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There are many layers here, as I see it sitting in a northern european non-eurozone country: Moving bankers bad investments onto public books is a monumentally

• NotableAlamode 12y ago
  Are you not in effect saying: never pay back debt at all? For whenever you don't pay back debt, then it's the lender's fault, nobody forced them to lend, it's their own risk. While this is a consistent position that has historically been held by some, it's incompatible with any modern economy. In particular it is incompatible with the modern concepts of old-age pension, health insurance, unemployment insurance etc.
  • biehl 12y ago
    No - as a citizen I'm saying. Don't let bankers buy risky papers to a degree that they cannot cover their own losses. The german and french bankers should not have bought greek government bonds at the prices they did considering the greek levels of public debt.
    • NotableAlamode 12y ago
      Why do you keep talking about German and French banks only? As Atropos pointed out, Greek banks had the highest exposure. German banks had quite a low exposure. In the light of this (and the power structure of the EU/ECB) the German taxpayer is bailing out French and Greek banks. Anyway, what is deemed risky is highly subjective and easy to see only in hindsight.
      • biehl 12y ago
        Because democratically, the foreign debt-relation makes the whole difference. If all of the greek debt had been domestic, then a restructuring would have been a purely domestic matter - solvable by a democratic election. What is ugly is when foreign states impose non-sensical demands of another country as part of a move to bail out their own banks.
        • NotableAlamode 12y ago
          I'm not sure I see your point. Greece has a perfectly democratic way of getting rid of its debt: default. Russia in 1998 was the last big European country to do so. Iceland's banks also defaulted on some wholesale depositors a few years ago. Greece has (partly or fully) defaulted on foreign debt already on several occasions in the past. Greece has in effect already defaulted on some of its current debt, although it is not always called a default. Moreover Greece is getting extremely favourable interest rates and repayment schedules on its remaining debt. The real question is: why is Greece not going the democratic way of defaulting on its external debt? And the answer is, as you know well, that Greece wants to continue receiving all that sweet EU money. Why stop a good thing? ... impose non-sensical demands ... Have you considered that not everybody thinks that fighting corruption, tax-avoidance etc is non-sensical?
          • ptaipale 12y ago
            Agreed. However, once again, we should not compare directly solutions of Iceland (banks) and Greece (government), because the problems are quite different. Iceland (the country, the government) was not in much debt and did not default. Icelandic banks did default and went bankrupt. The banks (Kaupthing, Glitnir and Landsbank) were split so that Icelandic debts and assets were moved into new surviving publicly owned domestic versions of the banks, and the foreign remnants of the banks were placed into receivership and liquidation. Russia, the country, actually defaulted. Russia is today not known as a safe place for investments (though the history of a default is just a small part there; in Russia's assets, it has huge energy reserves, and in its liabilities, it has kleptocracy, corruption and an arbitrary justice system).
• twobits 12y ago
  "Moving bankers bad investments onto public books is a monumentally poor decision for everyone" It's a great decision for the banks, and the politicians that got their cut. It's (only) a bad decision for you and me, the tax payers, who are being raped.