7 ms·

Germany Deserved Debt Relief, Greece Doesn't

33 points by hencq 11y ago

dudul 11y ago
"Germany had brought it on itself, of course, but it was no longer ruled by the Nazis" So when a country changes government we should just cancel their debts? The Nazis were democratically elected by the German people. Isn't it what democracy is about? Giving power and responsibility to the people. Greece accumulated their debt by implementing shitty socialist policies, Germany by killing over 70 million people.
- drzaiusapelord 11y ago
  The Russians said they weren't going to pay Soviet debt and told everyone to get lost. So yes, this actually happens. Credit ratings fall, etc but that's it.
  - user_0001 11y ago
    Having a few mega bombs probably help. I don't think it works out for some smaller countries
- deleted 11y ago
  [deleted]
- omonra 11y ago
  I guess what Germany went though can be described as complete change of the system (similar to Russia post revolution). Greeks merely elected a different government while keeping the system intact. If they were taken over by the Troika who would do as they pleased, I imagine that would likely precipitate debt writeoff. The problem is that the Greeks want to keep things as they were / be forgiven the debt. That's mutually exclusive.
  - afterburner 11y ago
    "The problem is that the Greeks want to keep things as they were" I don't think that's true, if you remember that they just elected a very different party into government.
    - omonra 11y ago
      I'm talking about things that led to the financial catastrophe: Low productivity Entitlement system Patronage system etc These may be nice things to have but they simply don't have the money to pay for them. The austerity they've felt has probably gone 1/3 of the way of what is needed (random guess - maybe more or less). And then they elected this new government because it was too painful. I fully sympathize with their plight - it's similar to a nation going on unemployment after having a nice middle-class job. But there is simply no moral case that other EU members should be sponsoring their former lifestyle.
      - afterburner 11y ago
        Austerity is not the same as entitlement reform. Austerity is targeting a surplus regardless of the costs, which in this case tanked GDP faster than they could pay off debt, meaning the dept to GDP ratio got much worse. Entitlement reform is an entirely separate thing. And given that Syriza has, in fact, slashed pensions and raised the retirement age, they are clearly willing to do that. Since they are a new party dedicated to breaking with the past governance, they are also willing to embrace change. And since they won the election, this means the population gave them a mandate to do exactly that. The old party, which was responsible for many of the entitlements in the first place, sure as heck wasn't willing to change Greece. Complaining about the new party seems strangely misplaced.
- VeejayRampay 11y ago
  As much as I agree with the point you're making, the total number of casualties for WW2 is generally estimated at around 70 million people (sad to have to say that, but it's give or take). Needless to say that not all of those deaths were caused by Germany itself. Though you could argue that their actions got everyone involved and, as such, the war started. Also, it's not as much the "shitty socialist policies" (whatever that means, since Greece was until fairly recently, ruled by a conservative party) but the fact that taxation has long been a problem there, leaving the coffers empty and abandoning a huge chunk of the economy to hand-to-hand payments, tax dodgers and overall fraudsters.
  - afterburner 11y ago
    "got everyone involved" Heh, that's putting it lightly. They attacked everyone.
    - exar0815 11y ago
      Well, the Japanese were in the attacking business pretty much, too... And sadly never accounted for their warcrimes....
- elektromekatron 11y ago
  As far as I am aware, Greece and several other of the periphery Eurozone countries with similar debt crisis, accumulated their debt over time through a system of credit swaps developed as financial instruments by companies including J P Morgan and Goldman Sachs, to enable perifery EU countries to hide their borrowing to make it easier to appear to be inline with the rest of the Eurozone, which was fine until the crash and the tide went out. If you were in a cynical and slightly paranoid frame of mind, it could even look like an economic attack on the Euro by US financial institutions.
- hencq 11y ago
  I often see the trope that the nazi were democratically elected, but that either demonstrates a very poor understanding of history or is a deliberate misrepresentation.
  - dudul 11y ago
    Care to elaborate?
    - hencq 11y ago
      I suggest reading the Wikipedia article on the rise of the Nazi party [1] or doing a Google search [2], but here's the gist of it: The Weimar Republic was very weak democratically and there were regular street battles between Nazis and Communists. The Nazi party got elected into parliament, but didn't have a majority. Still, Hitler was able to convince president Hindenburg to name him chancellor. After the Reichstag fire, most civil rights were suspended, effectively ending democracy. Most of Hitler's political opponents were arrested or removed from the Reichstag. Even so the Nazi party did not achieve a majority in the next elections. He then essentially intimidated parliament to grant him dictatorial powers in the Enabling Act. [1] https://en.wikipedia.org/wiki/Nazi_Party#Rise_to_power:_1925.E2.80.931933 https://en.wikipedia.org/wiki/Nazi_Party#Rise_to_power:_1925... [2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=was%20hitler%20democratically%20elected%20into%20office https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
- mikeash 11y ago
  The Nazis weren't elected. They never got anything close to a majority of the vote. They got a decent minority of the vote and then cheated their way to absolute power from there.
  - dudul 11y ago
    https://en.wikipedia.org/wiki/German_presidential_election,_1932 https://en.wikipedia.org/wiki/German_presidential_election,_... "[Hitler] was appointed chancellor on 30 January 1933." https://en.wikipedia.org/wiki/German_federal_election,_July_1932 https://en.wikipedia.org/wiki/German_federal_election,_July_... "They saw great gains by the Nazi Party, which for the first time became the largest party in parliament, though without winning a majority." That's what democracy is about, the dictatorship of the biggest minority. The constitution of the Weimar republic was crappy, but that's just how it was. How did they cheat their way to power?
    - dragonwriter 11y ago
      > That's what democracy is about, the dictatorship of the biggest minority. That's a notable failure mode of attempts to implement democratic ideals, but its definitely not what democracy is all about.
      - dudul 11y ago
        By "democracy" I meant "what today passes as democracy".
    - mikeash 11y ago
      Hitler being appointed Chancellor would have been unimportant if the rules had actually been followed, because the post of Chancellor had little power. However, not long afterwards the Reichstag was burned (quite possibly by the Nazis, but nobody knows who was really responsible) and the Nazis took advantage of the resulting environment of terror to seize power. The Enabling Act which gave Hitler absolute power was passed with a substantial number of legislators banned from participating, and the rest voted under explicit thread by armed Nazi troops.
smcl 11y ago
This trend of submitting posts sniping at Greece\Germany is starting to get ugly and isn't really suitable for HN, can we please stop?
- drzaiusapelord 11y ago
  It won't stop because there are lot of angry leftists (mostly Europeans) who are upset that Greece might actually be forced to pay its bills and what that means for the welfare state model the EU has built itself on. So they snip from the sidelines about nazis, war, banks, conspiracy theories, etc that has nothing to do with the subject at hand. Greece is something of a canary in the coalmine here about Europe's leftist policies. The economic situation in other countries like Portugal, Spain, Italy, Croatia, Bulgaria, etc shows that there's a larger problem here. They don't want to pay their bills or cut services. They just want an endless gravy train and soon might suffer the same consequences as Greece. Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state and even some of them have problems with youth unemployment, job growth, low military spending, almost no defense against an expansionist Putin outside of the US Military (whose spending they are first to criticize), etc. We're witnessing the end of the welfare state as we know it, and apparently a lot of Europeans can't handle that basic fact. Apparently from the knee-jerk drive-by downvotes, they can't handle this comment as well.
  - ojbyrne 11y ago
    If your second last sentence is true, then you can't have monetary union. Break up the Euro.
    - drzaiusapelord 11y ago
      This is also my opinion as well. A shared currency is just a bad idea and that's something the English realized early on, or at least the Thatcher administration did. Her 1995 book "Path to Power" pretty much predicted this situation.
      - 11y ago
deleted 11y ago
[deleted]
- omonra 11y ago
  Did you even read the article?
  - deleted 11y ago
    [deleted]
    - drzaiusapelord 11y ago
      60/40 from 60% of eligible voters is far, far from a strong mandate. This is a very contentious issue within Greece as well. Its a majority win of course, but its certainly not 90/10 or even 80/20.
      - afterburner 11y ago
        You don't pay attention to many elections do you? 60/40 is a blowout for the popular vote, and 60% turnout is large. Also, 60 is 50% more than 40.
        drzaiusapelord 11y ago
        Elections and referendums are very different things. Popular referendums often go way very high towards one side. 60/40 in that context just isn't impressive and there are many, many Greeks who see the current leadership as reckless and dangerous.
        afterburner 11y ago
        The popular vote of an election is exactly the same metric as a referendum. They can be compared directly. There have been many extremely close but critical referendums: https://en.wikipedia.org/wiki/French_Maastricht_Treaty_referendum,_1992 https://en.wikipedia.org/wiki/French_Maastricht_Treaty_refer... https://en.wikipedia.org/wiki/Danish_Maastricht_Treaty_referendum,_1992 https://en.wikipedia.org/wiki/Danish_Maastricht_Treaty_refer... https://en.wikipedia.org/wiki/Quebec_referendum,_1995 https://en.wikipedia.org/wiki/Quebec_referendum,_1995 https://en.wikipedia.org/wiki/Quebec_referendum,_1980 https://en.wikipedia.org/wiki/Quebec_referendum,_1980 https://en.wikipedia.org/wiki/Swedish_European_Union_membership_referendum,_1994 https://en.wikipedia.org/wiki/Swedish_European_Union_members... https://en.wikipedia.org/wiki/Norwegian_European_Union_membership_referendum,_1994 https://en.wikipedia.org/wiki/Norwegian_European_Union_membe... 60% is decisive, and a clear mandate.
VieElm 11y ago
The Marshall plan was preceded by the Morgenthau plan which would have destroyed Germany's ability to ever create war again, reducing Germany to subsistence level farming. The Allied occupiers actually began destroying the German infrastructure, but it didn't work out however as Europe's economy had historically depended on Germany's industrial base and America and Western Europe needed to counter growing Soviet power in the first beginnings of the cold war. It other words it had nothing to do with "deserved", Germany was rebuilt out of strategic necessity to face two looming threats to international stability and peace.
- chm 11y ago
  I'm currently playing my first game of Diplomacy. Anyone with the slightest interest in world politics should play it once. It's teaching me more about how the world works than 2 years of reading The Economist (sadly canceled due to lack of time). I now associate a feeling and experience to the words "strategic necessity".
- greekswithdebt 11y ago
  Germany was always an industrious country. Greece is a tax dodging, spendaholic, big-time-borrowing-then-avoiding-repayment country. How much cash can they continue to pour into that bottomless pit? Let them leave the euro, let them have their drachma, they need to sort out the real problems first.
  - irixusr 11y ago
    Historically, Germany has always been a militaristic country who have repeatedly tried to take over the world (however childish that sounds). Last time around they killed several dozens of millions of people. Today German industry still makes weapons used to kill people around the world. While the Greeks haven't really bothered anyone except the Turks and a little bit the Bulgarians. Too busy drinking ouzo I guess. So the Greeks leave the euro. And we nuke the Germans to ensure the future of humanity? Or perhaps, instead of bailing them out, the Allies should have made Germany into an agrarian society with the same result. See how nasty this game becomes?
alricb 11y ago
There might also have been another reason for forgiveness: who had destroyed West German cities and killed thousands of civilians to no great military effect in the process (hint: not the Nazis).
guelo 11y ago
Greece can't afford the debt so the only possible solution is to default. But Europe is using all it's available power to threaten Greece to prevent it from defaulting. Expecting a population to put up with a generation of depression is ridiculous and it's not going to happen. When Detroit defaulted it wasn't kicked out of the dollar and people were still allowed to move to other parts of the country.
- VieElm 11y ago
  I think the problem with "forgiving" the debt is that 1. someone is going to pay for that debt, the debt that is owed to someone is on their balance sheet as (rapidly declining) value they possess. That is the debt doesn't magically disappear, someone has to pay for it one way or the other. 2. Those in position to pay that debt fear Greece is just a bottomless pit that they'll be "forgiving" debt for a long while to come since Greece's social programs aren't sustainable and there aren't any indicators that Greece's economy will grow fast enough to support them. The problem isn't just debt that's owed now, but the money Greece will owe in the future (and can't pay) given Greece's situation. People that are going to have to pay for Greece's problems don't just want an end to Greece's current problem just to fall into the same trap soon here after, lurching from one crisis to another. I think that's a pretty fair concern to have.
  - dllthomas 11y ago
    On the other hand, that asset on their balance sheet was returning a higher rate due to risk that Greece might someday have to default...
  - guelo 11y ago
    This points to the real problem. When Greece was originally "bailed out" in 2010 what actually happened was that the debt was moved from German and French banks to EU taxpayers. The banks were paid in full by the EU and IMF for all the bad debt they had made. But capitalism cannot work that way, when lenders make a bad loan they're supposed to take the losses, that's how interest rates are set. If they can lend without any risk then the whole market gets out of whack. On your point #2, Greece has been running a primary surplus for several years now, meaning the government takes in more than it spends before debt payments.
deleted 11y ago
[deleted]
chi-sq 11y ago
Second Greek bailout included a €100bn haircut. From Wikipedia: "EU Member States would also pass on to Greece all profits which their central banks made by buying Greek bonds at a debased rate until 2020. Private investors accepted a slightly bigger haircut of 53.5% of the face value of Greek governmental bonds,[10] the equivalent to an overall loss of around 75%." From the article: "The Federal Republic of Germany's creditors -- 20 countries including Greece -- indeed agreed at a London conference to write off 55 percent of the country's 32.3 billion Deutsche marks of foreign debt."
MisterWebz 11y ago
Does Syriza actually want debt relief? Judging from Varoufakis' interviews, he wants to implement policies that would foster economic growth, which would allow Greece to slowly pay back its debts. He claims the EU's proposals would further cripple the economy which would mean they will never be able to pay back its debt. So it's not necessarily about debt relief, it's about which policies are most suitable for Greece.
irixusr 11y ago
The nazis stayed in power but wore the clothes of democrats: http://www.spiegel.de/international/germany/from-dictatorship-to-democracy-the-role-ex-nazis-played-in-early-west-germany-a-810207.html http://www.spiegel.de/international/germany/from-dictatorshi... And, for all syriza's faults (they're socialists :p), they're not responsible for the mess: they were never in power. Therefore, they were never corrupt or fed the system of clientism. I don't like socialism, quite the contrary. But German banks made bad loans. German banks get bailed out by all EU governments, nationalizing their losses [1] German bank survive stronger than ever. Sounds more like a moral hazard [2] for the banks than free market capitalism to me. 1. ironically enough, Portugal, and All the other PIIGs, holds greek bonds because they bailed out German banks in a sign of "European solidarity". 2. It's easy to make money when you gamble with the House's money. In the US when (small[3]) banks fail, their assets are sold, their depositor's assets insured up to 100k and the system continues nicely. 3. I realize congress and friends chickened out with the "too large to fail". But TAARP was much larger than what the Greek bailout ever needed to be. And the EU's gdp is larger than the US'
- astrodust 11y ago
  The European GPD is slightly larger than the US, but it's important to note that it is larger. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
  - irixusr 11y ago
    Noted and updated.
- drzaiusapelord 11y ago
  > But TAARP was much larger than what the Greek bailout ever needed to be. And the EU's gdp is larger than the US' TARP paid itself off as the US economy is almost always a sure bet. The chances of the Greeks paying off their debt is pretty much zero. These are very different situations.
  - 11y ago
Nacraile 11y ago
I feel like existing debt is a bit of a red herring in discussion of the crisis. Yes, Greece has a lot of debt, but as a consequence of the previous bailout, that debt has very long maturity and low interest, so it doesn't actually cost that much to service. The actual issue is that Greece has a huge primary deficit (and always has). Germany et all are disinclined to continue funding that deficit forever, which is entirely understandable (why should German taxpayers pay for both German and Greek services?) This is the actual problem. Writing off the existing debt does nothing to solve this.
- dmoy 11y ago
  Hasn't Greece been running a primary surplus for >18 months now?
elorant 11y ago
As I mentioned in another post the article is insulting for us Greeks because it is historically inaccurate. At one point the author mentions “There are ruins at the center of Athens, too, but they are rather more ancient”. This is utterly inaccurate. Germans literally left Greece in ruins. The following is a report written in 1946 for the Greek government that describes the extend of the destruction. http://www.truth-out.org/speakout/item/24456-the-math-of-mass-starvation-and-murder-germany-in-greece-during-world-war-ii http://www.truth-out.org/speakout/item/24456-the-math-of-mas...
- deleted 11y ago
  [deleted]
- irixusr 11y ago
  As an Italian, I am embarrassed by the lack of sympathy and support my government has shown for you. As German allies we must accept our responsibility for the destruction and famine left in our wake. But let me congratulate you on a second Oxi day. I love your country, and I hope to return there next year!
  - elorant 11y ago
    We hold no grudge against you guys. Italians treated our people quite nicely during the war and besides we share a common heritage that permeates millennia. We also hold no grudge towards Germans either. For decades they visit Greece each summer for vacations and we treat them as we treat every other guest to our country. It’s just that they always look down to us with contempt. For them we’re the lazy pricks who drink ouzo and lie on the beach all day. Even Merkel herself called us lazy. And then it bothers them when we say they’re all Nazi descendants. If you want our respect you have to give it first. We don’t want no debt relief or whatever. All we want is a viable agreement that will not tank the economy further and lead more young people to unemployment. You give us that and we’ll repay everything. Simple as that.
    - irixusr 11y ago
      Well said. Good luck.
briantakita 11y ago
> Germany Deserved Debt Relief, Greece Doesn't Consider the source of this article. > Germany was much better positioned to put creditors' generosity to good use than is Syriza's Greece. Some would say that Greece was subject to financial violence; hardly generosity. http://www.huffingtonpost.com/john-perkins/economic-chaos-loans-gree_b_901949.html http://www.huffingtonpost.com/john-perkins/economic-chaos-lo...

33 points by hencq 11y ago

dudul 11y ago

"Germany had brought it on itself, of course, but it was no longer ruled by the Nazis" So when a country changes government we should just cancel their debts? The Nazis were democratically elected by the German people. Isn't it what democracy is about? Giving power and responsibility to the people. Greece accumulated their debt by implementing shitty socialist policies, Germany by killing over 70 million people.

drzaiusapelord 11y ago
The Russians said they weren't going to pay Soviet debt and told everyone to get lost. So yes, this actually happens. Credit ratings fall, etc but that's it.
- user_0001 11y ago
  Having a few mega bombs probably help. I don't think it works out for some smaller countries
deleted 11y ago
[deleted]
omonra 11y ago
I guess what Germany went though can be described as complete change of the system (similar to Russia post revolution). Greeks merely elected a different government while keeping the system intact. If they were taken over by the Troika who would do as they pleased, I imagine that would likely precipitate debt writeoff. The problem is that the Greeks want to keep things as they were / be forgiven the debt. That's mutually exclusive.
- afterburner 11y ago
  "The problem is that the Greeks want to keep things as they were" I don't think that's true, if you remember that they just elected a very different party into government.
  - omonra 11y ago
    I'm talking about things that led to the financial catastrophe: Low productivity Entitlement system Patronage system etc These may be nice things to have but they simply don't have the money to pay for them. The austerity they've felt has probably gone 1/3 of the way of what is needed (random guess - maybe more or less). And then they elected this new government because it was too painful. I fully sympathize with their plight - it's similar to a nation going on unemployment after having a nice middle-class job. But there is simply no moral case that other EU members should be sponsoring their former lifestyle.
    - afterburner 11y ago
      Austerity is not the same as entitlement reform. Austerity is targeting a surplus regardless of the costs, which in this case tanked GDP faster than they could pay off debt, meaning the dept to GDP ratio got much worse. Entitlement reform is an entirely separate thing. And given that Syriza has, in fact, slashed pensions and raised the retirement age, they are clearly willing to do that. Since they are a new party dedicated to breaking with the past governance, they are also willing to embrace change. And since they won the election, this means the population gave them a mandate to do exactly that. The old party, which was responsible for many of the entitlements in the first place, sure as heck wasn't willing to change Greece. Complaining about the new party seems strangely misplaced.
VeejayRampay 11y ago
As much as I agree with the point you're making, the total number of casualties for WW2 is generally estimated at around 70 million people (sad to have to say that, but it's give or take). Needless to say that not all of those deaths were caused by Germany itself. Though you could argue that their actions got everyone involved and, as such, the war started. Also, it's not as much the "shitty socialist policies" (whatever that means, since Greece was until fairly recently, ruled by a conservative party) but the fact that taxation has long been a problem there, leaving the coffers empty and abandoning a huge chunk of the economy to hand-to-hand payments, tax dodgers and overall fraudsters.
- afterburner 11y ago
  "got everyone involved" Heh, that's putting it lightly. They attacked everyone.
  - exar0815 11y ago
    Well, the Japanese were in the attacking business pretty much, too... And sadly never accounted for their warcrimes....
elektromekatron 11y ago
As far as I am aware, Greece and several other of the periphery Eurozone countries with similar debt crisis, accumulated their debt over time through a system of credit swaps developed as financial instruments by companies including J P Morgan and Goldman Sachs, to enable perifery EU countries to hide their borrowing to make it easier to appear to be inline with the rest of the Eurozone, which was fine until the crash and the tide went out. If you were in a cynical and slightly paranoid frame of mind, it could even look like an economic attack on the Euro by US financial institutions.
hencq 11y ago
I often see the trope that the nazi were democratically elected, but that either demonstrates a very poor understanding of history or is a deliberate misrepresentation.
- dudul 11y ago
  Care to elaborate?
  - hencq 11y ago
    I suggest reading the Wikipedia article on the rise of the Nazi party [1] or doing a Google search [2], but here's the gist of it: The Weimar Republic was very weak democratically and there were regular street battles between Nazis and Communists. The Nazi party got elected into parliament, but didn't have a majority. Still, Hitler was able to convince president Hindenburg to name him chancellor. After the Reichstag fire, most civil rights were suspended, effectively ending democracy. Most of Hitler's political opponents were arrested or removed from the Reichstag. Even so the Nazi party did not achieve a majority in the next elections. He then essentially intimidated parliament to grant him dictatorial powers in the Enabling Act. [1] https://en.wikipedia.org/wiki/Nazi_Party#Rise_to_power:_1925.E2.80.931933 https://en.wikipedia.org/wiki/Nazi_Party#Rise_to_power:_1925... [2] https://www.google.com/webhp?sourceid=chrome-instant&ion=1&espv=2&ie=UTF-8#q=was%20hitler%20democratically%20elected%20into%20office https://www.google.com/webhp?sourceid=chrome-instant&ion=1&e...
mikeash 11y ago
The Nazis weren't elected. They never got anything close to a majority of the vote. They got a decent minority of the vote and then cheated their way to absolute power from there.
- dudul 11y ago
  https://en.wikipedia.org/wiki/German_presidential_election,_1932 https://en.wikipedia.org/wiki/German_presidential_election,_... "[Hitler] was appointed chancellor on 30 January 1933." https://en.wikipedia.org/wiki/German_federal_election,_July_1932 https://en.wikipedia.org/wiki/German_federal_election,_July_... "They saw great gains by the Nazi Party, which for the first time became the largest party in parliament, though without winning a majority." That's what democracy is about, the dictatorship of the biggest minority. The constitution of the Weimar republic was crappy, but that's just how it was. How did they cheat their way to power?
  - dragonwriter 11y ago
    > That's what democracy is about, the dictatorship of the biggest minority. That's a notable failure mode of attempts to implement democratic ideals, but its definitely not what democracy is all about.
    - dudul 11y ago
      By "democracy" I meant "what today passes as democracy".
  - mikeash 11y ago
    Hitler being appointed Chancellor would have been unimportant if the rules had actually been followed, because the post of Chancellor had little power. However, not long afterwards the Reichstag was burned (quite possibly by the Nazis, but nobody knows who was really responsible) and the Nazis took advantage of the resulting environment of terror to seize power. The Enabling Act which gave Hitler absolute power was passed with a substantial number of legislators banned from participating, and the rest voted under explicit thread by armed Nazi troops.

smcl 11y ago

This trend of submitting posts sniping at Greece\Germany is starting to get ugly and isn't really suitable for HN, can we please stop?

drzaiusapelord 11y ago
It won't stop because there are lot of angry leftists (mostly Europeans) who are upset that Greece might actually be forced to pay its bills and what that means for the welfare state model the EU has built itself on. So they snip from the sidelines about nazis, war, banks, conspiracy theories, etc that has nothing to do with the subject at hand. Greece is something of a canary in the coalmine here about Europe's leftist policies. The economic situation in other countries like Portugal, Spain, Italy, Croatia, Bulgaria, etc shows that there's a larger problem here. They don't want to pay their bills or cut services. They just want an endless gravy train and soon might suffer the same consequences as Greece. Only the most wealthy, least corrupt, and productive EU states can have a proper welfare state and even some of them have problems with youth unemployment, job growth, low military spending, almost no defense against an expansionist Putin outside of the US Military (whose spending they are first to criticize), etc. We're witnessing the end of the welfare state as we know it, and apparently a lot of Europeans can't handle that basic fact. Apparently from the knee-jerk drive-by downvotes, they can't handle this comment as well.
- ojbyrne 11y ago
  If your second last sentence is true, then you can't have monetary union. Break up the Euro.
  - drzaiusapelord 11y ago
    This is also my opinion as well. A shared currency is just a bad idea and that's something the English realized early on, or at least the Thatcher administration did. Her 1995 book "Path to Power" pretty much predicted this situation.
    - 11y ago

deleted 11y ago

[deleted]

omonra 11y ago
Did you even read the article?
- deleted 11y ago
  [deleted]
  - drzaiusapelord 11y ago
    60/40 from 60% of eligible voters is far, far from a strong mandate. This is a very contentious issue within Greece as well. Its a majority win of course, but its certainly not 90/10 or even 80/20.
    - afterburner 11y ago
      You don't pay attention to many elections do you? 60/40 is a blowout for the popular vote, and 60% turnout is large. Also, 60 is 50% more than 40.
      - drzaiusapelord 11y ago
        Elections and referendums are very different things. Popular referendums often go way very high towards one side. 60/40 in that context just isn't impressive and there are many, many Greeks who see the current leadership as reckless and dangerous.
        afterburner 11y ago
        The popular vote of an election is exactly the same metric as a referendum. They can be compared directly. There have been many extremely close but critical referendums: https://en.wikipedia.org/wiki/French_Maastricht_Treaty_referendum,_1992 https://en.wikipedia.org/wiki/French_Maastricht_Treaty_refer... https://en.wikipedia.org/wiki/Danish_Maastricht_Treaty_referendum,_1992 https://en.wikipedia.org/wiki/Danish_Maastricht_Treaty_refer... https://en.wikipedia.org/wiki/Quebec_referendum,_1995 https://en.wikipedia.org/wiki/Quebec_referendum,_1995 https://en.wikipedia.org/wiki/Quebec_referendum,_1980 https://en.wikipedia.org/wiki/Quebec_referendum,_1980 https://en.wikipedia.org/wiki/Swedish_European_Union_membership_referendum,_1994 https://en.wikipedia.org/wiki/Swedish_European_Union_members... https://en.wikipedia.org/wiki/Norwegian_European_Union_membership_referendum,_1994 https://en.wikipedia.org/wiki/Norwegian_European_Union_membe... 60% is decisive, and a clear mandate.

VieElm 11y ago

The Marshall plan was preceded by the Morgenthau plan which would have destroyed Germany's ability to ever create war again, reducing Germany to subsistence level farming. The Allied occupiers actually began destroying the German infrastructure, but it didn't work out however as Europe's economy had historically depended on Germany's industrial base and America and Western Europe needed to counter growing Soviet power in the first beginnings of the cold war. It other words it had nothing to do with "deserved", Germany was rebuilt out of strategic necessity to face two looming threats to international stability and peace.

chm 11y ago
I'm currently playing my first game of Diplomacy. Anyone with the slightest interest in world politics should play it once. It's teaching me more about how the world works than 2 years of reading The Economist (sadly canceled due to lack of time). I now associate a feeling and experience to the words "strategic necessity".
greekswithdebt 11y ago
Germany was always an industrious country. Greece is a tax dodging, spendaholic, big-time-borrowing-then-avoiding-repayment country. How much cash can they continue to pour into that bottomless pit? Let them leave the euro, let them have their drachma, they need to sort out the real problems first.
- irixusr 11y ago
  Historically, Germany has always been a militaristic country who have repeatedly tried to take over the world (however childish that sounds). Last time around they killed several dozens of millions of people. Today German industry still makes weapons used to kill people around the world. While the Greeks haven't really bothered anyone except the Turks and a little bit the Bulgarians. Too busy drinking ouzo I guess. So the Greeks leave the euro. And we nuke the Germans to ensure the future of humanity? Or perhaps, instead of bailing them out, the Allies should have made Germany into an agrarian society with the same result. See how nasty this game becomes?

alricb 11y ago

There might also have been another reason for forgiveness: who had destroyed West German cities and killed thousands of civilians to no great military effect in the process (hint: not the Nazis).

guelo 11y ago

Greece can't afford the debt so the only possible solution is to default. But Europe is using all it's available power to threaten Greece to prevent it from defaulting. Expecting a population to put up with a generation of depression is ridiculous and it's not going to happen. When Detroit defaulted it wasn't kicked out of the dollar and people were still allowed to move to other parts of the country.

VieElm 11y ago
I think the problem with "forgiving" the debt is that 1. someone is going to pay for that debt, the debt that is owed to someone is on their balance sheet as (rapidly declining) value they possess. That is the debt doesn't magically disappear, someone has to pay for it one way or the other. 2. Those in position to pay that debt fear Greece is just a bottomless pit that they'll be "forgiving" debt for a long while to come since Greece's social programs aren't sustainable and there aren't any indicators that Greece's economy will grow fast enough to support them. The problem isn't just debt that's owed now, but the money Greece will owe in the future (and can't pay) given Greece's situation. People that are going to have to pay for Greece's problems don't just want an end to Greece's current problem just to fall into the same trap soon here after, lurching from one crisis to another. I think that's a pretty fair concern to have.
- dllthomas 11y ago
  On the other hand, that asset on their balance sheet was returning a higher rate due to risk that Greece might someday have to default...
- guelo 11y ago
  This points to the real problem. When Greece was originally "bailed out" in 2010 what actually happened was that the debt was moved from German and French banks to EU taxpayers. The banks were paid in full by the EU and IMF for all the bad debt they had made. But capitalism cannot work that way, when lenders make a bad loan they're supposed to take the losses, that's how interest rates are set. If they can lend without any risk then the whole market gets out of whack. On your point #2, Greece has been running a primary surplus for several years now, meaning the government takes in more than it spends before debt payments.

deleted 11y ago

[deleted]

chi-sq 11y ago

Second Greek bailout included a €100bn haircut. From Wikipedia: "EU Member States would also pass on to Greece all profits which their central banks made by buying Greek bonds at a debased rate until 2020. Private investors accepted a slightly bigger haircut of 53.5% of the face value of Greek governmental bonds,[10] the equivalent to an overall loss of around 75%." From the article: "The Federal Republic of Germany's creditors -- 20 countries including Greece -- indeed agreed at a London conference to write off 55 percent of the country's 32.3 billion Deutsche marks of foreign debt."

MisterWebz 11y ago

Does Syriza actually want debt relief? Judging from Varoufakis' interviews, he wants to implement policies that would foster economic growth, which would allow Greece to slowly pay back its debts. He claims the EU's proposals would further cripple the economy which would mean they will never be able to pay back its debt. So it's not necessarily about debt relief, it's about which policies are most suitable for Greece.

irixusr 11y ago

The nazis stayed in power but wore the clothes of democrats: http://www.spiegel.de/international/germany/from-dictatorship-to-democracy-the-role-ex-nazis-played-in-early-west-germany-a-810207.html http://www.spiegel.de/international/germany/from-dictatorshi... And, for all syriza's faults (they're socialists :p), they're not responsible for the mess: they were never in power. Therefore, they were never corrupt or fed the system of clientism. I don't like socialism, quite the contrary. But German banks made bad loans. German banks get bailed out by all EU governments, nationalizing their losses [1] German bank survive stronger than ever. Sounds more like a moral hazard [2] for the banks than free market capitalism to me. 1. ironically enough, Portugal, and All the other PIIGs, holds greek bonds because they bailed out German banks in a sign of "European solidarity". 2. It's easy to make money when you gamble with the House's money. In the US when (small[3]) banks fail, their assets are sold, their depositor's assets insured up to 100k and the system continues nicely. 3. I realize congress and friends chickened out with the "too large to fail". But TAARP was much larger than what the Greek bailout ever needed to be. And the EU's gdp is larger than the US'

astrodust 11y ago
The European GPD is slightly larger than the US, but it's important to note that it is larger. https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal) https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nomi...
- irixusr 11y ago
  Noted and updated.
drzaiusapelord 11y ago
> But TAARP was much larger than what the Greek bailout ever needed to be. And the EU's gdp is larger than the US' TARP paid itself off as the US economy is almost always a sure bet. The chances of the Greeks paying off their debt is pretty much zero. These are very different situations.
- 11y ago

Nacraile 11y ago

I feel like existing debt is a bit of a red herring in discussion of the crisis. Yes, Greece has a lot of debt, but as a consequence of the previous bailout, that debt has very long maturity and low interest, so it doesn't actually cost that much to service. The actual issue is that Greece has a huge primary deficit (and always has). Germany et all are disinclined to continue funding that deficit forever, which is entirely understandable (why should German taxpayers pay for both German and Greek services?) This is the actual problem. Writing off the existing debt does nothing to solve this.

dmoy 11y ago
Hasn't Greece been running a primary surplus for >18 months now?

elorant 11y ago

As I mentioned in another post the article is insulting for us Greeks because it is historically inaccurate. At one point the author mentions “There are ruins at the center of Athens, too, but they are rather more ancient”. This is utterly inaccurate. Germans literally left Greece in ruins. The following is a report written in 1946 for the Greek government that describes the extend of the destruction. http://www.truth-out.org/speakout/item/24456-the-math-of-mass-starvation-and-murder-germany-in-greece-during-world-war-ii http://www.truth-out.org/speakout/item/24456-the-math-of-mas...

deleted 11y ago
[deleted]
irixusr 11y ago
As an Italian, I am embarrassed by the lack of sympathy and support my government has shown for you. As German allies we must accept our responsibility for the destruction and famine left in our wake. But let me congratulate you on a second Oxi day. I love your country, and I hope to return there next year!
- elorant 11y ago
  We hold no grudge against you guys. Italians treated our people quite nicely during the war and besides we share a common heritage that permeates millennia. We also hold no grudge towards Germans either. For decades they visit Greece each summer for vacations and we treat them as we treat every other guest to our country. It’s just that they always look down to us with contempt. For them we’re the lazy pricks who drink ouzo and lie on the beach all day. Even Merkel herself called us lazy. And then it bothers them when we say they’re all Nazi descendants. If you want our respect you have to give it first. We don’t want no debt relief or whatever. All we want is a viable agreement that will not tank the economy further and lead more young people to unemployment. You give us that and we’ll repay everything. Simple as that.
  - irixusr 11y ago
    Well said. Good luck.

briantakita 11y ago

> Germany Deserved Debt Relief, Greece Doesn't Consider the source of this article. > Germany was much better positioned to put creditors' generosity to good use than is Syriza's Greece. Some would say that Greece was subject to financial violence; hardly generosity. http://www.huffingtonpost.com/john-perkins/economic-chaos-loans-gree_b_901949.html http://www.huffingtonpost.com/john-perkins/economic-chaos-lo...