As Greece falls in arrears, one man wants to crowdfund €1.6 billion payment

British campaign organizer: “Right come on guys, let's just get this shit sorted.”

Read the whole story

 

[kruzes]

MatthewSleeman[/url]":28ap9a8d]

0bliv!on[/url]":28ap9a8d]

Cloudgazer[/url]":28ap9a8d]

kruzes[/url]":28ap9a8d]

bspoel[/url]":28ap9a8d]I downvoted because it is a misleading stat. That money didn't go to Greece, it went to pay back the banks that made the original loans. And it wasn't a donation either, those bailouts are loans. Source:

http://www.theguardian.com/world/2015/j ... t-money-go

So you have a mortgage you won't be able to pay. I go to the bank and tell them you're not going to be able to pay, and use my influence to have them cut the debt in half. Then I lend you the rest of the money from my own pocket (so you can pay back the rest of it and keep the house), and some more to help you get back on your feet. You don't have to pay interest or principal on my loan for 10 years, and the interest rates are historically low. You just have to promise you'll get a job, whatever that is.

Who am I helping? The bank, I'm sure.

Bad analogy

Instead suppose you have a large unsecured credit card debt that rolls every few months and your lender tells you they will no longer roll it over and you must start paying it down on a schedule that you can't possibly manage.

Then the troika show up and say that you have to pay every penny (the debt wasn't cut in half, in fact there wasn't any hair cut at all, which is unheard of in a default crisis), but that you have to spend less on food, stop supporting your aged parents, give up your health insurance, etc in order to make the payments - which in return they will put on a slightly less crazy schedule. Except it's worse than that, because due to the effects of fiscal multipliers when you're an entire nation the more you cut your expenses, the less you earn, so rather than paying down your debt, in practical terms cutting your expenditure just puts you deeper in a hole.

That's not lefty (nobel prize winning) economists like Stieglitz or Krugman saying it, that's straight from the IMF, one of the troika of bodies inflicting the pain.

https://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf

Let's use your analogy then - other than declaring bankruptcy, what would you advise the 'individual' in this case do? Keep spending money that's borrowed on credit that they can't repay? Let's not forget, it was Greece that went, hat in hand, to the troika to request a bailout and the loan.

And I don't understand this constant demonising of the troika - at the end of the day, what THEY want is also to be repaid. They don't have some ulterior motive of driving Greece into the ground for some nefarious purpose, they want Greece to cut its overly generous pension plans, start actually collecting taxes, and increase the net productivity of the country.

They reason the troika is catching flak is because they should have KNOW that Greece couldn't service those loans, look at the size of them, it's rather silly.

And given the nature of the lending institutions they should have known that would have had a bad effect on the Greek economy and what a good, and their demanding that the bad steps be taken. Or at least that's what I've been gathering from the the links in comments

The problem is some people say Greece's problem wasn't so bad because the UK had 250% debt to GDP at the end of the war and paid it, but others will say the 170% Greece has is unpayable.

There's nothing to say that having a stock of public debt equal two years of a country's output is unsustainable, particularly when you're talking about Europe, where many states collect 50% of GDP every year, and in Greece there isn't much private debt to speak of (eg. Portugal is worse of than Greece when you consider its investment position abroad: more external debt vs. assets).

 

[0bliv!on]

copsewood[/url]":3lsiftk7]

mexaly[/url]":3lsiftk7]
The EU is still young. If they can hang on to Greece this early on, they will do better with bigger problems down the line.

I'm happy to forgive Greece all their debts. Coming from one of the richest countries in the EU which doesn't want to be in the Euro, and probably never will, the issues of whether Greece continues in the Euro (bad idea) or whether Greece continues in the EU (probably necessary for political stability) are not inextricably linked. As far as I'm concerned forgive the debts, let the banks lose profits and bankers lose some bonuses on account of this, but there's no unresolvable reason a Greece with its own currency shouldn't continue to be in the EU.

Easy to say when it's not your money that's being owed.

The private banks have already had most of their loans repaid, it's now the European institutions - the IMF and the EU that are owed money. More importantly though - it's the structural problems with the Greek economy which led to the need for a bailout (tax evasion, government over-spending, etc) which will persist in being problems unless they're addressed.

Right now Greece is like a grown man throwing a tantrum because he wants steak for dinner when he can only afford beans.

 

[CppThis]

Abhi Beckert[/url]":2eernxm9]

Peevester[/url]":2eernxm9]Yeah, in the worst possible way, by giving them money to pay interest on loans, but not enough to actually pay off the loans. The EU should treat their member states like the US does - if one is in trouble, you send grants, not force them to take out more loans and kick the can down the road by forcing more debt.

There's no question Greece is messed up - they have a dysfunctional tax system and a fairly corrupt government (to the point where they try to arrest auditors trying to point out the corruption - I don't remember the guy's name or I'd find a link for that). However, crushing them with austerity and forcing them to take on new loans isn't going to fix any of that.

Since you're so critical of how the EU is approaching this, what do you think they should be doing differently?

Well clearly sir they should just, uh, you know, like, do something, maaan. Yeah! Professor Derpypants always told me that we as a global community can solve anything with sufficient finger-waving and social somethingorother. And by 'we' I mean 'someone else' of course, since I'm a member of the, uh, disenfranchised thingie and thus don't have any responsibility for anything then, now, or in the future.

 

[Some Idiot]

theoilman[/url]":2jwv5p9p]

overHere[/url]":2jwv5p9p]Bail them out so they can continue to mismanage and be right back in this mess next time? No thank you. Greece needs to get their act together. I feel for the working class that is going to take the brunt of this, but perhaps if they'd forced the elite to take better care of their economy, they wouldn't be facing this problem.

Bail them out, and they won't learn a lesson. Let them fail, and maybe, just maybe, they won't do it again. Look at the banking situation here in the U.S. You think they aren't going to do that again? Most of them made a killing on the shitstorm they caused, and no one was held accountable.

And you think the IMF and troika are innocent idealists, unlike the US banks? Hah!

Bearing in mind that one US bank in particular was the one to aid the previous administration in hiding some of its debts in order to make a profit?

I'll give you three guesses which one. And, by the way, this is something that was known to the IMF.

 

[kerikoli]

copsewood[/url]":w34cs62i]

mexaly[/url]":w34cs62i]
The EU is still young. If they can hang on to Greece this early on, they will do better with bigger problems down the line.

I'm happy to forgive Greece all their debts. Coming from one of the richest countries in the EU which doesn't want to be in the Euro, and probably never will, the issues of whether Greece continues in the Euro (bad idea) or whether Greece continues in the EU (probably necessary for political stability) are not inextricably linked. As far as I'm concerned forgive the debts, let the banks lose profits and bankers lose some bonuses on account of this, but there's no unresolvable reason a Greece with its own currency shouldn't continue to be in the EU.

Agreed.
It's not gonna be cheap but we have to put an end to it.
Greeks will loose more than what they imagine but it's their choice entirely.

 

[kzagoris]

saru-kun[/url]":abdb0pgo]Give a nation some money, they'll eat for a day.
Teach a nation to balance their own budget (or at least keep their Debt/GDP ratio in check), they'll eat for a lifetime.

A pile of money with no conditions would just put off the inevitable. Greece's problems have been systemic problems, years in the making. The entire Euro currency concept, being fundamentally flawed, has not helped either.

Either way, another bailout, without serious, comprehensive reform, will do them very little good at this point.

you know that the greece budget is balanced? The talks are about the amount of surplus (2% vs 3.5 %)

 

[Cloudgazer]

kruzes[/url]":3ctwkoq4]

Cloudgazer[/url]
Bad analogy

Instead suppose you have a large unsecured credit card debt that rolls every few months and your lender tells you they will no longer roll it over and you must start paying it down on a schedule that you can't possibly manage.

Then the troika show up and say that you have to pay every penny (the debt wasn't cut in half, in fact there wasn't any hair cut at all, which is unheard of in a default crisis), but that you have to spend less on food, stop supporting your aged parents, give up your health insurance, etc in order to make the payments - which in return they will put on a slightly less crazy schedule. Except it's worse than that, because due to the effects of fiscal multipliers when you're an entire nation the more you cut your expenses, the less you earn, so rather than paying down your debt, in practical terms cutting your expenditure just puts you deeper in a hole.

That's not lefty (nobel prize winning) economists like Stieglitz or Krugman saying it, that's straight from the IMF, one of the troika of bodies inflicting the pain.

https://www.imf.org/external/pubs/ft/wp/2013/wp1301.pdf

Greece had a 50%/€100bn haircut on privately held debt, and €50bn set aside to prop up their own banks after this. That's on top of the €230bn in bilateral and institutional loans, and the €90bn emergency lifeline to greek banks.

I'm not going to comment on anything else, if you're going to base your opinion on the fact that there was no haircut.

https://en.wikipedia.org/wiki/Greek_gov ... ebt_crisis

But in your analogy the 50% haircut happened when the borrower went to the bank in trouble, that's not at all the case here.

Instead in 2010 when the Greeks admitted they had a problem they had deep austerity imposed, and it wasn't until 2012 that we got the haircut. By that time GDP had contracted substantially, and the debt to GDP ratio would have hit 216%, up from 150% at the time austerity was imposed.

The haircut was also in effect much smaller because over a third of the debt forgiven was held by Greek banks in the first place, so that money had to be replaced by the troika and ended up back on Greece's balance sheet.

From 2010 to 2012, the troika presided over a real decline in GDP of over 20%, an increase in debt ratio from 150% to 216% (pre haircut) and a 10fold increase in private interest rates on greek debt.

This isn't a case of a feckless borrower who blew through their 50% loan forgiveness. This is a case of vindictive lenders, who imposed such destructive policies that a subsequent 70billion euro haircut (the net amount) didn't even begin to cover.

 

[bspoel]

JPan[/url]":1hsbgpjp]
Not only did the EU give them 70% of that money, they also gave it to them on ultra-low interest rates.

I'm sorry, but you're simply wrong. It wasn't a gift. You can't charge interest on a gift.

JPan[/url]":1hsbgpjp]
So low that they only have to pay 1% of their GDP to service it. So obviously it did "go to the banks" but that is what debts are.

Before the bailout, Greece owed money to the banks of Europe. After the bailout, Greece owed money to the troika. Less than 10% of the money went to Greece to get back on its feet.

JPan[/url]":1hsbgpjp]
They used the debt to pay for lots of things they couldn't afford before. And now they have to pay for that.

You are right if you're talking pre-2010. The problem back then was a corrupt political elite that cooked the books. Which, by the way, was done with full knowledge of Europe, and with permission of Eurostat, the agency that checks memberstate finances.

Last year that corrupt bunch was finally voted out of office. That is a big opportunity for change. If you listen to their finance minister, they really want to reform the tax system etc. (http://livestream.com/dmake/zukunft/videos/89664402 , English starts at 12:40)
To make that work you need a period of stability. The EU could easily have created that by throwing the new government a bone, but they didn't, probably for political reasons.

JPan[/url]":1hsbgpjp]
So yes the money went to service the debt of Greece and Greece didn't use it for cocaine. But the money they owed to the banks was used to live way over their means before. So yes every EU citizen gave them 750Euro. Just for money they used up before.

I think you are right on average. But I don't think that money was spread evenly among Greeks. Most of it went to the corrupt elite. If there's a way to get it back from them, I'm all for it, but unfortunately that money is very mobile and can probably not be recovered. I just think it is unfair to blame that mess on the average Greek. The first to blame is the corrupt elite, and then the banks that enabled them with these loans.

 

[Ahtaps]

Wait, so people actually want to pay tax? I guess if you dress it up as crowdfunding to pay a national budget then it does make it more attractive.

 

[kerikoli]

Well, Greece seemes to get down on earth

http://www.ft.com/fastft/353421

 

[wk_]

Thrasius[/url]":is7u0fmg]Greece didn't do this on its own. I can't find the Krugman column showing that Greek debt levels weren't too outside the norm pre financial crisis. So I'll post this:

http://mobile.nytimes.com/2015/06/29/op ... &referrer=

European Central Bank and IMF imposed austerity caused the current crisis, not Greece.

And Greece's inability to inflate to get out of the liquidity trap has forced its hand. Germany is holding a gun to Greece's head to enact its own ideological agenda.

And I want to add in an edit that Europe is endangering the whole world economy through its actions. Screw the banks. Make them take a hit. Save Greece!

The average pension in Greece in 2009 was 1350 EUR. It was just one of the many things that was unsustainable. And it's now Germany's fault why they are broke.

 

[bglick4]

Well, maybe this will give the Greeks an idea of what 1.6 Billion euros looks like. Although, if this were actually a popular cause, it would give an idea of the power of crowd funding. After all, all it would take is for everyone in Europe to donate at little over two euros and the debt is paid. It would be interesting to see a crowd funding initiative for a high budget charity project that would be popular, like building levees in a poor flood ravaged area or something along those lines.


As it is though, even some of the most liberal big government types look on Greece with disgust. Not a chance this is popular enough to get anywhere close.

 

[JPan]

bspoel[/url]":vzzipoi7]

JPan[/url]":vzzipoi7]
Not only did the EU give them 70% of that money, they also gave it to them on ultra-low interest rates.

I'm sorry, but you're simply wrong. It wasn't a gift. You can't charge interest on a gift.

JPan[/url]":vzzipoi7]
So low that they only have to pay 1% of their GDP to service it. So obviously it did "go to the banks" but that is what debts are.

Before the bailout, Greece owed money to the banks of Europe. After the bailout, Greece owed money to the troika. Less than 10% of the money went to Greece to get back on its feet.

JPan[/url]":vzzipoi7]
They used the debt to pay for lots of things they couldn't afford before. And now they have to pay for that.

You are right if you're talking pre-2010. The problem back then was a corrupt political elite that cooked the books. Which, by the way, was done with full knowledge of Europe, and with permission of Eurostat, the agency that checks memberstate finances.

Last year that corrupt bunch was finally voted out of office. That is a big opportunity for change. If you listen to their finance minister, they really want to reform the tax system etc. (http://livestream.com/dmake/zukunft/videos/89664402 , English starts at 12:40)
To make that work you need a period of stability. The EU could easily have created that by throwing the new government a bone, but they didn't, probably for political reasons.

JPan[/url]":vzzipoi7]
So yes the money went to service the debt of Greece and Greece didn't use it for cocaine. But the money they owed to the banks was used to live way over their means before. So yes every EU citizen gave them 750Euro. Just for money they used up before.

I think you are right on average. But I don't think that money was spread evenly among Greeks. Most of it went to the corrupt elite. If there's a way to get it back from them, I'm all for it, but unfortunately that money is very mobile and can probably not be recovered. I just think it is unfair to blame that mess on the average Greek. The first to blame is the corrupt elite, and then the banks that enabled them with these loans.

I didn't say they gave it to them as a gift. They gave it to them as a loan so they wouldn't go bankrupt. And they gave it to them on ultra-low interest rates. But yes if I sounded like it was a gift that is not correct.

But its just not true to frame it as if the money went to the Greek elite and the rest didn't benefit. Yes a lot of money went to a minority but most money is just banally spend on nice people.

Greece had very early retirement ages ( they spend 16% of their GDP on pensions, Germany has 8) , they had a way too big state with lots of comparable well paid state employees that did very little. That doesn't even mean that these people got rich but you still have to achieve 30k per person. And the country simply wasn't a 30k per year economy. They were at best a 20k a year economy so that has to shrink. As mentioned they had 13% trade deficit. Imports were twice exports. What Greece was doing just didn't support a country that has 70% of the per head GDP as something like France ( with lots of worldbeating companies ) Germany ( with higher exports than the US ) or the UK. And no most of that money did not go to the elites.

So the important thing is to get the economy working again and the program of Syriza is definitely not the right way to do it. The issue is not money the sides were very close in that issue, the issue is to force them to reform a lot of the areas they don't want to touch because it involves their clientele. Like state workers and yes pensioners.

 

[MatthewSleeman]

JPan[/url]":29fenood]

bspoel[/url]":29fenood]

JPan[/url]":29fenood]

muhname[/url]":29fenood]Every euro-zone citizen (with the exception of Greeks) has already donated like 750€..

Why does this get down voted? The bailout package in total is over 220billions ( including target costs etc. ) this is pretty much 750 Euro for every person. This whole 3 Euro thing is just ridiculous.

I downvoted because it is a misleading stat. That money didn't go to Greece, it went to pay back the banks that made the original loans. And it wasn't a donation either, those bailouts are loans. Source:

http://www.theguardian.com/world/2015/j ... t-money-go

That's just a stupid argument. They borrowed money, they need to service the interest rates. Not only did the EU give them 70% of that money, they also gave it to them on ultra-low interest rates. So low that they only have to pay 1% of their GDP to service it. So obviously it did "go to the banks" but that is what debts are. They used the debt to pay for lots of things they couldn't afford before. And now they have to pay for that.

Its like someone having a job that makes 28k a year and borrowing 5k every year because his lifestyle costs 32k and then when the total debt is 50k he also gets a wage cut and only makes 24k. So the banks try to foreclose him. Now the family of this person take over 40k of the debt and give it to him practically interest free, they just tell him he needs to cut expenditure to 23.7k and build up some skills to build up a better job. And by the way the family is not that rich either, their income is between 40k and 14k a year and some of them have had similar problems before and cut expenditure severely.

And then the child tells the family that they are selfish and mean that they don't pay his 32k lifestyle forever. By the way all numbers are very roughly GDP per head.

So yes the money went to service the debt of Greece and Greece didn't use it for cocaine. But the money they owed to the banks was used to live way over their means before. So yes every EU citizen gave them 750Euro. Just for money they used up before.

You get only out of that argument if you say that money you owe is not important and they should have just defaulted. Which works but then they cannot believe they can continue to use the same bank account as the family anymore ( i.e. they need to get out of the Euro ) and they will definitely never get a house loan again because their credit rating is shot to hell and back.

To continue your example, your a freelance consultant and some of those cuts you had to make? They where to stuff that got you jobs that make you money, it sort of creates a downward cycle. We can only hope it doesn't continue

 

[bglick4]

Ahtaps[/url]":kbdl92eu]Wait, so people actually want to pay tax? I guess if you dress it up as crowdfunding to pay a national budget then it does make it more attractive.

Well, the problem isn't that people aren't willing to pay taxes, the problem is that Greeks aren't willing to pay taxes and con't care if this tanks the Euro. It would actually be kind of great if this caught on, especially in those countries blessed with a two party system where, even if 49% of the people support a project, it will get no funding because the majority oppose it. Instead of raising taxes on everybody to build a ballpark or other such nonsense, start a crowd funding initiative and let those who foolishly support such projects pay for it. "If you don't want your sports team whose games you can't afford to attend to move to another city, donate to this crowd funding initiative so that you will still be able to watch them on TV unless they are blacked out which would never be if they were in another city."

 

[JaneDoe]

overHere[/url]":4wtl3k1p]Bail them out so they can continue to mismanage and be right back in this mess next time? No thank you. Greece needs to get their act together.

Collecting all the taxes the Greece people evaded would be a huge step in solving the current problems.

 

[Deleted member 192806]

saru-kun[/url]":4tolajt0]Give a nation some money, they'll eat for a day.
Teach a nation to balance their own budget (or at least keep their Debt/GDP ratio in check), they'll eat for a lifetime.

A pile of money with no conditions would just put off the inevitable. Greece's problems have been systemic problems, years in the making. The entire Euro currency concept, being fundamentally flawed, has not helped either.

Either way, another bailout, without serious, comprehensive reform, will do them very little good at this point.

Long as those "reforms" result in an independent Greece, instead of a "third-world" dependent Greece.

 

[JPan]

MatthewSleeman[/url]":3709lah7]

JPan[/url]":3709lah7]

bspoel[/url]":3709lah7]

JPan[/url]":3709lah7]

muhname[/url]":3709lah7]Every euro-zone citizen (with the exception of Greeks) has already donated like 750€..

Why does this get down voted? The bailout package in total is over 220billions ( including target costs etc. ) this is pretty much 750 Euro for every person. This whole 3 Euro thing is just ridiculous.

I downvoted because it is a misleading stat. That money didn't go to Greece, it went to pay back the banks that made the original loans. And it wasn't a donation either, those bailouts are loans. Source:

http://www.theguardian.com/world/2015/j ... t-money-go

That's just a stupid argument. They borrowed money, they need to service the interest rates. Not only did the EU give them 70% of that money, they also gave it to them on ultra-low interest rates. So low that they only have to pay 1% of their GDP to service it. So obviously it did "go to the banks" but that is what debts are. They used the debt to pay for lots of things they couldn't afford before. And now they have to pay for that.

Its like someone having a job that makes 28k a year and borrowing 5k every year because his lifestyle costs 32k and then when the total debt is 50k he also gets a wage cut and only makes 24k. So the banks try to foreclose him. Now the family of this person take over 40k of the debt and give it to him practically interest free, they just tell him he needs to cut expenditure to 23.7k and build up some skills to build up a better job. And by the way the family is not that rich either, their income is between 40k and 14k a year and some of them have had similar problems before and cut expenditure severely.

And then the child tells the family that they are selfish and mean that they don't pay his 32k lifestyle forever. By the way all numbers are very roughly GDP per head.

So yes the money went to service the debt of Greece and Greece didn't use it for cocaine. But the money they owed to the banks was used to live way over their means before. So yes every EU citizen gave them 750Euro. Just for money they used up before.

You get only out of that argument if you say that money you owe is not important and they should have just defaulted. Which works but then they cannot believe they can continue to use the same bank account as the family anymore ( i.e. they need to get out of the Euro ) and they will definitely never get a house loan again because their credit rating is shot to hell and back.

To continue your example, your a freelance consultant and some of those cuts you had to make? They where to stuff that got you jobs that make you money, it sort of creates a downward cycle. We can only hope it doesn't continue

That is the Keynesian argument and it is definitely valid. If your economy has a lot of production capacity and it sits idle because of missing demand, adding money to the economy can help to keep people in work. That is the idea of Keynes. Now you an definitely argue that the austerity measures made the problem worse in a lot of countries ( in the short-term, in the long term keynsians agree that productivity is the number that counts ). So Spain, Portugal et al. might have a claim that they would have had a less painful time if they could have added money to their economy. But Greece? They had an import deficit of 13%, and a big public sector. And their private sector is strangled by a lot of red tape and has lots of tourism etc which do not depend on local demand. So I doubt that this is a valid argument here.

The only question was how quickly to do the adjustment and perhaps the EU miscalculated by pressing for fast adjustments and thereby preparing the way for Tsirpas and his band of clowns to get elected. But as said the economy was growing again the adjustment process seemed to be over and they could now have followed up with structural reforms ( which they should have done earlier ) not turning back the dial to the handout way it was and asking the EU to finance that.

 

[Fristie Blade]

bspoel[/url]":zwtke4r5]

Fristie Blade[/url]":zwtke4r5]

coslie[/url]":zwtke4r5]

bluesdrivemonster[/url]":zwtke4r5]How true is it that the current PM of Greece won't impose higher taxes on the upper class of Greece to get them out of this mess? And would that even help a lot?

Not even a little true. The current leadership want to crack down in tax evasion. They also offered to defer military spending. However the IMF and company want to dictate cuts to social spending and an increase to taxes that will fall heavily on the poor.

Excuse me, but if you followed the negotiations - i did - you might have observed that the Greece government was very reluctant to cut into military spending and actually needed to be pushed into accepting it by the trojka. For some stupid reason, the fictional idea of "the Turks will attack us" generates a "can't cut budget here" attitude. Totally silly because they would not attack in first place and if ever anything happened, Greece under attack would never be accepted by any of its allies. And Greece would not even need to pay the bill for their allies coming to help

Very hard to verify your observations without links. This piece explains why cutting military spending isn't as easy as it sounds.

The part where Greece was pressured into cutting harder in military spending was claimed by Jean-Claude Juncker according to this article[7url] in Flemish. He claimed it when venting his frustration about the Greece government not doing its most in order to find a compromise.

As for the piece you linked, it was an interesting read. It explains some reasons why it might be more difficult, but I did not say it needed to be easy. If there were an easy solution, I am sure that it would have been taken a long time ago.

Not all of the objections seem valid either.
First the article claimed that in NATO you MUST do a certain amount of spending so they can not save there. But then it goes on telling, Greece and a few others are the only ones complying with the rule. That shows it is not really a must then.
It claims that he can't go hard on military spendings because he might loose their support. I do not find it credible that he would be afraid of a military coup because of them being dissatisfied with cutting their budget. If ever there was a good excuse for a left party to cut further into military spending then it is this one: an external debt that forces to far-reaching measures.
And the Turkish threat is a bogus one. Yes, there are small infractions and testing. But Turkey is not Russia. Nor is Greece Ukraine. Turkey would not dare attack Greece and Europe would NEVER let Greece being attacked.

 

[emphy]

overHere[/url]":1xdz43t9]Bail them out so they can continue to mismanage and be right back in this mess next time? No thank you. Greece needs to get their act together.

This current government poposed to do so... this is constantly being missed in the media reports but they agreed to most of the measures, but in exchange they ask for some hint of support to be able to sustain the debt.

 

[JPan]

emphy[/url]":3bzozkez]

overHere[/url]":3bzozkez]Bail them out so they can continue to mismanage and be right back in this mess next time? No thank you. Greece needs to get their act together.

This current government poposed to do so... this is constantly being missed in the media reports but they agreed to most of the measures, but in exchange they ask for some hint of support to be able to sustain the debt.

Ah come one. The debt service is already quite low. Even 2-3% of GDP is not a huge amount of money for debt services. But on the table were 1% this year increasing later. Also debt restructuring in the future was on the table but AFTER they reformed first. The main problem is that the Greek government promises to reach these numbers by increasing taxes on companies and people. They want to save pensioners and state workers. ( which are their clientel ) the problem is that you need business and workers to get out of the doldrums so IWF and EU tried to get them to cut there instead. Because increasing business taxes now would surely make them miss the target even more. So the problem is not the numbers the problem is the Syriza is a socialist party that wants to protect its clientel and that thinks that "money is paper".

 

[kruzes]

Cloudgazer[/url]":b9wv3c4r]From 2010 to 2012, the troika presided over a real decline in GDP of over 20%, an increase in debt ratio from 150% to 216% (pre haircut) and a 10fold increase in private interest rates on greek debt.

And between 2000 and 2007 the greeks presided over an accumulated 35% of GDP growth, wih a 35% increase in public expenditure, an average 75% in salary increases, and 50% increase in consumer spending. That's 3 to 8 times as much as either Germany or Portugal, countries (strong and weak) that shared the same currency.

What does Greece have to show for that time? They organized an Olympiad, little else. It was all fueled by debt from govs they voted in again and again.

Now they're back at where they started, with GDP at the 2000 level. The difference is, because they didn't reform, a quarter of them don't have jobs, while the rest is still getting paid above 2000 levels. Retirees help their grandsons instead of them working to help their elders (incidentally only one of those creates actual wealth that can be redistributed).

 

[emphy]

JPan[/url]":hjnsp2wj]

Ah come one. The debt service is already quite low. Even 2-3% of GDP is not a huge amount of money for debt services. But on the table were 1% this year increasing later. Also debt restructuring in the future was on the table but AFTER they reformed first. The main problem is that the Greek government promises to reach these numbers by increasing taxes on companies and people. They want to save pensioners and state workers. ( which are their clientel ) the problem is that you need business and workers to get out of the doldrums so IWF and EU tried to get them to cut there instead. Because increasing business taxes now would surely make them miss the target even more. So the problem is not the numbers the problem is the Syriza is a socialist party that wants to protect its clientel and that thinks that "money is paper".

Please read:
http://yanisvaroufakis.eu/2015/06/18/gr ... eurogroup/

And:
http://www.theguardian.com/business/201 ... ill-needed

Edit: guardian link added

 

[muhname]

bspoel[/url]":361mhgk4]

JPan[/url]":361mhgk4]

muhname[/url]":361mhgk4]Every euro-zone citizen (with the exception of Greeks) has already donated like 750€..

Why does this get down voted? The bailout package in total is over 220billions ( including target costs etc. ) this is pretty much 750 Euro for every person. This whole 3 Euro thing is just ridiculous.

I downvoted because it is a misleading stat. That money didn't go to Greece, it went to pay back the banks that made the original loans. And it wasn't a donation either, those bailouts are loans. Source:

http://www.theguardian.com/world/2015/j ... t-money-go

The money did go to Greece in the sense that it was used to pay their debt. Also, it was a donation because it is crystal clear that Greece will never pay it back. It's the 6th time modern day Greece defaults to its creditors since the 1830's. Greece has been in default to its creditors nearly half of its existence..

 

[Pixy Misa Mk II]

kerikoli[/url]":1yaobhcr]Well, Greece seemes to get down on earth

http://www.ft.com/fastft/353421

Probably a good thing, but in the long term Greece might still have to exit the Euro to survive.

 

[ampet]

So much moralising here. It is kinda racist, actually, as if Greeks were anthropologically inferior.
Greece is paying for the bad choices of the political class before it. Saying that in a democracy the electorate is responsible for their political class is naive at best. Americans don't fare much better with all the bible-thumping, climate-change denial clowns in political institutions all over the US. Yes, the first (natural) reaction is to say that Americans deserve what they vote, but is it so easy?

Now, Greece has lived beyond their means. If I go to a bank and I take out a loan which I will never be able to repay, never mind what data I bring to support my ability to do so, it is in the bank's interest (erm, unless they're not closing an eye on purpose, which would make them either incompetent, loan sharks or other kinds of criminal institutions) to double-check and make sure that the data isn't cooked. We've blamed the banks for the subprime crisis, we can and should do so again for Greece.

Greece is being subject to an unsustainable therapy, and anyway the lenders are interfering with the sovereignty of the Greeks. That's unacceptable. The thing is, Greece may want to decide to take the issue in their own hands, declare default, stop paying the debt (maybe altogether) and start from scratch (which would amount to a war economy, but nations all over the world since the dawn of civilisation have endured similar sacrifices), but the Eurozone will not allow them to do so.

Mr Tsipras has been elected in January, since then the EZ and Greece haven't been able to agree on what measures to take. That's because the EZ have also fought against it (the whole debacle is a ruse to oust Syriza out of power, because they will not bend to the request of bitter austerity which, at best, is not a proven therapy, and at worst is the worst way of fixing an economic crisis, and which anyway poses the issue that its effects are most bitterly felt by the lower classes). In a sane Union (the European Union should be all about brotherhood, integration, blah blah) there should be acceptance of the sovereignty of a member state, and since the Greeks have voted Syriza into power, they should respect that and understand that, yes, the debt will be repaid, but as Syriza deems best. The whole issue is not about economics, it is eminently political. Greece has to stay in the Eurozone because otherwise the Euro is undermined (never mind what Juncker, Schauble, Merkel etc. are saying these days, it is cheap fear mongering), and the Eurozone is trying its best to undermine Syriza so that similar movements in other countries (Podemos in Spain, for example) will lose momentum.

Now, Syriza says, no to tax increases in the islands (where it is already more expensive to live), no to immediate increase to the retirement age (we did so in Italy and we had a huge mess in our hands, dealing with tens of thousands of individuals who had found themselves stuck in unemployment - at 57 years of age - awaiting for a pension which was just round the corner having undergone an early retirement plan agreed with their companies, who of course wouldn't hire them back; Syriza proposed instead to increase the retirement age gradually), no to cuts in pensions (should they do so once again? They have already done so twice, if I'm not mistaken), no to limitations in collective bargaining (do you realise this is unacceptable?!). At the same time, what's the point in basically firing a huge proportion of the public workforce if the private sector can't absorb it? What's the point in all of this? Instead of getting better, it gets worse. Harsher and harsher cuts are demanded as time passes, and there is no end in sight. In the meantime, the deficit is now at 180% of GDP (at the beginning of the crisis it was around 130%), a significant proportion of the population has no job, no health insurance, no house even (many are living in campers or in shelters). GDP has decreased by 30%, there is 27% unemployment (60% among the young workforce... which begs the question: what's the point in postponing retirement, when the young can't find a job?). Where's the dignity in all this?

 

[llyrnion]

I'm Portuguese, and I believe we'll eventually be hit hard because of this, regardless of the solution, and despite all the nonsense about Portugal being the "good pupil". Nonsense that I see repeated here in the comments ad nauseam, so "Behave and you'll be rewarded" is apparently a popular story. Comments like these always bring to mind the Bertrand Russel quote:

The fundamental cause of the trouble is that in the modern world the stupid are cocksure while the intelligent are full of doubt

Mind you, while I know I'm full of doubt, I don't really know I'm all that intelligent. I just do my best to avoid wearing blinders.

Funny how everyone seems to focus on "the money", as if that was the issue. It is a relevant part of the issue, naturally. State services must be replaced with private services - Health, education, pensions. There's a lot of money to be had there. The same with the selling of State companies to private owners, which is a move I don't oppose per se, but I've yet to see an example where it has actually been of any benefit to the State, and we have had several "good" examples of this in Portugal, since the 90s.

Me, I believe the issue is mainly political. We must not deviate from the "Austerity is the only solution" diktat, and we certainly must not allow a "strange body", i.e., a party foreign to the "Center", to succeed in taking the EU in another direction.

Now, if I were Mr. Tsipras, on the night he won the election, I would've been on the phone with Moscow. Not because I believe Russia is any better than the EU. I find them to be pretty much the same, each country in the EU looking out for #1, and everyone else be damned. I'd do it because Greece may have some leverage with Russia (leaving the EU and NATO), while it has no leverage at all with the EU. Hell, I'd even be attempting deals with Iran, if necessary, "and everyone else be damned". Unfortunately, I have to conclude Mr. Tsipras proved to be either too optimistic, a bad strategist, or both.

I may be wrong, but I suppose if it wasn't for Barack Obama's concern with the scenario where Greece turns to Russia (or worse, to chaos), our European "friends" would've pushed even harder.

Leaving the euro and the EU would be an immediate catastrophe for Greece, granted. But I can't see how staying will be any better. It seems similar to the difference between having your head forcibly plunged into a tank or being tied on the shore waiting for the tide to rise. Either way, you'll drown.

 

[ampet]

By the way, Ireland for example has partially recovered through extremely low tax rates for corporations, which has maybe helped growth in Ireland, but there is now the bigger issue of corporations choosing Ireland as a base for their operations in order to practically avoid paying taxes. So this won't last long. And by the way, the Irish had to vote several times until the outcome of their referendum was compliant to the requests of the Eurozone. Which is hardly democratic, is it?

Italy is not getting better, Portugal doesn't seem getting much better, Spain isn't getting better, etc. etc.
Austerity only brings prolonged misery and sale of the state's assets to foreign entities.

(By the way, I think Tsipras has more or less secretly probed the modern-day "Second World" for assistance and possible alignment. Probably there isn't much to be gained through this, but I think it will be a last resort Plan B. At this point, it would probably be wise to start hinting at the fact that Europe doesn't want a Russian or maybe Chinese naval base in the Mediterranean).

 

[kruzes]

":13kkc1q7]Adriano Petrosillo[/url]"Greece is being subject to an unsustainable therapy, and anyway the lenders are interfering with the sovereignty of the Greeks. That's unacceptable. The thing is, Greece may want to decide to take the issue in their own hands, declare default, stop paying the debt (maybe altogether) and start from scratch (which would amount to a war economy, but nations all over the world since the dawn of civilisation have endured similar sacrifices), but the Eurozone will not allow them to do so.

Didn't you hear the news? They already have defaulted.

This is what default looks like: those with plastic money can withdraw 60€/day, those without must wait for the banks to open to get in line and withdraw 120€ max. Plastic can be used internally, but gas stations are refusing to be paid plastic. Imported goods can no longer be purchased directly (no iTunes for you guys anymore, sorry). Pensions for the former self employed are no longer being paid in full because the currently self employed are unable to contribute due to capital controls, and all reserves are depleted and/or invested in a bankrupt state's assets.

They're very sovereign with their own money which, unfortunately for them, as finally ran out.

 

[haar]

andriod users say about Apple "it's greek to me" ... So why not not have Apple bail out Greece?...

 

[ampet]

kruzes[/url]":2xm1f290]

":2xm1f290]Adriano Petrosillo[/url]"Greece is being subject to an unsustainable therapy, and anyway the lenders are interfering with the sovereignty of the Greeks. That's unacceptable. The thing is, Greece may want to decide to take the issue in their own hands, declare default, stop paying the debt (maybe altogether) and start from scratch (which would amount to a war economy, but nations all over the world since the dawn of civilisation have endured similar sacrifices), but the Eurozone will not allow them to do so.

Didn't you hear the news? They already have defaulted.

This is what default looks like: those with plastic money can withdraw 60€/day, those without must wait for the banks to open to get in line and withdraw 120€ max. Plastic can be used internally, but gas stations are refusing to be paid plastic. Imported goods can no longer be purchased directly (no iTunes for you guys anymore, sorry). Pensions for the former self employed are no longer being paid in full because the currently self employed are unable to contribute due to capital controls, and all reserves are depleted and/or invested in a bankrupt state's assets.

They're very sovereign with their own money which, unfortunately for them, as finally ran out.

As I said, defaults amount to a war economy. But people do that, when it's worth it. Is a week, or a month, or even six months of capital controls such a tragedy, when the alternative is years of harsh austerity, where the only available jobs are very low wage ones with hardly any rights (and extreme competition by the rest of the unemployed workforce, so that basically you are "one of the many"), no health insurance for the unemployed, etc.?

As the Germans say (the irony!): a end with horror is better than horror with no end.

 

[bspoel]

Fristie Blade[/url]":1nesr8hr]

The part where Greece was pressured into cutting harder in military spending was claimed by Jean-Claude Juncker according to this article in Flemish. He claimed it when venting his frustration about the Greece government not doing its most in order to find a compromise.

Thanks for actually producing a source. I'm Dutch so the Flemish is no problem. In the press this has all gone down into a he-said-she-said battle. Taking Junkers' words at face value, I guess there's political realities in Greece that preclude that course of action. Normally a leftwing government would love to cut the military.

My basic outlook is this: The greeks have seen their economy shrink by a whopping 27%. Part of that is due to a large output gap, estimated at 12 percent. This output gap can easily be closed by increasing the amount of money circulating in the greek economy. When this is done, Greece actually has a primary surplus. This is a _very_ important point, because it shows that currently the Greek economy is fundamentally sustainable. All the previous cuts have done their work in that regard.

Because of all this I believe the Greeks should have their sovereign right to decide where their money is going. We should just make a deal what the target of their primary surplus should be, and let them pay back their loans from that primary surplus. They won't be able to repay all their debt that way, but everyone agrees that Greece cannot pay back their full debt no matter what.

But the EU won't have none of this. They blame the Greeks for their current situation, in order to shift the blame away from austerity. That's because many parties would lose support back home if they acknowleged that. And austerity has really url=https://zcomm.org/znetarticle/greece-five-pictures-of-a-troubled-country/]performed abominable compared to the predictions of its supporters (see the last graph)[/url].

Another good read: http://mainlymacro.blogspot.co.uk/2012/ ... ueeze.html

 

[acc15]

In Greece, about 18% of population is public servants.

It is 6,8%, either you're talking out of your ass, or you're quoting a percentage out of the employed and not the general population. They have approx. 700.000 public workers and they're a country of 11 million. That's actually par for the course in most Western countries.

 

[kruzes]

Adriano Petrosillo[/url]":1tt2lsd3]

kruzes[/url]":1tt2lsd3]

":1tt2lsd3]Adriano Petrosillo[/url]"Greece is being subject to an unsustainable therapy, and anyway the lenders are interfering with the sovereignty of the Greeks. That's unacceptable. The thing is, Greece may want to decide to take the issue in their own hands, declare default, stop paying the debt (maybe altogether) and start from scratch (which would amount to a war economy, but nations all over the world since the dawn of civilisation have endured similar sacrifices), but the Eurozone will not allow them to do so.

Didn't you hear the news? They already have defaulted.

This is what default looks like: those with plastic money can withdraw 60€/day, those without must wait for the banks to open to get in line and withdraw 120€ max. Plastic can be used internally, but gas stations are refusing to be paid plastic. Imported goods can no longer be purchased directly (no iTunes for you guys anymore, sorry). Pensions for the former self employed are no longer being paid in full because the currently self employed are unable to contribute due to capital controls, and all reserves are depleted and/or invested in a bankrupt state's assets.

They're very sovereign with their own money which, unfortunately for them, as finally ran out.

As I said, defaults amount to a war economy. But people do that, when it's worth it. Is a week, or a month, or even six months of capital controls such a tragedy, when the alternative is years of harsh austerity, where the only available jobs are very low wage ones with hardly any rights (and extreme competition by the rest of the unemployed workforce, so that basically you are "one of the many"), no health insurance for the unemployed, etc.?

As the Germans say (the irony!): a end with horror is better than horror with no end.

They are free to decide.

As a creditor, I'd honestly rather they did, instead of having this saga continue. Instead, they've just asked for an extra €30bn for the next couple of years. Democratically, I'd rather accept the loss of what we already sent their way, than double down on it.

 

[llyrnion]

Adriano Petrosillo[/url]":2lfqtx8t]By the way, Ireland for example has partially recovered through extremely low tax rates for corporations, which has maybe helped growth in Ireland, but there is now the bigger issue of corporations choosing Ireland as a base for their operations in order to practically avoid paying taxes.

As much as I hate these legal "tax-evading" schemes, I can't really fault Ireland. The same applies to Luxembourg and Holland, the two other most notorious players. They're doing what independent countries do, looking out for #1. What I find hard to understand is how can anyone claim there's any sort of "union" in the EU. If you take a look here, you'll see that as early as 1951 there were "protests from some countries that their sovereignty was being infringed". IOW, merely 6 years after we needed the US to save our bacon, we were already bickering and looking out for #1.

There is no union. We've been at each other's throats for centuries, and what we have now is an uncharacteristically long intermission. One which I believe was mainly caused by US commitment, because they were probably getting tired of being dragged into our mess every couple of decades.

(By the way, I think Tsipras has more or less secretly probed the modern-day "Second World" for assistance and possible alignment. Probably there isn't much to be gained through this, but I think it will be a last resort Plan B. At this point, it would probably be wise to start hinting at the fact that Europe doesn't want a Russian or maybe Chinese naval base in the Mediterranean)

I'm speaking with no knowledge of fact here, but I believe he either began those talks too late or without enough commitment. If I had to hazard a guess, I'd say he believed he could get a good deal with Europe; hence, my "too optimistic". It's true there's not much to be gained, but if you make a move that will burn most - if not all - of your current bridges, you better do it when you have already begun the work towards building other bridges.

 

[kruzes]

bspoel[/url]":3hp0bjry]My basic outlook is this: The greeks have seen their economy shrink by a whopping 27%. Part of that is due to a large output gap, estimated at 12 percent. This output gap can easily be closed by increasing the amount of money circulating in the greek economy. When this is done, Greece actually has a primary surplus. This is a _very_ important point, because it shows that currently the Greek economy is fundamentally sustainable. All the previous cuts have done their work in that regard.

Greece's GDP has grown an average of 2%/year since the 70s (this recession included). Between 2000-2007 it grew 4%/year. Did they find oil in the Aegean? No, they found cheap debt within the Euro. Which they proceeded to spend on organizing an Olympiad. Now, they're right back at where they'd be if they had grown 2%/year. But sure, there's an output gap. Krugman even says so.

 

[storyteller]

Forget the politics, think of the fees! Indiegogo will make a mint on this moonshot if it works.

 

[digi99]

The real people that should be in jail are the IMF and everybody who pushed the nonsense austerity measures that got Greece in this situation in the first place.

 

[ampet]

kruzes[/url]":vplllfh2]

Adriano Petrosillo[/url]":vplllfh2]

kruzes[/url]":vplllfh2]

":vplllfh2]Adriano Petrosillo[/url]"Greece is being subject to an unsustainable therapy, and anyway the lenders are interfering with the sovereignty of the Greeks. That's unacceptable. The thing is, Greece may want to decide to take the issue in their own hands, declare default, stop paying the debt (maybe altogether) and start from scratch (which would amount to a war economy, but nations all over the world since the dawn of civilisation have endured similar sacrifices), but the Eurozone will not allow them to do so.

Didn't you hear the news? They already have defaulted.

This is what default looks like: those with plastic money can withdraw 60€/day, those without must wait for the banks to open to get in line and withdraw 120€ max. Plastic can be used internally, but gas stations are refusing to be paid plastic. Imported goods can no longer be purchased directly (no iTunes for you guys anymore, sorry). Pensions for the former self employed are no longer being paid in full because the currently self employed are unable to contribute due to capital controls, and all reserves are depleted and/or invested in a bankrupt state's assets.

They're very sovereign with their own money which, unfortunately for them, as finally ran out.

As I said, defaults amount to a war economy. But people do that, when it's worth it. Is a week, or a month, or even six months of capital controls such a tragedy, when the alternative is years of harsh austerity, where the only available jobs are very low wage ones with hardly any rights (and extreme competition by the rest of the unemployed workforce, so that basically you are "one of the many"), no health insurance for the unemployed, etc.?

As the Germans say (the irony!): a end with horror is better than horror with no end.

They are free to decide.

As a creditor, I'd honestly rather they did, instead of having this saga continue. Instead, they've just asked for an extra €30bn for the next couple of years. Democratically, I'd rather accept the loss of what we already sent their way, than double down on it.

But they're not free to decide. That's the point. The Eurozone won't accept a Greek default (never mind the IMF payment), because the Euro depends on Greece. Or that's how they (used to) spin it. Honestly, this is bullshit. They should have been allowed to default years ago and exit the euro gradually and in an orderly way. So that's what they've done, but without allowing them to default up to now, dictating them what to do and exiting the euro gradually by impoverishing the country before it happened. What all this debacle amounts to is a five year long repossession by the Eurozone, without actually getting much by the way.

"The Euro is not negotiable".
"There are no provisions for exiting the Euro".

This is the kind of ominous statements we've heard since the crisis.

Now Tsipras has sent a proposal for a new bailout (which the press is spinning as a "concession", but that's bullshit too, because it's practically what he had agreed to do up to Saturday and very little more), but he's playing a very risky political game which he will probably lose (that's a Greek hero alright!), so I only think he sent it to show good will on his part. He can now say, "well, I tried, but they're unreasonable" (and his opposers will say that he's an incompetent prick, that you can't expect his creditors to let themselves be manipulated like that, etc. but why not? As if the creditors are people in flesh and blood, when they're actually complex institutions which shouldn't care much about drama and which are as calculating and manipulative as Tsipras himself).

 

[JPan]

emphy[/url]":1rnocjkv]

JPan[/url]":1rnocjkv]

Ah come one. The debt service is already quite low. Even 2-3% of GDP is not a huge amount of money for debt services. But on the table were 1% this year increasing later. Also debt restructuring in the future was on the table but AFTER they reformed first. The main problem is that the Greek government promises to reach these numbers by increasing taxes on companies and people. They want to save pensioners and state workers. ( which are their clientel ) the problem is that you need business and workers to get out of the doldrums so IWF and EU tried to get them to cut there instead. Because increasing business taxes now would surely make them miss the target even more. So the problem is not the numbers the problem is the Syriza is a socialist party that wants to protect its clientel and that thinks that "money is paper".

Please read:
http://yanisvaroufakis.eu/2015/06/18/gr ... eurogroup/

And:
http://www.theguardian.com/business/201 ... ill-needed

Edit: guardian link added

Ahaha you actually pointed to a link for varoufakis. The biggest hot air balloon ever. He is perhaps the reason that his country will go to Shit because he has a huge ego a theoretical idea of economics ( he was professor which means he actually believes what he says and has a completely overstated sense of self) no sense of politics and realities and is in general the most insufferable winding the political scene has ever seen.

So I will ignore that. Regarding the Guardian link there are two things to say 118% of gdp are not unsustainable. Most bonds are very long running and have 30 year maturities. Also the US is where at 90? Secondly a cut was on the table Merkel said it juncker said it but they also all said that this can only happen AFTER THE FREAKING REFORMS. Because after six months of varoufakis monologues about economic theories and the rest of that clown troupe saying one thing and doing another nobody trusts them anymore.