis (NM)
Distrust of government is pathological?
I guess you missed ALL of your early US history course.
Michael O'Neill (Bandon, Oregon)
This entire situation should put to rest the long held fantasy of conventional western economics that the markets are made up of rational agents seeking maximum utility.

Here we have the 'best and the brightest' of economists and bankers completely ensorcelled by their emotions to the detriment of their fiscal interests. They would rather destroy the Euro then let those shiftless Greeks get away with dancing in the sun on the money they were loaned ten or fifteen years ago.

Until these master bankers admit that they are acting as slaves to their own emotions and actually start to act in a rational manner there can be little hope of a good outcome.
BSR (Boston)
Greece currently spends ~2.5% of its GDP on military spending which is much higher than the average NATO country (for example Germany spends 1.2% of GDP). The probability of a military threat to Greece as a NATO member is essentially zero.

Why don't the EU/ECB/IMF ask Greece to cut their military spending rather than breaking promises to its pensioners and raising heavily regressive taxes on food etc? That seems like an easy fix.
sdavidc9 (Cornwall)
Greece and Turkey could easily get into a military confrontation over Cyprus or something else. Managed correctly, such a confrontation could be used by Erdogan to distract his supporters from other things.

To the extent that the Greek army budget goes to pay soldiers, layoffs will increase unemployment and damage the government's ability to maintain law and order against groups on the right (or left).
nick (Noston)
Wont work because Greece is under constant threat from Turkey, which is a very hostile country still run in large part by its military that currently occupies 1/3 of an independent country (Cyprus) and is constantly violating Greek air and sea space. Turkey is a NATO "ally" in name only-it constantly threatens war against Greece and does not live up to it NATO obligations-ask the US Sept of Defense. And Turkey has 8X the population of Greece. Also, all NATO countries are supposed to spend upwards of I believe 2.5% on their defense as a NATO obligation. Greece does. The fact that the Europeans n general don't has emboldened Putin to date, and will continue to do so,
Jon Davis (NM)
Greece's NATO basea defend Germany.
The fact that Greece...and the US pay for Germany's defense IS a problem.
Delicate Genius (Cambridge, MA)
We will soon be having this conversation about Ukraine, where the IMF Riot the IMF had planned is made more difficult not only by eastern ethnic Russians stubbornly refusing to let the US puppet regime in Kiev murder them as easily as the US would like... but by the fact that even the Banderites are beginning to catch on that the ECB and IMF want, mostly to "help" themselves to Ukrainian natural wealth.

If you don't understand how {private} central banking and fractional reserve currency creation works - you simply cannot understand what is going on in Greece, what is beginning to happen in Ukraine...

and why no one talks about the very different approach taken by Iceland and, to a lesser extent, Hungary.
Bel (Westchester, ny)
My genius friend, Ukraine & Greece are very dissimilar situations.

The structural problems Greece has outdate the fall of the Soviet Union.

While we may continue to discuss the IMF & its relationship with Ukraine in the coming years, it will be because of their forfeiture of their nuclear arsenal back in the 90's (for relatively cheap $), and for ridiculous natural gas prices charged by mother Russia these past few years. The Ukrainians have the US to thank for the former. Ironically, the latter has more to do with the European Union being asleep at the switch re: Gazprom... (look into Gerhard Schroeder's ridiculous relationship with Putin's gas company)

Good luck with your studies in Cambridge....
Greece is simply a structural matter, and the chickens are coming home to roost - hopefully finally.
Gerhard Miksche (Huddinge, Sweden)
In my opinion, a very sensible comment. But it is not just beginning to happen in the Ukraine. The country is moving at full speed towards a crash. Instead of spending the money there is on improving the economy, half of it is funneled to the military to fight Russia. Since a U.S. citizen is head of the Department of Economy, one need not second guess who is holding the reins. It was presumed that Germany and other European nations will settle the bill. But this will not happen.
Porter (Sarasota, Florida)
Greece is the poster child for the failure of conservative austerity policies worldwide, the misguided directions of the heartless and misguided sages at the International Monetary Fund, and the futility of reining in megabank excesses.

And of course all the 'right people' (i.e. fat cat conservatives) can't live with that.

Austerity, Germany, the IMF, and the international banksters can take a well-deserved bath. Bring back the drachma, Greece! Run your own currency and you'll do just fine.
Paul (White Plains)
Surely you jest. Greece has been a big government socialist state for many years. Hey, hairdressers there retire at 50 with nice pensions, so you can only imagine what government bureaucrats, teachers and police get! Meanwhile, nobody forced Greece to take loans from other Euro nations. They took the loans to subsidize their socialist state benefits, and now they won't repay them. Your solution is to let the lenders eat the cost of the loans. In my book, that's called extortion. Any austerity implemented is Greece's fault and responsibility.
Bel (Westchester, ny)
"Greece is the poster child for the failure of conservative austerity policies worldwide"

This must be one of the most misguided statements of all time.

Socialist policies dating back to before the fall of the soviet empire are the albatross.

I agree that the Drachma will help those in Greece currently bound to the Euro. But not much...
Mary (Atlanta, GA)
Actually, you have it completely backwards. Greece is the poster child for the failure of liberal socialism where everyone get's a piece of everyone elses money until those with money are broke.
Frank (Durham)
With respect to Greece's own responsibility for the crisis, no one is giving it a by-pass. It is the consequence of inefficient, corrupt politicians. However, no one forced lending institutions or bond holders to buy into Greece's economy. It's like going on the stock market: you make a mad decision, you gamble and you must take the loss. I can understand single individuals making a mistake, but what possessed large banks and big financial players to keep on lending Greece money? And why did France and Germany insist that Greece keep on buying their weapons with money that it didn't have.
The problem remains: Greece must do all it can to get out of the mess and the creditors must either take a huge haircut or must be patient (maybe both) until Greece is able to settle its debts. No amount of excoriating them will produce money.
AB (Eugene)
Greece will be out of the EU, and that's probably for the best. The European pact is one where all countries move towards a common goal and share a vision of the future. Greece has amply shown that they do not share that vision: not even a crippling recession could alter their economic policy and economic structure in a way that better aligns it with the demands of a common economic union.
The split will be costly, but ultimately the EU will be better for it.
Jon Davis (NM)
Hopefully the UK will also leave.
Swans21 (Stamford, CT)
Really!? Twenty-six countries share the same exact vision, and Greece is the only country which doesn't?

And alter what economic policy? Greece is currently in a de facto debtor's prison ... how in the world can they repay debt when the germans are strangling their economy with austerity? Plus, they don't control their own currency, so they can't deflate their way out of trouble.

Conservatives need to realize that, just because they don't like Keynesian economics, doesn't mean it's not how the world works.
ReaderX (Michigan)
If the EU and Germany would give in to Greek's demands, that would be the end of the EU. Within 5 years the Union would devolve. Just the next election in Italy and Spain would do it. A Spanish and an Italian Tsirpas would emerge. And the next election in Germany would bring the AfD. The End.
The Greeks need to come up with a plan, not Germany.
delaxo (Athens)
A Greek plan?
Sure: Escape from the dungeon!
jbb (new york)
Once again no comment on the corrupt banking practices that are intertwined the in EU. Take a ride south of Athens and see the hundreds of uncompleted villas built on spec with money lent by European banks much like the Wall Street thieves in the US. None of the loaned money that comprises the current Greek debt ever worked its way to the people but rather was caught up in the corrupt system of the previous Greek regime. The troika was well aware of Greek corruption but greed triumphed logic. A fearful financial symmetry is at work globally and the NYT does not seem up to the job on informing about it.
Paul (White Plains)
The lesson of Greece is simple: Don't pour more good money down a socialist black hole. They will simply use it to prop up overpaid do-nothing government and union jobs. Let Greece default. The world will not come to an end, and a valuable lesson will have been learned by like minded big government nations who like to spend other people's tax money.
G. Michael Paine (Marysville, Calif.)
But is wasn't a "socialist" black hole at the time.
Peak Oiler (Richmond, VA)
My my, how well you know Greece.

Actually, it's the corruption of the elite that have kept Greece in trouble. Look for the same here, from your fellow-traveler GOP billionaires.

Greece has widespread tax-cheating and bribery of officials. That preceded the current government, but a White-Plains guy who gets his economics from AM Radio and has never even visited Greece would not know that.
AgentG (Austin,TX)
Greece is not a socialist country, though it is more left than the US. They have private property, markets, and free enterprise. However, they do have an overblown public sector with archaic regulations on commerce and business activity. On top of that, you have severe endemic corruption and tax-evasion, which is essentially criminal in nature on a wide scale. So, it's more like a mafia state with oligarchs in control.
BDR (Ottawa)
The editorial is based on the perhaps false assumption that remaining in the Euro zone is appropriate and beneficial for both Greece and Europe.

First, if Greece left the Euro, an arrangement it should never have had given its fiscal history, it can remain in the EU.

Second, the estimate of a debt/GDP ratio of 177% is a useless factoid. It gives the editorial writer a false idea of the degree that the debt must be reduced; the OECD average is closer to one-half that amount.

Third, the exit of Greece from the peculiar monetary arrangement underlying the Euro, a monetary union without a fiscal union - think of the US or Canada with a central bank, but no federal government - might leave the Euro strengthened because the remaining countries would be less financially problematic.

Fourth, an exit strategy coupled with an expected devaluation of the replacement currency against all currencies, including the Euro, will place in the position of a sovereign country again, and not as a 19th century colony or protectorate whose economic affairs are run for the benefit of European powers.

Fifth, as a sovereign country in the EU, much like the UK, Greece will be able to decide on the sort of economic and social policies it wants to pursue. A devaluation, e.g., might be needed to stimulate domestic production to compensate for higher priced imports, thereby leading to the reforms the EU commission is attempting to impose by fiat.
SAK (New Jersey)
European plan for rescue of Greece has failed. Despite
austerity the economy has shrunk as it should have.
It is crazy economics to impose austerity when the
country is in recession. Greece should default and
exit Euro. It could remain in European area for trade.
Let German banks take a hit as US banks did for
sub prime loans. Greece lied about the state of their
economy with the help of Goldman Sachs and German
banks assessed the risk with the eyes closed. After
some turmoil Greece will be fine-tax cheats will enjoy
their lavish life style and poor will muddle through.
Herrenmensch (Pennsylvania)
A lot of German banks also took a huge hit with American sub prime "securities" that were sold to them with the blessing of the united states gov. Remember the US banks and the US gov (Fannie Mae and Freddie Mac) scammed the rest of the world with these "investment" grade securities
Mary (Atlanta, GA)
Spending only works when you have a real, short term plan for effective spending. Greece had neither - it spent like a sailor, without collecting national taxes (corruption at the local levels is beyond belief). And it did so for decades. This isn't new, and anyone involved with the EU discussions a couple of decades ago knew full well that Greece wasn't capable of becoming a member. Nor Italy. Nor Portugal. Nor a number of other countries that we're not talking about. Yet.
Larry the Island Owner (A place with more $$$ than you'll EVER know)
Just do what Germany did a half-century ago- break away; build up an enormous military; invade the Continent and burn those who held your People and Country hostage financially. Seems if this isn't done every half century or so, these "people" get out of control. If you want to drop some drones on Wall Street while you're at it, feel free. Obama paved the way for legality on that.
AR Clayboy (Scottsdale, AZ)
May I please borrow $1 billion from the NYT editorial board. Once I receive it, I intend to work less than all of my neighbors and to buy anything I can convince myself will make my life better. I expect the hardship I encounter as a result of the debt to be a major factor in your approach to repayment. I refuse to sacrifice anything. I will not change any of my attitudes or behaviors. I won't work much and will overpay myself when I do. I will spend and spend and spend. If repayment proves too difficult, and it will,I expect the NYT to lend me more money to cover the shortfall. And when I ultimately reach the point where my debt is to large to repay under any circumstances, I expect the NYT editorial board to pay the underage from their own pockets. If you resist my demand that you repay my debt, I will make sure the entire world knows how arrogant, selfish and heartless you are. When can I pick up my cash?
AgentG (Austin,TX)
You are mistaken about not working much and overpaying, which adds some key insight into internal Greek social structure. Essential you have the upper classes who don't pay taxes, while the workers slave away for low wages. Some government jobs come with perks and 'stability' that the Greeks sadly take as a given, not realizing that they can't afford them. And no one is telling them the truth about the economics. Also, a nation is much different than an individual, so I would rate your satire as only half-justified.
Swans21 (Stamford, CT)
The thing you leave out is the NY Times is happy to lend you the $1 billion to buys its products, thus boosting its financial fortunes. Then, when you can't pay back, suddenly they become high and mighty, and insist that you act "responsibly", "like adults". They put you in the equivalent of debtors' prison - aka, austerity - until you pay back ... oh, but you can't pay back because they have strangled your ability to earn enough to do so.

Just like the NY Times would have the sense not to lend you $1b, the germans should have had the sense to be careful what they were loaning out.
pieceofcake (konstanz germany)
and one day - after the usual European comprise has been found - the Editorial Board perhaps can reseach what a dubious role US advice -(and the NYT) - has played in this whole crises.
Like from Goldman Sachs to Syrizas fascination with NYT editorials about the Greek Crisis. And some of your European readers were already thinking about a concentrated effort against all the mindboggling misinformation the NYT dished out from the beginning of the crisis - and which lead to the often cartoonish and stereotypical view and comments of readers who are concerning US affairs - mostly well informed.

But nevermind - reporting about the economical crisis in Europe has gotten better - and so a 'Zombie State'? -

Don't watch so many Horror movies guys? It might influence y'all's f Headlining?
Swans21 (Stamford, CT)
Please just take your haircut and move on. You didn't have a problem with the setup when the loose money was allowing Greeks to buy bmw's and other german goods, thus boosting the german economy. Now, it's blown up, and all of a sudden you don't like the setup anymore? Hypocritical at best ...

But, good to see the usual European fall-back position ... when you run out of excuses, blame the U.S. for everything.
E J Boyson (Nashville Tn)
Is it true that The economies of Greece & Philadelphia are roughly the same size?
Jon Davis (NM)
Not a fair comparison.
Philadelphia is awash in drug dealers.
Keith (KC, MO)
I don't know about that, but the size of the economies of Greece and Missouri are roughly the same size.
Tony (Alameda County)
This is pure stupid: the Greek economy is smaller than many counties in California: smaller than LA County. Smaller than Orange County. Santa Clara, San Francisco, and Alameda Counties. For god's sake, since the politicians there don't want to enact reforms, just fuhgettaboutem, let them default, kick them out of the EuroZone, and move on. Whosoever lent Greece money will simply have to take a loss -- and not invest there again. Move on...stop with all this overly dramatic hand wringing. It's so obvious: Greece doesn't want to pay back all that it borrowed. Cut em off: let those grandstanding Greek pols figure out how they will run their country without German, French, or US investments. Good riddance!
Harry (Michigan)
Let them eat cake.
Delicate Genius (Cambridge, MA)
The Times, like the Academy, is trapped, slumbering in Keynesian dogmatism.

When eminent mathematicians attack Keynesian thinking, it is not for no reason.

Most of the "debt" Greece owes was conjured out of thin air. Fiat currency, loaned into existence.

We can be confident the average NYT reader does not actually understand how the money system works. If they did, they would have at least supported the notion of ending the Fed and having the US government simply print its own money.

In addition to the basic absurdity of asking pensioners to tighten their belts in order to pay back what banks created out of thin air, the role of Goldman Sachs in this fiasco has, predictably, not been much discussed by a press that continues to aid and abet their ongoing crimes against humanity.

And I am not being hyperbolic. The money system itself is arranged so that productive labor is forever robbed by those with the issuing power - the legal ability to print currency. Large banks loan fiat currency into existence but the borrower has to slave away for that fiat to pay it back. Labor for ink and paper.

This is a sketch. John Nash understood full well the insidiousness of the paradigm economists like Paul Krugman take as ineluctable.

Greece can and should refuse to pay back most of this debt, and its brighter future may lay outside the Eurozone and EU, with the BRICs.
randy tucker (ventura)
More ouzo please.

It blows me away that a country this beautiful and this rich in history with a friendly, welcoming populace finds itself in this situation. As an outsider with little detailed understanding of the economics, my emotional side makes me suspect this is not the fault of the Greek people. They are who they have always been. Entering the EU did not magically change their national character. If anything, it is the fault of the big European financial countries for believing they can forcibly change the age old outlooks and historic mindset of the Greek people to drag them into line with German and Swedish behavioral patterns.
Mathias Weitz (Frankfurt, Germany)
As if greeks were not happy to buy brand new fridges, big color tvs or fast cars.
According to you they should have stayed with feta, sunsets and mule carriages.
j. von hettlingen (switzerland)
@randy tucker,
Many of the "friendly, welcome" Greeks you mentioned, had been able to rely on social largesse for decades!!! This allowed them to be mindless and wasteful.
I only feel sorry for those, who are coming of age and looking for jobs.
AgentG (Austin,TX)
You are mistaken. There is a long history of corruption and tax evasion by the capital class in Greece, as well as dishonesty in finanical matters by the government going back for decades. They play by different rules and have their own financial reality, of which the Greeks are in denial. So maybe bankruptcy is the only way the old structures will get torn down, but then it might be much worse what comes next.
su (ny)
One real question about this debt catastrophe.

I express this issue every time in my comments,

EU structure in Bruxelles allowed this happened. Greece economic problems is not a result of one term lousy government profligate spending. This trend developed almost 20-30 years period under the eyes of EU.

In every step Greece crisis is showing that EU as a union is an inept structure. it rivals the FIFA.

How about malign intentions? such as Letting this happen to Greece an d sharing the plundered treasure which means give half trillion to nation like giving a meth addict cocktail of drugs without charge, you know that guy is going to die, but in Nations physically nations doesn't die, they undergo capitulations, that is my friend plundering the treasure.

EU financial POWERHOUSES did this to Greece for malign intentions, Greece rich and politicians are the accomplices of this scheme. If this is not the truth, evidences suggests EU is an ultimate inept structure, there is no reason to keep faith to EU.
Robert (Out West)
i'm just a tad bit curious: any of the folks yelling about how the Times is just a pack of commies and so is Greece happen to read the article, or know anything about what seems to happen in Europe when a liberal government collapses into financial chaos?

equally, I'm curious: any if the folks yelling about the IMF and fascism and exploited workers happen to know why in the world Germany and France would want to just hand Greece more money, or where Greece GETS more money from if they turn their back on Europe?

Gee whizzikers, has everybody forgotten the old adage, "You can't get blood from a turnip?"

i'm all in favor of social democracy and paying debts and all, but there ain'
Keith Ferlin (Canada)
So you in favor of private banks not having to eat bad loans they made in pursuit of their greed. This must mean you were in favor of bailing out the banks for all of the questionable loans they made causing the Great Recession and being bailed out by the taxpayer. Privatize profit, socialize losses.
Swans21 (Stamford, CT)
Robert, the problem is that you don't know recent Greek political history. It was a conservative gov't which started this mess, not the hated "commies", or socialists, liberals, etc. You can't just make up facts to fit your world-view ...
jrj90620 (So California)
Too bad Greece doesn't have a reserve currency,that would allow its central bank to print currency,to pay its debts.That's what the other welfare state,the U.S. does.Eventually,the Dollar and other abused fiat currencies will crash.Who will bail us out?
Swans21 (Stamford, CT)
Welfare state, really? Out of the major industrialized countries in the world, the U.S. would rank last in the category of being a "welfare state".
Robert T (Blmfld MI)
Where's my hairdresser pension at age 50? Big shock Greece is going down. The State of Illinois is next.
LS (Brooklyn)
The debt in question has nothing to do with pensions or other social spending. The money was lent so the Greek government could bail out the Greek banks. Those banks mostly used the money to pay off the their own debts, which they were about to default on. The beneficiaries were mostly German and French banks and their bond holders.
lweiner144 (florida)
The euro zone is flawed and stretched too thin among countries with little economic or philosophical homogeneity. With near constant threat of default destabilizing the monetary union anyway, why not let nonconforming economies see their way out? The economies left will share ideology thus enabling them to function as a true monetary union should... not as a constant desperate bank of last resort for economies that fundamentally don't agree with neoliberalism as an economic philosophy for their people.

This situation is the worst one for all the parties involved. For Greece (and probably for Spain and Italy as well), practicing their favored loose form of socialism creates painful debt against other leaner nations and further burdens them with no path toward currency devaluation once they find themselves suffocating with debt. Without currency devaluation they are forced to shoulder austerity entirely on the backs of its already struggling working class.

Greece needs to decide if it wants to maintain its character or become like Germany. If Greece's overwhelming support of Syriza is any indication, then get ready to print some drachma.
AgentG (Austin,TX)
It is fairly consistent that 'socialism' is used very improperly. The Greeks don't have socialism and neither does Spain or Italy. They have heavily regulated markets, such as labor, capital, and business licenses, but they do have private ownership and not collective resources being provided by the state. It's a big difference that many Americans are not willing to grasp.
Walter Fisher (Ann Arbor)
We have such short memories. We need to remember the debt piled on Germany at the end of WWI. Yes, Greece is no post WWI Germany but the rigidity of the demanders of payment are the same. Clearly, the debt is not repayable and the lenders knew that going in.

A revisit to the times of Alexander Hamilton should remind even our friends in the EU that our taking on the debts io the various Colonies even in the face of the Colonies that had no debts to speak of enabled us to become the great Country of the later Nineteenth Century and beyond. There was much grumbling at the outset but the consolidation of the debts by the Union proved to be the best choice.
Joel (New York, NY)
Of course the eurozone leadership does not trust Mr. Tsipras and the Syriza party; based on recent experience there is no reason that they should. It is very difficult, if not impossible, to negotiate a deal under those circumstances.

The alternatives for Greece are harsh. Either elect a new government that will cut what will surely be a painful deal with the eurozone and then abide by it or let Mr. Tsipras lead the country out of the eurozone and into default. It is unrealistic to expect the eurozone leadership to provide meaningful economic relief to Greece with its present leadership.
Swans21 (Stamford, CT)
I don't know why you think default would be painful, look at Iceland.
Ch (Los Angeles)
Greeks are nice and hardworking people but they just hold some rather archaic views of the state and its relationship to the citizenry--a form of agonistic pluralism fueled by perennial class conflict. Other countries like Ireland, Portugal etc. had similar currents but they changed to accommodate the more integrative philosophies of Germany, France, Scandinavia etc. The Greeks just don't fit into the EU and should make a graceful exit, with the help of their European friends. In the end, it would be best for all.
AgentG (Austin,TX)
This seems to be the most accurate representation of what is going on yet. And no one is telling the Greeks that all these archaic ideas are fatally flawed in the 21st century.
Bob (New York, NY)
It is very disappointing to see the Times refer to Germany's obligations to pay restitution and/or reparations to Greece for WW II as "posturing". The Times regularly covers the efforts of private individuals to recover property that was stolen from them by the Nazis. Unfortunately, these efforts do not always succeed. But they are always reported carefully and analyzed from a legal perspective. The Times has not seen fit to offer a similar analysis of Greece's claims. In your editorial about this subject, the link is to an article in another paper, which shows the scant attention you have paid to the issue. Before calling this effort "posturing" it would be nice to see the Times analyze this issue carefully and in depth, giving due weight to both sides' perspectives. I am not sure why the claims of an entire nation or nations are any less deserving of careful consideration than the claims of individual victims.
Michael (Austin)
Why is it acceptable for Greece to break its promise to pensioners but not to break its promise to banks? The banks took risks and contributed to causing the problem. The pensioners just worked for a living.
Mathias Weitz (Frankfurt, Germany)
I want my government making me promises too,
lend the money from american taxpayers,
and find some morale in not paying it back,
so that i can retire early.
Carlo 47 (Italy)
I feel very sorry for your offending title, which makes the pair with the previous Roger Cohen's title of his column “The Greek Trap”.

Both of you reveal very little respect for the Greek situation and a bit of racism, if you both know the full story starting from the past wrong steps done by EU-ECB-IMF.

In fact the creditor banks and Countries lent to the previous government all that money with the only guarantee that it was a right-wing one and having is change all the harsh measures for the Greek people asked by the Troika, and brought Greece to the humanitarian catastrophe.
All that was possible because the corrupted and clientilist Greek government, which didn't care of its own people, was connive with the Troika led by Germany and vice-versa.

Now the Creditors, which are no more called Troika but are always the same, ask to the actual Government even harsher measures, which are obviously refused because Mr Tsipras explained that for them the priority is the Greek humanitarian situation, but the creditors don't want to listen.

Greece could have bin saved five months ago, but now it is too late and will hardly come out from the actual desperate situation: the default is already there like the death's shadow.
The question now is: Who failed?

Obviously EU (Germany)-ECB-IMF failed completely their approach, and soon they have to respond to the world if the Greece will default and cause a worldwide financial catastrophe.
Ron Veraart (Greece)
As a business many in Greece, I see many things happening here. What disturbs me most, is the fact that Europe (Brussels) is not willing to give Greece any opportunity to built up their economy. Since in Greece the left wing party SYRIZA is in power, one of the good things they have achieved, is that the masks of the face of Brussels has fallen down! It is more clear what the intentions are of Europe: Earning money on a country that is in deep problems. All the "help" is not for Greece, but to keep the bank system working; the system that actually created the problems. If Europe should follow it's initial principles, it would say to Greece: "you need a trouser? Here is one and you can keep it!"But NOT how it is now: "You need a trouser? Well here is one, but we demand 3 back!!!"
Europe needs to change, otherwise Stipras could be right when he said yesterday: If Greece steps out, it is the beginning of the end of the EU". And maybe it is not that bad, to start the EU from scratch again, because the mistakes were already made in the beginning by pushing the Euro into the economy while many inhabitants of countries did not wanted the Euro coin!
In my opinion, the best would have been: first start the Euro coin macro economic (B2B) and when failures have been repaired, than it is time to go to the next level: the micro economy. maybe Greece would have been better off by now.
M. Shu (Germany)
Gee, ever noticed that there are "local currencies"? Within the Eurozone? These are very simple ways to strengthen local economies by keeping money spend within the community which produces it. See what is all possible IF SOMEBODY WOULD JUST GET OUT OF THEIR LETHARGY? But perhaps it would not work in Greece because the first batch of local currency would just not be honored as somebody would certainly make off with the real funds to Switzeland or GB to disappear. That's why it is definitly better to keep screaming for help and refuse the helping hand to lift you at the same time because your rescuer might just dare to advise you how not to fall in the water again....
Prof.Jai Prakash Sharma, (Jaipur, India.)
"Growth with social fairness and fiscal sustainability" demand as suggested by the European Central Bank Chief, Mario Draghi perhaps best sums up a feasible debt relief deal if agreed to between the eurozone and Greece to avoid crisis.
reader (Maryland)
Greece is a failed state, so failed that it cannot even benefit from the same measures that countries like Ireland and Portugal successfully took to solve the same problems. A Wall Street Journal analysis from 10/6/2015 shows the severity of the problem On top of that there is an attitude problem by the Greek people and its representatives that Greece is fine, it doesn't have to adjust to the world around it but the world has to adjust to it - and fund it too. A truly sad situation.
DEL (Haifa, Israel)
To understand Greece's financial crisis, recall Zorba the Greek, only now it's Greece the Zorba, it's "Never on Sunday," it's Aesop-the-Greek's "The Ant and the Grasshopper" all over again.
Holly Laraway (Birmingham, NY)
The NYTimes editorial board is consistent. I guess to you the word WORK is a four letter word and creativity/competition is a foreign concept on how to create a economic growth. The Greeks simply created too large of a welfare state to be sustainable, welfare includes huge amounts of overpaid government employees who actually don't come close to even a 40 hour work week and can retire at a really young age, which is 50. 50 years of age is now what 40 years of age was just a few decades ago. The Greeks should have a retirement age of 70 for government employees and much lower wages.
Greece's mess is their own doing. The European Union can't let these people off. Otherwise Italy, Portugal and Spain will follow in their footsteps because the avenue to free money is just too tempting, which is what you the NYTimes is proposing for the Greeks, Free Money. In investing your 1st loss is almost always your best loss. Greece should have been forced to default years ago.
TheOwl (New England)
The problem with the Greek financial situations, dear Editorial Board, revolves around teh the core principles of lending...The three C's. Collateral, Capacity, and Character.

Greece is deficient in all three.

Greece does not have the COLLATERAL to pledge to guarantee the loans. They never did, and as along as Greece continues on the path that they currently are on, they never will.

Next, Greece does not have the CAPACITY to fund the obligations that they need to accept to fund any payment plan that to which they might agree, even if the lenders take massive haircuts to gain the Greeks signature on any loans. Greece has allowed it's economic base erode to the level of a third- or fourth-world country. They have little industrial capacity and even fewer prospects for establishing such even in the next half-century.

Finally, the Greeks have proven to be without the CHARACTER to honor their financial agreements or, for that matter, to even pretend that they might. Their ethic of tax evasion and public funding of their non-productive population has both put and kept them on the ropes, and there is clear evidence that its leftist government is singularly unwilling to effect or even to attempt any alteration in thes most basic of flaws in the national character.

It would seem that it would be best for the world, and ironically best for the Greeks, that they stop the pretense that the situation will change without Greece entering bankruptcy and exiting from the Euro.
David (California)
"the Greeks have proven to be without the CHARACTER to honor their financial agreements"

What you mean is that they should honor their financial agreements with bankers but repudiate their financial agreements with pensioners.
natan (japan)
There is no mechanism in place to kick out Greece from the eurozone without also ending its EU membership. To enable this option all EU memberstates will have to agree to keep Greece in the EU but out of euro. I don't see this happening.
Desperate Moderate (Ohio)
When almost half the country "works" for government and the other half rely on government, and when a country believes it can spend ceaselessly, increase debt with no real way to pay it and then demand that the rest of the countries bail them out, then you get Greece (with the US heading down the same path)! While most of Europe worked hard (relatively), increasing productivity and creating goods and products, Greece, well, had government and produced nothing. Now somehow Europe "needs to produce a realistic plan to revive the Greek economy". Really? How about Greece provide a "realistic plan" to revive its own economy. So typical of the NYT to demand all to pay for the sins of the few. Sounds so familiar these days. The NYT would probably endorse Tsipras if he ran for US president (at least over any Republican)!
Stefan K, Germany (Hamburg)
Greece will be thrown out of the Euro for purely practical reasons. This is not about punishing bad past behavior. It's about realizing that, far from ever repaying any debt, the Greek plan of action is to continue leeching further funds from the rest of the euro zone, and then default. Why was it impossible, even for a very left wing government, to collect taxes still owed by rich greeks? It should have been a natural for them. But the sad truth is that the greeks consider a Euro repaid to be a Euro wasted. Congrats for bilking 240B Euros. Now go away.
David (California)
Great thought. Let's kick Mississippi out of the US while we're at it. They consistently underperform.
Mike K (Irving, TX)
I wonder how much of the debt Greece owes is principal and how much is accrued interest. Everyone's entitled to make money but if the big lending banks in Europe are anything like the big lending banks here, hold on to your shirt and check your back pocket.
jb (ok)
Of IMF loans, "more than 80 per cent of the bailout funds were used to bail out, either directly or indirectly, the financial sector (both Greek and foreign) – not the Greek state."
John (Staten Island)
If the entire European Union bent it's will toward collecting Greece's unpaid taxes and laundered cash it would go a long way toward paying off the debt. But its always the middle class that is expected to clean up the mess created by the ' job creators' who always get bailed out first.
coverstory1 (New York)
The Statement “officials in the rest of the eurozone have made the Greek crisis worse since the first loan was made in 2010, by demanding senseless austerity policies that have inflicted suffering on individuals, contracted the economy” is true and important but does have enough historical perspective and knowledge. At the time Wall Street bankers were trashing the American economy in 2006-2008 with illicit illegal activities, the German bankers were predatory lending, somewhat like Wall Street securities fraud, to the Greeks and Spanish among others. Analyzing the statistics of these transactions could keep many PhD’s busy for years. But again it was the German and Greek oligarchs and privileged and not the Greek people who should be held accountable. The appropriate way to correct the situation is to focus on who did what and who profited, not damage wantonly all the innocent people. The lenders were primarily motivated by commissions and they could see no further than their own immediate wealth noses. Like the American subprime mortgage illegalities, you might say the homeowner should have known the deal was sweet. But a busy working couple should not be expected to put their financial sense above the fancy, mahogany desk banker. The dominant reality is the quarterly financial greed of the lenders. The real crime is predatory lending by German bankers and they should be prosecuted for it in the international court if they do not make arrangements like proposed here.
Emmett (Boston)
The concept of transferring wealth from one state to another is well established in the US. Residents of wealthier states in the Northeast have long been transferring wealth to our poorer brothers in the south. This transfer is accepted because of a shared sense of common destiny (regardless short term political acrimony).
The EU and the EZ were formed in recognition of Europe's common destiny by leaders who understood the tremendous cost of political conflict in Europe. But, Europe has returned to its historical foundations of narcissism. God help them when they once again realize they need one another (presumably when Russia starts picking off states to the east). At which point Europe will inevitably come begging the US to save it once again. Pathetical for a people who believe themselves superior, whether to the US or the Greeks.
When that day comes, perhaps the US will follow the advice of many on this board and let the Europeans fend for themselves.
Dudie Katani (Ft Lauderdale, Florida)
Greece borrowed.... Greece pays. no free ride .. Greece is a deadbeat and will never pay the $$$$$ back. They are commie socialist country and will screw the west if at all possible. If 80%f your budget is pensions and free money... whats left to spend.Time to jettison the Greeks to the winds of modern economics. Let them go get credit without any collateral. I think they should sell off the country to pay the debt or let Greece go down in the annals of history as a failed state. Greece will be in good company... Argentina comes to mind. The European model though nice in theory, failed because there is no central bank or central budget plan to hold countries to. Each country is on its own and so fiscal responsibility is a joke. If Europe want to succeed, then a central bank to handle each country as a state, and they must abide by the approved budget. The countries cannot issue money and loans and bonds must be approved by the central bank based on ability to pay back. Greece cannot thus whoever gave them $$$ are nuts. Germany should wake up and go it alone or with those countries responsible of their people. England, France, Scandinavian countries etc. Jettison the riff raff and flotsam and move forward.
Robert (Out West)
Good thinking, because failed states with shattered economies and collapsed liberal governments have a long, long history of...hey, wait a minute.

That's not good at all.

And may one make a wild guess about how one RECOGNIZES these "riff-raff?"
Konstantinos Gkikas (New Jersey)
Since Xerxes crossed the strait,
Ye never saw an enemy so vengeful at your gate.
Today the Greeks look weak, and divided. Nothing new. It’s a big part of our History, no matter if Hellas was a Balkan Ottoman Vilayet, or the Roman province, or the “rigid” Byzantium. It is the same, like the Homeric times, the classical era with the 40 years Peloponnesian War, the Hellenistic period, or the years right after the World War II.
For five years they are experiencing the collapse of the economy, the humiliating collapse of the state. Painfully they make the wrath necessity. They know that of their negligence, their mistakes, all expectations went wrong, and are in despair.
But anyway they loudly say.
When our voice offends the European financial oligarchs, because of our sins, while conveniently they are forgetting their own sins, watch out;
when the European elites can rig the game in their favor and the losers have no hope, watch out.
When the powerful and the dominants talk big about rules and the need to follow them, think about the First rule, the Α and the Ω, of all the rules; the dictum that the market economy requires broad social consent.
In their own way point out that the EU broke the dictum in a chauvinistic way, and that’s why ECB’s executive directives have become “bazookas” and manipulative tools against those who know “that the dice are loaded.”
They look at USA, and they whisper; inactivity through talking points is not a solution...
su (ny)
Reed Erskine (Bearsville, NY)
Reading the comments on the Greek/EU Impasse, it appears that there are many experts among NY Times readers who brandish opinions as if they were facts, and rant about Greek "deadbeats and tax-cheats", but the situation is not so black and white. Most of the bail-out funds provided to Greece go right back to European creditors and do little to improve the lot of Greek citizens who are the innocent victims and bystanders in this mess. No one seems willing to cast the situation as a humanitarian crisis, but that is what it is becoming.
delaxo (Athens)
Greeks should exterminate 752,395 pensioners and raise VAT for foodstuff to 37%.
Then they might be able to buy the fantastic new F-16s that they needs so much against their enemies!
Ahmet Altiner (NYC)
Greece should default, and enter a currency union with Turkey. Call it the Ottoman Lira if you will....
Robert (Out West)
Because of what, their long history of friendship?

good grief.
su (ny)
Another Erdogan shared pyschosis.

Ottoman lira, seriously.
M. Shu (Germany)
No, just to see how a country, which is not part of the EU, got its act very much together over the past decades, has a stable thriving economy , exports tremendously, expands its infrastructure and tourism-just look at the push of Turkish Airlines leaping into foreground of top airlines...while Olympic is throttling along, if at all.....
Jack Archer (Pleasant Hill, CA)
Grexit seems a less bad option the longer this phony "crisis" goes on. Everyone knows the terms of a reasonable agreement, which this editorial outlines succinctly. So, why the resistance to resolving it? Look no farther than Berlin and the German Govt.'s determination to punish the Greeks for having the gall to vote democratically for a center-left govt. not willing to do as it is told to do. Can't have that, in the eurozone, dominated by Germany, and set up to beggar its neighbors. Harsh language, yes, but Germany's actions deserve censure. Unless Merkel relents, she will go down in history as the chancellor who started the unraveling of the eurozone (and perhaps the EU as well).
j. von hettlingen (switzerland)
Is the idea of a "Grexit" bad? Perhaps not. It may be messy for Greece at the beginning. Yet with its own currency, it could attract investments and be more competitive. As years go by, jobs would be created. The economy may bounce back.
A "Grexit" would also mean Greece's default and the creditors may never see their money back. The Greeks know that. It explains why they try to press for a - partial - debt relief.
At the end of the day, it's the creditors, who might have to take the short end of the stick. One way or the other, they will have to lose money. Now it's all about reaching a feasible agreement for both sides.
Michael Cohan (St Louis, MO)
By the way, I enjoyed how you worked Israel into your piece as somehow being responsible for what is going on in Greece. Yep, when in doubt, blame the Jews.
Carolyn Egeli (Valley Lee, Md)
We all know that the reason Greece is in trouble is because of the elite sucking the place dry, whether it be the banksters, the weapons manufacturers, or the local good old boys. The people of Greece are hardly deadbeats. They work longer hours for less money and scant vacations then anyone else in Europe..certainly doesn't even compare to the working conditions of Germans. The weapons manufacuturers of France, Germany, the US and probably Israel..that one I don't know for sure…but they all required their sales to continue as part of the austerity package. Who requires purchases to a person going through bankruptcy? The vultures, that's who.
Michael Cohan (St Louis, MO)
You use that word "We". I do not think it means what you think it means.
Anyone who understands economics understands that the poor policies of the Greek government, including but not limited to lying about their spending to get into the Euro in the first place, is the cause of the problem.
Fred (USA)
Classic NYT editorial... It's not the deadbeats fault, government spending isn't the peoples fault (is there a Mr. Government who I haven't met?), evil lenders should forgive deadbeat debt, and...lenders should give deadbeats more money. "All the Redistribution Worth Reading"...
Frank (Durham)
Fred, I am not sure that you got the just of the editorial. Nowhere does it sanction Greece's behavior. It simply says that this is the situation and it must be resolved in the only possible way available. Like the bankrupt person who pays cents on the dollar to get a new start, Greece needs a big dose of debt forgiveness to get back on its feet. We are way beyond fault finding. It is time to solve the problem, if they want to, and this includes giving Greece breathing room …and forcing it to make gradually necessary reforms.
Jonathan (Boston)
I like that Fred. I would add, "All the personal irresponsibility that's fit to spew".

C'mon people, let's have at at. What are YOUR additions to the bizarre and self-serving NYT tag line?

Nothing like the NYT telling us stuff we don't already know about its' latest give away scheme.
Interested (New York, NY)
It must feel really good when you can leave a "comment" on the NYT thread when you either have read the title alone, willfully misread the editorial or just made something up from thin air.

There is nothing in the editorial that doesn't lay a large degree of responsibility at the feet of the Greek government but it actually does make a nuanced case that the Troika is willing to endure a Grexit in order to be done with the annoyances that Greece puts upon it. The Eurozone thinks, somehow, once "justice" has been secured the costs to the European economy can "be managed."

OK, Fred, enough facts. Go back to your fantasies.
Johnny (Johnny)
Enacting the most radical government reforms the troika wants will not (ever) pay off the staggering debt that has accumulated in Greece. The negotiations focus on the perceived "victimization" of the euro lenders (i.e. they have been swindled of funds by corrupt borrowers) with the concomitant "reform" of the Greek system through punishment. This strategy has never yielded anything but civil unrest. Greece should be treated as a disaster relief area within the Euro. There should be investment in infrastructure and manufacturing that would build true revenue rather than simply throwing money at the Greek promises that cannot materialize. Where are the discussions for investment from the Euro which would give significant incentives and advantages to the Euro group? Instead of outsourcing manufacturing to Asia, why not invest in new manufacturing within Greece which will generate long term revenues to compensate all parties involved. The initial loans to Greece were to invest in the future. Rather than the Euro simply releasing funds that immediately pay off the Euro banks, they should again focus on meaningful investments for long term success.
Charlie (NJ)
So your point of view is even though the initial massive investments in Greece's future didn't work they should be give more investments "for long term success" and not meet their obligations from the prior loans or, frankly, to their country. No responsibility to collect taxes, raise pension ages. No light at the end of the debt tunnel. Just throw more money at the problem and pray.
karen (benicia)
a marshall plan for greece-- just like the US sponsored after WWII and whih is the ONLY reason Europe recovered. The arrogance of the former beneficiaries is on plain view now as they refuse to pay it forward.
Azulka (USA)
Here comes the Drachma and the Drama.
Arthur Layton (Mattapoisett, MA)
Lenders and the Greek government should ignore the possible affect on the Euro and the EU if Greece defaults on its loans. Discussion of this issue only delays and confuses the settlement of Greece's real problems. The EU will survive without Greece. One choice available to the lenders is to call the debt. And if Greece can't pay, the next step is comparable to foreclosure. Greece is cut off from future loans and is forced to fall back on its own resources to pay its bills. If the Greek government fails to make long-term changes necessary to grow its economy, then the voters can fire them and bring in new leadership.
Vince (Toronto, ON)
Greece did not simply commit all of these sins on their own. Greece was brought into the EU by the other member nations. Those nations also have to accept responsibility for their actions.

You simply cannot cut Greece off from the world and say "suffer for your sins." If this were to happen, you'd get an election where the extremists get into power. You'll see things like nationalizing all foreign owned businesses, moving to Russia for assistance, ethnic strife, and mass suffering of the population of Greece. The entire reason they're negotiating all of these deals is to prevent that from happening.
Cormac (NYC)
Syriza is the new leadership. The crisis was brought on by decades of the center-right, and occassionally center, elite backed parties that had the full support and backing of the creditor countries. Syriza is the Greek people saying "stop the merry-go-round, it's killing us." Just like pushers don't like it when junkies want treatment, the EU elites don't like this and are threatening cold-turkey if they don't fall back in line - and back into hopeless decline.
Rocky (Space Coast, Florida)
For anyone who has had to handle high level, high stakes negotiations the situation is obvious: this has weeks ago surpassed pragmatic economic and arithmetic realities and theories, and now is all about pecking order, face saving, political survival, saving a nation's honor, and who to pin blame upon.

It is the place that all negotiators fear and do everything to avoid because once you enter the realm of emotions and egos the outcome is rarely a good one for either side. This was doomed from the beginning because of the Greek radical left fire-breathers who have no idea how to negotiate with folks well versed in structured negotiation. Tsipras background is as the leader of "Occupy" type demonstrators who take over buildings and block streets. How do you think that sits with the EU, ECB and IMF elite professionals? Tsipras "negotiates" through demands, threats, and insults. Economics matter far less now than preserving political status and personal honor. Who knows what will happen.
T3D (San Francisco)
"Tsipras "negotiates" through demands, threats, and insults. Economics matter far less now than preserving political status and personal honor."
Funny - sounds like a page out of Ted Cruz's battle tactics.
Cormac (NYC)
This is Greece's fault? From day one all they did was make reasonable proposals only to be treated with insult, arrogance and denial. The EU deserves whatever negative impact they get from this. They have been both childish and duplicitous.
Paul (Long island)
Yes, sadly Greece has become "a financial zombie state" due to the drastic austerity program they've been forced to follow to get debt relief. But, Greece has reached a breaking point where their economy is in shambles with unemployment at Great Depression levels. So, it is now time, as you note, that "European officials need to produce a realistic plan to revive the devastated Greek economy." The conundrum as Paul Krugman explains in today's column is that European Union (E.U.) officials are wedded to the victim-blame, austerity program despite all the evidence that it's a failure. To rescue Greece requires that they, and the rest of the world, stop scapegoating Greece and realize that their economic chemotherapy called austerity is killing Greece rather than saving it. The issue for the E.U. and its leaders is: Are they willing to change their beliefs in order to save Greece and perhaps themselves in the process? If history is any guide, the "group think" of austerity being embraced by the Europeans will once again be their undoing as it has been so tragically in the past.
Milo Minderbinder (Brookline, MA)
Thanks New York Times, but I'm reasonably sure that European leaders already know they have a problem. No doubt the NYT meant this advice to Europe constructively, but the editors should realize how tone deaf they sound. The US doesn't have a single penny at stake in an economic mess that has already cost 250 billion euro. Let Europe make it's own decisions. But if you feel moved to write an editorial about looming economic chaos from massive debt and decades of overspending, there's plenty to write about close to home. Public employee pension plans in Puerto Rico, Illinois, Chicago, Pennsylvania, New Jersey and many others are underfunded by a total of about half a trillion dollars, roughly double the size of the current Greek bailout. Much like the Greek mess, any solution will require pain from everyone, from retirees to taxpayers, and the longer a realistic solution is delayed the more pain there will be. Then there's student loans to consider, with over $1 trillion guaranteed by the US government and a default rate above 10%. The default rate doesn't include loan forgiveness programs, so the total capital loss is nearly 20% of loans made. There are quite a few debt problems to write about that only Americans can solve. Let's solve them before we give advice to other countries.
Julie Dahlman (Portland Oregon)
Debt. who profits. Banks! Student Loan debt was acquired by unsuspecting students and nefarious colleges (hedge fund managers and/or other investors portraying themselves as educators) who receive payment from taxpayers but did not provide these students with an appropriate education for the job market.

I cannot believe there are so many people who still defend the banks right to defraud we the people.
David (California)
The US is not immune to the effects of a financial crisis in Europe. I have an interest in what goes on there, and I expect my newspaper to keep me informed.
kickerfrau (NC)
all these suggestions have been addressed already ! but the big problem is the tax dodgers who have their money in Switzerland ! Greeks with money do not want to pay taxes and the government has been very effective collecting property taxes ! good luck on changing a society that does not want change ! They just need to return to the Drachmen.
David (California)
"Greeks with money do not want to pay taxes"

As opposed to Americans who enjoy it.
Yannis (Geneva)
For a large part of the population staying in or out of the Euro AND the EU won't make a difference. Staying in means: less buying power (pension down, VAT up, etc.), Leaving/Grexit means: short big shock, devaluation, and so on; i.e. less buying power. So at the end of the day, the Greek population loses either way. Why stay in the euro and EU if your partners don't support you (making you poorer is not support, OK. whatever the esteemed politicians say). So for Tsipras there isn't much to lose if he communicates well with the Greek people. And I am sure he will. It's Europe and the drivers behind this mess that will lose. The quesiion now becomes, who will short the euro, how much capital will be put to bear, like Soros did with the GBP. I think European leaders will wake up to a nasty surprise. the questions then becomes, how do they shove it down the throat of their own people.
Fred (Kansas)
This issue has many facets but in the end any solution must allow hope. How can Greece survive with continuation of these thoughtless austerity requirements? Put the people to work, grow the Greek economy and let them pay back debt at a rate that makes budget sense.
bruxman (Europe)
Greece already had the biggest debts forgiveness in history and pays very low interest on current loans. There is currently no repayment of the loans from the EU.

The counterpart, reforms, never happened for real. The current government is actually revoked some baby steps towards reform that the previous governments had agreed to.

This is not about financial wizardry but about trust. Nobody trusts Greece anymore and that includes the attitude towards the Greek people. Because the tax evasion and the nepotism are done by almost everyone in Greece, babies excepted but not the grannies.

Americans rarely understand Europe and its complexities. After WW II there was a big attempt to work with each other on the basis of trust and strict rules. With no trust in Greece and the Greek rejection of the common rules divorce is the only option.
Bob Acker (Oakland)
This editorial is clueless, but no more so than the Times' news coverage of this entire affair. This paper is a shadow of its former self. Bloomberg has been miles ahead of you on this.
Mathias Weitz (Frankfurt, Germany)
5 years lost, 5 years Lagarde-List with just 2 inquiries (if you include Kostas Vaxevanis for publishing the list). 5 years and fakelaki is still common practice.
31% of the budget deficit are just by dodging taxes of self-employed professionals.
Austerity are peanuts, a distraction. All this ruckus for just a little and pointless gain. What are €8 bn of loans against €20 bn unpaid taxes every year ? And taxes don't need to get paid back.

This shouldn't fester, that begging for loans is a more realistic prospective than tackling down the frailties of the society. We can get an economy going, counter a downcycle, but we can't, and we shouldn't dress up a failed country.

(all data cited from )
R. R. (NY, USA)
Debt repayment is so twentieth century!
george (coastline)
Many here want to punish the Greeks for their sins, of which there are many. It is clear that Greece has behaved badly. But just who is getting punished for their deceit and greed? Does anyone really believe that pensioners and youth created this problem? They're the ones supporting Syriza, not the Greeks with their money safely in Switzerland . you either forgive the debt they can never repay, or you continue the punishment. If Greece defaults it's going to hurt for sure, but hust how bad and how far the hurt spreads is anyone's guess. Don't think for a minute the Spanish aren't paying attention it's all up to Germany. They either treat the Greeks with a bit of the compassion and solidarity they showed to their brethren in the DDR, or they'll end up dominating a divided Europe. The Euro will become the Deutchmark by another name.
michelle (Rome)
If they truly believe the European union is worth saving then they will cancel the Greek debt.
Max (Manhattan)
The editorial recommends exactly more of the same: Forgive some debt in return for promises of reform of the tax evasion and cumbersome business regulations practices that have brought Greece to its present condition. As 'many Eurozone leaders' suspect, based on many similar go-arounds, those promises will be made but not kept. The editorial does not ask: What makes this occasion different?
TheOwl (New England)
Inasmuch as the pension program of Greece is one of the key elements ing Greece's economic nightmare, your argument is based on a straw man...a straw man that has helped create the very problem that you are trying to whitewash.

Is this a new low for the you are calling yourselves today to avoid having to accept responsibilities that your profligate spending of other peoples' money has imposed upon the very people that you claim to represent?

No, not really. This is merely a continuation of the political delusion of the Ponzi-scheme-type wealth-transfer programs that have long been the basis of your failed ideology.
David (California)
It seems to me that the EU approach has, for years, been "more of the same." More austerity, more privitazation of public assets, more pain. Time for a new, more realistic approach.
Max (Manhattan)
The 'new, more realistic approach' is for them to be finally kicked out of the EU for chronic, serial welshing. They don't like austerity, but they like paying their taxes even less. Let them figure that out on their own drachma, not Europe's euro.
Sarah (Arlington, VA)
@ Christine McMorrow
You write about 'all those Greek islands that have favorable, or even no tax requirements', a statement that is completely pulled out of thin air. Greek islands have the same tax laws as Greece proper.
The ultra rich tax evaders in Greece hide their fortunes - akin to citizens of other countries - in Swiss banks, the Cayman Islands and other foreign tax havens far away from the grip of the Greek government.
karen (benicia)
Just as the "ultra rich" in the US do not pay their share. That is one reason they are so rich. They are not citizens of any single country-- they are global citizens with loyalty only to themselves and their ilk.
Roland Berger (Magog, Québec, Canada)
“European officials need to produce a realistic plan to revive the country's devastated economy.” They won't do that, they can't do that. They are in control, yet under control of the capital.
Martin (Brinklow, MD)
Capitalism is good in creating money but it has no regulated mechanism for destroying money.
Greece borrowed billions from banks, banks got billions from central banks who issued this money on account of the loans. Now this fiat money is in circulation and since banking is ruled by strict arithmetic, this money cannot disappear.
For Greece to have a future many of these loans have to be cancelled, the principle declared lost. Bankruptcy is good to level the playing field and start anew. Bankruptcy is not good for the CEO's of the banks the the heads of governments who signed off on the loans, that is the reason they don't want to give up a single Euro of debt.
But it is a Kabuki dance what the negotiators perform in front of us. There is no way the Greek society can repay 375 billion in debt. No way. But could the US ever repay 18 Trillion dollars?
Is the real fear that our house of cards of a financial system with astronomical debts that are moved around and treated with the highest respect as if it were gold, could easily collapse once debt obligations can be shrugged off?
MKM (New York)
Let Greece crash. Within five years the classic Greek dinner will be back all over New York as the ones with some gumption get out. I'm really tired of all these plastic chains taking over the city.
Leonard Miller (NY)
NYT: "... if the eurozone does not make this relatively small sacrifice now, it will suffer greater losses if Greece defaults and exits from the euro. That result, aside from increasing European losses, would undermine confidence in the common currency in future crises."

Arguably, a Greece exit from the euro would reduce the chances of future common currency crises and would increase, not decrease, confidence in the euro. By being willing to accept the exit of apparently hopeless delinquents from the Euro and seeing the damage to such delinquents, it is less likely that such a scenario would be repeated. Conversely, trying to endlessly patch over a hopeless situation would only fortify forces in other eurozone countries--such as Podemos in Spain--to emulate the Greek attitudes thereby perpetuating a cloud over the Euro.
The solution is simple. Greece needs to dump the Euro.
John LeBaron (MA)
Responsibility for Greece's fiscal calamity seems equally attributable to Greek profligacy and to the lenders who enabled it in the first place. Equal balance in executing the necessary reconstruction would not only be fair, it is also essential, especially with a hostile, revanchist Russia sitting at Europe's doorstep with a baldly declared motivation to smash the Union to smithereens.
blackmamba (IL)
After millennia of war culminating in two 20th Century world wars, the Western European tribes finally fashioned an economic and a currency union that they hoped would lead to less bloodshed and political strife among them.

Coupled with an earlier military union against an eastern bloc of nations under the under the dominion of the Soviet Union this system has worked as planned. Aided by the collapse of the Soviet Union and it's "allies" peace generally reigned. Yugoslavia's dissolution was the exception. Germany which is the economically strongest, most populous and troublesome of the European nations was the real target keystone nation. Aging and shrinking populations threaten a looming demographic crisis.

That the EU and EZ are not political unions is a problem. The belief that economic advantage would promote both peaceful international relations had a corollary goal. It was also believed that the nations would also trend towards civil secular plural egalitarian democratic rule. But there are political socioeconomic educational historical factors that leave the best path forward open to different interpretations of national values and interest. Due to human nature and nurture this is very hard. American history is the ultimate proof of that.

The EU must decide if the known union makes more sense than the alternative. In zombie horror mythology the craving for eating human flesh is focused on brains. What is the brainy European best plan for Greece?
jlalbrecht (Vienna, Austria)
As a small business owner in Europe, this is the number one economic issue on my radar.

Several comments have asked (I'm paraphrasing), "But what will happen if Greece defaults?" There was an excellent article in the NYT about game theory and Yanis Varoufakis (Greek Finance minister) regarding just this last week. The answer is: No one knows what will happen if Greece defaults, other than it will be bad. How bad? Potentially another world-wide recession.

Europe has not yet recovered from the last recession that is already 7 years in the past. I can tell you that from first hand experience. A major shock to the system could bring another decade of pain, but on top of the current pain, it could well bring desperation. Desperate people commit desperate acts.
Rocky (Space Coast, Florida)
Word wide recession? Why? Greece is a small $240 Bil per year economy. In World scale, that is barely a ripple. When Argentina went bust, it's economy was 3 times the size of Greece's, and most people can't even remember that Argentina went bust, let alone tell you when or what world wide effect it had (none is the answer).

So this global effect rhetoric is completely over the top. Yes, no doubt the EU will be somewhat effected, but mostly politically not as much economically (but some, no doubt). And EU is hardly the world. What happens in the USA affects the world, but not the EU. For one reason, the EU is a just a word; it consists of radically varying countries and economies and while they might portray themselves as a bloc they are only so in limited fashion.
jlalbrecht (Vienna, Austria)
Study history:

1. How big was Lehmann Brothers compared to the rest of the financial firms? The thought was, "Lehmann Brothers is small enough that it won't affect the rest of the market and players if we let it fail." You are applying the same logic to Greece.

2. The EU is bigger than the US in population. The EU is the US's largest export market outside North America (#1 Canada; #2 Mexico). China is #4 after the EU. A downturn in the EU will affect the US massively.

3. The EU is a huge trading partner with Russia (3rd largest after US and China). Russia's economy is struggling, and politically and militarily Russia is compensating. A recession/depression in the EU will have negative impacts on Russia, with unclear economic, political and military implications.

4. In (2) and (3) above you'll note China being high on the list. China's growth is slowing over the last few years. Similar to Russia, it's militarily aggressive activities have grown as it's economy has slowed. An EU recession/depression will affect China, with (similar to Russia) unclear economic, political and military implications.

5. About 100 years ago, WWI was started by a single assassin killing a single royal in a single monarchy. People are desperate in Greece, Spain, Portugal, Ireland, etc. They have been suffering under austerity, not unlike Germany between the wars. Desperate people undertake desperate actions.
blgreenie (New Jersey)
This Greek drama yet has an uncertain ending. The Greeks, represented by Mr. Tsipras and his Syriza party, described as the victims in this drama, parry back and forth as the IMF withdraws in frustration and the world's investors pace nervously on the sidelines. The Times' comments ignore the tremendous resistance, from deeply ingrained culture and tradition, to making needed changes within Greece as well as Mr. Tsipras' role upon coming on stage, to foil demands made on Greece from outside. Even if a last minute solution occurs, will it survive?
Charlie (NJ)
In this country we have a future funding issue with Social Security. The solutions are clear yet we don't act because it hasn't reached crisis yet. In New Jersey the public pension is underfunded, the solutions are clear yet we don't act because we haven't reached crisis yet. These are just 2 of many examples of fiscal irresponsibility. Until we reach a crisis the current political leadership in both parties prefer to posture politically instead of having the guts to compromise and lead. Not much different than what got Greece into their crisis.
kd (Ellsworth, Maine)
To fully fund Social Security indefinitely, all Congress would have to do is raise the income limit that's taxable. Or eliminate the limit, like Medicare. It's not rocket science.
hhelenhh (Colorado)
We do not have a future funding issue with Social Security. That is just more right-wing Koch Party sloganeering. The SS fund is solvent. The only thing we need for SS is to remove the cap and apply the SS tax to all income. I say that as a person who's income slightly exceeds the cap....I am in favor of paying so that no senior lives in poverty!
Cormac (NYC)
We do NOT in this country have a future funding crisis of Social Security. What we have is a bunch of people who oppose the program and want to make money on its demise who keep trying to make the public believe we have funding crisis.

How many times do mainstream economist have to explain that before it sinks in?!?!
Coolhunter (New Jersey)
Let them go, and go quickly. Greece will never find a way out of using other people's money to solve there economic problems. Socialism does just work. Wise up world.
Sarah (Arlington, VA)
Greece got into trouble more than other countries by the enforced austerity measures pushed upon it by their rich neighbours.
And, in case you don't know, that was happening under a right-wing conservative government to start with, not because of a sushulist, big, bad, gubmint.
Eric (New Jersey)
Let Greece go bankrupt and let it leave the EU and abandon the EURO.

Why should the German people who work hard and save their money be robbed to continue subsidizing the Greeks?

Why is the New York Times solution to every problem - real or imagined - always to raise or collect more taxes?

As for the EU, the sooner that socialist Ponzi scheme collapses the better.
M.M. (Austin, TX)
Where to begin?

First, tax collection in Greece is at Third-World levels and it needs to be enforced so the government can pay its bills. No one is suggesting raising taxes in Germany.

Secondly, the EU is far from a socialist experiment. It is, if anything, way too loose and open for its own good. Most observers agree that the EU needs closer integration, not less. Without the EU European nations may go back to their old habits of invading one another and we're going to have to clean up the mess.

In conclusion, reactive conservative thought doesn't apply in this case (in all cases, really).
Delicate Genius (Cambridge, MA)
This is not an argument, it is a string of unargued assertions.

The prevention of war is an odd reason to support stifling bureacracy, disregard for European culture and ethnic rights {rights for Sweden, for example, to remain Swedish, a proposition which the very stupid actually claims to be racist}, and the rule of bankers.

The example of the US Federal Reserve should suffice. Set up to prevent bank runs and depressions, the Great Depression began 15 years later after several "shocks" to the financial system.

A couple of world wars followed. Some banks financed both sides in both wars.

If you want to end wars, strip banks of the right to conjure currency out of thin air - otherwise, you're merely talking about disregarding the will and consent of the peoples of Europe on the disingenuous pretext of wishing to do right by them.
Mel Farrell (New York)
There really is a very simplistic way to look at this fully developed Greek tragedy; blame rests entirely in the hands of the the troika, that economic death dealing group, made up of the International Monetary Fund, the European Commission, and the European Central Bank.

Together these three imposed the kind of severe austerity on the Greek people that has essentially beggared them, robbed them of everything in their singular goal of keeping the European .01%ters economically whole.

And now the people of Greece are cornered, afraid, angry and willing to now fight back against a plan that never once considered the devastation it was visiting on the nation.

The only way out, if Greece is to remain in the Union, is to forgive the debt, and develop a real pathway back, that is focused on Greek survival instead of satisfying the relentless demands of the .01%ters.
Mark Crozier (Free world)
That's only half the story. They only got to that point because they freely borrowed money they couldn't afford to repay.
jlk3536 (Philadelphia)
Cut the umbilical cord and let Greece sink or swim. They may have to go back to the middle ages but it might teach productivity to all those currently on the dole.
John (Hartford)
"the government of Prime Minister Alexis Tsipras must agree to changes that would increase tax collection, make the government more efficient and to boost economic growth by making it easier to start new businesses."

And therein lies the problem. The Greek government has absolutely intention of taking serious steps to reform the Greek economy. They just want the rest of the Eurogroup to hand over the cash in return for a lot empty promises. Thus the entire problem will re-surface at some future date.
Mark Thomason (Clawson, MI)
They are not asking "to hand over the cash." It is all debt roll over. It is stretching out the payback, not new cash. Their proposal is to pay their own way, and the debate is about the rate of payback from any surplus.
John (Hartford)
@Mark Thomason

It was a figure of speech intended to convey the general Greek desire to return business as usual although even on the narrow question you're wrong. It is it is new cash because the Greek government want the release of about 7 billion in loans that are being withheld because the Greeks haven't followed through on their side of the bargain. Then in addition there is the ELA the banking system is continuing to receive from the ECB. The payback has been greatly ameliorated (maturities were extended and interest rates lowered when the original bailout deal was struck)
Mark Thomason (Clawson, MI)
"Resolving Greece’s fundamental economic and financial problems" is essential. But it requires agreeing on what those problems are.

The disagreement about what to do is fundamental. It is a disagreement about the nature of the problem.

That is not examined in the debate. Each side assumes its own truth, and then cannot understand how those who support a different remedy can possibly think that will work.

One side sees takers and free riders who don't want to pay for their benefits. The other side sees an unhealthy society, so unequal that it abandons its own and is starving from lack of what it won't allow -- demand. One side wants to cut back on benefits, the other side wants to support and expand demand.

Often we hear that they are both right, so we can compromise by avoiding the debate and just doing both. We can't. We need to decide this, and focus our energies on what works.

That is as true in the US as in Greece, which is where the heat comes from in the debate "about Greece."

I'm with Krugman on this question. However, I must insist it can't be papered over. We must fight it out. Obama is wrong. There is no compromise with this. It must be done the FDR way:

"They are unanimous in their hate for me--and I welcome their hatred. I should like to have it said of my first Administration that in it the forces of selfishness and of lust for power met their match. I should like to have it said of my second Administration that in it these forces met their master."
reminore (ny)
a bit of backstory:

billions of euro were given to greece for the development of infrastructure - many millions found their way into private hands through corruption (ie. the notorious delor packages)

billions of euro were spent purchasing german leopard tanks, anti aircraft systems, and submarines made by the german company siemens.

greece was one of the largest markets for the sale of german mercedes cars in europe!

greece, which used to be a poor country with factories that made most everything - now has almost no industry left, but imports. example: the pitsos company, which existed in greece since the 1950s used to make kitchen ovens and fridges was purchased by a german company and dismembered.

greece entered the EU under very harsh agricultural terms, and the effect on agricultural production has been catastrophic. why oh why do greeks need to be purchasing dutch milk and butter in the grocery stores?

the syriza government does not have a mandate to sign on for more austerity. rather, there should be a referendum on the question or new elections. let the people make this weighty decision. if they sign, they will have to put up and shut up. if they choose to say no, they will be begin the process of rebuilding a small mediterranean country by concentrating on national issues important to greece.

and the investors? they will certainly not miss an opportunity to invest, once the dust has settled...
John (Hartford)
@reminore ny

You left out some bits of the story. Like the Greeks lying to join the Euro in the first place. Then lying for years about the state of their public finances so they just go on with unimpeded borrowing. The hugely bloated public sector, widespread corruption and the dysfunctional tax collection system somehow escaped mention also. I'm sure it was just an oversight.
Cormac (NYC)
@John of Hartford
YOU left out some of the story - like how the banking and political elites of Germany and the EU conspired with the Greek establishment to falsify their financial status for years in order to get them into the EU and to move the page, profitable loan packages. How those same EU elites are now the ones lading the negotiations and demanding a hard line on the new anti-establishment government of Greece.
Pierre Anonymot (Paris)
"European officials need to produce a realistic plan to revive the devastated Greek economy"

There IS a realistic plan and the and the Greeks know it: grexit. When the political powers wanted to extend their political power and seduced inappropriate economies into joining the euro power club they knew or should have known that this would blow up sooner or later. Well, it is Now. Time for the fat cats to lick the wounds of the European public who will pick up the tab. The Greek public has also paid and will pay more for a few years, but they will have excised some of the EU leaders greed.
miken (ny)
This should be a lesson to the socialists among us.
Lynn (New York)
The Greeks actually are running a current funds surplus. The problem is servicing debt from the past. In other words, the problem is NOT socialists, it is people who in the past made a business decision to lend money that was an unwise decision and now don't want to pay for their business error.
MKM (New York)
@Lynn - infantilizing the Greeks does not help.
M.M. (Austin, TX)
FYI, Sweden is more "socialist" than Greece and they're doing just fine. It's not about labels it's about efficiency and responsibility.
Nikko (Ithaca, NY)
If Greece's creditors are so concerned about moral hazard, then they should strike a deal with Greek leadership to offload a portion of public debt on the tax-dodgers, like those who complained loudly at the government using Google Maps to find people with pools they didn't state on their taxes, in exchange for substantial debt relief. Bad apples are the product of the tree, but should all the tree suffer?
Bob (Atlanta)
Ran out of other people's money
William M. Shaw (Shreveport, LA)
OPM -- which I pronounce "Opium" -- can stand either for "Other People's Money" or DC's "Office of Personnel Management". Same difference, I suppose.

If Greece leads, can America be far behind?
J (New York, N.Y.)
The Greek economy was never large enough and certainly not on its
way to being large enough to handle its debt responsibly. It created
a false standard of living based on borrowing and still seeks to maintain
some of those standards on continued borrowing.

Europe needs to embrace a more Federalist system with richer states
transfering grants to poorer states in an effort to raise living standards
and customer markets for all. You can not borrow or lend your way to
prosperity at this point.
Jon Davis (NM)
More evidence of Post-History.
Banks are too big to fail.
But failed countries?
No problem.
eusebio vestias (Portugal)
Really I believe in Euro that will stay strong and helping each other Greece the need to reform and by the end of the fiscal flow is not offer real change the let them go to the beginning
RS (Philly)
I agree with "...make the government more efficient and to boost economic growth by making it easier to start new businesses."

Thanks for finally acknowledging the logic and wisdom of the Republican economic plan.
Dausuul (Indiana)
Except for the part where we aren't Greece.

If you're starving, more food will help. If you're obese, not so much.
Sarah (Arlington, VA)
The 'wisdom' of the Republican economic plan has put the world into an economic crisis not seen since the Great Depression in the first place, in case you didn't notice.
M.M. (Austin, TX)
We miss those Republicans. Today's Republican Party has a different plan: "I got mine and you don't get any."
Lawrence (Washington D.C.)
It makes the nations that did not adopt the Euro look brilliant.
Perhaps Scotland will look harder at the choices it will be making in the future. A nation not in charge of it's own currency has fewer choices.
William M. Shaw (Shreveport, LA)
Greek politicians, on the prowl for dachmas, devastated their own country. It is up to Greek politicians, not Euro-denominated bureaucrats, to make the necessary reforms.
Carl (Basel)
The solution you offer is the same solution the EU and IWF offered greece 2012.
Their debt was cut by 107 billion Euros (53,3%). They also received 130 billion kredit with low interest rates. This is not counting for all the rest of the money they received in the EU until 2012 (which mounts up to about 240 billion Euro).

In exchange they commited themselves to cut back on pensions (they have some of the highest pension rates in europe on average higher than germany for example). Cut back on beauraucracy (highest cost in comparison to Bip in the Eu). Restructure the taxation system and actually collect taxes.

The germans offered to help out in setting up a working taxdepartment - They refused.
The french goverment offered help in restructuring - They refused.
They received from the french goverment a list with over 2000 suspected taxfrauds (Lagarde List) and up to now all they have done is try to protect politicians from being prosecuted.

I just don't see how a state with such a level of corruption and taxevasion (not only politicians but also every day citizens) will ever manage to get their system running.
So how long should the rest of the euopean taxpayers (the banks don't hold any debts anymore) pay. Especially people from the balcan states with a much lower standard of living.
Mel Farrell (New York)
While all of what you report is accurate, it offers no solution for their predicament.

To subject the people to ever harsher austerity measures will create still more anger, and push off any possibility of sustainable economic recovery.

So, the only solution is for the troika to bite the bullet, forgive or delay debt repayment, several years delay, stop with further austerity demands, and give the nation breathing room to crawl out of this mess.

Wo gets hurt ?? The well protected European .01%ters will have to take a hit, a hit that will by no means cause them any real economic harm; and yes there is the fear that others such as Portugal, Italy and Ireland, will seek relief, but why not.

Where is it written that seriously injured parties should be crippled instead of helped to real long term recovery, recovery that eventually benefits the entire European Union.
Carl (Basel)
I see their predicment in the fact that they are not willing or unable to change their situation.
Reforms have to come from within. If forced upon them by other groups like the troika it only bares resentment.

The .01%ters aren't the ones to take the hit. They did that partly with the first debt cut. Since then all the debt has been transfered to the public. The european taxpayers are also financing the help funds (Target 1 and 2).

In my opinion it would be best to default greece. Have them sort out their System while running on a seperate currency (drachme). The european states could still help them out with various reconstruction aids (since they would still be part of the EU).
Mathias Weitz (Frankfurt, Germany)
Greece received $100 million for a land registry office from the EU in 1990.
Now 25 years later the only places with an official land registry are a few island, and just because the italians did that when they occupied these island in WW2.
Paul Muller-Reed (Mass.)
I am tired of hearing that the Greeks have a low retirement age and exceptionally large social benefit programs. The retirement age is 61 in Greece. That is not low. As for social programs, they help the poor, and what has German austerity done to the Greek population, create more unemployed and poor. So don't blame social programs, blame the stupidity of right wing economics.
Erasmus (Sydney)
61 is the recently increased official retirement age in Greece. By contrast, for the Germans who have to pay the Greek's pensions, the pension age is on-track to increase to 67. And 75% of Greeks take early retirement - ie. they retire before the official retirement age. Some 8% of them retire - on a state pension funded by EU not Greek taxpayers - before the age of 50.
Charlie (Los Angeles)
It's more than the retirement age. It's about producing things that the markets and others wants, not just olives. 40% of the Greek people work for the govt which doesn't know what the world wants because it's an administrative body. That's not a right or left wing thing... it's just common sense.

Yet with a huge governmental workforce they can't collect taxes? All these millionaires hiding their homes behind a shanty facade paying nothing in property taxes? Once again... not a left or right wing thing. Google maps shows thousands of homes with pools, yet only ten percent of the people report them for property tax purposes. Left wing places like Santa Monica, California can work. Right wing places, like Hong Kong can work. It's all about management.
Mark Thomason (Clawson, MI)
"for the Germans who have to pay the Greek's pensions"

That is not true. This is entirely about the size of surplus from which to make payback. There is no new money for Greece to pay pensions or anything else.
Jon Davis (NM)
Give Merkel some credit.
She has converted the E.U. into a subsidiary of Germany.
Mark Thomason (Clawson, MI)
Not exactly. It is more that the rich took over everywhere.

On a state level, the Germans are rich, but this benefits the rich and only the rich everywhere, in France, Germany, Britain, and even Greece.
Michael (New York)
In the "Flat Earth" economy, the "old world " basics of economic stability and growth are gone. The problem is not limited to the Euro, in the US and other nations of the world, banks are no longer responsible for their own solvency. The money that is loaned and invested is from the Government. So therefore the Government is the "Bank". A healthy economy is based upon employment , production of goods and services but also savings by individuals. With a .25% return on savings accounts , why would anyone want to use the "old " savings method? So any investor, hoping for a good return is taking huge risks and there are plenty of "middle men" taking a piece of that investment .This is a direct result of interest rates being manipulated and artificially low. This is a large part of this vicious cycle. We are devaluing and undermining our world economies by this present method of "low" interest rates.
Richard Luettgen (New Jersey)
Euro-cynics would argue that these ideas wouldn't bear lasting fruit. They would forgive debt or suspend all or most of its servicing requirements, Greece would promise all kinds of reforms, then simply welsh on the promises. Many appear to have concluded that the only way Greece can remain a part of the currency union is as perpetual pensioner. The cynics have become increasingly hopeless of a real solution that they can dictate.

A still-swollen public sector, still-uncompetitive labor laws, corruption, inability to collect taxes, massive bureaucracy that stifles everything and a profligacy that supports its own young pensioners endlessly ... these are challenges that probably can't be solved in a generation. And that assumes that they'll WANT to solve them -- Tsipras and his Syriza Party clearly don't . Indeed, they were elected to avoid needing to face the consequences of these issues.

If Greece cannot function independently while servicing debt it amassed, and a generation or more assuming effective leadership is required to transform their society into something competitive, then very few will have the patience to wait them out. They never should have joined the currency union and forfeited their ability to manipulate a national currency to address economic problems. The inevitable future is for them to exit that union, massively devalue a new drachma, repudiate a debt they can not only never repay but can't even service ... and simply start over.
TMK (New York, NY)
Well, hello?? What part of “broke” do we not understand? No money is ever going to be repaid. Zero, zilch. Consequently, the only option on the table is (and has been for a while) forgive and forget.

So instead of useless negotiations that ask for money out of thin air, or eliciting promises that _are_ thin air, all parties including the NYT should get down to how exactly to forgive and forget. Which, turns out, is relatively easy. The banker's version of f&f would be to write-down and never lend again (Grexit). The humane version would be aid, lots of it, with the World Bank and the UN stepping-in where IMF once sat (there’s a Putin version too but let’s not get into that for now).

All stuff that banks and aid organizations do routinely. Why not campaign for both versions in parallel? It'll be a win-win situation. Just look at Lehman: are the US better off today without Lehman or should the US have forgiven them and let them keep passing the buck? Sure AIG got a free pass, but Greece is no AIG. While years later, Lehman is gone, and the dollar stronger, much stronger.

It's no different with Greece and Europe. Let the bad bank go now. When it becomes good again (hello UN, World Bank), welcome it back. It’s good for Greece, good for the Euro.
Glenn Sills (Clearwater Fl)
Greece's situation is very similar to a poor person who has become addicted to pay-day loans. Their income doesn't cover both their needs and the payments on the loan, so they keep taking out additional loans to pay off the previous loan. We have some new laws limiting this problem and of course we also have bankruptcy.

A country is not the same as a person, but the arithmetic of the situation is the same here.
Joseph Huben (Upstate NY)
What would it cost to forgive the Greek debt entirely? No moral hazard was applied to the banking crisis, why worry about the moral hazard of not punishing a sovereign state when corporations that caused the collapse, made bad loans, all walked away in tact to screw things up again.
Do the people of any country imagine that corporations won't victimize them? What does it mean to be a Nation?
MKM (New York)
The banks repaid the bailout to the Treasury at a profit to the government. Thats why their was no moral hazard.
Jurgen (Germany)
Greece basically went from bancruptcy to bancruptcy since winning independence from the Ottoman empire.
They joined the Eurozone with faked statistics and don't belong there.
I really don't understand why they should stay in the Eurozone.
Their administration is on banana republic level.
Their industry lightyears away from Northern Europe.
Tax evasion is a normal condition.
The people are not willing to accept the truth and support much needed reform.
Why should the rest of Europe continue financing unsustainable promises made by Syriza
that most EU countries wouldn't offer their own people ?
su (ny)
They joined the Eurozone with faked statistics and don't belong there.

This is a lie.
Fake statistics, why on earth Turkey cannot do the same thing. they hire Goldman Sachs etc and they do exactly the same things.
If fake statistics and cheating is so crucial, how on earth no body else in Europe didn't discover that.

AS I said that is a great nasty lie.

This is happened because Europe power brokers wanted to be happened, because they can get money out of it.

I do not buy Greek cheated Europe, Turkey is trying to cheat Europe last 30 years European audits is catching every single glitch in the statistics.

I am sorry but If Greeks are cheaters, European Union very welcomed that cheating to fill their pockets.
reminore (ny)
its true - greece was in debt to england and france for nearly a century for debts related to their war of independence from the turks. don't worry - those countries got their money back many times over via the influence of the country. this was also the fact that gave birth to the system of patronage that plagues greece.

as far as the 'faked statistics'...what the BND didn't do their homework? what kind of an intelligence service do you have? germany was happy to loan the money which would be spent purchasing siemens submarines for billions of euro...

on the question of industry: greece was left destroyed by war slowly rebuilt, and then joined the EEC/EU...and slowly, the factories disappeared one by one - purchased by european conglomerates and shut down! in effect, greece became a colony existing on subsidies.

i agree with you - greece should chose to leave the union and rebuild the country. no more weapons system purchases from germany, no more mercedes, no more siemens!
Sharon mostardi (Ravenna ohio)
Let the private banks who took the risk take the haircut. Their practices caused all this world financial misery. Why do they deseerve payment over the everyday needs of Greek citizens? The US should have made them pay and didn't. No need to continue this unfair practice
Mark Thomason (Clawson, MI)
Too late. The governments already bailed out the banks and took over the risks (for free). The banks themselves already made off with their money.
Robert (Minneapolis)
I thought the bank debt was gone.
abo (Paris)
"Greece will most likely default on its debts and would probably be forced to abandon the euro."

And that's a problem how? The NYT wants Europe to forgive Greece's debts. The difference between that and Greece defaulting on its debts is - well, actually I don't see much difference; in both case the debts are gone. That Greece might be forced to abandon the euro is assumed to be a negative, when for years and years Americans have argued that it's a positive. (See your own Paul Krugman for example, although he's recently taken to waffling on the matter.)

Maybe the NYT could look a little closer to home, rather than writing yet another editorial on Greece? Puerto Rico has high unemployment, terrible GDP numbers, is losing population, and is suffering under a crushing debt. When is the NYT editorial board going to thunder about the human calamity there? And demand that the American federal government take over all the debt and then forgive it?
William M. Shaw (Shreveport, LA)
The American confederation foundered on bad debtors -- would Rhode Island like to take a bow? -- which is why our new Constitution was written later, in 1787, then ratified in 1789. There were a lot of dodgy compromises in confecting the new constitutional document among the thirteen original states, but the resolution of bad sovereign debts from the more prodigal states was certainly an important factor.
abo (Paris)
@William Shaw. A movement towards a federal Europe would help, but in order for that to happen, the UK (which is against) needs to leave the EU. That won't happen before 2016-17. So a federal Europe won't come soon enough to save Greece.
Marc (Columbus, OH)
The US didn't bail out a bunch of reckless banks that made bad loans to Puerto Rico, followed by demanding that the island impoverish its pensioners and slash the safety net to pay the banks off. And the US does - routinely - bail out states that have had difficult economic times with massive internal transfers. We pumped billions into states like Florida and Nevada in the Great Recession - states that would have had catastrophic failures on their own.

When five years of a policy have completely failed it is time to look at a new policy.
Benjy (USA)
Germany's politicians have done a masterful job of shielding their constituents from the truth. This crisis has always been about the amount of the debt write off which Germany's lenders need to take. So far, at least in public, the answer has been ZERO. The cost of any meaningful debt write off will be significant to German taxpayers. The German banking system fosters a close relationship between the public and private sector. Clearly, Greece needs pension and tax reform, but until Germany agrees to a haircut, it will difficult to get a deal done.
Erasmus (Sydney)
Chicken and egg. Clearly Germany needs to accept a further haircut but until Greece implements basic reforms it will be difficult to get a deal done.
Benjy (USA)
But It's not a "Chicken and Egg" scenario. Historically, the typical response to a sovereign debt default is for a country to devalue its currency to buy time to strengthen its economy and pay back their loans. Devaluation this has not been an option for Greece since joining the Euro. Germany's lenders knew this risk when they made their loans to Greece -- now they must pay the price.
Erasmus (Sydney)
Devaluation IS an option for Greece - it could leave the Euro at anytime (a sovereign decision). But Greece wants to stay - it likes the handouts it receives and all those early pensioners want to keep being paid in Euros not peanuts. But Greece won't leave - it wants the Germans to give them more money so that it can meet its repayment obligations. The Germans want to attach strings to any such payments.
Christine McMorrow (Waltham, MA)
"But if the eurozone does not make this relatively small sacrifice now, it will suffer greater losses if Greece defaults and exits from the euro."

In all the articles about Greece, I have yet to read in detail the implications of total default on the entire European (and global) economy. What I know is this: when the Greek crisis seems imminent, financial market recoil in shock, even in the US. Every breathless piece of news warning of total calamity seems to be followed by more of the same.

One would almost think somebody is crying wolf here. The dance of default and pullback is growing old and the more running to the brink occurs, the less urgent crisis resolution seems. As with any impasse, something (and some people) have to give. I fully agree with those who call for sacrifice on both sides, particularly regarding Greek social programs. Because the intrinsic conditions that so heavily contributed to the Greek crisis--a very low retirement age, overextended social benefit programs, and a lack luster economy built on caretaking other people's money (on all those Greek islands with favorable, or even no, tax requirements)--must be changed.

As the French would say, plus ca change, plus ca reste le meme, Something has to give: and this time, it falls on both creditors and the indebted.
John S. (Arizona)
The debtors have paid immensely in this economic debacle brought on the banks and creditors. The political supporters of these wrongdoers have used this ruse of "saving and reforming Greece" to bailout these blameworthy banks and creditors. Remember it was the bad behavior of the banks and creditors that created the economic crisis that has caused such pain and suffering in Greece (and the United States).
JFR (Yardley)
... and that the "bailouts" so far have funnelled money not into Greece but through Greece into foreign banks (esp. German banks). Lots of money is moving around but the Greeks are seeing none of it - and it will only get worse.
hansfritz (germany)
'Remember it was the bad behavior of the banks and creditors that created the economic crisis that has caused such pain and suffering in Greece (and the United States).'

No excuse for Banks an bankers neither in the US or in Europe but you also have to remember that the European creditors are dealing with a country which was ruled by one of the worst Oligarchies in Europe. The Rich Greek Rulers who plundered their country and now successfully have nearly taken all of their bounty oit of their homeland even didn't manage to install a comparable social net as in othere European States in their country - and then adding insult to injuries they used children and the despicable situation in hospitals to exploite their own poosr.
D. Korda (Greece)
A note on Greece's unemployment statistics. When shops close and businesses fold, their proprietors are not included in the unemployment statostics, which only track private and public employees. The real unemployment figure is between 35 and 40 percent, and rising all the time.
JFR (Yardley)
The EU (and the World) should think of the magnificent heritage and antiquity Greece (and, similarly, Italy) holds. It's worth some effort on our parts to help
these damaged states. There is great value there, let's do what we have to do to preserve it.
wrd9 (USA)
The Greeks and Romans are a mere shadow of their former greatness. Greece and Italy(as are Spain and Portugal) are now populated by people who engage in mass tax evasion and the shadow economy. They don't have the mentality of the law abiding and industrious Germans or Swiss. There are white elephant projects strewn across Italy and Spain built with EU money due to incompetence and corruption. Only 25% of Portuguese students graduate from high school. How can one have a successful economy with such a low graduation rate without resorting to massive transfers from the productive northern Europeans? This is why southern Europeans are derided. It's all well and good if they want to continue their corrupt cultures but they shouldn't get subsidies from the EU unless they implement reforms.
Scott Holman (Yakima, WA USA)
As I recall, the root of Greece's problems with debt came from understating what it owed so that it could get into the Euro zone. I don't know how to go about lying about banking matters, but apparently, someone in Greece did. So, they got into the E.U., but their lies caught up with them.

Kick them out of the European Union, cut them off from borrowing, and tell them that they created this problem, so now they have to find their own solution. Write off the existing debt as a bad investment, and prevent any lending to Greece for the next 25 years. Let them have their own currency back, but refuse to accept it for payment outside of Greece. Payment must be made in goods or services.

Greece will survive. The E. U. will survive. A lot of financial speculators will lose their butts. The world will go on. A re-accounting is needed, instead of just kicking the can down the road.
Cormac (NYC)
@Scott Holman said:
" I don't know how to go about lying about banking matters, but apparently, someone in Greece did."

Actually, it was someone, or several someone's, in Berlin and Munich, and Brussels, and Paris, and New York (Goldman Sachs) who did. He connivance of the banking and political elite of the EU in falsifying the books to ensure that Greece was in was one of the reasons the current creditors bailed-out the private lenders in the first place.

The Greek establishment weren't the only conspirators. Their allies in the rest of Europe helped. Now that the Greeks have thrown off their pals for an outsider reform government, only the creditor side of the table still has institutions with responsibility for that fraud.
redmist (suffern,ny)
I'm really not hearing what the social impact would be if Greece defaulted and withdrew from the euro. Will hospitals and schools function? Will pensioners starve? Will general chaos ensue?

Isn't the key what solution provides a social safety net for the Greek people?
aybeevee (New York, NY)
Cormac (NYC)
@redmist asks:
"Will hospitals and schools function? Will pensioners starve?"

Actually, that is happening right now under austerity in Greece. Greece has already paid an economic price for the current "relief" perhaps unparalleled in modern history. The debate is really over how much worse it will get and which path minimizes the pain.
Jimmy (Greenville, North Carolina)
The only answer that I can see is to make Greece the 51st state of the US. Greece would be ideal for some large military bases. And they have some great ports.
M (New England)
Let them out of the euro and then write off the debt. And move on with life.
Prometheus (NJ)

Greece is the U.S. in 20-yrs.
N B (Texas)
Especially if tax revenues fall due to underfunded enforcement. IRS enforcement collects $6 for every $1 spent so of course the mathematical geniuses in the GOP cut the IRS budget to punish. I'd love to see the IRS audit every House and Senate member Demo and GOP alike.
John S. (Arizona)
Since this economic crisis began, there has been an all out effort to enslave the Greek people to the nation's creditors. This enslavement of the Greek people has been commonly known as "reform," but this "reform" has been an attempt to control a nation by stripping it of its natural worth and vitality through the application of an onerous credit system.

This oppressive credit system is one in which the failures of the creditors' judgments are rewarded by the economic enslavement of the debtors. These creditors wish to have the rewards of risk taking with the concomitant penalties for faulty decisions.

It is very much like what happened in the United States. the banks that reaped the immense profits from their risky behavior were bailed out by the taxpayer when that risk-taking backfired. Conversely, the average American citizen was punished for the misbehavior of the banks.

Perhaps what the European creditors fear the most is that Syriza and Prime Minister Alexis Tsipras would be a tyrant in the ancient, non-pejorative and non-oligarchic meaning of the word. Greek history is replete with saviors of the nation who rejected intolerable economic and political policies.
hansfritz (germany)
'It is very much like what happened in the United States.'

In the United States 'the banks that reaped the immense profits from their risky behavior were bailed out by the taxpayer when that risk-taking backfired.'

In Europe the banks 'reaped' no profits from no risky behavior -(as all the loans were for customers = countries which were ironiously the highest rated by US -(the only) internationl credit rating agencies.
Besides in Europe there was debt forgiveness for Greece alone of 100 Bill and the interest rates and conditions of loans are very favorable for the weaker party.

So the European and the US situation is actually NOT comparable AT ALL.
JPE (Maine)
Greece today, Illinois tomorrow. Public pensions that are over promised, rewarded too early and notoriously under-funded lead to disaster. And they expect others to rescue them. Who could ever believe a commitment made by any Greek government?
William M. Shaw (Shreveport, LA)
Slush funds to buy elections. I have too many relatives who retired from "civil-service" dead head jobs at age 50, having been promised expensive non-contributory pensions out of general tax revenues, to be too outspoken on our public profligacy.

But ... but ... I played musical chairs when young. And I read Carlyle on the French Revolution, which is well worth a re-read.
B. Rothman (NYC)
Yes. The Illinois workers did their part. They paid into the system; it was the state that defaulted on their contractual agreements. And when you don't collect from those who can pay taxes you move down the food chain to those who can pay but with more and more difficulty -- increasing the resentment toward gov't but letting the businesses escape payment through the back door.

The best system provides jobs and we have been struggling back to the job support system since Obama first took office. We were hemorrhaging jobs before then. When you use H1B visas to import cheaper workers and let go of your citizen workers who then claim unemployment or perhaps more long term support, it is helpful to the business bottom line but it eats into the social and economic cost within the nation. (That's back door business support.)

Start where you will, we live in a closed circle of economics: your spending is my income; your cutback becomes my loss either through a lost job or collectively through increased use of government (communal) funds. The party escaping the system now is the business that benefits from special government laws that reduce its costs through lower taxes and/or reduced labor costs. The party paying all costs is the public. We don't have enough jobs for the people we have now and waiting for the job creators is like waiting for godot. Education is not a solution. Disney imported and replaced highly skilled and educated workers not field or factory workers.
pcohen (France)
Apart from the weirdness of the EU policy towards Greece it shows very clearly the unholy foundation of the euro.The combined governments of the euro zone simply do not know what to do about a crisis their euro produced.They had no clue what they started when rallying for the euro, and they still are acting like a bunch of amazed chickens. In the meantime the citizens in Europe can see a whole people ground to ruin while the europhiles do everything to 'rescue' the euro (source of the problem) and above all their own banks.
Nations like Italy or France are not and will not be really at ease inside the euro and imagine what EU brass has in stock for them when serious problems appear. We have a financial crisis in Europe but far more important to reflect upon is the devastation the leaders produce in their utopian haze.
hansfritz (germany)
on the other hand the Euro - the common currency - is the great tool to correct some very nasty habits - like corruption or the rich mans Oligarchy.

No better tool to finally come up with the motivation to make ALL of Europe a very promising continent for the future.
Juanita K. (NY)
Greece should have cut down on tax evasion years ago, but refuses to. This "relatively small" sacrifice that the NY TImes expects the banks to pay? How much does the NY Times expects banks to pay so that tax evasion can continue?
Glenn Sills (Clearwater Fl)
So should the United States but we Congress has been underfunding the IRS for years for obvious political reasons. Some things are easy to talk about but harder to do.
Mark Thomason (Clawson, MI)
We too allow our wealthy to write tax laws that don't include them paying their share. That is the fundamental problem in Greece, not the little guy's evasions (yes, they happen too) but that they system is designed not to reach much of the money from those most able to pay, who ride high on the system and collect the corruption.
wrd9 (USA)
I don't see Syriza going after the wealthy elites. If Syriza was really interested in social justice then they should have been confiscating a large portion of wealth from corrupt politicians and business people. For solidarity with the Greek people. There is none of that going on. Syriza just wants more handouts of other people's monies.
D. H. (Philadelpihia, PA)
DANGER AHEAD! Beware humiliating a country! Let's not forget what happened in Germany after her defeat in WW I. Forced to accept humiliating conditions at the Treaty of Versailles, her economy spun out of control into a nosedive, resulting in hyper-inflation, a time when a wheelbarrow full of bank notes was required to purchase a loaf of bread. In order to escape the ordeal, the Germans were vulnerable to the depredations of of the lunatic Hitler. We all know what happened as a result of their humiliation: WW II. The price of the second unspeakably brutal second world war was inestimable in the toll it took in lives and in depraved, savage actions by the Nazis. Lurking in the wings in Greece is a NeoNazi party. Beware destroying Greece, lest we push her people into the arms of a home-grown Hitler! The world can scarcely afford a WW III.
Sonja Helmich (Germany)
Well, Little Greece would hardly attack the NATO.... Greece is member of EU and is supported with about 4 Billion Euro per year. Since 1985.
Jon Davis (NM)
Greece may have no choice but to align itself, at diplomatically and economically, with Putin.
wrd9 (USA)
Ain't going to happen. The Greeks are more likely to get drunk on ouzo.
In every home & school,children should be taught the pitfall of unbridgeable debt.
No amount of financial jugglery can erase the simple fact:Greece ain't in an capacity to pay back its loans,interest.....
Till,Debt do us apart,the moral of the story is lend wisely to bogus borrowers.
Lend at your risk & when borrowers default spare us readers the agony of hearing a sob story oft repeated.
Mark (italy)
Your are absolutely right, very person should understand the dangers of debt and it should be a mandatory subject in school.
phil morse (cambridge)
What would Zeus do?
delaxo (Athens)
Privatize Olympus, of course.
delaxo (Athens)
Privatize Olympus, of course.
Jimmy (Greenville, North Carolina)
"......forgive the debt......."

That is certainly a noble thought which I hope will catch on everywhere. However, the very idea of lending will have to be changed. I'm pretty sure we would all like debt forgiveness. The Lord may forgive us but the banks are something else altogether.

When there is no punishment for reckless actions those reckless action continue. And get worse sometimes.

Pay the piper.
delaxo (Athens)
Could we check the bill before paying?
Cornflower Rhys (Washington, DC)
In modern banking, I'm pretty sure that the bankers calculate potential losses into the price of credit. Come on, they have themselves covered. They'll be OK, but a pensioner with no job prospects who is entirely dependent on a government pension to survive has no options and may well not be all right if the pension is cut below a subsistence level.
Mark Thomason (Clawson, MI)
"When there is no punishment for reckless actions those reckless action continue."

Equally true of those lenders who make bad loans. All the loss from the transaction need not go to just one side. Both had open eyes and knew the score.
Jon Davis (NM)
Regardless of who is most to blame, the EC brought some this on itself and must offer Greece real assistance.
Tom Paine (Charleston, SC)
"Greece will most likely default on its debts and would probably be forced to abandon the euro." The Greek crisis has the feeling of a slo-mo train wreck. Sometimes there are only "bad" choices and one has to choose from them. The above should be that choice.
CBRussell (Shelter Island,NY)
The Eurozone...has not come to terms with more than just a joint
economic status...The Eurozone should become a political well
as an economic zone...a Federation of European States...and this..
is the Last Step for the "Eurozone" to becoming a "Eurozone Federation"\
a economic....and political state...
Debt the precursor to what the 19th Central Bankers resolved.
with drastic measures...outcome is devastating...WWII..for example
because of Reparations...and this can be avoided by making the Eurozone
a Federation...
Sonja Helmich (Germany)
it's just that the majority of EU citizens do not want federation.
Raymond (BKLYN)
A zombie state is the product of 1) brutal austerity measures insisted on by creditor banks via their politicians, 2) corrupt lending practices by the banks to circumvent regulations, a practice guided by investment banks – in Greece's case, by GoldmanSachs which, for its scheming, received the largest advisory fee ever, well over $300,000,000. Any of these bullying institutions looking to claw back that fee from GS? Heaven forfend.
RS (Philly)
The GS fee was part of a contract.
Peisinoe (New York)
Brutal austerity was due to brutally expensive pension system the country could never afford.

Greece has been living way above its economic production and somehow they fee entitled to it - they even believe other people should pay for it!

As Thatcher would say" The problem with socialism is that you eventually run out of other people's money.
A. Taxpayer (Brooklyn NY)
They have assets they can sell to pay the debt
delaxo (Athens)
And they can sell their kidneys and other organs too.
That will certainly teach them.
mingsphinx (Singapore)
Debt forgiveness in exchange for Greek reforms? The 2012 Memorandum was supposedly about lenders writing off debt, fresh funds from supranational institutions going in and Greece promising to reform itself. After getting the funds, the Greeks simply refused to do what they promised and have instead created another crisis in order to demand more money. You know what they say about people who get fooled twice right?

There is a widespread misconception which seems to have deep roots: people think (like the Times does) that Europe has much to gain from keeping Greece in the euro. Whilst it is true that there are benefits to Europe in retaining Greece as a member of the euro, there are also costs involved. As things stand, the costs to the rest of Europe of Greece's membership are not only enormous and open ended (think pension and healthcare benefits of early retirees), they outweigh any benefits that Greek participation brings to the table.

In other words, it is not worth it to keep Greece in if they will not implement meaningful reforms to reduce the cost burden their membership entails for the rest of Europe. But those reforms are not possible even with a government that wants to implement it because the Greeks will not accept them. It is even less likely with the Syriza government that came to power opposing just such reforms.

It is wrong to bully the rest of Europe into giving the Greeks anymore money when so much has already been given and then promptly wasted.
pcohen (France)
I disagree with your perspective.The Greeks did not 'waste' the money they received as loans from IMF or ECB, they used it to pay the banks that loaned previous governments hallucinogenic sums. Creating a viable economic future for Greece is a different matter altogether. Greece came out of WW2 as a pseudo feudal state,with an elite that makes the maffia seem endearing. No one is helping the Greeks, the EU is helping only itself and has zero qualms about the costs. Constructing the Greek population as 'the cause' of the current problems is not only lack of knowledge, but in itself a cause for further mismanagament.
hansfritz (germany)
pcohen wrote 'Greece came out of WW2 as a pseudo feudal state,with an elite that makes the maffia seem endearing.'

And he is right: No one wants to help this 'mafia' again and the problem the other European countries are facing - is trying to help 'the Greek population' - and NOT the Greek Mafia -(again)

And as both are 'Greek' - NOT constructing 'the Greek Mafia' - as 'the cause' of the current problems is lack of knowledge.
jamie baldwin (Redding, Conn.)
Maybe, but Greece is in the EU. It's departure would suggest that the EU isn't the capable, functional system it's supposed to be. This problem can't be solved? Because...?

What, exactly, have the Greeks "simply refused to do" and to what extent is the alleged refusal responsible for the economic depression that has resulted since the agreement of 2012? If a pump stops working you can get mad and hit it with a hammer or you can prime it. Which approach works?
hansfritz (germany)
'Greece and the other countries in the eurozone are once again at an impasse days ahead of a crucial deadline.'

Yes - and the usual European compromise will come in the last minute - as in this case a corrupt system puts up the utmost fight to be reformed.
And I'm not talking so much about Syriza - I'm talking about such an ingrained sytem where that even well meaning Greek reformers couldn't overcome it yet and in a ironiously way needed all the pressure applied by the other Europeans to finally get a completely corrupt system under control.

And it might take another generation and so long other European will have to keep paying for Greece - which is all worth it - for the concept of a peaceful United Europe.

And if the Anglo-American World would stop constantly questioning - a without question 'stressful process' - with utmost hyperbole -(as is the custom in the US) - it might help a lot.
RDG (Thuwal)
Has anyone considered if Germany and Greece should even still be in the same economic union sharing a common currency. The evidence seems to say, "bad mix".
ritchie (Europe)
Greece is simply the most unwilling State you can deal with! - that is the problem and this goes down not only to their Government but 99% of the Greek people resist the idea of doing anything in their State. The just do not want to pay their debts, they still want early retirement with comparativley hight pensions. The State has no funcioning Bureaucracy etc. They do not want help, hints, suggestions. Extremely difficult for the EU to deal with such a Zombie State indeed.
N B (Texas)
Pensioners and Greek government workers are getting paid pennies on the dollar of what is promised.
wrd9 (USA)
If the Greeks had paid their taxes and battled corruption then this wouldn't have happened. They have only themselves to blame. The EU can't keep supporting people who refuse to face reality and lack a will to change. They need an even bigger dose of reality, a Grexit.
tbrucia (Houston, TX)
Getting agreement is one thing. ("Tsipras must agree to changes that would increase tax collection, make the government more efficient and to boost economic growth by making it easier to start new businesses.") -- Getting the Tsipras government to actually do these things once they have the money is another thing.

If the eurozone makes relatively small sacrifices now, it can expect to continue making small sacrifices as far as the eye can see....
btb (SoCal)
Greece WILL exit the Euro and the world will go right on spinning.
G.T. (Edmonton)
Correct, except that Greece will spin into the orbit of the Russians and the EU/US/IMF/ECB consortiums will have none of that. The common taxpayer (you and I) will continue to prop up the Greeks whether we like it or not. I imagine, too, there is good in helping a neighbor (whether we like Syriza or not) in a time of need.
William Burdumy (Marburg, German)
Greece should never have been given a loan in the first place. Greece was already a failed state, before the the crisis began and will never pay these loans back. Anyone who has ever been to Greece or had contacts with Greeks, can understand what I'm saying. The only sensible course of Action is to let Greece default and get out of the Euro and then let them solve their problems themselves.
delaxo (Athens)
After Greece gets out of Eurozone, Greeks should express their gratitude to all those honest philanthropists that rushed in their rescue, motivated by a genuine altruistic care for the wretched country.
delaxo (Athens)
Zombie vs. Vampires: a tough struggle.
Tony T. (DC)
Nobody is forcing you to take their loans, you know. Vampires? Just simply walk away, then...
delaxo (Athens)
Great advice to "simply walk away"!
But the Eurozone quicksand makes that difficult.
Greece is a sitting duck at the mercy of vultures...
Cormac (NYC)
Not accurate. The Troika acted like of sharks: take our loans at our terms and with our conditions or we'll destroy your economy, plunging you into poverty, misery, and violence. It was the classic, slow-ruin or fast-ruin offer of the thug.