6 ms·

Surrender fiscal sovereignty in return for bailout, Merkel tells Tsipras

35 points by r721 11y ago

r721 11y ago
Krugman's opinion: http://krugman.blogs.nytimes.com/2015/07/12/killing-the-european-project/ http://krugman.blogs.nytimes.com/2015/07/12/killing-the-euro...
fixxer 11y ago
How is this philosophically different from demanding that your drunk friend (who, you know has always been a bit of a fuck up) surrender his car keys? He already has been to rehab a few times and, if you let him, he's gonna destroy a lot more than just his car. In both cases, it is reasonable given the immediate circumstances. That said, you knew this would happen and you enabled him, so you're still an asshole.
- alayne 11y ago
  As long as people continue this Greeks are reckless good for nothings myth it is going to be hard to find solutions.
  - fixxer 11y ago
    Not my words. Their economy is smaller than Louisiana's, their population is more than twice, and they really, really like entitlements. Sorry if this hurts feelings, but that is not a recipe for success.
    - alextgordon 11y ago
      Yet the "solution" on offer is to keep shrinking their economy??
      - duncan_bayne 11y ago
        That's a very Keynesian perspective. The Austrian (heh) school says that in fact, the tax-and-spend policies favoured by Greek voters harm the economy in a variety of ways, one of which is by encouraging malinvestment. (And I agree with them, FWIW).
  - duncan_bayne 11y ago
    Don't try to turn this into an argument about racism. There is something fundamentally, deeply broken with the Greek economy: http://www.lapasserelle.com/billets/greece_GDP_growth.jpg http://www.lapasserelle.com/billets/greece_GDP_growth.jpg No-one with any sense is trying to make this about "Greeks". But there is clearly something wrong with politics and economics in Greece.
    - deleted 11y ago
      [deleted]
    - Daishiman 11y ago
      In an economic union with no possibility of states to set their own monetary policy, there will always be a squeaky wheel. If this fact is not admitted, there is not point for Greece to be in the union.
    - deleted 11y ago
      [deleted]
    - pessimizer 11y ago
      > There is something fundamentally, deeply broken with the Greek economy The current growth rate is a result of austerity, not a bizarre retroactive justification for it.
      - duncan_bayne 11y ago
        I think you're conflating two different issues: a) the Greek economy is currently in debt with no realistic way of repaying it in the short term, and b) Greek politicians have adopted a socialist-minded Keynesian tinkering-around-the-edges that has somehow been named 'austerity'. The root cause of a), and then the body politic adopting b), is broken economic culture: https://mises.org/library/greece%E2%80%99s-biggest-problem-its-anti-capitalist-culture https://mises.org/library/greece%E2%80%99s-biggest-problem-i... "And so it is with Greece. After already securing debt relief and effectively being allowed to default by restructuring its debts over the next fifty years at subsidized interest rates — and after actually achieving economic growth in 2014 by cutting taxes and slashing the size of its sclerotic, bloated government — this toxic Greek culture prevailed once more and elected a team of socialist die-hards to drag it back into the mire. Of course it doesn’t help that on the other side of the negotiating table is another bunch of central planners in the EU, IMF, and ECB. Nevertheless, Greece sits stuck between two central planning negotiation parties because its people have been too busy demanding goodies instead of freedom."
  - afarrell 11y ago
    There is a difference between saying that "the Greek people are corrupt" and saying "the Greek government and tax-collection system (or other systems) are corrupt".
- ArkyBeagle 11y ago
  It is radically different. Your "drunk friend" is not an allegedly sovereign nation. To conflate these is a pretty serious anthropomorphic fallacy. Either continue with the fiction of nation-states or do without it. That's the choice that will be highlighted.
  - techdragon 11y ago
    Compare individual free will and international sovereignty and the metaphor fits well enough.
    - ArkyBeagle 11y ago
      That has to be at the very least "compare/contrast". Individuals may well have free will but it's vastly more difficult to say the same of nation states. The entire EU GDP growth rate is hovering around 1% and has for a very long time. Unless interest rates really are actually zero (or negative), there's no way in the aggregate to beat the vig for debt in Europe at all other than being lucky. That's closer to a lose-lose than I am comfortable with. Apparently, there is now a tradeoff between the ECB balance sheet and whether or not certain countries are ... something like feasible. Perhaps the analogy breaks down, but suppose that rather than this being Greece circa 2008 after the mortgage crash, this is South Carolina circa 1848ish after the Railroad Mania period? Then what?
- Lazare 11y ago
  The analogy seems inapt. More like your friend asking for a loan to get him out of a jam, and you replying "sure, if you give me your bank account details, social media passwords, and power of attorney". Realistically, your options are to either be a soft touch and give the guy a loan, or wash your hands of it and let him crash and burn. This...isn't how people treat their friends. Or how sovereign nations treat each other. (Well, I guess it is now...)
  - fixxer 11y ago
    If you think the bailout compares to a "loan", I can see why you find the analogy inapt. I would compare the requisite bailout magnitude to paying off your friend's mortgage, his friend's mortgages, and their student loan debt... In which case, send me those passwords.
    - Lazare 11y ago
      Like most "loans" to friends, this one isn't being paid back, no. "Loan" is the word friends use for gifts to try and make it more palatable, but if you're charging interest and expecting prompt repayment they aren't your friend, and if you aren't it's not a loan. But: Either give him the money or tell him to fuck off. Those are the only realistic options. If you think he's going to spend it on drugs and he's sitting there promising that no, he'll use it to cover his rent, honest, and you don't believe him then don't give him the money. There's no moral option where you say yes, then lock him in your basement; believe it or not that's actually quite illegal.
- Daishiman 11y ago
  A very brief history of debt will show you that, whenever in history countries have bowed to the demands of external creditors for reform, it never turned out well for them, and just another opportunity for predatory investors and foreign interests to get a hold of a country's internal policies for their own purposes. Joseph Stiglitz, as chief economist of the World Bank, wrote a book on the matter on how the IMF's neoliberal policies of privatization functioned as a mechanism to give away national sovereignty and political power. Do you understand that this transfer of fiscal sovereignty is not "temporary"? That the deals Greece makes now will be dependent on, literally, decades of compliance to reforms made now, under pain of the debt relief going away? The Germans may be in the same political union, but they're not Greece's friends, and will never be. Alliances and pacts are always transitory. Giving away political power is a ludicruous proposition.
  - Spooky23 11y ago
    The real story here isn't Greece but Germany. What happens when the other spendthrift states refuse to tow the line? If the answer is a Lufthansa flight full of bean counters administering a nation like a receiver, that doesn't bode well for the future of the EU.
  - marcosdumay 11y ago
    > whenever in history countries have bowed to the demands of external creditors for reform, it never turned out well for them It worked very well for Brazil at the 90's. And yes, those were IMF demands. They helped. Greece situation is different. But you can't generalize it either.
    - Daishiman 11y ago
      And it didn't work in Africa. It didn't work in Argentina. The places where it's helped have been fewer, and the effect of failed policies has been substantially worse than the good effects of the successful policies.
      - marcosdumay 11y ago
lifeisstillgood 11y ago
It's the same demand the Euro-elite are making to every other member of the 28 states. It's not that the offer is a bad one, it's just that it's not democratically done, not openly done, and we fucked them over for five years before this whole thing started. That said fiscal Union is probably a good move.
- igravious 11y ago
  I couldn't agree more. Very succinctly put.
nerdcity 11y ago
Fiscal sovereignty was already surrendered when the adopted the Euro in the first place.
- deleted 11y ago
  [deleted]
- outside1234 11y ago
  Only when the country was totally mismanaged. Nobody is interfering with the Netherlands for instance.
  - igravious 11y ago
    The reason you're being downvoted is because your reply is logically, to be frank, bollocks. Whether or not you believe that countries gave up fiscal sovereignty upon joining the euro you'd have to believe based on your assessment of the political implications of the euro project. How each individual country manages their affairs _in no way_ could affect whether their fiscal sovereignty was called into question upon joining the euro. What you're saying doesn't make _logical_ sense, regardless of ideological position. EDIT: sorry for saying bollocks to you, that was harsh, i'll leave it in as a record of what i said but i take it back, again sorry. also - in light of the fiscal and monetary distinction people are making here (see: https://news.ycombinator.com/item?id=9876055 https://news.ycombinator.com/item?id=9876055) - if you remember, monetary sovereignty was definitely given up (because you can't print your own money any more) at the time of joining the euro (and even the ERM in the first place when currencies were pegged). and fiscal sovereignty was given up to a degree because there were broad parameters set, like the 60% rule and the 3% rule and so on. Remember those? I couldn't understand those rules at the time but i do now, they were there to prevent situations like what's happening now with Greece! People complained that even France and Germany broke those. I suppose this is the giving up of fiscal sovereignty at the micromanagement level now, e.g. "raise so much in taxes, implement these social reforms". it stinks.
- cryptoz 11y ago
  Was it? Not technically, I think; monetary policy was surrendered, not fiscal policy. Unless you're making a comment about how there can't be sane monetary policy without matching fiscal policy, in which case, carry on.
bhickey 11y ago
As Thomas Piketty pointed out, 60% of German debt was cancelled in 1953. (http://thewire.in/?p=5851 http://thewire.in/?p=5851) France defaulted on its debts after the Napoleonic wars. The United Kingdom defaulted in 1932. Apart from Greece's inability to inflate its way out of debt, how is this any different?
- rbehrends 11y ago
  > Apart from Greece's inability to inflate its way out of debt, how is this any different? The debt forgiveness because of the London Debt Agreement amounted to about 11% of West Germany's 1953 GDP. Most of West Germany's public debt was internal and was wiped out by the currency reform in 1948 (which meant that West German savings took a 93.5% haircut) [1]. Germany has to be thankful to the Allies for imposing only very light sanctions after WW2; but debt forgiveness didn't play much of a role in Germany's recovery. I.e. there is a strong moral argument that you can make, especially given that Greece largely waived WW2 reparations, but the economic situation isn't the same. [1] Also, East Germany wasn't as lucky and got hit hard by reparations.
  - igravious 11y ago
    Why should they be "thankful"? I'm wary of this attitude. Isn't defeat and the brutal horror of war (especially that war) sanction enough? Not trying to be smart here, genuine question. Did not know the numbers though, thanks. The situations aren't as alike it seems as people (myself included) are making it out to be. But they're not completely unalike and people remember history ...
    - rbehrends 11y ago
      Sorry, I meant to write reparations, not sanctions. Reparations to help restore the economies of those countries that the Third Reich had looted and pillaged and left in ruins.
  - Rondom 11y ago
    I think this article also gives some insight into the differences. http://www.theguardian.com/commentisfree/2013/feb/27/greece-spain-helped-germany-recover http://www.theguardian.com/commentisfree/2013/feb/27/greece-...
outside1234 11y ago
A lot of people are comparing this to the German writedown, which in someways is both apt and not apt. Its also important to note that there are no easy paths out of this - money is not invented from nowhere. The Germans took a horrific beating at the end of World War II - whole cities (Dresden et al) were literally burned completely to the ground at the hand's of the creditor's planes. While it was the German people's fault to some extent, they were also realistically under a dictatorship when it happened and that had to be taken into account (not everyone or even a majority of people were in favor of the war). This is the same logic that applied during the first two Greek bailouts (and the 60% haircut the debt has already taken in the private sector) - the Greek people were mislead as to the fiscal state of their country and deserved some faith and leniency. However, after that, they have done very little to improve the fiscal structure in their company. EVEN WITHOUT ANY DEBT PAYMENTS, the country still is running a deficit because they are way over generous on their pensions, have way too many people working in government, and have a continuing rampant tax collection problem. This has gone on for 5 years since the start of the crisis and they haven't fixed it (or even close), and by not fixing it, have made the problem way worse. This needs to change now. They have proven they are not able to do it themselves, it threatens the whole currency, and therefore, like receivership for a bankrupt company, they need to have an external actor come in and do it for them. Or default and leave the currency. (Which is in my opinion what they should do.) This is not pretty - but that's reality - and the Greek people have earned it at this point by not electing leaders that have put them on a path to a sustainable fiscal budget. There is a lesson in there for all of us. EDIT: And there comes the predictable vote downs. I am honestly not anti-Greek, just trying to summarize the situation as someone with an economics background. EDIT2: This is also not "just the Germans" - there is also substantial baltic opposition to bailing out Greece without reforms happening first: http://www.ekathimerini.com/199040/article/ekathimerini/news/eurozones-poorer-nations-take-hard-line-on-greece http://www.ekathimerini.com/199040/article/ekathimerini/news...
- timr 11y ago
  "However, after that, they have done very little to improve the fiscal structure in their company. EVEN WITHOUT ANY DEBT PAYMENTS, the country still is running a deficit because they are way over generous on their pensions, have way too many people working in government, and have a continuing rampant tax collection problem." You know that the greek government was running a surplus as recently as 2013, right? Most of the "bailout" money never went to Greece -- it went straight to their creditors. Greece definitely borrowed too much, but it's just factually incorrect to say that they haven't improved their fiscal structure.
steve19 11y ago
It should never have come to this. They have commendable ideals but Tsipras and Varoufakis, and activist and an academic, were the wrong people at the wrong time. What the Greeks needed was old-school politicians who have played the game for years. In an ideal world people would all work together for the common good, but in politics it's every person for themselves, and it's naive to think anything else. Using mainstream media and social media to constantly attack the people on the other side of the negotiating won over their voters, the Greek people, and the left in Europe, but ultimately has only served to anger their creditors (the politicians and those who voted the politicians in).

35 points by r721 11y ago

r721 11y ago

Krugman's opinion: http://krugman.blogs.nytimes.com/2015/07/12/killing-the-european-project/ http://krugman.blogs.nytimes.com/2015/07/12/killing-the-euro...

fixxer 11y ago

How is this philosophically different from demanding that your drunk friend (who, you know has always been a bit of a fuck up) surrender his car keys? He already has been to rehab a few times and, if you let him, he's gonna destroy a lot more than just his car. In both cases, it is reasonable given the immediate circumstances. That said, you knew this would happen and you enabled him, so you're still an asshole.

alayne 11y ago
As long as people continue this Greeks are reckless good for nothings myth it is going to be hard to find solutions.
- fixxer 11y ago
  Not my words. Their economy is smaller than Louisiana's, their population is more than twice, and they really, really like entitlements. Sorry if this hurts feelings, but that is not a recipe for success.
  - alextgordon 11y ago
    Yet the "solution" on offer is to keep shrinking their economy??
    - duncan_bayne 11y ago
      That's a very Keynesian perspective. The Austrian (heh) school says that in fact, the tax-and-spend policies favoured by Greek voters harm the economy in a variety of ways, one of which is by encouraging malinvestment. (And I agree with them, FWIW).
- duncan_bayne 11y ago
  Don't try to turn this into an argument about racism. There is something fundamentally, deeply broken with the Greek economy: http://www.lapasserelle.com/billets/greece_GDP_growth.jpg http://www.lapasserelle.com/billets/greece_GDP_growth.jpg No-one with any sense is trying to make this about "Greeks". But there is clearly something wrong with politics and economics in Greece.
  - deleted 11y ago
    [deleted]
  - Daishiman 11y ago
    In an economic union with no possibility of states to set their own monetary policy, there will always be a squeaky wheel. If this fact is not admitted, there is not point for Greece to be in the union.
  - deleted 11y ago
    [deleted]
  - pessimizer 11y ago
    > There is something fundamentally, deeply broken with the Greek economy The current growth rate is a result of austerity, not a bizarre retroactive justification for it.
    - duncan_bayne 11y ago
      I think you're conflating two different issues: a) the Greek economy is currently in debt with no realistic way of repaying it in the short term, and b) Greek politicians have adopted a socialist-minded Keynesian tinkering-around-the-edges that has somehow been named 'austerity'. The root cause of a), and then the body politic adopting b), is broken economic culture: https://mises.org/library/greece%E2%80%99s-biggest-problem-its-anti-capitalist-culture https://mises.org/library/greece%E2%80%99s-biggest-problem-i... "And so it is with Greece. After already securing debt relief and effectively being allowed to default by restructuring its debts over the next fifty years at subsidized interest rates — and after actually achieving economic growth in 2014 by cutting taxes and slashing the size of its sclerotic, bloated government — this toxic Greek culture prevailed once more and elected a team of socialist die-hards to drag it back into the mire. Of course it doesn’t help that on the other side of the negotiating table is another bunch of central planners in the EU, IMF, and ECB. Nevertheless, Greece sits stuck between two central planning negotiation parties because its people have been too busy demanding goodies instead of freedom."
- afarrell 11y ago
  There is a difference between saying that "the Greek people are corrupt" and saying "the Greek government and tax-collection system (or other systems) are corrupt".
ArkyBeagle 11y ago
It is radically different. Your "drunk friend" is not an allegedly sovereign nation. To conflate these is a pretty serious anthropomorphic fallacy. Either continue with the fiction of nation-states or do without it. That's the choice that will be highlighted.
- techdragon 11y ago
  Compare individual free will and international sovereignty and the metaphor fits well enough.
  - ArkyBeagle 11y ago
    That has to be at the very least "compare/contrast". Individuals may well have free will but it's vastly more difficult to say the same of nation states. The entire EU GDP growth rate is hovering around 1% and has for a very long time. Unless interest rates really are actually zero (or negative), there's no way in the aggregate to beat the vig for debt in Europe at all other than being lucky. That's closer to a lose-lose than I am comfortable with. Apparently, there is now a tradeoff between the ECB balance sheet and whether or not certain countries are ... something like feasible. Perhaps the analogy breaks down, but suppose that rather than this being Greece circa 2008 after the mortgage crash, this is South Carolina circa 1848ish after the Railroad Mania period? Then what?
Lazare 11y ago
The analogy seems inapt. More like your friend asking for a loan to get him out of a jam, and you replying "sure, if you give me your bank account details, social media passwords, and power of attorney". Realistically, your options are to either be a soft touch and give the guy a loan, or wash your hands of it and let him crash and burn. This...isn't how people treat their friends. Or how sovereign nations treat each other. (Well, I guess it is now...)
- fixxer 11y ago
  If you think the bailout compares to a "loan", I can see why you find the analogy inapt. I would compare the requisite bailout magnitude to paying off your friend's mortgage, his friend's mortgages, and their student loan debt... In which case, send me those passwords.
  - Lazare 11y ago
    Like most "loans" to friends, this one isn't being paid back, no. "Loan" is the word friends use for gifts to try and make it more palatable, but if you're charging interest and expecting prompt repayment they aren't your friend, and if you aren't it's not a loan. But: Either give him the money or tell him to fuck off. Those are the only realistic options. If you think he's going to spend it on drugs and he's sitting there promising that no, he'll use it to cover his rent, honest, and you don't believe him then don't give him the money. There's no moral option where you say yes, then lock him in your basement; believe it or not that's actually quite illegal.
Daishiman 11y ago
A very brief history of debt will show you that, whenever in history countries have bowed to the demands of external creditors for reform, it never turned out well for them, and just another opportunity for predatory investors and foreign interests to get a hold of a country's internal policies for their own purposes. Joseph Stiglitz, as chief economist of the World Bank, wrote a book on the matter on how the IMF's neoliberal policies of privatization functioned as a mechanism to give away national sovereignty and political power. Do you understand that this transfer of fiscal sovereignty is not "temporary"? That the deals Greece makes now will be dependent on, literally, decades of compliance to reforms made now, under pain of the debt relief going away? The Germans may be in the same political union, but they're not Greece's friends, and will never be. Alliances and pacts are always transitory. Giving away political power is a ludicruous proposition.
- Spooky23 11y ago
  The real story here isn't Greece but Germany. What happens when the other spendthrift states refuse to tow the line? If the answer is a Lufthansa flight full of bean counters administering a nation like a receiver, that doesn't bode well for the future of the EU.
- marcosdumay 11y ago
  > whenever in history countries have bowed to the demands of external creditors for reform, it never turned out well for them It worked very well for Brazil at the 90's. And yes, those were IMF demands. They helped. Greece situation is different. But you can't generalize it either.
  - Daishiman 11y ago
    And it didn't work in Africa. It didn't work in Argentina. The places where it's helped have been fewer, and the effect of failed policies has been substantially worse than the good effects of the successful policies.
    - marcosdumay 11y ago

lifeisstillgood 11y ago

It's the same demand the Euro-elite are making to every other member of the 28 states. It's not that the offer is a bad one, it's just that it's not democratically done, not openly done, and we fucked them over for five years before this whole thing started. That said fiscal Union is probably a good move.

igravious 11y ago
I couldn't agree more. Very succinctly put.

nerdcity 11y ago

Fiscal sovereignty was already surrendered when the adopted the Euro in the first place.

deleted 11y ago
[deleted]
outside1234 11y ago
Only when the country was totally mismanaged. Nobody is interfering with the Netherlands for instance.
- igravious 11y ago
  The reason you're being downvoted is because your reply is logically, to be frank, bollocks. Whether or not you believe that countries gave up fiscal sovereignty upon joining the euro you'd have to believe based on your assessment of the political implications of the euro project. How each individual country manages their affairs _in no way_ could affect whether their fiscal sovereignty was called into question upon joining the euro. What you're saying doesn't make _logical_ sense, regardless of ideological position. EDIT: sorry for saying bollocks to you, that was harsh, i'll leave it in as a record of what i said but i take it back, again sorry. also - in light of the fiscal and monetary distinction people are making here (see: https://news.ycombinator.com/item?id=9876055 https://news.ycombinator.com/item?id=9876055) - if you remember, monetary sovereignty was definitely given up (because you can't print your own money any more) at the time of joining the euro (and even the ERM in the first place when currencies were pegged). and fiscal sovereignty was given up to a degree because there were broad parameters set, like the 60% rule and the 3% rule and so on. Remember those? I couldn't understand those rules at the time but i do now, they were there to prevent situations like what's happening now with Greece! People complained that even France and Germany broke those. I suppose this is the giving up of fiscal sovereignty at the micromanagement level now, e.g. "raise so much in taxes, implement these social reforms". it stinks.
cryptoz 11y ago
Was it? Not technically, I think; monetary policy was surrendered, not fiscal policy. Unless you're making a comment about how there can't be sane monetary policy without matching fiscal policy, in which case, carry on.

bhickey 11y ago

As Thomas Piketty pointed out, 60% of German debt was cancelled in 1953. (http://thewire.in/?p=5851 http://thewire.in/?p=5851) France defaulted on its debts after the Napoleonic wars. The United Kingdom defaulted in 1932. Apart from Greece's inability to inflate its way out of debt, how is this any different?

rbehrends 11y ago
> Apart from Greece's inability to inflate its way out of debt, how is this any different? The debt forgiveness because of the London Debt Agreement amounted to about 11% of West Germany's 1953 GDP. Most of West Germany's public debt was internal and was wiped out by the currency reform in 1948 (which meant that West German savings took a 93.5% haircut) [1]. Germany has to be thankful to the Allies for imposing only very light sanctions after WW2; but debt forgiveness didn't play much of a role in Germany's recovery. I.e. there is a strong moral argument that you can make, especially given that Greece largely waived WW2 reparations, but the economic situation isn't the same. [1] Also, East Germany wasn't as lucky and got hit hard by reparations.
- igravious 11y ago
  Why should they be "thankful"? I'm wary of this attitude. Isn't defeat and the brutal horror of war (especially that war) sanction enough? Not trying to be smart here, genuine question. Did not know the numbers though, thanks. The situations aren't as alike it seems as people (myself included) are making it out to be. But they're not completely unalike and people remember history ...
  - rbehrends 11y ago
    Sorry, I meant to write reparations, not sanctions. Reparations to help restore the economies of those countries that the Third Reich had looted and pillaged and left in ruins.
- Rondom 11y ago
  I think this article also gives some insight into the differences. http://www.theguardian.com/commentisfree/2013/feb/27/greece-spain-helped-germany-recover http://www.theguardian.com/commentisfree/2013/feb/27/greece-...

outside1234 11y ago

A lot of people are comparing this to the German writedown, which in someways is both apt and not apt. Its also important to note that there are no easy paths out of this - money is not invented from nowhere. The Germans took a horrific beating at the end of World War II - whole cities (Dresden et al) were literally burned completely to the ground at the hand's of the creditor's planes. While it was the German people's fault to some extent, they were also realistically under a dictatorship when it happened and that had to be taken into account (not everyone or even a majority of people were in favor of the war). This is the same logic that applied during the first two Greek bailouts (and the 60% haircut the debt has already taken in the private sector) - the Greek people were mislead as to the fiscal state of their country and deserved some faith and leniency. However, after that, they have done very little to improve the fiscal structure in their company. EVEN WITHOUT ANY DEBT PAYMENTS, the country still is running a deficit because they are way over generous on their pensions, have way too many people working in government, and have a continuing rampant tax collection problem. This has gone on for 5 years since the start of the crisis and they haven't fixed it (or even close), and by not fixing it, have made the problem way worse. This needs to change now. They have proven they are not able to do it themselves, it threatens the whole currency, and therefore, like receivership for a bankrupt company, they need to have an external actor come in and do it for them. Or default and leave the currency. (Which is in my opinion what they should do.) This is not pretty - but that's reality - and the Greek people have earned it at this point by not electing leaders that have put them on a path to a sustainable fiscal budget. There is a lesson in there for all of us. EDIT: And there comes the predictable vote downs. I am honestly not anti-Greek, just trying to summarize the situation as someone with an economics background. EDIT2: This is also not "just the Germans" - there is also substantial baltic opposition to bailing out Greece without reforms happening first: http://www.ekathimerini.com/199040/article/ekathimerini/news/eurozones-poorer-nations-take-hard-line-on-greece http://www.ekathimerini.com/199040/article/ekathimerini/news...

timr 11y ago
"However, after that, they have done very little to improve the fiscal structure in their company. EVEN WITHOUT ANY DEBT PAYMENTS, the country still is running a deficit because they are way over generous on their pensions, have way too many people working in government, and have a continuing rampant tax collection problem." You know that the greek government was running a surplus as recently as 2013, right? Most of the "bailout" money never went to Greece -- it went straight to their creditors. Greece definitely borrowed too much, but it's just factually incorrect to say that they haven't improved their fiscal structure.

steve19 11y ago

It should never have come to this. They have commendable ideals but Tsipras and Varoufakis, and activist and an academic, were the wrong people at the wrong time. What the Greeks needed was old-school politicians who have played the game for years. In an ideal world people would all work together for the common good, but in politics it's every person for themselves, and it's naive to think anything else. Using mainstream media and social media to constantly attack the people on the other side of the negotiating won over their voters, the Greek people, and the left in Europe, but ultimately has only served to anger their creditors (the politicians and those who voted the politicians in).