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This is one of the key issues with just issuing more debt to "solve the issue" - paying the right hand with the left hand doesn't solve anything. The reason th

This is one of the key issues with just issuing more debt to "solve the issue" - paying the right hand with the left hand doesn't solve anything. The reason the money went back to the creditor country is that the interest payments were due and they did this to "kick the can" down the road on how sustainable those payments were. The can is down the road now and just throwing more money to Greece isn't going to solve anything. Honestly, I think Greece should just flip the bird to Europe and walk away from the debt. They should reintroduce their currency. They won't be able to get more than humanitarian assistance but this will give them the internal political will to balance their budget. Re: Surplus: Here is the data I am working off of: http://www.tutor2u.net/economics/revision-notes/a2macro-eu-greece3.png http://www.tutor2u.net/economics/revision-notes/a2macro-eu-g... No surpluses or even close - send a reference if you have different data - genuinely curious.

timr 11y ago
Gross Government Debt is not the same thing as a budgetary deficit. The greeks had, through massive tax increases and spending cuts, achieved an annual surplus. They still had a huge amount of debt from prior deficits: http://www.reuters.com/article/2014/04/23/greece-primary-idUSB5N0N100B20140423 http://www.reuters.com/article/2014/04/23/greece-primary-idU... You'll see lots of whinging (mostly from Fortune, but also a few others) that this isn't a "real" surplus, but they're splitting hairs. The point is that the Greeks made a real positive change to their economy. They're just buried under a mountain of debt, and if Germany gave a flying fuck about keeping Greece in the EU, they'd be trying to find a way to restructure it -- as they did for Ireland.
- jsnell 11y ago
  First, the graph you complained about is specifically showing large budget deficits for the last 14 years or so. It's the blue bars. You might think the data in that graph is somehow false, but at least it's very relevant data for this conversation. Second, there indeed all kinds of sources claiming there's been a primary surplus for years. It's also clear that Greece is paying very little interest (2.6-4.0% of GDP in 2014 depending on the source -- it's quite amazing that you can't get reliable facts on something like this!). Their debt is also continuing to increase rapidly, and now they're going to need another 80 billion bailout. This combination of supposed facts just doesn't add up. If there's a primary surplus and the interest payments are tiny, there should be either a fiscal surplus or at most a tiny fiscal deficit. And in that case there's no reason for the debt to grow. The easiest conclusion to see is that this is just the books being cooked once again. For example in 2013 that was a total of 9.5% of GDP in spending being ignored due to being supposedly non-recurring. (Not blaming Greece for this btw, it's been in the interest of the EU to pretend that the situation is somehow getting better and the plan is working). This rather suggests that forgiving the debt (not just, some but even all the debt) would do little to get them out of the whole. They'd still be running a deficit, and would just have to start going to debt once again.
igravious 11y ago
Oh come on. https://duckduckgo.com/?q=greece+surplus (1st hit) NY Times: "Greece Has a Budget Surplus, a Respite That Could Be Shortlived" (2nd hit) Reuters: "Greece sees 2015 budget surplus close to bailout target: report" and so on ...
- sampo 11y ago
  Greece had achieved primary surplus, which means surplus before paying interest on debts is accounted for. http://www.merkfunds.com/currency-asset-class/glossary/primary-surplus.html http://www.merkfunds.com/currency-asset-class/glossary/prima...
  - nandemo 11y ago
    Yes, and timr was replying to this: > EVEN WITHOUT ANY DEBT PAYMENTS, the country still is running a deficit because they are way over generous on their pensions, So clearly primary surplus is relevant.

timr 11y ago

Gross Government Debt is not the same thing as a budgetary deficit. The greeks had, through massive tax increases and spending cuts, achieved an annual surplus. They still had a huge amount of debt from prior deficits: http://www.reuters.com/article/2014/04/23/greece-primary-idUSB5N0N100B20140423 http://www.reuters.com/article/2014/04/23/greece-primary-idU... You'll see lots of whinging (mostly from Fortune, but also a few others) that this isn't a "real" surplus, but they're splitting hairs. The point is that the Greeks made a real positive change to their economy. They're just buried under a mountain of debt, and if Germany gave a flying fuck about keeping Greece in the EU, they'd be trying to find a way to restructure it -- as they did for Ireland.

jsnell 11y ago
First, the graph you complained about is specifically showing large budget deficits for the last 14 years or so. It's the blue bars. You might think the data in that graph is somehow false, but at least it's very relevant data for this conversation. Second, there indeed all kinds of sources claiming there's been a primary surplus for years. It's also clear that Greece is paying very little interest (2.6-4.0% of GDP in 2014 depending on the source -- it's quite amazing that you can't get reliable facts on something like this!). Their debt is also continuing to increase rapidly, and now they're going to need another 80 billion bailout. This combination of supposed facts just doesn't add up. If there's a primary surplus and the interest payments are tiny, there should be either a fiscal surplus or at most a tiny fiscal deficit. And in that case there's no reason for the debt to grow. The easiest conclusion to see is that this is just the books being cooked once again. For example in 2013 that was a total of 9.5% of GDP in spending being ignored due to being supposedly non-recurring. (Not blaming Greece for this btw, it's been in the interest of the EU to pretend that the situation is somehow getting better and the plan is working). This rather suggests that forgiving the debt (not just, some but even all the debt) would do little to get them out of the whole. They'd still be running a deficit, and would just have to start going to debt once again.

igravious 11y ago

Oh come on. https://duckduckgo.com/?q=greece+surplus (1st hit) NY Times: "Greece Has a Budget Surplus, a Respite That Could Be Shortlived" (2nd hit) Reuters: "Greece sees 2015 budget surplus close to bailout target: report" and so on ...

sampo 11y ago
Greece had achieved primary surplus, which means surplus before paying interest on debts is accounted for. http://www.merkfunds.com/currency-asset-class/glossary/primary-surplus.html http://www.merkfunds.com/currency-asset-class/glossary/prima...
- nandemo 11y ago
  Yes, and timr was replying to this: > EVEN WITHOUT ANY DEBT PAYMENTS, the country still is running a deficit because they are way over generous on their pensions, So clearly primary surplus is relevant.