3 ms·

It seems reasonable to me that the major burden fall on the lenders. After all, they are the ones tasked with due diligence, credit rating, etc. I can ask my b

by abakker 10y ago

It seems reasonable to me that the major burden fall on the lenders. After all, they are the ones tasked with due diligence, credit rating, etc. I can ask my bank for a $100million loan. If they judge me worth of that, and then I fail to pay, yes, it is my fault for losing the money, but their fault for misjudging the risk. The lender has the majority of the power in the relationship until the loan is given, so it is in their court to make sure that they do their research. It appears that the crux of this article is that the IMF didn't do the research, or did it wrong, and badly misjudged many risks and solutions. The IMF had reasonably good information about the situation in Greece, and still didn't see the warning signs.

ethbro 10y ago
Or to put it another way, if you feel the majority of the blame falls on Greece, I'm happy to loan any person in the world a large sum... Provided I'm given the right to direct their, their children's, and their children's children's labor towards repaying me. And how is bending a government towards repayment at all costs different than enslavement of its citizens? Except in this case the master happened to be incompetent enough that they made their own repayment less likely.
- wmil 10y ago
  Fundamentally the problem with Greece is that the IMF & EU are focussed on saving the Euro. Meanwhile Greece is unable and / or unwilling to meet it's Eurozone obligations. The only real solution it to toss Greece out, but negotiate a smooth transition to a new drachma. Convert all existing debt to drachmas. Greece can deal with the outstanding debt by devaluing their currency. However they'll have to choose between letting pensions see their purchasing power decline, or finally cracking down on tax cheats. But people have a strange moral attachment to the EU / Euro. So it won't happen.
  - ethbro 10y ago
    > Convert all existing debt Would that include the debt from northern European banks already offloaded onto them? Because that seems like an equally terrible deal. "We're going to bail you out with a loan, the balance goes to your creditors, you're responsible for repayment, and everyone is pissed at you because we told them we were giving you cash."

by abakker 10y ago

ethbro 10y ago

Or to put it another way, if you feel the majority of the blame falls on Greece, I'm happy to loan any person in the world a large sum... Provided I'm given the right to direct their, their children's, and their children's children's labor towards repaying me. And how is bending a government towards repayment at all costs different than enslavement of its citizens? Except in this case the master happened to be incompetent enough that they made their own repayment less likely.

wmil 10y ago
Fundamentally the problem with Greece is that the IMF & EU are focussed on saving the Euro. Meanwhile Greece is unable and / or unwilling to meet it's Eurozone obligations. The only real solution it to toss Greece out, but negotiate a smooth transition to a new drachma. Convert all existing debt to drachmas. Greece can deal with the outstanding debt by devaluing their currency. However they'll have to choose between letting pensions see their purchasing power decline, or finally cracking down on tax cheats. But people have a strange moral attachment to the EU / Euro. So it won't happen.
- ethbro 10y ago
  > Convert all existing debt Would that include the debt from northern European banks already offloaded onto them? Because that seems like an equally terrible deal. "We're going to bail you out with a loan, the balance goes to your creditors, you're responsible for repayment, and everyone is pissed at you because we told them we were giving you cash."