2 ms·

Well, they are paying around 4% GDP in debt (2.5% real, since some creditors are allowing for a non-service period), which is actually not that much. But they h

Well, they are paying around 4% GDP in debt (2.5% real, since some creditors are allowing for a non-service period), which is actually not that much. But they have a huge debt/GDP ratio (around 200%), which has dramatically increased during the crisis, specially during the austerity period imposed by the creditors. So, austerity is not working, there is not much more that can be squeezed, and the Greek worry is that squeezing more public spending will actually further reduce GDP, making the ratios all the worse. A big chunk of the Greek economy is based on public spending now, and lots of people are living off the state, because unemployment has soared. This situation is far from ideal, but what can be done? Sure, you can just force all those people under bridges, but is that in the interest of Greece or Europe? Faced with that prospect, Greece would leave the Euro, which would be a blow to the Euro-project. We have a terminal patient, and we can help it. With a bit of luck, in a couple of decades it will become a productive member of society again. The Marshall Plan had a lots of good reasons going for it, and probably some critique too. In the end it proved to be a good solution, which increased prosperity worldwide. It was a political decision. You could have very well argued: "those Germans, they looked for it and they got what they deserve: let them rot", but we didn't, and we are all the better off. Regarding countering the USSR: as I have argued above, geo-politically the situation is right now very similar. The Greeks are courting the Russians and the Chinese (or the other way around). Do we want to split the European project at the Balkans?

marcoperaza 11y ago
I understand your perspective on this, I just think that bailout money should be contingent on measures to make Greece's public sector sustainable. At the very least, that means cutting the deficit so it grows slower than GDP. In the long run, it means fixing Greece's deeper economic issues. The EU is already being very generous by accepting tax hikes in a lot of areas where Greece should really be implementing spending cuts. But Syriza wants to convert even more of the spending cuts into tax hikes. The structural reforms are more important. Deregulating professional trades, selling off nationalized industries, easing bureaucratic barriers to business. The problem is that the Greeks have elected an anti-capitalist far-left party, which is fundamentally opposed to the goal of the reforms. If the EU is going to budge at all, it should be on accepting a longer term deficit reduction plan. They shouldn't budge on the structural reforms.

marcoperaza 11y ago

I understand your perspective on this, I just think that bailout money should be contingent on measures to make Greece's public sector sustainable. At the very least, that means cutting the deficit so it grows slower than GDP. In the long run, it means fixing Greece's deeper economic issues. The EU is already being very generous by accepting tax hikes in a lot of areas where Greece should really be implementing spending cuts. But Syriza wants to convert even more of the spending cuts into tax hikes. The structural reforms are more important. Deregulating professional trades, selling off nationalized industries, easing bureaucratic barriers to business. The problem is that the Greeks have elected an anti-capitalist far-left party, which is fundamentally opposed to the goal of the reforms. If the EU is going to budge at all, it should be on accepting a longer term deficit reduction plan. They shouldn't budge on the structural reforms.