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Without European (and incl. German) money Greece would be bancrupt and no longer in the Eurozone. Bancrupt banks in Europe would have helped no one, particularl

by lispm 9y ago

Without European (and incl. German) money Greece would be bancrupt and no longer in the Eurozone. Bancrupt banks in Europe would have helped no one, particularly not Greece. For the welfare of the people in Greece the greek government is responsible, not Angela Merkel.

isolli 9y ago
The better solution was to let Greece default. Then the banks who had bought Greek bonds without proper due diligence would have borne the cost of their mistakes, not innocent bystanders. These were mostly French and German banks, and it would have been up to their respective governments to bail them out (or not).
sgift 9y ago
> For the welfare of the people in Greece the greek government is responsible, not Angela Merkel. That is correct, but one could ask that people don't go around and say "Germany saved Greece!", cause no .. it didn't. It saved its banks.
- lispm 9y ago
  There is a lot of propaganda involved. Sure Greek politicians did not blame themselves for taking huge amount of credit money and wasting it. Without paying back the money (-> to the banks), Greece would have been bancrupt within days. Thus saving the banks saved Greece from being bancrupt. Without banks and without government money from the outside, nobody would have given Greece any credits...
  - StavrosK 9y ago
    I don't know if you've been to Greece recently, but, at this point, a one-off bankruptcy looks much preferable to this slow and constant descent into poverty.
  - ahartmetz 9y ago
    The thing is, the Greek system mostly worked, corruption and waste and all, before it entered the Euro area. Cheap credit and no possibility of currency devaluation broke it. The currency union was just very badly thought out. A currency union without a fiscal union is probably a bad idea. That was recognized somewhat by the stability criteria for new members that were then swiftly ignored for various reasons.
    - lispm 9y ago
      > the Greek system mostly worked That's highly debatable and in a changing political landscape there was no future for that. A tiny country next to the EU and a large Eurozone? Greece needed reforms and some (not all) of them were long delayed. That's also the point of the EU and the Eurozone. It provides the framework for the reforms. The largest win for Greece is a stable democracy, after a long phase of political instability and military governments.
      - Deadolus 9y ago
        Not saying that it would have worked - but there is actually a tiny, tiny country surrounded by the Eurozone - Switzerland. And while surely not everything is perfect there, I think they are doing quite well.
- readittwice 9y ago
  Saving some affected banks would've been cheaper than saving Greece. Even if "saving german banks" might have been one of the reason, it wasn't THE reason as you claim.
sjwright 9y ago
Without being tied to the common currency, the Greek Drachma would have devalued relative to the Deutsche Mark, making Greek exports and tourism more lucrative. Had this been able to occur, the impact to the Greek economy would have been far less. Instead, the common currency has greatly benefited Germany: had the Germans retained the Deutsche Mark, their currency would be valued higher than the Euro is now, making their exports more expensive and/or lowering the profits of export industries.
- lispm 9y ago
  Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians. Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.
  - readittwice 9y ago
    > Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
    - lispm 9y ago
      It could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
  - petre 9y ago
    > Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.
petre 9y ago
Greece would have been perfectly fine without the Euro. It is the Euro, Goldman and Sachs, Greek politicians and Deutche Bank that have bankrupted it.
eurozone 9y ago
To add to discussion: Greece GDP growth is less than 0% from 2006 to 2016. The map data is here https://www.reddit.com/r/europe/comments/70mf7u/european_gdp_growth_between_2006_and_2016_xpost/ https://www.reddit.com/r/europe/comments/70mf7u/european_gdp...
zurn 9y ago
The bankruptcy scenario was always highly unlikely, the banks would have been bailed out with tax money. Just like they were bailed out with tax money in actual history, just with another name (loans to the Greek government, who gave the money back to the unwisely lending EU banks).
madshiva 9y ago
Greece had many problem to solve. It's why they collapse. Not only about the Euro but about the organization, culture of doing nothing. I'm a bit bad with them but when you don't have any register of the real estate and just need to pretend that you own the land for whatever reason, should not be surprised that the country is falling...and this is just the tip of the iceberg.

by lispm 9y ago

isolli 9y ago

The better solution was to let Greece default. Then the banks who had bought Greek bonds without proper due diligence would have borne the cost of their mistakes, not innocent bystanders. These were mostly French and German banks, and it would have been up to their respective governments to bail them out (or not).

sgift 9y ago

> For the welfare of the people in Greece the greek government is responsible, not Angela Merkel. That is correct, but one could ask that people don't go around and say "Germany saved Greece!", cause no .. it didn't. It saved its banks.

lispm 9y ago
There is a lot of propaganda involved. Sure Greek politicians did not blame themselves for taking huge amount of credit money and wasting it. Without paying back the money (-> to the banks), Greece would have been bancrupt within days. Thus saving the banks saved Greece from being bancrupt. Without banks and without government money from the outside, nobody would have given Greece any credits...
- StavrosK 9y ago
  I don't know if you've been to Greece recently, but, at this point, a one-off bankruptcy looks much preferable to this slow and constant descent into poverty.
- ahartmetz 9y ago
  The thing is, the Greek system mostly worked, corruption and waste and all, before it entered the Euro area. Cheap credit and no possibility of currency devaluation broke it. The currency union was just very badly thought out. A currency union without a fiscal union is probably a bad idea. That was recognized somewhat by the stability criteria for new members that were then swiftly ignored for various reasons.
  - lispm 9y ago
    > the Greek system mostly worked That's highly debatable and in a changing political landscape there was no future for that. A tiny country next to the EU and a large Eurozone? Greece needed reforms and some (not all) of them were long delayed. That's also the point of the EU and the Eurozone. It provides the framework for the reforms. The largest win for Greece is a stable democracy, after a long phase of political instability and military governments.
    - Deadolus 9y ago
      Not saying that it would have worked - but there is actually a tiny, tiny country surrounded by the Eurozone - Switzerland. And while surely not everything is perfect there, I think they are doing quite well.
readittwice 9y ago
Saving some affected banks would've been cheaper than saving Greece. Even if "saving german banks" might have been one of the reason, it wasn't THE reason as you claim.

sjwright 9y ago

Without being tied to the common currency, the Greek Drachma would have devalued relative to the Deutsche Mark, making Greek exports and tourism more lucrative. Had this been able to occur, the impact to the Greek economy would have been far less. Instead, the common currency has greatly benefited Germany: had the Germans retained the Deutsche Mark, their currency would be valued higher than the Euro is now, making their exports more expensive and/or lowering the profits of export industries.

lispm 9y ago
Greece imports a lot -> gets more expensive. Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. People also think in economic terms, but the Euro is a political project. Countries like Greece wanted to be in the Eurozone. It was not Germany's wish. It was the wish of Greece and the population of Greece also wanted it - not just the politicians. Germany actually did not want to have the Euro itself, it agreed to the Euro to get the Reunification. But it agreed on the Euro to be a stable currency, not one that politicians would devalue to gain short term effects.
- readittwice 9y ago
  > Greece imports a lot -> gets more expensive. I just want to add: This could also be a good thing, since people in Greece are more likely to spend money on goods produced in Greece. This could help their economy.
  - lispm 9y ago
    It could, but for example Greece lacks energy resources and imports a lot of oil and gas. That's not easy to replace and that still would involve imports. The top imports are fuels, machines/computers, pharmaceuticals, electrical equipment, ships, ...
- petre 9y ago
  > Greece with its Drachma would have been a welcome victim for currency speculation. This was tried with the Euro, too, but it failed. All pegs are a potential victim of currency speculation. The solution is to end the peg and let the currency float, as it happened to the British Pound/Deutche Mark during the Soros stunt in the 90s or more recently with the Euro/Swiss Franc peg.

petre 9y ago

Greece would have been perfectly fine without the Euro. It is the Euro, Goldman and Sachs, Greek politicians and Deutche Bank that have bankrupted it.

eurozone 9y ago

To add to discussion: Greece GDP growth is less than 0% from 2006 to 2016. The map data is here https://www.reddit.com/r/europe/comments/70mf7u/european_gdp_growth_between_2006_and_2016_xpost/ https://www.reddit.com/r/europe/comments/70mf7u/european_gdp...

zurn 9y ago

The bankruptcy scenario was always highly unlikely, the banks would have been bailed out with tax money. Just like they were bailed out with tax money in actual history, just with another name (loans to the Greek government, who gave the money back to the unwisely lending EU banks).

madshiva 9y ago

Greece had many problem to solve. It's why they collapse. Not only about the Euro but about the organization, culture of doing nothing. I'm a bit bad with them but when you don't have any register of the real estate and just need to pretend that you own the land for whatever reason, should not be surprised that the country is falling...and this is just the tip of the iceberg.