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I am german and that viewpoint is entirely new to me. Thank you for the link.

by aw3c2 16y ago

barrkel 16y ago
That it is novel somewhat surprises me. I thought it was commonly known and accepted that it was in large part German banks that were being bailed out when bailing out Greece. Similarly, as I understand it - and have long understood it, since perhaps 2005 or so (I'm Irish) - the property bubble in Ireland was driven by historically low interest rates - only easily possible with an influx of foreign capital denominated in Euro. Inflation in house pricing was so extreme that relying on it became an accepted way of becoming wealthy. Now, in Ireland, lots of people are pointing fingers, blaming politicians, banks, property developers, etc., but the real theft was by the property owning middle class themselves. When people wonder where the money of the boom went, they need only look to people who owned houses. And another problem with house ownership - especially in English-speaking countries - is that it is seen as politically damaging to enact policies that cause house prices to fall, because it reduces the perceived wealth of the middle class. But this very same dynamic is what causes people to be upset, screaming that teachers and policepeople can no longer afford houses on their wages, ergo wages must rise, first time buyer tax rebates / etc. and other stupid policies that just serve to push up house prices even further. It's all pretty depressing, and makes one despair somewhat of democracy.
- lispm 16y ago
  The number one lender, by far, to Greece is France, not Germany. Germany is distant third.
  - barrkel 16y ago
    Indeed, the numbers I know about indicate that France is owed 66% more than Germany, but that's not very distant. It's also somewhat hard to find a breakdown of debt numbers private and public, owed to entities in other countries. For example, I understand the lump of debt owed to Switzerland was because of a Greek bank being HQ'd there: http://www.read-news.info/financial/switzerland%E2%80%99s-non-exposure-to-greece/ http://www.read-news.info/financial/switzerland%E2%80%99s-no... The bank's deposits are backed by Greece; it's now HQ'd in Luxembourg. Was Switzerland the one you had in mind for second?
    - lispm 16y ago
      France is then lending 66% twice as much as Germany to Greece. '66% more' than Germany is significant IMO. So much for the theory that this was largely for bailing out German banks. Basically France' banks are being bailed out (plus a lot of other countries incl. UK and US). Germany is not especially exposed to Greece's problem. Germany also provides only 11% of Greece imports (though Germany has 20% of the EU GDP). Greece's problems are home made (lots of weapons imports, large military, corruption, country run by a few families, ...). The decision to spend billions on military ships, submarines, military aircrafts, tanks, etc. is entirely political.
      - patrickk 16y ago
        Another problem is that tax receipts in Greece are way below what they should be. The Greeks' view is that their government is useless at spending public money, so they view it as their duty to dodge as much tax as possible. One law, for example, allows Greek property owners to avoid paying tax on a building until it is completed - so a lot of property owners don't build the top floor on block of apartments, so it isn't "finished" and therefore nontaxable. We had a similar problem in Ireland up until the 1980s/90s where dodging tax was practically a national pastime - if you rang up your bank, they would advise you on how to dodge tax! They would encourage customers to set up accounts in the Cayman Islands. Even the former Irish Prime Minister was in on the act: http://www.breakingnews.ie/ireland/ojidojsnmh/ http://www.breakingnews.ie/ireland/ojidojsnmh/ The key to solving the tax receipts problem is a strong body for collecting tax and heavy penalties for non-compliance.
- DenisM 16y ago
  >It's all pretty depressing, and makes one despair somewhat of democracy. The more things change the more they stay the same. "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy." http://en.wikiquote.org/wiki/Alexis_de_Tocqueville http://en.wikiquote.org/wiki/Alexis_de_Tocqueville
- dhs 16y ago
  "I thought it was commonly known and accepted that it was in large part German banks that were being bailed out when bailing out Greece." That's how I - I'm German - understand it, but I think it's pretty much the minority report around here these days. The vox populi still argues that we shouldn't have done it, as if there were an option out of it even now. The majority doesn't grasp what's happening and why it happens, and it seems to be very easy to keep them in the dark right now.

I am german and that viewpoint is entirely new to me. Thank you for the link.

by aw3c2 16y ago

I am german and that viewpoint is entirely new to me. Thank you for the link.

That it is novel somewhat surprises me. I thought it was commonly known and accepted that it was in large part German banks that were being bailed out when bailing out Greece. Similarly, as I understand it - and have long understood it, since perhaps 2005 or so (I'm Irish) - the property bubble in Ireland was driven by historically low interest rates - only easily possible with an influx of foreign capital denominated in Euro. Inflation in house pricing was so extreme that relying on it became an accepted way of becoming wealthy. Now, in Ireland, lots of people are pointing fingers, blaming politicians, banks, property developers, etc., but the real theft was by the property owning middle class themselves. When people wonder where the money of the boom went, they need only look to people who owned houses. And another problem with house ownership - especially in English-speaking countries - is that it is seen as politically damaging to enact policies that cause house prices to fall, because it reduces the perceived wealth of the middle class. But this very same dynamic is what causes people to be upset, screaming that teachers and policepeople can no longer afford houses on their wages, ergo wages must rise, first time buyer tax rebates / etc. and other stupid policies that just serve to push up house prices even further. It's all pretty depressing, and makes one despair somewhat of democracy.

lispm 16y ago
The number one lender, by far, to Greece is France, not Germany. Germany is distant third.
- barrkel 16y ago
  Indeed, the numbers I know about indicate that France is owed 66% more than Germany, but that's not very distant. It's also somewhat hard to find a breakdown of debt numbers private and public, owed to entities in other countries. For example, I understand the lump of debt owed to Switzerland was because of a Greek bank being HQ'd there: http://www.read-news.info/financial/switzerland%E2%80%99s-non-exposure-to-greece/ http://www.read-news.info/financial/switzerland%E2%80%99s-no... The bank's deposits are backed by Greece; it's now HQ'd in Luxembourg. Was Switzerland the one you had in mind for second?
  - lispm 16y ago
    France is then lending 66% twice as much as Germany to Greece. '66% more' than Germany is significant IMO. So much for the theory that this was largely for bailing out German banks. Basically France' banks are being bailed out (plus a lot of other countries incl. UK and US). Germany is not especially exposed to Greece's problem. Germany also provides only 11% of Greece imports (though Germany has 20% of the EU GDP). Greece's problems are home made (lots of weapons imports, large military, corruption, country run by a few families, ...). The decision to spend billions on military ships, submarines, military aircrafts, tanks, etc. is entirely political.
    - patrickk 16y ago
      Another problem is that tax receipts in Greece are way below what they should be. The Greeks' view is that their government is useless at spending public money, so they view it as their duty to dodge as much tax as possible. One law, for example, allows Greek property owners to avoid paying tax on a building until it is completed - so a lot of property owners don't build the top floor on block of apartments, so it isn't "finished" and therefore nontaxable. We had a similar problem in Ireland up until the 1980s/90s where dodging tax was practically a national pastime - if you rang up your bank, they would advise you on how to dodge tax! They would encourage customers to set up accounts in the Cayman Islands. Even the former Irish Prime Minister was in on the act: http://www.breakingnews.ie/ireland/ojidojsnmh/ http://www.breakingnews.ie/ireland/ojidojsnmh/ The key to solving the tax receipts problem is a strong body for collecting tax and heavy penalties for non-compliance.
DenisM 16y ago
>It's all pretty depressing, and makes one despair somewhat of democracy. The more things change the more they stay the same. "A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy." http://en.wikiquote.org/wiki/Alexis_de_Tocqueville http://en.wikiquote.org/wiki/Alexis_de_Tocqueville
dhs 16y ago
"I thought it was commonly known and accepted that it was in large part German banks that were being bailed out when bailing out Greece." That's how I - I'm German - understand it, but I think it's pretty much the minority report around here these days. The vox populi still argues that we shouldn't have done it, as if there were an option out of it even now. The majority doesn't grasp what's happening and why it happens, and it seems to be very easy to keep them in the dark right now.