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Yes, pretty much. The author's argument is that everybody knew that their economic state was misrepresented, so the banks should have never lend them money in t

Yes, pretty much. The author's argument is that everybody knew that their economic state was misrepresented, so the banks should have never lend them money in the first place. The mismanagement leading up to the financial crises was of course the fault of the Greek government. However, the reforms that the EU has proposed/enforced since then seem to have been more about punishing the Greeks than about actually building a properly functioning economy. That might feel justified (and because of that it has the support of many voters) but long-term it is not a viable solution to the problem.

mike_hearn 11y ago
The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. Maybe hairdressing should not be considered a 'dangerous profession', thus unlocking various benefits. Maybe Greek train drivers should not be paid $130,000 a year to drive near-empty trains. Maybe Greece should be able to grow its own food instead of importing more than half of it. Greece is hosed because, as the article points out, it is an incredibly screwed up and corrupt country. The EU is desperately trying to make it a few percent less screwed up, and mostly getting nowhere. Greece absolutely isn't hosed because of those awful European creditors who deserve to be punished for their naive belief that maybe Greece would improve. I mean, just go take a look at the garbage that has been pouring out of Greece and ordinary Greek people about German in recent times. Allusions to Hitler seem to fall from their mouths every single day. The idea that maybe Germans should not be paying for Greeks is not fascism, yet they routinely act as if it is. Greece has no real alternative but to adopt severe reforms and that means severe "austerity", whereby "austerity" of course what people mean is shrinking the Greek state to a size more appropriate to the size of its economy.
- DangerousPie 11y ago
  Sure, some of the austerity measures make sense. Tax evasion and the bloated public sector are a huge issue and need to be fixed. But it has to happen in a way that doesn't completely destroy the economy in the process.
- Amezarak 11y ago
  > Greece has no real alternative but to adopt severe reforms and that means severe "austerity", whereby "austerity" of course what people mean is shrinking the Greek state to a size more appropriate to the size of its economy. Greece has a perfectly workable alternative in a Grexit. It would help them enormously and not require austerity but there are political reasons that won't allow it. If Greece was using the drachma, this would not be a problem. The other problem with austerity measures is that they have a tendency to inhibit growth or even shrink the economy; shrinking the government further certainly doesn't help that situation. EDIT: I forgot to add that Greece has a primary budget surplus - meaning that if it wasn't for the debt they owe, they'd be doing fantastically budgetarily.
  - Xylakant 11y ago
    As a purely economic solution, a Grexit combined with a default might work. However, who would step up and finance the ongoing deficit? Interest rates even for short term borrowing would be unsustainable. What would happen in the meantime, until such a Grexit could actually be performed? The banks don't have money any more, there's no infrastructure to print new bills, there's no plan on how to actually do that. It's the choice between austerity because the lenders want it or austerity because there's no money left. On top of that, would Greece leave the EU? There's a lot of greek living and working abroad under the EU residence/work rules. Would such a vote not be perceived as a "No" to europe, effectively pushing greece out of the EU at least on a temporary basis? I'm not convinced that the Grexit is a workable alternative in a larger context.
    - Amezarak 11y ago
      > As a purely economic solution, a Grexit combined with a default might work. However, who would step up and finance the ongoing deficit? As I added in my edit, Greece has a primary budget surplus. There would be no ongoing deficit. Existing debt would be paid off with the expedient of default and currency devaluation, just as other countries have historically done. A little rough patch and then things look up. Seems a much healthier alternative than decades of economic suffering due to more and more austerity and the consequences thereof. > there's no infrastructure to print new bills I can't imagine that is a very hard problem to solve. > On top of that, would Greece leave the EU? There's a lot of greek living and working abroad under the EU residence/work rules. Would such a vote not be perceived as a "No" to europe, effectively pushing greece out of the EU at least on a temporary basis? Does leaving the Euro mean leaving the Eurozone? That's an honest question. I don't think it does, but I've heard this said before. On your final point, I don't disagree: at least right now leaving the Eurozone is politically untenable. But I suspect that economically it might be the most sensible thing to do, and not just for Greece. Unless Europe forms a real fiscal union, this kind of madness will happen over and over.
- digikata 11y ago
  The reforms may be a long term solution, but pushing austerity to far makes the end solution push out in time and actually make it less likely that the loans are able to be paid back in a reasonable time frame.
- taki1 11y ago
  So if you have known all of that you still invite them to the Euro, you still lend them like there is no tomorrow, and then you put all the blame on them? What kind of investor are you? A german banker? Ja wohl! Ich know all of thiz but I still lend them because if antyhing happens I call up Die Frau and she get our back. Nice, really nice.
- taki3 11y ago
  So if you have known all of that you still invite them to the Euro? You still lend them like there is no tomorrow eve though you have known this stuff has been going on for decades? And then you put all the blame on them? What kind of investor are you? A German banker? Ja wohl! Ich know all of thiz and that I shouldn't lend them any money! But I still lend them because if antyhing happens I call up Die Frau and she get our back. Nice, really nice. So German too!
- tacone 11y ago
  > The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. What's the retirement age of the other people in Europe, excuse me? 62 like in Germany? 67+ like in Italy? > Greece is hosed because, as the article points out, it is an incredibly screwed up and corrupt country. Japan is often ranked as the most corrupted country in the world, but still is going fine. It resisted many crises, and it's one of the most powerful economies in the world. You may guess that corruption is not part of the equation then. Isn't USA corrupted? Isn't China? The whole idea that economies fall down because of corruption is non-sense. As long as money stealed by corrupted people stays in the country the economy does not suffer that much. Corruption issue is about social justice more than everything else.
  - westiseast 11y ago
    I think you're looking at corruption in a one dimensional way. Corruption generally acts as a tax on the economy, a drag factor. Most countries experience corruption, but mitigate it with dynamic economies, productive work forces, abundant natural resources or whatever. Greece hasn't really mitigated corruption, and has compounded it with a range of other problems. Corruption is prt of the Greek problem, not the sum of it.
    - visarga 11y ago
      Maybe they could put some islands up for sale? They have tons of them. That kind of restructuring would make it easier to maintain their living standards.
  - rosser 11y ago
    Japan is often ranked as the most corrupted country in the world... [Citation needed] I searched for "most corrupt countries" and pulled up the first dozen-odd resulting pages. Not one of them mentioned Japan.
    - EliRivers 11y ago
      I certainly don't think of Japan as corrupt in the more common way, but in terms of being institutionally compromised, the Japanese government is effectively in the business of maintaining and giving money to the institutionally corrupt construction industry, permanently and forever, no matter how unnecessary and unwanted the construction is. They have got some outstandingly unnecessary and unwanted construction programmes. Certainly by no means one of the most corrupt, though.
- josephlord 11y ago
  No reforms in the world will allow Greece to meet the current liabilities, even the IMF says so. The bigger the surplus the Government runs (to pay back the creditors) the more the economy will shrink and the further more they will miss their target by. Germany isn't paying for Greece, it (well the troika but Germany is significantly calling the shots) is effectively governing Greece by a series of manufactured crises every 6 months in which they can impose conditions (detailed policy requirements on internal issues including pensions and taxes) for the next payment (which is 90% transferred to creditors rather than going to Greece itself). Whether fascism is the right word or not there is something profoundly undemocratic about the situation and there are several valid comparisons with fascism. Singling out a groups as scapegoats for all blame and the aspect of collective punishment. Sensible people trying to maximise the return on their loans would restructure them to take some loss but to enable Greece to recover to be able to pay the bulk of them. Instead the focus seems to be punishment for irresponsible lending.
  - mafribe 11y ago
    Singling out a groups as scapegoats for all blame and the aspect of collective punishment In line with many on the right, you are singling out Germany as a group as a scapegoat! Indeed Syriza's approach to the negotiations was to run a divide-and-conquer on the EU, trying to pit the rest of the EU against Germany. This backfired badly. Germany isn't paying for Greece In what sense? Greece owes Germany €88.7 Billion. Sensible people trying to maximise the return on their loans would restructure them to take some loss but to enable Greece to recover to be able to pay the bulk of them. Which is of course exactly what the troika is trying to do (however imperfectly), and much debt has already been written off or rolled over, but the Syriza government is blocking this as much as possible. there is something profoundly undemocratic Greece is perfectly free democratically to decide to ignore the troika, and default on all debt. Greece is also free to other other countries to pay for its debt, e.g. Japan, the US, Venezuela. But Greece has no unconditional right to other people's money. Why should Latvia and Lithuania, who are much poorer than Greece, finance a ridiculously bloated Greek military? There are much poorer countries still, Cambodia, Malawi, Niger, Angola. Why is it so vital that the rest of the world blows billions on fairly wealthy Greece, rather than these much more needy countries?
- bjourne 11y ago
  Greeks have one of the higher average retirement ages in Europe: http://www.newstatesman.com/blogs/world-affairs/2012/05/exploding-myth-feckless-lazy-greeks http://www.newstatesman.com/blogs/world-affairs/2012/05/expl... 61.7 for Greece, 60.9 is the EU average.
  - ageek123 11y ago
    Not quite. Check out the quotes from the Greek labor minister in the following article. The situation is much worse than it seems. http://greece.greekreporter.com/2014/12/04/75-of-greek-pensioners-enjoy-early-retirement/ http://greece.greekreporter.com/2014/12/04/75-of-greek-pensi...
    - rurban 11y ago
      This happens all over Europe. All unionized and high profile workers successfully demand earlier and earlier retirements. Check the numbers. Greece' average retirement age is above the EU average age.
narrator 11y ago
The derivatives that underwrote the debt made it all ok though. Same thing happened with the mortgage bubble. It's an easy way to turn a bunch of garbage into a bunch of AAA prime credit stuff. When the whole thing collapses, all the bankers get 100 cents on the dollar courtesy of central bank printing and sticking it to the taxpayer.
- azernik 11y ago
  The key difference here is that the banks have already been bailed out (when international institutions like the IMF and ECB took over the loans), and now those institutions are demanding that instead of the taxpayer picking up the bill, the Greek pensioner do so. Shame.
return0 11y ago
The reforms were not "punishing", they just were never implemented in full due to resistance from the people. Even today, the majority prefers a clash and chaos to reforms.
brohee 11y ago
Implementing a land registry and getting people to pay taxes is not punishment... What part of the reform is actually punitive? The history of the Greek land registry is kinda hilarious btw...http://openeurope.org.uk/blog/reforming-greece-easier-said-done-never-ending-case-land-registry/ http://openeurope.org.uk/blog/reforming-greece-easier-said-d...
- cgio 11y ago
  The part that led to 25% drop in GDP and three times the unemployment rate. The part that took a 50bn problem and made it 330. You can say whatever you want about the incompetence of Greek governments, but the wise foreign advisors managed to be even worse in every respect (e.g. using wrong multipliers to calculate impact of reforms and even making growth assumptions in an economy they themselves dried up from investment.)
- miopa 11y ago
  There is an additional reason that makes the 'Cadastre' extremly difficult project for Greece. A lot of the land in northern Greece is claimed (with documents) by people who are now citizens of Republic of Macedonia. Greece will break some EU laws if it doesn't honor those documents, but that land is used for more than 60 years by other people or the Greek state.
  - dragandj 11y ago
    Ah, unwillingness to return stolen property to the righteous owners is a valid excuse?

mike_hearn 11y ago

The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. Maybe hairdressing should not be considered a 'dangerous profession', thus unlocking various benefits. Maybe Greek train drivers should not be paid $130,000 a year to drive near-empty trains. Maybe Greece should be able to grow its own food instead of importing more than half of it. Greece is hosed because, as the article points out, it is an incredibly screwed up and corrupt country. The EU is desperately trying to make it a few percent less screwed up, and mostly getting nowhere. Greece absolutely isn't hosed because of those awful European creditors who deserve to be punished for their naive belief that maybe Greece would improve. I mean, just go take a look at the garbage that has been pouring out of Greece and ordinary Greek people about German in recent times. Allusions to Hitler seem to fall from their mouths every single day. The idea that maybe Germans should not be paying for Greeks is not fascism, yet they routinely act as if it is. Greece has no real alternative but to adopt severe reforms and that means severe "austerity", whereby "austerity" of course what people mean is shrinking the Greek state to a size more appropriate to the size of its economy.

DangerousPie 11y ago
Sure, some of the austerity measures make sense. Tax evasion and the bloated public sector are a huge issue and need to be fixed. But it has to happen in a way that doesn't completely destroy the economy in the process.
Amezarak 11y ago
> Greece has no real alternative but to adopt severe reforms and that means severe "austerity", whereby "austerity" of course what people mean is shrinking the Greek state to a size more appropriate to the size of its economy. Greece has a perfectly workable alternative in a Grexit. It would help them enormously and not require austerity but there are political reasons that won't allow it. If Greece was using the drachma, this would not be a problem. The other problem with austerity measures is that they have a tendency to inhibit growth or even shrink the economy; shrinking the government further certainly doesn't help that situation. EDIT: I forgot to add that Greece has a primary budget surplus - meaning that if it wasn't for the debt they owe, they'd be doing fantastically budgetarily.
- Xylakant 11y ago
  As a purely economic solution, a Grexit combined with a default might work. However, who would step up and finance the ongoing deficit? Interest rates even for short term borrowing would be unsustainable. What would happen in the meantime, until such a Grexit could actually be performed? The banks don't have money any more, there's no infrastructure to print new bills, there's no plan on how to actually do that. It's the choice between austerity because the lenders want it or austerity because there's no money left. On top of that, would Greece leave the EU? There's a lot of greek living and working abroad under the EU residence/work rules. Would such a vote not be perceived as a "No" to europe, effectively pushing greece out of the EU at least on a temporary basis? I'm not convinced that the Grexit is a workable alternative in a larger context.
  - Amezarak 11y ago
    > As a purely economic solution, a Grexit combined with a default might work. However, who would step up and finance the ongoing deficit? As I added in my edit, Greece has a primary budget surplus. There would be no ongoing deficit. Existing debt would be paid off with the expedient of default and currency devaluation, just as other countries have historically done. A little rough patch and then things look up. Seems a much healthier alternative than decades of economic suffering due to more and more austerity and the consequences thereof. > there's no infrastructure to print new bills I can't imagine that is a very hard problem to solve. > On top of that, would Greece leave the EU? There's a lot of greek living and working abroad under the EU residence/work rules. Would such a vote not be perceived as a "No" to europe, effectively pushing greece out of the EU at least on a temporary basis? Does leaving the Euro mean leaving the Eurozone? That's an honest question. I don't think it does, but I've heard this said before. On your final point, I don't disagree: at least right now leaving the Eurozone is politically untenable. But I suspect that economically it might be the most sensible thing to do, and not just for Greece. Unless Europe forms a real fiscal union, this kind of madness will happen over and over.
digikata 11y ago
The reforms may be a long term solution, but pushing austerity to far makes the end solution push out in time and actually make it less likely that the loans are able to be paid back in a reasonable time frame.
taki1 11y ago
So if you have known all of that you still invite them to the Euro, you still lend them like there is no tomorrow, and then you put all the blame on them? What kind of investor are you? A german banker? Ja wohl! Ich know all of thiz but I still lend them because if antyhing happens I call up Die Frau and she get our back. Nice, really nice.
taki3 11y ago
So if you have known all of that you still invite them to the Euro? You still lend them like there is no tomorrow eve though you have known this stuff has been going on for decades? And then you put all the blame on them? What kind of investor are you? A German banker? Ja wohl! Ich know all of thiz and that I shouldn't lend them any money! But I still lend them because if antyhing happens I call up Die Frau and she get our back. Nice, really nice. So German too!
tacone 11y ago
> The reforms are the only long term solution. They're reforms like, maybe Greeks should retire at the same age that other people in Europe do. What's the retirement age of the other people in Europe, excuse me? 62 like in Germany? 67+ like in Italy? > Greece is hosed because, as the article points out, it is an incredibly screwed up and corrupt country. Japan is often ranked as the most corrupted country in the world, but still is going fine. It resisted many crises, and it's one of the most powerful economies in the world. You may guess that corruption is not part of the equation then. Isn't USA corrupted? Isn't China? The whole idea that economies fall down because of corruption is non-sense. As long as money stealed by corrupted people stays in the country the economy does not suffer that much. Corruption issue is about social justice more than everything else.
- westiseast 11y ago
  I think you're looking at corruption in a one dimensional way. Corruption generally acts as a tax on the economy, a drag factor. Most countries experience corruption, but mitigate it with dynamic economies, productive work forces, abundant natural resources or whatever. Greece hasn't really mitigated corruption, and has compounded it with a range of other problems. Corruption is prt of the Greek problem, not the sum of it.
  - visarga 11y ago
    Maybe they could put some islands up for sale? They have tons of them. That kind of restructuring would make it easier to maintain their living standards.
- rosser 11y ago
  Japan is often ranked as the most corrupted country in the world... [Citation needed] I searched for "most corrupt countries" and pulled up the first dozen-odd resulting pages. Not one of them mentioned Japan.
  - EliRivers 11y ago
    I certainly don't think of Japan as corrupt in the more common way, but in terms of being institutionally compromised, the Japanese government is effectively in the business of maintaining and giving money to the institutionally corrupt construction industry, permanently and forever, no matter how unnecessary and unwanted the construction is. They have got some outstandingly unnecessary and unwanted construction programmes. Certainly by no means one of the most corrupt, though.
josephlord 11y ago
No reforms in the world will allow Greece to meet the current liabilities, even the IMF says so. The bigger the surplus the Government runs (to pay back the creditors) the more the economy will shrink and the further more they will miss their target by. Germany isn't paying for Greece, it (well the troika but Germany is significantly calling the shots) is effectively governing Greece by a series of manufactured crises every 6 months in which they can impose conditions (detailed policy requirements on internal issues including pensions and taxes) for the next payment (which is 90% transferred to creditors rather than going to Greece itself). Whether fascism is the right word or not there is something profoundly undemocratic about the situation and there are several valid comparisons with fascism. Singling out a groups as scapegoats for all blame and the aspect of collective punishment. Sensible people trying to maximise the return on their loans would restructure them to take some loss but to enable Greece to recover to be able to pay the bulk of them. Instead the focus seems to be punishment for irresponsible lending.
- mafribe 11y ago
  Singling out a groups as scapegoats for all blame and the aspect of collective punishment In line with many on the right, you are singling out Germany as a group as a scapegoat! Indeed Syriza's approach to the negotiations was to run a divide-and-conquer on the EU, trying to pit the rest of the EU against Germany. This backfired badly. Germany isn't paying for Greece In what sense? Greece owes Germany €88.7 Billion. Sensible people trying to maximise the return on their loans would restructure them to take some loss but to enable Greece to recover to be able to pay the bulk of them. Which is of course exactly what the troika is trying to do (however imperfectly), and much debt has already been written off or rolled over, but the Syriza government is blocking this as much as possible. there is something profoundly undemocratic Greece is perfectly free democratically to decide to ignore the troika, and default on all debt. Greece is also free to other other countries to pay for its debt, e.g. Japan, the US, Venezuela. But Greece has no unconditional right to other people's money. Why should Latvia and Lithuania, who are much poorer than Greece, finance a ridiculously bloated Greek military? There are much poorer countries still, Cambodia, Malawi, Niger, Angola. Why is it so vital that the rest of the world blows billions on fairly wealthy Greece, rather than these much more needy countries?
bjourne 11y ago
Greeks have one of the higher average retirement ages in Europe: http://www.newstatesman.com/blogs/world-affairs/2012/05/exploding-myth-feckless-lazy-greeks http://www.newstatesman.com/blogs/world-affairs/2012/05/expl... 61.7 for Greece, 60.9 is the EU average.
- ageek123 11y ago
  Not quite. Check out the quotes from the Greek labor minister in the following article. The situation is much worse than it seems. http://greece.greekreporter.com/2014/12/04/75-of-greek-pensioners-enjoy-early-retirement/ http://greece.greekreporter.com/2014/12/04/75-of-greek-pensi...
  - rurban 11y ago
    This happens all over Europe. All unionized and high profile workers successfully demand earlier and earlier retirements. Check the numbers. Greece' average retirement age is above the EU average age.

narrator 11y ago

The derivatives that underwrote the debt made it all ok though. Same thing happened with the mortgage bubble. It's an easy way to turn a bunch of garbage into a bunch of AAA prime credit stuff. When the whole thing collapses, all the bankers get 100 cents on the dollar courtesy of central bank printing and sticking it to the taxpayer.

azernik 11y ago
The key difference here is that the banks have already been bailed out (when international institutions like the IMF and ECB took over the loans), and now those institutions are demanding that instead of the taxpayer picking up the bill, the Greek pensioner do so. Shame.

return0 11y ago

The reforms were not "punishing", they just were never implemented in full due to resistance from the people. Even today, the majority prefers a clash and chaos to reforms.

brohee 11y ago

Implementing a land registry and getting people to pay taxes is not punishment... What part of the reform is actually punitive? The history of the Greek land registry is kinda hilarious btw...http://openeurope.org.uk/blog/reforming-greece-easier-said-done-never-ending-case-land-registry/ http://openeurope.org.uk/blog/reforming-greece-easier-said-d...

cgio 11y ago
The part that led to 25% drop in GDP and three times the unemployment rate. The part that took a 50bn problem and made it 330. You can say whatever you want about the incompetence of Greek governments, but the wise foreign advisors managed to be even worse in every respect (e.g. using wrong multipliers to calculate impact of reforms and even making growth assumptions in an economy they themselves dried up from investment.)
miopa 11y ago
There is an additional reason that makes the 'Cadastre' extremly difficult project for Greece. A lot of the land in northern Greece is claimed (with documents) by people who are now citizens of Republic of Macedonia. Greece will break some EU laws if it doesn't honor those documents, but that land is used for more than 60 years by other people or the Greek state.
- dragandj 11y ago
  Ah, unwillingness to return stolen property to the righteous owners is a valid excuse?