Greece and Creditors Move Toward Deal, and Investor Optimism Surges

Markets responded after the government agreed to meet most of the terms demanded by its creditors and requested a bailout as a starting point for talks.

Comments: 102

  1. I was pretty sure that Greece should exit the Euro . . . that is, until Paul Krugman came to the same conclusion. Obviously, I needed to rethink this. What Greece needs is a plan -- and here it is: a fire sale. What resource could Greece sell and not deplete itself? Greece itself! Greece has history, coastline, cuisine. Dear Greece: Offer discounted flights to Athens, free entry through your ports, when you run out of hotel rooms encourage your citizens to list on airbnb -- then let the tourists help pay your debts. We do it here in the USA -- we call it Florida.

  2. They already suggested this the last time Greece faced a crisis. Greece's ruins could be sold off and I'm sure just a couple would be worth more than the money Greece owes (IMO).

  3. Well, it looks like the bankers win again. It sure must be nice for investors and creditors to know that their investments will always pay off. I had thought that there was risk involved in investing. What is that phrase about socializing the losses?

  4. Apparently, you either did not read, or do not understand, the article. There will will debt relief, including principal write-downs (again). So it is simply not the case that these "investments will always pay off."

  5. How much of a principal write-down?

  6. You call a $60 billion new bailout "as a starting point towards debit relief" a win for creditors?

  7. And, they tell me my vote counts.

  8. What does that mean? If tomorrow we had a plebiscite here in the US on the question of whether everyday should be Saturday and cake should not be fattening, would you expect the inevitable "yes" vote to "count"?

    Democracy is always constrained by reality.

  9. Everyday got to be a cake filled Saturday for the holier than thou Germans when after killing countless numbers of people in two world wars they had their debts forgiven.

  10. And interests. Whose interests? You guessed it.The same story over and over. Capital always wins. It ALWAYS calls the shots.

  11. Question for all the people, including Greeks, who say that "the greedy creditors took a risk when they loaned Greece money, and should be prepared to lose their money" - based on that logic, no country's taxpayers should now be asked to provide further loans to Greece. Are you ready to live with that logic? Or does only apply when payment is due, not when loans are made?

  12. Yes, I think Greece is only deserving of humanitarian aid at this point. Giving money to Greece entails a huge risk - you can still take it, but just realise the risk you're taking and price the interest accordingly. This is how life is supposed to work.

  13. Mississippi, Alabama, Louisiana, Arkansas, West Virginia, etc finances are similar or worse compared to Greece. The United States government supported our southern states with money after the Wall Street debacle of 2008.

    Europe problem is not financial - it's mostly political.

  14. Lenders are supposed to exercise due diligence. No one forced them to make loans. Out financial system is supposed to depend on shrewd bankers making loans they believe will be repaid. Apparently you don't have much of a brain to be a banker because you government will help you get your loan repaid by forcing repayment.

  15. While investors celebrate Greece capitulating to Germany and the EU, the 800 pound Gorilla, called China, will make Greece look a grain a sand on an expansive beach. For now the Euro, and EU, are safe. No other nation will attempt to do what Greece did. Fear has been sewn to keep the Euro Zone together.

    Meanwhile, the Chinese government cannot stem the drop in their stock market. Or, the flow of money out of the country into foreign real estate (the US, Australia, to name two). The government overextended itself with massive building projects, and the Chinese wealth has been invested both domestically and foreign. The Chinese stock market bubble has burst, and soon that will send shock waves around the world.

    The Chinese government reaction? Go back to tried and true "central planning". Let Marxism be their guide. This alone has sent shivers in other Asian and Pacific markets. Australia and New Zealand are in recession. South Korea, Singapore, Malaysia and Japan are not far behind. For the US, this means very soon breaks will be applied to its own so called "recovery".

    Yes, the EU put Greece in its place. Investors in the US and Europe are elated. Just how long they ignore the Chinese situation is uncertain. But, the "largest casino in the world" (Chinese stick market) is about to go bust.

  16. All true, but there is an even bigger problem of the same sort. During the time China's stock market formed this bubble, the US stock market went up even more. At least China had some growth to back the increase in stock prices.

    Worldwide, stocks went up without growth. It was a place to put money when other places paid nothing because interest rates were zero, but a bubble is a bubble whatever the reason.

  17. I agree, as the other "largest casino in the world" (US Stock market), will quickly follow China when it comes to bubble's bursting. There is a reason why real estate has been going up double digit percentage rates lately; So, a new housing bubble is forming, because of low interest rates and investor speculation.. And when that bubble bursts a lot of people both in the US, and other places, will have a rude awakening.

  18. I am very much afraid Greece is the canary in this coal mine we are in, and it is going to get very ugly now the canary has died.

    The options to trim and pretend and fake it are running their course, and reality looms. There has not been growth. Assets have been re-distributed upward to enrich elites instead of distributed productively to produce growth in demand and the production that responds only to demand in the Western world.

  19. Greece is just negotiating to see how much more they can rip off Europe in its desperation to be married. Don't fall for it, Europe. Don't play the sucker on a continuing basis. You don't need this guy.

  20. Think of the Great Depression with no FDR, and no chance of an FDR because they are straight-jacketed in the euro.

  21. I'm not quite sure what good raising tax rates will do given the fact that Greece doesn't collect the taxes as it is. It would seem actual collection should be a priority. But it looks like Mr. Tsipras has finally accepted reality. The greatest irony is that Greece could rebound quite quickly and amazingly, in my opinion, if they were to open up their professions and get rid of the bloated system of graft and bribery required to start and/or run a private business. In the end Greece has created these problems, and really, only Greece can solve them. These loans just buy them time. Ultimately they have to decide between being in the same situation 5 or 10 years from now or changing.

  22. As long as investors get paid off; there is no crisis. Worked in this country.

  23. I think Angela Merkel should now put it to the German people in a referendum as to whether their government should loan or allow their banks to loan more money to the Greek government.

  24. A well-meant suggestion, but in Germany, if referendums are held at all, it is only at the local or municipal level, never at the all-important national level. Politicians take the view that the people are there to be ruled by democratically elected representatives, not to actually be heard or even be allowed to take part in the decision-making process itself. The assumption is that the people don't know what is good for them, only the politicians do. However, in a case such as a referendum on Greece, we could save ourselves the time simply because the naysayers would win hands down. Guaranteed.

  25. This is not a German decision to make. It's a EU decision to be made.

    This is not Greece vs. Germany as so many Germanophobes and apologists for Greek corruption want us to believe.

  26. Why? As we've just seen by the 'no' vote in Greece, the politicians and bankers do exactly as they please despite what the people tell them to do.

  27. Funny, it sounds like the Wall Street Journal regulars are visiting every the topic of Greece comes up. What's wrong, your hedge funds underperforming? When a debt is unpayable you write it down or write it off. Historically this has been the best answer time and time again, as was written up in these pages quite nicely. Does it bother you that much that you would rather make a bad economic decision, than when in your opinion someone gets away with something you find objectionable?

  28. Those who do follow Wall Street know the first rule of lending is to never throw good money after bad. The loans to Greece are uncollectible; why lend them more money?

  29. This is not a solution to the Greek debt crisis. This plan amounts to just kicking the proverbial can down the road that is already heavily littered with lots of cans.

    Yep, and with this potential agreement Greece will be doomed to become a welfare state living off the generous aid … err loans … of the Euro Zone and the IMF for at least three years … meanwhile Greece will be obliged to carry a larger debt load with no potential to ever fully repay creditors in future.

    This was made worse by the fact that the governing Syriza party lied to Greeks after winning a resounding “No” vote for no new austerity measures in the referendum of last Sunday.

    The only guarantee that will result from this potential agreement is that Greece will become poorer and in need of additional support in future.

    The future of Greece is more uncertain than ever.

    And investors are increasingly optimistic about Greece winning this Ponzi Scheme !?!?

  30. Hopefully this will resolve the current dramatic impasse that threatens to dissolve the European Union and condemn a whole generation of Greeks to recession and unemployment. For the "final accord" to be useful or effective, it will need to include significant debt-relief. There's now way out of a haircut for creditors. Anything else, no matter how deep the reforms proposed, will have us back to this discussion in matter of months. Let's solve this thing once and for all.

  31. Let's keep in mind that the proposed "new loan" of 53.5 billion Euros is to be used largely or entirely to make payments on Greece's outstanding debt as those payments come due. Assuming that's true, and further assuming that Greece would otherwise not make those payments, the lenders won't really be out any "new" money. They'll hand 53.5 billion Euros to Greece, which will promptly hand them back.

    Only to the extent -- if any -- that Greece is allowed to use the new 53.5 billion Euros for purposes other than payments on Greece's outstanding debt will that 53.5 billion Euros really be a "new" loan.

  32. If this is the case, why the charade? Why not write down the debt and stop lending more? Or the even more relevant question - Why would Greece agree to such a "bailout?" They've already stopped paying their debt. If they receive no benefit from the new money, why borrow?

  33. We have the same system is the U.S. Privatize the profits and socialize the risk. Lend money (no point in due diligence profits guaranteed), squeeze the Greeks, use the money lent to pay yourself back, squeeze the Greeks some more, lend them more to repay what was just lent, tell them how to run their country since they obviously can't, impose a macroeconomic system that doesn't work, and tell yourself how wonderful you are.

  34. Defaulting on ECB held debt would cause the ECB to stop lending money to Greek Banks, leaving Greece with the only choice of switching to Drachma to keep its Banks open.

  35. They could have had this months ago. Who is paying for all the time that highly paid government officials of the other european countries have wasted on the greek shenanigans instead of dealing with their actual jobs?

  36. German Dude- who is paying?

    You are.

  37. Until the next round, still deeper in the hole. I'm profoundly disappointed at the Greeks who negotiated this disaster--particularly after the referendum. And where are Varoufakis' comments? The justifications? The more things change, the more they stay the same.... Remember the early 20th century days of "gun diplomacy"? Countries do not pay, Europeans (and US) just sent the navy in to occupy the customs office of a little nation and pay themselves off (they did so in the Caribbean all the time). That was called no risk loans, your country's navy backed bankers. This was a bit subtler. Economic artillery. I just wonder why the Greeks complied and prolonged the agony and the war. The Brits were smart keeping control of their currency and not joining the Eurozone. This brought to full clarity.

  38. Mr. Tsipras and Ms. Merkel should solidify their deal by having Mr. Schauble and Mr. Varoufakis --the two fire-throwing dogged ministers-- head a new anti-tax evasion task force, to get those taxes into the Greek (and German) treasury.

    This should be, most certainly, an effort of the two nations because the Greek oligarchs have camped the fruits of their tax evasion in the dominions of Mr. Schalube, i.e. Germany, Switzerland, and the rest of the eurozone.

  39. "I'm not quite sure what good raising tax rates will do given the fact that Greece doesn't collect the taxes as it is."

    I read (quickly -- it's long and technical) the actual Greek offer (posted elsewhere by the Times). On tax increases and tax collection, I noticed there were several proposals to crack down on "farmers." One wonders, of course, how Greek farmers will feel about that. But it also suggests the Greek government considers it more convenient simply to increase taxes on groups that are already paying taxes and whose income, presumably, can be detected more easily than the income of the tax scofflaws.

    I don't know what, if anything, can be done to ferret out the untaxed income of some wealthy Greek who's got it squirreled away in foreign bank accounts. But if that difficulty induces the Greek government to focus instead on squeezing more tax revenue out of those Greeks who already are paying their taxes, I'm not sure that's either fair to those tax-paying Greeks or likely to produce much in the way of additional tax revenue. My hunch is that Greek farmers (for example) are already pretty strapped. Taking away their subsidy for diesel-oil taxes (for example) may hit them pretty hard and probably won't add much to the bottom line.

  40. How can the Greek electorate who voted Tsipras in & then so ardently voted No last Sunday not want a change of government?

  41. Sounds to me like the bankers will be made whole (although in a longer time frame than they would like), state assets--which means assets belonging to the people--will be sold off to the profiteers, and the working poor and pensioners will pay the bill. I don't think this is what the ordinary Greek people had in mind when they voted No.

  42. I really wish people would get past this "bankers this, bankers that" stuff. THIS IS NOT ABOUT BANKS (unless you're referring to the German and French taxpayers making sure the Greek banks don't collapse tomorrow, which I somehow doubt). Ten percent of the money loaned to Greece is from the IMF, 65% is from taxpayers of other European nation-states. The people being made whole (IF Greece pays these loans back) will be other working Europeans, NOT BANKS. And these "poor pensioners" you speak of - one lady was profiled in another NYT article; she retired at the age of 53 from a state-owned Greek bank. Now she's fretting about her pension being cut! Are you blessed kidding me?!? The populist nonsense and mythology about what's going on in Greece is just astounding.

    How about this: we give the Greeks their "no", the working taxpayers of Europe take a loss of a few hundred BILLION dollars, the Greek banking system collapses, and instead of unemployment being 25% it will be 50%, and the Greek pensioners will get ZERO, because Greece ain't got no money. Would THAT make you happy?!?!

  43. It seems that you're not hearing the sounds correctly. "Evil" bankers got 75% haircut in 2012 bailout (53% in face value, the rest on lower interest rate and extending maturity of the remaining debt):
    http://money.cnn.com/2012/03/09/markets/greece-creditors-default/

    The massive write-off in 2012 resulted in no serious reform in terms of tax collection. Greece just experienced a positive economic growth in the second half of 2014 which thanks to Syriza gov't was totally erased in 2015.

    Debt write-off is only good for growth if it comes with strings attached and reforms to not repeat what caused the default in the first place. No sign of that in today's Greece, alas.

  44. If the state assets being sold had in fact been profitable, they would have produced a surplus that would have saved the budget. The 'profiteers' you denounce are taking a big risk and may, like others who trusted the Greeks end up losing some or all their money.

  45. Comments like this one ignore a very important point:

    "When a debt is unpayable you write it down or write it off."

    What you overlook is this:

    When you have to write off an asset that you've paid cash dollars for, you'll think long and hard before buying that asset again.

    Few investors will buy bonds issued by a borrower who defaulted last time – especially if the borrower last time described its creditors as "terrorists" for asking that the borrower honor its promise to pay. Those who will lend to such a borrower will demand much higher interest rates, and possibly collateral. By contrast, borrowers that pay when due will be able to borrow at much lower interest rates and may never be asked for collateral.

  46. You are correct. Lenders will think twice or demand a high premium to lend to Greece. Under the current system they effectively have no risk because the euro zone guarantees their loans will be repaid. I am anxious to get into this business myself since it seems like a no risk way to make money. Lend at "high" interest rates because of. "high" risk and yet there is little risk.

  47. Except , people who complete bankrupcy are chased by lenders. Why? The slate is wiped. Reality lenders are willing to go/duped? By the same governments , people over and over. A write off does not bar credit, realistically it enhances it. Rightly or wrongly.

  48. HJR,

    "Except , people who complete bankrupcy are chased by lenders. Why?"

    They're chased by lenders because (1) US bankruptcy laws prohibits them from declaring bankruptcy again for at least 7 years; and (2) when they emerge from bankruptcy, they have no other debts.

    Countries can't declare bankruptcy. Then can only default. And they can do that without any waiting period between defaults.

  49. Some day it will be noted that our profligate society continually delayed the day of reckoning for irresponsible countries states, cities and even individuals until irresponsibility became epidemic (having been rewarded repeatedly) and it ultimately all came irretrievably crashing down.

  50. As far as I'm concerned, this is simply kicking the can down the road. How can Greece be expected to repay a quarter of a trillion dollars over ANY time frame when its economy has contracted by 25%, unemployment is hovering around 25%, and young people, the future tax base, are departing seeking better economic conditions? Per usual, politicians are putting self preservation before the long term common good.

  51. How will cuts to pensioners and tax increases in a depressed economy stimulate the economy. It simply reduces consumer demand. This all designed to pay back creditors.

  52. We know for a fact that government spending and payments do not stimulate the economy. If they did, Greece would have the world's healthiest economy instead of the sickest

  53. You're right. Clearly the better solution would be to immediately double all government spending, including government employee salaries & pension, and halt all collection of taxes.

  54. Well how nice the stock market crowd can get even more returns. However this is just kicking the can down the road one more time. So the collapse of Greece will be delayed for 4-6 months and we will be right back here having the same discussion. The best thing for Greece is to return to their own currency and get off the Euro, and then to gradually implement reforms. There would be a lot of short term pain but each time you delay the inevitable the sale of the pain that is coming increases.

  55. Haven't they promised this before, many times? What's new that we should believe Greece will finally get serious about their corruption, which is very deeply ingrained in their national psyche by now?

  56. It's time for both the EU and Greece to recognize reality. For the EU, that means writing off the loans to Greece. (Sorry, EU taxpayers.) For Greece it means no more borrowing. Time to live within your means. Whether or not Greece stays in the Euro is a sideshow.

    It's interesting to note that this option is within Greece's power. They've already stopped paying their debt, and the only major effect of that action is an inability to borrow. The fact that Greece is so desperate for a deal says they need a bailout, even beyond the cash necessary to service their debt.

  57. Typical left-wing capitulation to the money men. How sad.

  58. It's all smoke and mirrors.

  59. Go there and live with it, then say smoke and mirrors.

  60. I wasn't talking about the real hardships of the people affected. I cannot imagine how hard it must be and hope never to experience it. I meant that the world economic system is built on fairy dust. And that means we are all in it together, and all threatened.

  61. Tsipras really drove a hard bargain. Good to see Yannis signed on to the new proposal. They must be very proud of what has been accomplished since they walked away from the table. Who needs banks and a somewhat functional economy when you have good weather !

  62. Time for Greece to face and live in reality for a change, do something about yrou spending, your pensions and your corrupt government, how many more times can they expect other countries to foot the bill for their excesses? It already put a financial strain on the other EU countries involved. Thsi shoudl be the final straw no more bailouts. As Yogi Berra once said, I'll see it when I believe it.

  63. Did you object as well when Germany's debt was forgiven in 1953 thus making possible what became "the German miracle"?

    Would you object if your social security was slashed by more than half (as the previous Greek govt was forced to do by outside creditors)? Would you object if the reason lied in the manipulations of Wall Street? (yes Goldman Sacks among others were involved in creating the Greek crisis and made huge profits out of it). Where was the moralizing when our major banks held the US economy hostage? We just bailed them out with hard working taxpayers' money while their top executives still got multimillions in bonuses.

    The global financial economy has become so complex that very few people understand it. We can only see the results. In the US as in other countries, the few that form the financial elite have substantially increased their wealth while the wealth of the middle class has been diminishing. Not as fast as it did in Greece but still pretty fast. Since "money doesnt grow on trees" simple arithmetic tells us how this is happening.

    Our financial inequality matches the one the US and the world faced in the 1920s. Remember the WWII that resulted?

    Austerity in Europe has lowered the GDPs of the ountries that fell for it and encouraged extreme right wing parties. Capitalism doesn't work for the people unless govts insure that money keeps on circulation instead of accumulating and remaining idle at the top (for ex. in the Cayman Islands!)

    THINK.

  64. Anyone who is capable of thought knows that austerity was working in Greece, until the loons at Syriza took over. Any thinking person already knows Social Security will be slashed because it is a more unsustainable Ponzi scheme than Greece. Every thinking person knows that weakness was the cause of WWII, income inequality played zero role.

  65. Frau Kanzlerin Merkel: "We are all Europeans but some of us are more European than others."

  66. Mr. Tsipras: "We are all Europeans but some of us do not need to repay our debts. Or pay our taxes. Got it? 'cause now I'm on another break, and then it's time for me to retire."

  67. Well, if the 'markets' are up, the deal must be good, right?

    When did stock markets (termed 'legalized gambling' by many financial analysts) become the be-all-and-end-all measure of the national / world economy? What ever happened to quaint measures like GNP, standard of living, number of people living in poverty, or share of income by all sectors of society?

    PS: For insight on the Greek economy and its impact / implications on the rest of us, see Paul Krugman's column today.

  68. Krugman has no say in the Greek situation, they spend and borrowed just like he told them to, and you see the bankrupt nation that Krugman's ideas created.

    Yes, the markets are right. The markets represent the decisions of hundreds of millions of individuals making their own decisions. I know you think one bureaucrat is smarter than all Americans and therefore must make all decisions, but this is patently false

  69. Tsipras has a done a great disservice to his people. Closing the banks was a very bad idea and sent a very bad signal to the world. Europe should take this deal and stabilize Greece and then design an artful withdrawal for Greece from the Euro. A 23 % VAT will do little to inspire visitors to Greece when they can easily go to other places for much less. Greece should never have been in the Euro in the first place. Will we see another write down a few years from now, shuddering the world markets?

  70. And let's see how the Greeks react. IF they swallow the pill in a resigned way, particularly after the show of a referendum. I hope Tsipras does not try to sell this as a victory.... I do not know why they are applauding him in the photo. Why even call for the referendum? To get a few dollars off from their now humongous debt off? The Greeks now lost credibility. They could have opened up "hope" not only for the many in their country but for others in Europe and the world. I'm very cynical at this point in history/life, but saw a ray of hope in the results of that referendum. Now back to the usual scenario. I feel sick.

  71. you know, I am a bit more optimistic at this point. Both sides have been brought to the very brink of the abyss and neither one really liked what they saw. And i think both sides are looking for any excuse to back away from that abyss.

    You can see the "Ray of hope" in the referendum, but consider:

    (1) Greece's past AND CURRENT taxing, pensions, etc. are UNSUSTAINABLE.
    So even if Germany caves in, Greece will still fail, because they still have unsustainable spending policies. They must change them.... and now maybe they will.

    (2) Germany will never get back its money. Cant happen. paying those loans in the long run will keep Greece down for generations. So it must forgive parts of those loans. Also seeing the Abyss, I think they will forgive those loans.

    I think what both sides saw here scared the S$%#$T out of them.

    mission accomplished?

  72. So, the Greeks voted in a new leftist government and voted NO last week. This week they said "deal" on the very same plan they vehemently decried last week. The new "loan" of $59 billion will be used to make payments on their old loans. So, everything basically is the same, except Greece promises to change certain behaviors, which the world has heard before.

    As for the "greedy creditors" the NYT readers must begin to acknowledge these are not banks and hedge funds that you desperately despise. Rather, the "creditors" are the European Central Bank (ECB) and the International Monetary Fund (IMF) which are government-run international banks who exist to support the economies of member nations.

    With all that, here's the mystery - in 6 months or a year - what will change in Greece such that they either pay what they owe (and adapt changes to their spending culture) or that they are forgiven all these loans?

    I imagine, the Greeks will use the cry that has worked so well this time and in 2012 "the lenders are GREEDY EVIL PEOPLE~!!!!"

    And with that, the world will (again) gasp at the "greed". Of course, other than the "greedy" ECB and IMF there are NO other entities/people willing to lend to Greece.

    I offer again, the the commenters here, along with Dr. Krugman - is it only a call for others to lend to/forgive Greece or are you willing do to that with your own money?

  73. The ECB and the IMF are the creditors now, because they bought Greece's debt from the banks and hedge funds that had made the original -- admittedly bad -- loans. And when a bad loan is made it takes two offenders; one is the person receiving the loan and the other is the person offering it, and both parties in this case knew that the money borrowed would not be be repaid... . In fact, more than 90% of the bailout funds go back to private entities -- mainly German banks -- and this is where Mrs Merkel is being herself insincere to the German people. Basically Germany is bailing out it's banks with German taxpayer money. But it's easier to blame those backwards, rowdy Greeks, than admit the full picture. So I suggest you do some homework before deciding to comment on such complex issues.

  74. The Greeks want to retire at 50 with near full pay, and demand that everybody except them pay for it- and it's the banks, hedge funds, and lenders who are greedy????

  75. If the Greeks provide some reforms on their side, which the have, and Merkel and her supporters give in and agree some type of reasonable debt forgiveness, then perhaps we can all breathe a sigh of relief.

    The ball is now in Merkel's court, who, yesterday, for the first time in this crisis mentioned the "suffering of the Greeks." I hope that presages mercy on her part.

    I have no crystal ball. But to me the rising markets suggest a better deal for Greece is in the offing.

  76. Tsipras is clearly not a good negotiator. He fails to stand his ground over important promises and then charges recklessly forward when he should remain cautious. This creates the impression that he is insincere. But that is not so. He is just a bad poker player.

  77. "I don't think this is what the ordinary Greek people had in mind when they voted No."

    I'm sure you're right, but remember: Voting "no" didn't wipe out the debt; it was nothing more than an expression of displeasure by the borrower. When the time came to honor its commitments, Greece really had only three choices:

    1. Pay what it owes – which it was unable to do.

    2. Announce that it would not pay – which it was unwilling to do.

    3. Cut some deal with the lender – which is what it's offered to do.

    When a borrower's choice is #3, it doesn't have a whole lot of bargaining power. It can express displeasure, as Greek's voters did, but the only effect of that (if any) is to worry the lender that next time the borrower might pick #2 instead of #3. That threat has some value, but not all that much when the lender already has serious doubts that the borrower ever will pay.

  78. A charade to perpetuate the fantasy of a European Union. But as long as we've decided that the Greeks will now pay taxes, I'd like to suggest formal agreements that the French stop being so arrogant, and that the Italins stop being so inappropriately enjoyable.

  79. So Greece will borrow more money to pay the interest on the money it already borrowed and can't pay back. And Greece promises to make changes to its tax and pension systems similar to promises it made in the past and for the most part did not keep.

    How is this anything other than a delaying tactic? How is this not almost a guarantee that the EU and Greece will face the same problems in six months that it's facing now? And how is this not a sellout of the Greek vote last week (which, IMO, was delusional, but what's the point of the vote if Tsipras then turns around and spurns it)?

    Fundamentally, what is different about this deal compared to past deals, other than the fact that Greece got another, relatively small, reduction of its debt, which remains so large that it's highly likely Greece will never pay it back?

    Facing facts is often hard. Apparently the EU would prefer not to do that. Perhaps when it comes to Greece they never will. But I hope they've learned this much: Do you due diligence before you admit any more countries into the EU and the euro. Failure to do this will cost you a bundle.

    Have they learned? We shall see.

  80. It seems that after all the shin kicking, arm twisting, political clownism and other evasive tactics that have turned this spectacle into a Greek tragedy and a comedy of errors rolled into one, a compromise may be in the offing. We all hope that this costly misadventure will come to an end, especially for those in Greece who are not to blame for what the elites and politicos have wrought. But based on past experience and the intransigence that the Greek establishment has shown by not being willing to get rid of corruption and live within their means, I am more inclined to believe in Santa Clause rather than believe that the agreement close at hand will sustainably improve Greece's economic situation.

  81. Prime Minister Alexis Tsipras’s is fooling his people with a referendum knowing wilfully that he was ready to comply with their creditors demand.
    Responsible politicians propose real solutions this why his nation has supported him with rejecting all the proposals submitted to them by their creditors at his instructions
    Comming out with a new statement that they were ready to comply and ready to raise retirement age at 67 is nonsenseful.

  82. Paying your bills and living within your means is a real solution

  83. Thanks for the link.

  84. Joan complains that the "No" vote is being ignored here:

    "And, they tell me my vote counts."

    Your vote DOES count – on matters that voters get to decide. Whether to pay a debt is not such a matter.

    The "no" vote may have been useful to scare the creditors a bit. But the creditors already understood that Greece probably couldn't pay its debts, and therefore wouldn't. The "no" vote simply told the creditors that the Greek people also didn't want to pay their debts. Hardly news – and certainly not binding on the creditors.

  85. Here's an idea, albeit one that won't work:

    "Greece's ruins could be sold off and I'm sure just a couple would be worth more than the money Greece owes..."

    I doubt any northern Europeans would buy Greek ruins. In the old days, of course, they'd just cart them off without paying (as when the British took the Elgin marbles, for example). But pay for them? Never.

  86. For all intents and purposes, the Greeks voted in a Communist Party. The PM followed the Party line by blaming all of Greece's ills on the Capitalists. But now, in the moment of truth, the PM has caved in. He must hold firm! Did Stalin ever waiver during the 5 year plans? No! Even if the Greeks must starve, like the 10 million in the Ukraine, ideology is more important than food.

  87. I gather this is intended as sarcasm.

  88. Its funny how much the tone of the comments have changed from ve to -ve in the last 5mo. since Syriza came to power. Unfortunately many of us can't see past the politicians and the media and how they influence our opinion. Greeks are still a hard working, honorable and proud nation and know very well how to repay their debt in full. They never asked for a handout just equal and fair treatment.

  89. Honorable is as honorable does. If they know how to pay their debts, why don't they?

  90. Greece got some concessions relative to the Juncker proposed that was quickly offered after the referendum was announced. It was wise that Tsipras did not cancel the referendum.
    First of all, the Greek voters said 'NO' to the offer on the table before the referendum was announced. What Tsipras is offering now is more favorable to Greece than the referendum the Greeks voted on.
    Secondly, it made good sense, from Tsipras’ standpoint, to hold the referendum even if he did not gain much over the Juncker last plan. The referendum result, and the written agreement Tsipras got from the opposition parties in Greece, shields him from possible criticism in the future, that he went off on his own and failed to carry out the mandate given to him by the voters.
    I think he ended up getting some concessions from the EZ and he strengthened his leadership position in Greece. This should help him and the country when it comes time to implement the tough measures they are facing.

  91. "Investors seemed increasingly optimistic" In this case, investors are dumb as posts.

  92. Feb 23rd 1953 London, the allies (winners of ww2) agree to haircut Germany's (cause of ww2 and millions of deaths) debt by 50%. We shouls all read history and see the facts

  93. I pity the Greeks! They are trapped whithin their crisis and there's no perfect solution.
    I pity them more because they surrendered to the EU and left their only chance for independence. Perhaps the Greek politicians really had no choice!

  94. Ok guys, stop thinking and let's go to visit Greece and bring them some relief, they need our help, let's go to Greece!!!

  95. Despite all the bravado in the press, I think when Tsipras finally walked to the edge and stared down into the abyss, he was truly frightened and rightly so.

  96. Have Germany pay back the money plus interest that they stole from the Greek banks during WWII!
    And let's remind ourselves of the German debts forgiven to the Germany after WWII.
    That should shut up Angela Merkel and Wolfgang Schäuble.

  97. Indeed, "optimism rose" yesterday, as the Greek government agreed to accept the terms imposed by its creditors, to get another bailout. Today many Greeks went to the beach to forget their woes! When asked about what they thought about the crisis. Some were surprisingly nonchalant! Amazing!

  98. It may be necessary for Greece to commit to a rather detailed schedule of dates where next payments are linked to achievements of agreed goals. Macro goals might not be enough to persuade Germany to go along with the deal so more micro goals may desirable to motivate Greece and necessary to convince Germany.

  99. 'Let's just swap Greece for Puerto Rico', suggests German finance minister Wolfgang Schäuble. There is only one problem. The people of Puerto Rico don't want Germany as their master and Schäuble running their lives. They rather have a Republican Congress.

  100. Thus far, Alexis Tsipras has put up a show with no substance. He should be in show business, not politics where his actions have serious consequences.

  101. I noticed this week Ethiopian garment workers earning $20 monthly, in the recent past, workers in Pakistan earning $.17 hourly for products to export to the West. Reexamine the slave ships knowing full well that many would die during the voyage. People who profited from slavery failed to comprehend the connection between their lives and the slaves--the order of things. They were in all honesty, good people but without a sense of how they fit into an overall scheme. There is a profound flaw in our inculcation of ethics that relate to this social order. For the most part, they are people of power who educate, inform our public with mere sound bite or omission of important news. We must soberly and morally reflect, examine the book and concept, " The Moral Arc" and reflect upon our consciousness for a broader paradigm. We are part of the problem in the order of things.Financial and moral bankruptcy is the order of the day but not in the area of macroeconomics. We all want to savor the joy of life but inculcating a sense of individual responsibility but must be required. Can't everyone be a statesmen, attorney, politician, government worker, restaurant or shop owner. It requires governance with respect that somehow we pull together. This is what is missing( rather assigning bigoted blame on the other guy) will lead to the destruction of Western democracy. Just how far have we really progressed?