5 ms·

Greek trend? I can remember quite a few american banks doing just this recently.

by Moru 12y ago

bsaul 12y ago
Debt cancellation indeed has always existed, greeks just bringed it to another level, with their magic combo : fraud the state's accountings, get as much as you can from the eurozone before the crisis, get as much as you can from other european countries after the crisis, and then 2 years later when things start to stabilize, declare unilaterally that you're not going to reemburse people, and party in the streets over that decision. At least US banks had the decency to not laugh about it publicly.
- BSousa 12y ago
  Geesh. I'm no Greek and not fond of Syriza, but god damn, the brainwashing is strong here. a) fraud the state's accountings: True, but the difference was minimal (2.7% or so to 3.07%, and by fraud you mean they accounted for the expenses on arrival and not when ordering, not cook your books). Also, this was well known by all the other countries and none of them made a peep at the time b) get as many as you can before the crisis from banks that (correctly) assumed they would get their money anyway. c) get as much as you can from european countries after the crisis to pay the mostly German and French banks what they have loaned before, moving private debt to the hand of the tax payer (of the 250b, only about 27 billion were for greek gov. usage and all the rest was for debt payment/interest/etc [1]) d) they never said they won't pay, they just want to change terms and not just keep getting more and more indebted to foreign institutions that through their mandate are actually 'ruling' the countries. Again, no fan of Syriza, but enough is enough. Folks in Greece (and Portugal and Spain) are in a very bad shape, poverty is up and the only thing the troika cares is about the deficit reduction and nothing else.
  - briandear 12y ago
    And why is Greece in bad shape? Mightn't the deficit and fiscal mismanagement be the problem? How else should they solve it?
    - BSousa 12y ago
      There are various reasons, and I never said that it wasn't their fault they got into this mess. But lets not pretend it was ALL their fault. But independently of whose fault it is, there are two options: a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties b) continue to blame them for this situation and use every opportunity to punish them with more and more austerity measures while 'feeling good' about dishing out the punishment and calling them 'lazy greeks' Also, pre-crisis, the greek debt wasn't that bad (high, but stable) [1] compared to other countries. Spain and Portugal also had levels similar to Germany until 2008, which is interesting since it was at this time that the EU stimulus plan came to effect [2] and if you see the measures, some could say it benefitted German and French industries (cars and green tech) 1: https://www.google.pt/publicdata/explore?ds=ds22a34krhq5p_&met_y=gd_pc_gdp&idim=country:el:it:es&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=gd_pc_gdp&scale_y=lin&ind_y=false&rdim=country_group&idim=country:el:it:es:de:fr&ifdim=country_group&hl=en_US&dl=en&ind=false https://www.google.pt/publicdata/explore?ds=ds22a34krhq5p_&m... 2: http://en.wikipedia.org/wiki/2008_European_Union_stimulus_plan http://en.wikipedia.org/wiki/2008_European_Union_stimulus_pl...
      - ptaipale 12y ago
        > a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties And that is what has been tried. Debt payment has been postponed a lot, there' been plenty of debt restructuring. Still, that is what Syriza now does not want to do. Greeks are still paying less taxes (in proportion to their national income) than anyone else in the eurozone (except Lithuania, who adopted euro one month ago).
        BSousa 12y ago
        Can I ask if this taxation note is based on http://i.imgur.com/NWQ7zTM.jpg http://i.imgur.com/NWQ7zTM.jpg ? I honestly don't know about Greece, but I can tell you that graph is very wrong in so many levels. For example, Sweden is at 44.5%, but they count all money paid as taxes (according to a Deloitte report I was given when I had a job offer there, I can try to dig it up if needed) including what will go to social security/retirement/etc. In Portugal, you pay income tax (let's say around 20% give or take), but then, you as an employee pay 11.5% to social security and your employer pays 22.5%. So roughly, 34.5% to social security alone, but this doesn't go to the 'tax revenue' bracket. So, if we take in account corporation tax at 23% (lower in 2015), VAT at 23% for most stuff (including electricity!!), and income tax (variable between 14 and almost 50%), + social security, that 33.1% is way off. In 2012, a person in Portugal would have to work until August to have his 'taxes paid'. This means, more than 60% of his work output is taxes one way or the other.
  - bobcostas55 12y ago
    This post has no connection with reality, I have no clue why it's upvoted. a) Regarding the state accounting fraud: first of all, using the past tense ("was") is misleading. As of last year, Greece was still cooking its books[0]. It remains to be seen if they have actually stopped. You say the difference was minimal. When? When they brought in Georgiou to fix the Greek statistics service, the 2009 deficit was revised from 3.7% to 15.8%. The reaction of the government? Prosecute the guy because he refused to continue lying.[1] b) You say banks correctly assumed they would get their money. This is nonsense. The banks lost nearly 80% of the value of their loans in the "PSI".[2] The word you're looking for is "incorrectly". They screwed up and paid dearly for it. c) Pure nonsense. I have no clue where you're getting that from but it doesn't even deserve a response. d) The troika has zero power when it comes to "ruling" Greece. How do you think Greece has been able to completely avoid structural reforms and pro-growth measures for 5 years now, if the troika is ruling the country? Almost none of the reforms the troika asked for in exchange for the loans have been implemented. [0] yanisvaroufakis.eu/2014/04/24/greek-statistics-are-back-primary-deficit-presented-as-surplus-with-eurostats-seal-of-approval/ [1] http://www.spiegel.de/international/europe/chief-greek-statistician-charged-for-revealing-true-size-of-debt-a-882942.html http://www.spiegel.de/international/europe/chief-greek-stati... [2] http://en.wikipedia.org/wiki/Private_sector_involvement http://en.wikipedia.org/wiki/Private_sector_involvement
    - bsaul 12y ago
      Thanks for bringing a bit of reality check to the previous poster. Now i would disagree a bit with you on d) : The only power the troika had was that the greek government needed to get regular loans to repay part of the interests of their huge debt and the salaries of the greek state workers. That did give the troika the power to keep a bit of pressure on the greek government and ensure it will keep reforming the country a bit. And the reforms started to work, because now the greek budget is balanced enough for the state to be able to pay their workers without the need for additional loans from the EU. Unfortunately, it means now that the greeks can effectively say FU to the european troika if they plan on stopping to repay their debt, without risking an internal chaos. The only persons that will effectively have a hole in their budget as a result are the other EU states (states and not banks, meaning citizens), mostly french and germans.
  - ptaipale 12y ago
    > a) fraud the state's accountings: True, but the difference was minimal (2.7% or so to 3.07% ... Interested to know where those figures are from and how reliable they are. 2.7 % to 3.07 % is not exactly minimal (one seventh higher than target) but I agree that is not yet huge. However, reports have indicated far higher actual deficits [0]: "Greece estimated its 2009 deficit would be 12.5 per cent of gross domestic product, far above 3.7 per cent predicted in April. It revised its 2008 deficit up to 7.7 per cent from 5 per cent." I don't agree that the troika would only care "about the deficit reduction and nothing else." I think a lot of people are trying to think how to do things without hurting the Greek people, but on the other hand, when money runs out, the money runs out. People who do pay their taxes - that are far higher than in Greece - are fed up, and that is going to show up in the upcoming elections, too. [0] http://www.ft.com/cms/s/0/33b0a48c-ff7e-11de-8f53-00144feabdc0.html#axzz3QZVTlatH http://www.ft.com/cms/s/0/33b0a48c-ff7e-11de-8f53-00144feabd...
- radisb 12y ago
  >At least US banks had the decency to not laugh about it publicly. It is good to know that US Banks take seriously and in a professional manner the frauds they commit.
_delirium 12y ago
And applied to regular people, it's already been quite legally enshrined in the U.S. for a long time. The U.S. has forgiving bankruptcy laws (which are incidentally often partially credited for its entrepreneurial culture). Croatia doesn't, so debts are hard to discharge. In a system with a forgiving bankruptcy system, this kind of one-time amnesty wouldn't be necessary, because someone who has no assets, very low income, and high debt would simply declare bankruptcy and have the debt discharged.
simonh 12y ago
Which ones? I know you're not talking about TARP because that was paid back, and the government even made a profit. So what is it you are referring to?

Greek trend? I can remember quite a few american banks doing just this recently.

by Moru 12y ago

Greek trend? I can remember quite a few american banks doing just this recently.

bsaul 12y ago

Debt cancellation indeed has always existed, greeks just bringed it to another level, with their magic combo : fraud the state's accountings, get as much as you can from the eurozone before the crisis, get as much as you can from other european countries after the crisis, and then 2 years later when things start to stabilize, declare unilaterally that you're not going to reemburse people, and party in the streets over that decision. At least US banks had the decency to not laugh about it publicly.

BSousa 12y ago
Geesh. I'm no Greek and not fond of Syriza, but god damn, the brainwashing is strong here. a) fraud the state's accountings: True, but the difference was minimal (2.7% or so to 3.07%, and by fraud you mean they accounted for the expenses on arrival and not when ordering, not cook your books). Also, this was well known by all the other countries and none of them made a peep at the time b) get as many as you can before the crisis from banks that (correctly) assumed they would get their money anyway. c) get as much as you can from european countries after the crisis to pay the mostly German and French banks what they have loaned before, moving private debt to the hand of the tax payer (of the 250b, only about 27 billion were for greek gov. usage and all the rest was for debt payment/interest/etc [1]) d) they never said they won't pay, they just want to change terms and not just keep getting more and more indebted to foreign institutions that through their mandate are actually 'ruling' the countries. Again, no fan of Syriza, but enough is enough. Folks in Greece (and Portugal and Spain) are in a very bad shape, poverty is up and the only thing the troika cares is about the deficit reduction and nothing else.
- briandear 12y ago
  And why is Greece in bad shape? Mightn't the deficit and fiscal mismanagement be the problem? How else should they solve it?
  - BSousa 12y ago
    There are various reasons, and I never said that it wasn't their fault they got into this mess. But lets not pretend it was ALL their fault. But independently of whose fault it is, there are two options: a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties b) continue to blame them for this situation and use every opportunity to punish them with more and more austerity measures while 'feeling good' about dishing out the punishment and calling them 'lazy greeks' Also, pre-crisis, the greek debt wasn't that bad (high, but stable) [1] compared to other countries. Spain and Portugal also had levels similar to Germany until 2008, which is interesting since it was at this time that the EU stimulus plan came to effect [2] and if you see the measures, some could say it benefitted German and French industries (cars and green tech) 1: https://www.google.pt/publicdata/explore?ds=ds22a34krhq5p_&met_y=gd_pc_gdp&idim=country:el:it:es&hl=en&dl=en#!ctype=l&strail=false&bcs=d&nselm=h&met_y=gd_pc_gdp&scale_y=lin&ind_y=false&rdim=country_group&idim=country:el:it:es:de:fr&ifdim=country_group&hl=en_US&dl=en&ind=false https://www.google.pt/publicdata/explore?ds=ds22a34krhq5p_&m... 2: http://en.wikipedia.org/wiki/2008_European_Union_stimulus_plan http://en.wikipedia.org/wiki/2008_European_Union_stimulus_pl...
    - ptaipale 12y ago
      > a) try to get to an agreement that can get Greece back into shape, even if it means postpone debt payments, restructuring, haircut, etc where it is beneficial for all parties And that is what has been tried. Debt payment has been postponed a lot, there' been plenty of debt restructuring. Still, that is what Syriza now does not want to do. Greeks are still paying less taxes (in proportion to their national income) than anyone else in the eurozone (except Lithuania, who adopted euro one month ago).
      - BSousa 12y ago
        Can I ask if this taxation note is based on http://i.imgur.com/NWQ7zTM.jpg http://i.imgur.com/NWQ7zTM.jpg ? I honestly don't know about Greece, but I can tell you that graph is very wrong in so many levels. For example, Sweden is at 44.5%, but they count all money paid as taxes (according to a Deloitte report I was given when I had a job offer there, I can try to dig it up if needed) including what will go to social security/retirement/etc. In Portugal, you pay income tax (let's say around 20% give or take), but then, you as an employee pay 11.5% to social security and your employer pays 22.5%. So roughly, 34.5% to social security alone, but this doesn't go to the 'tax revenue' bracket. So, if we take in account corporation tax at 23% (lower in 2015), VAT at 23% for most stuff (including electricity!!), and income tax (variable between 14 and almost 50%), + social security, that 33.1% is way off. In 2012, a person in Portugal would have to work until August to have his 'taxes paid'. This means, more than 60% of his work output is taxes one way or the other.
- bobcostas55 12y ago
  This post has no connection with reality, I have no clue why it's upvoted. a) Regarding the state accounting fraud: first of all, using the past tense ("was") is misleading. As of last year, Greece was still cooking its books[0]. It remains to be seen if they have actually stopped. You say the difference was minimal. When? When they brought in Georgiou to fix the Greek statistics service, the 2009 deficit was revised from 3.7% to 15.8%. The reaction of the government? Prosecute the guy because he refused to continue lying.[1] b) You say banks correctly assumed they would get their money. This is nonsense. The banks lost nearly 80% of the value of their loans in the "PSI".[2] The word you're looking for is "incorrectly". They screwed up and paid dearly for it. c) Pure nonsense. I have no clue where you're getting that from but it doesn't even deserve a response. d) The troika has zero power when it comes to "ruling" Greece. How do you think Greece has been able to completely avoid structural reforms and pro-growth measures for 5 years now, if the troika is ruling the country? Almost none of the reforms the troika asked for in exchange for the loans have been implemented. [0] yanisvaroufakis.eu/2014/04/24/greek-statistics-are-back-primary-deficit-presented-as-surplus-with-eurostats-seal-of-approval/ [1] http://www.spiegel.de/international/europe/chief-greek-statistician-charged-for-revealing-true-size-of-debt-a-882942.html http://www.spiegel.de/international/europe/chief-greek-stati... [2] http://en.wikipedia.org/wiki/Private_sector_involvement http://en.wikipedia.org/wiki/Private_sector_involvement
  - bsaul 12y ago
    Thanks for bringing a bit of reality check to the previous poster. Now i would disagree a bit with you on d) : The only power the troika had was that the greek government needed to get regular loans to repay part of the interests of their huge debt and the salaries of the greek state workers. That did give the troika the power to keep a bit of pressure on the greek government and ensure it will keep reforming the country a bit. And the reforms started to work, because now the greek budget is balanced enough for the state to be able to pay their workers without the need for additional loans from the EU. Unfortunately, it means now that the greeks can effectively say FU to the european troika if they plan on stopping to repay their debt, without risking an internal chaos. The only persons that will effectively have a hole in their budget as a result are the other EU states (states and not banks, meaning citizens), mostly french and germans.
- ptaipale 12y ago
  > a) fraud the state's accountings: True, but the difference was minimal (2.7% or so to 3.07% ... Interested to know where those figures are from and how reliable they are. 2.7 % to 3.07 % is not exactly minimal (one seventh higher than target) but I agree that is not yet huge. However, reports have indicated far higher actual deficits [0]: "Greece estimated its 2009 deficit would be 12.5 per cent of gross domestic product, far above 3.7 per cent predicted in April. It revised its 2008 deficit up to 7.7 per cent from 5 per cent." I don't agree that the troika would only care "about the deficit reduction and nothing else." I think a lot of people are trying to think how to do things without hurting the Greek people, but on the other hand, when money runs out, the money runs out. People who do pay their taxes - that are far higher than in Greece - are fed up, and that is going to show up in the upcoming elections, too. [0] http://www.ft.com/cms/s/0/33b0a48c-ff7e-11de-8f53-00144feabdc0.html#axzz3QZVTlatH http://www.ft.com/cms/s/0/33b0a48c-ff7e-11de-8f53-00144feabd...
radisb 12y ago
>At least US banks had the decency to not laugh about it publicly. It is good to know that US Banks take seriously and in a professional manner the frauds they commit.

_delirium 12y ago

And applied to regular people, it's already been quite legally enshrined in the U.S. for a long time. The U.S. has forgiving bankruptcy laws (which are incidentally often partially credited for its entrepreneurial culture). Croatia doesn't, so debts are hard to discharge. In a system with a forgiving bankruptcy system, this kind of one-time amnesty wouldn't be necessary, because someone who has no assets, very low income, and high debt would simply declare bankruptcy and have the debt discharged.

simonh 12y ago

Which ones? I know you're not talking about TARP because that was paid back, and the government even made a profit. So what is it you are referring to?