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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 t

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.
- grey-area 11y ago
  To actually exit the vicious downward spiral, they need significant debt forgiveness (yes more), as Germany received after WWII, as well as stuctural reform of course, but one without the other will disappoint both creditors and the Greek people. The funniest thing about this whole manufactured crisis is that the ECB is printing 1 trillion euros via QE at the moment to buy gov bonds and nationalised industry bonds, which completely dwarfs the sums for Greece and is essentially doing the same thing - buying government debt and making all EZ citizens slightly poorer in order to allow counter-cyclical investment. http://www.bloombergview.com/quicktake/europes-qe-quandary http://www.bloombergview.com/quicktake/europes-qe-quandary
cmurf 11y ago
Right. And I don't think there is any good path forward. Greece has essentially gone up a box canyon. What annoys me about the IMF is, where the hell were they with these observations and recommendation about debt even one month ago when everything was actually working? Where were they six months ago? The debt load being untenable is not news for everyone else. Apparently the EU has a law that makes actual debt forgiveness illegal, all that can be done is extend it or reduce the interest rate. Neither of these approximates what the IMF would recommend, has recommended, to any other country with their own currency rather than being part of a currency union: monetize the debt through inflation. I can understand the German affinity for rules and policy adherence over politics. But self evidently the Greeks are not Germans, and do not share this preference. So how does the EU system afford a compromise that at worst means both sides are equally unhappy? Because right now, basically Germany and the creditors are getting their way to the expense of Greece. Europe is clearly not willing to either bail out Greece (or Portugal, or Italy), nor long term subsidize their economies like what happens in the U.S. It's not willing or able to setup an EU wide tax structure that's EU administered and audited to both make compliance easy, as well as consistently punishing tax evasion across all socio-economic levels. None of the major problems have been addressed: Greece's debt load is unchanged, as well as its affinity for patronage and tax evasion.
- peterfirefly 11y ago
  > None of the major problems have been addressed: Greece's debt load is unchanged, as well as its affinity for patronage and tax evasion. The current ultimatum is very much about addressing those problems.
  - ZenoArrow 11y ago
    How is adding more debt designed to address the debt load problem? Is Greece getting a sizable interest-free repayment holiday?
    - peterfirefly 11y ago
      Yes. And they have been enjoying one for several years now.
blumkvist 11y ago
This is not a matter of black and white. One side is grey and the other is pitch black. A black hole sucking money. I'm sorry, but they have been paying themselves pensions, child support, 13th, 14th and 15th salaries + other bonuses for national holidays for decades, with money they don't have. Time to pay up. That's how it goes. If they have to pay with tears, I'm truly sorry for the situation, but the party is over.

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.

grey-area 11y ago
To actually exit the vicious downward spiral, they need significant debt forgiveness (yes more), as Germany received after WWII, as well as stuctural reform of course, but one without the other will disappoint both creditors and the Greek people. The funniest thing about this whole manufactured crisis is that the ECB is printing 1 trillion euros via QE at the moment to buy gov bonds and nationalised industry bonds, which completely dwarfs the sums for Greece and is essentially doing the same thing - buying government debt and making all EZ citizens slightly poorer in order to allow counter-cyclical investment. http://www.bloombergview.com/quicktake/europes-qe-quandary http://www.bloombergview.com/quicktake/europes-qe-quandary

cmurf 11y ago

Right. And I don't think there is any good path forward. Greece has essentially gone up a box canyon. What annoys me about the IMF is, where the hell were they with these observations and recommendation about debt even one month ago when everything was actually working? Where were they six months ago? The debt load being untenable is not news for everyone else. Apparently the EU has a law that makes actual debt forgiveness illegal, all that can be done is extend it or reduce the interest rate. Neither of these approximates what the IMF would recommend, has recommended, to any other country with their own currency rather than being part of a currency union: monetize the debt through inflation. I can understand the German affinity for rules and policy adherence over politics. But self evidently the Greeks are not Germans, and do not share this preference. So how does the EU system afford a compromise that at worst means both sides are equally unhappy? Because right now, basically Germany and the creditors are getting their way to the expense of Greece. Europe is clearly not willing to either bail out Greece (or Portugal, or Italy), nor long term subsidize their economies like what happens in the U.S. It's not willing or able to setup an EU wide tax structure that's EU administered and audited to both make compliance easy, as well as consistently punishing tax evasion across all socio-economic levels. None of the major problems have been addressed: Greece's debt load is unchanged, as well as its affinity for patronage and tax evasion.

peterfirefly 11y ago
> None of the major problems have been addressed: Greece's debt load is unchanged, as well as its affinity for patronage and tax evasion. The current ultimatum is very much about addressing those problems.
- ZenoArrow 11y ago
  How is adding more debt designed to address the debt load problem? Is Greece getting a sizable interest-free repayment holiday?
  - peterfirefly 11y ago
    Yes. And they have been enjoying one for several years now.

blumkvist 11y ago

This is not a matter of black and white. One side is grey and the other is pitch black. A black hole sucking money. I'm sorry, but they have been paying themselves pensions, child support, 13th, 14th and 15th salaries + other bonuses for national holidays for decades, with money they don't have. Time to pay up. That's how it goes. If they have to pay with tears, I'm truly sorry for the situation, but the party is over.