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This is really reckless, I hope the Greek government rejects this deal. The debt is already beyond what Greece can pay, unemployment is very high, and yet the p

This is really reckless, I hope the Greek government rejects this deal. The debt is already beyond what Greece can pay, unemployment is very high, and yet the plan is to combine more debt and more austerity. This is nothing less than a power grab, there's no interest in a strong Greek economy before its public infrastructure has been sold off. I hope the Greek government has the guts to go bankrupt. It'd be a short term loss with a long term gain. It's not like the creditors have to lose out, Argentina showed that by paying off its debts after their currency issues. Similarly, savings could be protected by freezing their value and offering to pay the equivalent in the new currency (assuming Greece would be required to leave the Euro).

rsync 11y ago
"I hope the Greek government has the guts to go bankrupt. It'd be a short term loss with a long term gain. It's not like the creditors have to lose out, Argentina showed that by paying off its debts after their currency issues." The confusing part is that there is a very recent, very relevant precedent that was set by Iceland and for some reason that course of action is completely off the table. I don't know why. It appears to have worked very well for Iceland.
- tptacek 11y ago
  Iceland isn't part of the Eurozone, is it?
  - kawera 11y ago
    No, it isn't.
    - tptacek 11y ago
      Then how are the situations comparable? Iceland had a bank crisis triggered by a speculative bubble produced by poorly managed deregulation. It imposed capital controls, was bailed out by the IMF, and took on a crapload of debt in the process, which it is paying off. All this was managed by Iceland's central bank, which controls Iceland's own currency. Greece has multiple structural flaws and an economy that does not appear compatible with the Eurozone, while being locked into the monetary policy of Germany and France, who effectively control the ECB. The only thing these events seem to have in common is that they were economic crises. Iceland's problems were acute; Greece's chronic. Iceland's had a single cause, Greece many. Iceland controls its monetary policy, Greece signed that over to the Eurozone. Iceland got assistance from the IMF, Greece requires ongoing assistance from the ECB. Iceland is paying off its debts, Greece is (it seems apparent) never going to do that.
- radu_floricica 11y ago
  I don't think Iceland's government defaulted. AFAIK, they simply let their own banks fail and made no move to support them. UK was pretty pissed off because their citizens lost cash in those banks, and they expected Iceland's citizens to cover for them. Greece is in a completely different pot of hot water. Their incomes (taxes) keep being lower than expenditures, aka salaries, pensions etc. Not getting any more EU help means they will start paying their doctors and firefighters with monopoly money.
  - peterfirefly 11y ago
    > and they expected Iceland's citizens to cover for them. because that was actually Iceland's obligation so it wasn't at all unreasonable for the UK and the Netherlands to expect that. http://ec.europa.eu/finance/bank/index_en.htm http://ec.europa.eu/finance/bank/index_en.htm (Single Passport and cross-border banking)
    - nextw33k 11y ago
      I don't know the exact details but I didn't think Iceland was in Europe, the UK wanted to rush them in so that those rules could apply: https://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_European_Union https://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_Eu...
      - peterfirefly 11y ago
        Iceland is and was in the EFTA and hence in the EEA where the single-passport rules apply -- and applied back then as well, otherwise the Iceland banks operating in the UK and the Netherlands would have been under UK/NL supervision instead of IS supervision. UK/NL were not ALLOWED under those rules to meaningfully supervise IS banks operating in their countries. As long as they operated under IS law and IS supervision, they operated under IS insurance rules with the usual EU (EEA) 100k€ limit. Iceland blatantly broke the rules. Later, after the shit hit the fan, Iceland did apply for EU membership and negotiations begun. Iceland later withdrew their application.
neokya 11y ago
It isn't that black and white. While exiting might be good in the long run, you make it sound like it will be all right. If they exit, Greece will suffer worst and will need humanitarian help to save it's citizens. Remember, Argentina still can't raise capital from market even after more than a decade.
- Daishiman 11y ago
  > Remember, Argentina still can't raise capital from market even after more than a decade. Argentina was quite capable of doing that just right before their legal case with a few predatory holdouts made life for the government difficult again. To be fair, it was an incredibly mismanaged trial (both by the defending lawyers and Cristina's insane and confusing statements), and the holdouts in question are essentially the scum of planet Earth, purposely speculating on junk bonds and always going to trial for profit. Despite that, both national and local governments have been raising capital to the tune of several billion dollars. Of course, the interest rate is insane, but that's more of a question of the government's disastrous capital control policies; serious private investors were not convinced that the default over the holdouts' bonds is too relevant.
blumkvist 11y ago
You've been drinking a lot of cool aid, it seems. This is a popular propanda statement on a lot of TVs in the region. The greek governments and people had many, many years to reform and they simply refused. They have jaw dropping social spending and corruption. They elected a populist party and voted OXI to the last proposal, which was better than this one. Also, Argentina is in a terrible situation, don't know why you even bring it up. Probably more kool aid you drank from some politician you saw on TV.
- mikeash 11y ago
  I think you make some good points, but unfortunately your first paragraph and last sentence destroy the value of your comment.
- neokya 11y ago
  This is my thought as well. Countries which recognised the problem and took charge of it are doing good now, eg Ireland. Greek politics looks quite bad. They need a market friendly government who can indeed do reforms. Sadly, left parties have the majority. Only way forward I guess is to force reform down their throat by IMF/EU first and then hope they realize it then continue it. That's what happened in India in 1991 https://en.wikipedia.org/wiki/Economic_liberalisation_in_India https://en.wikipedia.org/wiki/Economic_liberalisation_in_Ind...
- grey-area 11y ago
  You're both talking past each other by adopting extreme positions and making sweeping moral judgments about entire nations. My issue with this new bailout is that it presents yet more debt as the solution to crushing debts which Greece can't even afford the interest payments on. As the IMF admitted, it's not a sustainable solution, the many politicians and reporters talking about it probably know this but they just don't care because they can more easily sell a simple morality tale about Greek profligacy or German imperialism to their constituents.
  - derriz 11y ago
    I agree that more debt is disconcerting. But the alternative of going "cold turkey" would result in a humanitarian crisis. This is a country which imports most of its food, energy and medicine. The banks are bust and the government doesn't have the money to pay next month's public sector salaries.
elorant 11y ago
The debt is already beyond what Greece can pay, unemployment is very high, and yet the plan is to combine more debt and more austerity. These are the bad news. The good news is that now Greece will participate in ECB's QE program that will relief some of the debt burden and is also promised a 35bn five-year program to finance growth, as part of Juncker's 315bn investment plan. [1] All things considered this isn't a bad deal after all, if we could leave aside all the unpleasantness and the bad blood of the negotiation process. As a Greek I'm happy we avoided bankruptcy because exiting the Eurozone would bring us back to the stone age. And of course if we haven't been fooling around for five months we could probably get a much better deal. [1] http://www.euractiv.com/sections/eu-priorities-2020/junckers-eu315bn-investment-plan-unveiled-fifteenfold-leverage-and http://www.euractiv.com/sections/eu-priorities-2020/junckers...
- outside1234 11y ago
  I'm so happy to hear someone from Greece say that. I think the alternatives were all worse and this is the best of a lot of bad options.
- ZenoArrow 11y ago
  Reading the details of Juncker's €315bn investment, it just sounds like a new loan package, what makes this particular loan package good for economic growth?
  - elorant 11y ago
    Because it goes directly to the economy rather than bailing out banks.
    - ZenoArrow 11y ago
      I don't think it's quite as good a deal as you might think. First of all, the investment is €21 billion, not €315 billion. €315 billion is the projected return on that investment. Secondly, that €21 billion will be spread across a number of EU countries, Greece's share will be a fraction of that total. Thirdly, whilst SMEs are mentioned in the announcement, a larger portion of the investment returns are expected to come from long term investments. Long term investments generally refer to investments that have a low return on investment in the short term and better return in the long term, which can be a sensible way to invest, but those investments will be based on loans, and the interest accumulated on those loans doesn't necessarily start when the investment pays off (i.e. the interest could start straight after the loan is made, regardless of how long the return on investment is projected to take). Lastly, even if Greece got the full investment (which they aren't likely to), this €21 billion is a drop in the ocean compared to the existing debt, and furthermore will come with its own debt, it might help if it was managed right but it's a huge gamble and I'm not convinced it would make much of a dent in the overall debt. Perhaps I'm wrong, but I hope you can see why I have these doubts.

rsync 11y ago

"I hope the Greek government has the guts to go bankrupt. It'd be a short term loss with a long term gain. It's not like the creditors have to lose out, Argentina showed that by paying off its debts after their currency issues." The confusing part is that there is a very recent, very relevant precedent that was set by Iceland and for some reason that course of action is completely off the table. I don't know why. It appears to have worked very well for Iceland.

tptacek 11y ago
Iceland isn't part of the Eurozone, is it?
- kawera 11y ago
  No, it isn't.
  - tptacek 11y ago
    Then how are the situations comparable? Iceland had a bank crisis triggered by a speculative bubble produced by poorly managed deregulation. It imposed capital controls, was bailed out by the IMF, and took on a crapload of debt in the process, which it is paying off. All this was managed by Iceland's central bank, which controls Iceland's own currency. Greece has multiple structural flaws and an economy that does not appear compatible with the Eurozone, while being locked into the monetary policy of Germany and France, who effectively control the ECB. The only thing these events seem to have in common is that they were economic crises. Iceland's problems were acute; Greece's chronic. Iceland's had a single cause, Greece many. Iceland controls its monetary policy, Greece signed that over to the Eurozone. Iceland got assistance from the IMF, Greece requires ongoing assistance from the ECB. Iceland is paying off its debts, Greece is (it seems apparent) never going to do that.
radu_floricica 11y ago
I don't think Iceland's government defaulted. AFAIK, they simply let their own banks fail and made no move to support them. UK was pretty pissed off because their citizens lost cash in those banks, and they expected Iceland's citizens to cover for them. Greece is in a completely different pot of hot water. Their incomes (taxes) keep being lower than expenditures, aka salaries, pensions etc. Not getting any more EU help means they will start paying their doctors and firefighters with monopoly money.
- peterfirefly 11y ago
  > and they expected Iceland's citizens to cover for them. because that was actually Iceland's obligation so it wasn't at all unreasonable for the UK and the Netherlands to expect that. http://ec.europa.eu/finance/bank/index_en.htm http://ec.europa.eu/finance/bank/index_en.htm (Single Passport and cross-border banking)
  - nextw33k 11y ago
    I don't know the exact details but I didn't think Iceland was in Europe, the UK wanted to rush them in so that those rules could apply: https://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_European_Union https://en.wikipedia.org/wiki/Accession_of_Iceland_to_the_Eu...
    - peterfirefly 11y ago
      Iceland is and was in the EFTA and hence in the EEA where the single-passport rules apply -- and applied back then as well, otherwise the Iceland banks operating in the UK and the Netherlands would have been under UK/NL supervision instead of IS supervision. UK/NL were not ALLOWED under those rules to meaningfully supervise IS banks operating in their countries. As long as they operated under IS law and IS supervision, they operated under IS insurance rules with the usual EU (EEA) 100k€ limit. Iceland blatantly broke the rules. Later, after the shit hit the fan, Iceland did apply for EU membership and negotiations begun. Iceland later withdrew their application.

neokya 11y ago

It isn't that black and white. While exiting might be good in the long run, you make it sound like it will be all right. If they exit, Greece will suffer worst and will need humanitarian help to save it's citizens. Remember, Argentina still can't raise capital from market even after more than a decade.

Daishiman 11y ago
> Remember, Argentina still can't raise capital from market even after more than a decade. Argentina was quite capable of doing that just right before their legal case with a few predatory holdouts made life for the government difficult again. To be fair, it was an incredibly mismanaged trial (both by the defending lawyers and Cristina's insane and confusing statements), and the holdouts in question are essentially the scum of planet Earth, purposely speculating on junk bonds and always going to trial for profit. Despite that, both national and local governments have been raising capital to the tune of several billion dollars. Of course, the interest rate is insane, but that's more of a question of the government's disastrous capital control policies; serious private investors were not convinced that the default over the holdouts' bonds is too relevant.

blumkvist 11y ago

You've been drinking a lot of cool aid, it seems. This is a popular propanda statement on a lot of TVs in the region. The greek governments and people had many, many years to reform and they simply refused. They have jaw dropping social spending and corruption. They elected a populist party and voted OXI to the last proposal, which was better than this one. Also, Argentina is in a terrible situation, don't know why you even bring it up. Probably more kool aid you drank from some politician you saw on TV.

mikeash 11y ago
I think you make some good points, but unfortunately your first paragraph and last sentence destroy the value of your comment.
neokya 11y ago
This is my thought as well. Countries which recognised the problem and took charge of it are doing good now, eg Ireland. Greek politics looks quite bad. They need a market friendly government who can indeed do reforms. Sadly, left parties have the majority. Only way forward I guess is to force reform down their throat by IMF/EU first and then hope they realize it then continue it. That's what happened in India in 1991 https://en.wikipedia.org/wiki/Economic_liberalisation_in_India https://en.wikipedia.org/wiki/Economic_liberalisation_in_Ind...
grey-area 11y ago
You're both talking past each other by adopting extreme positions and making sweeping moral judgments about entire nations. My issue with this new bailout is that it presents yet more debt as the solution to crushing debts which Greece can't even afford the interest payments on. As the IMF admitted, it's not a sustainable solution, the many politicians and reporters talking about it probably know this but they just don't care because they can more easily sell a simple morality tale about Greek profligacy or German imperialism to their constituents.
- derriz 11y ago
  I agree that more debt is disconcerting. But the alternative of going "cold turkey" would result in a humanitarian crisis. This is a country which imports most of its food, energy and medicine. The banks are bust and the government doesn't have the money to pay next month's public sector salaries.

elorant 11y ago

The debt is already beyond what Greece can pay, unemployment is very high, and yet the plan is to combine more debt and more austerity. These are the bad news. The good news is that now Greece will participate in ECB's QE program that will relief some of the debt burden and is also promised a 35bn five-year program to finance growth, as part of Juncker's 315bn investment plan. [1] All things considered this isn't a bad deal after all, if we could leave aside all the unpleasantness and the bad blood of the negotiation process. As a Greek I'm happy we avoided bankruptcy because exiting the Eurozone would bring us back to the stone age. And of course if we haven't been fooling around for five months we could probably get a much better deal. [1] http://www.euractiv.com/sections/eu-priorities-2020/junckers-eu315bn-investment-plan-unveiled-fifteenfold-leverage-and http://www.euractiv.com/sections/eu-priorities-2020/junckers...

outside1234 11y ago
I'm so happy to hear someone from Greece say that. I think the alternatives were all worse and this is the best of a lot of bad options.
ZenoArrow 11y ago
Reading the details of Juncker's €315bn investment, it just sounds like a new loan package, what makes this particular loan package good for economic growth?
- elorant 11y ago
  Because it goes directly to the economy rather than bailing out banks.
  - ZenoArrow 11y ago
    I don't think it's quite as good a deal as you might think. First of all, the investment is €21 billion, not €315 billion. €315 billion is the projected return on that investment. Secondly, that €21 billion will be spread across a number of EU countries, Greece's share will be a fraction of that total. Thirdly, whilst SMEs are mentioned in the announcement, a larger portion of the investment returns are expected to come from long term investments. Long term investments generally refer to investments that have a low return on investment in the short term and better return in the long term, which can be a sensible way to invest, but those investments will be based on loans, and the interest accumulated on those loans doesn't necessarily start when the investment pays off (i.e. the interest could start straight after the loan is made, regardless of how long the return on investment is projected to take). Lastly, even if Greece got the full investment (which they aren't likely to), this €21 billion is a drop in the ocean compared to the existing debt, and furthermore will come with its own debt, it might help if it was managed right but it's a huge gamble and I'm not convinced it would make much of a dent in the overall debt. Perhaps I'm wrong, but I hope you can see why I have these doubts.