Despite Greek Privilege, I have no duty to be a slave who works until age 80 so the Greeks can retire at 50
2
I accept that austerity is not a good way to come out of a financial hole such as the one Greece is currently in. But if more money is thrown at the problem, it has to be ensured that a good portion of the money is invested in productive enterprises. Thus some amount of cutbacks have to be implemented, along with making sure that money is also spent on job creating measures. Otherwise, the hole will get only deeper, and Greece will be back to square one after the current bailout money is spent. The big question is, what is being done to ensure that the bailout money is being allocated optimally for maximum returns?
3
The Germans don't send in their troops or freeze Greek assets to get their money back. They accept their loss. But they cannot be forced to continue losing money forever. They need to make sure that the next loan or extension will not mean business as usual.
1
Europe's austerity programs hurt economies it's accountable for. Requiring Greece to pay > they can afford doesn’t make sense.
Greece made mistakes in gov’t & culture. Radical changes are required in their people paying taxes, in job creation, in a full day’s pay for a full day’s work, reduction in perks, pensions, etc. Greece is a dying country & will be back for help if the terms aren’t more aligned with what they can afford.
Don't understand European continued austerity commitment when proven to put & keep economies in severe recession.
Managing a Country’s or Eurozone finances is very different than managing personal finances. Maybe they need to go back to basic: Monetary Theory & Policy as well as Micro & Macro Economics, & Behavioral Economics.
Both Europe & US need to re-create & maintain a middle class in our societies governed by complex systems. Complex systems science tells us, also the analysis in the book "Capital" that complex systems run in continuous loops rewarding success to the successful over & over again. So the more money you make, more money & power you get to make more money & power…& on.
Income inequality, product of complex financial/economic systems, require nations to use taxes, fraud & greed accountability, consumer protections, etc. to support a middle class.
Greece & Europe seem doomed unless they question & modify the reliance on austerity as the solution. Have to forgive enough of Greek debt for people to have hope & for investment in Greece.
Greece made mistakes in gov’t & culture. Radical changes are required in their people paying taxes, in job creation, in a full day’s pay for a full day’s work, reduction in perks, pensions, etc. Greece is a dying country & will be back for help if the terms aren’t more aligned with what they can afford.
Don't understand European continued austerity commitment when proven to put & keep economies in severe recession.
Managing a Country’s or Eurozone finances is very different than managing personal finances. Maybe they need to go back to basic: Monetary Theory & Policy as well as Micro & Macro Economics, & Behavioral Economics.
Both Europe & US need to re-create & maintain a middle class in our societies governed by complex systems. Complex systems science tells us, also the analysis in the book "Capital" that complex systems run in continuous loops rewarding success to the successful over & over again. So the more money you make, more money & power you get to make more money & power…& on.
Income inequality, product of complex financial/economic systems, require nations to use taxes, fraud & greed accountability, consumer protections, etc. to support a middle class.
Greece & Europe seem doomed unless they question & modify the reliance on austerity as the solution. Have to forgive enough of Greek debt for people to have hope & for investment in Greece.
1
Now is the time for the world to come to Greece's aid and help develop their economy. Not the governments, the people of the world. Who can invest and start a business that provides jobs? Who can go as a tourist and buy goods and use services and pay well for it? Who can teach courses in how to build business or help in other ways. This is a society that needs the knowhow people in the world have that has to be brought in to bring this nation into the modern scene. What goods can Greece produce for trade that would bring money into the country? What facilities do they have to host international conferences and conventions? If I were financially able, I'd see this as an opportunity to show that American know how and inventiveness could turn Greece into a prosperous nation with all its debts paid. They are a bright and capable people that on more than one occasion were one of the premier countries of the world. Who will help them?
1
Private foreign investments. Expansion of tourist industries. Humanitarian agencies with long-term programs, peace-corps volunteers, Doctors-Without-Borders, donations. A concerted international effort to assist Greece at this time, or we will be staring in the face at the brutality of nations.
Your Excellency Minister of The Federal Republic of Germany,
Dr. Schaeuble:
The Greek debt is 330 billion euro, the number of employed Greek is 3.3 million. That makes 100,000 Euro debt for each employed person in Greece. This is far beyond even the German worker.
Obviously, then, this debt has grown beyond legal issues and is now a humanitarian problem. As such, it might technically no longer be an issue solely of your department, the Ministry of Finance.
Actually, the situation reminds one of the reunification of Germany in 1990. The cost of reunification is estimated to have been 1.3 trillion Euros - four times as much as the present outstanding debt of Greece.
And yet, the German people took on this huge burden and reintegrated a population of 16 million people which is, by the way, 5 million more than the Greek population today. You will remember, Sir, most Germans considered reunification a humanitarian issue as well as a financial issue.
Admirably, Germany succeeded. Similarly, since an ever closer Europe is the declared goal of Germany's EU policy would it not make sense, and a great opportunity, for Germany to set aside, partially or in total, the crushing debt of Greece and help re-integrating that country so as to assist it in becoming a strong fellow-member of the EU?
Also, infuriated Germans may want to consider the insults coming from Greece simply as a crude cry for help from a proud people.
Regards
Dr. Schaeuble:
The Greek debt is 330 billion euro, the number of employed Greek is 3.3 million. That makes 100,000 Euro debt for each employed person in Greece. This is far beyond even the German worker.
Obviously, then, this debt has grown beyond legal issues and is now a humanitarian problem. As such, it might technically no longer be an issue solely of your department, the Ministry of Finance.
Actually, the situation reminds one of the reunification of Germany in 1990. The cost of reunification is estimated to have been 1.3 trillion Euros - four times as much as the present outstanding debt of Greece.
And yet, the German people took on this huge burden and reintegrated a population of 16 million people which is, by the way, 5 million more than the Greek population today. You will remember, Sir, most Germans considered reunification a humanitarian issue as well as a financial issue.
Admirably, Germany succeeded. Similarly, since an ever closer Europe is the declared goal of Germany's EU policy would it not make sense, and a great opportunity, for Germany to set aside, partially or in total, the crushing debt of Greece and help re-integrating that country so as to assist it in becoming a strong fellow-member of the EU?
Also, infuriated Germans may want to consider the insults coming from Greece simply as a crude cry for help from a proud people.
Regards
2
This is all good and well...but where shall the money come from? Germany's finances are healthier than in France, Italy or Greece but certainly strained. There is one crucial difference between East Germany and today's Greece. Most East German's welcomed and understood West-Germany's interventions, of which there were many, including very painful and humiliating ones. I know because I lived there. After all, East Germans had "lost". Although the shouts of Nazi's may be crude cries for help - it's arguably the least effective way of asking. But seriously would Greece agree to structural reforms on the order of those endured in East Germany? I have my doubts.
1
Proud people don't go 100,000 euros per person in debt. Proud people pay their bills and live within their means. Germany and the world have nodule to fund Greek excesses
Alexis Tsipras is all show and no substance. By agreeing to be railroaded so permissively, other EU members really could not speak on its behalf. Who pays the price? The Greek lower class who had not enjoyed the extravagant pensions and benefits.
1
Greece's debt has to be frozen immediately with repayment to be initiated at a later date after the their economy comes back. Interst on loans have to be forgiven. Only the principal is to be returned after the economy has come back for several years. Let the patient get well first.
2
Great idea! Now you "loan" me $100,000,000,000 under those same terms
If they trim back and start spending responsibly they should be alright eventually. The deeper they cut the faster the recovery. What did they expect? Now it's time to pay the piper and pay they will and should with heavy austerity programs. The American people are in for a big surprise in the very near future after what our POS community organize did to us, I can only imagine what it will take to straighten this 18+ trillion dollar debt out if even possible.
1
The Germans and the GOP.
Cut from the same cloth
Cut from the same cloth
2
Blame the Germans , blame the Germans how about placing the blame where it belongs ,with the banks, who if anyone simply googles Goldman Sachs /Greek crisis and read the facts about Blankfein and Cohen back in 2002, structuring a financial instrument to allow Greece to borrow heavily and delay paying debt insuring a big payday for Goldman and the implosion of Greece at some point in the future; of course I realize the German factory workers or the Greek garbage men are so much easier to blame, since they don't have the clout to control the press as Goldman and their ilk. Greece is just the tip of the iceberg : the havoc being wrought by the bankers, financiers and proponents of globalization has managed to destroy the great middle class created by men of vision; Americans like Henry Ford and A.P. Giannini who were smart enough to realize that sharing the wealth was essential to a good long term business model, as well as social stability. The ruling classes need to change before we revisit the horrors of Germany in the late 1930's, Shouldn't embracing right wing parties such as Golden Dawn in Greece and Marine Le Pens in France be an indication that people are tired of being manipulated and lied to? The E,U. was the dream of Mitterrand and Kohl that has turned into a nightmare much like the vision of globalization but on a smaller scale; the short term plan for Greece is clear, privatize the assets socialize the debt [sound familiar] a real Greek Tragedy.
2
Instead of replying individually to Mattias from Frankfurt and other commentors, I will simply remark that students of history ,and thus posterity, view the "solution" imposed on Greece as identical to "historical" colonialism, without the soldiers. So neo colonialism boils down to "Why put boots in the ground?"
3
Any impartial observer who has taken time to familiarize himself with the economic history of Greece concludes that its financial crisis is of its own making. Those who think otherwise are misinformed. The record shows decades of profligate consumerism without production coupled with ruinous spending by successive Greek governments and the wild expansion of public sector jobs calling for such lunacies as bonuses for showing up for work on time. Add to this a tax policy that rewards cheating. Now come the lenders seeking repayment and along with them the spectacle of Greeks mewling at the dreadful prospect of having to repay what they borrowed.
5
What does it matter if it is of their own making? Not all of us are born to understand the history of economics, and the weeping of the people of a country anywhere should not be tolerated. Not in this day and age. We were to say this of the Jews after WWII, they had brought it upon themselves because they had money and were the cause and ire of Germans during the rise of Hitler. A child I was then on hearing this, and a child today I remain when it comes to such life matters. It has never rung true to my ears.
Enough already with these lenders, who know that one cannot repay them. They're scavengers and vultures. We have them in America pounding on our doors.
We are address the Human Condition here. We may lose a country. Europe may follow one day. It's a cold world out there, but we can do something, something to help the people of Greece, and never mind if they do not remember because we will be doing something for ourselves.
It is an attitude, Mr. Tyler, when one chooses to look down only to pull someone up. Our existence is not that important in the big realm of things, our time is limited, let us find ways of getting through this awful time in history. Let us finds ways of giving safe passage to others who are more vulnerable than you and I.
You are in possession of a fine mind, let us not go home to sleep peacefully during a massive holocaust of the Greek Economic currency, and let us remember the people in this historical story.
Enough already with these lenders, who know that one cannot repay them. They're scavengers and vultures. We have them in America pounding on our doors.
We are address the Human Condition here. We may lose a country. Europe may follow one day. It's a cold world out there, but we can do something, something to help the people of Greece, and never mind if they do not remember because we will be doing something for ourselves.
It is an attitude, Mr. Tyler, when one chooses to look down only to pull someone up. Our existence is not that important in the big realm of things, our time is limited, let us find ways of getting through this awful time in history. Let us finds ways of giving safe passage to others who are more vulnerable than you and I.
You are in possession of a fine mind, let us not go home to sleep peacefully during a massive holocaust of the Greek Economic currency, and let us remember the people in this historical story.
2
It does matter - because in the end someone is asked to pay for past mistakes, in this case the European tax payers. You may consider starting a fund for Greek suffering and contribute part of your income. And please leave term holocaust out of the Greek economic crisis. Your usage cheapens the suffering and death of millions.
1
Kostya
You raise some valid points and do you know the difference between a holocaust and The Holocaust? In giving an interview, a Jewish New York economist, who loves America and nearly was placed in a camp as an adolescent in France, was to say 'we should not make a holocaust out of the dollar' causing my heart to sink because I knew the phones would start ringing.
A lovely elderly woman called, and I apologized while explaining that my supervisor was referring to a massive fire, and not one of the biggest moral blights in contemporary history.
We are in need of a list of 'non profit' agencies both national and international to make a donation for the People of Greece. Not all of us will be able to afford this, but it is a beginning, and should you have a Greek friend, give the friend cash to send home.
You raise some valid points and do you know the difference between a holocaust and The Holocaust? In giving an interview, a Jewish New York economist, who loves America and nearly was placed in a camp as an adolescent in France, was to say 'we should not make a holocaust out of the dollar' causing my heart to sink because I knew the phones would start ringing.
A lovely elderly woman called, and I apologized while explaining that my supervisor was referring to a massive fire, and not one of the biggest moral blights in contemporary history.
We are in need of a list of 'non profit' agencies both national and international to make a donation for the People of Greece. Not all of us will be able to afford this, but it is a beginning, and should you have a Greek friend, give the friend cash to send home.
BLOOD FROM A TURNIP Well it looks as if rather than the EU members getting a haircut the Greeks are going to have to be squeezed even harder than they have been already. Citizens along the political spectrum there have risen up in protest. My concern is not so much for those on the left as the extreme right, where the reaction is more ominous.
4
How fast can a culture change, or can it change at all? I don't know enough to fully characterize the Greek character, but all evidence seems to indicate they will not, or cannot change. Or at least, they didn't during all the recent years of plunging GDP and draconian economic pressure.
This is not to condemn the Greeks as dishonest, lazy, and the like. It is to ask the fundamental question about changing the power structure and culture of an entire country. Do we have any historical evidence of such a tectonic shift in the very nature of a people? Has the endemic corruption in Latin America materially abated over the last 100 years? Has the Teutonic lust for Ordnung abated over the decades?
What needs to be aired, I feel, is a realistic discussion of how Europe will help Greece get back on its feet, given the scenario where tax evasion, oligarchic self-interest, and other deficiencies stubbornly resist outside pressure.
This is not to condemn the Greeks as dishonest, lazy, and the like. It is to ask the fundamental question about changing the power structure and culture of an entire country. Do we have any historical evidence of such a tectonic shift in the very nature of a people? Has the endemic corruption in Latin America materially abated over the last 100 years? Has the Teutonic lust for Ordnung abated over the decades?
What needs to be aired, I feel, is a realistic discussion of how Europe will help Greece get back on its feet, given the scenario where tax evasion, oligarchic self-interest, and other deficiencies stubbornly resist outside pressure.
6
There is mistaken idea expressed here frequently that the battle is between "Germans" and "Greeks." No. The conflict is between bankers (with German bankers taking the lead) and working people in Greece, of whom 10%, by the way, are migrants. Rich people in Greece and Greek bankers are lined up with the German bankers.
To win public support for their continued theft from workers in Greece, the German corporate media paints the Greeks as "lazy." The OECD statistics, to the contrary, show Greeks work an average of more than 2000 hours a year to the Germans' less than 1400. Like Trump's comments about Mexicans, the putdown of Greek workers is a xenophobic lie.
The other thing to keep in mind is that the U.S. bankers and government, although they are not completely in concordance with those in Berlin, are also part of the problem. Greek spending on military, pushed by NATO commitments, increased the debt significantly. The U.S.-based Goldman-Sachs investment bank showed Greek politicians (not the current government) how to mask the true debt and get new loans. Also, U.S. bankers hold most of the unpayable $72 billion debt of Puerto Rico and is doing the same there as the German bankers are doing to Greece's workers (and as the U.S. bankers did to Detroit).
On one side are the bankers and bosses. On the other, the rest of us.
To win public support for their continued theft from workers in Greece, the German corporate media paints the Greeks as "lazy." The OECD statistics, to the contrary, show Greeks work an average of more than 2000 hours a year to the Germans' less than 1400. Like Trump's comments about Mexicans, the putdown of Greek workers is a xenophobic lie.
The other thing to keep in mind is that the U.S. bankers and government, although they are not completely in concordance with those in Berlin, are also part of the problem. Greek spending on military, pushed by NATO commitments, increased the debt significantly. The U.S.-based Goldman-Sachs investment bank showed Greek politicians (not the current government) how to mask the true debt and get new loans. Also, U.S. bankers hold most of the unpayable $72 billion debt of Puerto Rico and is doing the same there as the German bankers are doing to Greece's workers (and as the U.S. bankers did to Detroit).
On one side are the bankers and bosses. On the other, the rest of us.
9
Where does accountability come in? Nobody made Greece borrow the money. Nobody enabled Greek officials to accept bribes to look the other way when business and people pay no tax. Nobody made the Greeks engage in the derivatives contract with Goldman, and then fail to disclose in public records that they had done it. The Greeks brought this entirely on themselves, and they know they did it. And stop blaming the bankers, who are certainly going to take significant losses here. When you lend the Greeks money, you can negotiated how and when you want to be repaid.
1
Theft??? The Greeks borrowed the money of their own free will.
Having just returned from Greece and experienced the civility with which Greeks on both sides of this issue are displaying, I am dismayed by the choice of the Times and other newspapers and media to show what are truly rare violent protests. It's a cliché, but no less true for being so, that Greeks are by nature philosophical, rational and broad minded. In cafés and living rooms, they are discussing the almost impossible choices that confront them calmly and thoughfully. They are now paying the taxes which they had resisted since the Ottoman, and later Italian occupation, and they are supporting open markets and pension reform. They accept that more hardship awaits them and are asking that they be given the opportunity to re-build their country by releasing them from a huge burden of debt that any normal bankruptcy procedure would lift.
10
'...They are now paying the taxes which they had resisted since the Ottoman...'
Should this fact just be ignored?
Should this fact just be ignored?
2
Wolfgang Schäuble, the German Finance Minister, continues to massage the Greek wounds with more salt by suggesting that the Greeks should leave the EU. His complete lack of sensitivity for the Greeks' plights reminds me so much of Donald Rumsfeld's comment that "bad stuff" just happens. Like Rumsfeld, Schäuble takes no responsibility for the economic miseries that are happening on Greek soil. But for any over-leveraging situation, the bank is equally accountable as the borrowers. But since German banks finance German politicians, they get a free pass and the Greeks get all the blames.
6
Please stop the crying. Schauble is being sensible. Greek cannot afford its standard of living. It does not produce enough, or collect enough in taxes, to support the existing state workers and their pensions. That is a simple fact.
There are two solutions - cut the wages and pensions, or leave the euro so the pensions and wages can be restated (lower) in drachmas. The latter solution is probably far more achievable politically. Schauble is correct in his analysis. I'm sure he is truly sorry if he did not deliver the message in more flowery terms.
About your complaints that the bank and lender are equally responsible, don't worry . . .the banks are taking it on the chin hear because they will not take big losses on what they are owed.
There are two solutions - cut the wages and pensions, or leave the euro so the pensions and wages can be restated (lower) in drachmas. The latter solution is probably far more achievable politically. Schauble is correct in his analysis. I'm sure he is truly sorry if he did not deliver the message in more flowery terms.
About your complaints that the bank and lender are equally responsible, don't worry . . .the banks are taking it on the chin hear because they will not take big losses on what they are owed.
1
Are you saying the German banks weren't bailed out? They were.
2
Schaeuble is suggesting what other economists, including Paul Krugman, have been saying for a long time. How is this rubbing salt into wounds? Schaeuble indeed carries NO responsibilities for the misery of Greece - for one he is not a bank that made bad loans to Greece in the past. As the finance minister of Germany it is his responsibility to his voters to keep Germany financially afloat. I agree with him....doing the same things repeatedly and expecting different results is the definition of insanity. Greece may have a better chance without the Euro.
2
Greece is like a guy who keeps digging a hole, demanding a ladder when he can't get out, then once he has the ladder, just keeps digging until provided with a longer ladder. Sooner or later you just need to fill the grave and move on.
8
The bottom line here is that Greek debt will not be paid in full. What never ceases to amaze me about the conservative view is while it is true that Greece did lots of irresponsible borrowing, their creditors did at least the same amount of irresponsible lending. If you lend someone money knowing full well that there was a better than fair chance that they would lever be able to pay it back, you don't get to complain when the borrower defaults. I do agree however that Greece is not entitled to borrow even more money. These are the terms and conditions of the new loans, if you don't like them, you don't get the money.
1
I think the right agrees the lenders were foolish too. I don't know anyone knowledgeable in finance that thinks otherwise. At this point, it's not a political matter. It's simply a matter of two parties agreeing to what is a reasonable amount of debt forgiveness. The lenders know if they forgive too little, they kill any incentive Greece has to grow it's economy and pay back the lender.
1
But if the banks didn't lend Greece the money they demanded, the banks would have been dragged through the coals fro their "cruel" refusL to lend
And so it always seems. Politicians inherit the omissions and commissions of previous administrations. They, in turn, do only what they must, while focusing on what will be best for their political future. In turn, they often merely turn over a greater problem to their successor.
Prime Minister Alexis Tsipras inherited just such a can of worms. Besides Athens, there surely is much blame to go around throughout Europe, but especially in Berlin. The concept of the common currency--a central bank managing the monetary policy for 19 very different nations--was a mistake.
Also, relinquishing control over one's own currency--and the generally used tool, devaluation, to combat unsustainable debt is not longer available. The inflexibility of the Eurozone--adhering to rules established two decades before, and Germany's insistence on Austerity further escalated the problems. Lastly, the debt markets granting Greece much lower interest rates immediately after joining the Euro just encouraged it to go further into excessive debt.
http://thetruthoncommonsense.com
Prime Minister Alexis Tsipras inherited just such a can of worms. Besides Athens, there surely is much blame to go around throughout Europe, but especially in Berlin. The concept of the common currency--a central bank managing the monetary policy for 19 very different nations--was a mistake.
Also, relinquishing control over one's own currency--and the generally used tool, devaluation, to combat unsustainable debt is not longer available. The inflexibility of the Eurozone--adhering to rules established two decades before, and Germany's insistence on Austerity further escalated the problems. Lastly, the debt markets granting Greece much lower interest rates immediately after joining the Euro just encouraged it to go further into excessive debt.
http://thetruthoncommonsense.com
3
Germany is not to blame for the Euro - the common currency was pushed by Mitterrand. Kohl hated giving up the Deutschmark. Other than that much agreed.
3
For over five years the Greeks failed to improve tax collection, reduce corruption , remove barriers to business development and reduce the size and scope of their pension plan. How many times must their creditors continue to accept empty promises? Throwing good money after bad makes no sense. It is time to amputate them from the EU . A proud nation is in disgrace for thinking that others will pay for their excesses. Addicts eventually hit bottom and either die or reform. Their fate is in their hands.
5
@jim chin jenks ok
It's been much longer than "over" five years.
It's been much longer than "over" five years.
1
I had the experience of financially bailing out a Greek man for 12 years hoping he would become self reliant. He eventually returned to Greece to live off his mother after failing at three short term teaching jobs and my refusal to give him any more "loans".
I was a social liberal like many of you that respond. Now I have to say that unless there is a sustainable system in place that you are loaning to, you are enabling a bad situation to get worse.
The Greeks are not going to abide by rules and they will continue down the same road until the bailouts stop. Their system is corrupt.
I was a social liberal like many of you that respond. Now I have to say that unless there is a sustainable system in place that you are loaning to, you are enabling a bad situation to get worse.
The Greeks are not going to abide by rules and they will continue down the same road until the bailouts stop. Their system is corrupt.
6
Typical socialist EU, they have raided the funds of the 28 common market countries to fund the Greek banks and the 18 countries in the euro zone.
The Greeks will never pay off this debt.
No wonder the EU is a doomed organisation.
The Greeks will never pay off this debt.
No wonder the EU is a doomed organisation.
2
Spain, Portugal, Ireland and Italy after witnessing what is happening to Greece should prepare an escape plan.
4
So the cradle to grave mentality, again, fails. Retire at 52, 30 hour work week, etc, has to be paid for somehow. Sorry Greece, you've got to pay for it.
6
The NYT always writes about Greece and Germany - further, Soll tries to explain me the German psyche yesterday, which marches upon racism, like the stupid stereotypes of alleged lazy Greeks. But one question: What's about the Americans? What's about the IMF, which is dominated by the US (17%). The answer is: Regarding the proposal of debt relief for Greece, the US ministry of finance declared that this option for unacceptable. Poor hypocrisy. The swiss journal Neue Zürcher Zeitung (NZZ) approached this with the article 'Interested onlooker overseas'/Interessierte Zaungäste in Übersee', yesterday.
2
It is sad to see a European nation to be nation to be governed more enduring From planet earth and much this disillusioned wtih this old Europe
A fair resolution to the Greek problem:
1. Require Greece to undergo major structural reform - clean up corruption, end anti competitive labor and pension laws, enforce tax collection. (Done!)
2. Jail some Greece government and bank officials for corruption.
3. Give the private lenders a hefty haircut for reckless lending and demand bankers to return their bonuses for loans that put their banks at risk.
When 2. and 3. are implemented it will be a lot easier to accept the suffering of the Greek people, who right now are taking the full brunt of major malfeasance by many.
1. Require Greece to undergo major structural reform - clean up corruption, end anti competitive labor and pension laws, enforce tax collection. (Done!)
2. Jail some Greece government and bank officials for corruption.
3. Give the private lenders a hefty haircut for reckless lending and demand bankers to return their bonuses for loans that put their banks at risk.
When 2. and 3. are implemented it will be a lot easier to accept the suffering of the Greek people, who right now are taking the full brunt of major malfeasance by many.
6
Agreed, as long as in point 2 you add corrupt German, French, etc bankers and politicians.
Otherwise there is no disincentive to rapacious neo colonialism.
Otherwise there is no disincentive to rapacious neo colonialism.
2
Looks like the Greeks will be going on a Greek diet for a really really long time. Too soon?
Socialism is a failure, continually handing out free lunches in the form of lifetime pensions at age 50 bad, I get it. Inexplicably there are a lot of commenters on this board who don't seem to get the above truism.
4
Germany is demanding Fiscal Union, but there is no federation which can act as the legal mechanism for decisions about fiscal policy, so she, with the ECB and the IMF created an alphabet soup of extra legal financial facilities designed to hide the fact that in 2010 there was a scramble to save the banks by feeding funds into Greece. Greece had thus become nothing more than a super liquidity facility for the purpose of the Troika feeding liquidity through Greece, and back into the banks. Bloomberg this morning had their epiphany on Tom Keane's Show, when they realized that there was never the intention to rescue Greece at the beginning of this Euro circus in 2010.
The internal devaluation of labor by Germany post unification would have been for nought if the German Vendor Economy, which was based upon reduced unit labor costs, derived from labor "reform," stalled. So the banks were tasked to lend.
Germany had a political problem beyond the deficiencies in the Euro system of currency union without political union, because were Germany to become recessive, the promise of austerity to in the long term reward German workers, who were sacrificed to create the Vendor Economy, would have been exposed as a sham. Labor would rebel against any further reform, and the political hacks who enabled the banks to take the money and run. Germany became desperate to force Greece into compliance with her narrative, and when Germany is desperate, Germany becomes dangerous to itself and others.
The internal devaluation of labor by Germany post unification would have been for nought if the German Vendor Economy, which was based upon reduced unit labor costs, derived from labor "reform," stalled. So the banks were tasked to lend.
Germany had a political problem beyond the deficiencies in the Euro system of currency union without political union, because were Germany to become recessive, the promise of austerity to in the long term reward German workers, who were sacrificed to create the Vendor Economy, would have been exposed as a sham. Labor would rebel against any further reform, and the political hacks who enabled the banks to take the money and run. Germany became desperate to force Greece into compliance with her narrative, and when Germany is desperate, Germany becomes dangerous to itself and others.
2
The ECB's charter is designed to prevent "Fiscal union" at the behest of Germany, hence the legal "extra legal" backflips since declared legal. But I won't quibble on what remains esoteric for most.
My question is, why don't people get the rest of your post?
My question is, why don't people get the rest of your post?
Greece cannot repay its debt, without major restructuring, debt forgiveness, or extension of the timeline for repayment, or some combination of all these measures, and possibly with the addition of others more drastic. This is just a simple statement of economic fact. The Greek economy is in a depression, 25% unemployment, it has little exports, its debt ratio will likely reach 200% of GDP in the near term. The issue has become too personalized. It has nothing to do with which party’s financial rectitude is unimpeachable or whose profligacy needs to be punished. German anger is understandable they are watching their money sail over the horizon in a burning trireme which they helped set ablaze. It is not easy to admit that mistakes were made. But if the German and other creditors want to see their money repaid while they are still breathing a new approach has to be adopted. Even under ideal conditions it will take Greece generations to repay the current 300 billion euro debt. Further austerity will only make repayment less likely. The Greek economy has been beaten into submission. Germany’s point has been made, and they have proved exactly what? That you can’t get blood from a stone - but we knew that already.
1
It is not 'Berlin' that has so far guaranteed 82,000,000,000 EUR to Greece (plus additional 22 bn EUR in this never-see-it-again present), but the ordinary German taxpayer. People that pay 50% income tax.
And this taxpayer asks himself why he/she should hand-over money to an incompetent state while the German government declares every day that there is no money for better healthcare, education, infrastructure. The money disappearing in Greece is real, not some virtual US debt. I wonder what some people in this forum actually want - money transfers without any need for Greece to change?
In today's German newspapers the headline news is a proposed income tax increase to help finance Greece. When do Germans get a chance for a referendum to stop this nonsense?
And this taxpayer asks himself why he/she should hand-over money to an incompetent state while the German government declares every day that there is no money for better healthcare, education, infrastructure. The money disappearing in Greece is real, not some virtual US debt. I wonder what some people in this forum actually want - money transfers without any need for Greece to change?
In today's German newspapers the headline news is a proposed income tax increase to help finance Greece. When do Germans get a chance for a referendum to stop this nonsense?
6
Yes and you Germans were happy when the German banks and government were loaning money to Greece so the Greeks could buy German cars, tvs, radios, appliances, furniture, etc. that they could not afford because it kept the factories running in Germany and Germans making high wages with good benefits and living the "high life". Now the piper comes due, the Greeks are broke, wages are low there and they can't repay the money that was squandered on over priced German consumer goods. The ultimate Ponzi scheme!
2
Shame on you. You must be one of the people in the US that believes that mortgages should not be repaid because the borrower should not be held responsible for their buying decisions.
And no, Greece is not full of German products. It is full of too many government employees (gov't hired them to do non-jobs in an effort to pretend there was a middle class when there was no economy over the last 50 years outside of tourism).
And no, Greece is not full of German products. It is full of too many government employees (gov't hired them to do non-jobs in an effort to pretend there was a middle class when there was no economy over the last 50 years outside of tourism).
Why was my earlier answer deleted? The fact remains the German banks and German government deliberately loaned Greece tens of billions of euros from 1981 on to buy expensive German products, including automobiles, computers, cameras, tvs, radios, appliances, etc. This helped the German factories to keep running as a "new market" was found in Greece. The Greeks did not have the kind of incomes and wages to afford this over priced merchandise but the German government wanted to keep the factories running and high wages and good benefits flowing to keep the German blue collar workers fat, happy, and well fed. The Teutons lived a luxurious lifestyle while the Greeks got used to a merely comfortable one. 30 years pass and now the Greek debt has grown crushing and unpayable as all financial schemes of this nature will. Angela Merkle, who to all appearances definitely needs to go on an austerity diet herself, wants to impose draconian measures on the Greek population to keep the banksters profits rolling in while poverty and misery and unemployment grind on endlessly in the Hellenic republic and Germany enjoys the "good life". The Germans tried in two World Wars to conquer and dominate Europe by the most violent and cruel means and after being defeated and their debts forgiven and massive American aid after World War II Germany now is dominating Europe by "peaceful" economic means that are still causing misery and ruin for millions of people in southern and eastern Europe.
Western "democracy" in action.
The Greeks rejected austerity in the referendum that took place earlier this month, a result unacceptable to banks and creditors, so contrary to popular will, austerity measures are put in place.
Reminds me of our very own US Congress, where the failure to pass bills to advance social welfare leads to the bill's death, but the failure to pass, say, a bailout or a trade deal will be brought to a vote again and again until it passes.
Stark reminders of who is running things.
The Greeks rejected austerity in the referendum that took place earlier this month, a result unacceptable to banks and creditors, so contrary to popular will, austerity measures are put in place.
Reminds me of our very own US Congress, where the failure to pass bills to advance social welfare leads to the bill's death, but the failure to pass, say, a bailout or a trade deal will be brought to a vote again and again until it passes.
Stark reminders of who is running things.
1
1+1=2. Math is running things.
Latin America is a case study -per excellence- of economies going under due to public debt out of control.
One important lesson from LA's debt crisis of the past is initial bailout program estimations are always grossly underestimated. This will certainly be the case of Greece.
Not only Greek public finances are insolvent but the banking system is near collapse. The recapitalization bill of banks -- to be paid by taxpayers -- will surely grow as precise calculations are done by the ECB/IMF.
Politicians all over the world love to do good with taxpayers money until spending gets out of control and society is summoned to pay the bill.
One important lesson from LA's debt crisis of the past is initial bailout program estimations are always grossly underestimated. This will certainly be the case of Greece.
Not only Greek public finances are insolvent but the banking system is near collapse. The recapitalization bill of banks -- to be paid by taxpayers -- will surely grow as precise calculations are done by the ECB/IMF.
Politicians all over the world love to do good with taxpayers money until spending gets out of control and society is summoned to pay the bill.
4
The ECB and IMF and World Bank are nothing but blood sucking vampires living off the blood, sweat and tears of working people everywhere to keep the billionaire banksters and crapitalsits living their luxurious lifestyles. They should all be abolished and the people running them and their masters the White Collar Mafia prosecuted for crimes against humanity and their stolen fortunes confiscated and returned to their victims, the workers and taxpayers of every nation. This would be true justice and ultimately peace and prosperity would actually prevail for the 99.9% instead of the 0.1%.
The IMF asks for a debt relief for Greece so that Greece can take on another debt, that’s smart. The UK says “not a single cent”, that’s even smarter. To save the Euro, 18 nations are forced to borrow Greece money (again) and 15 out of 18 countries insist on reforms - and the Germans are bad. If Greece is not willing to accept and implement those reforms, the Grexit is inevitable - again, because of the bad Germans. This pathetic opinion making process is most obviously guided by extreme left wing parties in Europe, that have nothing to suggest but understood that German Bashing helps them to win terrain with archived sentiments. I wonder if Krugman, Sachs and co got paid for their banal and irresponsible outburst that together with the papers that spread this populist propaganda support the picture of the enemy Germany. #thisisacoup = #thisisaSoup. The Euro Union is breaking in pieces and there is new old hate. Compliments, you put Germany at the wall.
3
The "deal" forced on Greece by Schauble and others will now raise Greece's debt burden from 180% to 225% of GDP, utterly unrealistic. The leaking of the IMF report which, as one option, called for a 30 year debt moratorium, is an attempt by some to interject reality into the situation. Sec. Lew, in meetings in Europe, recognizes that a Greek default could trigger a huge derivatives blowout threatening the US as well as Europe but, like the president, has no answers as long as this administration continues to resist the return of Glass-Steagall , recently reintroduced into the Senate by Sen. Warren and others.
2
Tsipras is proud of his fight. But this fight has shattered investors' confidence in Greece willingness to pay its dept. Fortunately, he came to his senses. Better late than never.
In fact, Greece may have voted to say YES to the deal, but the deal hasn't been voted on by those holding the purse strings and this morning German Finance Minister Wolfgang Schauble said publicly that a Grexit was, after all, probably the most desirable outcome for all concerned, after admitting that Greece would need a huge debt write-off. The problem for the rest of the Eurozone and EU is that Portugal, Ireland, Italy, Greece, and Spain (the PIIGS acronym by which they are charmingly known for their similar debt issues) are in the same boat, albeit perhaps only slightly less leaky than Greece's.
If the EZ and the German banks and the IMF and the ECB and the EC write off Greece's debt, bail it out a third time, and let it remain in the Eurozone, they set a dangerous precedent,even with all that austerity, and those other nations will start clamoring for the similar relief.
Writing off Greece's debt but still forcing it out of the EZ is the only way the powers that be can bow to the inevitable (Greece stands no chance of paying this off anytime in the next half century) yet make it clear that severe punishment is the price.
If you read blogs of foreign papers you can see rising anti-German sentiment, despite acknowledgement of Greece's profligacy. I doubt Germany is anxious to shoulder the blame for ordinary folk of another EU nation starving in the streets. Grexit leaves Greece on its own, albeit free of debt. Greece should have begun to prepare for this last year.
If the EZ and the German banks and the IMF and the ECB and the EC write off Greece's debt, bail it out a third time, and let it remain in the Eurozone, they set a dangerous precedent,even with all that austerity, and those other nations will start clamoring for the similar relief.
Writing off Greece's debt but still forcing it out of the EZ is the only way the powers that be can bow to the inevitable (Greece stands no chance of paying this off anytime in the next half century) yet make it clear that severe punishment is the price.
If you read blogs of foreign papers you can see rising anti-German sentiment, despite acknowledgement of Greece's profligacy. I doubt Germany is anxious to shoulder the blame for ordinary folk of another EU nation starving in the streets. Grexit leaves Greece on its own, albeit free of debt. Greece should have begun to prepare for this last year.
2
I wish the Greeks would rise and overthrow the government that betrayed them.
And when what happens? How exactly does this course of action change their outlook?
I'm confused. The Greeks have failed to repay TWO massive loans already, blaming everyone else for the trouble they're in, which apparently justifies their continued fighting and resistance to all measures offered. So now they're being offered ANOTHER bailout--which, almost certainly (I'm being nice here), they'll never be able to repay--and all they do is whine about the need for more debt reduction. And this plan is supposed to encourage fiscal responsibility and much-needed economic reforms? The Greek people are great hosts--I went there on my honeymoon and two other times--but they are culturally committed to fighting against all odds while refusing to acknowledge that the "enemy" is none other than themselves.
5
What has taken place in Greece from the election of Tsipras to the referendum of the people last week to leave the Euro to the Tsipras double-cross of now even harsher austerity is nothing less than a refutation of democracy. In the 21st century democracy is just a word to hide the true and palpable hegemony of power in the hands of bankers, creditors and toady politicians who convene before cameras in five-star hotels to make preordained decisions against the Kabuki backdrop of eleventh hour negotiations. The Greeks always knew they would have to suffer economic hardship. And they "voted" to do it their way with dignity and with a united identity befitting their great history. Instead, they will do it as vassals of the ruling class. This is a tragedy.
2
well said. agreed.
What did the Greek people think would happen when they voted 'No'?
That they would be able to continue borrowing money with no strings attached?
That they would be able to continue borrowing money with no strings attached?
Really I could not agree with you more. Seems that Europe, with one of the most bloody conflict histories among nations is now resorting to just another weapon to continue those conflicts for continental dominance.
Yes, Greece has allowed very poor economic practices for decades. It will suffer for those practices for years to come. I do not know the upside of staying with the euro under the present circumstances, perhaps it is overwhelmingly positive. Greece has always considered itself European and I am sure that loss of belonging would sting pride. However, there are other nations on the continent holding out of the European Union, they would not be alone.
I am confident of Greek ingenuity. If they could stop fighting among themselves and recognize they are a united people with everything to lose if they do not take matters into their own hands, exiting the eurozone and the euro might make sense. Wishful thinking I suppose.
Yes, Greece has allowed very poor economic practices for decades. It will suffer for those practices for years to come. I do not know the upside of staying with the euro under the present circumstances, perhaps it is overwhelmingly positive. Greece has always considered itself European and I am sure that loss of belonging would sting pride. However, there are other nations on the continent holding out of the European Union, they would not be alone.
I am confident of Greek ingenuity. If they could stop fighting among themselves and recognize they are a united people with everything to lose if they do not take matters into their own hands, exiting the eurozone and the euro might make sense. Wishful thinking I suppose.
The whole bailout structure shows how anti-capitalist European Officials and Central Banks as much as the old Soviet Union. Believing nothing of the Free Market they bail out countries to subvert it. I will explain. The usual entirely stanard idea is that the Free Market Chooses interest rates a country pays on its debt. These rates are supposed to be set by the market as a compensation for risk and other market conditions. Greek long term debt pays 10% interest rates, Germany 1.5%. Thus to first order the market is judging Greece is much more risky place to invest in Germany. That means the lenders fear default. But what happens if the European Central Bank and the European Commission (the IMF being American dominated tells another story) bails out all the Greek foreign creditors. This creates a moral hazard as there is no compelling reason to lend to Germany and every one to lend to Greece as the debt is protected. If the ECB wants to permanetly underwrite the Greek debt then that's their perogative but they need to pay Market rates for debt in Germany or at the ECB borrowing rate. In a flash the Greek debt becomes sustainable, creditors take a market linked haircut and the world goes on. Alternatively, Greece should be allowed to default and the creditors pay the cost of their risky investment given them the proper incentive to buy safe bonds. It is interesting that all espouse Capitalist Market principles, but in reality corruption rules the day.
1
How about the following win-win compromise?
If the Greeks increase tax collections by 20% (not necessarily by raising taxes but simply by collecting them) and if they raise their retirement age by 20% (from 55 to 66 years of age over a period of 5 years), then their sovereign debt will be reduced by 20% plus 20% = 40%.
If the Greeks increase tax collections by 20% (not necessarily by raising taxes but simply by collecting them) and if they raise their retirement age by 20% (from 55 to 66 years of age over a period of 5 years), then their sovereign debt will be reduced by 20% plus 20% = 40%.
2
The next election should be interesting.
Germany just doesn't get it. Their experience after WWI with the crushing terms of the Treaty of Versailles resulted in a disaster. The Marshall Plan and the benefits from it resulted in the prosperity that they enjoy to this day. How can they possibly believe that this will end well for Greece? How can they believe this will end well for Europe?
1
I would like to really know what these austerity measures entail and how they affect the common person. Aren't there many hard working Europeans whose taxes are being used to support perfectly healthy individuals in Greece who got to retire in their early 50's? Aren't there many Greeks who are still refusing to pay taxes- both rich and middle class? I have siblings in Europe who because of their own countries' austerity measures must now work until they are nearly 70 and Greeks are boo-hooing! It doesn't seem right. Give us the facts NYT!
6
I'd give you the facts, Sara, to the extent that I have them, but I really don't have the next six months to sit here at the keyboard. Here are a couple for you, though:
A few years back, a friend of ours retired at 50, under the regulation that says that a woman can retire at 50 if she has a child under 18 still at home.
I cannot, for the life of me, work out the logic (ha!) behind this one.
TV newsreaders and announcers can retire early because they are exposed, as a condition of their work, to dangerous microbes in their microphones.
It goes on and on - 678 of them, as I recall (from an article in the NYT a few years back, but I may have that wrong).
p.
A few years back, a friend of ours retired at 50, under the regulation that says that a woman can retire at 50 if she has a child under 18 still at home.
I cannot, for the life of me, work out the logic (ha!) behind this one.
TV newsreaders and announcers can retire early because they are exposed, as a condition of their work, to dangerous microbes in their microphones.
It goes on and on - 678 of them, as I recall (from an article in the NYT a few years back, but I may have that wrong).
p.
Sorry, I did get that number wrong - it's only 580 categories, Here's the link:
http://www.nytimes.com/2010/03/12/business/global/12pension.html
p.
http://www.nytimes.com/2010/03/12/business/global/12pension.html
p.
Hey , Let be a logical and mature about this subject.
What is the most egregious mistake at this moment was done by EU is they are not willing to accept Euro implementation so far was wrong. It is plain wrong.
It needs major overhauling, Greece and may be more nations should be detached from this money for their economies sake, ( what IMF says and admits finally).
or
If they commit to keep Euro as it is even encapsulating more nations, Then One thing is sure , you cannot answer the failing economies with austerity. That is wrong. it is proven by Greece last 5 year with crystal clear experimentation.
So Germany find itself in villain position , in euro crisis movie. that is not totally wrong either.
What is the most egregious mistake at this moment was done by EU is they are not willing to accept Euro implementation so far was wrong. It is plain wrong.
It needs major overhauling, Greece and may be more nations should be detached from this money for their economies sake, ( what IMF says and admits finally).
or
If they commit to keep Euro as it is even encapsulating more nations, Then One thing is sure , you cannot answer the failing economies with austerity. That is wrong. it is proven by Greece last 5 year with crystal clear experimentation.
So Germany find itself in villain position , in euro crisis movie. that is not totally wrong either.
Facing financial chaos, economic entropy and popular discontent, Tsipras may be resorting to desperate, yet sensible, even shrewd, measures: take the latest tranche of money to keep Greek banks afloat and buy time to implement as much of needed reforms as the Greeks can bear, then default, exit the eurozone, resuscitate the drachma and at a low value relative to foreign currencies and export its way out of the present economic straits. Were Greece to do so, overnight Greece would become a bargain for tourists and foreigners seeking to invest equity in Greek real estate, common stocks and direct investment. Prosperity, surging employment and restored social order would inevitably follow. Not for nothing the Chinese character for “crisis” is the combination of “danger” and “opportunity.”
Other European countries remain outside the eurozone without apparent ill effects. Why not Greece?
Other European countries remain outside the eurozone without apparent ill effects. Why not Greece?
Exactly what is the meaning of the "no" vote? Exactly what is the point of seeking a Greek referendum if at the end Tsipras just ignores his own people?
2
In truth the package does not provide Greece with $94 Billion in assistance and I wish journalists would stop phrasing it that way.
A huge chunk of this money will never see the main street of any Greek city as it will be cycled back to the Banksters that should have never loaned Greece the money in the first place. Essentially it is a refinancing of debt- not any real form of assistance.
Next, the austerity imposed will cause additional contraction in an already shrunken Greek economy thanks to the last round of austerity.
Third, Greece will lose valuable public owned assets that will be sacrificed at fire sale prices to outsiders.
This was a NeoLiberal hit job under the guise of financial assistance from the supposed European Union, ECB and IMF.
A huge chunk of this money will never see the main street of any Greek city as it will be cycled back to the Banksters that should have never loaned Greece the money in the first place. Essentially it is a refinancing of debt- not any real form of assistance.
Next, the austerity imposed will cause additional contraction in an already shrunken Greek economy thanks to the last round of austerity.
Third, Greece will lose valuable public owned assets that will be sacrificed at fire sale prices to outsiders.
This was a NeoLiberal hit job under the guise of financial assistance from the supposed European Union, ECB and IMF.
So Germany is bad because they're asking for the Greeks to live up to their word, their promise, when they borrowed? I don't believe that Greece ever had an intention of repaying the loans nor mending their ways so they could repay. Or even pay the interest. I believe they fully intended to waste money and not clean up the corruption and the mentality of its citizens to evade both taxes and their responsibility as citizens. The Greeks put themselves in this position and have no one to blame but themselves - as a nation and as citizens.
4
'They deserved it' from a friend, whose family spent time in a camp during WWII. Another benefit of maturing is to remain silent, while offering a viable solution.
In listening to a Middle Eastern friend yesterday tell me how her own people have resorted to decimating their own cultural artifacts, in search of selling some stone to place bread on their table, there was sorrow in her voice. The Bible of her Country is being preserved in Berlin.
Both these friends know each other and we have worked together in the humanitarian community industriously over the years. Some in retirement are being called back to help in an emergency relief operation; time is of the essence.
While working hard to untangle this Greek political nest of vipers, care packages are being sent to the people of Greece and their children. During this passage of austerity grief, please place on the web some well known 'not for profit' agencies, for a modest donation if able, or purchase Greek goods in one's neighborhood.
While the IMF is busy in negotiations, people have to eat and a child somewhere in Greece may be starving. Let us begin today to save its life.
In listening to a Middle Eastern friend yesterday tell me how her own people have resorted to decimating their own cultural artifacts, in search of selling some stone to place bread on their table, there was sorrow in her voice. The Bible of her Country is being preserved in Berlin.
Both these friends know each other and we have worked together in the humanitarian community industriously over the years. Some in retirement are being called back to help in an emergency relief operation; time is of the essence.
While working hard to untangle this Greek political nest of vipers, care packages are being sent to the people of Greece and their children. During this passage of austerity grief, please place on the web some well known 'not for profit' agencies, for a modest donation if able, or purchase Greek goods in one's neighborhood.
While the IMF is busy in negotiations, people have to eat and a child somewhere in Greece may be starving. Let us begin today to save its life.
The IMF asks for a debt relief for Greece so that Greece can take on another debt, that’s smart. The UK says “not a single cent”, that’s even smarter. To save the Euro, 18 nations are forced to borrow Greece money (again) and 15 out of 18 countries insist on reforms - and the Germans are bad. If Greece is not willing to accept and implement those reforms, the Grexit is inevitable - again, because of the bad Germans. This pathetic opinion making process is most obviously guided by extreme left wing parties in Europe, that have nothing to suggest but understood that German Bashing helps them to win terrain with archived sentiments. I wonder if Krugman, Sachs and co got paid for their banal and irresponsible outburst that together with the papers that spread this populist propaganda support the picture of the enemy Germany. #thisisacoup = #thisisaSoup. The Euro Union is breaking in pieces and there is new old hate. Compliments. You put Germany at the wall.
1
The problems of Greece are much greater than their debt. The corruption is rampant - in 2014, 18% of the population payed at least one bribe. The tax system is extremely inefficient. The political system is supremely inefficient with nepotism from the top to the bottom. Finally, the bureacracy, overly regulated and ridden with red tape, hinders growth and competition. A friend of mine, from Greece, left his native country several decades ago. The reason was that he found the system to be "rotten to the core" and something that will "never be fixed". So he left. Something a great number of greeks have continously been doing. For this reason, simply writing off debt will not help Greece, but rather prolong the time it will take until they finally realize that more stringent measures must be taken.
5
this settlement is more political in nature than Fiscal. the other members of the Euro knew that Greece would never able to repay the past , present or future loans. Greece -along with some other small countries- should not be admitted into Euro.
we would not surprised to hear about the "fourth" bailout later.
we would not surprised to hear about the "fourth" bailout later.
1
I'm amazed that the Greeks still don't get it. They ecstatically voted "No" and now they're tossing Molotov cocktails because Tsipras is trying desperately to make a moribund nation swallow a bitter pill fiscal austerity?
For years, under successive governments, the Greeks have lived a hedonistic life, dismissing the profligate consequences of overwhelming debt with a cavalier ""What, me worry?" attitude. They cheated on their taxes, cooked their fiscal books to join the EU, and sipped Makedonikos and Agioritikos wines while lolling on the beach. All the while, the frugal Germans, their bete noire, were hard at work.
What exactly qualifies the Greek nation to ask for Europe's sympathy when it gorged on free lunch while the rest of the EU had to pay for theirs? Frankly, the Greeks that gave us Homer and Herodotus, Pericles and Solon, Archimedes and Euclid should be ashamed and get used to the harsh reality. Maybe then only they'd really understand the import of "Η φτήνια τρώει τον παρά," meaning "If you buy cheaply, you pay dearly."
For years, under successive governments, the Greeks have lived a hedonistic life, dismissing the profligate consequences of overwhelming debt with a cavalier ""What, me worry?" attitude. They cheated on their taxes, cooked their fiscal books to join the EU, and sipped Makedonikos and Agioritikos wines while lolling on the beach. All the while, the frugal Germans, their bete noire, were hard at work.
What exactly qualifies the Greek nation to ask for Europe's sympathy when it gorged on free lunch while the rest of the EU had to pay for theirs? Frankly, the Greeks that gave us Homer and Herodotus, Pericles and Solon, Archimedes and Euclid should be ashamed and get used to the harsh reality. Maybe then only they'd really understand the import of "Η φτήνια τρώει τον παρά," meaning "If you buy cheaply, you pay dearly."
6
The chess match that now characterizes the process of allowing Greece to survive in the European Union (E.U.), if only barely, at the whim of Germany and its allies like Finland, has now reverted to the latter's respective parliaments for approval and the resumption of the contentious negotiations to fund the Greek debt. With a key member of the financial "troika," the International Monetary Fund (I.M.F.) now firmly aligned with Greece in seeking debt reduction, it now is up to Germany to either force the so-called "Grexit" that expels Greece from the Euro or finally to admit the failure of its harsh austerity program. Given the animosity and distrust, it is hard to envision German Chancellor Angela Merkel suddenly changing course and giving in to any demand to reduce Greece's debt. However, if the I.M.F. balks as it appears, Greece might be forced out and the E.U. and the Euro might be irreparably damaged.
And if somehow tomorrow everyone stopped lending to the Greeks, the same pious commentators would cry discrimination and injustice and tyranny and whatever else is the buzzword of the day.
3
No matter if you are on the side of the right or the left I think we all can agree that being in debt sucks. There is a lesson to be learned by the situation in Greece. will debtor nations learn? Sadly I doubt it.
3
This situation in Greece is like a father being willing to bail out his son who has run up his credit card bill so high he can't repay it unless dear old Dad pays it off. But in order to pay off the debt, Dad requires his son to change his spending habits. What this amounts to is the son can no longer continue to spend at the same level that got him very deep in debt the first time. Now, if the son refuses to change his spending habits, then dear old Dad will not help and the son will go into bankruptcy. I didn't even finish HD and understand that much about economics. It really is that simple.
11
Listening to the "man on the street" interviews conducted by BBC, etc., I came away with the feeling that the Greeks have no understanding of economic reality. I know there are a lot of smart people in Greece, but they must be a distinct minority. I thought I was listening to my 11 year old granddaughter.
4
It’s irrelevant if Greece gets more money or not, nor if they get a debt relief.
There will be no economic recovery after a debt relief.
Why should anybody invest in Greece? The country has to offers no comparable benefits.
The problem is that Greece is unwilling or unable to tackle their economical and structural problems. Why should anybody invest in Greece? The country has to offers no comparable benefits. Nobody can help Greece, only they themselves.
- Fight the dramatic corruption
- Build a working tax organisation
- ....
There will be no economic recovery after a debt relief.
Why should anybody invest in Greece? The country has to offers no comparable benefits.
The problem is that Greece is unwilling or unable to tackle their economical and structural problems. Why should anybody invest in Greece? The country has to offers no comparable benefits. Nobody can help Greece, only they themselves.
- Fight the dramatic corruption
- Build a working tax organisation
- ....
4
Maybe is not a bad idea to read the agreement on Greece (http://www.consilium.europa.eu/en/press/press-releases/2015/07/12-euro-s..., about which everyone speaks and writes but few really know. Among other measures, are the following:
- "To help support growth and job creation in Greece (in the next 3-5 years) the Commission will work closely with the Greek authorities to mobilise up to EUR 35bn (under various EU programmes) to fund investment and economic activity, including in SMEs(1). As an exceptional measure and given the unique situation of Greece the Commission will propose to increase the level of pre-financing by EUR 1bn to give an immediate boost to investment to be dealt with by the EU co-legislators. The Investment Plan for Europe will also provide funding opportunities for Greece".
- "Upfront measures to improve long-term sustainability of the pension system as part of a comprehensive pension reform programme"(2).
- "The safeguarding of the full legal independence of ELSTAT"(3).
(1) USD 38.1 billion. Are the US providing similar help to a 11.5 million people country in the world?.
(2) Pension spending in Greece is above 16% of GDP!!!. Is it bad for the country try to rationalize this nonsense?.
(3) Geek statistics office submitted false data to the European Commission to join the monetary union.
- "To help support growth and job creation in Greece (in the next 3-5 years) the Commission will work closely with the Greek authorities to mobilise up to EUR 35bn (under various EU programmes) to fund investment and economic activity, including in SMEs(1). As an exceptional measure and given the unique situation of Greece the Commission will propose to increase the level of pre-financing by EUR 1bn to give an immediate boost to investment to be dealt with by the EU co-legislators. The Investment Plan for Europe will also provide funding opportunities for Greece".
- "Upfront measures to improve long-term sustainability of the pension system as part of a comprehensive pension reform programme"(2).
- "The safeguarding of the full legal independence of ELSTAT"(3).
(1) USD 38.1 billion. Are the US providing similar help to a 11.5 million people country in the world?.
(2) Pension spending in Greece is above 16% of GDP!!!. Is it bad for the country try to rationalize this nonsense?.
(3) Geek statistics office submitted false data to the European Commission to join the monetary union.
4
In the specific case of Greece, the first factor is the economic decay factor related to corruption in bureaucracy and cronyism .. much like Italy. Now, to overcome this impasse or negotiating bloc (one signed yesterday may be a smal part of it ) between Greece and the EU, both parties must agree on one fact: put Greece in a position to reach a number of years the standards of other European countries ..
This could be done with the support and direct involvement of experts from the EU countries and should interest any sector of the country. Only in this way Greece can hope and then to return to ensure stable and relible economic development and enable the EU to extend a loan that would be repaid.
This procedure will also affect other countries to heal their weak economies pervaded by this "social cancer", now it requires that the European Union, the USA, USSR and all the countries concerned together with the international organizations will drawn up standard procedures of compliance rules intervening directly in each country to approve a plan to counter tax evasion, tax havens, speculative finance and anti-corruption. Economic factors well established as major deterrents to economic and social development as well as triggering factors of religious and military conflict.
This could be done with the support and direct involvement of experts from the EU countries and should interest any sector of the country. Only in this way Greece can hope and then to return to ensure stable and relible economic development and enable the EU to extend a loan that would be repaid.
This procedure will also affect other countries to heal their weak economies pervaded by this "social cancer", now it requires that the European Union, the USA, USSR and all the countries concerned together with the international organizations will drawn up standard procedures of compliance rules intervening directly in each country to approve a plan to counter tax evasion, tax havens, speculative finance and anti-corruption. Economic factors well established as major deterrents to economic and social development as well as triggering factors of religious and military conflict.
1
What is overlooked, I think, is that Tsipras, say what you will about his negotiating techniques, has succeeded in getting every cash euro out of the EU that he could, in actual banknotes, and giving his people all the time he could to move money out of the country before he had to impose capital controls.
Every Greek mattress, I think by now, has its quota of 50-euro notes. Even on Grexit, I think, there will be enough euros out there for it to remain the currency de facto, with drachmas accepted at a discounted rate and with considerable reluctance. Add to that the fact that it is relatively simple these days to charge in foreign currency, including for hotel and similar, with credit and debit cards, I think on a Grexit the economy will function at some level, which means less possibility of a hyperinflation scenario.
That will probably disappoint those who expect, come the Grexit, to secure luxury beachfront vacations for a handful of semi-worthless drachmae. Sorry.
Every Greek mattress, I think by now, has its quota of 50-euro notes. Even on Grexit, I think, there will be enough euros out there for it to remain the currency de facto, with drachmas accepted at a discounted rate and with considerable reluctance. Add to that the fact that it is relatively simple these days to charge in foreign currency, including for hotel and similar, with credit and debit cards, I think on a Grexit the economy will function at some level, which means less possibility of a hyperinflation scenario.
That will probably disappoint those who expect, come the Grexit, to secure luxury beachfront vacations for a handful of semi-worthless drachmae. Sorry.
Everyone knows that there will be debt relief. But it will come only after the Greeks actually carry out their promises and act in a fiscally responsible way. They have been quite irresponsible for the last 10 years and now it is time to pay for their own very generous social welfare state, or leave Europe and inflate their way out of their perennial budget shortfalls.
10
They have behaved irresponsibly for the last 50 years, not 10.
It is not the working-class Greeks who are the problem. It is the wealthiest--the Onassis-level oligarchs--who have hidden their wealth in outlaw offshore banks--who are the problem, just as our oligarchs here are the parasites in our body politic. Evading taxes on a middle-class income might keep a few hundred dollars out of government revenues. Evading taxes on a 7 or 8-figure income keeps millions of dollars out of government revenues. Cut off the head of this monster, the international oligarchy, and keep an axman ready to lop off any successive oligarchs, and the economy will recover.
2
Interesting. Though, instead of 'cutting' and 'lopping' the world's richest horders, shouldn't we be trying to find a way to rid the world of 'safe havens' where they can squirrel away their money without consequences, whether in Switzerland or the Cayman Islands, which are effectively co-conspirators in the largest ongoing heist from the 'working man/woman' in human history?
Hmm.. coming from Europe's east, I cant read with a straight face writings about how badly the common Greek suffers - not in this article, to be precise, but in many others.
Greece is still a rich country. They have a long way to go down until they could even be considered 'middle income'.
And why do we have to pay for rich Greece's debts, or guarantee them - caused by her own mismanagement?
I want my money back
Greece is still a rich country. They have a long way to go down until they could even be considered 'middle income'.
And why do we have to pay for rich Greece's debts, or guarantee them - caused by her own mismanagement?
I want my money back
4
The agreements concluded between Greece and the European Union, imposed by the drama of the moment is perhaps the only possible although totally inadequate. THis agreement to be auspicious for a permanent restructuring of the Greek economy, must be immediately followed by concrete measures to reorganize the fiscal, economic social Greek system.
This crisis in the world is a crisis of legality and respect for the rules that affects more the most fragile and uncivilized countries. The economic instability in certain countries, as well as the rise of inequality among citizens is a consequence of this and depends not only on the economic and social structure of the country concerned (Greece, Italy or others ..) but also from the inability to efficiently manage finance and tax system by the International Institutions like UN, IMF, World Bank, IMF= effectiveness of International Politics by macro areas of our planet.
In the specific case of Greece, the first factor is the economic decay factor related to corruption in bureaucracy and cronyism .. much like Italy. Now, to overcome this impasse or negotiating bloc (one signed yesterday is a small part of it ) between Greece and the EU, both parties must agree on one fact: put Greece in a position to reach a number of years the standards of other European countries . This could be done with the support and direct involvement of experts from the EU countries and should be of interest to any sector of the country
This crisis in the world is a crisis of legality and respect for the rules that affects more the most fragile and uncivilized countries. The economic instability in certain countries, as well as the rise of inequality among citizens is a consequence of this and depends not only on the economic and social structure of the country concerned (Greece, Italy or others ..) but also from the inability to efficiently manage finance and tax system by the International Institutions like UN, IMF, World Bank, IMF= effectiveness of International Politics by macro areas of our planet.
In the specific case of Greece, the first factor is the economic decay factor related to corruption in bureaucracy and cronyism .. much like Italy. Now, to overcome this impasse or negotiating bloc (one signed yesterday is a small part of it ) between Greece and the EU, both parties must agree on one fact: put Greece in a position to reach a number of years the standards of other European countries . This could be done with the support and direct involvement of experts from the EU countries and should be of interest to any sector of the country
Discussions: YES! But please on the same level. Meaning - I don't have the feeling the americans are well informed. Most of the people here haved never visited Germany or Greece or read a europaen newspaper. But they have an opinion about the crisis, the greeks and germans. This opinion is based on a handfull articel published the last weeks and the breaking news on FOX. Look at your newspapers - do you realy have the impression that you are well informed? How many articles about the crisis in Europe you can find today at the NYT? How many (unbiased and based on facts) analysis you found there the last days? You are following the polemical theses of some scientist like lemmings without knowing real facts and knowing whats really going on in Europe. You never criticizing yourself but complains about Germany. The americans are always good in looking back in the history of others. That's ok! No one should forget what happened! But in return, it should be allowed to speak about American history (I don't want to start with the native americans and slaves) - let's talk about Vietnam, Iraq and so on! Instead of bashing Germany - read europaen newspapers, get independent information and learn!
4
I think Mr. Tsipras should get on a podium outside the Reichstag in Berlin and address a crowd of Germans. He should explain how they, the Germans, should be happy to work hard and pay their proper taxes so that his nation, the Greeks, can live large, retire early and NOT pay their taxes.
Because this is why they have been rioting in the streets of Athens. They just don't get it. They need to pay their own way in this world. Just like you and I do.
Because this is why they have been rioting in the streets of Athens. They just don't get it. They need to pay their own way in this world. Just like you and I do.
3
Contrary to what all politicians tell us, the bill does come due.
1
As with the entire world in this day and age, society believes it is appropriate to spend more than you have and governments/politicians are equally irresponsible promising more,for purposes of getting elected. This song has been played all over the world including the US (Our federal debt, Detroit, Illinois, Stockton, Boise, Student debt, Housing Crash, etc).
3
The Greeks don't get it: it's not 'Berlin' that pays, it's ordinary German citizens that finance this bail-out. The German state budget is balanced, and the new legal framework of public finances in Germany does not allow the State to run a deficit.
Berlin does not guarantee the bail-out with virtual money, this is real tax payers money. Why should a German citizen not ask the government to protect its interests? Greece has a track record of half a century of mismanagement, chaos, and lies. Germany is not the problem, it's Greece. If we just transfer money without any request for change, the situation will not improve for the Greek society. And France, Italy and others will simply ask for similar concessions in case.
Germans are fed up to pay for Greece while our own state says its has no money to pay for better education, infrastructure or healthcare. Let aside lower taxes (the highest in Europe).
Berlin does not guarantee the bail-out with virtual money, this is real tax payers money. Why should a German citizen not ask the government to protect its interests? Greece has a track record of half a century of mismanagement, chaos, and lies. Germany is not the problem, it's Greece. If we just transfer money without any request for change, the situation will not improve for the Greek society. And France, Italy and others will simply ask for similar concessions in case.
Germans are fed up to pay for Greece while our own state says its has no money to pay for better education, infrastructure or healthcare. Let aside lower taxes (the highest in Europe).
4
Who knows what to say. I'm flabbergasted, frankly, that the European Union can be so oblivious to the consequences of its own actions, not just for Greece but for itself, as well. I do not see how the IMF position is not integrated in a meaningful way, and the Greek people made to suffer endlessly. Greece needs a better plan to exit the Euro and it needs it now. Take the replenishment and run. At this point, the lenders do not deserve to get back their money.
2
The austerity measures will help Golden Dawn. Maybe that us what the Euro banks want, but they will regret it. The Greek people voted for Syriza in hope. Since the Left was unable to do anything they will probably go hard Right. I hope the effect is the same as the effect of reparations on Germany post WWI. Why Germany wants to recreate the treaty of Versaille is beyond me. I do hope Greeeks flood the rest of Europe with immigration and trash the economies of Northern Europe by sheer numbers. That would be fitting. Of course, that is the least harmful option. Maybe a Golden Dawn government can scare Europe sufficiently. Increased suicide rates do not faze them. DEm,ocracy is dead and if I was a Greek i would refuse to vote in ANY government. Let the EU take over day to day governance. They have destroyed Greek sovereignty. They should not get only the benefits without the cost of having to rule an angry people from afar.
Most inappropriate comment I have read so far.
But in Texas clocks tick differently anyway...
But in Texas clocks tick differently anyway...
From a Bulgarian newspaper:
"There are no signs that the austerity programs in Estonia, Latvia or Ireland killed their economy. Actually their economic facts show the opposite. Therefore we should better not talk about the Greek’s pride, about revolution or any other ‘blabla’ - there is nothing revolutionary fighting for your privileges with your bankruptcy at stake. It is also not about dignity, when you insist on tons of money you do not intend to pay back and instead ask for even more money.
About Prime Minister Tsipras: How do you call a person’s condition, who strikes on the table, demanding for billions of his lenders, calling them blackmailers right after and then negotiate with the same people promising to do whatever they are asking for to get the money? A tri-polar disorder?"
To the people who desperately want Germany to be the only "guilty" country.
"There are no signs that the austerity programs in Estonia, Latvia or Ireland killed their economy. Actually their economic facts show the opposite. Therefore we should better not talk about the Greek’s pride, about revolution or any other ‘blabla’ - there is nothing revolutionary fighting for your privileges with your bankruptcy at stake. It is also not about dignity, when you insist on tons of money you do not intend to pay back and instead ask for even more money.
About Prime Minister Tsipras: How do you call a person’s condition, who strikes on the table, demanding for billions of his lenders, calling them blackmailers right after and then negotiate with the same people promising to do whatever they are asking for to get the money? A tri-polar disorder?"
To the people who desperately want Germany to be the only "guilty" country.
2
Philip at the moment you will also acknowledge the Problem is not anymore what Greece does, want or how to solve their debt problem.
I advise you to read IMF report. Ever sane, logical and Future concerned person knew that the problem is Euro currency.
IMF ( god for sakes even IMF gave up) clearly signaled to EU leaders, there is no way to keep alive Euro other than moving forward and correcting the most important flaw in euro, Fiscal Union.
Without fiscal union, It is clear that Euro is working only Germany, and the rest effectively surrendered for being underdog. or other words, You cannot let Greeks govern their economy themselves or Italians them selves etc. Economy and fiscal issues of euro zone nations should be bring under one roof.
So Greece is dead in terms of economically and financially, it is time think about euro, which is the real issue here.
I advise you to read IMF report. Ever sane, logical and Future concerned person knew that the problem is Euro currency.
IMF ( god for sakes even IMF gave up) clearly signaled to EU leaders, there is no way to keep alive Euro other than moving forward and correcting the most important flaw in euro, Fiscal Union.
Without fiscal union, It is clear that Euro is working only Germany, and the rest effectively surrendered for being underdog. or other words, You cannot let Greeks govern their economy themselves or Italians them selves etc. Economy and fiscal issues of euro zone nations should be bring under one roof.
So Greece is dead in terms of economically and financially, it is time think about euro, which is the real issue here.
Lately I have tried to fight my one man war against the self-sabotage of the American left, and yes, I do resemble Don Quixote.
Nevertheless, I suggest again that the NYT and most of the commentators would reconsider their positions.
The problem is blatant invention of narratives. Now the new story is about the cruel Nazis who chokehold the Greek bystanders who were just selling some loosies.
Think, please! You are not advancing the cause of humane society by undermining your credibility. You are not convincing anyone but a handful of loudmouths who are not that different from the 911 truthers. You are alienating a lot of voters who don't believe that the real world is a simple morality story with villains and heroes.
Walk away from the exaggerated narratives about your own police officers. Walk away from the exaggerated narratives of evil Germans and innocent Greeks.
New York Times, please, investigate the Greek situation much, much more closely. Report the numbers, report the history, follow the money. Don't condone and implicitly support simplified narratives. Point out the shades of grey, explain the complexities. Don't let half-truths stand.
Nevertheless, I suggest again that the NYT and most of the commentators would reconsider their positions.
The problem is blatant invention of narratives. Now the new story is about the cruel Nazis who chokehold the Greek bystanders who were just selling some loosies.
Think, please! You are not advancing the cause of humane society by undermining your credibility. You are not convincing anyone but a handful of loudmouths who are not that different from the 911 truthers. You are alienating a lot of voters who don't believe that the real world is a simple morality story with villains and heroes.
Walk away from the exaggerated narratives about your own police officers. Walk away from the exaggerated narratives of evil Germans and innocent Greeks.
New York Times, please, investigate the Greek situation much, much more closely. Report the numbers, report the history, follow the money. Don't condone and implicitly support simplified narratives. Point out the shades of grey, explain the complexities. Don't let half-truths stand.
3
The debate and the events in the Greek parliament yesterday showed again a political immaturity criminal for the case. Tsipras did not fail to accuse the Europeans. One moment he accused the recent previous administrations in Athens, the next he asked them to help. The controversial president of the senate walked out, went back and theorized with "bubble talking" and finally resigned. A weak and unprecedented coalition became weaker, a call for rethinking, reshuffling, internal and governing instability. Is this government going to be the first to last a full years. Let us not forget that divisions in Greece have been the rule since antiquity, only now there lethal. On the other hand, Greeks exercised one of their passtimes, protesting and burning while the police was following them. It was the police that Tsipras indicated three months ago to change by laying back and staying in the background ( as if they were different before...).
2
So a NO vote now means YES. Looks like freedom has been steel-soled, click-clacked out of the birthplace of Democracy.
1
@Ben : Why don't the Germans get it?
Why don't the liberals get it?
That is, spending other people's money is fun. However, liberals rarely give their own money to the policy choices they espouse.
Why don't the liberals get it?
That is, spending other people's money is fun. However, liberals rarely give their own money to the policy choices they espouse.
6
You are behind the actuality, Moochers vs Givers , that sis the past.
The issue evolved to The Euro currency have been implemented correctly or with fatal flaw in it.
In other column, Finally German Finance minister accepted that Greece must be our of Euro which means Euro implementation was wrong.
At the end Countries doesn't change their currency whenever they like, consequences will be disastrous, which is proved in Greece case.
Euro constructed with flawed agreement and criminal negligence by the big powers of EU, it is payback time. meanwhile Greece was already flushed to drain.
That si what we are talking. Liberal's such as Krugman predicted this outcome 5 years ago, You austerity champions again deceived people with false premises, such as arbeit macht frei , Greece should not be in Euro, Costas Simitis told clearly in 2008 , Greece finance statistics were cooked and creditors well aware of it. But what would be the German intention to dump hundred billions euros to Greece other than eventually capitulating the Greece.
This is not anymore liberals vs conservatives issue, the issue has much more deeper than that.
The issue evolved to The Euro currency have been implemented correctly or with fatal flaw in it.
In other column, Finally German Finance minister accepted that Greece must be our of Euro which means Euro implementation was wrong.
At the end Countries doesn't change their currency whenever they like, consequences will be disastrous, which is proved in Greece case.
Euro constructed with flawed agreement and criminal negligence by the big powers of EU, it is payback time. meanwhile Greece was already flushed to drain.
That si what we are talking. Liberal's such as Krugman predicted this outcome 5 years ago, You austerity champions again deceived people with false premises, such as arbeit macht frei , Greece should not be in Euro, Costas Simitis told clearly in 2008 , Greece finance statistics were cooked and creditors well aware of it. But what would be the German intention to dump hundred billions euros to Greece other than eventually capitulating the Greece.
This is not anymore liberals vs conservatives issue, the issue has much more deeper than that.
I am a liberal, and though I think that there was an equal amount of bad lending on the part of the creditors, it is legitimate to ask the Greek Government, how are they going to pay back new loans?
Pension age increased to 67, VAT uniformised and increased, tax excemptions for the richest and for the isles reduced: why is that called 'austerity'? Greece sits on a wealth of primary products: there is gold in the north's mountains, there is oil and gas under the sea, all of it unexploited. Why haven't they even started to look into this? Why is this called a 'harsh' treatment when several europeancountries have a lower GPD/capita ?? The Greek left of course does not have the stomach to correct these sins of the past, the unions threaten to once again let the country come to a standstill: don't they realize they are only harming themselves even more? Of course debt restructuring should be discussed, but if the Greek don't even start correcting theuir failures of the past, nothing will come of it. And stop whining about these 'bad germans'.
12
One of the biggest parts of their economy is tourism. You can't go taking the tops off mountains and putting huge oil rigs in the ocean and maintain tourism.
AA Simon of NY NY said "I will be polite here. Germany needs to pound sand." I'm going to be impolite and say we should be careful about letting Germany have too much power. It's behaving like a despot, with disastrous humanitarian consequences.
Angela Merkel shows no normal human decency. Nobody can be oblivious to the Greek humanitarian crisis, but she is uncaring of it despite that she primarily has triggered it off. The ultimate hypocrite—refusing to allow for another country what her own country received. Was it a mistake, bailing Germany out so that it could become the country it is today?
There’s no integrity in its use of the power that it has as a result of the foundation it was able to build from that kindness. Merkel’s PR is ‘economic expediency’ and ‘unity’ in the Eurozone but she hasn’t a clue how to create and sustain long term unity and doesn’t understand economics and the real consequences of austerity even though they’re right in front of her.
You can’t create unity if you’re a bully and you don’t want to or don’t have the capacity to see that you’re dealing with human beings, not lifeless pawns on your chessboard. In two years Greek debt will be 200% of its GDP. Merkel et al can blame the Greeks and mouth off about being blameless themselves but that won’t change the truth—that their ignorance and inhumanity have cause this Greek tragedy.
Bullies, the lot of them. A lot of people who didn’t see it before see it now and despise them for it.
Angela Merkel shows no normal human decency. Nobody can be oblivious to the Greek humanitarian crisis, but she is uncaring of it despite that she primarily has triggered it off. The ultimate hypocrite—refusing to allow for another country what her own country received. Was it a mistake, bailing Germany out so that it could become the country it is today?
There’s no integrity in its use of the power that it has as a result of the foundation it was able to build from that kindness. Merkel’s PR is ‘economic expediency’ and ‘unity’ in the Eurozone but she hasn’t a clue how to create and sustain long term unity and doesn’t understand economics and the real consequences of austerity even though they’re right in front of her.
You can’t create unity if you’re a bully and you don’t want to or don’t have the capacity to see that you’re dealing with human beings, not lifeless pawns on your chessboard. In two years Greek debt will be 200% of its GDP. Merkel et al can blame the Greeks and mouth off about being blameless themselves but that won’t change the truth—that their ignorance and inhumanity have cause this Greek tragedy.
Bullies, the lot of them. A lot of people who didn’t see it before see it now and despise them for it.
5
Dear Jennifer,
again I underline that all (=19) countries pressurised Greece, not only Germany. So to take only one country out of the majority is kind of wrong.
You clearly follow all the statements blaming Germany as the bad guy forgetting that there are some other countries within the EU clearly voting for harder measures against Greece, because they have gone through "hell" during the financial crisis. Greece just refuses the same reforms they did with quite some positive effort.
There has been a debt cut for Greece in the last three years. Therefore Greece promised - again - to reform their country. But nothing happened - again.
All the countries in the EU are sick of being fooled by Greece.
Sick of being insulted.
Sick of paying for a richer country (for Ireland, Slovakia,...).
These are facts.
Germany clearly knows that their must be a cut. To give it now makes no sense due to the long terms of the credits. A cut without reforms would mean that other countries will follow and this will ruin Europe for sure.
Stop blaming Germany for others mistakes.
again I underline that all (=19) countries pressurised Greece, not only Germany. So to take only one country out of the majority is kind of wrong.
You clearly follow all the statements blaming Germany as the bad guy forgetting that there are some other countries within the EU clearly voting for harder measures against Greece, because they have gone through "hell" during the financial crisis. Greece just refuses the same reforms they did with quite some positive effort.
There has been a debt cut for Greece in the last three years. Therefore Greece promised - again - to reform their country. But nothing happened - again.
All the countries in the EU are sick of being fooled by Greece.
Sick of being insulted.
Sick of paying for a richer country (for Ireland, Slovakia,...).
These are facts.
Germany clearly knows that their must be a cut. To give it now makes no sense due to the long terms of the credits. A cut without reforms would mean that other countries will follow and this will ruin Europe for sure.
Stop blaming Germany for others mistakes.
Americans do not seem to understand what is really going on in Greece.
I have lived in Greece for nearly 2 years. Greeks are not lazy, it is just that they have another mentality towards work. According to our standards this might be lazy, but they have lived like this for hundreds of years. They do not understand that other nations might see them like this. They retire at age 50 or even earlier and before that they work slower than other nations and do not take most things very seriously. The tax system is so ineffective, it should not even be called a tax system. Because there basically is none. The rich are spared completely and most other 'normal' people pay less or nothing at all.
On another note, I find it appaling that so many people compare Germany's situation 1953 with Greece's situation right now. Greece is not a country destroyed by physical war. It destroyed itself by living over it means and not wanting to realize that this cannot go on forever. Of course they refuse now to leave their comfortable and slow lives behind them because to them it had worked very well so far.
If the United States were in the position of Germany or any other creditor, I can guarantee that everyone here would act in the same way. Because it is that hard working tax payers are forced to stand up for people that refuse to change anything. By the way, Greece already received a debt relief of nearly $50 billion not so long ago. Most of you seem to forget this.
I have lived in Greece for nearly 2 years. Greeks are not lazy, it is just that they have another mentality towards work. According to our standards this might be lazy, but they have lived like this for hundreds of years. They do not understand that other nations might see them like this. They retire at age 50 or even earlier and before that they work slower than other nations and do not take most things very seriously. The tax system is so ineffective, it should not even be called a tax system. Because there basically is none. The rich are spared completely and most other 'normal' people pay less or nothing at all.
On another note, I find it appaling that so many people compare Germany's situation 1953 with Greece's situation right now. Greece is not a country destroyed by physical war. It destroyed itself by living over it means and not wanting to realize that this cannot go on forever. Of course they refuse now to leave their comfortable and slow lives behind them because to them it had worked very well so far.
If the United States were in the position of Germany or any other creditor, I can guarantee that everyone here would act in the same way. Because it is that hard working tax payers are forced to stand up for people that refuse to change anything. By the way, Greece already received a debt relief of nearly $50 billion not so long ago. Most of you seem to forget this.
16
If the current Greek government had shown more diplomacy when they started renegotiating the 'bailout package', they probably wouldn't be in the same boat. Insulting your negotiating partners and apparently negotiating in bad faith tends to erode whatever goodwill the Greek governments had accrued previously.
7
I don't understand. The Greek government exhorted voters to reject a proposed deal. Over 60% of voters did. Then the same government negotiates a worse deal and imposes it. A lot of the talk is about how substantively unfair the deal is. But it also strikes me as procedurally flawed. For whom is the Greek government negotiating? The government seems unhinged.
4
All of you Greek apologists, I urge you, tomorrow morning please drive to your nearest walmart, walgreens, kroger , or macys. Walk in the door, go to a counter and pick up an item and walk out the door. When you are approached by security, an employee or police, just simply say:
“We took on powerful opponents, we clashed with international financial system,” he said. “And in that sense it was an uneven battle. But I’m proud of our fight.”
“We took on powerful opponents, we clashed with international financial system,” he said. “And in that sense it was an uneven battle. But I’m proud of our fight.”
8
This kind of oversimplification of the problem is exactly why it is where it is right now. Until we all are willing to accept that you can't take back the past and you have to swallow some of the dogmatism in order to rectify a situation and build a future, this is likely to descend into something far uglier. One side answering the other with only who is to blame while insisting on a solution that makes things worse is simply going to bring the crisis to its worst conclusion. To use your analogy, if Walmart's security response was you have to work for Walmart for negative ten cents an hour until you can pay it off, that would be more like what is going on here. This impossible to solve with more austerity.
The Germans keep wanting to punish the Greeks as if they were a disobediant child. Their condescending tone will leave scars on the European construct that will be difficult to heal. The Greeks keep on having to chose beteween one humiliation and an other. The United States of Europe, created around Prussia's despotic expansions, will end up clashing on Germany's short economic views that do not consider any geopolitics.
3
Every day I am quite shocked again by the comments and articles in the US papers.
Greece reached its goal to blame only the Germans for this tragedy - maybe because the Germans are so easy to blame using a 70-year-old weapon.
All the nations in the EURO (=19) voted against the Greece policy. Not only Germany. Some of the countries even voted for much harder measures against Greece (for example Slovakia, Ireland).
As a matter of fact some of the countries are much poorer than the Greeks and still they are paying for Greece.
And as the Germans all of these countries are sick of being fooled.
Sick of being insulted.
Sick of empty promises.
Sick of refusing the slightest reforms - even when they are obviously good for the country.
I am still wondering why the US is just not sending money, if this would cure the problem. Any idea?
Maybe the answer is, that everyone will realize in the next years, that the US increasing debts cannot be paid back as well.
Of course it is much better then to support a cut instead of underlining that mutual signed contracts must be followed.
Greece reached its goal to blame only the Germans for this tragedy - maybe because the Germans are so easy to blame using a 70-year-old weapon.
All the nations in the EURO (=19) voted against the Greece policy. Not only Germany. Some of the countries even voted for much harder measures against Greece (for example Slovakia, Ireland).
As a matter of fact some of the countries are much poorer than the Greeks and still they are paying for Greece.
And as the Germans all of these countries are sick of being fooled.
Sick of being insulted.
Sick of empty promises.
Sick of refusing the slightest reforms - even when they are obviously good for the country.
I am still wondering why the US is just not sending money, if this would cure the problem. Any idea?
Maybe the answer is, that everyone will realize in the next years, that the US increasing debts cannot be paid back as well.
Of course it is much better then to support a cut instead of underlining that mutual signed contracts must be followed.
13
All your saying is right but still, this entire Greece debt crisis driving euro affair to ditch, you can blame for that only one who is driving the bus, yes that one is Germany. It is sure soft belly is Greece, but it exposed the fatal flaw in Euro which Germany playing dumb since 2001.
If Germany was 'fooled' into taking over bad loans made by German banks ...
then, sadly, Germany has played the fool.
It's not an insult to state a fact.
And it's fine to say 'that mutual signed contracts must be followed', but out here in the real world, defaults happen all the time.
It's called 'risk'.
then, sadly, Germany has played the fool.
It's not an insult to state a fact.
And it's fine to say 'that mutual signed contracts must be followed', but out here in the real world, defaults happen all the time.
It's called 'risk'.
1
Don't worry. Greece has no intention to seriously implement any of the necessary reforms needed to address its economic depravity.
8
The IMF report saying Greece's debt is unsustainable, after a third bailout, came too late. For Ms. Lagarde, head of the IMF, the Greek debacle is turning into an institutional embarrassment.
Another bailout failure will add to criticism from developing countries shareholders, particularly BRICS, under represented in the Fund's decision making process.
The Greek tragedy shows how much the world has changed since 9/11. Not long ago, financial crises and social unrest did take place on exotic underdeveloped countries.
American/Europeans watched comfortably on their TV screens such tragedies happening in far away countries. Since 2009, it is the other way around. Schadenfreude.
Another bailout failure will add to criticism from developing countries shareholders, particularly BRICS, under represented in the Fund's decision making process.
The Greek tragedy shows how much the world has changed since 9/11. Not long ago, financial crises and social unrest did take place on exotic underdeveloped countries.
American/Europeans watched comfortably on their TV screens such tragedies happening in far away countries. Since 2009, it is the other way around. Schadenfreude.
2
I am impressed by the leadership of the leftist leader of Greece, who ate his words, went back on every campaign promise he made, and did the right thing. The referendum he called was ambiguous, and while 60% voted no to austerity measures, polls indicted that 3/4th of the citizenry wanted to stay in the EU and the Eurozone. Besides, the effect of abandoning the Euro in favor of a Greek currency would have probably resulted in hyperinflation, which is clearly much worse than continuing austerity prescribed by the EU.
On the other hand, the IMF has stated the obvious: that Greece's debt burden is unsustainable, and also that the current bailout amount is inadequate, making approval by the EU member countries legislatures problematic.
Frankly, this is an exponential moment for the EU, because they need to decide how badly they want to keep a member from succession. My hunch is that the EU bureaucracy wants it worse than the member countries citizens. In the end it will probably cost thousands of euros per citizen to keep Greece inside the EU and the Eurozone.
On the other hand, the IMF has stated the obvious: that Greece's debt burden is unsustainable, and also that the current bailout amount is inadequate, making approval by the EU member countries legislatures problematic.
Frankly, this is an exponential moment for the EU, because they need to decide how badly they want to keep a member from succession. My hunch is that the EU bureaucracy wants it worse than the member countries citizens. In the end it will probably cost thousands of euros per citizen to keep Greece inside the EU and the Eurozone.
1
Misinformation by the NYTimes is rare! Yet, the headline states that the Greek Government narrowly approved a package of tough austerity....
The final vote was 229 for and 64 against. This is an overwhelming approval.
A correction by the NYTimes is appropriate!
The final vote was 229 for and 64 against. This is an overwhelming approval.
A correction by the NYTimes is appropriate!
4
Won't most working-age Greeks just leave? How is the imposition of harsh austerity upon a member the act of a "Union"?
Germany adamant that the crushing, overwhelming, seemingly insurmountable debt that prohibits realistic attempts at movement forward and sustainable growth in Greece's economy not be forgiven? How much of their debts were cancelled and aid given to them post-WWII to rebuild their society after a war they instigated?
2
This IS NOT A DEAL, this is an insult aim to break the will of the people of Greece!!
1
"Greece, which is already €2 billion in arrears to the I.M.F. because of two loan payments it recently missed, faces a crucial deadline on Monday, when it must make a payment of €4.25 billion on bonds held by the European Central Bank.
The Greek government will probably be unable to make the payment unless it can secure some sort of temporary financing from the eurozone creditors. "
In other words, the European Central Bank needs to make a couple of entries in its computers, and everything will be fine. Only the ECB can make Euros, so all the countries using the euro are one entity. That entity is trying to maintain the independent identities of those countries, claiming that their money is different money than the money Greece has. Or doesn't. If Greece is to stay in the Euro, then the Euro must alter the demands of the greedy who care only for their money, and accept that part of itself is sick, and needs help.
If it is so difficult to accept that the creditors are not going to get their money back anytime soon, than they will have to write off all of their investment as Greece leaves the Euro and starts printing drachma. Everybody screwed up, there was lying and cheating, and now people are looking for a scapegoat. Greece has already been seriously wounded, and the eurozone is looking to finish her off.
Let Greece out, let it go back to its own currency, and let Greece figure out what is important.
The Greek government will probably be unable to make the payment unless it can secure some sort of temporary financing from the eurozone creditors. "
In other words, the European Central Bank needs to make a couple of entries in its computers, and everything will be fine. Only the ECB can make Euros, so all the countries using the euro are one entity. That entity is trying to maintain the independent identities of those countries, claiming that their money is different money than the money Greece has. Or doesn't. If Greece is to stay in the Euro, then the Euro must alter the demands of the greedy who care only for their money, and accept that part of itself is sick, and needs help.
If it is so difficult to accept that the creditors are not going to get their money back anytime soon, than they will have to write off all of their investment as Greece leaves the Euro and starts printing drachma. Everybody screwed up, there was lying and cheating, and now people are looking for a scapegoat. Greece has already been seriously wounded, and the eurozone is looking to finish her off.
Let Greece out, let it go back to its own currency, and let Greece figure out what is important.
1
"Under threat from the nation’s creditors " Actually, this should be. "Under threat from the other EUROZONE CITIZENS.
1
Why not live highlight the direct responsibility of USA in the Greek crash in 2010 ?.
In any case, the history of such a bankruptcy which paralyzed Greece came the downright from Goldman Sachs Group, which played an important role in the under-valuation of the Greek debt (which led to the crisis of 2010) after being designated by the government Greek , led by Papandreou Georgis , to serve as financial advisor .Hop! The Greek bank jumps and pushes an entire people to the soup kitchen... Mr. Tsipras can not do anything else but to comply with the requirements of European creditors themselves, frightened by the Pareto effect. So , the Greek bankruptcy suggests that over time it can destroy another European country to the image of Portugal, Poland or Tchequie , which are already in debt up to their necks and proceed by paltry repayments .Minima granted for fear of a new bankruptcy in European coffers already battered by a sort of chimerical union comparable to the collapse of the tulip in 1637.
In any case, the history of such a bankruptcy which paralyzed Greece came the downright from Goldman Sachs Group, which played an important role in the under-valuation of the Greek debt (which led to the crisis of 2010) after being designated by the government Greek , led by Papandreou Georgis , to serve as financial advisor .Hop! The Greek bank jumps and pushes an entire people to the soup kitchen... Mr. Tsipras can not do anything else but to comply with the requirements of European creditors themselves, frightened by the Pareto effect. So , the Greek bankruptcy suggests that over time it can destroy another European country to the image of Portugal, Poland or Tchequie , which are already in debt up to their necks and proceed by paltry repayments .Minima granted for fear of a new bankruptcy in European coffers already battered by a sort of chimerical union comparable to the collapse of the tulip in 1637.
5
You happy, Germany? You've bullied your ostensibly "compatriot" nation into submission. They've given up. You win.
Why do I have the strange feeling that the early- to mid- 1900s are repeating themselves?
Why do I have the strange feeling that the early- to mid- 1900s are repeating themselves?
1
... there were organized atrocities since the Greek landing at Smyrna 1919. ... ..they were witnesses to the atrocities perpetrated by Greeks in the Yalova, Gemlik, and Izmit areas and they . obtained abundant material evidence in the shape of "burnt and plundered houses, recent corpses, and terror stricken survivors" .... witnessed robbery by Greek civilians and arsons by Greek soldiers in uniform in the act of perpetration....when as the Greek Army landed, they started atrocities against the Turkish civilians, as they "laid waste the fertile Valley", and forced thousands of Turks to take refuge. Historian Taner Akçam noted that a British officer reported as follows:
..there was not even an organized resistance at the time of the Greek occupation. Yet the Greeks are persisting in their oppression, and they have continued to burn villages, kill Turks and rape and kill women and young girls and throttle to death children.
James Harbord, describing the ..occupation to the American Senate, wrote :
"The Greek troops and the local Greeks ..had joined them in arms started a general massacre of the Mussulmen [sic] population in which the officials and Ottoman officers and soldiers as well as the peaceful inhabitants were indiscriminately put to death." Armstrong, a Brit. officer....., reported that as the Greeks pushed out from Smyrna, they massacred and raped civilians, and burned and pillaged as they went.
https://en.wikipedia.org/wiki/Greco-Turkish_War_%281919%E2%80%9322%29
Probably you should address this question also to the other 17 countries voted against Greece. Some of them (the much poorer countries compared to Greece) even voted for harder measures. Of course it is much easier to follow the simple Greece prejudice that Germany is the guilty and bad guy.
But maybe you should even answer the question about the US hedge fonds - backed up by US federal court - pressing Argentina in the second bankruptcy within 13 years and ruining many people's life. I guess that is something different, isn't it? Especially when you keep in mind that the majority of the profit goes to just a bunch of richest guys.
But maybe you should even answer the question about the US hedge fonds - backed up by US federal court - pressing Argentina in the second bankruptcy within 13 years and ruining many people's life. I guess that is something different, isn't it? Especially when you keep in mind that the majority of the profit goes to just a bunch of richest guys.
This isn't going to end well and after the smoke clears and the debris are cleaned up Greece will still be between a rock and a hard place.
2
What did I tell you? That it would sail through the Greek Parliament, right?
Which is exactly what happened. It got overwhelming support in the Greek Parliament.
While just outside the Greek Parliament, on the streets of Greece, the ordinary Greeks protested against the Greek law makers accepting the deal.
Unfortunately the Greek police used violent methods to suppress the ordinary Greeks trying to stop the Greek Parliament from accepting the deal. They were cruelly beaten up on the streets. Nothing will stand in between the Greek lawmakers and the USD$96 BILLION.
When will the EU/ECB/IMF and the back seat driver USA kibitzing from afar, realise that this Greek government (and many past Greek regimes too) is probably corrupt.
It will agree to anything. As long as the lawmakers get their hands on the USD$96 BILLION.
Giving this Greek government USD$96 BILLION is NOT the same as giving it to the Greek population.
Very little will trickle down to the ordinary Greeks who need help.
By 2016, everyone will be wondering what happened to the USD$96 BILLION.
By 2016, why is Greece still dirt poor and why are the masses of ordinary Greeks starving?
Anyway in 2018, Greece will be back to ask the EU/ECB/IMF for a 4th USD$100 BILLION bail out. You don't want to lend money to Greece? Then the Greek politicians will say you are criminals & terrorists and that you want to humiliate Greece.
Which is exactly what happened. It got overwhelming support in the Greek Parliament.
While just outside the Greek Parliament, on the streets of Greece, the ordinary Greeks protested against the Greek law makers accepting the deal.
Unfortunately the Greek police used violent methods to suppress the ordinary Greeks trying to stop the Greek Parliament from accepting the deal. They were cruelly beaten up on the streets. Nothing will stand in between the Greek lawmakers and the USD$96 BILLION.
When will the EU/ECB/IMF and the back seat driver USA kibitzing from afar, realise that this Greek government (and many past Greek regimes too) is probably corrupt.
It will agree to anything. As long as the lawmakers get their hands on the USD$96 BILLION.
Giving this Greek government USD$96 BILLION is NOT the same as giving it to the Greek population.
Very little will trickle down to the ordinary Greeks who need help.
By 2016, everyone will be wondering what happened to the USD$96 BILLION.
By 2016, why is Greece still dirt poor and why are the masses of ordinary Greeks starving?
Anyway in 2018, Greece will be back to ask the EU/ECB/IMF for a 4th USD$100 BILLION bail out. You don't want to lend money to Greece? Then the Greek politicians will say you are criminals & terrorists and that you want to humiliate Greece.
But when do they start repaying their debt ?
2
Apparently, all that game theory that the US media went into orgasmic raptures about didn't work out too well.
9
Do you really think so?
I mean Varoufakis and Tsipras made Greece loose trust all over the world.
They ruined the small growth of GDP and decline of unemployment within a couple of weeks.
By insulting and accusing mainly Germany they even made it to get the majority in Germany to say "It's enough!" although most of the people want to help Greece even more. The hate they planted hopefully vanishes again in the following weeks. But I doubt it.
They didn't even hesitate to bring up Russia as a partner and pressurize the EU (and US).
So, you really think this game theory was so unsuccessful? THANK YOU!
The old "difference between theory and reality".
The damage Tsipras and Varoufakis caused within this time frame is really impressive in a negative way.
I mean Varoufakis and Tsipras made Greece loose trust all over the world.
They ruined the small growth of GDP and decline of unemployment within a couple of weeks.
By insulting and accusing mainly Germany they even made it to get the majority in Germany to say "It's enough!" although most of the people want to help Greece even more. The hate they planted hopefully vanishes again in the following weeks. But I doubt it.
They didn't even hesitate to bring up Russia as a partner and pressurize the EU (and US).
So, you really think this game theory was so unsuccessful? THANK YOU!
The old "difference between theory and reality".
The damage Tsipras and Varoufakis caused within this time frame is really impressive in a negative way.
This makes me not like the Germans so much. Where is their milk of human kindness? What would they do if a beggar approached them? another soul, who through no fault of their own, is in a wretched circumstance? The common man in Greece works longer hours for less pay and fewer vacations then most in Europe. These people are not to blame for what the bankers and crooks in their country have arranged. The Germans will carry this "karma" with them and it will have a way of coming back on them.
3
I am nearly speechless about so many wrong facts.
It is true that the normal worker works the same like many others in Europe. But the majority of the officials still retire very early with pensions far more than normal. Combined with the fact that 7.5% of the Greeks are working for the state (2.2% in Germany), you obviously have one of the major issues in Greece.
Germany is carrying more than 100bn Euros for Greece. Far more than any other country.
17 (=all!) other countries next to Germany voted the same against Greece. But Germany is the country to blame?
Some of the countries (Ireland, Slovakia,...) are even poorer than Greece and they still pay for Greeks unwiilingness for reforms.
Explain to them, why they should pour more money into a bottomless pit!
But I guess it is just easier to believe the Greek lies about Germany and repeat them over and over again. Isn't it?
It is true that the normal worker works the same like many others in Europe. But the majority of the officials still retire very early with pensions far more than normal. Combined with the fact that 7.5% of the Greeks are working for the state (2.2% in Germany), you obviously have one of the major issues in Greece.
Germany is carrying more than 100bn Euros for Greece. Far more than any other country.
17 (=all!) other countries next to Germany voted the same against Greece. But Germany is the country to blame?
Some of the countries (Ireland, Slovakia,...) are even poorer than Greece and they still pay for Greeks unwiilingness for reforms.
Explain to them, why they should pour more money into a bottomless pit!
But I guess it is just easier to believe the Greek lies about Germany and repeat them over and over again. Isn't it?
1
I am interested to know where you learned that the common man in Greece works harder with less pay and fewer vacations. I have not read this or heard this anywhere else and have the feeling you are just making it up. I am hardly a fan of Germany or of Germans, but why should a nation of savers and hard workers support a nation where people retire at 50 or so with fat pensions?
Facts? By law the germans have minimum 24 day payed vacation per year. They work 38-40 hours per week plus overtime. They pay up to 45% income tax plus solidarity surcharge, church tax and contributions to finance social security benefits. Means half of a year most of the germans pay for the government. The average income is 2000-2500€ net. Ususally you have to work 45 years to get your pension. Means you get retired at the age of 65-67. The minimum pension is 399€ for singles. It covers only the basics. The average cost of living are 650€ for a single household. A place in a nursing home costs between 2400-3300E per month. More facts?
this is from a stone-cold austerian (austeritator ?):
I am puzzled - austerity is not working on greece, everyone should be that honest to acknowledge this.
To make this work you need reforms that raise you productivity and expectations. You have to move by a stick, and that's what austerity is, but also by providing a path - at least that's what i think about it, and i know i am pretty alone with this opinion.
This austerity now is worse than a bombing raid. Why is Tsipras, why are the greeks accepting this. And they should realize there is no leniency, not for a long time. The rift has hardened, blame it on the brinkmanship of the last month.
I am puzzled - austerity is not working on greece, everyone should be that honest to acknowledge this.
To make this work you need reforms that raise you productivity and expectations. You have to move by a stick, and that's what austerity is, but also by providing a path - at least that's what i think about it, and i know i am pretty alone with this opinion.
This austerity now is worse than a bombing raid. Why is Tsipras, why are the greeks accepting this. And they should realize there is no leniency, not for a long time. The rift has hardened, blame it on the brinkmanship of the last month.
3
As 32 members of Tsipras's own party in the parliament and 3 of his ministers voted no to more austerity measures, he will have to reshuffle his government or form a new coalition with other parties. It may not be a bad idea, because he, as a radical leftist, must hate nepotism and corruption - a problem to growth and development.
With its mountain of debts and the lack of innovations and energy to create a vibrant economy, Greece will be mired in a perpetual state of hardships. Will Tsipras be the one to save his country?
With its mountain of debts and the lack of innovations and energy to create a vibrant economy, Greece will be mired in a perpetual state of hardships. Will Tsipras be the one to save his country?
3
Whether the bailout deal helps Greece come out of the debt or not, it's certain to cause political instability and chaos that might be worse than the Grexit.
5
The Greeks might not like the imposition of draconian rule by the Germans, but they should remember that the British have offered them no help at all. None.
16
Neither has the US (but, let's face it, the IMF is basically the US in European-tailored clothes). Why should Greeks live by the sweat of others's brows anyway?
1
What has it got to do with the British? We are not in the Euro, we never will be, we did not lend Greece any money to buy expensive goods from us (unlike France and Germany), we did not indulge in "la la land" economics by pretending that the North - South economic disparity in Europe before monetary union would not be a problem and it would all work out in the end. In fact Gordon Brown told the EU heads exactly that and warned them that this would eventually happen and the UK would not spend it's taxpayer's money bailing out Eurozone members.The Greeks should remember equally that the USA taxpayer have offered them no help at all either - probably for much the same reasons the UK will not get involved. The UK is not in the Eurozone and it is not our problem!
Why pick on the Brits?
The UK is not part of the Euro and is currently owed $10Bn by Greece in non-governmental loans. The USA has $11 Bn loans with Greece. What kind of help do you suggest we offer?
The UK is not part of the Euro and is currently owed $10Bn by Greece in non-governmental loans. The USA has $11 Bn loans with Greece. What kind of help do you suggest we offer?
I don't think anyone really understansd the mentality at work here, Google "German bankruptcy process". There is no easy discharging of debts, and it's regarded as a personal and moral failure. You are an absolute pariah and under control of the state for 7 years following your declaration. This is how it is now, and only a few years ago it was much much worse. This is how they are, culturally - the mistake is in expecting them to be otherwise.
10
There was a time when insolvency made you a pariah in the US. William McKinley's friends and supporters bailed him out in 1893, when he was Ohio Governor, so he would still have a chance to become president. Today, people want to renege on the loans that got them an education, and then use that education to earn money free and clear. Free stuff for all! Well, except the banks, and they ought to be in jail for 2008 or something.
2
First of all I seriously doubt that Google is the answer to fully understand the "mentality at work".
So many people comment on Germany and the Germans, having no clue what they are talking about.
Indeed, there is a 7-year ban when you have to declare a personal insolvency. To reach this final state is rather difficult and only for private persons, not for companies. It was established to prevend - more or less criminals - to easily go into insolvency hiding 'stolen' money from your debitors with a family member and probably doing this over and over again. As a matter of fact these scenarios are only possible between private persons. Banks would never lend you too much money without a chance getting it back. So bottom line this private insolvency right is a protection of the private sector. Of course the 7-years are also a bit too high in my opinion.
Following the US model - where the majority can easily owe too much money to banks and others - led into the world wide financial crisis. The one or the other will remember. Is this the better way!? I doubt it.
And please be more sensitive with a judgements of a country you have probably never been to and your knowledge comes from Google...
So many people comment on Germany and the Germans, having no clue what they are talking about.
Indeed, there is a 7-year ban when you have to declare a personal insolvency. To reach this final state is rather difficult and only for private persons, not for companies. It was established to prevend - more or less criminals - to easily go into insolvency hiding 'stolen' money from your debitors with a family member and probably doing this over and over again. As a matter of fact these scenarios are only possible between private persons. Banks would never lend you too much money without a chance getting it back. So bottom line this private insolvency right is a protection of the private sector. Of course the 7-years are also a bit too high in my opinion.
Following the US model - where the majority can easily owe too much money to banks and others - led into the world wide financial crisis. The one or the other will remember. Is this the better way!? I doubt it.
And please be more sensitive with a judgements of a country you have probably never been to and your knowledge comes from Google...
Only one of several reasons why today's Germans will not be able to effectively lead a United Europe that could act as a true peer of USA or the Asia giant.
Not wanting to sound the pessimist -- But it will only be a short amount of time before yet another IMF payment is delinquent, and this new deal also falls through. It is a given fact that "Austerity" is simply not a word in the Greek vocabulary. Greece continues to come up late -- and short, every time.
And while it may somehow continue to remain in the EU, its days in the Euro are numbered.
And while it may somehow continue to remain in the EU, its days in the Euro are numbered.
11
It appears that democracy is dying rapidly. Just days ago, the Greek people voted, by about 60 percent to 40 percent, to say no to creditor demands that were less harsh than these. The Greek people have been ignored.
And I know that this will make me sound politically inconsistent, but in this country we've decided to ignore the Constitutional requirement that treaties are only enacted upon the consent of the Senate. (W.D.C. has agreed that the Iran treaty passes unless the no vote is two thirds).
And the entirety of the world is becoming subject to the dictates of the World Bank and the International Monetary Fund and Globalist contrivances and cabals that rebuff and repudiate the will of the people, e.g., environmental legislation may be nullified if it "infringes" on world trade.
Having sounded in some ways left, and in some ways right, I suspect that this post will get no positive responses.
And I know that this will make me sound politically inconsistent, but in this country we've decided to ignore the Constitutional requirement that treaties are only enacted upon the consent of the Senate. (W.D.C. has agreed that the Iran treaty passes unless the no vote is two thirds).
And the entirety of the world is becoming subject to the dictates of the World Bank and the International Monetary Fund and Globalist contrivances and cabals that rebuff and repudiate the will of the people, e.g., environmental legislation may be nullified if it "infringes" on world trade.
Having sounded in some ways left, and in some ways right, I suspect that this post will get no positive responses.
11
It seems that after a marathon negotiating session arguing over the minutiae, Europe cannot see the forest for the trees.
Greece cannot pay back its debts. it has neither the ability, nor it seems, the inclination. The money given to Greece and any in the future is lost. Greece defaulting and going back to its own currency seems like the least worst option.
Greece cannot pay back its debts. it has neither the ability, nor it seems, the inclination. The money given to Greece and any in the future is lost. Greece defaulting and going back to its own currency seems like the least worst option.
4
I've asked myself for a while where the hatred against Germany in the comment section comes from. It's getting increasingly clear: Many people here are only interested in the Greek crisis as an analogy to the US economy. Germany is equated with the Banks, Greece with the middle class and people with lower income in America.
Of course that doesn't work on many levels. Just one example: poorer countries pay because Greece doesn't collect tax from Greek millionaires and billionaires.
Hence all this confusion.
Of course that doesn't work on many levels. Just one example: poorer countries pay because Greece doesn't collect tax from Greek millionaires and billionaires.
Hence all this confusion.
26
The Greeks brought these harsh proposals on themselves; they should stop blaming everyone else. They have borrowed ad infinitum, refused to honour their commitments for reform promised at the second bailout; renege on re-payments to IMF and everybody else. Then along comes Tsipras with his whiplash changes of mind and a finance minister who uses words like blackmail, terrorism. Of course, one wonders why the Eurozone wants to keep throwing good money after bad; it can only be because they don't want the euro to break up. The Greeks know this and will blackmail the Eurozone for all its worth. Even though the Greek parliament has passed the new austerity measures dictated by the Eurozone it shouldn't be long before they start stalling, delaying, re-negotiating and in the end they will again renege. They've done it twice so a third time is easy for them.
16
But, "timeo Danaos [Greci] dona ferentes" -- I fear the Danaeans [Greeks] bringing gifts. Whether Greece wants, can, and will be able to, live to its undertaking is far from certain, and the uncertainty is not reduced by the International Monetary Fund's proposal to forgive a part of Greece's debt. And whose money is it that the IMF is ready to forgive so generously? The simplest solution would be to let Greece out of the Euro zone and write off the Greek debt over some period of time -- as I noted earlier, at present it amounts to about €1,500 or $1,650 per adult of the European Union's population, excluding that of Greece.
It will be time enough to worry about further consequences, such as Greece's exit not only from the EU, but from NATO as well.
It will be time enough to worry about further consequences, such as Greece's exit not only from the EU, but from NATO as well.
4
I am hoping that the IMF does not provide any further monies to Greece unless there is substantial debt. relief as the majority of IMF funds are American taxpayers monies. If the Greek "leaders" had any brains they would be formulating a plan to leave the Euro without "dying" fiscally. Europe has committed its future to its present and although inflation is hated and feared by European financial experts, the tremendous debts. now existing for the EU will only recede that way and over very long periods of time. This scenario requires a freeze of any excess spending. The standard of living in Europe is surely going to drop as can already be evidenced by so many professionally educated and trained young Europeans waiting tables at restaurants and the availability of medical services being given to those with an $appointment$. Greece should get out now while the getting out is possible without having to give away the "family jewels".
4
At no time have I read the Greece has a normal, rational economy. All reports agree that Greece is crippled by a corrupt, bloated, and highly bureaucratic government. It rife with no show jobs, graft etc. corruption exists at all levels of their society.
The national pastime is to starve government of revenues while bleeding it dry via a distorted form of socialism. Amazingly, while the population knows this truth, they have a bizarre sense of entitlement.
Austerity will not cure this problem, but an economic collapse might provoke the introspection needed for reform. Grexit is the sole solution.
The national pastime is to starve government of revenues while bleeding it dry via a distorted form of socialism. Amazingly, while the population knows this truth, they have a bizarre sense of entitlement.
Austerity will not cure this problem, but an economic collapse might provoke the introspection needed for reform. Grexit is the sole solution.
26
How is it that conservatives pretend to know economics when in reality they are clueless?
Here is a quick lesson with numbers (if you want to respond, you should also use numbers not catchphrases):
Each American owes $57,000.
Each Greek owes $30,000
America's GDP has grown 16% since 2009.
Greece's GDP has shrunk 25% since 2009.
Austerity does not work. If Bush and Obama did not stimulate the economy we might not be better off than Greece now. The Greeks cannot print their own currency, so they are trapped.
All of you claiming that the Germans are simply sticking to rules, ask what they did when Deutche Bank was loosing billions of dollars because they gambled in the US real estate market.
Here is a quick lesson with numbers (if you want to respond, you should also use numbers not catchphrases):
Each American owes $57,000.
Each Greek owes $30,000
America's GDP has grown 16% since 2009.
Greece's GDP has shrunk 25% since 2009.
Austerity does not work. If Bush and Obama did not stimulate the economy we might not be better off than Greece now. The Greeks cannot print their own currency, so they are trapped.
All of you claiming that the Germans are simply sticking to rules, ask what they did when Deutche Bank was loosing billions of dollars because they gambled in the US real estate market.
15
To compare the US GDP and debts per capita to Greece is quite alright.
But when you do, you should as well point out the development of the debt per person.
The increase in the US is 49,3% from 2009 to 2014.
It doubled within only 7 years and so outrunning any growth of GDP.
I haven't heard only one economist explaining how the US is planning to pay this back. Being sarcastic, I could point out that it is quite clear why the US supports Greece on a cut.
Yes, the US can print more money, of course. Leading to the loss of the people and even more poverty.
I still don't get - maybe that is why I am not an economist - how spending more money you have and will have - is a long term plan!?
But when you do, you should as well point out the development of the debt per person.
The increase in the US is 49,3% from 2009 to 2014.
It doubled within only 7 years and so outrunning any growth of GDP.
I haven't heard only one economist explaining how the US is planning to pay this back. Being sarcastic, I could point out that it is quite clear why the US supports Greece on a cut.
Yes, the US can print more money, of course. Leading to the loss of the people and even more poverty.
I still don't get - maybe that is why I am not an economist - how spending more money you have and will have - is a long term plan!?
Economic wonderland Greece? Which significant industry are in Greece ? Are we talking now of production output of Olives ? A report published by the European Commission has condemned Greece for falsifying its data on public finances. In 2004 Greek data was so unreliable that debt and deficit figures was even higher than the revised forecast. Greece admitted that the budget figures it used to gain entry to the euro three years ago were fudged. The Finance Minister, George Alogoskoufis, said the true scale of Greece's budget deficit was massively understated enabling Athens to dip below the qualification bar and into the EU's single currency. You may be wondering why Mr. Schaeuble is so harsh to your fello Countrymen
This whole affair between Greece, its bank creditors, and the European Union is hardly settled, despite news of an agreement with Europe, and with Greece's Parliament accepting the terms of that agreement. Not only will it be impossible for Greece to repay the money it owes, they have no intention of paying it back and never did.
The left wants to view this as a vindictive Germany at work here, attempting to ruin Greece with draconian repayment terms, but the truth is Greece has ruined itself with its corruption, its dishonesty as a nation about what it is, and and with its long-running inability to govern itself effectively. The wealthier European countries to the north have reached the limits of their compassion concerning Greek behavior, and are asking when enabling bad behaviors by loaning them more money is simply encouraging a con artist to play them again and again.
This matter will go on in this fashion for years into the future. It will drop out of the daily news headlines, but the underlying issues will remain unresolved because the whole EU structure is built on political quicksand, and has no effective way of stopping its wayward members from taking advantage of a fiscal union without any enforcement mechanisms.
23
So in the next 4-5 weeks, Greece's government is busy, busy, busy, identifying and improving VAT collection, renovating methods, meeting with best-in-class professional business types, thanking the EU and the troika for their tireless efforts, and not making any additional criticisms in public!
Tsipras may astound all the Greeks when he recovers Greece in this term. Not the next one.
Tsipras may astound all the Greeks when he recovers Greece in this term. Not the next one.
2
There is no moral element to this and relief that Germany got after WWII is irrelevant.
What matters is that Greece is a spendthrift and its creditors, who certainly did their due diligence, were equally irresponsible in lending to Greece.
A fair and just result is that the creditor and the lenders experience some pain, but the majority of Europe's ruling class seem to believe that only Greece should suffer. Imposing harsh, unjust and impossible to meet demands on a country will not resolve this problem.
Everyone needs to grow up. Greece needs to begin to act responsibly and, if it can't, it shouldn't be able to borrow. The lenders need to recognize that they've made bad loans, write them off and be more prudent in the future.
What matters is that Greece is a spendthrift and its creditors, who certainly did their due diligence, were equally irresponsible in lending to Greece.
A fair and just result is that the creditor and the lenders experience some pain, but the majority of Europe's ruling class seem to believe that only Greece should suffer. Imposing harsh, unjust and impossible to meet demands on a country will not resolve this problem.
Everyone needs to grow up. Greece needs to begin to act responsibly and, if it can't, it shouldn't be able to borrow. The lenders need to recognize that they've made bad loans, write them off and be more prudent in the future.
20
"The fund’s decision to go public with its position suggested that the draft agreement would be only the starting point for further negotiations about the sustainability of the debt and the willingness of lenders to recognize that they might not get all their money back."
People seem to miss the fact that the EU is taking this opportunity to enforce some discipline on Greece, which Greece has so far managed to dodge, e.g. raising the retirement age so that it conforms with the rest of Europe. The media continues to refer to this type of reform as a "harsh austerity measure" but one wonders whether this cliche accurately characterizes the facts.
People seem to miss the fact that the EU is taking this opportunity to enforce some discipline on Greece, which Greece has so far managed to dodge, e.g. raising the retirement age so that it conforms with the rest of Europe. The media continues to refer to this type of reform as a "harsh austerity measure" but one wonders whether this cliche accurately characterizes the facts.
3
This is Greece's only choice. To reject the plan would mean leaving the euro, with a likely drop in the value of Greek assets of 50%, and runaway inflation. While debt relief is a long-term issue, getting the banks open and some kind of economic reforms going is urgent. Maybe this will finally force the Greeks to shed the corruption and tax evasion that has long plagued their society
13
This concise article explains that Greece was never bailed out. Starting in 2010, banks were bailed out, with the transfer of Greek debt to European taxpayers. Northern Europeans (Germany and France in particular) saved their banks and their economies - at the expense of Greece. How long will they keep dreaming that their lopsided currency union without fiscal union will endure?
http://jubileedebt.org.uk/reports-briefings/briefing/six-key-points-gree...
http://jubileedebt.org.uk/reports-briefings/briefing/six-key-points-gree...
11
A fiscal union would require that many of the Eurozone Members State countries give up a great deal of their sovereignty and amend their constitutions. Imagine what would be required if Mexico and the USA would somehow get a common currency and then would both have to give up their power to decide on their own fiscal policy to a higher governing body.
From http://mazi-ta-fagame.gr/v1/?p=2621
Recent survey by GPO, conducted for the National Confederation of Greek Commerce.
Based on experiences in their daily transactions, Greeks award the gold medal for tax evasion to medical doctors at a rate 88.6%, followed artisans (eg electricians, plumbers) 85.4%, then law firms - notaries (75.2%), restaurants and taverns 57.9%. The list of those who evade taxes, according to the survey , even including gas stations (44.1%), small shops (37.6%) and supermarkets (17.7%).
Question:
What makes the EU believe that the new bail out will work any better ?
Recent survey by GPO, conducted for the National Confederation of Greek Commerce.
Based on experiences in their daily transactions, Greeks award the gold medal for tax evasion to medical doctors at a rate 88.6%, followed artisans (eg electricians, plumbers) 85.4%, then law firms - notaries (75.2%), restaurants and taverns 57.9%. The list of those who evade taxes, according to the survey , even including gas stations (44.1%), small shops (37.6%) and supermarkets (17.7%).
Question:
What makes the EU believe that the new bail out will work any better ?
20
And General Electric, along with many other corporations, hasn't paid any federal income taxes in years. But in this country that's legal.
12
What makes anybody believe that the errors of the fathers will work any better than than the errors of the same patriarchs when they blew it the first time? And apply the same errors again and again? Hear the IMF -- and sorry Shylock, there's no blood in that turnip and never was.
Many fake bailouts. Lots of protecting imprudent German banks (German banks - that wanna be like New York banks and immune from their own ripoff stupidity -- maybe they can sell the lie of innocence - HAH banks with no clue about real assets, to big to -- yeah yah)
Many fake bailouts. Lots of protecting imprudent German banks (German banks - that wanna be like New York banks and immune from their own ripoff stupidity -- maybe they can sell the lie of innocence - HAH banks with no clue about real assets, to big to -- yeah yah)
And the relevance to that to this discussion is what exactly?
Regardless of the vote in the Greek Parliament this drama is far from over. The draconian terms imposed by Germany has pushed Greece to the brink of a failed state. Greece's current government will not survive and soon a new election will bring deep discord and violence to the streets. It never ceases to amaze how obtuse the Masters of Europe (Germany) have been in this entire lamentable affair. They are the leading beneficiaries of the Euro Zone and they are burning down part of the house. Now let's see if they can put out the fire.
10
"The draconian terms imposed by Germany has pushed Greece to the brink of a failed state."
Let's see, banks loan Greece money but those same banks are at fault for Greece's failed economy for loaning Greece the money in the first place.
Greece needs more money and banks shouldn't loan Greece anymore money but are called upon to do the right thing and loan Greece the money. Greece won't be able to pay it back but the banks took risk so too bad. Got it. The liberal perpetual victim machine.
Let's see, banks loan Greece money but those same banks are at fault for Greece's failed economy for loaning Greece the money in the first place.
Greece needs more money and banks shouldn't loan Greece anymore money but are called upon to do the right thing and loan Greece the money. Greece won't be able to pay it back but the banks took risk so too bad. Got it. The liberal perpetual victim machine.
6
There is already coined a terminology for Greece , if austerity keep going.
First Economical concentration camp in German Euro Empire.
People will work for only to pay debt but nothing, will hope one day you know that term A.M.F.
First Economical concentration camp in German Euro Empire.
People will work for only to pay debt but nothing, will hope one day you know that term A.M.F.
How melodramatic you are. Greece has been a basket case for many years. Despite a cash infusion of a huge cash infusions Greeks just can't make hay. Their forefathers are turning in their graves ...
Edit needed: Within the first few lines of this article (front page) it says "...lawmakers narrowly approved." In the body of the article it says "The measures passed easily." I believe the second is correct.
19
There are plenty of inaccuracies in the article. Who cares about finer details? In particular Schäuble is misquoted, apparently he is the perfect villain. Readers interested in a better coverage should read the Guardian.
The lefties seem to be political invertebrates, they can't seem to pick a course and keep to it; the righties will stick to their beliefs even if it will take them over the edge of the earth. Would you choose a left shoe or a right one?
2
Not everyone is as stupid as you think. One can have a value-system, yet still engage in critical thought, analysis, and even introspection.
"...of harsh austerity measures..." Leave it to the NYT to call living within one's means "harsh." Really goes against the Times support of socialism.
26
Three times applying for welfare. Why this odd feeling that Greece constantly needs to be bailed out? Cut the cord and let them make it on their own. The Greeks keeps saying the EU is humiliating them, its not the EU but they constantly keep shooting themselves in the foot.
Greece is a drain on the rest of the union, sever the gangrenous part of the union and be done with this crowd who think they are entitled to be coddled from cradle to grave.
Nice shot in the Times of the violent protests which shows what type of hoodlums roam the streets. Shame on them all!
Greece is a drain on the rest of the union, sever the gangrenous part of the union and be done with this crowd who think they are entitled to be coddled from cradle to grave.
Nice shot in the Times of the violent protests which shows what type of hoodlums roam the streets. Shame on them all!
7
You've clearly spent zero time studying the eurozone, with its history of financial chicanery and internecine power-politics that has yielded this all-too tragic, yet predictable, moment.
If you had, you'd realize that, although the Greek government has been far from blameless, the German government has exploited its perch as the eurozone's biggest economy to leverage the zone's monetary policy to its benefit, at the expense of smaller, weaker members. Of course, there's much more to it.
You've instead taken 45 seconds of your life to express a know-nothing attitude laced with a dumbed-down ideology.
If you had, you'd realize that, although the Greek government has been far from blameless, the German government has exploited its perch as the eurozone's biggest economy to leverage the zone's monetary policy to its benefit, at the expense of smaller, weaker members. Of course, there's much more to it.
You've instead taken 45 seconds of your life to express a know-nothing attitude laced with a dumbed-down ideology.
7
Having spent much time considering this issue, I can say that your response to Steve is silly. His view is far closer to that of many Europeans than yours.
I think Tsipras needs to demonstrate some reforms. The reforms are overdue. I recall reading this February NYT article which reported that Greece may have as much as 97B Euros in unpaid taxes: http://www.nytimes.com/2015/02/27/business/international/in-greece-bailo...
Maybe Greece should institute a sort of amnesty program: Pay the back taxes you owe by year end and we'll waive the penalties; don't, and your penalties will be increased 5x and we'll pursue you as a felon and prosecute/jail you. Maybe a little legislation to put some teeth in that? And some PR: Somehow, Greece needs to make tax evasion seem unpatriotic, rather than a national pastime.
The citizens of other European countries -- and the honest people from the lower/middle classes in Greece -- shouldn't be asked to make up the gap that wealthy tax evaders are helping to create.
Maybe Greece should institute a sort of amnesty program: Pay the back taxes you owe by year end and we'll waive the penalties; don't, and your penalties will be increased 5x and we'll pursue you as a felon and prosecute/jail you. Maybe a little legislation to put some teeth in that? And some PR: Somehow, Greece needs to make tax evasion seem unpatriotic, rather than a national pastime.
The citizens of other European countries -- and the honest people from the lower/middle classes in Greece -- shouldn't be asked to make up the gap that wealthy tax evaders are helping to create.
20
It's not just the wealthy that evade taxes in Greece. It is a national pastime. I was offered to pay less in cash for a purchase in Greece -- apparently to allow the seller to avoid reporting the revenue and paying the sales tax (VAT). There are well-documented cases of real estate tax cheating as well.
1
The same choice has existed for 5 years or more: Debt relief of some kind or Grexit. They are not going to pay all of this back. When I owe you 1 drachma, I have a problem. When I owe you 1 billion drachma, you have problem.
13
I feel so badly for the Greek people. Austerity is NOT the answer.
13
Austerity is clearly a bad answer. It indicates, states have been over-borrowing and overspending during the good times.
1
It appears that Mr. Tsipras decided to play poker with the rest of the Eurozone countries and lost. He bluffed and then had to back down. One can understand his interest in playing the game in attempting to get the best deal for Greece, but perhaps he shouldn't have played this game unless he was willing to maintain his defiance all the way.
Now he represents a population that is at odds with his stance. Greece is on record as wanting to defy the Eurozone, but they have been let down by a politician who backed out. So now we will go on extending and pretending when the Greeks had finally summoned the courage to go it alone.
Though the costs of going it alone are high, it may have been the best solution in the long run. In a country that invented the theory of democracy, we find that Greek leaders continue to serve their constituents poorly.
Now he represents a population that is at odds with his stance. Greece is on record as wanting to defy the Eurozone, but they have been let down by a politician who backed out. So now we will go on extending and pretending when the Greeks had finally summoned the courage to go it alone.
Though the costs of going it alone are high, it may have been the best solution in the long run. In a country that invented the theory of democracy, we find that Greek leaders continue to serve their constituents poorly.
11
Have you ever faced starvation?
I am thinking, this should be us in about 20 years or so. Enjoy the free liberal/progressives/socialist/communist ride while you can, because when it is over, it's going to get ugly.
5
As a fairly read historian of the 20th Century, I remember studying what happened in Germany post WWI. It wasn't pretty. Actually it was ugly. Is that what you are talking about?
Actually, the Greeks were smart to vote in the austerity because they can always default later without the full austerity measures in compliance, and I think they will end up doing just that. The IMF position makes it easier in the long run for them to default on some of the debt because the Greeks will cite the IMF position as the justification for their own default. Germany refused to let them have a haircut, so they will just give themselves the haircut by never paying back the debt.
4
Successive Greek governments have already done that. This is why the Eurozone countries have lost trust in Greece.
2
Greece should have never been allowed to use the euro. The politicians cooked the books. Also, to be frank, Greece is a 2nd world nation. (It is the truth.) For that country to be allowed to use euro was poor judgment on Germany and the other 1st world nations of the European Union.
15
Germany objected vehemently. France wanted as many small countries in as possible and the US wanted Eastern Europe in.
5
Eric , what you express is the truth.
Nobody disagrees Greece economic management was disaster at best.
But
Creditors doesn't seem to be naïve or their best intention.
Creditors knew very well Greece will never pay that amount of debt, so under international laws Creditors have very right to confiscate Greece GDP , but at the same time Greece tied with euro , so Creditors knew that Big nations of EU try to save euro , they will get some money from there too.
Who is loosing end of this deal, Greece ordinary people and EU tax payers.
Nobody disagrees Greece economic management was disaster at best.
But
Creditors doesn't seem to be naïve or their best intention.
Creditors knew very well Greece will never pay that amount of debt, so under international laws Creditors have very right to confiscate Greece GDP , but at the same time Greece tied with euro , so Creditors knew that Big nations of EU try to save euro , they will get some money from there too.
Who is loosing end of this deal, Greece ordinary people and EU tax payers.
"2nd world" was a Cold War notion; it was the world of socialist-communist countries (USSR and satellites). You might be right to an extent, given the extreme leftists that are ruling Greece at the moment.
Over the past few years, the very character of Germany and Russia have come out into the clear where EVERYONE can see it in its raw forms.
These countries are not any different now than in 1944. Russia would rather die than surrender an inch of land. Germans would rather die than admit they had done anything wrong.
These countries are not any different now than in 1944. Russia would rather die than surrender an inch of land. Germans would rather die than admit they had done anything wrong.
3
Russia will invade and kill.
Germany will expect you to pay your debts.
Germany will expect you to pay your debts.
15
In the 90s I had defaulted on a creditcard - when a client went out of business and did not pay me. I ended up with interest rates of 28% - loan sharking, really. The bank offered me nothing like the treatment Greece is getting. They certainly did not offer more money.
I would add one comment: Germany still wants to rule the world. Remember the motto of Germany in the 1930's. "Today we rule Germany. Tomorrow, the whole world."
1
signs of things to come...... put your money under your mattress because the financial system will take it from you otherwise. we the people are not immune this financial system is designed to write the laws and enforce them for the benefit of the moneyed elite.
8
So true. So sad.
The comparison between German debt after WW2 an Greece in 2015 is funny. When was the last time Greece was at war? What is exactly the reason why Greeks are out of money?
11
Wall Street is the answer to the last part of the question. Goldman-Sachs in particular. Then the ECB. Yes, the bankers.
America's per capita debt is greater than that of Greece. After that comes Italy, and Greece is in third place. We will have to reduce social security by 99% to pay it back.
5
Our Congress and Presidents (many of both parties) robbed the piggy bank of social security to hide the debt. Blame the people who govern us for lying to us.
Today, the Greek voters learned that you can't vote to repeal math.
11
This is neither about money or debt. It is about governance. Democracy in the West is done. There are many ways to destroy it. War is no longer necessary. The 1% want it all and they are on the way to realizing their dream of no rivals: the Democrats here are in the pocket of the corporations; the Left in Europe is now officially dead; the Right is no problem. All forms of social welfare will be eliminated and Orwell's prediction will be fulfilled: the stamping of a boot on a face forever is the future. Too extreme? 7000 suicides in Greece already. Watch the rise of the body count over the next couple of years. Who then will protest?
5
Extreme Left is alive and well in Greece. Syriza's (the ruling party's) Left Platform website is iskra.gr named after the Russian political newspaper started by Lenin in 1900. These people certainly follow powerful ideas and ideals, which led to the bankruptcy of the Soviet Union and the rest of the communist states in Europe…
The prime minister Tsipras is not far behind, having named one of his sons Ernesto (after Che Gevara).
The prime minister Tsipras is not far behind, having named one of his sons Ernesto (after Che Gevara).
1
"Lawmakers narrowly approved a package of harsh austerity measures ..."
The Greek parliament approved the measures 229 to 64, which is more than two thirds of the vote. That is in no way "narrow," NYT!
The Greek parliament approved the measures 229 to 64, which is more than two thirds of the vote. That is in no way "narrow," NYT!
20
After lying about their finances in order to join the Eurozone, and after failing to pay back several multi-billion dollar bailouts, it's amazing to see so many people, commenters on this and other recent articles, criticize and demonize Germany for simply expecting Greece to act according to expected norms, much less contractual law, like all the other Eurozone members. Iceland and Ireland managed to pull themselves out of the economic debacle that basically originated in the United States, why can't Greece? The simple reasons are: it's a country of tax evaders, on every economic level; it's a country with one of the earliest retirement ages in the developed world; and it's a country that believes that even after joining a club that it could not afford to be a member of, it deserves to be funded by the other countries of the club that adhere to the rules of membership. Here's a true and personal story to illustrate my annoyance with the Greeks in their situation: summertime, I'm riding in the car with some Greek friends, here in America, and for whatever reasons, one said, "isn't it nice that as an artist, the Greek government pays for my insurance?" Very surprised, I asked and they confirmed that they are American citizens, born in Greece. Followed by, "I think it's great that as artists they support us, don't you?" Shocked and wondering how they could afford that, I smiled, stared out the window, and wondered who was paying for such largesse. And then the feta hit the fan.
39
The German and French administrations knew full-well that Greece was "lying about [its] finances in order to join the Eurozone," yet welcomed Greece.
1
I am convinced that if Greeks can manage to survive a few years, that the troika will eventually write off or, at least, considerably reduce the debt. It is the logical thing to do and it was done for Germany both after WWI and WWII when the Allies realized that the Germans couldn't possibly pay for reparations. As a matter of fact, the IMF is already asking for a cut in the debt. Unfortunately, they will have to go through suffering and dislocation, if not political turmoil, before creditors arrive at the inevitable conclusion.
7
Frank, please explain what Germany's WW II reparations has to do with Greek paying its recently acquired debt?
13
They're banking on it!
The IMF are hypocrytes. They want a cut in Greece's debt, just as long as its the other lenders that take the cut.
5
Good cop, bad cop and keystone cop. Now let me get this straight:
For a while, Greece asked for debt relief but didn't want IMF to get involved. Then Germany, who is adamant about no debt relief, didn't want any negotiation without IMF. Now IMF refuses to deal unless debt relief is on the table.
For a while, Greece asked for debt relief but didn't want IMF to get involved. Then Germany, who is adamant about no debt relief, didn't want any negotiation without IMF. Now IMF refuses to deal unless debt relief is on the table.
5
not really, they want to get paid, the only way they can see that if if europe picks up the tab, imf said, europe pick up greece tab and pay us (greece owes imf money) and imf says no haircut for greece on our debt, but as a euro member the euro should pick up their tab and give them a haircut, saying we believe greece needs a haircut but not from us, we loan to poorer countries so cant forgive them their debt, but since the euro is so strong they can absorb greece debt, so borrow more from peter to pay us paul, paul being the imf.
@Bos. Last weekend Merkel fought for hours that the IMF must stay on board, against Tsipras' wish to leave the IMF out of the picture. But you are mistaken if you think the IMF's position is totally new. According to her speaker, Merkel was already informed about the new IMF numbers (Greek debt -> 200% of GDP, etc) during the negotiations. The IMF had insisted in massive debt relief for weeks, eg look at their paper sent to Greece and the creditors on June 25. On the same day Mr Hollande told a reporter that talks on a restructuring of the Greek debt would take place "in phase two" in autumn. Too vague for Mr Tsipras, so he called a referendum.
The reality is that the IMF, Merkel, Hollande and the other creditors are not too far away from each other in their assessment of the situation. However, they play different roles in public - and here you are absolutely right: Hollande plays the good cop, Merkel is the harsh cop. As the visible face of the creditors, Mrs Merkel dangles the carrot of debt restructuring in autumn before Mr Tsipras - and hopes to get improved efforts from the Greek side in the next months.
Merkel has already said that pausing the repayments for 30 years is an option. She has even admitted that debt relief may be the better solution economically (do you hear that, Mr Krugman?), but not politically. - The truth is: the IMF and Merkel are close allies.
The reality is that the IMF, Merkel, Hollande and the other creditors are not too far away from each other in their assessment of the situation. However, they play different roles in public - and here you are absolutely right: Hollande plays the good cop, Merkel is the harsh cop. As the visible face of the creditors, Mrs Merkel dangles the carrot of debt restructuring in autumn before Mr Tsipras - and hopes to get improved efforts from the Greek side in the next months.
Merkel has already said that pausing the repayments for 30 years is an option. She has even admitted that debt relief may be the better solution economically (do you hear that, Mr Krugman?), but not politically. - The truth is: the IMF and Merkel are close allies.
While it's true that the IMF staff have long opposed the program in Greece, the IMF is controlled by its shareholders, principally the US and the EU. Guess who will win the debate.
1
Their deadline wasn't Thursday, it was Wednesday. More passive-aggressive Greek behavior.
9
The per capita GDP of Greece is around 21000 USD that is around double that of ChIna and ten times as much as that of the Philippines, a third world country. There are around 20 million people in the Philippines who lives on one to two dollars per day. Sadly the Philippines is burdened by having a population of a 100 million. In spite of that the debt to GDP ratio of the Philippines is 45 compared to 177 for Greece, second only to Japan which is 230. While Japan is a highly industrialized country Greece is not. From this
perspective Greece has accumulated too much debt, and highly doubtful whether they can repay the money they owed.
perspective Greece has accumulated too much debt, and highly doubtful whether they can repay the money they owed.
4
The article says "Greek lawmakers narrowly approved" the package, but the final vote count was 229-64, with 6 abstentions. Not exactly a "narrow" margin.
15
Greece will take the money and go bankrupt anyway. Six months to a year is my guess. We all saw how they voted in the referendum. That mentality hasn't changed and maybe leaning more that way.
17
Through the looking glass indeed.
What a weird political reality.
If a restaurant is failing, the last thing the owner needs to do is cut his staff, his hours of operation and buy inferior food ingredients in order to save money.
That's called dumb austerity.
He needs advice on how to improve his food and service.
He needs a new plan and new energy.
He needs more investment not less.
Assuming his restaurant has a viable chance at all.
Same here.
Greece needs inflow of investment, optimistic leadership and some way not to be crushed by crippling debt.
Human beings are always viable.
Marshal the pride and effort of the Greek people.
And stop crushing them to ground.
What a weird political reality.
If a restaurant is failing, the last thing the owner needs to do is cut his staff, his hours of operation and buy inferior food ingredients in order to save money.
That's called dumb austerity.
He needs advice on how to improve his food and service.
He needs a new plan and new energy.
He needs more investment not less.
Assuming his restaurant has a viable chance at all.
Same here.
Greece needs inflow of investment, optimistic leadership and some way not to be crushed by crippling debt.
Human beings are always viable.
Marshal the pride and effort of the Greek people.
And stop crushing them to ground.
6
It's also a very dumb plan for the restaurant owner to borrow new loans to keep affording his relatives short work weeks, funding his folks with the same retirement spendings, and preparing for his own early retirement.
4
Ten years ago, friends of mine, one a Greek expat, wanted to start a solar business on a Greek island. The administrator needed to approve the business never found time for them. It is difficult to start a business, when you are not on location, find the guy and hand him a stuffed envelope. So much for "inflow of investment."
5
"Greece needs inflow of investment" ........ I would call 204 Billion Euros over the past 5 years from the other members of the EU an inflow of investment wouldn't you ?
So what have they done with it?
So what have they done with it?
2
Please stop calling - living within their means - "harsh austerity".
I can understand why the amateurish ideologues in Athens use that term. But a purportedly legitimate newspaper should not be using such hyperbolic rhetoric.
If the Greeks can not live without constant infusions of outside money that they can't pay back, something has to give. And their profligacy should be the first victim.
I can understand why the amateurish ideologues in Athens use that term. But a purportedly legitimate newspaper should not be using such hyperbolic rhetoric.
If the Greeks can not live without constant infusions of outside money that they can't pay back, something has to give. And their profligacy should be the first victim.
61
GDP down by 25%. Unemployment at 28% (official, not the higher real number). Pensions cut by 44%. Retirement age raised by as much as 12 years. 40% of the country in poverty. Food insecurity rampant. People having to choose between medicine and meals.
And that is before the last few months.
I think that counts as harsh austerity. Especially since their national "means" have primarily shunk due to the very same austerity policy and the debt this is in serviice of was mostly a make work program for export firms in Germany and France.
And that is before the last few months.
I think that counts as harsh austerity. Especially since their national "means" have primarily shunk due to the very same austerity policy and the debt this is in serviice of was mostly a make work program for export firms in Germany and France.
5
greece is so strange thats why they broke, thats because 1/10 were employed by the government, the government is broke so needs to lay off people, pensions payments in greece is almost twice as other euro countries, retirement age they have early retirement for hazard, i mean hell they have hazard retirement for people who work with chemicals like hairdressers/plumbers/factory workers, and medicine its socialized with price controls, the government every year publishes a price index, when you go into the pharmacy the pharmacist (pharmacy must be owned and run by its pharmacist and a pharmacist may only only 1 pharmacy since they must be on hand, in greece they have never even heard of over the counter since its illegall) must open the yearly price book and sell you the medication for the amount quoted, with price controls in effect the government owes 1.2billion since they are demanding that the pharmaceutical companies sell them the drugs at their price controlled rate, so the companies are halving the shipments since they are getting half the payment, so the shortage of medicine is a result of their policy.
I would consider critically claims of Greeks being subjected to "harsh austerity".
Greece had a GDP growth inflated by excessive borrowing and spending until 2008. When the bubble burst and the easy money was no longer available the GDP had to go down.
The Baltic states (Estonia, Latvia, Lithuania) also had similar GDP reduction starting in 2008, except they took the pain in 2 rather than 5 years. The Balts are also poorer than Greeks. Still, they came out stronger on the other side of the recession, and are now bailing out Greece.
The extremely high unemployment in Greece (and especially youth unemployment) is certainly outrageous. A factor that worked in Balts' favor is the flexibility of their labor force. This is how they have lower unemployment than Greece. The minimum salaries in the Baltic states are 289, 320 and 355 euros / month respectively. The figure for Greece -- 683 euros / month.
Even with the "raised retirement age" in Greece, it is still effectively low. In December 2014 the previous Greek government reported that three out of four public sector and Social Security Fund (IKA) pensioners in Greece were opting to use legal loopholes that allowed them to stop working before the age of 61: “In the public sector, 7.91% of pensioners retire between the ages of 26 and 50, 23.64% between 51 and 55, and 43.53% between 56 and 61."
Reducing one's standard of living is always painful. However, compared to some of Greece's creditors the situation there is not dire.
Greece had a GDP growth inflated by excessive borrowing and spending until 2008. When the bubble burst and the easy money was no longer available the GDP had to go down.
The Baltic states (Estonia, Latvia, Lithuania) also had similar GDP reduction starting in 2008, except they took the pain in 2 rather than 5 years. The Balts are also poorer than Greeks. Still, they came out stronger on the other side of the recession, and are now bailing out Greece.
The extremely high unemployment in Greece (and especially youth unemployment) is certainly outrageous. A factor that worked in Balts' favor is the flexibility of their labor force. This is how they have lower unemployment than Greece. The minimum salaries in the Baltic states are 289, 320 and 355 euros / month respectively. The figure for Greece -- 683 euros / month.
Even with the "raised retirement age" in Greece, it is still effectively low. In December 2014 the previous Greek government reported that three out of four public sector and Social Security Fund (IKA) pensioners in Greece were opting to use legal loopholes that allowed them to stop working before the age of 61: “In the public sector, 7.91% of pensioners retire between the ages of 26 and 50, 23.64% between 51 and 55, and 43.53% between 56 and 61."
Reducing one's standard of living is always painful. However, compared to some of Greece's creditors the situation there is not dire.
1
So, I have heard that only 11% of Greeks pay taxes... NYT, any fact check on these numbers? Maybe you can verify this info.
Does that mean that the Greeks are "more equal" than other EU nations? That they are entitled to billions of euros every 3-5 years, only because, well, they are Greek? If so, this has a name: ethnic discrimination.
Does that mean that the Greeks are "more equal" than other EU nations? That they are entitled to billions of euros every 3-5 years, only because, well, they are Greek? If so, this has a name: ethnic discrimination.
10
No, it is not true. The figure bis an Internet myth based on an accounting quirk. Every year EU countries calculate the % of taxes uncollected. The standard practice is to write them off each year or so as"never gonna happen" and start the count again (this is what Germany does for instance). In Greece, they don't do that, and instead carry the liability over from year to year, adding it up. Which is how you get to the eye-popping number of 89%.
In an apples to apples annual comparison, Greece's "uncollected" number is above the EU average, but not by much. (Germany's is below the EU average.)
In an apples to apples annual comparison, Greece's "uncollected" number is above the EU average, but not by much. (Germany's is below the EU average.)
2
Look to the Greek billionaires for not paying their taxes. They are one of the main problems. They hide their money like Romney did. In off-shore banks and Switzerland.
1
Is the Greek public spending (clientelism through public companies, government jobs and pensions), also above the EU average? Combine the two, and you have a debt crisis.
Many of the commenters don't really seem to know the facts. By now, forgiving Greek debt will mostly hurt tax payers in other countries, not the banks. Why? Because, when the crisis first hit, the banks only gave money to Greece on condition that European tax payers would guarantee the loans through the Emergency Fund. For instance, every Belgian would have to pay over 1200 euros if Greece's debt would be forgiven. Similar amounts apply to other member states. So "let the greedy lenders eat their losses" is actually not an option anymore (unless you would label the tax payers in the other member states who bailed out Greece twice before during this crisis as "greedy lenders").
32
Tom M
I don't think you have the narrative quite right. Nobody guaranteed payment on the Greek bonds the investors bought at 12 cents on the dollar (or, rather, the euro). The same way US bonds are guaranteed only by the good faith of US government, so are the Greek obligations only guaranteed by their government. The investors knew the bad shape the Greek economy was in, but the potential profit was too good to miss.
So they did not "give" money to Greece with the EU's taxpayers as underwriters, they just took a risky gamble. And when they saw the loans go sour, they dumped them on the EU central bank, effectively making the taxpayers the creditors/losers. Of course, if the bet had paid off, the taxpayers would not have shared in the gain. In other words, socialize the debt, privatize the profits.
As someone said, nice work if you can get it.
I don't think you have the narrative quite right. Nobody guaranteed payment on the Greek bonds the investors bought at 12 cents on the dollar (or, rather, the euro). The same way US bonds are guaranteed only by the good faith of US government, so are the Greek obligations only guaranteed by their government. The investors knew the bad shape the Greek economy was in, but the potential profit was too good to miss.
So they did not "give" money to Greece with the EU's taxpayers as underwriters, they just took a risky gamble. And when they saw the loans go sour, they dumped them on the EU central bank, effectively making the taxpayers the creditors/losers. Of course, if the bet had paid off, the taxpayers would not have shared in the gain. In other words, socialize the debt, privatize the profits.
As someone said, nice work if you can get it.
This is an important point. For weeks, we have been hearing about these "creditors," as though they were a cabal of banker swells with diamond-encrusted walking sticks. Well, some of them may in fact be large national banks. But to your point, they are backed by ordinary working taxpayers in the other European states. NYT, it might be a good idea to stop using that term "creditors" without carefully defining it. In. Every. Article.
1
For weeks I've been saddened by the anger directed at the Greeks as if a nation's history didn't matter.
So, for a bit clarity, I've been re-reading Tony Judt's essay "A Grand Illusion? An Essay on Europe". Although it was written about 1995 it is remarkably current. Professor Judt was very skeptical of European unity, which he said is actually an old idea. He was concerned with the incorporation of eastern states into Europe but he also remarks on the differences between the more economically advanced northern countries and southern countries that are less well off. Aside from social differences he foresaw that economic differences and capabilities would tear any union apart, especially since those well off would need to help those less advanced.
He states it is likely that "the old fashioned nation-state is a better form in which to secure collective loyalties, enforce a fairer distribution of resources, and compensate for disruptive transnational economic patterns."
Boy, do I wish he were still alive to see what's happened and update his analysis.
So, for a bit clarity, I've been re-reading Tony Judt's essay "A Grand Illusion? An Essay on Europe". Although it was written about 1995 it is remarkably current. Professor Judt was very skeptical of European unity, which he said is actually an old idea. He was concerned with the incorporation of eastern states into Europe but he also remarks on the differences between the more economically advanced northern countries and southern countries that are less well off. Aside from social differences he foresaw that economic differences and capabilities would tear any union apart, especially since those well off would need to help those less advanced.
He states it is likely that "the old fashioned nation-state is a better form in which to secure collective loyalties, enforce a fairer distribution of resources, and compensate for disruptive transnational economic patterns."
Boy, do I wish he were still alive to see what's happened and update his analysis.
5
If I parse your high-toned rhetoric properly, you are admitting (via Doctor Professor Judt) that it was a mistake for the more responsible northern nations of Europe to enter into a faux government with the southern and eastern Europeans? Point granted. And Greece's "History?" That dog won't hunt.
1
Thank you for being the voice of intelligence and reason. It's nice to see someone actually discussing this in a big picture concept, and not simplifying the situation, like so many others in this discussion, to make it seem like forcing harsh austerity measures is simply asking the Greeks to live within their means.
Being in prison feels more secure than being free. Poor Greece. How tragic.
5
they are getting a $100B so what's the crying about?
6
But most of that money is revolving debt. It go to the current lenders. Very little will be available to improve the failed Greek economy. In the US we call that loan sharking.
What the Greeks have demonstrated here is that they are a group of highly incompetent individuals. There is no doubt left why they got in that mess in the first place. Where else could you have a referendum, and then pass a worse program than the program that was voted against? It shows the whole world how confused they are. Their leading man, Tsipras, is a big joke - a president acting like that is not fit to lead.
9
The chess match that now characterizes the process of allowing Greece to survive in the European Union (E.U.), if only barely, at the whim of Germany and its allies like Finland, has now reverted to the latter's respective parliaments for approval and the resumption of the contentious negotiations to fund the Greek debt. With a key member of the financial "troika," the International Monetary Fund (I.M.F.) now firmly aligned with Greece in seeking debt reduction, it now is up to Germany to either force the so-called "Grexit" that expels Greece from the Euro or finally to admit the failure of its harsh austerity program. Given the animosity and distrust, it is hard to envision German Chancellor Angela Merkel suddenly changing course and giving in to any demand to reduce Greece's debt. However, if the I.M.F. balks as it might, Greece might be forced out and the E.U. and the Euro might be irreparably damaged.
Any bets that Greece does not live up to this agreement? Have the ever been a trustworthy nation?
7
Indeed, google "Edmond About" & read what he wrote - in 1858!
Trustworthy? Read some history . Some people on here are completely lost.
Remember the harsh austerity terms that were applied to the banks when they needed bailing out? When $700 billion in TARP money was given to mega-wealthy bankers, boy, oh boy did they have to tighten their belts! No charity for them! No, sir.
9
That is truly an excellent and salient comparison!
2
They paid it back. On time. With interest. So there is that.
Lending another huge sum to a borrower who can’t make the last payment? This is all about political cover. It buys time for those who would rather not be embarrassed today. Talk about the proverbial can being kicked. This allows Merkel and Co. to wiggle home in hopes that it all goes away and people stop talking about it. Legacies preserved for the moment.
1
So the borrowed "proceeds" actually go to pay back local and foreign banks' interest (primarily) and the Greek citizenry at large get squeezed like blood out of a turnip. That just sickens me.
6
That's the way it has been in the past, and will continue to be. The banks have managed to put themselves in the position of both benefactors and beneficiaries of the whole "bailout" process. This is the natural evolution of a process that began at the time of Napoleon. Few countries recognize this, fewer countries have any remedies, nor even opposition, to this criminal system.
Greece has no options.
Greece has no options.
Just as it happened in 2009 in the U.S., even though for a moment, Obama actually had the upper hand in negotiating the outcome of a bailout. Instead, and, I believe, as he was instructed to do, Obama gave the banks all the taxpayer money with absolutely no "strings". Appalling! He could have demanded the re-institution of Glass-Steagall! But, no, he simply acquiesced, as he was told, and tried to spin that crushing betrayal as some sort of "positive". Disgusting beyond words.
1
So now Greece has finally been forced to accept that they have to stop spending more than they earn. Might be the birth place of democracy, but this balanced budget thing seems to have escaped them . . .
16
Greece was actually running a primary surplus last year. The main reason that debt to GDP in Greece is rising so quickly is not because the debt itself is rising so quickly, but the crippling austerity measures are shrinking the GDP so quickly.
1
Um, they've been spending less then they earn for a few years now - to the tune of 4.5% of GDP last year. Show me a US state that does that.
For shame.
Those who voted FOR are exactly the same who did it twice before, exactly those who will make it not work. The sole viable solution in face of the irrational demands of the triumvirate has been Grexit.
Those who voted FOR are exactly the same who did it twice before, exactly those who will make it not work. The sole viable solution in face of the irrational demands of the triumvirate has been Grexit.
If Greece is following the dictates by the Germany , then it will be unfair to blame the Greece for the failure if few years later Greece is in worse condition and comes back for more help-as IMF is predicting.
1
It's also unfair to have taxpayers of 18 Euro zone countries (many of them -- poorer than Greeks) to pay for the shenanigans and haggling of the Greek government, which caused the Greek economy to tank over the last year. This is what the IMF is highlighting in the beginning of their July 14 report.
1
Welcome to the real world Greece, where you borrow money and then pay it back. Smells, like common sense and accountability , eh?
13
What world is that? Not Wall Street.
In 'the real world' most governments have control over their currency's money supply. You know what we'd do if we were in Greece's shoes? Print more.
1
If there is one thing I became convinced of after studying public policy in graduate school is that we often fail to appreciate (beforehand) or assess (later on after the fact) the likely and potential consequences of a certain policy choice. I think this is true for many types of issues including energy policy (our addiction to fossil fuels and a landscape designed around cars), foreign policy (think here of major issues like development aid, war reparations, etc) and technological innovation (impact on makeup of a nation's economy, public safety impacts, etc).
The Greece debacle offers yet another example. I have seen extensive analysis of the impact a Grexit could have had (or will have?) on Greece, the EU project and the global economy. You know what I have seen less than I would like? An analysis of how current policy choices will likely affect young Greeks for decades to come. The consequences of short sighted policymaking sometimes last for decades and even generations.
I see no easy answer for what ails Greece. But I do see one thing sure to make this particular issue worse...and that is putting profits ahead of people. Ultimately let's ask ourselves this: Which is more important...banks or people?
Here in the USA the bankers received a bailout. Talk about messed up priorities! And yet the poor and unemployed are often derided by "news" sources such as Fox News as "the moocher class"! Excuse me? We here in the USA have little moral high ground compared to Greece.
The Greece debacle offers yet another example. I have seen extensive analysis of the impact a Grexit could have had (or will have?) on Greece, the EU project and the global economy. You know what I have seen less than I would like? An analysis of how current policy choices will likely affect young Greeks for decades to come. The consequences of short sighted policymaking sometimes last for decades and even generations.
I see no easy answer for what ails Greece. But I do see one thing sure to make this particular issue worse...and that is putting profits ahead of people. Ultimately let's ask ourselves this: Which is more important...banks or people?
Here in the USA the bankers received a bailout. Talk about messed up priorities! And yet the poor and unemployed are often derided by "news" sources such as Fox News as "the moocher class"! Excuse me? We here in the USA have little moral high ground compared to Greece.
6
From the moment they seek to impose those terms, I give Greece's current government, headed by Syriza and Tsipras, three months before they're kicked into the Med. and Greece elects itself a new government dedicated to repudiating the terms, their debt, and exiting the euro.
4
Pray for the day - when lenders who knowingly give money to people who will not be able to repay it - not only lose their money, but go to jail for malpractice.
3
On one hand, there is nothing surprising about the IMF saying the debt can never be laid back. If I'm not mistaken, it's said the same thing before. What I don't understand is why Lagarde is saying this now, wasn't she at the Euroministers meeting last weekend? Did she tell Merkel then no, I can't support this deal?
There's much we don't understand, clearly.
There's much we don't understand, clearly.
4
She was an observer at the meeting over the weekend. I believe the IMF did alert Eurozone leaders privately about this through some kind of document over the weekend. The IMF ended up going public with the warning on Tuesday. It's an interesting twist to the whole debacle, but sounds a lot more practical than anything else that's come out of that weekend of negotiations.
While many of agree debt relief is likely needed, the mindset of the Greek people has to change, why are there not protests outside the houses of the wealthy who apparently have not paid taxes for years !!!!, why are the government officials not arresting obvious tax cheats... this would create a notion in the rest of the EU that things are changing ,for the last 2 bailouts nothing changed for this aspect. Perhaps also all these early retired people should go back to work for the government for free in return for collecting there checks that some of them are fraudulently collecting.
6
Notably, the IMF does not volunteer to write off Greek debt. It is advising the 18 Eurozone members who lent money to Greece to bite the bullet. Many of them (Latvia, Lithuania, Estonia, Slovakia, Slovenia, Malta, Portugal) are smaller and poorer or about as poor as Greece. One of them (Slovenia) has actually contributed more than anyone else to the previous Greek bailouts if measured as a portion of their own GDP (more than 3%).
5
That is why the EU in its current form is not viable. This kind of financial crisis cannot be solved politically among member states that are essentially peers. It requires a higher order government body, such as a federal government that is given a substantial portion of sovereignty from each member state, that administrates the euro currency. What are the chances?
As many people have pointed out, Germany has had the huge benefit of debt relief in the past, and they should extend the same kindness to Greece today.
3
Germany thrived and became the economic engine of Europe as a consequence. Not so with Greece, a perennial pauper.
i think the imf is full of it, they say that europe should forgive them their debt and use that money to pay the imf instead, claiming europe has the capacity to absorb that debt while the imf cannot since they represent many poorer countries, hey you should forget they debt and loan them more money so they can repay me, i think greece should leave the euro then they can fund their social programs as much as they want.
4
Fund their social programs with what? Worthless paper money backed by no production of any kind?
Why does the IMF, and so many NYT commenters, care so much more about Greece than about developing countries locked in civil war and famine that carry a much, much higher debt service ratio? African countries cannot secure debt relief notwithstanding that their basic human needs are not being met. Retire at 50, 60 or even 70? Heck, they need money just to buy medication to fight malaria. The IMF is playing favorites with Greece, and the moral relativism is brutally ugly.
9
So Greece essentially becomes an underdeveloped country of no promise beyond the climate from which any young man or woman who does not have rich parents will need to flee to have a decent chance in life.
20
Yes. Greece will continue to be what it has long been. A 3rd rate back water of a nation.
1
Greece has always been an underdeveloped nation. If not for the Euro, they would have been bankrupt 15 years ago. Greece is currently paying less in interest on their bonds (as a ratio to GDP) then they did 15 years ago, but yet is unable to pay it's civil servants and pensions. The challenge is that they don't generate enough income to sustain their life-style.
No matter how you deal with it (addtl. support from Europe or Grexit) the issue with Greece will continue and will only get worse over the next 10 years (aging population).
One thing that really surprises me is the attitude of the unemployed (and not just in Greece). There are plenty of jobs in agriculture, but no local unemployed person is willing to work there and it is getting done by Bulgarians and Romanians (same in California/Mexicans, Germany/Polish etc.)
No matter how you deal with it (addtl. support from Europe or Grexit) the issue with Greece will continue and will only get worse over the next 10 years (aging population).
One thing that really surprises me is the attitude of the unemployed (and not just in Greece). There are plenty of jobs in agriculture, but no local unemployed person is willing to work there and it is getting done by Bulgarians and Romanians (same in California/Mexicans, Germany/Polish etc.)
I am ot a fan of the I.M.F. They impose unworkable restrictions of countries, especially poor countries to give all their wealth to the very rich and private corporations. They insist the people must be punished.
12
So...that means you should be a fan now since its the IMF that is insisting on debt RELIEF in order for the Greeks to be able to pay their creditors AND invest in rebuilding the economy. Without the IMF insisting on this, the Greeks were doomed to penury by being forced to abide by the Eurozone's terms.
1
In this case, though, they seem to be on Greece's side and have pushed for substantial debt relief to such an extent that there is a rift between them and the EU
2
Ultimately, the IMF and Paul Krugman, have been correct. There is no paying back what is owed, without exit and evaluation, or a haircut and delay in repayment.
24
Interestingly, IMF insists in its report that the previous bailout program was on track until a year ago: "About a year ago, if program policies had been implemented as agreed, no further debt relief would have been needed to reach the targets under the November 2012 framework (debt of 124 percent of GDP by 2020 and “substantially below” 110 percent of GDP by 2022)." The costs of the Greek bailout escalated to 60 B euros by July 2 and to 85+ B euros by July 14 because of the actions and inaction of the Greek government (e.g., calling the July 5 referendum).
2
I'm sorry that Tsipras didn't walk out of the meetings and stick with his referendum's mandate, but I think he got cold feet -- and, in truth, who wouldn't? My own suggestion now is that, since nothing in the meagre help they will get can stave off another crisis within months, they should use the time to get themselves ready for an exit from the EU on Greece's terms, not the EU's (which, for all intents and pirposes, means Germany's). They should get setup for printing the drchma gain, try to save some money, and then exit, telling the Germans to whistle for their money.
1
Coincidentally, in another article in today’s NYT (“Oskar Gröning, Ex-SS Soldier at Auschwitz, Gets Four-Year Sentence”) you can read the appalling tale of how Germany managed to fritter away opportunities to prosecute some 6,500 Germans who worked at Auschwitz-Birkenau, a hell-hole where an estimated 1.1 million men, women and children, including many from Greece, were gassed.
And what is Germany’s record of "efficiency" in this arena of governance?
Only 49 of those 6,500 have been brought to justice by Germany in the ensuing 70 years. That’s one prosecution every 1-1/2 years since the war’s end in 1945.
Now, need I remind you that all Germany’s war debts were forgiven by the allies, a fact which made it possible for Germany to work a miracle in terms of its own rebirth.
Am I alone in being troubled by Germany's behavior in the matter of Greece today? Could Germany now feel so self-important today that it may have actually forgotten which happened back then?
Otherwise, how could Merkel and Wolfgang Schäuble whine and fume so self-righteously about Greece with nary a hint of embarrassment?
And what is Germany’s record of "efficiency" in this arena of governance?
Only 49 of those 6,500 have been brought to justice by Germany in the ensuing 70 years. That’s one prosecution every 1-1/2 years since the war’s end in 1945.
Now, need I remind you that all Germany’s war debts were forgiven by the allies, a fact which made it possible for Germany to work a miracle in terms of its own rebirth.
Am I alone in being troubled by Germany's behavior in the matter of Greece today? Could Germany now feel so self-important today that it may have actually forgotten which happened back then?
Otherwise, how could Merkel and Wolfgang Schäuble whine and fume so self-righteously about Greece with nary a hint of embarrassment?
38
Need is not only the mother of invention, but also the mother of all compromise.
4
If France and the I.M.F. are demanding that the Germans write off the Greek debt after the Greeks have consistently refused to reform, perhaps the French and the I.M.F. can transfer the Greek debt to themselves rather than insisting that the Germans take a haircut for funds they loaned in good faith. They are being very cavalier with other people's money and the Germans don't like it one bit.
17
1. It is neither fair nor accurate to say that "the Greeks have consistently refused to reform," so you statement is a pure hypothetical.
2. If the Germans don't want the IMF involved they should have a world with their elected leadership, since the German negotiaators were the ones who insisted - most recently in writing - that the IMF remain a party to the negotiations and to any further loans or agreements despite Greek objections.
Are you quite sure of your facts regarding German opinion? Like do you have polling or anything about their view of the IMF?
2. If the Germans don't want the IMF involved they should have a world with their elected leadership, since the German negotiaators were the ones who insisted - most recently in writing - that the IMF remain a party to the negotiations and to any further loans or agreements despite Greek objections.
Are you quite sure of your facts regarding German opinion? Like do you have polling or anything about their view of the IMF?
France owns almost as much Greek debt as Germany. They are also putting their money where their mouth is.
France (and the UK, Greece, Spain, USA) forgave much bigger German debt after Germany leveled Europe so Germany had to grow a conscience and forgive Greek debt now.
Is Germany up to the challenge? I doubt it.
Is Germany up to the challenge? I doubt it.
This comments section is a tribute to the notion of not letting the facts get in the way of your opinion.
It hardly matters that people have no idea why Greece is in debt, who owns that debt, who gets hurt if Greece doesn't pay. You think you're striking out against "capitalists" and "banksters", but you have no idea what you're talking about. The facts are well known and easily discoverable by anyone with access to Google. I can only conclude that most commenters would rather be angry than correct.
It hardly matters that people have no idea why Greece is in debt, who owns that debt, who gets hurt if Greece doesn't pay. You think you're striking out against "capitalists" and "banksters", but you have no idea what you're talking about. The facts are well known and easily discoverable by anyone with access to Google. I can only conclude that most commenters would rather be angry than correct.
53
'...but you have no idea what you're talking about. The facts are well known and easily discoverable ....."
Well, apparently there is enough information around to fuel disagreement by some of the world's most famous economists, so it seems that either the facts aren't as clear as you think they are or that the implications of those facts aren't clear or both.
Well, apparently there is enough information around to fuel disagreement by some of the world's most famous economists, so it seems that either the facts aren't as clear as you think they are or that the implications of those facts aren't clear or both.
1
You haven't said anything except that you disagree with most commentors. Why? I've lived in Greece and know perfectly well why they are in trouble. It doesn't come from what you sit back and read. It's historically complex and has to do with a country agriculturally poor and industrially underdeveloped that became dependent on a certain kind of tourism for revenue. The profitability of tourism depends on the kind of tourists you attract. France, #1 destination in the world is finding its culture devastated and the profitability peanuts from tourism. Fortunately that is balanced with both agriculture and industry. Greece lacks that balance.
People who think they have the answer because they're on google or graphics or stats or economic theories have their heads in the sand - to be polite.
Get a real life.
People who think they have the answer because they're on google or graphics or stats or economic theories have their heads in the sand - to be polite.
Get a real life.
1
Best comment I've seen here in a while! The main problem is, many people are only interested in Greece because they want to use it as an analogy for US politics.
1
Now here's a thought. The UK finally paid off the cost of World War 1 - yes World War 1! in the 1990's. We were impoverished by World War 2, and bust, but continued to pay our way without the Marshall Aid which assisted other European nations. Germany despite all the devastation brought about by their government between 1939 and 1945 were allowed by other European nations to forgo much of their debt, (1953?) and indeed Greece agreed to writing off 50% of the debt owed to them. The lesson is obvious. Give Greece some slack and treat the Greeks like we (the UK and the USA) treated Germany and other European nations post war. Greece will never be in a position to pay of all this Eurozone debt. Impoverishment can only lead to more conflict - and in the wings in Greece is a virulent fascist party. Sound familiar to anyone?
70
Thank you for pointing out the potential upside for the Greek fascists. I have been concerned about this from the very start.
You make it sound as if the US and UK forgave Germany's debts after WWII out of the goodness of their hearts! Actually, it was a geopolitical decision, since they needed Germany (and especially its economy) to counter Soviet encroachment in Central Europe. There actually is a geopolitical reason to help Greece now (and again it has to do with Russian encroachment), although you don't mention it in your comment.
However, your analogies about the UK paying off its WWI debt and scraping by after WWII without Marshall Plan help are very appropriate. What those things suggest is that the right thing to do is not shirk your debt, that ultimately it needs to be paid off, and that sometimes you just have to tighten your belt--even though you think it's already as tight as it can go--and just endure some hardship. Whatever Greeks are going through now, it's certainly not as bad as what the British went through as they rebuilt after the war, so I can't really say I have too much sympathy for them, especially since they didn't suffer through any war--they just overspent.
However, your analogies about the UK paying off its WWI debt and scraping by after WWII without Marshall Plan help are very appropriate. What those things suggest is that the right thing to do is not shirk your debt, that ultimately it needs to be paid off, and that sometimes you just have to tighten your belt--even though you think it's already as tight as it can go--and just endure some hardship. Whatever Greeks are going through now, it's certainly not as bad as what the British went through as they rebuilt after the war, so I can't really say I have too much sympathy for them, especially since they didn't suffer through any war--they just overspent.
1
It is a popular myth that ENgland didn't receive Marshall Plan aid. England DID receive Marshall Plan aid. Here is the relevant quote from a Wikipedia article on it:
"The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total), followed by France (18%) and West Germany (11%). Some 18 European countries received Plan benefits.[3] Although offered participation, the Soviet Union refused Plan benefits, and also blocked benefits to Eastern Bloc countries, such as East Germany and Poland. The United States provided similar aid programs in Asia, but they were not called "Marshall Plan".'
"The largest recipient of Marshall Plan money was the United Kingdom (receiving about 26% of the total), followed by France (18%) and West Germany (11%). Some 18 European countries received Plan benefits.[3] Although offered participation, the Soviet Union refused Plan benefits, and also blocked benefits to Eastern Bloc countries, such as East Germany and Poland. The United States provided similar aid programs in Asia, but they were not called "Marshall Plan".'
The future of Greece is grim whether or not Prime Minister Alexis Tsipras signs the document; referring to it as an 'agreement' would be a misnomer.
It is tragic, particularly for the young people of Greece, that those living in the country where the cradle of civilization is thought to have begun face a future without hope for decades...
It is tragic, particularly for the young people of Greece, that those living in the country where the cradle of civilization is thought to have begun face a future without hope for decades...
12
A little history:
Primarily German and French banks lent money to Greece during the late 1990's and early to mid 2000's to buy things like French and German military tanks and warships. The money went into the pockets of French and German arms manufacturers, briefly touched by Greek government hands, a clever way to get Greek taxpayers to subsidize French and German arms manufacturers.
Despite the bogus nature of these deals, Greece was paying off the loans. But in 2008, when the house of cards built by psychopathic bankers on Wall Street collapsed, Greek tourism declined, the Greek economy started to contract, and Greece's ability to make payments on those loans drastically diminished.
No worries for the banks. Primarily the German government bailed out its banks, again by briefly touching Greek government hands with the money on its way into the pockets of German bankers. So now the Greeks owed the original loans plus the money Germany gave its banks to bail them out.
Now, there are commenters in these threads who claim that every loan must be paid back in full, that the Greeks are lazy, profligate spend-thrifts -- that whole pile of nonsense about what terrible people Greeks are. But these commenters overlook two natural, daily occurrences in the world of finance everywhere: bankruptcy and bad debt write-offs.
There is a parameter in banking called "risk." Risk is the chance that a loan might not be paid back. Risk is real.
Primarily German and French banks lent money to Greece during the late 1990's and early to mid 2000's to buy things like French and German military tanks and warships. The money went into the pockets of French and German arms manufacturers, briefly touched by Greek government hands, a clever way to get Greek taxpayers to subsidize French and German arms manufacturers.
Despite the bogus nature of these deals, Greece was paying off the loans. But in 2008, when the house of cards built by psychopathic bankers on Wall Street collapsed, Greek tourism declined, the Greek economy started to contract, and Greece's ability to make payments on those loans drastically diminished.
No worries for the banks. Primarily the German government bailed out its banks, again by briefly touching Greek government hands with the money on its way into the pockets of German bankers. So now the Greeks owed the original loans plus the money Germany gave its banks to bail them out.
Now, there are commenters in these threads who claim that every loan must be paid back in full, that the Greeks are lazy, profligate spend-thrifts -- that whole pile of nonsense about what terrible people Greeks are. But these commenters overlook two natural, daily occurrences in the world of finance everywhere: bankruptcy and bad debt write-offs.
There is a parameter in banking called "risk." Risk is the chance that a loan might not be paid back. Risk is real.
161
"No worries for the banks. "
Yet another comment that's patently wrong. The banks took a 50% haircut. I would have preferred it to be 95%, but 50% is a serious.
Don't believe it? Look it up.
As for the spending, I don't remember the Greeks needing any encouragement. It's time to pay the piper.
Yet another comment that's patently wrong. The banks took a 50% haircut. I would have preferred it to be 95%, but 50% is a serious.
Don't believe it? Look it up.
As for the spending, I don't remember the Greeks needing any encouragement. It's time to pay the piper.
3
Yes, yes. All that government debt had nothing to do with pensioning workers off at the age of 55, while many of the new EU member nations were raising their retirement ages to 62 and up, or with the failure to collect taxes due and to enforce widespread flaunting of tax law, or with bloated bureaucracies. No, no, it's all about German and French weapons manufacturers. Right, got it.
Greeks bought tanks and warships? I did not know that. Now I am convinced their suffering is well deserved. Tanks and warships. Why?
Isn't this great? The conservative IMF has come out and publicly stated the obvious: Greece can never repay its current debt load and there must be debt relief.
This position was known among the European negotiators over the weekend, but apparently they ignored it. In other words, decisions within the Eurozone are not being made based on rational analysis but rather based on ideological prejudices.
With this being the case, there is little doubt that the Eurozone will break apart eventually. It was a nice idea, but the member states simply are not ready for it. Leaders such as Merkel and Schauble are unwilling to make the tough decisions which will maintain the union in the face of strong domestic protest. The union can only work when it is accepted as a solitary union and not a disparate collection of independent states.
This position was known among the European negotiators over the weekend, but apparently they ignored it. In other words, decisions within the Eurozone are not being made based on rational analysis but rather based on ideological prejudices.
With this being the case, there is little doubt that the Eurozone will break apart eventually. It was a nice idea, but the member states simply are not ready for it. Leaders such as Merkel and Schauble are unwilling to make the tough decisions which will maintain the union in the face of strong domestic protest. The union can only work when it is accepted as a solitary union and not a disparate collection of independent states.
12
Who needed money: Greece
Who borrowed money: Greece
Who spent more money than they can afford: Greece
Who can't pay their debts: Greece
Who asks to borrow more money to pay previous debts: Greece
Who loses: Everyone the lent money to Greece
Time to cut the rope and let them sink to the bottom.
Who borrowed money: Greece
Who spent more money than they can afford: Greece
Who can't pay their debts: Greece
Who asks to borrow more money to pay previous debts: Greece
Who loses: Everyone the lent money to Greece
Time to cut the rope and let them sink to the bottom.
33
Who lent money to a bad credit risk: German banks
Who enjoyed a high rate of interest on those loans: German banks
Who should have lost their investment (loans) when the financial crisis hit: German banks
Who got BAILED OUT by German taxpayers: German banks
Who owns the debt now, because they BAILED OUT banks: German gov't.
Let the German gov't eat the debt, then claw it back from their banks. Takes TWO to make a loan, people.
Who enjoyed a high rate of interest on those loans: German banks
Who should have lost their investment (loans) when the financial crisis hit: German banks
Who got BAILED OUT by German taxpayers: German banks
Who owns the debt now, because they BAILED OUT banks: German gov't.
Let the German gov't eat the debt, then claw it back from their banks. Takes TWO to make a loan, people.
24
Who knew full well that the Greek economy was troubled before they let Greece into the EU: Europe
Who overlooked troubled state of the Greek economy because they cared more about politics - like Cyprus: Europe
Who was to blame with the U.S. housing bubble: borrowers and the banks who knew full well that many borrowers could never repay
Who is to blame in the current EU/Greece crisis: EU and Greece
Who overlooked troubled state of the Greek economy because they cared more about politics - like Cyprus: Europe
Who was to blame with the U.S. housing bubble: borrowers and the banks who knew full well that many borrowers could never repay
Who is to blame in the current EU/Greece crisis: EU and Greece
9
@Carol: By your logic, banks should never lend to poor credit risks. Thus, my guess is that you support the proposition that banks should not grant mortgages to low-income people if they're trying to buy too much house, if they can't come up with 20% downpayment, etc. Without credit, the poor can no longer get by. Is this what you are advocating? If so, by all means let's apply this policy to the US, too, and not just Greece.
1
"The IMF's warning Tuesday that Greece needs debt relief going "far beyond what Europe has been willing to consider so far." It isn't proposing to write off its own loans to Greece, saying it represents many poorer countries around the world. But argues Europe should be able to." Do as the IMF says, not what the IMF does. Isn't that hypocrisy ?
11
Yes, that's hypocrisy. And the IMF certainly has it's own record of ruthlessness.
But nevertheless, they are talking sense here. Writing off large parts of the debt makes a lot more sense than postponing payments to the year 3000 or whenever. Postponing payments may be roughly equivalent to writing off debt, but it has two severe drawbacks. It's more depressing psychologically for the debtor, and it makes it even less likely to ever get any money back at all. Merkel may have the psychological effect on her voters on her mind, but she should be thinking a lot lot more of the Greeks state of mind. Their position is much more extreme, so their needs should come first. It wont do anybody any good to push the Greeks over the brink of sanity.
But nevertheless, they are talking sense here. Writing off large parts of the debt makes a lot more sense than postponing payments to the year 3000 or whenever. Postponing payments may be roughly equivalent to writing off debt, but it has two severe drawbacks. It's more depressing psychologically for the debtor, and it makes it even less likely to ever get any money back at all. Merkel may have the psychological effect on her voters on her mind, but she should be thinking a lot lot more of the Greeks state of mind. Their position is much more extreme, so their needs should come first. It wont do anybody any good to push the Greeks over the brink of sanity.
9
The key question here is : does Greece need reforms?
The current government has clearly shown that it is unwilling to institute them, and if the debt is forgiven, the lender nations loose all leverage.
The current government has clearly shown that it is unwilling to institute them, and if the debt is forgiven, the lender nations loose all leverage.
1
when I lend money to an already impoverished borrower, a borrower for whom it was perfectly clear there was no possible way to repay, do I have the right to own and punish that borrower as the EU and its current ruler G is doing
11
If the IMF want to give Germany debt relief I suggest they buy the debt and write it off!.
Its like telling someone else to take a loan and buy you a house.
Its like telling someone else to take a loan and buy you a house.
9
Except that it is not like personal debt, because the entities involved are national economies, not individual persons or corporations that behave and respond in a fundamentally different manner.
TheIMF also is a creditor of Greece. They remain joined at the hip to the Germans at the demand of the Germans (and over the objections of the Greeks) because the Germans want their expert opinion and blessing. So here they are giving it and telling the Germans (and other creditors) what they need to do to get the IMF approval they so crave (and Greece has scorned).
Lo and behold, the IMF says, the Greeks have a point on this.
If Germans don't wnat the IMF's opinion, they shouldn't ask for it. If they don't want the IMF's blessing and involvement, they shouldn't insist on it. If they don't like what the IMF thinks, that's their choice.
Lo and behold, the IMF says, the Greeks have a point on this.
If Germans don't wnat the IMF's opinion, they shouldn't ask for it. If they don't want the IMF's blessing and involvement, they shouldn't insist on it. If they don't like what the IMF thinks, that's their choice.
The article focused on the IMF point that significant Greek debt restructuring is needed. However, it overlooks that the same report assigns the blame for the worsening economic situation in Greece and the exponentially growing costs of bailing it out ($95 and counting) squarely to the Greek governments over the last one year -- Mr. Samaras's and especially Mr. Tsipras's. The first point of the IMF report says: “About a year ago, if program policies had been implemented as agreed, no further debt relief would have been needed to reach the targets under the November 2012 framework (debt of 124 percent of GDP by 2020 and “substantially below” 110 percent of GDP by 2022).”
This point has more than simply historical significance. If I am a taxpayer, say, in one of the Baltic states, after reading the IMF report I would be asking my government: "Why should we continue to throw some serious good money after bad and pay for the extravagant choices made over the past year by the Greek governments and voters? That, while Greeks still enjoy much higher standard of living compared to our population." In a way, the IMF report provides political cover for euro zone politicians to give up on Greece's membership if they chose to do so.
This point has more than simply historical significance. If I am a taxpayer, say, in one of the Baltic states, after reading the IMF report I would be asking my government: "Why should we continue to throw some serious good money after bad and pay for the extravagant choices made over the past year by the Greek governments and voters? That, while Greeks still enjoy much higher standard of living compared to our population." In a way, the IMF report provides political cover for euro zone politicians to give up on Greece's membership if they chose to do so.
25
The fact is that taxpayers in all monetary unions support such fiscal transfers. This is done not with tax revenue, but with fiat currency. We do this in the USA all the time and our democracy depends on such decisions not being made by the electorate. In other words, Europe has failed in monetary union by failing to accommodate these fiscal transfers, which are an inherent and required part of a currency union like the eurozone. You can't apply your simple household microeconomic values to these macroeconomic issues, because national economies are fundamentally different entities than a microeconomic entity and have different behaviors and responses.
10
I would advise that you read the comment by Bill Appledorf, who explains very well why Greece is in this situation.
The statement that Baltic countries' standard of life is worse than that of Greeks couldn't be further from the truth. The fact that there are Greeks that are wealthy doesn't make them the average Greek. 10thousand people have committed suicide in Greece because of the crisis, so if there's no living at all there's no standard of living either. Suicides in Greece were always low and depressions were extremely low before the crisis, unlike Baltics and Northern European countries that are high and people suffer from depression.
Now these countries are following Germany's lead, because they are afraid they might end up like Greece and so was Spain, Portugal and Ireland during the deliberations.
I would also suggest that you read the comment by Melvyn Nunes, it's very educative Germans.
The statement that Baltic countries' standard of life is worse than that of Greeks couldn't be further from the truth. The fact that there are Greeks that are wealthy doesn't make them the average Greek. 10thousand people have committed suicide in Greece because of the crisis, so if there's no living at all there's no standard of living either. Suicides in Greece were always low and depressions were extremely low before the crisis, unlike Baltics and Northern European countries that are high and people suffer from depression.
Now these countries are following Germany's lead, because they are afraid they might end up like Greece and so was Spain, Portugal and Ireland during the deliberations.
I would also suggest that you read the comment by Melvyn Nunes, it's very educative Germans.
Lots of comparisons between Greece's debt problem today and Germany's debt problem after WWII. But these are bad comparisons.
Germany had a viable economy, although one decimated by war and indebted. They did not need financial reform. Germany needed political reform to prevent further aggression. They received debt relief when the allies were convinced these reforms were in place.
Greece does not have a viable economy. They need debt relief, true. But this will be of only temporary help if they do not enact structural reforms in their economy. I don't mean "austerity" which has harmed their economy, I mean a reformed tax code with fewer loopholes and which is enforced, and removal of politically-infused business regulations.
When Greece enacts required economic reforms, then debt relief becomes in almost everybody's best interest and will probably happen.
Germany had a viable economy, although one decimated by war and indebted. They did not need financial reform. Germany needed political reform to prevent further aggression. They received debt relief when the allies were convinced these reforms were in place.
Greece does not have a viable economy. They need debt relief, true. But this will be of only temporary help if they do not enact structural reforms in their economy. I don't mean "austerity" which has harmed their economy, I mean a reformed tax code with fewer loopholes and which is enforced, and removal of politically-infused business regulations.
When Greece enacts required economic reforms, then debt relief becomes in almost everybody's best interest and will probably happen.
22
When the Soviet imposed dictatorship collapsed in 1989, Germans were able to form a unified, democratic state. Germans in the West are still paying the bill for undoing the damage that communists did to the East. I think they understand the difference between helping the victimized and giving hand-outs to people playing the victim card.
And do keep in mind that in 2003 a German government, led by the Social Democratic Party, implemented a series of measures that increased retirement ages, lowered worker benefits, and increased taxes. These measures helped restore balanced growth to the German economy. They apparently also helped Angela Merkel win the next election and retain office until today. True democratic socialism is one thing. Demagogic neo-Marxism is quite another
And do keep in mind that in 2003 a German government, led by the Social Democratic Party, implemented a series of measures that increased retirement ages, lowered worker benefits, and increased taxes. These measures helped restore balanced growth to the German economy. They apparently also helped Angela Merkel win the next election and retain office until today. True democratic socialism is one thing. Demagogic neo-Marxism is quite another
Excellent points! I think that the 1953 German write-down mostly comes up because of the hypocritical moralizing rhetoric Germany and its fans keep dishing out. They seem intent on framing this as a morality play rather than treating it as an economic and political issue.
Greece HAD a viable economy before the euro disaster and can have one again with some sane debt relief, investment, and reforms that the Greek government admits are needed.
A two-step, two-stage solution to the financial trap should be pursued through the creation of an Euro-2 Zone, an antichamber or clearing house to full euro-citizenship. Within it, Greece will have breathing space to pay and grow simultaneously. At the same time, address the Gk puzzle through a vast all-European effort for Gk development. Call the young and educated in droves. Create an Erasmus for economic tasks.
Yesterday on TV you could see Merkel from Germany and Hollande from France talking to each other in Brussels on this money issue. This was good except they had a French/German translator literally standing in the middle to help them out. These folks are still living in the 19th century. An EU of the here and now is way beyond their skills.
5
the IMF should feel free to write off 100% of its $23,600,000,000 Greek IOU, and then try selling that to the US taxpayers.
16
Here is one US taxpayer who would be OK with that. But you do know that the IMF is not a US agency and their funds don't all come from us, right?
One of the weak points of the weekend's document from "the institutions" was its position that extending repayment dates and reducing interest rates are okay but a haircut is not, when simple arithmetic can make changed dates and rates equivalent to any desired haircut. A document that ignores arithmetic is politician stuff -- no wonder the IMF rebelled.
3
Germany's postwar debt was only a tiny fraction of what the Greeks owe, both in absolute and relative terms.
Then part of Germany's debt indeed was cut -- as was a large part of Greece's debt, already years ago, at the beginning of this crisis! That much the situations actually have in common.
However, then Germany paid back the rest of their debt while meticulously accounting for what it had spent the assistance funds for (i.e. rebuilding a viable economy so that it could become the frontline state against the Warsaw Pact, providing thousands of tanks to NATO against the Red Army) -- meanwhile Greece just keeps embezzling any money that is sent there and shows no intention to reform its economy and structures of governance to become financially self-reliant, ever -- and forget about meticulous accounting (and, ironically, it now has far more tanks than Germany, almost 2000 vs barely 400, paid for with borrowed money of course, that are needed for -- exactly nothing).
Those are the facts, and they are easily accessible (if you read more than just the NY Times) -- but I guess German-bashing is just more fun ?!?
Then part of Germany's debt indeed was cut -- as was a large part of Greece's debt, already years ago, at the beginning of this crisis! That much the situations actually have in common.
However, then Germany paid back the rest of their debt while meticulously accounting for what it had spent the assistance funds for (i.e. rebuilding a viable economy so that it could become the frontline state against the Warsaw Pact, providing thousands of tanks to NATO against the Red Army) -- meanwhile Greece just keeps embezzling any money that is sent there and shows no intention to reform its economy and structures of governance to become financially self-reliant, ever -- and forget about meticulous accounting (and, ironically, it now has far more tanks than Germany, almost 2000 vs barely 400, paid for with borrowed money of course, that are needed for -- exactly nothing).
Those are the facts, and they are easily accessible (if you read more than just the NY Times) -- but I guess German-bashing is just more fun ?!?
41
Greece paid back by 4 years of civil war against the communists , right after having been devastated by the Germans in the WW2 ... And about the looting and destruction by the Germans they have not get a a penny, cause they were "allies" in NATO. History cannot be changed in NYT comments my friend. About the reforms see how the debt and unemployment have risen in Greece after 5 years of Reforms the have dictated to Greece form the lenders.... Those are facts too
10
Who did the Greeks buy the tanks from? If it was a German company or one from another European country then the Greeks just transfered the money through some metal....
5
You are right but the paradox of macroeconomic reality is that Greece cannot improve without debt relief. So despite the fiscal imprudence, it still makes sense to give more debt relief macroeconomically. Then, I would agree that Greece needs some form of conservatorship until it gets good governance and fiscal management. But there is no future in indebting Greeks for generations to come for anyone in Europe and that is also not morally acceptable.
Thankfully, Christine Legarde is a person of intelligence and not an ideologue. She is right to insist that the banks take a cut. She should have done this earlier, true. She has been saying that Greece cannot repay the debt. The Germans hear that as Greece refuses to repay the debt. They clearly knew what they were doing when they loaned the money. It wasn't their first rodeo.
They have taken Greece's dignity and democracy. Can't they give something in return? Shame cannot be eaten.
They have taken Greece's dignity and democracy. Can't they give something in return? Shame cannot be eaten.
18
The banks and other private lenders already had to write off more than 100 euros in 2012.
The IMF is correct in insisting on debt relief for Greece and Germany should support this considering they received huge debt relief after WII. To get Greece back on it's feet economically benefits the world economy in the whole.
11
This has absolutely no connection to Greece's overspending and corruption.
10
I am sorry, but this is actually funny... "get Greece back on its feet"... In their modern history, they have n-e-v-e-r been on their feet financially. This is just the latest in a series of mismanaged economic episodes.
5
And Greeks overspending and corruption have little to do with its current debt crisis - as every major economist has said.
You would think the Germans, of all people, would have learned a thing or two about debt forgiveness, on the one hand, and about the political consequences of fiscally humiliating a suffering nation, on the other.
26
They did, which is why they already lent Greece 100 billion at extremely generous terms, supported a cut to the Greek debt of about another 100 billion, several years ago, at the beginning of the crisis, and are now offering another 100 billion additional funds, combined with a reform program that Greece should have implemented already years ago anyways (and had promised that they would, but then didn't).
They (the "Evil Schaeuble", actually) also offered to send 500 German tax specialists, for free, to help Greece build a functioning tax collection system (the offer was rejected, "Greek pride and honor" or something like that).
The only people humiliating the Greeks here are the Greeks themselves.
They (the "Evil Schaeuble", actually) also offered to send 500 German tax specialists, for free, to help Greece build a functioning tax collection system (the offer was rejected, "Greek pride and honor" or something like that).
The only people humiliating the Greeks here are the Greeks themselves.
3
The European currency union is inherently dysfunctional without political union. too. The euro experiment is doomed to fail without the implementation of profound structural changes - which would necessarily force states to relinquish an unacceptable degree of political sovereignty in exchange for economic stability. Animosities are too great nationalism is too strong for European states to agree on much of anything. European states will continue to seek power to the detriment of their neighbors. It's the nature of our anarchic global system.
7
I think you need to move away from who holds the moral high ground. So what if Germany got debt forgiveness 50 years ago. It has no bearing on today's issue. The question is whether Greece can reform its economy and grow its economy and whether insistence on repaying their enormous debt undercuts any likelihood that they can grow their economy. The insistence that there be no debt relief is simply a way for certain EZ countries to expel Greece from the EZ. Such an expulsion means none of the creditors would get repaid. So effectively Germany and others are saying that they would rather be paid back nothing than give debt relief because they are © willing to pay that price to get Greece out.
19
this is the crux, if you don't have a federal system then the eurozone will fail, end of story. In the US, the southern states, bless their benighted hearts, get far more money from the Federal government than they pay back, that's the deal that was struck. If something similar isn't built in Europe, it's only a matter of time before the dominoes start to fall. All the finger pointing back and forth misses the point, the same arguments can be made between California and Alabama.
7
If the US banks and Wall Street could rob the American people, go broke doing it, and get a bailout forever, why can't some debt be forgiven for Greeks who admit they made mistakes. They didn't steal the money like the banks here in the US. They should pay something but if Greece can't get back on its feet, Europe is bound to feel the effect for years to come...I think it would be to their benefit to forgive some debt
8
The Germans may feel exploited by the Greeks but it's one of their favorite summer vacation destinations and has been for so long that next to English the next most spoken foreign language in Greece has been German. What that means is that the Germans should know the limitations of Greece's economy and it's potential for growth better than most others. Their refusal to accept that Greece just cannot pay and is just a less efficient country in all ways than is Germany is silly and they should know it.
5
I hope everyone realizes that the IMF is not suggesting reducing payments due from Greece to the IMF. The IMF wants every Euro Cent it loaned to Greece paid back. It is only demanding that loans from the European nations be written off. This then puts the IMF in a marginally better position to get its money back from Greece.
12
The debts are too large to ever be repaid. This is simply reality. It can be faced by mutual agreement, or it can be faced in a few days when Greece misses a payment on EU bonds. Mutual agreement is better, as the process can be managed and a balance between reforms and growth can be reached. "Extend and Pretend" has run its course. The reality is that Greece cannot pay off 200% of GDP in debts. How they choose to face this reality will indicate the moral clarity and values not just of Greece or Germany, but the Entire European project. Thus far, there is little to be seen that is inspiring.
When the USA scrapped the Articles of Confederation to adopt our current Constitution, "in order to form a more perfect union", we created the most durable government on planet Earth and a beacon of freedom and humanity for centuries. Where is European vision and leadership today? Blame and greed rule the day in Europe, while people suffer. Without vision, the people perish.
When the USA scrapped the Articles of Confederation to adopt our current Constitution, "in order to form a more perfect union", we created the most durable government on planet Earth and a beacon of freedom and humanity for centuries. Where is European vision and leadership today? Blame and greed rule the day in Europe, while people suffer. Without vision, the people perish.
90
How does Argentina's situation fit in your view of simple reality.
By judgement of US federal court Argentina was pushed into second insolvency within 13 years. Argentina was forced to pay back 100% of their bonds to the US hedge fonds which bought the bonds very cheap some month earlier.
The hedge fonds rejected a debt cut which led into the insolvency and pushing back Argentina for years.
It is always a little different when it is not about your own money, isn't it?
By judgement of US federal court Argentina was pushed into second insolvency within 13 years. Argentina was forced to pay back 100% of their bonds to the US hedge fonds which bought the bonds very cheap some month earlier.
The hedge fonds rejected a debt cut which led into the insolvency and pushing back Argentina for years.
It is always a little different when it is not about your own money, isn't it?
Comparisons between the United States and The Eurozone are inapt. In 1787, and thereafter, while the colonies surely had their differences among one another, we were basically one culture, shared a single language, and suffered from a single foe. None of that is true about Europe. A more valid comparison would be the United States and the countries of South America. Do we bail out Argentina? Brazil? Ecuador? How many in the United States Congress would vote to bail out Mexico and still keep their seats in the next election cycle? And even in our "more perfect Union", Congress doesn't bail out States that spend lavishly on pensions and other social costs, then do not collect taxrs to pay for them. If they did, who would bother with the annual budget struggle?
And the reference to debtor's prison is also inapt. Prison yes, but not debtor's prison. For years, Greece intentionally misstated its financial position. It simply lied about its assets, income, and liabilities. Under our system, we do not reward fraud.
Are the people of Greece going to suffer because their leaders were dishonest and stupid? Sigh, I guess that's the way it works. Are the Euro banks going to suffer from a default on foolishly, and perhaps dishonestly made loans? Yup. Is that fair? Yup again.
And the reference to debtor's prison is also inapt. Prison yes, but not debtor's prison. For years, Greece intentionally misstated its financial position. It simply lied about its assets, income, and liabilities. Under our system, we do not reward fraud.
Are the people of Greece going to suffer because their leaders were dishonest and stupid? Sigh, I guess that's the way it works. Are the Euro banks going to suffer from a default on foolishly, and perhaps dishonestly made loans? Yup. Is that fair? Yup again.
Perhaps it's time to recognize that the E.U. is only a good idea for responsible nations. This likely leaves out Greece, Italy, Portugal and Spain for starters. Give it up Germany and go back to the deutschmark.
Why not listen to a few Greek voices, or rather read their opinion or news items online. I can recommend:
- an article in eKathimerini from today, Juy 15, 2015, titled: "EU publishes Greece assessment, sees debt reprofiling". Debt reprofiling but no write-offs, and only if Greece implements reform measures demanded by its creditors.
- a news piece in eKathimerini from yesterday, July 14, 2015, titled "Italy's FinMin says only three states supported deal with Greece."
- To Vima online (English edition), an article from last Sunday, July 12, 2015, titled "Beyond the mistakes of Mr. Tsipras and the foolishness of Mr. Varoufakis".
- in the Greek Reporter and article by Philip Chrysopoulos, in the opinion sector, titled: " Wednesday's strikes show Greeks refuse change". (http://
greece.greekreporter.com/2015/07/14/wednesdays-strikes-show-greeks-refus...
Google will help interested readers in easily finding the To Vima and the eKathimerini website.
One of the impediments for a sound Greek economy indeed seems to be the fact that a considerable part of the Greek population does not want change and modern reform. A larger part than in Ireland and Portugal and Spain where the government agreed to and implemented reform measures, with a positive effect on the economic situation of their country.
Today is a crucial day for Greek society because tonight's vote on the proposed 3rd bailout/reform agreement will show if Greece is ready to reform and modernise its economy.
- an article in eKathimerini from today, Juy 15, 2015, titled: "EU publishes Greece assessment, sees debt reprofiling". Debt reprofiling but no write-offs, and only if Greece implements reform measures demanded by its creditors.
- a news piece in eKathimerini from yesterday, July 14, 2015, titled "Italy's FinMin says only three states supported deal with Greece."
- To Vima online (English edition), an article from last Sunday, July 12, 2015, titled "Beyond the mistakes of Mr. Tsipras and the foolishness of Mr. Varoufakis".
- in the Greek Reporter and article by Philip Chrysopoulos, in the opinion sector, titled: " Wednesday's strikes show Greeks refuse change". (http://
greece.greekreporter.com/2015/07/14/wednesdays-strikes-show-greeks-refus...
Google will help interested readers in easily finding the To Vima and the eKathimerini website.
One of the impediments for a sound Greek economy indeed seems to be the fact that a considerable part of the Greek population does not want change and modern reform. A larger part than in Ireland and Portugal and Spain where the government agreed to and implemented reform measures, with a positive effect on the economic situation of their country.
Today is a crucial day for Greek society because tonight's vote on the proposed 3rd bailout/reform agreement will show if Greece is ready to reform and modernise its economy.
6
When my tax dollars do not go to fund the IMF only then do they have the right to call for writing off Greek debt.
But, since this is not the case and the United States provides nearly 20% of the funding for the IMF, this organization has no business telling me or the American taxpayer that we should take a loss in order to pay for the actions of a thoroughly irresponsible Greek government and its people.
But, since this is not the case and the United States provides nearly 20% of the funding for the IMF, this organization has no business telling me or the American taxpayer that we should take a loss in order to pay for the actions of a thoroughly irresponsible Greek government and its people.
11
Newsflash: contributing tax dollars give you absolutely zero say on how that money is spent. Only voting does.
Oh please. You live in New Hampshire. You don't pay taxes.
Alexis Tsipras has done about as much for his nation as Neville Chamberlain did for his.
5
This comment makes absolutely no sense. There is no comparison of the two situations.
6
We'll see. Contrary to most press reports, the current agreement seems quite close to what he said he would do when running for election. Not everything, but enough of his red lines. Now, he might get debt relief too, the one thing he most cares about.
So we may be looking at a guy who (a) finally pushes through unpopular reforms, (b) got more freedom to reshape public spending in a progressive left way, and (c) got the debt relief his country needed to have a future.
I'm not saying it will go down that way, but I wouldn't start writing his history chapter yet. High risk gamblers can lose big, but they sometimes win too.
So we may be looking at a guy who (a) finally pushes through unpopular reforms, (b) got more freedom to reshape public spending in a progressive left way, and (c) got the debt relief his country needed to have a future.
I'm not saying it will go down that way, but I wouldn't start writing his history chapter yet. High risk gamblers can lose big, but they sometimes win too.
Or Barack Obama for his.
While the analysis of Greek debt by the IMF is logical, they did not act on their position during the negotiations. The EU has solidified that logic and economic theory have no place in this battle, which is clearly about dominance of the banks and the German economy.
7
I agree that the IMF's timing seems poor at best and at worst devious, but I understand it supplies 3/11's of the funding of any agreement, so it does have a place at the table. Also, reports have been that the IMF has made its position clear in private talks with the EZ/ECB and ESM.
Is it possible that ignoring the IMF's position forced it to go public?
Is it possible that ignoring the IMF's position forced it to go public?
5
The Eurozone countries NOT the European Union, please do not get them confused. The UK is not in the Eurozone therefore we could not influence the decisions taken by Germany and France. If we were I think a different outcome would have been arrived at
Lord, forgive us our debts as we forgive our debtors.
4
As "Greece is the IMF's largest debtor", the IMF could give Greece a haircut. Many of Greece's creditors are cash-strapped and can need every single cent for their domestic budget.
9
And Switzerland could close its tax havens and force rich Greeks to repatriate their billions and pay taxes. All of the countries in the world know what kind of scam Switzerland, Luxembourg and UK to name a few, are running on all the citizens of the world and we resent you for it greatly. Quit cheating, close the tax havens, and let us all get our deserved taxes from the billionaires' hidden funds
Given the major role the I.M.F. has in the current proposed austerity reforms of closely monitoring Greek finances in Athens, their recommendation that the debt load is unsustainable can be viewed as an encouraging step for Greece which desperately wants and clearly needs "debt reduction." If Greece approves the list of reforms today, then it will be up to the E.U. and especially Germany and it hard-line allies to finally confront this issue in the negotiations that will follow. This time they will not just be dealing with Greece and and it ally in France, but one of the key members of the "troika" in the I.M.F., formerly the major proponent of austerity. And the decision they will be making will not be about the so-called "Grexit," but the viability of the Euro and the austerity program as a way of maintaining it. So, the ante will be raised, and, in reality, they'll be deciding on the "Eurexit," or the exit of the Euro as a sound currency.
4
So, the IMF only wants to help if there was some hope. Greece cannot be helped anymore. The best way is a Grexit and save more than 80 billion for the rest of the EU. This amount can be spend in the economies of the thrusthworthy and much poorer countries in the EU. Greece can ask Poetin to be a part of the new USSR, with their new currecy: the rouble
11
If the Eu politicians are democrats then they should listen to the Greeks and don't give another loan to Greece. Anything else is a shame
No, Greece will have its debts forgiven as were Germany's, and the Netherlands will accept it or can leave. Sorry but no one cares about Netherlands. Americans are with Greece. Look at our most celebrated economists, they are ALL sympathetic to Greece.
Europe is not strictly about balance sheets. It is a political and moral Union too, something Germany and Netherlands don't seem to bother about.
Europe is not strictly about balance sheets. It is a political and moral Union too, something Germany and Netherlands don't seem to bother about.
3
When the sea levels start rising dramatically, remember your cold hearts Netherlands and please don't ask any of us to put our fingers in the holes of all the dikes. Such haughtiness from a country only known economically for a tulip bust. I sure would hate to be in a political union with any of the N Euro as they are strictly loud belligerent fair weather friends.
The debt will never be repaid, not in Greece, not in Puerto Rico, not in the United States. This is simply an exercise in increasing the money supply. When the debt cannot be repaid and is simply rolled over in perpetuity and when the central banks cannot inflate their way out of the problem we have reached the end of the line. Yes, of course central banks will eventually forgive the debt but that does not solve the problem of too few jobs and low wages. The money supply increase that goes to the top X%, that increases their capital, stocks, and real estate does not create jobs or increase wages.
4
The IMF is not being helpful.
Debt relief should come into play once the Greeks demonstrate compliance and accountability.
Debt relief should come into play once the Greeks demonstrate compliance and accountability.
6
translation: debt relief should come into play once the blood starts flowing from the squeezed stone.
There seems to be a much more crucial fault in the fabric of Greece`s society which no money in the world can solve, as Michael Lewis in his great piece of journalism pointed out.
"After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.
The hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.
The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse."
http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-201010
"After systematically looting their own treasury, in a breathtaking binge of tax evasion, bribery, and creative accounting spurred on by Goldman Sachs, Greeks are sure of one thing: they can’t trust their fellow Greeks.
The hardest thing to do in Greece is to get one Greek to compliment another behind his back. No success of any kind is regarded without suspicion. Everyone is pretty sure everyone is cheating on his taxes, or bribing politicians, or taking bribes, or lying about the value of his real estate. And this total absence of faith in one another is self-reinforcing. The epidemic of lying and cheating and stealing makes any sort of civic life impossible; the collapse of civic life only encourages more lying, cheating, and stealing. Lacking faith in one another, they fall back on themselves and their families.
The structure of the Greek economy is collectivist, but the country, in spirit, is the opposite of a collective. Its real structure is every man for himself. Into this system investors had poured hundreds of billions of dollars. And the credit boom had pushed the country over the edge, into total moral collapse."
http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-201010
29
I read that Lewis book. Nonsense. He spent a week in Greece interviewing selective people and made vast generalizations to fit the stereotype coming out of the German propaganda machine.
I spent months in Greece over a decade and did business there and am offended by this essay. They are decent family people who are generous, warm, educated and honest. They pay their bills immediately. Yes, people are perhaps distrustful of government --- BUT, who can blame them?
Let's cut out the stereotyping and help Greece now, shall we? Enough kicking someone when he's down.
I spent months in Greece over a decade and did business there and am offended by this essay. They are decent family people who are generous, warm, educated and honest. They pay their bills immediately. Yes, people are perhaps distrustful of government --- BUT, who can blame them?
Let's cut out the stereotyping and help Greece now, shall we? Enough kicking someone when he's down.
3
Here, illampu, I have to say that this is pretty much accurate.
p.
p.
Jack Lew will be in Europe for talks about the Greek crisis Thursday and Friday. Combine that with the US's effective veto power in the IMF and it's clear this story isn't over yet. There are still a myriad of possible solutions. Mr. Lew has previously proposed a solution that would have a series of "triggers" that would reward Greece for good economic behavior. This weekend should tell whether he is still on that path or decided to go "haircut".
3
The Merkel Doctrine (no debt relief, no temporary exit from the Euro) will be the death of the Euro and the EU. Who on earth can accept as European Constitutional Law Mrs. Merkel's fiat that EU countries are not permitted to go bankrupt?
Either Greek debt needs a haircut, or Greece needs an EU-sponsored Marshall Plan that will restore their economy.
Either Greek debt needs a haircut, or Greece needs an EU-sponsored Marshall Plan that will restore their economy.
8
Wow the anti-german and anti-euro rhetoric on this website is something else.
I suspect what we're seeing is anger born out of humiliation at the way the radcial left wing Syrizia party was beaten to a bloody pulp in the negotiations with the rest of Europe. Humiliated, and ending up taking on more austerity than at the beginnning. The NYTimes, along with the Guardian, two large left leaning online publications, are now open in their anti-German and anti-EU rhetoric.
No matter, you can be angry and hostile, but doesnt make you right. The Germans (and others) are right to stand up for hard working taxpayers and hold Greece's feet to the fire. I hope they stand firm, and there are millions more where i came from.
I suspect what we're seeing is anger born out of humiliation at the way the radcial left wing Syrizia party was beaten to a bloody pulp in the negotiations with the rest of Europe. Humiliated, and ending up taking on more austerity than at the beginnning. The NYTimes, along with the Guardian, two large left leaning online publications, are now open in their anti-German and anti-EU rhetoric.
No matter, you can be angry and hostile, but doesnt make you right. The Germans (and others) are right to stand up for hard working taxpayers and hold Greece's feet to the fire. I hope they stand firm, and there are millions more where i came from.
89
Caezar writes, "The Germans (and others) are right to stand up for hard working taxpayers and hold Greece's feet to the fire "
How fortunate for Germany that in 1953 other hard-working taxpayers supported the London Debt Agreement, where 60% of German foreign debt was cancelled.
How fortunate for Germany that in 1953 other hard-working taxpayers supported the London Debt Agreement, where 60% of German foreign debt was cancelled.
12
The anti-Greek rhetoric is also astounding. Thousands of US companies file chapter 11 every year, collectively writing off billions in debt and equity while continuing in business, leaving consumers, taxpayers and investors holding the bag. Where is the moral outrage when that happens?
6
Again moralizing. The question is how sincere are you if you make an impossible demand. Or are there other motives at work. If you want a solution to the Greek crisis you have consider debt relief. If you want Greece out of the EZ then you make an impossible demand.
2
During the last 180 years Greece never showed any interest in becoming an industrial nation and then they stopped or became too lazy to thrive as an agricultural nation.
Greece imports now 80 % of their olive oil from Italy. Their Feta comes now from Denmark or Germany. Their tomatoes rot on fields because it`s cheaper or easier to import them from Holland. Oranges and lemons are imported from Spain and almost all of their potatoes come from Egypt.
How dare they blaming other nations? After burning already hundreds of billions, to demand even more money?
I hope that for fleecing other nations for so long and without any remorse, that Greeks will get and learn from a tough lesson.
Greece imports now 80 % of their olive oil from Italy. Their Feta comes now from Denmark or Germany. Their tomatoes rot on fields because it`s cheaper or easier to import them from Holland. Oranges and lemons are imported from Spain and almost all of their potatoes come from Egypt.
How dare they blaming other nations? After burning already hundreds of billions, to demand even more money?
I hope that for fleecing other nations for so long and without any remorse, that Greeks will get and learn from a tough lesson.
55
Wow, these are amazing statistics! Do you have a source?
1
C'mon, illampu, at least get your facts straight, and refrain from hyperbole. Yes, there's Italian olive oil in my local (German) supermarket, but there's also Greek (which sells at a premium, by the way). If there's a shortage of local oil, it's because it's being exported - in delis in downtown Toronto, you can buy organic olive oil which is produced just down the road from us (at 50 bucks a liter, I should add). I speak as a (very modest) producer of olive oil myself.
Similarly with your other examples. 'Feta' is a protected name, and only feta produced in Greece can be called such. And boy, there's lots of it being sold. Foreign feta has to be sold as 'white cheese' - I grant you it is cheaper than the locally-produced stuff.
We're knee-deep in citrus (and avocado) in the season here in Crete, and most of the production, along with greenhouse vegetables (tomatoes, peppers, cucumbers, eggplant and others) is exported to (wait for it) Germany. Go to any street market - there are four a week in the nearby town - and you'll see nothing but Greek produce. Selling out. Potatoes from eastern Crete are much-prized, and also sell at a premium.
As for Dutch tomatoes, puh-leeze: around here, we recognize four states of water: liquid, ice, steam, and Dutch tomatoes.
p.
Similarly with your other examples. 'Feta' is a protected name, and only feta produced in Greece can be called such. And boy, there's lots of it being sold. Foreign feta has to be sold as 'white cheese' - I grant you it is cheaper than the locally-produced stuff.
We're knee-deep in citrus (and avocado) in the season here in Crete, and most of the production, along with greenhouse vegetables (tomatoes, peppers, cucumbers, eggplant and others) is exported to (wait for it) Germany. Go to any street market - there are four a week in the nearby town - and you'll see nothing but Greek produce. Selling out. Potatoes from eastern Crete are much-prized, and also sell at a premium.
As for Dutch tomatoes, puh-leeze: around here, we recognize four states of water: liquid, ice, steam, and Dutch tomatoes.
p.
It should be noted that if there really is the necessity of debt cutting now, it is only because of the immense damage wrought to the Greek economy during 6 months of clownish-grotesque behavior of the Tsipras administration.
In other words Tsipras is now saying: "see, we said at the beginning that we would get additional debt cutting, then we smashed that much value in our own economy that the creditors had absolutely no more choice to give us a cut in debts to make up for the damage we caused".
Of course that means that the Greek people don't actually benefit at all from this "accomplishment" of Tsipras, at best they would break even and be back to the point when he took office and started his rampage (and probably not even close).
And the citizens of the rest of the Eurozone will have to pay for the Syriza-sociopath's acts.
Because that is what debt-cutting means: more money from the tax-paying (and voting) citizens of Europe going to Greece.
And the IMF is not all of the sudden being generous: what they are saying is that *Europe* should cut Greece's debts, so that the IMF's risk is reduced. The IMF isn't cutting anything.
That's how much the IMF doesn't trust Greece, especially under Tsipras, to make good on any promise.
Lastly, if it turns out the IMF only launched this balloon to help the reform package get passed by the Greek parliament, only to then fall back in line with the rest of the Troika, I called it first.
In other words Tsipras is now saying: "see, we said at the beginning that we would get additional debt cutting, then we smashed that much value in our own economy that the creditors had absolutely no more choice to give us a cut in debts to make up for the damage we caused".
Of course that means that the Greek people don't actually benefit at all from this "accomplishment" of Tsipras, at best they would break even and be back to the point when he took office and started his rampage (and probably not even close).
And the citizens of the rest of the Eurozone will have to pay for the Syriza-sociopath's acts.
Because that is what debt-cutting means: more money from the tax-paying (and voting) citizens of Europe going to Greece.
And the IMF is not all of the sudden being generous: what they are saying is that *Europe* should cut Greece's debts, so that the IMF's risk is reduced. The IMF isn't cutting anything.
That's how much the IMF doesn't trust Greece, especially under Tsipras, to make good on any promise.
Lastly, if it turns out the IMF only launched this balloon to help the reform package get passed by the Greek parliament, only to then fall back in line with the rest of the Troika, I called it first.
6
Greece a developed Nation? Your still romanticising about centuries ago.
True it came out with the first ideas of democracy but even then women were treated as chattel.
Present day Greece continues to play us (for the third time it appears) for the rubes we are - enablers.
History will write as it will. Angie Merkel was not wrong in her position from the get go.
True it came out with the first ideas of democracy but even then women were treated as chattel.
Present day Greece continues to play us (for the third time it appears) for the rubes we are - enablers.
History will write as it will. Angie Merkel was not wrong in her position from the get go.
29
Although the IMF is proposing this (and showing for the first time in living memory that it has a heart) slightly late, I still believe that it would be best for the following to happen:
1) Greece should default on its payments to the banks
2) Grexit should happen at the earliest
3) Drachma2 will (obviously) be embraced at a very very advantageous exchange rate
4) The Greek people will be forced into hardship (which is not different from what they will be undergoing under the current agreement)
5) The Greek people will emerge as an independent nation with their own voice and pride intact
6) The banks who have played hardball, will have been brought down to earth - and hopefully learn about responsible lending
7) Just as we have set-in-stone requirements to get into the Euro zone, you will have set-in-stone conditions which force a country to exit the Euro zone
My sympathies are totally with the Greek government and the Greek people.
1) Greece should default on its payments to the banks
2) Grexit should happen at the earliest
3) Drachma2 will (obviously) be embraced at a very very advantageous exchange rate
4) The Greek people will be forced into hardship (which is not different from what they will be undergoing under the current agreement)
5) The Greek people will emerge as an independent nation with their own voice and pride intact
6) The banks who have played hardball, will have been brought down to earth - and hopefully learn about responsible lending
7) Just as we have set-in-stone requirements to get into the Euro zone, you will have set-in-stone conditions which force a country to exit the Euro zone
My sympathies are totally with the Greek government and the Greek people.
26
The IMF needs to step into this negotiation forcefully and insist that the deal be reworked while Greece is supplied with bridging loans during the negotiations.
The idea that the German deal with force the elderly to pick through garbage to find food, is really disgusting but that is what the Germans want. I am sorry but Germany should not be allowed to impose that level of poverty on any nation in the name of helping them manage their finances.
Germany has demonstrated why Angela Merkel is unfit to lead the EU and the EU needs to find someway to sideline her in delicate negotiations. She simply gets too spiteful and nasty to be negotiator on anything.
Wolfgang Schauble should also be replaced at the international level. Let him manage the internal finances, but his views and attitude render him unfit to be a player on the international stage.
If the EU fails to rein in these two Germans they will end up destroying the EU by their hateful attitude and attempt to punish any country which does not follow their rules.
The idea that the German deal with force the elderly to pick through garbage to find food, is really disgusting but that is what the Germans want. I am sorry but Germany should not be allowed to impose that level of poverty on any nation in the name of helping them manage their finances.
Germany has demonstrated why Angela Merkel is unfit to lead the EU and the EU needs to find someway to sideline her in delicate negotiations. She simply gets too spiteful and nasty to be negotiator on anything.
Wolfgang Schauble should also be replaced at the international level. Let him manage the internal finances, but his views and attitude render him unfit to be a player on the international stage.
If the EU fails to rein in these two Germans they will end up destroying the EU by their hateful attitude and attempt to punish any country which does not follow their rules.
8
Judyw, what about the 17 or 18 countries that agree with Germany's stance?
If Greece gets a 30-year extension, they need 0% interest rates on the total debt of €403 billion. Possibly final settlement fees at final payment. Greece will need some expert financial assistance from Pro-grade, smart, clean investment professionals after this extension is approved.
This really would be great for all of EU and all of the tourists on the globe. In 30 years, heads of state will look back and say they made the right choice for EU government.
This really would be great for all of EU and all of the tourists on the globe. In 30 years, heads of state will look back and say they made the right choice for EU government.
1
Greeks always blame everybody else but themselves for the problems they caused. Like in 1908 when as the predecessor of the Euro-Zone, the Latin Monetary Union, caught them diluting the gold content in its coins and flooding money markets with paper money. That torpedoed the Latin Monitary Union.
Tsipras blames the debt on Predatory lending". Greece is a country of 11 million and could be expected to manage its lending professionally. If Greece is so incompetent that it shouldn't have been given money in the first place, then why should it be given further money now?
Tsipras blames the debt on Predatory lending". Greece is a country of 11 million and could be expected to manage its lending professionally. If Greece is so incompetent that it shouldn't have been given money in the first place, then why should it be given further money now?
13
WHO KNOWS BEST? Why is it that the position of the IMF is so much closer to that of Greece, the debtor nation, than to the EU nations, lead by Angela Merkel? If you ask me whose opinion is based on a more accurate overall economic assessment, I would have to go with the experts of the IMF. Though Merkel has a doctorate in physics, to outward appearances she seems to reject the notion of thorough, objective analysis of the facts to determine why it is that the IMF sees the way forward so differently from her. The glaring hypocrisy of the German leader in having been the beneficiary of the haircut that the world took after two world wars begun by her country certainly undercuts her claims to holding the moral high ground. Since the world benefited from rebuilding the defeated Germany not once, but twice, with brilliant results the second time, Merkel would do far better to study how it was that the Marshall plan succeeded in laying the foundation for Germany's economic miracle. Her input in a rescue plan for EU members could bring about another economic miracle for Germany along with other member states. To me that looks like a win-win position, which I hope Chancellor Merkel will seriously consider adopting. The EU truly needs a change of course to bring its economy back onto the path of growth and prosperity. The IMF can help devise such a grand overhaul.
7
Forcing the Greek government to institute agreed-upon reforms - something it has repeatedly failed to do during the debris trail of this financial unravelling - is harsh but necessary.
So is a substantial 'haircut' for the lending banks.
The Greeks and the banks entered into these loan agreements with both sides privately knowing they were unsustainable and with the full intention of inflicting pain on the other, the Greeks by pleading poverty and the banks by threatening ruin.
Neither side is guiltless, and both sides have finally found the limit of their selfishness. A successful negotiation is one where neither side is happy; impose the reforms and the haircut, and try a more honest and realistic approach to activating the Greek economy.
So is a substantial 'haircut' for the lending banks.
The Greeks and the banks entered into these loan agreements with both sides privately knowing they were unsustainable and with the full intention of inflicting pain on the other, the Greeks by pleading poverty and the banks by threatening ruin.
Neither side is guiltless, and both sides have finally found the limit of their selfishness. A successful negotiation is one where neither side is happy; impose the reforms and the haircut, and try a more honest and realistic approach to activating the Greek economy.
3
The requirement for debt relief is a misunderstanding. The issue is in loaning Greece more money while the Greece refuses to pay existing loans and recognizes no obligation to do so or eliminating Greece's excesses that required the original loans.
12
This strikes me as a pretty idle threat on the part of the IMF. If the IMF insists on debt relief in the current agreement, then the eurogroup will simply say, "Fine, Grexit," which the IMF does not want at all costs, because the USA does not want Grexit at all costs.
10
A lot of commenters and others don't seem to understand that things get worse for Greece whether they accept and implement the EU plan or reject it and leave the EU and euro. There really is no "victory" to celebrate either way. Yes, those who were running Greece, and many in the EU, are responsible for where Greece is, but the average Greek has little to do with it; while there will continue to be pain for all Greeks, sanctimoniously punishing the entire country for the sins of the few, some of who are not even Greek, is not right. It also will not succeed in Greece being able to repay its debts. The middle ground is the pragmatic solution, for everyone.
149
I disagree with the notion that "the average Greek has little to do with it". They vote don't they? Every Greek voter and citizen is absolutely responsible for their plight. If they vote, then every Greek voter has a responsibility to be educated and smart about what their government is doing and what the various parties are promoting for economic and regulatory policies. If Greek voters don't take responsibility, then Democracy is not the right form of government for Greece. They'd be better off with a (hopefully benevolent) king.
9
There will continue to be pain ... except for those who took the money and ran.
Where is the 300 B$ ?? There are about 11 million Greeks. 300 B$ is thus roughly $30,000 per Greek ... every man, woman, child ... $120,000 per mythical family of 4 . You don't hear of average Greeks having gotten that money... or having it now.
So where did it go? Who has it?
Where is the 300 B$ ?? There are about 11 million Greeks. 300 B$ is thus roughly $30,000 per Greek ... every man, woman, child ... $120,000 per mythical family of 4 . You don't hear of average Greeks having gotten that money... or having it now.
So where did it go? Who has it?
I refer you to European papers with journalists on the ground in Greece. Many, many people, mostly small business owners, are saying that if the tax rate is raised, they will simply burrow further into the black economy. A responsible country realizes that taxes are necessary and that everyone must do his or her part to help the whole. Greece, in its "pride", seems angry that it will have to change its culture of tax evasion.
1
I can't believe there are still people that think European taxpayers, including taxpayers in poorer countries like Estonia, Latvia, Lithuania and Slovakia, should continue to bail out Greece despite Greece's lack of progress and willingness on reforms.
Why should European taxpayers continue to fund a country that refuses to help itself?
Why should European taxpayers continue to fund a country that refuses to help itself?
70
Why should California taxpayers continually see their money go to backward states like Mississippi, which seems to bask in its role as the economic pit of the US? It comes with being a true Union.
Exactly. It is the managers of the banks who sold the debt to these foolish governments who should suffer the loss. Moral hazard, you know.
You either want a politically and economically united Europe or you don't. You clearly don't. Before creation of the EU Europe was in a state of constant warfare. Why do people (especially Europeans) continually lose sight of the overall goal here when distracted by central banker balance sheets?
2
Here's a thought, how about the IMF forgive all of its loans to Greece.. That would be a simple solution to the last remaining hurdle....
7
The IMF is setting a dangerous precedent in determining that Greece, which ostensibly is a developed nation, cannot repay its debt and recover in a timely manner. Frankly, there are dozens of developing countries that have been subject to much more horrific IMF debt repayment schemes and have suffered far, far more than Greece. Why does the IMF only care about Greece and not other poor countries? If Greece is offered a second debt haircut, then perhaps it's time to kick them out of the EZ and let them try their hand at rebuilding their economy with the caveat that they will never receive any more bilateral or multilateral economic assistance.
12
If admitting realiity is setting a dangerous precedent (how is Greece considered a 'developed' nation if there are no industrial production or exports?) then sign me up.
Why don't the Germans get it?
This is a bankruptcy workout like any other. In a bankruptcy the law recognizes that it is in nobody's best interest to have the insolvent debtor basically go to debtor's prison.
Imprudent lenders get to pay for their past folly by by getting only partial repayment, and on easier terms than they want.
Imprudent borrowers have their reputation trashed and ability to borrow greatly restricted until they can re-establish themselves. But they are still left with enough assets to be able to live, albeit less lavishly than the did when they got into trouble.
The fundamental problem is that the Germans have no chance of getting anything back if the Greeks leave the Euro. If they want to get anything back, they need to keep the banking system solvent and let the Greek government work out its problems without the added burden of debt payments.
What they are doing now behaving like loansharks and sending in the finger breakers to rough up the borrower.
This is a bankruptcy workout like any other. In a bankruptcy the law recognizes that it is in nobody's best interest to have the insolvent debtor basically go to debtor's prison.
Imprudent lenders get to pay for their past folly by by getting only partial repayment, and on easier terms than they want.
Imprudent borrowers have their reputation trashed and ability to borrow greatly restricted until they can re-establish themselves. But they are still left with enough assets to be able to live, albeit less lavishly than the did when they got into trouble.
The fundamental problem is that the Germans have no chance of getting anything back if the Greeks leave the Euro. If they want to get anything back, they need to keep the banking system solvent and let the Greek government work out its problems without the added burden of debt payments.
What they are doing now behaving like loansharks and sending in the finger breakers to rough up the borrower.
274
On the contrary, the hawkish German finance minister Mr. Schäuble has offered Greece debt forgiveness and humanitarian aid, but without new bailouts/ subsidized loans (which also means Greece will have to exit the euro zone and introduce its own currency). The Greeks do not want the latter, since it will mean sharp devaluation of their new currency, inflation, lowering their standard of living, and the value of their property.
3
It is well known that few countries have bankruptcy laws and the conceptual understanding of debt effects as in the USA. In Germany bankruptcy is a major shame and is associated with a lack of morality, and is effectively a death sentence economically. This is exactly the issue that the Germans don't get -- too much morality and sticking to the rules is harmful in the end, something that is so perverse and non-intuitive it strikes terror at the heart of German and other non-Europeans, because it seems to suggest that profligacy is not that bad and can be accepted. The focus needs to be on growth and expansion to resolve debt, not obsessive morality and strict rules. It is simply hard for Germans to accept that.
2
You've identified what is missing from the ESM - the equivalent of a US-style Chapter 11 backruptcy, and an impartial judge - outside the Commission mechanisms - that would decide which creditors get paid, which won't, and how to re-organize the entity declaring insolvency.
2
It's comforting to see that there are some grown-ups involved in this Greece thing. If one leaves it to the politicians (Ms. Merkel, Mr. Schaeuble etc.) the debt burden will just grow and grow. That would not be helpful.
Although, in principal, I'm against rule by technocrats, sorting the Greece mess should be left to them.
Although, in principal, I'm against rule by technocrats, sorting the Greece mess should be left to them.
3
About time the IMF got on the right side of things, heeding the world's and its prior experience with similar situations over the decades, where the same shell games, make believe games, sanctimonious moralizing posturing and punishing just allowed things to get worse before inevitably reducing or erasing the debt burden.
The focus should always have been on boosting Greece's private sector as the only sustainable way for the country to pay back its debts or accrue the least additional debt, and to attract private investors.
The focus should always have been on boosting Greece's private sector as the only sustainable way for the country to pay back its debts or accrue the least additional debt, and to attract private investors.
1
'The focus should always have been on boosting Greece's private sector...'
Agreed, Swatter, and that's one of the reforms that has been agreed to. Not, alas, for the first time but maybe this time... Greek business law is a nightmare of a tangled web of rules and regulations designed, primarily, to protect incumbents and keep out, or at least discourage, competition.
Not just businesses, but the professions as as well. Attempting to get foreign qualifications approved can take years, although within the EU, there is supposed to be mutual recognition of professional qualifications. 'Oxford? I haven't heard of that one. Do you have anything to prove that it's a legitimate degree-granting institution?'
The sad thing is that Greeks have a very strong entrepreneurial streak that is being strangled, or driven abroad, and a lot of potential foreign investment simply throws its hands up in despair and goes home. I've seen it, time and again.
p.
Agreed, Swatter, and that's one of the reforms that has been agreed to. Not, alas, for the first time but maybe this time... Greek business law is a nightmare of a tangled web of rules and regulations designed, primarily, to protect incumbents and keep out, or at least discourage, competition.
Not just businesses, but the professions as as well. Attempting to get foreign qualifications approved can take years, although within the EU, there is supposed to be mutual recognition of professional qualifications. 'Oxford? I haven't heard of that one. Do you have anything to prove that it's a legitimate degree-granting institution?'
The sad thing is that Greeks have a very strong entrepreneurial streak that is being strangled, or driven abroad, and a lot of potential foreign investment simply throws its hands up in despair and goes home. I've seen it, time and again.
p.
The reality for Greece, Puerto Rico, Egypt and the world is that we face Peak Oil and Climate Change. Yet instead of facilitating the Green Transition we need to survive with some semblance of civilization intact and without catastrophic feedback loops leading to huge global warming. (Discovered recently to have increases of 5 degrees C in just 13 years!) the banksters and plutocrats continue their games of seizing public shared assets for short term greed. Sundrenched Greece is one of the European countries with the highest use of oil for its energy. Besides sun Greece also has miles of coastline which usually provides wind energy. Germany is one of the leaders in solar panels and wind turbines. A German "Marshall Plan" of providing solar panels and renewable energy solely from German products which would reduce Greek energy costs, Peak oil usage and greenhouse emissions would benefit all and help save the planet while preserving a decent life.
This would be a win for German renewables manufacturers, a win for Greece, and a win for the planet.
When will the elites wise up?
This would be a win for German renewables manufacturers, a win for Greece, and a win for the planet.
When will the elites wise up?
6
We have had PEAK oil since the 1970's ...yet supplies just keep going up.
Peak CHEAP oil ...maybe ...
How is SOLAR doing in the USA ...companies STILL going bankrupt? IS it still 3X as expensive ...?
What do I do with any excess energy that IO produce ...as my local company doesn't have the ability to have it flow two ways?
I have heard that fusion IS JUST 5 YEARS AWAY .... have been hearing that since 1981 or maybe even before that ...
Peak CHEAP oil ...maybe ...
How is SOLAR doing in the USA ...companies STILL going bankrupt? IS it still 3X as expensive ...?
What do I do with any excess energy that IO produce ...as my local company doesn't have the ability to have it flow two ways?
I have heard that fusion IS JUST 5 YEARS AWAY .... have been hearing that since 1981 or maybe even before that ...
2
The I.M.F. is another left wing organization that is all too ready, willing and able to demand forgiveness of Greek debt obligations which were entered into in good faith. This type of thinking will only lead to more debtor nations defaulting on their loans at the expense of their creditors. Whatever happened to national responsibility and economic morality? Are those nations who lend to willing borrowers going to be stiffed on a regular basis going forward? If so, watch as the international lending markets dry up and economic expansion grinds to a halt. This is economic madness.
48
Which economic morality? Speculation, looting, and take over of a country's assets by large corporations? Hi, Milton!
1
Excessive lending led to a bubble in the US housing market, now it's overleveraging the Chinse stock market. Greece has been given an unsustainable amount of debt. Perhaps creditors need to learn a dose of caution and suffer some consequences. Lending is not charity, the creditors and borrowers are equal parties to the deal, both stand to profit when things go well and both stand to lose when things go badly. Time to pay the piper.
1
Good god almighty I have to think that's the first time in history anyone has called the IMF left wing. They were the ones that forced harsh measures on Greek spending that resulted in the government now running a primary surplus (unlike most every other nation in Europe). Greece must now do away with legacy costs much like Chicago so that it can finally move forward rather than borrow to fund short term expenditures.
2
"Guntram B. Wolff, the director of Bruegel, a research organization in Brussels, wrote in a blog post on Tuesday that the fund had taken too long to push for more debt relief for Greece and did not do enough to force Greece to modernize its economy."
Mr. Wolff is certainly right about that.
If Christine Lagarde and her colleagues from the IMF have participated in these negotiations for weeks now with no intention of supporting a bailout deal unless it includes significant forgiveness of Greek debt without making their position in this regard clearly known, they have done a great disservice to all other parties involved.
Mr. Wolff is certainly right about that.
If Christine Lagarde and her colleagues from the IMF have participated in these negotiations for weeks now with no intention of supporting a bailout deal unless it includes significant forgiveness of Greek debt without making their position in this regard clearly known, they have done a great disservice to all other parties involved.
8
Finally one of the troika is making sense. Every year bankruptcy courts write off billions of dollars of corporate debt in chapter 11 proceedings so the companies can continue in business. This is done without moral approbation. Time to give the Greeks the same treatment.
98
The only difference here is that Greece wants more loans. Generally, as far as I know, creditors don't continue to lend if they are not even going to get their money back.
4
The problem is: Greece does not want simply to declare bankruptcy. They need to keep getting new loans on reasonable terms, which would allow them to stay in the euro zone and largely maintain their standard of living.
4
"It’s the duty of Parliament not to allow this blackmail against the government and Parliament to be completed,”
Blackmail is not demanding payment for debts owed, nor is it imposing conditions on not collecting your debt immediately when the debtor cannot pay.
Blackmail is running up a tab and then demanding conditions on its repayment.
I know it is a complicated affair, but it is a stretch for Greece to play the victim card after years of not paying taxes and living on debt.
Blackmail is not demanding payment for debts owed, nor is it imposing conditions on not collecting your debt immediately when the debtor cannot pay.
Blackmail is running up a tab and then demanding conditions on its repayment.
I know it is a complicated affair, but it is a stretch for Greece to play the victim card after years of not paying taxes and living on debt.
13
To be fair, Greece did adhere to demands made on it in the last few years, demands that very predictably made things worse in terms of their economy and ability to pay.
5
Swatter, Greece did not comply with the demands for economic reforms.
In fact, the current agreement is mostly a re-iteration of demands agreed to but not implemented in the past. Their retirement age is still too low, and there are too many tax exemptions for those who choose to pay taxes. Among other things.
What Greece did was to make some cuts to spending which hurt their economy without fixing the corruption at the root of its failure.
In fact, the current agreement is mostly a re-iteration of demands agreed to but not implemented in the past. Their retirement age is still too low, and there are too many tax exemptions for those who choose to pay taxes. Among other things.
What Greece did was to make some cuts to spending which hurt their economy without fixing the corruption at the root of its failure.
3
Am not sure what the article means when it says that Lagarde is like a "head of state." Do the authors mean "head of government"? The head of state of European countries is of course usually a figurehead, e.g., Queen Elizabeth of the UK or President Joachim Gauck of Germany. A head of government in Europe is usually a prime minister, who has actual power. It seems like Lagarde is more like the latter than the former, but the comparison does not seem terribly apt in either case.
5
Ignorance is rife in the world of professional nitpickers. The President in France has the power, not the premier, thus the President is head of state and government. Let's discuss issues, shall we?
1
@Olivier
It seems it's you who's being the nitpicker. I made a general statement about European heads of state & government, and it remains true regardless of yours. I'm still wondering what the article authors meant about Lagarde. How much power does she wield? That's an issue.
It seems it's you who's being the nitpicker. I made a general statement about European heads of state & government, and it remains true regardless of yours. I'm still wondering what the article authors meant about Lagarde. How much power does she wield? That's an issue.
This is all silly. The Greeks have no intention of paying any of their debts, ever. Think about it, they are 300 billion in debt and asking for another 100 billion, none of which will ever be repaid, ever. Let them go, write off all there debts, and do it now. When they are out of the euro you do not ever need to give them another dime. Think of it as having save 100 billion. Stop this foolishness.
13
It's not about letting them go - Brussels knew about Greece's deficit problems from the beginning, year 2000 was it?, and the "solutions" from the EU and IMF since Greece's crisis began, much of which Greece faithfully adopted, in many ways made things worse - especially infuriating because there has been much experience telling us that these measures were going to hurt more than help. In other words, many others bear some responsibility too for where Greece is right now, and a responsibility to rectify the harm that they did in between moralizing.
4
What measures were faithfully adopted? And which made things worse?
1. ramping up a land registry office - nothing exists after 15 years of counselling by many EU states!
2. Fighting clientelism? Or at least creating an effective, independent tax agency. Nothing happened! Rich Greek continue to pay no or almost no taxes. The tax privilege of Ship-owners is constitutionally protected. The tax laws, however, change almost every week! Nobody does really understand them! At least enterprises do not.
3. To privatize, decrease the public sector and fight institutional slack? Almost nothing happened.
4. Repealing thousands of regulations dampening competition – such as fix prices for OTC-Drugs, restrictions on the freedom of establishment of – eg – optometrists etc.
1. ramping up a land registry office - nothing exists after 15 years of counselling by many EU states!
2. Fighting clientelism? Or at least creating an effective, independent tax agency. Nothing happened! Rich Greek continue to pay no or almost no taxes. The tax privilege of Ship-owners is constitutionally protected. The tax laws, however, change almost every week! Nobody does really understand them! At least enterprises do not.
3. To privatize, decrease the public sector and fight institutional slack? Almost nothing happened.
4. Repealing thousands of regulations dampening competition – such as fix prices for OTC-Drugs, restrictions on the freedom of establishment of – eg – optometrists etc.
4
Just remember. Germany's post-war debt was cut.
13
As was Greece's and Germany paid back the remainder. Greek will never do.
11
Let's recall that the IMF, although formed to facilitate exchange rate stability and payment balance, has taken it upon itself to fight poverty through wealth redistribution. Let's also recall that the IMF is headed by a French socialist, who has been an ardent supporter of Greeks far left leadership and its anti-austerity dogma. Finally, let's recall that the Obama Administration -- although proclaiming neutrality on the Greek matter -- strongly supports debt forgiveness and can give voice to that view through the IMF. Progressives are indignant at the notion that Greece will have to pay its debts. The global left will not rest until the burden of Greek sloth has been foisted upon the international financial system and the Greek people are returned to their world of overpaid government employment, summer vacations and early retirement on generous pensions. After all, the Greeks are the poster children for all of humanity in the great progressive future.
8
Greece is a lot like Arizona. Az takes about $1.47 from the federal government for every $1 paid in federal taxes. According to the link below, Az ranks 44 out of 50 states, as one of the states most dependent on the federal government handouts.
If Arizona were a country like Greece, it would be terribly in debt like Greece and asking its neighbors (perhaps Illinois from which Obama hails) for a loan extension to avoid the terrible pain of austerity.
http://wallethub.com/edu/states-most-least-dependent-on-the-federal-gove...
If Arizona were a country like Greece, it would be terribly in debt like Greece and asking its neighbors (perhaps Illinois from which Obama hails) for a loan extension to avoid the terrible pain of austerity.
http://wallethub.com/edu/states-most-least-dependent-on-the-federal-gove...
7
I worked for the World Bank for many years, which sits across from the IMF. I'd walk out one day and there would be protestors calling "us" communists; the next day, a different group would call "us" capitalist pigs exploiting the poor. You, of course, belong in the former group of rabid ideologues.
The truth is more the following: both the IMF and IBRD (world bank) are governed by the same representatives of member governments, most typically from their treasury or finance ministries. They mostly tend to be conservative and protecting the interests of their member countries, although not wanting to be perceived as mean, and those countries with the most financing of the 2 groups have more say in what happens, i.e., the developed countries have more say. Below that is a mixed bag of different professionals spanning a wide range of political leanings, necessarily informing the directors' offices what the consequences are of different policies who always can have "their people" in the home country advise them further.
And that is what you are seeing now: recognition by the IMF of what has transpired in the past regarding countries in debt crisis. Rather than my going into it here, I suggest that you read Eduardo Porter's article in the NYT from July 8 - it's not ideology, just reality.
The truth is more the following: both the IMF and IBRD (world bank) are governed by the same representatives of member governments, most typically from their treasury or finance ministries. They mostly tend to be conservative and protecting the interests of their member countries, although not wanting to be perceived as mean, and those countries with the most financing of the 2 groups have more say in what happens, i.e., the developed countries have more say. Below that is a mixed bag of different professionals spanning a wide range of political leanings, necessarily informing the directors' offices what the consequences are of different policies who always can have "their people" in the home country advise them further.
And that is what you are seeing now: recognition by the IMF of what has transpired in the past regarding countries in debt crisis. Rather than my going into it here, I suggest that you read Eduardo Porter's article in the NYT from July 8 - it's not ideology, just reality.
4
An interesting comment from someone who lives in a State that is economically close to Greece in the fiscal union we call the United States of America. Arizona is one of the most dependent States (of the 50) on Federal spending for taxes paid. Arizona gets (from the least dependent (mainly Blue) States $1.48 for every dollar it pays to Washington (http://wallethub.com/edu/states-most-least-dependent-on-the-federal-gove.... "People that live in glass houses shouldn't throw stones."
8
The sustainable Greek repayments must equal the amount Greece would pay if a common tax system was created. It will always be a negative number. Many U.S. states have a negative payment and always will compared to the wealthy states.
Using debt to make what should be transfer payments through a tax system just means the banks will be paying a tax that should have been paid by the people of the wealthy European states.
Greed will break apart the European Union.
Using debt to make what should be transfer payments through a tax system just means the banks will be paying a tax that should have been paid by the people of the wealthy European states.
Greed will break apart the European Union.
16
Shouldn't it be illegal, or at least unethical, to lend money to someone who clearly can't pay it back, and then hold a gun to their head and insist? Clearly there should be debt relief, with Germany taking the "haircut," not Greece.
59
Well, I agree it should be illegal, but if it were not, it should be illegal to transfer private debt to the tax payers, which is what Merkel (and the other leaders) did in full awareness that private banks were going to be saved from loosing 100% of their investments in Greek debt. Merkel only bailed out the private banks that decided to invest in Greek bonds (and there is usually a predictable excuse that the banks didn't know they weren't going to get it back).
Greece needs huge reforms, no doubt. But, giving a loan to someone who is already deep in debt, for the sole purpose of making payments on the other loans is not going to turn a beaten down state into a high functioning economy, even decades from now.
Greece needs huge reforms, no doubt. But, giving a loan to someone who is already deep in debt, for the sole purpose of making payments on the other loans is not going to turn a beaten down state into a high functioning economy, even decades from now.
3
No, this makes no sense. Who shall judge this? Additionally, for the second relief package, Germany was forced to extend new loans as it is forced now. Now Germany is forced gain and then we shall have another haricut in 3 years because we again "forced" Greek to accept more money. Hilarious.
10
Same thing happened here with mortgages--banksters should have taken haircuts during the financial crisis and new contracts for mortgages should include risk for lenders.
2
Cut all pensions down to just above poverty level. Minimum retirement age should be 65. Without that, there is no way Greece will ever have a chance to repay what it's already borrowed.
6
How will the government accrue revenue to pay the debts if the economy is further flattened? Yeah, pensioners buy stuff. The emphasis should always have been to strengthen Greece's private sector as the only sustainable way of addressing their debt problems - debt overhang and reduced demand from cutting government make that very hard to do.
2
After all, nothing juices an economy like a population subisting at "just above poverty level". Some vision for the future. Give me a break.
5
You obviously are not up to speed.
Already over 50% of the elderly are IN POVERTY by EU standards.
Now pensions are to be cut 20% more and food taxed at 13% and medicine at 6%.
There ya go -- at least 75% of the elderly will be in poverty --- and oh yeah, they are already supporting their unemployed children (the unemployment for 18 -40 is over 50%)
ANd what if they cannot physically work because of illness before 65? Go die in a ditch?
There have over 7000 people commit suicide because of the loss of jobs and income. Ya wanna go for double that?
Already over 50% of the elderly are IN POVERTY by EU standards.
Now pensions are to be cut 20% more and food taxed at 13% and medicine at 6%.
There ya go -- at least 75% of the elderly will be in poverty --- and oh yeah, they are already supporting their unemployed children (the unemployment for 18 -40 is over 50%)
ANd what if they cannot physically work because of illness before 65? Go die in a ditch?
There have over 7000 people commit suicide because of the loss of jobs and income. Ya wanna go for double that?
3
So the IMF makes its concerns about Greece's ability to repay the debt public after the agreement is reached but before it is ratified by the Greek parliament? This timing raises the risks that the current Greek government will be replaced. (A wish of the troika.) Does no one else find the timing suspicious?
I'm not sure if this is disarray or hardball politics on the Euro side.
I'm not sure if this is disarray or hardball politics on the Euro side.
5
The Germans are not so special that they can hold Greece up to a standard that they could not pay. They got their debt forgiven in 1953 and never paid reparations to Greece. Germany and it's allies are imperialists seeking to crush the people of Greece. Instead they should prosecute the banks that loaned money to Greece and to the credit ratings corporations that allowed Greece into the EU and gave fraudulent ratings to Greece. Finally, Germany should have hearings on their own officials who colluded with banks to falsify Greek solvency.
111
You sure never paid ALL of it.
After all whether or not the creditor is willing to let you off it is - to use your government's words - a MORAL obligation.
And Germany certainly NEVER paid reparations to those it injured or killed or whose property was damaged or destroyed -- or the rest of the world who had to spend the money to shut down Germany's wars of aggression for power not once but twice.
Try again - Germany still has a huge MORAL financial debt to the world.
After all whether or not the creditor is willing to let you off it is - to use your government's words - a MORAL obligation.
And Germany certainly NEVER paid reparations to those it injured or killed or whose property was damaged or destroyed -- or the rest of the world who had to spend the money to shut down Germany's wars of aggression for power not once but twice.
Try again - Germany still has a huge MORAL financial debt to the world.
3
No Germany did not pay it all....was forgiven 60%. Banks that colluded with credit rating companies to create fraudulent solvency, and credit ratings then sold the debt to third parties or bundled them and sold the bundle. These wonderful banks were rescued with taxpayer dollars and have the audacity to demand payment from Greek citizens. Don't you get it? Greek citizens were defrauded and are being persecuted for a debt that Banks created and profited from. How many Greeks profited? Where are they now? Switzerland? Shameful.
2
"They got their debt forgiven in 1953 and never paid reparations to Greece. "
Neither statement is true. Germany got only half of its debt forgiven and they did pay (admittedly modest) reparations to Greece. It is idiotic to turn this into Germany vs. Greece conflict anyway. More than half of the euro zone backs the German position. Only the other big debtors don't.
Neither statement is true. Germany got only half of its debt forgiven and they did pay (admittedly modest) reparations to Greece. It is idiotic to turn this into Germany vs. Greece conflict anyway. More than half of the euro zone backs the German position. Only the other big debtors don't.
4
Given that much of the money that was lent to Greece merely served as a means of transferring many billions of euros of debt from French and German banks back to Greece, then the Germans are merely wanting to have their cake and eat it too by not supporting debt relief. But the IMF is correct: The deal currently being negotiated is certain to fail without writing off a large portion of the debt.
There's a saying about the U.S. that it usually does the right thing, but only after trying everything else. Well, Greece has tried everything else. Perhaps it is time to do the right thing: Provide the troika with an ultimatum on debt relief and leave the EU if the troika does not follow through.
There's a saying about the U.S. that it usually does the right thing, but only after trying everything else. Well, Greece has tried everything else. Perhaps it is time to do the right thing: Provide the troika with an ultimatum on debt relief and leave the EU if the troika does not follow through.
133
The money was extended from the Greek banks to its population or do you think the money evaporate? The don't have to provide an ultimatum, they can go whenever they want. Germany would be happy for a complete debt relief if Greece leaves the Euro. Greece can then enjoy the middle ages again.
11
That Greek debt represents $500, transferred from every man, woman and child in Europe into the pockets of Greek citizens. You're very generous with other peoples' money.
4
Markus, about half of the money went to pay European banks which held Greek debt. This was a transfer of debt from the European banks to Greece.
If I was a Greek politician, I would vote to turn down the deal with the European Union. There is no realistic way Greece can meet the terms of the deal offered by the EU.
I would then support the government negotiating long term leases to Russia and China for naval and air bases. The Greek coast line as well as the Greek Islands offer many alternatives that Russia and China might be willing to pay a large price for.
Unlike Norther Europe, Greece does not have a surplus of natural resources to sell off for funds to stimulate growth. It does have a very important geopolitical location and it desperately needs capital.
While Germany apparently doesn't care, this would certainly generate serious problems for the southern NATO countries and the U.S. And who knows, the U.S. might even be willing to provide funds for this to stop Russia and China.
I would then support the government negotiating long term leases to Russia and China for naval and air bases. The Greek coast line as well as the Greek Islands offer many alternatives that Russia and China might be willing to pay a large price for.
Unlike Norther Europe, Greece does not have a surplus of natural resources to sell off for funds to stimulate growth. It does have a very important geopolitical location and it desperately needs capital.
While Germany apparently doesn't care, this would certainly generate serious problems for the southern NATO countries and the U.S. And who knows, the U.S. might even be willing to provide funds for this to stop Russia and China.
10
Tsipras visited Russia twice in the few months he's been in office, and in that regard, you'd think that he sent a very clear message of what a snub from Europe would mean to the geopolitics of the continent. In terms of negotiating strategy, you'd think this is a great tactical move.
Then the referendum happened. It should be a perfectly acceptable thing to do any time, in any country, right? After all, what is a democracy if not the will of the people. The problem is, that after he gained this huge political capital from it, from what we see, he didn't have a way to convert that to actual cash (pun intended).
A 62% alone is not enough to gain the upper hand in negotiations. There was no plan B, and perhaps no plan A either. It seems like they expected to show up with the 62% result and somehow everyone would say "oh, wow, we'd better do something here, this guy came with a 62%". This would have all worked out swimmingly if he had prepared his administration to go into the drachma if he didn't get some give. The EZ saw all that. The 62% was Tsipras' gun, but they found he had no bullets in it. So, then, Merkel brought out the Panzer tank, the Messerschmitt and the V1 rocket (and the references to WWII weapons are intentional). If she and her fin min are not like that, they are certainly responding to the popular opinion in Germany.
Then the referendum happened. It should be a perfectly acceptable thing to do any time, in any country, right? After all, what is a democracy if not the will of the people. The problem is, that after he gained this huge political capital from it, from what we see, he didn't have a way to convert that to actual cash (pun intended).
A 62% alone is not enough to gain the upper hand in negotiations. There was no plan B, and perhaps no plan A either. It seems like they expected to show up with the 62% result and somehow everyone would say "oh, wow, we'd better do something here, this guy came with a 62%". This would have all worked out swimmingly if he had prepared his administration to go into the drachma if he didn't get some give. The EZ saw all that. The 62% was Tsipras' gun, but they found he had no bullets in it. So, then, Merkel brought out the Panzer tank, the Messerschmitt and the V1 rocket (and the references to WWII weapons are intentional). If she and her fin min are not like that, they are certainly responding to the popular opinion in Germany.
2
We do care but they have at least to try to become a working nation. If you are so concerned just transfer some money to Greece.
9
Putin has learned his Latin well in school:`Quidquid id est, timeo Danaos `, beware of Greeks bearing gifts. He knows that there is no way Russia could afford an ally like Greece. He just enjoys poking the US and Obama a bit. Things work out for him also in Ukraine. European papers report since Saturday that the Right Sector =the fascists= supplied with arms from the US, are fighting now Ukrainian goverment troops and take control of great terrains in Ukraine.
2
If Greece engaged in " reckless borrowing " then the banks lending the money engaged in " reckless lending ". Why should only Greece be required to pay the cost of joint business ventures gone bad? Clearly, some major " debt restructuring " is needed and justified.
173
This is NOT a "joint business venture gone bad". This is one party not doing what was agreed to.
8
And some bankers not doing their due diligence. Greece's sovereign debt was viewed as a good bet because a) they were financially distressed and would pay higher rates and b) lenders assumed that the EU would bail Greece out. Whoops.
1
In 2012 (the previous Greek bailout) the banks did have to write off more than 100 B of Greek debt. The European taxpayers and the IMF covered most of the remaining private debt -- 240 B euros, by offering Greece generous interest rate and extended maturity (better than what Portugal and Italy have to pay, for example).
Imagine how a similar deal would have worked in the U.S. mortgage debt crisis: The bank is forced to write off a third of the principal owed on a house, the government takes over the rest of the mortgage, and reduces the monthly payment the borrower has to make by reducing the interest from 8% to 3% and increasing the pay-off period from 20 years to 40 years. Sounds fair?
Imagine how a similar deal would have worked in the U.S. mortgage debt crisis: The bank is forced to write off a third of the principal owed on a house, the government takes over the rest of the mortgage, and reduces the monthly payment the borrower has to make by reducing the interest from 8% to 3% and increasing the pay-off period from 20 years to 40 years. Sounds fair?
4
It would seem that the I.M.F. is stating the obvious, that Greece owes too much to pay it off in a reasonable time and without crippling it's ability to recover from it's economic contraction at all. The creditors are going to lose money, probably a lot more than half of it. There are problems with Greece's government's failure to manage it's responsibilities but this reflects how really poor Greece really happens to be in comparison with it's much bigger and more prosperous neighbors in the north of Europe. It's not a nation that has a strong industrial base nor any really comparable way of generating wealth like Germany does. People go crazy over the proportional rates of failures to collect tax revenues, the proportional rates of pensions costs, the regulations meant to secure the livelihoods of people while totally ignoring the context of the size of Greece's economy and it's limited opportunities dictated by geography and potential for growth. Anyone who visits and travels across Greece can see that it is a country without the means to generate the kind of economic expansion enjoyed by the bigger nations of Europe. The railroads do not criss cross the land, nor do highways, nor is there air traffic of any consequence, the main form of transportation is by sea and there are too few places for large ports to offer commerce that spans the country. This does not just limit transportation, it limits power and water delivery systems, as well as all modern infrastructure.
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And all that is what makes Greece so beautiful...,
@casual observer If you are correct, what has Greece done to correct its situation? The answer seems to be nothing, just demanding money in loans, refusing to pay it back and using the money to retire decades early, provide free services and enrich corrupt government officials.
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I am a simple guy with simple ideas-if someone borrows money to live beyond their means and refuses to pay back-this is a criminal offence and necessary fines should be imposed since bad habits will persist even after write-offs. Has the IMF freely recommended writing off debts by developing countries without strings attached as they are advocating for Greece? On the other hand, its nice to see Greece making EU dance to their tune.
5
Germany benefits from debt relief after WWII and never repaid the money they forcibly took from Greece in exchange for German "defense" of Greece. What's good for the goose is good for the gander.
In addition, you are oversimplifying an intentionally completed situation.
http://www.zerohedge.com/news/2015-06-22/goldmans-conspiracy-theory-stun...
If a banker lends money to someone s/he knows is a bad risk, shouldn't s/he assume part of the risk and part of the loss?
In addition, you are oversimplifying an intentionally completed situation.
http://www.zerohedge.com/news/2015-06-22/goldmans-conspiracy-theory-stun...
If a banker lends money to someone s/he knows is a bad risk, shouldn't s/he assume part of the risk and part of the loss?
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In most of the developed world, debtors prisons were abolished long ago and there are mechanisms for writing down debt of individuals and companies: namely bankruptcy. The IMF is saying that it is now impossible for the Greek economy to generate the income necessary to pay off that debt and what amounts to bankruptcy proceedings are unavoidable.
The punishment Greece has suffered for its past sins are certainly great enough at this point. Even with relief, the Greek economy will take decades to recover.
The punishment Greece has suffered for its past sins are certainly great enough at this point. Even with relief, the Greek economy will take decades to recover.
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To be clear: the private lenders (mostly, German and French banks at the time) were required to write off more than 100 B euros of Greek government debt in 2012, before the Greek government was bailed out by the European taxpayers and the IMF. That is a significant portion of the Greek debt and much more compared to what the U.S. banks were required to write off during the 2008 mortgage debt crisis. It might not have been enough, but was considered a fair compromise at the time.
6
There needs to be a debt payment moratorium that lasts at least a decade, call it a haircut or not, it doesn't matter.
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There also needs to be a lending moratorium for the same period.
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The average Greek debt maturity is 16.5 years already.
1
The IMF is prepared to assist financially? The US is by far the largest funder of the IMF. Yet like Greece the US is operating under deficit spending and has enormous debt. So the IMF is going to take money from a county that spends more then it takes in, and lend it to a country that spends more then it takes in?
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The US is Greece's 8th largest creditor through our IMF contributions. The US taxpayer will take a bath to benefit Greek citizens.
3
Back at Square One, nothing has changed. The only decent thing Schaubel has said is that Greece and the Greeks will be better off out of the Eurozone. ALL of the ill-fitting nations that were squeezed into the EU & EZ for purely political purposes would be better out and the stong countries would be better with them out, also!
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So, lower the interest rates, extend the payment period, and get it done.
Greece will have their "debt relief" and the Germans can say "no haircut".
Greece will have their "debt relief" and the Germans can say "no haircut".
13
A haircut to the tune of 80% is required.....just like the German debt forgiveness in 1953.
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