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

 

[mexaly]

Plus 10 Euros. Let's make history.

 

[Dietz]

Greece also has a 1.3 population replacement rate. And the 43 grandchildren that 100 retired pensioners think they can make pay the bill for their fat pensions do not want to pay that bill. I don't blame them.

 

[mexaly]

overHere[/url]":g5ks8f1j]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.

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.

 

[mexaly]

peppeddu[/url]":2vajv8zk]First they cook the books for years and then then they cry foul and ask for a bailout.
Hell no, not until we make sure it won't happen again.

The general greek population is not to blame, but the higher ups are.
To date (afaik) not a single person has gone to jail for screwing up the Greek economy and now they want free money and a free pass to go back and do it all over again.

No thanks.

Personally, I'm not in the E.U., and my country's politics and culture are not wholly appropriate as yardsticks for theirs.

 

[UltimateLemon]

tjones2[/url]":9zdbxaa8]

bluesdrivemonster[/url]":9zdbxaa8]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?

How true is it that the IMF won't allow for tax increases, and wants spending cuts? Quite true as they recently rejected a tax-heavy budget .

They did ask for tax increase. They proposed increase in taxes for restaurant and catering, and insurances. At the same time they asked to reduce the taxes in energy, basic food, hotels and water, medicine, theatre. At the same time, they proposed increase in retirement age, reduction in number of public servants, elimination of Ekas by 2017 and removing tax exemption on Greek islands.

Saying IMF doesn't allow tax increase is a vast over-simplification.

Basically Tsipras is running a populist policy for poor, rich and government employees regardless of what it's doing to middle class.

EDIT : Most greek people would not be affected by retirement age increase since they retire at 62 (proposed 67). Public servants on the other hand retires at 58 (or 35 years of service) on 80% of final salary. In Greece, about 18% of population is public servants.

 

[IrishMonkee]

UnnDunn[/url]":11nkmme2]You know what? Fuck it, I can chip in $5...

You know what? Fuck it, I'll... umm, fuck it, nm. lol

 

[ZhanMing057]

Oz7[/url]":2aqk4wed]

yester64[/url]":2aqk4wed]

Thrasius[/url]":2aqk4wed]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.

Maybe this one

In 2007, Greece had public debt of slightly more than 100 percent of GDP — high, but not out of line with levels that many countries including, for example, the UK have carried for decades and even generations at a stretch. It had a budget deficit of about 7 percent of GDP. If we think that normal times involve 2 percent growth and 2 percent inflation, a deficit of 4 percent of GDP would be consistent with a stable debt/GDP ratio; so the fiscal gap was around 3 points, not trivial but hardly something that should have been impossible to close.

Now, the IMF says that the structural deficit was much larger — but this reflects its estimate that the Greek economy was operating 10 percent above capacity, which I don’t believe for a minute. (The problem here is the way standard methods for estimating potential output cause any large slump to propagate back into a reinterpretation of history, interpreting the past as an unsustainable boom.)

So yes, Greece was overspending, but not by all that much. It was over indebted, but again not by all that much. How did this turn into a catastrophe that among other things saw debt soar to 170 percent of GDP despite savage austerity?

Nothing would have happened if the "savage austerity" actually became implemented at both the government and local level. As it turned out, the monopsony, labor restrictions, corruption and pension balloons went on as usual. Krugman seems to suggest that this situation is the making of the whole Eurozone - which I don't necessarily disagree with - but it is clear who bears primary responsibility. I still think that the Euro is a "good, if" kind of idea. We're just seeing the "if" part fail in a dramatic way.

 

[mexaly]

nmalinoski[/url]":3ajl4lx0]I've finally made the connection; crowdfunding campaigns are simply internet telethons.

Where's Jerry Lewis?

 

[mexaly]

saru-kun[/url]":rtdhz60m] You can't have a nation that controls its own budget, but does not control its own currency.

Sure we can. In my country, we call them States.

 

[mexaly]

CppThis[/url]":3nkbl71q]Well, anyone stupid enough to throw even more money at the Euro-feudalist elite's sinking ship basically deserves to get conned, so I don't really have a problem with this dodgy campaign.

I've spent a LOT more money on marijuana than I sent to Greece, so I'm not worried about being swindled.

 

[jandrese]

It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

 

[UltimateLemon]

jandrese[/url]":21ztb4rn]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

Inflate drachma with what? They've got no assets, no natural resources or export capabilities. Their credit rating is dirt. After defaulting on IMF and this fiasco with EU, who would think drachma would actually be valuable?

 

[TechnologyDinosaur]

coniferae[/url]":3lwdinh7]I haven't done the math but 3 Euros per person seems like fairly little wealth redistribution to get Greece out of trouble. Besides, the real payoff is the intangible of goodwill and a better Europe? I say lets get this shit sorted!

They already got that. 4 years ago.
When it came time to hold their end of the bargain and make changes to stop spending more than they earn, like actually start paying taxes and stop retiring at 50 and stop collecting dead relatives pensions they rioted on the streets and spent the bailout money supporting their relaxed lifestyle instead. And here we are.

They keep electing politicians who promise them the most benefits and keep pumping billions from northern Europe to pay for it. They'll never learn their lesson unless you let them fail and maybe then they'll understand you need to pay taxes to enjoy the benefits of the services and benefits paid for by said taxes.

 

[UltimateLemon]

TechnologyDinosaur[/url]":uf2wxlda]

coniferae[/url]":uf2wxlda]I haven't done the math but 3 Euros per person seems like fairly little wealth redistribution to get Greece out of trouble. Besides, the real payoff is the intangible of goodwill and a better Europe? I say lets get this shit sorted!

They already got that. 4 years ago.
When it came time to hold their end of the bargain and make changes to stop spending more than they earn in taxes, like actually start paying taxes and stop retiring at 50 they rioted on the streets and spent the bailout money supporting their relaxed lifestyle instead. And here we are.

They keep electing politicians who promise them the most benefits and keep pumping billions from northern Europe to pay for it. They'll never learn their lesson unless you let them fail and maybe then they'll understand you need to pay taxes to enjoy the benefits of the services and benefits paid for by said taxes.

They also called that bailout illegal yesterday.

Then promptly asked for another bailout.

 

[ZhanMing057]

jandrese[/url]"s047pu0]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

It is a well-known fact to, well, people who don't know much about economics. Yes, some economists would agree, but other would disagree. In fact, there are entire departments of people who insist that austerity is a perfectly acceptable way of regaining financial stability, given certain assumptions about the economy in question. Not to mention that within the sphere of policies that can be called "austerity" there are some that are much more efficient than others.

Now do these assumptions hold for Greece? Most likely not. But this is not to say that no country can make use of austerity measures. Other European nations seemed to have done okay after 2011-2012, just to give a few examples.

jandrese[/url]"s047pu0]
The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

My inner pessimist thinks that Greece won't get away with it unless it gets kicked out the Euro, hyperinflate until their debt is just paper, then settle at a more manageable rate and monetary scheme. Even if they have no assets, the government can just print their way out of the debt.

What I do agree is that it will be painful. I wouldn't want to be a Greece citizen for the next few years.

 

[UltimateLemon]

Peevester[/url]":2984wvzb]

overHere[/url]":2984wvzb]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.

You, sir, need to do some research. The EU Central Bank has mismanaged this whole crisis, to the point it's mostly of their own making. Austerity measures are stupid, and add wrecking the country from neglect to all the financial damage that throwing Greece under the bus costs.

A sane EU would consider their member states as, you know, MEMBER STATES, and properly support Greece. They want to call themselves a union, but they also want to force members to fend for themselves? The hell with that. The equivalent of $3 per EU citizen? JUST BILL THEM.

Since 2010, 240,000,000,000 Euros have been poured into Greece. Current population of Greece is 11,200,000. That means Greece has borrowed 21400 Euros per person since 2010, excluding ELA assistance and IMF extensions. That's sounds like a pretty good support.

 

[Peevester]

UltimateLemon[/url]":3j7taiv6]

Peevester[/url]":3j7taiv6]

overHere[/url]":3j7taiv6]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.

You, sir, need to do some research. The EU Central Bank has mismanaged this whole crisis, to the point it's mostly of their own making. Austerity measures are stupid, and add wrecking the country from neglect to all the financial damage that throwing Greece under the bus costs.

A sane EU would consider their member states as, you know, MEMBER STATES, and properly support Greece. They want to call themselves a union, but they also want to force members to fend for themselves? The hell with that. The equivalent of $3 per EU citizen? JUST BILL THEM.

Since 2010, 240,000,000,000 Euros have been poured into Greece. Current population of Greece is 11,200,000. That means Greece has borrowed 21400 Euros per person since 2010, excluding ELA assistance and IMF extensions. That's sounds like a pretty good support.

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.

 

[snowman<ca>]

It has come a long way since it was around €120 a couple days ago, it was pretty ironic that even the indiegogo page for the Greek Bailout Fund was in crisis when I first heard about it.

 

[UltimateLemon]

Peevester[/url]":2yyim16z]

UltimateLemon[/url]":2yyim16z]

Peevester[/url]":2yyim16z]

overHere[/url]":2yyim16z]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.

You, sir, need to do some research. The EU Central Bank has mismanaged this whole crisis, to the point it's mostly of their own making. Austerity measures are stupid, and add wrecking the country from neglect to all the financial damage that throwing Greece under the bus costs.

A sane EU would consider their member states as, you know, MEMBER STATES, and properly support Greece. They want to call themselves a union, but they also want to force members to fend for themselves? The hell with that. The equivalent of $3 per EU citizen? JUST BILL THEM.

Since 2010, 240,000,000,000 Euros have been poured into Greece. Current population of Greece is 11,200,000. That means Greece has borrowed 21400 Euros per person since 2010, excluding ELA assistance and IMF extensions. That's sounds like a pretty good support.

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.

It's a loan they asked for knowing full well the conditions and consequences. If the local authorities couldn't handle the conditions, they should have haggled for the conditions before borrowing the money, not after the money is spent.

As for the austerity argument, the core of the problem is that not all them were actually implemented. There is also no question that their economy was improving when Syriza came in power. Yes GDP has lowered and unemployment was high but it was at a rebound at that point.

Finally, they aren't forcing anyone to take new loans. Syriza is and was ASKING for new loans. In fact, the final package would have been unlocked if they had agreed to implement the last bit of the austerity measures and EU was willing to negotiate some of it as well. Varoufakis unfortunately decided to try to play his game theory at the worst time in worst possible way in highly incompetent manner.

 

[CppThis]

UltimateLemon[/url]":1uhckkqf]Inflate drachma with what? They've got no assets, no natural resources or export capabilities. Their credit rating is dirt. After defaulting on IMF and this fiasco with EU, who would think drachma would actually be valuable?

Oh, don't be such a pessimist. Greece has no industry, no infrastructure, pervasive entitlement mentality, a growing hardline fascist undercurrent and a shitload of military hardware, and the government merely wants to add some self-serving hyperinflation to the mix. I see no way that this can possibly go wrong.

 

[anon_coward]

UltimateLemon[/url]":2sdr9yx3]

jandrese[/url]":2sdr9yx3]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

Inflate drachma with what? They've got no assets, no natural resources or export capabilities. Their credit rating is dirt. After defaulting on IMF and this fiasco with EU, who would think drachma would actually be valuable?

tourism

if they had the drachma then it would drop like a rock because of this and make it very cheap to go to greece on vacation giving them some money to pay off their debts. as it is now, the euro is pretty much the german mark and the franc

 

[UltimateLemon]

anon_coward[/url]":m6hnth8b]

UltimateLemon[/url]":m6hnth8b]

jandrese[/url]":m6hnth8b]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

Inflate drachma with what? They've got no assets, no natural resources or export capabilities. Their credit rating is dirt. After defaulting on IMF and this fiasco with EU, who would think drachma would actually be valuable?

tourism

if they had the drachma then it would drop like a rock because of this and make it very cheap to go to greece on vacation giving them some money to pay off their debts. as it is now, the euro is pretty much the german mark and the franc

Tourism has never been Greece's largest export market interestingly enough. At the same time, tourism also needs alot of imports to function. Petroleum processing is Greece's biggest export at the moment but Greece has to import crude oil. Second biggest export is shipping services, which doesn't pay tax to Greece.

But problem remains that Greece has notorious bad record at collecting taxes. Unless they improve their tax collection and address their local government corruption, any action they take won't do jack.

 

[tie]

Peevester[/url]":nevkclea]The equivalent of $3 per EU citizen? JUST BILL THEM.

That's just for this one interest payment on one of their loans. If they had made it, they would still have missed the next big payment in a couple weeks.

The Eurozone is stronger without Greece, and Greece's economy should do better on its own. This seems for the best.

 

[winterwatchers]

yea, like 1.6 billion will actually help. There is a sucker born ever minute

 

[BlackHex]

This campaign is misguided to say the least. Paying off the 1.6bn is a drop in their debt bucket and will only shift the issue a couple of months down the line.

A rough rebuttal is here:
http://www.zerohedge.com/news/2015-06-3 ... t-campaign

{edit}
and lets not forget the 3.46bn due to the ECB in just 20 days time.

 

[bluesdrivemonster]

ZhanMing057[/url]":1b9t3qli]Because getting more people to work is essential for it to work out. This policy of very strict labour laws and a still very big public sector leads to the fact that greek labour costs are still as high as in 2007 and the whole country is not competitive but lots of people are out of work.

What are these strict labour laws and how are they hindering people from working? From somewhere I've read that 25% of Greeks are unemployed and half of them are under the age of 25.

 

[BorgOvermind]

Better do as Iceland: it's the politicians that got the $, not the Greek people.
So just bag all politicians that made the loans, send them to the EU to be judged and tell EU to recover the $ from them, not from the people.

 

[Lex-Man]

The Greek PMs namenis Alexis not Alex.

 

[10thDoctor]

jandrese[/url]":1sqnuwsf]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

It is a well-known fact to, well, people who don't know much about economics. Yes, some economists would agree, but other would disagree. In fact, there are entire departments of people who insist that austerity is a perfectly acceptable way of regaining financial stability, given certain assumptions about the economy in question. Not to mention that within the sphere of policies that can be called "austerity" there are some that are much more efficient than others.

Now do these assumptions hold for Greece? Most likely not. But this is not to say that no country can make use of austerity measures. Other European nations seemed to have done okay after 2011-2012, just to give a few examples.

jandrese[/url]":1sqnuwsf]
The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

My inner pessimist thinks that Greece won't get away with it unless it gets kicked out the Euro, hyperinflate until their debt is just paper, then settle at a more manageable rate and monetary scheme. Even if they have no assets, the government can just print their way out of the debt.

What I do agree is that it will be painful. I wouldn't want to be a Greece citizen for the next few years.

I'm an economics student who just finished a couple of classes in historical monetary policy, with specific focus in hyperinflations and debt payments.

My guess, based on my limited knowledge of the situation, is that Greece will leave the Eurozone. They will go back to the Drachma, and will begin printing as much of it as they can to hyperinflate their way out of this. Then, as soon as they have paid off their debts (or when the crisis becomes too great for their citizens to bear), they will announce that the Drachma is defunct and will introduce a new currency that is based in some way on something (my guess would be the U.S. dollar-- historically, the currencies used to base other currencies off of have been the dollar and notes from the Deutsche Bundesbank, and since Germany now uses Euros, the latter option is unavailable. They could also base it on a commodity, such as gold or silver, but I find that fairly unlikely). Then, after a period to allow everyone to adjust to the new stable prices, they will transition back to a fiat standard.

The thing to remember with all of this is that money literally is just pieces of paper. A few people further back in the thread were scoffing at that, but it's literally true-- fiat money has absolutely no intrinsic value or backing of any kind. It's the belief in the government that keeps our monetary system running. Interestingly, the same can be said (to a degree) of commodity-backed money as well. Gold and silver have no intrinsic value, at least on a macro scale, and neither do any of the other commodities that are commonly used as a basis of currency-- but that's an entirely different subject, and one that doesn't really pertain to this discussion.

Edit: fixed a mistaken reference to "Deutsche Bank" instead of "Deutsche Bundesbank". Thanks to esque for the correction!

 

[coslie]

ZhanMing057[/url]":2tg7o94h]

jandrese[/url]":2tg7o94h]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

It is a well-known fact to, well, people who don't know much about economics.

You've got that exactly backwards. And the economists who still cling to austerity are the type that consistently ignore empirical evidence.

 

[argamond]

Thrasius[/url]":3a45hg4w]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!

Interesting that you don't even mention Goldman Sach who colluded with Greece to hide sovereign debt within derivative deals. Not that Goldman Sach isn't doing quite well right now, posting a $2.84b (off $10.6b) in a quarter

 

[UltimateLemon]

10thDoctor[/url]":3fxpk5lm]

jandrese[/url]":3fxpk5lm]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

It is a well-known fact to, well, people who don't know much about economics. Yes, some economists would agree, but other would disagree. In fact, there are entire departments of people who insist that austerity is a perfectly acceptable way of regaining financial stability, given certain assumptions about the economy in question. Not to mention that within the sphere of policies that can be called "austerity" there are some that are much more efficient than others.

Now do these assumptions hold for Greece? Most likely not. But this is not to say that no country can make use of austerity measures. Other European nations seemed to have done okay after 2011-2012, just to give a few examples.

jandrese[/url]":3fxpk5lm]
The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

My inner pessimist thinks that Greece won't get away with it unless it gets kicked out the Euro, hyperinflate until their debt is just paper, then settle at a more manageable rate and monetary scheme. Even if they have no assets, the government can just print their way out of the debt.

What I do agree is that it will be painful. I wouldn't want to be a Greece citizen for the next few years.

I'm an economics student who just finished a couple of classes in historical monetary policy, with specific focus in hyperinflations and debt payments.

My guess, based on my limited knowledge of the situation, is that Greece will leave the Eurozone. They will go back to the Drachma, and will begin printing as much of it as they can to hyperinflate their way out of this. Then, as soon as they have paid off their debts (or when the crisis becomes too great for their citizens to bear), they will announce that the Drachma is defunct and will introduce a new currency that is based in some way on something (my guess would be the U.S. dollar-- historically, the currencies used to base other currencies off of have been the dollar and notes from the Deutsche Bank, and since Germany now uses Euros, the latter option is unavailable. They could also base it on a commodity, such as gold or silver, but I find that fairly unlikely). Then, after a period to allow everyone to adjust to the new stable prices, they will transition back to a fiat standard.

The thing to remember with all of this is that money literally is just pieces of paper. A few people further back in the thread were scoffing at that, but it's literally true-- fiat money has absolutely no intrinsic value or backing of any kind. It's the belief in the government that keeps our monetary system running. Interestingly, the same can be said (to a degree) of commodity-backed money as well. Gold and silver have no intrinsic value, at least on a macro scale, and neither do any of the other commodities that are commonly used as a basis of currency-- but that's an entirely different subject, and one that doesn't really pertain to this discussion.

The problem I see with the approach at the moment is that their credit rating is just too shot and they don't really have anything to back up the currency either. They could print whatever they want but if nobody rrusts it, especially if euro recovers, then the new currency won't be worth very much.

 

[WereCatf]

I only skimmed through the comments, but I didn't anyone see stating the obvious: how is this guy planning to handle the perks? I mean, even just handling hundreds of thousands of postcards alone would be an enormous operation, plus shipping salad all over the Europe without a well-established network for 6€ just is completely out-of-touch with reality. The guy is making lofty promises that all these things will be handled on Greece's side of things, but he hasn't even talked to anyone over there about it yet, let alone have any sort of a concrete plan on how to make such an operation possible in the first place!

 

[JPan]

jandrese[/url]":3szl8u6d]It is a well known fact that the worst way out of a financial crisis is austerity. It's like losing your job so you sell your car and then have no way to get to a new job. Yes, I managed to squeeze in a car analogy, that's how internet I am.

The thing is, Greece has been mismanaged for a long time, and there isn't much they can do to fix it now. The money is gone and the people are getting hungry. IMHO the best option is to exit the Eurozone and go back to their own currency so they can inflate the crap out of it to get out of the debt problem and get their economy rolling again. The downsides are numerous and painful, and it may not solve their long term governance problems, but the only other option seems to be more counterproductive austerity and more throwing good money after bad from all of the other Eurozone members. Some people say that Greece leaving will cause a domino effect with all of the other weaker members, but I don't think that's necessarily the case. I think the EU can make the case that since Greece cooked their books so much when they entered the Eurozone that it was actually a mistake to allow them in and this is just correcting the past mistake.

The really sad part is that they were growing again. And then Syriza came and business essentially said: "Fuck it I give up". Perhaps the pressure was too strong after all they contracted by 25% of their GDP so a pushback from the voters was to be expected but in the 10 years before they increased their GDP by 40% more than the productivity. They had a trade deficit of 13% 2008. Pretty much half the economy was smoke and mirrors and financed by cheap money.

Keynesian spending works if you have lots of spare capacity and you need to keep it occupied because you have a temporary shortfall of demand because of the crisis. But in this case that is not the case. A reduction was inevitable.

 

[coslie]

JPan[/url]":3iiey54p]

coslie[/url]":3iiey54p]

bluesdrivemonster[/url]":3iiey54p]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.

Bullshit. The current government was willing to increase taxes on pretty much everybody. Problem is that this does not fix their economic problems. What they need to do is open labour laws and stop early pensioning. Because getting more people to work is essential for it to work out. And yes there were some cuts as well they are running out of money quickly because nobody trusts them anymore.
But especially the IMF wasn't content with that they wanted them to do actual structural reforms that would help the economy to get better in the long run. You know the kind of stuff Spain did which was really painful but now led to them being the fastest growing country in Europe. Still early days but ...

The problem is that this runs anathema to the politics of the current government they are a radical left party who
- reversed privatisations ( they can be bad but the public sector in Greece is so terrible that this is necessary
- stopped opening the labour market ( which is key to get the country back up )
- rehired state employees ( the one thing they need to reduce because a lot of them are just dead weight )

This policy of very strict labour laws and a still very big public sector leads to the fact that greek labour costs are still as high as in 2007 and the whole country is not competitive but lots of people are out of work. With a drachma they could deflate their currency but without it they need reforms. And the current government is completely opposed to them.

Hell Greece still doesn't have a land register. They got 150m from the EU a couple years back which resulted in nothing and the minister in charge said " Well this is Greece".

Or the other Syriza guy who just said regarding pensioners not getting their pension " Money is only paper, it will be found"

So basically the problem is not the money. The problem is that this was a country heavily living over its possibilities and now being ruled by a bunch of guys who think money is just paper. They take their democratic right not to implement the proposed reforms and the rest of Europe takes their democratic right not to give them anymore money.

And yes their debt is unsustainable in the long run but they only have to pay less as percentage of GDP now than France because the interest rates are so low. The problem is that while Spain,Portugal, Estonia, Ireland, Slowakia etc. reformed a lot Greece did not. Don't get me wrong they cut a lot but they didn't make any reforms that would actually make the country work better.

And the biggest problem is that nobody trusts the new government anymore. They always talk about the things they want to reform but they have done jackshit. They had 6 months now they could have heavily done some of the reforms that make sense to everybody. There is enough to do. But the only thing they produce is hot air. First they need to reform THEN the debt can be cut. Not the other way round.

Syriza aren't radical, unless not obeying the IMF is radical. The IMF are right wing ideologues with the same toxic prescription for everything. They've consistently used crisis to impose their agenda, with no regard as to whether or not it works, or if they are making things better or worse.

Greece isn't particularly efficient, and never should've been let in. (Thanks Goldman Sachs) They probably ought to leave. But they are far from the only guilty party in all this, and as usual it's the wrong people being made to suffer.

 

[Feniks]

I've booked a holiday to Greece so I will be doing my part in keeping the Greek economy alive. So long as civil war doesn't break out.

 

[Pixy Misa Mk II]

WereCatf[/url]":3didugox]I only skimmed through the comments, but I didn't anyone see stating the obvious: how is this guy planning to handle the perks?

It's a joke. It's a fixed funding campaign, so the money only goes through if it hits the goal of 1.6 billion euros.

Which, needless to say, won't happen.

It would have been better if he'd added stretch goals...

 

[CppThis]

JPan[/url]":1cyw2ont]Keynesian spending works if you have lots of spare capacity and you need to keep it occupied because you have a temporary shortfall of demand because of the crisis. But in this case that is not the case. A reduction was inevitable.

Keynesian economics (like communism, welfare, anything with 'social' in the name, etc.) sounds really great on paper where everything's just an abstract concept and there's no such thing as greed, sloth, spite, etc. But in practice it's doomed to failure because humans are corrupt, shortsighted, venal little weasels and power always flows toward those with the biggest egos and least personal responsibility.