7 ms·

>I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from th

by tsotha 12y ago

>I am hesitant to introduce what may seem like class warfare, but if you separate those who benefitted the most from European policies before the crisis from those who befitted the least, and are now expected to pay the bulk of the adjustment costs, rather than posit a conflict between Germans and Spaniards, it might be far more accurate to posit a conflict between the business and financial elite on one side (along with EU officials) and workers and middle class savers on the other. I don't buy this for a minute. The big beneficiaries of the Greek borrowing binge were Greek civil servants, who go 50% plus wage increases.

StavrosK 12y ago
Why can't it be both?
- tsotha 12y ago
  Oh, I don't doubt financial institutions benefited. But the idea the average Greek was just standing there minding his own business when a wall of debt washed over him is patent nonsense.
  - StavrosK 12y ago
    Do you really think the average person knew what was going to happen, when economists and banks didn't?
    - tsotha 12y ago
      Most people are smart enough to know the money has to come from somewhere. Over the long haul a country's budget isn't that different from that of a household. They voted for ever increasing levels services - if they didn't know the bill would eventually come due they certainly should have. And the idea economists and banks didn't realize ever increasing amounts of debt would be a problem just isn't credible.
      - vidarh 12y ago
        > And the idea economists and banks didn't realize ever increasing amounts of debt would be a problem just isn't credible. So you agree the creditors have a big part of the responsibility then? Because that is what you are effectively saying in the line I quoted. Either the creditor banks failed to realize the problem, in which case why do you expect Greek voters to? Or they were irresponsibly speculating on a bailout. In either scenario, it is to me ridiculous to expect the average Greek to bear the burden. The only reason they were, were because EU government basically strongarmed them into it in order to shield the creditors from taking the consequence of the risk that should be baked into their interest payments in the first place.
        tsotha 12y ago
        >So you agree the creditors have a big part of the responsibility then? Nope. It's 100% the debtor's responsibility that a debt is repaid.
        vidarh 12y ago
        Even if we agreed, and we don't, you are not answering my question: Even if it is 100% the debtor's responsibility that a debt is repaid, there is the matter of responsibility for why the loan was granted in the first place. The two are separate issues. Are you claiming it is 100% the debtor's responsibility that a loan was granted too? If the lenders had acted responsibly, they would not have faced the risk of non-payment, because a lot of these loans would not have been granted. Are you suggesting the debtors forced the lenders hands? Back to the specific issue of repayment: You may of course choose to consider it the moral option for the debtor to assume 100% of the responsibility of repayment. But legally, that's not true anywhere in the world that I'm aware of - every jurisdiction I know of have a vast range of situations where debts can be wiped out based on the actions of the lender in recognition of situations where the debtor is consider to not be responsible for repayment. E.g. here in the UK, if banks allows consumers to take out loans that are blatantly irresponsible without lying to the bank about their income and outgoings, it's the bank that is responsible, and the debt can be wiped out, because it is recognised that there is an asymmetric difference in power and that people can have valid reasons for being desperate enough, or not understanding the consequences of, loans that the lender should know they can't manage. Even in the face of a loan that was not irresponsible when granted, there's multitude of options for reducing or wiping clean the repayment, in recognition Yet somehow you believe Greek citizens should be held 100% responsible for actions they didn't take and likely did not understand, and that they had only indirect influence on, and even more so a risk you claim the banks did understand and still took? Personally I consider it deeply immoral and downright criminal to expect the Greek to repay these loans, and I'd strongly hope Greece refuses to pay, as creditors needs to be shown that there is a real risk in lending money without proper due diligence. They gambled with their shareholders money.
justincormack 12y ago
And the rich paid no tax, which was worth more.
- tsotha 12y ago
  Worth more than what? Than all the money the government borrowed? Not a chance.
npalli 12y ago
Greek civil servants are 3.3% of the population, less than that of Germany. What about the rest of 96.7% of population who are getting crushed. How does punishing the 96.7% fix the problem of crony corruption.
- tsotha 12y ago
  That's 27% of the budget, though. This is not a problem of "crony corruption". It's the same problem you see in Central and South America - voters who think they're entitled to Northern European levels of services without having a Northern European economy.
- zone411 12y ago
  The share of public worker sector workers out of overall employment was 29% in Greece vs 19% in Germany and they earned 49% more per hour than private sector employees (in Germany the difference was 19%). Source: http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1406.pdf http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1406.pdf

by tsotha 12y ago

StavrosK 12y ago

Why can't it be both?

tsotha 12y ago
Oh, I don't doubt financial institutions benefited. But the idea the average Greek was just standing there minding his own business when a wall of debt washed over him is patent nonsense.
- StavrosK 12y ago
  Do you really think the average person knew what was going to happen, when economists and banks didn't?
  - tsotha 12y ago
    Most people are smart enough to know the money has to come from somewhere. Over the long haul a country's budget isn't that different from that of a household. They voted for ever increasing levels services - if they didn't know the bill would eventually come due they certainly should have. And the idea economists and banks didn't realize ever increasing amounts of debt would be a problem just isn't credible.
    - vidarh 12y ago
      > And the idea economists and banks didn't realize ever increasing amounts of debt would be a problem just isn't credible. So you agree the creditors have a big part of the responsibility then? Because that is what you are effectively saying in the line I quoted. Either the creditor banks failed to realize the problem, in which case why do you expect Greek voters to? Or they were irresponsibly speculating on a bailout. In either scenario, it is to me ridiculous to expect the average Greek to bear the burden. The only reason they were, were because EU government basically strongarmed them into it in order to shield the creditors from taking the consequence of the risk that should be baked into their interest payments in the first place.
      - tsotha 12y ago
        >So you agree the creditors have a big part of the responsibility then? Nope. It's 100% the debtor's responsibility that a debt is repaid.
        vidarh 12y ago
        Even if we agreed, and we don't, you are not answering my question: Even if it is 100% the debtor's responsibility that a debt is repaid, there is the matter of responsibility for why the loan was granted in the first place. The two are separate issues. Are you claiming it is 100% the debtor's responsibility that a loan was granted too? If the lenders had acted responsibly, they would not have faced the risk of non-payment, because a lot of these loans would not have been granted. Are you suggesting the debtors forced the lenders hands? Back to the specific issue of repayment: You may of course choose to consider it the moral option for the debtor to assume 100% of the responsibility of repayment. But legally, that's not true anywhere in the world that I'm aware of - every jurisdiction I know of have a vast range of situations where debts can be wiped out based on the actions of the lender in recognition of situations where the debtor is consider to not be responsible for repayment. E.g. here in the UK, if banks allows consumers to take out loans that are blatantly irresponsible without lying to the bank about their income and outgoings, it's the bank that is responsible, and the debt can be wiped out, because it is recognised that there is an asymmetric difference in power and that people can have valid reasons for being desperate enough, or not understanding the consequences of, loans that the lender should know they can't manage. Even in the face of a loan that was not irresponsible when granted, there's multitude of options for reducing or wiping clean the repayment, in recognition Yet somehow you believe Greek citizens should be held 100% responsible for actions they didn't take and likely did not understand, and that they had only indirect influence on, and even more so a risk you claim the banks did understand and still took? Personally I consider it deeply immoral and downright criminal to expect the Greek to repay these loans, and I'd strongly hope Greece refuses to pay, as creditors needs to be shown that there is a real risk in lending money without proper due diligence. They gambled with their shareholders money.

justincormack 12y ago

And the rich paid no tax, which was worth more.

tsotha 12y ago
Worth more than what? Than all the money the government borrowed? Not a chance.

npalli 12y ago

Greek civil servants are 3.3% of the population, less than that of Germany. What about the rest of 96.7% of population who are getting crushed. How does punishing the 96.7% fix the problem of crony corruption.

tsotha 12y ago
That's 27% of the budget, though. This is not a problem of "crony corruption". It's the same problem you see in Central and South America - voters who think they're entitled to Northern European levels of services without having a Northern European economy.
zone411 12y ago
The share of public worker sector workers out of overall employment was 29% in Greece vs 19% in Germany and they earned 49% more per hour than private sector employees (in Germany the difference was 19%). Source: http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1406.pdf http://www.ecb.europa.eu/pub/pdf/scpwps/ecbwp1406.pdf