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You mean, they want the greeks to pay for their (mostly french and german) bankers poor investments?
by biehl 12y ago
You mean, they want the greeks to pay for their (mostly french and german) bankers poor investments?
- peterfirefly 12y agoYou mean, the Greeks want Northern/Eastern Europe to pay for Greek vote buying?
- danmaz74 12y agoWhy "Nothern/Eastern" Europe? Italy for example contributed 40 billion of the 240 billions that were used for the bailout so far.
- peterfirefly 12y agoVery good question. Mostly because Italy (and France) itself is in danger. Do we think the money really is there if it is needed? And that it won't push Italy (and France) over the brink?
- danmaz74 12y agoI just don't like bundling the "north" vs "south" of the EU. Yes Italy and Spain were in dangerous waters if you looked at the interest rate differentials with Germany, but they paid their quota of the bailout like everybody else - so they saved Greece as much as everybody else. Actually, they contributed much more than the new North-Eastern EU states, which have a much lower GDP (both total and per capita).
- peterfirefly 12y agoBut there is a very real North/South divide in the way the economies are structured and in societal norms (trust in others, corruption, tax evasion, clientelism). The PIIGS acronym wasn't conjured out of free air (Ireland seems over the worst, so we are down to PIGS now). Doesn't it piss you off, btw, that Eastern European countries with a poorer population than Greece participated in the Greek bailout but the Greeks still think they are entitled to more?
- danmaz74 12y agoAre you trying to tell me that countries from the former Soviet block are corruption free? In my own experience they are much more corrupted than Italy; there is no correlation between corruption and latitude. Regarding entitlement from some Greeks, I agree. But you should keep in mind the total net from/to the EU: all those poorer countries, even with the bailout, are getting much more from the EU than they are giving (as it should be).
- peterfirefly 12y ago> Are you trying to tell me that countries from the former Soviet block are corruption free? Not at all! But, yes, there /is/ a correlation between corruption and latitude.
- ptaipale 12y ago> Are you trying to tell me that countries from the former Soviet block are corruption free? I don't see him saying that. I see him saying that countries of the former Soviet block have poorer population than Greece [0] but are subsidizing it. Also as nations they are poorer, though their GDP has climbed to the same level. They soon will be richer than Greece. In 1990, they were still much poorer, as they were still under Soviet occupation and influence, while Greece had been a member of EEC/EC for ten years. Greece is lagging behind due to its sclerotic economy and clientelism of previous power parties, and Syriza seems to revert to the same. [0] http://stats.oecd.org/Index.aspx?DataSetCode=BLI http://stats.oecd.org/Index.aspx?DataSetCode=BLI
- danmaz74 12y agoI quote: > But there is a very real North/South divide in the way the economies are structured and in societal norms (trust in others, corruption, tax evasion, clientelism) This is very poor simplifcation, and pretty offensive too.
- ptaipale 12y agoIt might be offensive, but is it untrue? Note that we're not saying things about people as individuals. We're talking about national cultures, stereotypes and statistical averages. "Where trust is high, crime and corruption are low". http://www.pewglobal.org/2008/04/15/where-trust-is-high-crime-and-corruption-are-low/ http://www.pewglobal.org/2008/04/15/where-trust-is-high-crim... Regarding trust, below is one source for how people see it. Look at the European map. There's a bit of north/south divide (with Italy being somewhat north). http://www.jdsurvey.net/jds/jdsurveyActualidad.jsp?Idioma=I&SeccionTexto=0404&NOID=104 http://www.jdsurvey.net/jds/jdsurveyActualidad.jsp?Idioma=I&... This is not the same as amount of corruption (note how high China and Saudi Arabia are in the "most people can be trusted" index, while they don't rate as well in corruption indexes). Here's the Transparency's Corruption index map: https://www.transparency.org/cpi2014/results https://www.transparency.org/cpi2014/results Crime maps are many but what I can find quickly are not incompatible with this generalisation either: http://www.numbeo.com/crime/gmaps_rankings_country.jsp http://www.numbeo.com/crime/gmaps_rankings_country.jsp
- biehl 12y agoNope. I mean Our Eurozone growth model, [...] relied heavily on private, bank-driven, vendor-financing for the net exports of the surplus nations. [...]. The end result was a transfer of potential losses from the banks’ books onto Europe’s taxpayers in a manner that placed most of the burden of adjustment on the crisis countries that could least bear it. http://yanisvaroufakis.eu/2015/03/15/presenting-an-agenda-for-europe-at-ambrosetti-lake-como-14th-march-2015 http://yanisvaroufakis.eu/2015/03/15/presenting-an-agenda-fo... The money was already gone when we allowed bankers to handle it and invest it in high-risk projects like greek and spanish real-estate etc. And if we don't place the blame where it is due (with the bankers) then they will find another bubble to waste our money with another time. [edit: reply moved to proper place]
- lispm 12y agoIt's Greece which wants more money. Not Germany and France.
- yxhuvud 12y agoActually, what Greece wants is debt relief. Not more debt.
- peterfirefly 12y agoWhen your debt is forgiven -- or rather, paid by others -- you can borrow more. And that's what they want -- how else can they keep the current circus going?
- tormeh 12y agoGreece has a budget surplus before debt payments now. This is a new situation, of course.
- peterfirefly 12y agoThey briefly had a primary surplus. Are you willing to bet that they still do?
- lispm 12y agoGreece is almost broke. They don't have the money to pay all their welfare... Tax income is shrinking...
- deleted 12y ago[deleted]
- danmaz74 12y agoGreece took 240 billion euros from the other EU governments as a bailout. That is other citizen's money, not "bad bankers'" money.
- biehl 12y agoThey took them on the express condition that the vast majority was used to pay the bankers. So the former greek government was the willing participant in moving bankers losses onto public books. But that makes it no less the bankers losses that were covered with public money.
- pooper 12y agoIs Greece willing to say that it does not back decisions and agreements made by the previous government? How can anyone trust they won't do the same when this government bows out? Greece will lose all credibility in the international market if it keeps playing victim. No, the debts will not go away. Everyone loves to crap on big banks but in this case Greece owes money to EU nations. Unrelated side note: Bringing up the second world war makes Greece sound even more petty. What's wrong with you people?
- _delirium 12y ago> Greece owes money to EU nations Only because the private debts were nationalized in the last bailout round, which was basically a joint bailout of Greece's public finances and German/French banks, all of which were on the brink of insolvency. The bonds were previously mostly held by French and German banks, and the agreement did two things: 1) Greece was given a big chunk of money on the condition that most of it be sent back north to pay off a portion of their bonds; and 2) much of the remaining bad debt was shifted to public books, in the process being restructured with more generous terms. Greece has a large part of the fault in this whole saga, but they are not the only reason these originally privately held debts have now ended up on public books. I do think from a realpolitik perspective Greece is playing hardball at the wrong time: they had a much stronger negotiating position in 2010 than they do now, when much of the "contagion" problem has been contained. But the government at the time stupidly agreed to a set of terms that solved the German/French problem while containing but not solving the Greek problem. Few serious economists at the time believed the package was a workable one for Greece, unless you thought some extremely optimistic projects of Greek GDP growth were realistic; it was seen as at best kicking the can down the road. But by 2015 when Greeks realized that and voted in a government willing to play hardball, they are no longer in a good negotiating position.
- Atropos 12y agoActually, the highest investment in Greek government bonds was by Greek banks, see "The Greek Debt Restructuring: An Autopsy" by Zettelmeyer/Trebesch/Gulati.
- NotableAlamode 12y agoThe money was lent to improve the Greek economy. It was largely spent on an unnecessarily large army, a large, inefficient and extremely well remunerated civil service, olympic games, cushy early retirement deals and shenanigans like that.
- _delirium 12y agoA fairly large amount (though still outweighed by other issues) was just outright stolen as well. Not many Greeks were too surprised to discover corruption, but the amounts have surprised many people. I think it was widely believed that officials were pocketing "modest" amounts of money (€100k here, €150k there), but some turned out to have been pocketing Swiss-bank-account sized amounts of money, tens of millions. A number of the arms deals appear to have been corrupted as well, e.g. both Russia's Almaz-Antey, and Germany's Rheinmetall, appear to have paid large amounts in bribes, presumably to divert even larger amounts of contracts. And the Olympics construction contracts were almost certainly not clean. One thing that gained Syriza some centrist votes is that they come across as at least having clean hands: good or bad policies, people believe they aren't caught up in clientelist networks and stealing millions personally. Whereas the previous ND/Pasok unity government was widely suspected of still trying to cover up skeletons in its closet (e.g. the scandal over trying to suppress the Lagarde list didn't improve its image).
- NotableAlamode 12y agoYes, the "clean hands" thing is true, and it's about the only positive that Syriza has to offer.
- ptaipale 12y agoThis narrative of "bankers" (biehl, just look up how many times you repeat the word) is apparently popular somewhere, because it enables you to find a group of scapegoats who can be blamed for problems, a group about which someone can say "take their money, no one will suffer". But it is not so simple. What is borrowed to Greece is not "bankers'" own money. It is funds belonging to institutional investors. The job of those "bankers" is to look after that money and invest it. Significant institutions include things like pension funds or other savers. Write off the debt, who loses? It's not just some "banker"; the brunt will be carried by pension savers.