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I am astouned by all the comments, who say that "Greeks were getting a shitty deal" or that the bailout terms were somewhat "unfair". Facts are: Greece had a s

I am astouned by all the comments, who say that "Greeks were getting a shitty deal" or that the bailout terms were somewhat "unfair". Facts are: Greece had a spending deficit for several decades now. This spending deficit accumulated to such a big dept, that no investors were willing to lend greece any more money. 18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. In return they had an agreement that greece would cut their spending. Greece never lived up to the agreements it made. In the last weeks 18 european countries offered greece another bailout, where greece would receive several bilions again. In return they asked greece to finally cut spendings. Now greece voted against this bailout. There are a lot of people in europe (myself included, I am from Germany by the way) who are not willing to transfer further billions of euroes to greece, just so that a socialist party can fullfil its "promises" and increase their deficit.

dkopi 11y ago
One thing's for sure, without countries to bail them out, without banks to lend them more money - the greeks will have no other choice but to increase their tax income and decrease their spending. Austerity as some might call it.
- atmosx 11y ago
  If the ECB keeps the current regime for another 2 to 3 weeks, then Greece might be "forced" to go back to the Drachma and devalue. At that point you don't need to increase tax incomes but you might have a series of other problems (control devaluations, impose capital control for an undetermined period, etc.) - but in the long run, might be positive (According, to Krugman, Stiglitz, S. Keen, etc.)
  - dkopi 11y ago
    Inflating away debt is another form of increasing tax revenues. Also known as Seigniorage. It's just a more sophisticated way of collecting taxes, and it will harm the poorest greeks and middle class first.
- Mikeb85 11y ago
  Take away the debt payments, they're already running a surplus. No new loans = no reason to pay creditors. This is a worse outcome for Germany than Greece...
icebraining 11y ago
From the IMF report: http://graphics8.nytimes.com/images/2012/02/06/opinion/020612krugman5/020612krugman5-blog480.jpg http://graphics8.nytimes.com/images/2012/02/06/opinion/02061...
agounaris 11y ago
You don't speak for the people of Europe. The Eurozone deals will never help Greece recover...I just assume you didn't read the proposals. Anyway it's amazing that still some German naively believes that the problem is the "spending" of money.
- derriz 11y ago
  The Eurozone loans helped my country (another EU country which went bust in the GFC) recover. They allowed a "soft landing" in correcting government deficits. Of course it entailed new unpopular taxes and cutting government spending but most people are grateful that the country did not have to experience economic Armageddon - unfortunately it looks like Greece is about to experience this.
  - Amezarak 11y ago
    > hey allowed a "soft landing" in correcting government deficits. Of course it entailed new unpopular taxes and cutting government spending but most people are grateful that the country did not have to experience economic Armageddon - unfortunately it looks like Greece is about to experience this. There isn't a single EU country where 'correcting government deficits' with taxes and spending cuts helped the economy. You'd have been better off without austerity. The reason the Greek situation is now so terrible is exactly because of the austerity measures. They caused the 'economic armageddon.' Count your blessings that the austerity in most EU countries was not so bad, though in most of them GDP never has recovered and unemployment is in the low double digits. Not exactly a miracle story. Compare with the US, which managed a tepid stimulus.
    - nullrouted 11y ago
      So...when the Greeks have no money tomorrow, how do you think that is going to effect their economy? I guess for me the ultimate question to the "no" voters is now what? No one is going to lend Greece money anymore and they have no reserves so basically they are going to have to cut no matter what.
- SneakerXZ 11y ago
atmosx 11y ago
The fact that you are convinced that Germany acted in Greece's best interest is what sets us apart. Your money went mainly to your Banks, via Greece. Concluding, I'd rather go back to the Drachma and blow the Euro project than die starving becuase it suits your country's political class. ps. Even if Greece doesn't put the last nail on the coffin of the EU-project, I'm 100% sure that the UK will.
- ori_b 11y ago
  > The fact that you are convinced that Germany acted in Greece's best interest is what sets us apart. Greece not failing to pay creditors is good for both Greece and Greek's creditors. I'm not sure why you feel that the two are mutually exclusive.
- paskster 11y ago
  I am very pro Euro. But I don't like the fact that a single country in Europe feels that 18 other countries have to pay their debt. These bailouts in the past were signed from the greece government in the best interest of its people. A lot of people make it seem that we (non-greece european) somewhat forced theses agreements onto greece. In fact these bailouts where were unpopular in Germany, because it cost us a lot of our money, we could have spent on infrastructure, education, etc. Therefore I would love Greece to give up the Euro currency and leave the European Union, so that these other 18 countries don't feel any obligation anymore to transfer more money to greece. I believe that Europe will be stronger that way. Because a vision of a truly united European Union can only be reached if all countries play by the same rules and abide to their agreements.
  - twobits 11y ago
    You are not paying for greece. You (and all european tax payers) are paying for Deutsche Bank. Private debts were made public. You should ask Mrs. Merkel and Mr. Schauble, why you should pay for debts that were private.
  - mb_72 11y ago
    Half-Australian and half-Estonian here; I can only agree with your sentiment. It seems to me that decades of corruption, tax avoidance and financial mismanagement is responsible for the position that Greece is in today, and I don't see why it is necessary for other countries to reward such behaviour with continued support and understanding. You don't like the terms of financial support offered by the EU? Well, maybe you should have thought about how your country has been run and realise that - sooner or later - that is going to cost you jobs and economic stability.
rjurney 11y ago
Had their economy grown, they could have afforded the payments. This is the real problem, and the bailout doesn't fix it.
- dev1n 11y ago
  Exactly. Austerity was not what the Greeks needed. They received chemo therapy for a flu. Guided investment advice was all they needed. Not forced budget cuts which caused severe harm to their economy and pretty soon the global economy. Edit: spelling
dantheman 11y ago
The transfers to greece of the last few years were to a large extent a way of transferring private debt of german and french banks to the general EU populace. Overall, I agree - greece needs to get its house in order and that involves making tough decisions, cutting jobs, lowering benefits, etc. They don't have the revenue to support the quality of life that they want to provide.
- agounaris 11y ago
  It's not a matter of quality of life, its a matter of a sustainable debt. Increasing dramatically the taxation is killing the private sector which is the one that produced profits.
- kansface 11y ago
  They have ~25% unemployment - over 50% for youth... it seems like they already did plenty of that.
  - peterfirefly 11y ago
    Actually, no. Their labour market is extremely rigid, which is precisely one of the things that everybody wants them to fix -- and what they don't want to fix.
- NotableAlamode 11y ago
  The transfers to greece of the last few years were to a large extent a way of transferring private debt of german and french banks to the general EU populace. This is just not the case. Only about 1/3 of the bailout money went this way (and certainly not to the "general EU populace", only to some european tax payers). The remaining 2/3 went to Greek consumption in some form or other. It is estimated that 1/3 of the bailout money went to off-shore accounts. Moreover, taking on Greek debt is a massive gift to Greece, for this money no longer needs to be paid back, hence is a gift.
  - MrBuddyCasino 11y ago
    I'd be very interested in sources for this.
Kapura 11y ago
I understand your position, and the Greeks are truly in a hole that they have dug themselves, but do you think that this latest package would have helped them? It seems to me, as an outsider, that the political problems and ESPECIALLY the tax collection problems need to be addressed for any permanent change. Perhaps rather than austerity measures, the EU should have targeted the Greek public directly and tied the bailout funds to the citizens willingness to fund their own government.
- return0 11y ago
  How could that be possible? If foreign countries interfere with local tax collection then its a much bigger breach of sovereignity. The Eurozone is not a federal country. The lenders thus set monetary targets.
- TheCondor 11y ago
  With that much debt is there a way to help them? It's going to be painful regardless. The tax and corruption situation is an interesting one, it's not particularly new there. Who'd have ever guessed that a country with nearly 50% tax evasion might reneg on some debts? It's really bad when the local banks just factor that in when handing out loans. It's become part of the culture. I don't know how you fix that. I wish the Greek people the best though, it's a beautiful place
jwdunne 11y ago
Except that major spending cuts during a downturn are harmful, which is what Greece has been in pretty much since austerity. Greece has problems, I admit, but austerity during a downturn only makes that worse. Party comes along and says it wants to do invest in the economy because, clearly, austerity isn't working and we won't give them a chance. There are reports from the IMF and many other leading figures that now say austerity has had more of a negative impact than once thought. Greece has been cutting its spending or else it wouldn't have been given more money, as per the terms of the bail out. The effects of those cuts have been mediocre and, in fairness, harmful. http://www.theguardian.com/business/2014/feb/26/imf-inequality-economic-growth http://www.theguardian.com/business/2014/feb/26/imf-inequali... http://www.theguardian.com/business/2015/jun/15/focus-on-low-income-families-to-boost-economic-growth-says-imf-study http://www.theguardian.com/business/2015/jun/15/focus-on-low... http://www.washingtonpost.com/blogs/wonkblog/wp/2012/10/12/imf-austerity-is-much-worse-for-the-economy-than-we-thought/ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/10/12/i... http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/18/austerity-may-help-growth-during-good-times-but-man-does-it-hurt-during-bad-times/feed/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/18/a... http://www.bbc.co.uk/news/magazine-22223190 http://www.bbc.co.uk/news/magazine-22223190 http://www.bloomberg.com/bw/articles/2013-04-18/faq-reinhart-rogoff-and-the-excel-error-that-changed-history http://www.bloomberg.com/bw/articles/2013-04-18/faq-reinhart...
- crimsoneer 11y ago
  Greece was doing rather well at the end of 2014 before Syriza decided to stop playing ball.
  - jwdunne 11y ago
    I don't see an unemployment rate of 25% plus more spending cuts inbound as doing rather well. It was falling but very slowly.
  - vidarh 11y ago
    Not according to the IMF, who, while their report have some choice words for the Greek government too, have made it quite clear that the bailouts have been a total disaster.
ypcx 11y ago
It is staggering how brainwashed you are. Please try to form your opinion elsewhere than from the mainstream media.
- dang 11y ago
  Personal attacks are not allowed on HN, even when someone is wrong.
mnglkhn2 11y ago
It's like everybody all of the sudden will come to the conclusion that paying their mortgages is somehow a humiliating and oppressive endeavor. Nobody is really familiar with what the "oppressive" terms really are, but everybody feels like the Greeks are totally undeserving of paying their debts. How does everybody feel like to have their subway fares reduced to $0, the way the Greeks had them for the past decades? I think it is just fair that New Yorkers travel at the expense of the NY State, otherwise it is totally oppressive! /sarcasm Lots of projections in all these opinions. But for somebody that actually had to go through austerity measures, I am not happy to see others asking for a handout, with the only justification being "just because, Greek history". EDIT: and if you downvote, at least be New Yorker enough, and justify your action. Otherwise, I would say that you just want a handout.
- mnglkhn2 11y ago
  Only 300 of the area’s homes claimed to have swimming pools, which require owners to pay a luxury tax. But when officials looked into the low number, using Google Earth to scan the back yards, they found the number of pools to be closer to 20,000. The fraudsters responded by buying camouflage-print tarps to cover up their pools, the Mail reported. (http://nypost.com/2015/07/05/decades-of-fraud-have-swindled-greeks-out-of-billions/ http://nypost.com/2015/07/05/decades-of-fraud-have-swindled-...) In Greece, A Hairdresser Can Retire At 50 With Full Benefits (http://www.businessinsider.com/in-greece-you-can-retire-at-50-with-full-benefits-2010-3 http://www.businessinsider.com/in-greece-you-can-retire-at-5...)
- llamataboot 11y ago
  You do realize that plenty of US states carry a "deficit" right? Many states receive more money from the Federal budget than they pay back in. We can debate why this is the case, but I don't hear anyone telling Mississippi or Alabama to suck the bitter pill of austerity or leave the US.
  - mnglkhn2 11y ago
    And for that these states accept the uniform monetary policy developed at federal level. Greece can have an argument if they would accept the same. But if you want to be independent from a fiscal point of view, then assume the whole thing.
makeitsuckless 11y ago
You omitted the part where Greece repeatedly lied about the fact that it wasn't meeting its obligations. And now our TV's are showing images of Greeks celebrating that they've told us to f-off with our euros. That's going to kill any kind of sympathy they still had when what's left of the Greek economy is going to crash hard over the next few weeks and months. This is game over. Any compromise that was still possible is now dead, even if EU leaders would be willing to compromise, they can no longer sell this to their own people.
scythe 11y ago
It's easy to see the story from that side and I think it's not "wrong", but the geopolitical story is being missed. Greece has in a way helped the ECB by distracting economic pundits from their various other failures in the recession and recovery process. The truth is that we're all so used to being mad at the ECB that liberals are now confounded by the least bad thing they've done in a while. It's long since known and agreed that austerity policies were detrimental to the recovery. The thing is that Europe's failure to pursue expansionary monetary policyead to both diminished inflation (which means debts have larger real value) and diminished growth in the eurozone, both of which hindered Greece et al's ability to repay debts regardless of the terms they were given. That's added to the fact that inflation couldn't happen and internal devaluation wouldn't happen as chosen by the Greek people. And internal devaluation, what happened in Ireland, is a pretty ugly process, though Ireland would be okay right now if the ECB hadn't also blown the recovery in general, methinks. Now the issue is whether Greece gets what everyone else got. It's fair, but it isn't exactly right. And the ECB has distracted everyone from their big failures. This is also being tossed around as proof that currency unions don't work! That's kind of a strong conclusion. I think it could work if it were well managed and smaller and less diverse. A couple of economies in similar situations with proper economic management can probably keep things together with only a small chance of an Ireland-style devaluation (and no Greece events), and in the future the charter could predict these sort of things. That it turned into a call for political fusion of Europe is scary. I get that nationalism is bad and all, but you want to redraw the map and the culture... ...so you can keep the money.
ghostunit 11y ago
If you feel that "Greece" must be punished for fiscal irresponsibility with chaos and starvation, then while we're still bundling people into convenient country packages, why shouldn't "the USA" be bombed and occupied? Oh, those wars and massacres weren't your decisions? Then, you think the average Greek took those Eurozone loans and bailouts themselves?
- tedunangst 11y ago
  Perhaps because the US hasn't yet voted not to pay its debts.
Al-Khwarizmi 11y ago
"Transfer further billions of euroes to Greece" is precisely what the troika wanted to do, in exchange for draconian austerity measures like those of the last few years, which caused a 25% drop in GDP and a rise of the debt/GDP ratio from 105% to 175% (http://www.tradingeconomics.com/greece/government-debt-to-gdp http://www.tradingeconomics.com/greece/government-debt-to-gd...). The IMF themselves have said that Greek debt is unsustainable and a significant haircut is needed (although their head Lagarde ignores their analysts). Keeping with the dysfunctional austerity plans would only make the debt ball, and the eventual inevitable default, larger and larger. So even from a purely egoistic point of view, you should support the OXI.
- korisnik 11y ago
  >draconian austerity measures like those of the last few years, which caused a 25% drop in GDP and a rise of the debt/GDP ratio from 105% to 175% Easy there. The austerity measures and the troika only came into play in 2010. After Greek government called EC-ECB-IMF because it could not solve its own crisis. By 2010 (prior to Troika-imposed austerity), as a result of the Global Recession, Greece had already lost about 15% of its GDP and its debt had risen to about ~150% of its GDP. It is extremely disingenuous to say that austerity caused a 25% drop in GDP or that it caused the debt/GDP ratio to go from 105% to 175%.
  - Al-Khwarizmi 11y ago
    True that the troika only came into play in 2010, but the Greek governments of Karamanlis and Papandreou had been applying austerity packages themselves (although admittedly rather milder than the troika's) since the start of the recession.
- g4k 11y ago
  > The IMF themselves have said that Greek debt is unsustainable and a significant haircut is needed (although their head Lagarde ignores their analysts). This is actually not true. Based on the 2nd bailout terms from 2012 Greece doesn't have to pay interest on the loans until 2023 and does not have to start paying them back for the next 27 years.
liebknecht 11y ago
The reason you're "astounded" by all these comments may have to do with the fact that you seem to rather limited awareness of the basic history regarding Greece's current situation. For example, there's no mention at all in your remarks about the well-known shenanigans that led to Greece joining the Eurozone (and camouflaging its debts) in the first place (with the connivance of certain large foreign banks). Or of the naked arrogance and condescending, hoof-in-mouth verbiage we've been treated to by certain foreign leaders (like Angela Merkel) in recent months. Just simply: "look at those Greeks -- they're irresponsible, they're overspending, and now they're looking for another handout", basically.
- tptacek 11y ago
  As opposed to "look at those Germans, they're terrorists who are using control of the ECB to extort a regime change in Greece", which is an equally hyperbolic message --- and, in contrast the to the summary you've provided, actually a message overtly sent by Greece's leadership.
  - liebknecht 11y ago
    Except that Varoufakis was referring the Troika (or rather, their actions: he used the word "terrorism", not the more loaded term "terrorist") when he said that, not to the Germans as a people (or even to German banks, or their politicians). At no point in the El Mundo article did he call the Germans "terrorists", and -- worse than hyperbolic -- it's irresponsible for you to suggest that he did.
    - tptacek 11y ago
      The troika includes Germany. My impression of Germany's role in the troika ("Germany is the backbone of obduracy in the troika") could be wrong. Is it? Here's what Varoufakis said: What they’re doing with Greece has a name — terrorism [...] Why did they force us to close the banks? To instill fear in people. And spreading fear is called terrorism. My point, of course, is that these were both hyperbolic arguments.
spdy 11y ago
The funniest part is that people believe any western country will repay their dept. Neither Germany/France/Italy/Spain etc. will ever repay and the day when interest is the #1 spending point in every countries budgets we will maybe wake up and see that the system only benefits they few. The Eurozone needs a vision for its future especially on the dept problem. Piketty said it correctly what we need now is a dept conference to renegotiate the dept of all EU states. With this its possible to change the contracts of Maastricht and create new ways of financing the eurozone and implement ways of enforcing them as well. In a few months Spain and Portugal will elect left wing parties into their government because these countries suffer under the austerity programs as well. Do we want them to exit as well?
- jessaustin 11y ago
  Yeah when they don't have Greece to kick around anymore it's not as though the Germans and French are going to stop telling other nations how to live. It's funny how all the people who assured us for years that the Grexit would never occur are still just as certain, only now they're certain that the Grexit will teach all those other Mediterraneans a lesson in frugality. It's not a question of whether someone else will exit, it's a question of who will be first. Especially in about five years when it will be clear what a boon the Grexit will have been for the Greeks.
- izacus 11y ago
  I very much doubt anyone believes that Greece will repay their debt (even the IMF report was very clear about it). I also very much doubt other EU members would oppose erasure of debt / severe refinancing if Greece would prove that they're able to curb their deficit (after all, that's exactly what happened in Ireland).
trhway 11y ago
>18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. help them with what? One of the achievement of modern civilization is the recognition that bankruptcy is the preferable way than debtor prison to deal with non-ability to pay debts. >Now greece voted against this bailout. There are a lot of people in europe (myself included, I am from Germany by the way) who are not willing to transfer further billions of euroes to greece, just so that a socialist party can fullfil its "promises" and increase their deficit. if you noticed, Greeks have just agreed with you.
- tptacek 11y ago
  That's not entirely accurate. Some of the "No" votes may be agreeing with his statement, but the premise of the referendum was that it would strengthen Greek's negotiating hand: the "No" votes are supposed to represent a demand for better terms from the EU, not a rejection of the idea of a bailout altogether.
  - Jare 11y ago
    > the premise of the referendum was that it would strengthen Greek's negotiating hand Wrong. The reason for a referendum is so, whatever comes next, the people and the governing party go in knowing they are together, with a level of bonding that is extremely rare in our cynically modern western democracies. Compare with Spain's recently gag law, which was passed by the government against the will of almost half of their own voters (and presumably against 100% of everyone else).
    - tptacek 11y ago
      Somebody forgot to tell that to the government of Greece: http://www.reuters.com/article/2015/07/05/us-eurozone-greece-idUSKBN0P40EO20150705 http://www.reuters.com/article/2015/07/05/us-eurozone-greece...
  - lifeisstillgood 11y ago
    kinda... Yanis and tsiprias have been consistently clear - any deal must include debt restructuring. No sane person wants more debt looking at Greece's repayments levels, especially after 2020. The "No" vote, to my understanding, strengthens their demand to have whole debt restructuring included in this deal - not put off till later. Edit: this is a "strengthened hand", but subtly different to using that hand just to get more cash / debt. The ECB is like my bank manager wanting to give me an overdraft so I can make my mortgage payments so he does not have to foreclose. I want to have all debts up for discussion, he just goes on about overdrafts. It is forcing the EU to face up to the realities of a single currency and fiscal union. But at least it is a democractic approach...
natrius 11y ago
You're strongly implying that Greece didn't cut its spending, which is very incorrect. Greek spending is no longer the problem. https://www.vox.com/2015/6/30/8870257/greek-crisis-myth-austerity/in/8625476 https://www.vox.com/2015/6/30/8870257/greek-crisis-myth-aust...
learnstats2 11y ago
> 18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. In return they had an agreement that greece would cut their spending. OK, but the eurozone control the finances of the eurozone in a way which actively harms Greece's finances and economy. What will happen if Germany or France have an economic downturn? We already know the answer to this: the economies of small peripheral countries are thrown under the bus to protect the major ones. It should not be this way. If a country in the Eurozone is in trouble, they should be protected by the other countries sufficiently that they might be able to protect other countries, in turn, when the situation is reversed.
dia80 11y ago
It's a bit more complex than the Greek's have spent too much money and expecting Germans to bail them out. This situation was an inevitability [1] given the Eurozone's make up and the political classes being in denial has worsened it. [1] http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/ http://blog.mpettis.com/2015/02/syriza-and-the-french-indemn...
andmarios 11y ago
The main reason billions of euros “transferred” to Greece were to save German and French banks. This way our politicians (european citizens' politicians) turned a private debt to public debt that just keeps growing because everyone on the globe thinks that it is unserviceable, thus refuses to lent us. At the same time they sold us a “bad europe” story and sold you a “bad greeks” story. Most of the facts circling around (e.g Greeks average retirement age) are myths. Germany's minimum wage is double the average greek pension. Our prices in common goods don't differ much. One of the terms of our previous bailout was that people under 25 should work for 511 euros per month —that is gross salary. Can you survive on 400 euros per month (salary after deductions) in Germany? Neither can you in Greece. Now they want us to work for 300 euros a month. Do you think this is fair? We have a common currency. The currency's main purpose is to be used for the citizens' well being. But we can't manipulate our currency anymore because the rest of the EZ members (particularly Germany) have different plans. What can we do?
- dragandj 11y ago
  Please take a short trip a bit north, to Bulgaria (EU) or Macedonia (not EU) and you'll see that soon you'll have to make ends with 100 EUR a month, or even less. I do not know how many Drachmas that'll be, though, but that's the price of thinking with your pride...
abrezas 11y ago
For me, there are several reasons why the rest of the eurozone should help Greece get back on its feet, rather than only give it more loans: 1) Due to being in the monetary union, Greece is not able to print more money, devalue its currency or other monetary policies to help its economy. Greece is paying the price of being in a monetary union, and it should either get help from the other members of that union, or it is not really a union. 2) Also, take into account that Germany and other countries are benefitting from this monetary union by being able to use a currency that is devalued due to the poorer countries, and therefore is able to increase its export. 3) Much of the bailout went into the banks of other eurozone members therefore helping them as well. 4) Do not forget that Greece if not in the eurozone would be able to default on its debts, live on the primary surplus it is now generating and when it is considered a good debtor to get loans again. Instead of having to exit the eurozone (which would be a bad sign for the whole union) and default on its debts (which would mean other countries losing money) and THEN grow, it may be beneficial to everyone to do a debt restructuring. 5) Greece is paying an interest on the loan given to them to be able to pay the older debts to the ECB and others. They are not able to pay that interest on the subsequent loans and are asking to be able to use that for economic growth to pay the older loans! In a sense, you can see that as debt restructuring, which can also happen in other ways. This way creditors will also get their money back, altough restructured or payed later.
MrScruff 11y ago
This is nothing to with fairness. Greece need debt relief or it will collapse, and the creditors will still lose out. You're no doubt familiar with the concept of drawing a line in the sand and making decisions for the future common good, as happened with Germany's debts after WW2. The potential long term political and financial cost of abandoning Greece far outstrip the 70B it owes Germany. It will leave the European project in tatters, despite what Merkel assures us.
vegabook 11y ago
You forget that their are two Greeces, just like there are two Europes and increasingly, two Americas. Your comments are entirely reasonable when it comes to the rent-seeking corrupt upper classes in Greece who have run the country aground over 3 decades, costing both the European taxpayer and the honest working class Greek (who have voted NO). Your comments are unreasonable when taking into account the fact that the bailouts so far have overwhelmingly supported the existing wealthy (Greek and German) at the expense of the middle and lower classes (again, Greek and German (taxpayers)), who cannot be blamed for Greece's existing travails. The underlying issue here is that all European (and most American) banks are bankrupt, and that in order to support them we cannot let any of their assets go bad. Thus we must bailout their debtors (transfer of bad assets at inflated prices from the rich to the taxpayer). Watch this space. There is much more of this to come, and not only in Greece. It's what QE is all about. We're witnessing the weakest domino fall but there are many in the chain, and in all cases, pretending that people should "just pay their debts" is simplistic and ignorant of the unfair transfer of wealth happening before our eyes. Back to Mesopotamia: http://www.axel-troost.de/serveDocument.php?id=1967&file=5/5/19f.pdf http://www.axel-troost.de/serveDocument.php?id=1967&file=5/5...
JulianMorrison 11y ago
I don't think anybody sees Greece as innocent of creating the debt. But. 1. The ones bailed out have been private bankers, by public funds. 2. Austerity, demanded as the cure for deficit spending, has dragged Greece into a recession and achieved exactly none of its aims - spending is still high as a proportion of GDP, because GDP has crashed. 3. The creditors have stopped demanding austerity as a policy aimed at creating a viable economy, and switched to demanding it to punish the greeks for populist leftism, and to contain the anti-austerity parties in Europe, and because they have unprofessional snits against Tsipras. 4. The only sane answer is to write off a huge swathe of the debt, as patently irrecoverable, inject capital, give a decade long holiday from repayments, and let the Greek economy recover. 5. Only a NO vote could lead to this being on the table.
- Nelson69 11y ago
  Point 4 is sane? Greece doesn't seem interested in repaying their debt now, you think they're going to care in 10 years after just writing some of it off? Why won't they expect the rest to go away too? I think a lot of the "no" voters simply don't see any services from their government to justify their taxes, they already avoid taxes at endemic levels, and fundamentally don't actually feel any ownership for the debt. Moreover, can their economy recover without outside help? What does that actually look like? That's the bigger issue, any way you slice it, they got really used to making promises and living larger than they are. The wish or risk or whatever is that the ECB will want to recover some of that debt and in exchange for that wish, write off a large chunk of it and then continue to give them handouts. What does a viable Greek economy actually look like?
- Nelson69 11y ago
  Point 4 is sane? Greece doesn't seem interested in repaying their debt now, you think they're going to care in 10 years after just writing some of it off? Why won't they expect the rest to go away too? I think a lot of the "no" voters simply don't see any services from their government to justify their taxes, they already avoid taxes at endemic levels, and fundamentally don't actually feel any ownership for the debt. Moreover, can their economy recover without outside help? What does that actually look like? That's the bigger issue, any way you slice it, they got really used to making promises and living larger than they are. The wish or risk or whatever is that the ECB will want to recover some of that debt and in exchange for that wish, write off a large chunk of it and then continue to give them handouts. What does a viable Greek economy actually look like?
elorant 11y ago
Wow the amount of ignorance in this comment is staggering. Many countries have deficits for decades. Greece’s debt ballooned once we entered the Eurozone. From the hundreds of billions given as loans less than 20% went to our economy. Most were used to bailout EU banks, namely French and German ones. Greece never lived up to the agreement? Then how on earth did our GDP fall by 30% in five years? How come unemployment in young people reached 50% if we did nothing of what was agreed? The reason we rejected the last bailout was because it didn’t include any terms of debt relief which is the only way for the economy to recover. That and Tsipra’s incompetence paired by an equal amount of incompetence and lies from EU officials. As the saying goes, it takes two to tango. I’m not surprised that you are from Germany (I guess you read Bild a lot). Well I’m Greek and I have news for you. In 1954 we wrote off 50% of your debt to us. And we did it despite the fact that ten years ago you’ve invaded our country and wrecked havoc doing monstrosities like murdering whole villages including kids. We did out of solidarity to help your economy grow. It’s time now you do the same. It’s either that or we default and you can kiss your 70 bn loans goodbye. And then you can return to your miserable Mark because Euro will collapse sooner or later.
- exceptione 11y ago
  The reason we rejected thelast bailout was because it didn’t include any terms of debt relief which is the only way for the economy to recover. Well, according to many the way to recover is to make sure the state doesn't spend too much. The public sector is way too big and inefficient. Many european voters were against plunging into depts so that the money could be sent to greece. European leaders did it in anyway, in part to save the banks. Everyone in the other euro countries is carrying a huge dept for you right now, thousands of euro's even for newborns. Even though the european leaders vowed to their voters that all their money was going to be paid back to them, Greece had to pay back less than the european voters gave due to low interest and generous installments. Some earlier debts were written off already. Also, if Greece would have started to give the creditors slight hints that they were actually making the economy more healthy, than it would be easier for the euro leaders to break their pledges and forgive debts. The current economy doesn't suffer from the debts, it is suffering because it is structurally broken. Before Tsipras started to take over, the economy was getting better. He increased government spending. Even if all Greece's debts were forgiven, it would still have the problem of a third world economy. RIGHT NOW Tsipras is asking for more money, because the economy is structurally not sustainable.
rmdi 11y ago
Regardless of who's at fault here, and regardless of several wrong points you've made, what people need to realize is that when attempts have been made, when whatever asked has been materialized, and yet no solution is visible, then something needs to change. There's just this something that I can't help but add. There isn't a single country that has received more debt relief in modern history than Germany, but for a reason people seem to forget that. It's possibly because of that that you are now present. If one were to continue this would turn into some sort of debate/argument of you-did-that so I do-this. No, this isn't (again) about who's at fault, it's about realizing what is actually doable and what isn't and acting based on that. It's about not repeating a paraphrased form of history as we know it, which we so happily seem to indeed be doing. Edit: Learning how to separate paragraphs.
alkonaut 11y ago
Terms for new loans should of course include measures for improving the economy, but austerity never will. The last few years have shown (again) that austerity will only ever contract an already stressed economy. A reasonable deal should be a stimulating one. Not one with just spending cuts. A major haircut of existing debt, and enough new money flowing in to actually stimulate growth. There are no good options here. It's not like Greece will return to the Drachma and become a picturesque olive exporting tourist attraction. What will happen is that the following decade of poor economy will see extremists and Putin run the country. From a democratic and security perspective it's likely the lesser evil to just support the Greek economy. Those of us in the rest of Europe (not least in Germany) have made good money from having an artificially low interest rate for years, at the expense of the PIIGS countries.
mschuster91 11y ago
> 18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. That's a legend. The money went to the banks and to various arms companies.
ubernostrum 11y ago
Of course, the flip side is: https://news.ycombinator.com/item?id=9832222 https://news.ycombinator.com/item?id=9832222
rhodri 11y ago
I'll just leave this here: http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go http://www.theguardian.com/world/2015/jun/29/where-did-the-g...
seingen5 11y ago
Let me guess... You're not into the economy thing, are you? Because even the most amateur scholar of economics is able to understand that having Greece within the eurozone has helped Germany's exports by about 80-90 billion (can't get the source now). Right now, even the UK would rather have Greece on its own currency, so that the euro will be strenghened and UK will be in a position to ease its exports. And btw, you cant't really believe that you have given money to Greek citizens, money that otherwise would be in the pockets of german citizens. There's a thing called "banks". Since you are German, act like it, and do some research.
- dragandj 11y ago
  I have a still better plan: why don't they take even crappier Balkan economies in the eurozone instead of Greece, and "benefit" from even lower currency value, thus boosting exports to the max?

dkopi 11y ago

One thing's for sure, without countries to bail them out, without banks to lend them more money - the greeks will have no other choice but to increase their tax income and decrease their spending. Austerity as some might call it.

atmosx 11y ago
If the ECB keeps the current regime for another 2 to 3 weeks, then Greece might be "forced" to go back to the Drachma and devalue. At that point you don't need to increase tax incomes but you might have a series of other problems (control devaluations, impose capital control for an undetermined period, etc.) - but in the long run, might be positive (According, to Krugman, Stiglitz, S. Keen, etc.)
- dkopi 11y ago
  Inflating away debt is another form of increasing tax revenues. Also known as Seigniorage. It's just a more sophisticated way of collecting taxes, and it will harm the poorest greeks and middle class first.
Mikeb85 11y ago
Take away the debt payments, they're already running a surplus. No new loans = no reason to pay creditors. This is a worse outcome for Germany than Greece...

icebraining 11y ago

From the IMF report: http://graphics8.nytimes.com/images/2012/02/06/opinion/020612krugman5/020612krugman5-blog480.jpg http://graphics8.nytimes.com/images/2012/02/06/opinion/02061...

agounaris 11y ago

You don't speak for the people of Europe. The Eurozone deals will never help Greece recover...I just assume you didn't read the proposals. Anyway it's amazing that still some German naively believes that the problem is the "spending" of money.

derriz 11y ago
The Eurozone loans helped my country (another EU country which went bust in the GFC) recover. They allowed a "soft landing" in correcting government deficits. Of course it entailed new unpopular taxes and cutting government spending but most people are grateful that the country did not have to experience economic Armageddon - unfortunately it looks like Greece is about to experience this.
- Amezarak 11y ago
  > hey allowed a "soft landing" in correcting government deficits. Of course it entailed new unpopular taxes and cutting government spending but most people are grateful that the country did not have to experience economic Armageddon - unfortunately it looks like Greece is about to experience this. There isn't a single EU country where 'correcting government deficits' with taxes and spending cuts helped the economy. You'd have been better off without austerity. The reason the Greek situation is now so terrible is exactly because of the austerity measures. They caused the 'economic armageddon.' Count your blessings that the austerity in most EU countries was not so bad, though in most of them GDP never has recovered and unemployment is in the low double digits. Not exactly a miracle story. Compare with the US, which managed a tepid stimulus.
  - nullrouted 11y ago
    So...when the Greeks have no money tomorrow, how do you think that is going to effect their economy? I guess for me the ultimate question to the "no" voters is now what? No one is going to lend Greece money anymore and they have no reserves so basically they are going to have to cut no matter what.
SneakerXZ 11y ago

atmosx 11y ago

The fact that you are convinced that Germany acted in Greece's best interest is what sets us apart. Your money went mainly to your Banks, via Greece. Concluding, I'd rather go back to the Drachma and blow the Euro project than die starving becuase it suits your country's political class. ps. Even if Greece doesn't put the last nail on the coffin of the EU-project, I'm 100% sure that the UK will.

ori_b 11y ago
> The fact that you are convinced that Germany acted in Greece's best interest is what sets us apart. Greece not failing to pay creditors is good for both Greece and Greek's creditors. I'm not sure why you feel that the two are mutually exclusive.
paskster 11y ago
I am very pro Euro. But I don't like the fact that a single country in Europe feels that 18 other countries have to pay their debt. These bailouts in the past were signed from the greece government in the best interest of its people. A lot of people make it seem that we (non-greece european) somewhat forced theses agreements onto greece. In fact these bailouts where were unpopular in Germany, because it cost us a lot of our money, we could have spent on infrastructure, education, etc. Therefore I would love Greece to give up the Euro currency and leave the European Union, so that these other 18 countries don't feel any obligation anymore to transfer more money to greece. I believe that Europe will be stronger that way. Because a vision of a truly united European Union can only be reached if all countries play by the same rules and abide to their agreements.
- twobits 11y ago
  You are not paying for greece. You (and all european tax payers) are paying for Deutsche Bank. Private debts were made public. You should ask Mrs. Merkel and Mr. Schauble, why you should pay for debts that were private.
- mb_72 11y ago
  Half-Australian and half-Estonian here; I can only agree with your sentiment. It seems to me that decades of corruption, tax avoidance and financial mismanagement is responsible for the position that Greece is in today, and I don't see why it is necessary for other countries to reward such behaviour with continued support and understanding. You don't like the terms of financial support offered by the EU? Well, maybe you should have thought about how your country has been run and realise that - sooner or later - that is going to cost you jobs and economic stability.

rjurney 11y ago

Had their economy grown, they could have afforded the payments. This is the real problem, and the bailout doesn't fix it.

dev1n 11y ago
Exactly. Austerity was not what the Greeks needed. They received chemo therapy for a flu. Guided investment advice was all they needed. Not forced budget cuts which caused severe harm to their economy and pretty soon the global economy. Edit: spelling

dantheman 11y ago

The transfers to greece of the last few years were to a large extent a way of transferring private debt of german and french banks to the general EU populace. Overall, I agree - greece needs to get its house in order and that involves making tough decisions, cutting jobs, lowering benefits, etc. They don't have the revenue to support the quality of life that they want to provide.

agounaris 11y ago
It's not a matter of quality of life, its a matter of a sustainable debt. Increasing dramatically the taxation is killing the private sector which is the one that produced profits.
kansface 11y ago
They have ~25% unemployment - over 50% for youth... it seems like they already did plenty of that.
- peterfirefly 11y ago
  Actually, no. Their labour market is extremely rigid, which is precisely one of the things that everybody wants them to fix -- and what they don't want to fix.
NotableAlamode 11y ago
The transfers to greece of the last few years were to a large extent a way of transferring private debt of german and french banks to the general EU populace. This is just not the case. Only about 1/3 of the bailout money went this way (and certainly not to the "general EU populace", only to some european tax payers). The remaining 2/3 went to Greek consumption in some form or other. It is estimated that 1/3 of the bailout money went to off-shore accounts. Moreover, taking on Greek debt is a massive gift to Greece, for this money no longer needs to be paid back, hence is a gift.
- MrBuddyCasino 11y ago
  I'd be very interested in sources for this.

Kapura 11y ago

I understand your position, and the Greeks are truly in a hole that they have dug themselves, but do you think that this latest package would have helped them? It seems to me, as an outsider, that the political problems and ESPECIALLY the tax collection problems need to be addressed for any permanent change. Perhaps rather than austerity measures, the EU should have targeted the Greek public directly and tied the bailout funds to the citizens willingness to fund their own government.

return0 11y ago
How could that be possible? If foreign countries interfere with local tax collection then its a much bigger breach of sovereignity. The Eurozone is not a federal country. The lenders thus set monetary targets.
TheCondor 11y ago
With that much debt is there a way to help them? It's going to be painful regardless. The tax and corruption situation is an interesting one, it's not particularly new there. Who'd have ever guessed that a country with nearly 50% tax evasion might reneg on some debts? It's really bad when the local banks just factor that in when handing out loans. It's become part of the culture. I don't know how you fix that. I wish the Greek people the best though, it's a beautiful place

jwdunne 11y ago

Except that major spending cuts during a downturn are harmful, which is what Greece has been in pretty much since austerity. Greece has problems, I admit, but austerity during a downturn only makes that worse. Party comes along and says it wants to do invest in the economy because, clearly, austerity isn't working and we won't give them a chance. There are reports from the IMF and many other leading figures that now say austerity has had more of a negative impact than once thought. Greece has been cutting its spending or else it wouldn't have been given more money, as per the terms of the bail out. The effects of those cuts have been mediocre and, in fairness, harmful. http://www.theguardian.com/business/2014/feb/26/imf-inequality-economic-growth http://www.theguardian.com/business/2014/feb/26/imf-inequali... http://www.theguardian.com/business/2015/jun/15/focus-on-low-income-families-to-boost-economic-growth-says-imf-study http://www.theguardian.com/business/2015/jun/15/focus-on-low... http://www.washingtonpost.com/blogs/wonkblog/wp/2012/10/12/imf-austerity-is-much-worse-for-the-economy-than-we-thought/ http://www.washingtonpost.com/blogs/wonkblog/wp/2012/10/12/i... http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/18/austerity-may-help-growth-during-good-times-but-man-does-it-hurt-during-bad-times/feed/ http://www.washingtonpost.com/blogs/wonkblog/wp/2013/04/18/a... http://www.bbc.co.uk/news/magazine-22223190 http://www.bbc.co.uk/news/magazine-22223190 http://www.bloomberg.com/bw/articles/2013-04-18/faq-reinhart-rogoff-and-the-excel-error-that-changed-history http://www.bloomberg.com/bw/articles/2013-04-18/faq-reinhart...

crimsoneer 11y ago
Greece was doing rather well at the end of 2014 before Syriza decided to stop playing ball.
- jwdunne 11y ago
  I don't see an unemployment rate of 25% plus more spending cuts inbound as doing rather well. It was falling but very slowly.
- vidarh 11y ago
  Not according to the IMF, who, while their report have some choice words for the Greek government too, have made it quite clear that the bailouts have been a total disaster.

ypcx 11y ago

It is staggering how brainwashed you are. Please try to form your opinion elsewhere than from the mainstream media.

dang 11y ago
Personal attacks are not allowed on HN, even when someone is wrong.

mnglkhn2 11y ago

It's like everybody all of the sudden will come to the conclusion that paying their mortgages is somehow a humiliating and oppressive endeavor. Nobody is really familiar with what the "oppressive" terms really are, but everybody feels like the Greeks are totally undeserving of paying their debts. How does everybody feel like to have their subway fares reduced to $0, the way the Greeks had them for the past decades? I think it is just fair that New Yorkers travel at the expense of the NY State, otherwise it is totally oppressive! /sarcasm Lots of projections in all these opinions. But for somebody that actually had to go through austerity measures, I am not happy to see others asking for a handout, with the only justification being "just because, Greek history". EDIT: and if you downvote, at least be New Yorker enough, and justify your action. Otherwise, I would say that you just want a handout.

mnglkhn2 11y ago
Only 300 of the area’s homes claimed to have swimming pools, which require owners to pay a luxury tax. But when officials looked into the low number, using Google Earth to scan the back yards, they found the number of pools to be closer to 20,000. The fraudsters responded by buying camouflage-print tarps to cover up their pools, the Mail reported. (http://nypost.com/2015/07/05/decades-of-fraud-have-swindled-greeks-out-of-billions/ http://nypost.com/2015/07/05/decades-of-fraud-have-swindled-...) In Greece, A Hairdresser Can Retire At 50 With Full Benefits (http://www.businessinsider.com/in-greece-you-can-retire-at-50-with-full-benefits-2010-3 http://www.businessinsider.com/in-greece-you-can-retire-at-5...)
llamataboot 11y ago
You do realize that plenty of US states carry a "deficit" right? Many states receive more money from the Federal budget than they pay back in. We can debate why this is the case, but I don't hear anyone telling Mississippi or Alabama to suck the bitter pill of austerity or leave the US.
- mnglkhn2 11y ago
  And for that these states accept the uniform monetary policy developed at federal level. Greece can have an argument if they would accept the same. But if you want to be independent from a fiscal point of view, then assume the whole thing.

makeitsuckless 11y ago

You omitted the part where Greece repeatedly lied about the fact that it wasn't meeting its obligations. And now our TV's are showing images of Greeks celebrating that they've told us to f-off with our euros. That's going to kill any kind of sympathy they still had when what's left of the Greek economy is going to crash hard over the next few weeks and months. This is game over. Any compromise that was still possible is now dead, even if EU leaders would be willing to compromise, they can no longer sell this to their own people.

scythe 11y ago

It's easy to see the story from that side and I think it's not "wrong", but the geopolitical story is being missed. Greece has in a way helped the ECB by distracting economic pundits from their various other failures in the recession and recovery process. The truth is that we're all so used to being mad at the ECB that liberals are now confounded by the least bad thing they've done in a while. It's long since known and agreed that austerity policies were detrimental to the recovery. The thing is that Europe's failure to pursue expansionary monetary policyead to both diminished inflation (which means debts have larger real value) and diminished growth in the eurozone, both of which hindered Greece et al's ability to repay debts regardless of the terms they were given. That's added to the fact that inflation couldn't happen and internal devaluation wouldn't happen as chosen by the Greek people. And internal devaluation, what happened in Ireland, is a pretty ugly process, though Ireland would be okay right now if the ECB hadn't also blown the recovery in general, methinks. Now the issue is whether Greece gets what everyone else got. It's fair, but it isn't exactly right. And the ECB has distracted everyone from their big failures. This is also being tossed around as proof that currency unions don't work! That's kind of a strong conclusion. I think it could work if it were well managed and smaller and less diverse. A couple of economies in similar situations with proper economic management can probably keep things together with only a small chance of an Ireland-style devaluation (and no Greece events), and in the future the charter could predict these sort of things. That it turned into a call for political fusion of Europe is scary. I get that nationalism is bad and all, but you want to redraw the map and the culture... ...so you can keep the money.

ghostunit 11y ago

If you feel that "Greece" must be punished for fiscal irresponsibility with chaos and starvation, then while we're still bundling people into convenient country packages, why shouldn't "the USA" be bombed and occupied? Oh, those wars and massacres weren't your decisions? Then, you think the average Greek took those Eurozone loans and bailouts themselves?

tedunangst 11y ago
Perhaps because the US hasn't yet voted not to pay its debts.

Al-Khwarizmi 11y ago

"Transfer further billions of euroes to Greece" is precisely what the troika wanted to do, in exchange for draconian austerity measures like those of the last few years, which caused a 25% drop in GDP and a rise of the debt/GDP ratio from 105% to 175% (http://www.tradingeconomics.com/greece/government-debt-to-gdp http://www.tradingeconomics.com/greece/government-debt-to-gd...). The IMF themselves have said that Greek debt is unsustainable and a significant haircut is needed (although their head Lagarde ignores their analysts). Keeping with the dysfunctional austerity plans would only make the debt ball, and the eventual inevitable default, larger and larger. So even from a purely egoistic point of view, you should support the OXI.

korisnik 11y ago
>draconian austerity measures like those of the last few years, which caused a 25% drop in GDP and a rise of the debt/GDP ratio from 105% to 175% Easy there. The austerity measures and the troika only came into play in 2010. After Greek government called EC-ECB-IMF because it could not solve its own crisis. By 2010 (prior to Troika-imposed austerity), as a result of the Global Recession, Greece had already lost about 15% of its GDP and its debt had risen to about ~150% of its GDP. It is extremely disingenuous to say that austerity caused a 25% drop in GDP or that it caused the debt/GDP ratio to go from 105% to 175%.
- Al-Khwarizmi 11y ago
  True that the troika only came into play in 2010, but the Greek governments of Karamanlis and Papandreou had been applying austerity packages themselves (although admittedly rather milder than the troika's) since the start of the recession.
g4k 11y ago
> The IMF themselves have said that Greek debt is unsustainable and a significant haircut is needed (although their head Lagarde ignores their analysts). This is actually not true. Based on the 2nd bailout terms from 2012 Greece doesn't have to pay interest on the loans until 2023 and does not have to start paying them back for the next 27 years.

liebknecht 11y ago

The reason you're "astounded" by all these comments may have to do with the fact that you seem to rather limited awareness of the basic history regarding Greece's current situation. For example, there's no mention at all in your remarks about the well-known shenanigans that led to Greece joining the Eurozone (and camouflaging its debts) in the first place (with the connivance of certain large foreign banks). Or of the naked arrogance and condescending, hoof-in-mouth verbiage we've been treated to by certain foreign leaders (like Angela Merkel) in recent months. Just simply: "look at those Greeks -- they're irresponsible, they're overspending, and now they're looking for another handout", basically.

tptacek 11y ago
As opposed to "look at those Germans, they're terrorists who are using control of the ECB to extort a regime change in Greece", which is an equally hyperbolic message --- and, in contrast the to the summary you've provided, actually a message overtly sent by Greece's leadership.
- liebknecht 11y ago
  Except that Varoufakis was referring the Troika (or rather, their actions: he used the word "terrorism", not the more loaded term "terrorist") when he said that, not to the Germans as a people (or even to German banks, or their politicians). At no point in the El Mundo article did he call the Germans "terrorists", and -- worse than hyperbolic -- it's irresponsible for you to suggest that he did.
  - tptacek 11y ago
    The troika includes Germany. My impression of Germany's role in the troika ("Germany is the backbone of obduracy in the troika") could be wrong. Is it? Here's what Varoufakis said: What they’re doing with Greece has a name — terrorism [...] Why did they force us to close the banks? To instill fear in people. And spreading fear is called terrorism. My point, of course, is that these were both hyperbolic arguments.

spdy 11y ago

The funniest part is that people believe any western country will repay their dept. Neither Germany/France/Italy/Spain etc. will ever repay and the day when interest is the #1 spending point in every countries budgets we will maybe wake up and see that the system only benefits they few. The Eurozone needs a vision for its future especially on the dept problem. Piketty said it correctly what we need now is a dept conference to renegotiate the dept of all EU states. With this its possible to change the contracts of Maastricht and create new ways of financing the eurozone and implement ways of enforcing them as well. In a few months Spain and Portugal will elect left wing parties into their government because these countries suffer under the austerity programs as well. Do we want them to exit as well?

jessaustin 11y ago
Yeah when they don't have Greece to kick around anymore it's not as though the Germans and French are going to stop telling other nations how to live. It's funny how all the people who assured us for years that the Grexit would never occur are still just as certain, only now they're certain that the Grexit will teach all those other Mediterraneans a lesson in frugality. It's not a question of whether someone else will exit, it's a question of who will be first. Especially in about five years when it will be clear what a boon the Grexit will have been for the Greeks.
izacus 11y ago
I very much doubt anyone believes that Greece will repay their debt (even the IMF report was very clear about it). I also very much doubt other EU members would oppose erasure of debt / severe refinancing if Greece would prove that they're able to curb their deficit (after all, that's exactly what happened in Ireland).

trhway 11y ago

>18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. help them with what? One of the achievement of modern civilization is the recognition that bankruptcy is the preferable way than debtor prison to deal with non-ability to pay debts. >Now greece voted against this bailout. There are a lot of people in europe (myself included, I am from Germany by the way) who are not willing to transfer further billions of euroes to greece, just so that a socialist party can fullfil its "promises" and increase their deficit. if you noticed, Greeks have just agreed with you.

tptacek 11y ago
That's not entirely accurate. Some of the "No" votes may be agreeing with his statement, but the premise of the referendum was that it would strengthen Greek's negotiating hand: the "No" votes are supposed to represent a demand for better terms from the EU, not a rejection of the idea of a bailout altogether.
- Jare 11y ago
  > the premise of the referendum was that it would strengthen Greek's negotiating hand Wrong. The reason for a referendum is so, whatever comes next, the people and the governing party go in knowing they are together, with a level of bonding that is extremely rare in our cynically modern western democracies. Compare with Spain's recently gag law, which was passed by the government against the will of almost half of their own voters (and presumably against 100% of everyone else).
  - tptacek 11y ago
    Somebody forgot to tell that to the government of Greece: http://www.reuters.com/article/2015/07/05/us-eurozone-greece-idUSKBN0P40EO20150705 http://www.reuters.com/article/2015/07/05/us-eurozone-greece...
- lifeisstillgood 11y ago
  kinda... Yanis and tsiprias have been consistently clear - any deal must include debt restructuring. No sane person wants more debt looking at Greece's repayments levels, especially after 2020. The "No" vote, to my understanding, strengthens their demand to have whole debt restructuring included in this deal - not put off till later. Edit: this is a "strengthened hand", but subtly different to using that hand just to get more cash / debt. The ECB is like my bank manager wanting to give me an overdraft so I can make my mortgage payments so he does not have to foreclose. I want to have all debts up for discussion, he just goes on about overdrafts. It is forcing the EU to face up to the realities of a single currency and fiscal union. But at least it is a democractic approach...

natrius 11y ago

You're strongly implying that Greece didn't cut its spending, which is very incorrect. Greek spending is no longer the problem. https://www.vox.com/2015/6/30/8870257/greek-crisis-myth-austerity/in/8625476 https://www.vox.com/2015/6/30/8870257/greek-crisis-myth-aust...

learnstats2 11y ago

> 18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. In return they had an agreement that greece would cut their spending. OK, but the eurozone control the finances of the eurozone in a way which actively harms Greece's finances and economy. What will happen if Germany or France have an economic downturn? We already know the answer to this: the economies of small peripheral countries are thrown under the bus to protect the major ones. It should not be this way. If a country in the Eurozone is in trouble, they should be protected by the other countries sufficiently that they might be able to protect other countries, in turn, when the situation is reversed.

dia80 11y ago

It's a bit more complex than the Greek's have spent too much money and expecting Germans to bail them out. This situation was an inevitability [1] given the Eurozone's make up and the political classes being in denial has worsened it. [1] http://blog.mpettis.com/2015/02/syriza-and-the-french-indemnity-of-1871-73/ http://blog.mpettis.com/2015/02/syriza-and-the-french-indemn...

andmarios 11y ago

The main reason billions of euros “transferred” to Greece were to save German and French banks. This way our politicians (european citizens' politicians) turned a private debt to public debt that just keeps growing because everyone on the globe thinks that it is unserviceable, thus refuses to lent us. At the same time they sold us a “bad europe” story and sold you a “bad greeks” story. Most of the facts circling around (e.g Greeks average retirement age) are myths. Germany's minimum wage is double the average greek pension. Our prices in common goods don't differ much. One of the terms of our previous bailout was that people under 25 should work for 511 euros per month —that is gross salary. Can you survive on 400 euros per month (salary after deductions) in Germany? Neither can you in Greece. Now they want us to work for 300 euros a month. Do you think this is fair? We have a common currency. The currency's main purpose is to be used for the citizens' well being. But we can't manipulate our currency anymore because the rest of the EZ members (particularly Germany) have different plans. What can we do?

dragandj 11y ago
Please take a short trip a bit north, to Bulgaria (EU) or Macedonia (not EU) and you'll see that soon you'll have to make ends with 100 EUR a month, or even less. I do not know how many Drachmas that'll be, though, but that's the price of thinking with your pride...

abrezas 11y ago

For me, there are several reasons why the rest of the eurozone should help Greece get back on its feet, rather than only give it more loans: 1) Due to being in the monetary union, Greece is not able to print more money, devalue its currency or other monetary policies to help its economy. Greece is paying the price of being in a monetary union, and it should either get help from the other members of that union, or it is not really a union. 2) Also, take into account that Germany and other countries are benefitting from this monetary union by being able to use a currency that is devalued due to the poorer countries, and therefore is able to increase its export. 3) Much of the bailout went into the banks of other eurozone members therefore helping them as well. 4) Do not forget that Greece if not in the eurozone would be able to default on its debts, live on the primary surplus it is now generating and when it is considered a good debtor to get loans again. Instead of having to exit the eurozone (which would be a bad sign for the whole union) and default on its debts (which would mean other countries losing money) and THEN grow, it may be beneficial to everyone to do a debt restructuring. 5) Greece is paying an interest on the loan given to them to be able to pay the older debts to the ECB and others. They are not able to pay that interest on the subsequent loans and are asking to be able to use that for economic growth to pay the older loans! In a sense, you can see that as debt restructuring, which can also happen in other ways. This way creditors will also get their money back, altough restructured or payed later.

MrScruff 11y ago

This is nothing to with fairness. Greece need debt relief or it will collapse, and the creditors will still lose out. You're no doubt familiar with the concept of drawing a line in the sand and making decisions for the future common good, as happened with Germany's debts after WW2. The potential long term political and financial cost of abandoning Greece far outstrip the 70B it owes Germany. It will leave the European project in tatters, despite what Merkel assures us.

vegabook 11y ago

You forget that their are two Greeces, just like there are two Europes and increasingly, two Americas. Your comments are entirely reasonable when it comes to the rent-seeking corrupt upper classes in Greece who have run the country aground over 3 decades, costing both the European taxpayer and the honest working class Greek (who have voted NO). Your comments are unreasonable when taking into account the fact that the bailouts so far have overwhelmingly supported the existing wealthy (Greek and German) at the expense of the middle and lower classes (again, Greek and German (taxpayers)), who cannot be blamed for Greece's existing travails. The underlying issue here is that all European (and most American) banks are bankrupt, and that in order to support them we cannot let any of their assets go bad. Thus we must bailout their debtors (transfer of bad assets at inflated prices from the rich to the taxpayer). Watch this space. There is much more of this to come, and not only in Greece. It's what QE is all about. We're witnessing the weakest domino fall but there are many in the chain, and in all cases, pretending that people should "just pay their debts" is simplistic and ignorant of the unfair transfer of wealth happening before our eyes. Back to Mesopotamia: http://www.axel-troost.de/serveDocument.php?id=1967&file=5/5/19f.pdf http://www.axel-troost.de/serveDocument.php?id=1967&file=5/5...

JulianMorrison 11y ago

I don't think anybody sees Greece as innocent of creating the debt. But. 1. The ones bailed out have been private bankers, by public funds. 2. Austerity, demanded as the cure for deficit spending, has dragged Greece into a recession and achieved exactly none of its aims - spending is still high as a proportion of GDP, because GDP has crashed. 3. The creditors have stopped demanding austerity as a policy aimed at creating a viable economy, and switched to demanding it to punish the greeks for populist leftism, and to contain the anti-austerity parties in Europe, and because they have unprofessional snits against Tsipras. 4. The only sane answer is to write off a huge swathe of the debt, as patently irrecoverable, inject capital, give a decade long holiday from repayments, and let the Greek economy recover. 5. Only a NO vote could lead to this being on the table.

Nelson69 11y ago
Point 4 is sane? Greece doesn't seem interested in repaying their debt now, you think they're going to care in 10 years after just writing some of it off? Why won't they expect the rest to go away too? I think a lot of the "no" voters simply don't see any services from their government to justify their taxes, they already avoid taxes at endemic levels, and fundamentally don't actually feel any ownership for the debt. Moreover, can their economy recover without outside help? What does that actually look like? That's the bigger issue, any way you slice it, they got really used to making promises and living larger than they are. The wish or risk or whatever is that the ECB will want to recover some of that debt and in exchange for that wish, write off a large chunk of it and then continue to give them handouts. What does a viable Greek economy actually look like?
Nelson69 11y ago
Point 4 is sane? Greece doesn't seem interested in repaying their debt now, you think they're going to care in 10 years after just writing some of it off? Why won't they expect the rest to go away too? I think a lot of the "no" voters simply don't see any services from their government to justify their taxes, they already avoid taxes at endemic levels, and fundamentally don't actually feel any ownership for the debt. Moreover, can their economy recover without outside help? What does that actually look like? That's the bigger issue, any way you slice it, they got really used to making promises and living larger than they are. The wish or risk or whatever is that the ECB will want to recover some of that debt and in exchange for that wish, write off a large chunk of it and then continue to give them handouts. What does a viable Greek economy actually look like?

elorant 11y ago

Wow the amount of ignorance in this comment is staggering. Many countries have deficits for decades. Greece’s debt ballooned once we entered the Eurozone. From the hundreds of billions given as loans less than 20% went to our economy. Most were used to bailout EU banks, namely French and German ones. Greece never lived up to the agreement? Then how on earth did our GDP fall by 30% in five years? How come unemployment in young people reached 50% if we did nothing of what was agreed? The reason we rejected the last bailout was because it didn’t include any terms of debt relief which is the only way for the economy to recover. That and Tsipra’s incompetence paired by an equal amount of incompetence and lies from EU officials. As the saying goes, it takes two to tango. I’m not surprised that you are from Germany (I guess you read Bild a lot). Well I’m Greek and I have news for you. In 1954 we wrote off 50% of your debt to us. And we did it despite the fact that ten years ago you’ve invaded our country and wrecked havoc doing monstrosities like murdering whole villages including kids. We did out of solidarity to help your economy grow. It’s time now you do the same. It’s either that or we default and you can kiss your 70 bn loans goodbye. And then you can return to your miserable Mark because Euro will collapse sooner or later.

exceptione 11y ago
The reason we rejected thelast bailout was because it didn’t include any terms of debt relief which is the only way for the economy to recover. Well, according to many the way to recover is to make sure the state doesn't spend too much. The public sector is way too big and inefficient. Many european voters were against plunging into depts so that the money could be sent to greece. European leaders did it in anyway, in part to save the banks. Everyone in the other euro countries is carrying a huge dept for you right now, thousands of euro's even for newborns. Even though the european leaders vowed to their voters that all their money was going to be paid back to them, Greece had to pay back less than the european voters gave due to low interest and generous installments. Some earlier debts were written off already. Also, if Greece would have started to give the creditors slight hints that they were actually making the economy more healthy, than it would be easier for the euro leaders to break their pledges and forgive debts. The current economy doesn't suffer from the debts, it is suffering because it is structurally broken. Before Tsipras started to take over, the economy was getting better. He increased government spending. Even if all Greece's debts were forgiven, it would still have the problem of a third world economy. RIGHT NOW Tsipras is asking for more money, because the economy is structurally not sustainable.

rmdi 11y ago

Regardless of who's at fault here, and regardless of several wrong points you've made, what people need to realize is that when attempts have been made, when whatever asked has been materialized, and yet no solution is visible, then something needs to change. There's just this something that I can't help but add. There isn't a single country that has received more debt relief in modern history than Germany, but for a reason people seem to forget that. It's possibly because of that that you are now present. If one were to continue this would turn into some sort of debate/argument of you-did-that so I do-this. No, this isn't (again) about who's at fault, it's about realizing what is actually doable and what isn't and acting based on that. It's about not repeating a paraphrased form of history as we know it, which we so happily seem to indeed be doing. Edit: Learning how to separate paragraphs.

alkonaut 11y ago

Terms for new loans should of course include measures for improving the economy, but austerity never will. The last few years have shown (again) that austerity will only ever contract an already stressed economy. A reasonable deal should be a stimulating one. Not one with just spending cuts. A major haircut of existing debt, and enough new money flowing in to actually stimulate growth. There are no good options here. It's not like Greece will return to the Drachma and become a picturesque olive exporting tourist attraction. What will happen is that the following decade of poor economy will see extremists and Putin run the country. From a democratic and security perspective it's likely the lesser evil to just support the Greek economy. Those of us in the rest of Europe (not least in Germany) have made good money from having an artificially low interest rate for years, at the expense of the PIIGS countries.

mschuster91 11y ago

> 18 european countries transferred billions of euros in the last couple of years to greece, to help the country and the people. That's a legend. The money went to the banks and to various arms companies.

ubernostrum 11y ago

Of course, the flip side is: https://news.ycombinator.com/item?id=9832222 https://news.ycombinator.com/item?id=9832222

rhodri 11y ago

I'll just leave this here: http://www.theguardian.com/world/2015/jun/29/where-did-the-greek-bailout-money-go http://www.theguardian.com/world/2015/jun/29/where-did-the-g...

seingen5 11y ago

Let me guess... You're not into the economy thing, are you? Because even the most amateur scholar of economics is able to understand that having Greece within the eurozone has helped Germany's exports by about 80-90 billion (can't get the source now). Right now, even the UK would rather have Greece on its own currency, so that the euro will be strenghened and UK will be in a position to ease its exports. And btw, you cant't really believe that you have given money to Greek citizens, money that otherwise would be in the pockets of german citizens. There's a thing called "banks". Since you are German, act like it, and do some research.

dragandj 11y ago
I have a still better plan: why don't they take even crappier Balkan economies in the eurozone instead of Greece, and "benefit" from even lower currency value, thus boosting exports to the max?