Greek debt crisis [update: 3rd Bailout deal reached]

[FTeik]

Because I screwed up the quote-function and also had to correct the links in my second-last-post:

Cool story bro. Remind me again of how the German economic miracle was sparked? Was it A) crushing and senseless austerity or B) HUGE FUCKING DEBT FORGIVENESS.

You are also forgetting, that there WAS debt-forgiveness in 2012 by 100 billion https://en.wikipedia.org/wiki/Second_Ec ... for_Greece , which would amount to fifty percent of the then existing debt.

If I now lock at the debt-agreement from 1953 https://en.wikipedia.org/wiki/London_Ag ... rnal_Debts I can see, that Germany got – drolls rum – also debt-relief by 50 percent.

Explain to me, how a huge fucking debt-forgiveness of 50% for Germany is different from a huge fucking debt-forgiveness of 50% for Greece? Aside from that, contrary to Greece today (see below), I’m willing to bet, that the German negotiators of 1953 were negotiating in good faith, instead of annoying them with the kind of escapades Syriza pulled since coming to power.

[Crown]

Could have fooled me, especially when you simplify your argument like this (didn’t notice this the first time, I was already answering to your following post):

I suspect that isn't a hard task.

Cool story bro. Remind me again of how the German economic miracle was sparked? Was it A) crushing and senseless austerity or B) HUGE FUCKING DEBT FORGIVENESS.

You are also forgetting, that there WAS debt-forgiveness in 2012 by 100 billion https://en.wikipedia.org/wiki/Second_Ec ... for_Greece , which would amount to fifty percent of the then existing debt.

If I now lock at the debt-agreement from 1953 https://en.wikipedia.org/wiki/London_Ag ... rnal_Debts I can see, that Germany got – drolls rum – also debt-relief by 50 percent.

Explain to me, how a huge fucking debt-forgiveness of 50% for Germany is different from a huge fucking debt-forgiveness of 50% for Greece? Aside from that, contrary to Greece today (see below), I’m willing to bet, that the German negotiators of 1953 were negotiating in good faith, instead of annoying them with the kind of escapades Syriza pulled since coming to power.

Aside from the fact that your own source says it was a roughly 30% 'forgiveness' to begin with you mean? I mean, you can read right? Did you read it? Or is it number's that trouble you. Here, let me help you;

(€100bn / €350bn) x 100 = 28.6%

Where €100 billion is the agreed write down, and €350 billion was the actual debt at the time, again, from your own source;

When the swap is executed, the bond holders will receive a cash payment on 15% of their original holding, and become issued with new Greek bonds worth 31.5% of their old bonds (covered by 24 new securities). Combined this will result in a 53.5% haircut of the face value, so that the Greek debt pile overall will decrease from its current level at €350bn, to a more sustainable level around €250bn.

Now that we've taken care of obvious lie about Greece receiving a 50% debt forgiveness, onto your second article and I quote;

An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction.

Notice anything different there between the German debt forgiveness (+ Marshall plan) versus the Greek debt write down + the 'bailout'? It's already been posted in this thread (and time and time again), that the bailout money 'loaned' to Greece was laundered through it and into French and German banks. Post Nazi Germany though, got the Marshall plan AND debt reduction AND a pay back method which assisted in the German economic miracle.

And since you mentioned the suffering by "every fucking country on the continent", thank you for pointing that out. There are countries, that suffered more than Greece and longer than Greece (I'm looking at the Eastern European States here), but for some reason they are not in the same shit as Greece. One has to wonder why.

I know right, it's not like THEY HAD THEIR OWN CURRENCIES WHILE THEY WERE ENACTING REFORMS OR ANYTHING? RIGHT?

Well, if Greece wouldn’t have swindled itself into the Euro, it would have had to keep its own currency, too and would have had to pay double-digit interests for its credits. Since it didn’t have to do that Greece could cheaply borrow money until it was in over its head in debt.

Yes, and? You're not moralising again right? Could you stop doing that? It takes up so much time.

You also understand that Greece hasn't CAUSED THEM TO SUFFER, right?

No, Greece caused its own suffering, by amounting more debt than it could ever pay back:

- They swindled themselves into the Euro
- Despite not being ready for the Euro (Maastricht-criteria), they were granted access on the optimistic assumption, that the Greek government would move the country towards more compliance with the agreed upon criteria, when in reality the opposite was the case.
- Now when the bubble burst and the excrements hit the fan they receive emergency-loans, a haircut of 100 billion dollars, offers of help in modernizing their tax-system http://www.reuters.com/article/2012/02/ ... BA20120219 , ect.

In return they agreed to a number of reforms and while I have no doubt, that the “easy” ones – cutting pensions and wages (it should however also be noted, that from 2001-2008 the average wage in Greece rose by 40%), reducing the employment in the public sector, there seem to have been no structural reforms in regards to the tax-system or land-register, that are also enforced (and not just codified into law).
One is tempted to quote Bismark: “You can run a state with bad laws, if you have good officials, but the best laws are useless, if the officials are bad.”
When Syriza came into power, many of those reforms were cancelled and when the Troika travelled to Athens in February 2015, they weren’t allowed access to the information they demanded. Instead we get a cat-and-mouse-game for the last months, in which the Greeks manage to piss away any remaining good-will their creditors might have still had. Then they pull that stunt with the referendum about the reforms and austerity and a few days later Tsipras presents a list, which seems to contain everything and more he opposed until then. He is either lying to the creditors or he is lying to his own electorare.
Not only that, considering what Tsipras is currently offering for a third package, one also has to wonder, what has actually been done reform-wise since 2010. It can’t have been much, if there is still room for more. So if the Greeks didn’t follow through on their agreements then, why should we trust them to do so now?

Considering all this answer honestly: How credibly are such figures?

What are you talking about? It literally does not matter if the Greek economy was being run by saints (and it's never been my argument that it was), it could never meet the condition of its loans and it can't pay them back. DO YOU UNDERSTAND THAT? The whole bailout program looked like this;

• Step 1: Bailout the banks
• Step 2: Savagely cut the Greek economy to make it run a balanced budget
• Step 3: Pray the magic 'confidence fairies' invest and build up the Greek economy
• Step 4: Do it again

Shockingly, there are no such things as magic confidence fairies. There are such things as investors and leaders of industry who saw what Greece's debt burden was, what its debt payment structure was and what growth targets its economy need to achieve to meet these repayments and said 'fuck no'.

You understand that THE POINT of the German example; is that if we can all forgive Germany for fucking us, why can't you forgive Greece for fucking its self? You seem to think that Greece should be 'made to pay' due to some kind of 'morality' issue. I'm telling you; you can't get blood from a stone. Learn from history, the only way this ends with a win-win if the debt is restructured/forgiven, or it will be more of the same.

This isn’t about a debt-cut alone, despite the problems that would cause forthe Euro-zone and the reaction of other members with huge debts (which you would now, if you’d r ead my earlier posts from my discussion with K.A.Pital), this is also about trust and negotiating in good faith, which Syriza and the previous Greek governments squandered away.

Good faith eh? Like Schäuble deliberately seeking an agenda to force a Grexit? Like Shultz pushing for regime change and wanting to appoint 'technocrats'? Like the Eurogroup deliberately trying to suppress the IMF report which showed that in their estimation Greece would need a further €50bn debt write off and 10 year grace period from paying back ANY debts because they didn't want to vindicate the Greek position?

The Eurogroup is now culpable for this problem. The IMF has finally broken ranks and admitted the truth; the wrong medicine was administered to the patient.

b) Only, that there wasn't the threat of "just a hit" in 2010. Yeah, right, lets ignore that banks have to keep other people supplied with money and loans, too, aside from the Greeks. Also they are intermediaries between savers and debtors. "Oh, sorry Mister, you can forget your pension-plan, because we had to write off the money for Greece." "Apologizes Madam, but the saving-plan for your childrens study at university went up in smoke.

WELCOME TO CAPITALISM BRO. Again; it happens ALL THE GOD DAMNED TIME.

Right, and now it happened to Greece. Tough luck, but as you said, It happens all the god damned time.

It's about to happen to everyone if people are honestly too god-damned stupid to force a Grexit.

I can't edit, so this goes here, from here;
<snip image>

Fucking Greeks ... about to tie Germany (it includes Prussia) and Austria for number of bankruptcies since 1800 ... can't they just do better?

Well, three of those were for Prussia alone (and two of them because of the wars against Napoleon), so if you want to count for the whole of Germany, you'd have to start in 1871 (while Greek got its independance from the OttomanEmpire in 1822).

Yes I know it counted Prussia. I said it counted Prussia. The point was to push back on the fucking crypto-racisit bullshit of Greeks somehow being more 'reckless' economically than Germans/Norther Europeans. The picture stands.

[Simon_Jester]

Has anyone actually addressed the "there is literally no way for Greece to repay those debts even if their economy is fully reformed overnight" objection Crown (and others) keep raising? Did I just miss that somehow?

Because it would seem to me that this is a clincher. It's a complete waste of time to repeat "The Greeks need more reform" if reform won't actually enable the Greeks to pay their debts or rebuilt their economy.

And since I can only assume that the Greeks' creditors can do basic arithmetic... well, the only way they're getting their money back is to just take all the stuff in Greece- to claim ownership of real estate and businesses and utility monopolies and so on, with a total value comparable to that of Greece's national debt. In other words, a large fraction of the total value of all property in Greece, since we're talking about sums equal to a year or two worth of their GDP.

If they know that, then the accusations of 'predatory lending' associated with these bailouts seem pretty apt to me.

[Grumman]

How did we know that the German's ever learned to not stick people in ovens before we forgave their debts?

Because we fucking killed them. The only reason I cannot say we literally decapitated the German government before their debts were forgiven is because the drop wasn't long enough.

[Crown]

How did we know that the German's ever learned to not stick people in ovens before we forgave their debts?

Because we fucking killed them. The only reason I cannot say we literally decapitated the German government before their debts were forgiven is because the drop wasn't long enough.

I'm happy to write a list of those responsible if you want. You will find A) the current government isn't on it and B) it's not 10 million names long.

You understand what my comment was in reply to right?

[aerius]

Has anyone actually addressed the "there is literally no way for Greece to repay those debts even if their economy is fully reformed overnight" objection Crown (and others) keep raising? Did I just miss that somehow?

Of course not. Because that would involve doing math. And the numbers can only come up one way, that is to say the money ain't there, the money ain't gonna be there, and the loans can't ever be repaid in full. The math just is. There is no bullshit in the numbers. When the debt is greater than the GDP and the interest rate on the debt is also greater than the projected growth rate of the GDP, it can only end one way. People can cry all they want, but it ain't gonna change a damn thing. Anyone who insists otherwise is a complete fucking idiot or a goddamn fucking liar.

[Simon_Jester]

Hm. Help me out here.

Suppose as a hypothetical person is making $50000 a year, with a foreseeable salary increase of 5% a year, and owes $60000 in debt, with an interest rate of 6%.

If they can make debt payments of more than $3600 a year, they can still pay down that debt... eventually. Paying 7.2% of your income in interest payments is quite burdensome but it's at least realistically possible.

Now, the issue here, I think, is that austeritarians believe that Greece can do essentially the same thing. That if it just tightens its belt enough and expends enough of its effort, it can pay down those debts.

The interesting question is, why do they think so, and/or why isn't that possible?

Here's my speculation:

A private citizen's income is typically a matter of two separate streams: income and outflow. Altering the amount of money you spend doesn't change the amount of money you make, with a limited number of exceptions.* Usually, what determines your income is "how hard you work," or "what you do" or in some sense is a direct function of your effort, determination, self-discipline, and skills. Meanwhile, what determines your expenses is mostly a function of what conditions you are willing to live under- you can nearly always cut expenses if you're willing to make sacrifices. And most people spend at least 5-10% of their income on luxuries they COULD, in theory, do without if it were important enough. Some spend much.

So almost any single person, except for those in such absolute poverty that their basic needs are not met, CAN manage to make debt payments that allow them to ultimately pay off debts considerably larger than their annual income.

Why doesn't this generalize to nations, then?

I'm not a macroeconomics expert but I have a thing that might be the answer. As noted, an individual human's income and outflow are determined by separate processes that are only indirectly related. A country does not follow this rule. Almost all the 'income' that composes a country's GDP is the direct result of money spent by people IN that country. It's money circulating through the domestic economy.

So GDP isn't like your personal income. It's like measuring the rate at which blood flows around your body- circulation, not income.
_____________________

If your income is around $50000 a year, you probably COULD scrape together $5000 a year in debt interest payments and pay down a debt that is larger than your yearly income and growing faster than your yearly income.

By contrast... the human heart pumps about five liters of blood through itself a minute. Your annual "gross heart bloodflow" is five liters a minute times the number of minutes in a year- roughly 2.6 million liters a year, or about the volume of an Olympic swimming pool.

That does NOT mean you can supply 10% of this volume of blood every year! If you try to supply blood at a rate of 0.26 million liters a year (500 mL per minute), you will bleed out and die before you hit the fifteen minute mark!

The rate at which you can give blood isn't capped by the rate at which it flows through your veins. It's capped by the rate at which new blood is generated- because the blood is necessary for your life, and if you give up some of it without immediately replacing it your health will suffer. The rate at which the body generates blood isn't 5000 mL a minute, or 500 mL a minute... it's on the order of 500 mL a month.
__________________

Now, the situation for a country isn't quite this hopeless, I'd think. In the normal order of things, outside a hospital, humans don't naturally have any means to 'earn' blood from outside their body. Countries can 'earn' money from outside their borders, providing them with the means to pay off debt at a rate that is in theory faster than the natural growth of their economy (which gives a measure of the rate at which 'new blood' is generated.

Thing is... to do this they have to basically just... work for the sole benefit of foreigners. A lot. Either they'll end up stripping off assets to raise the money in a hurry, or they need to engage in long term production of economic goods that wind up benefitting the foreigners and NOT themselves (because the value of the goods isn't kept in the country, it's exported to pay the debt and nothing comes back to them in return except a "paid in full" statement)

So you end up in a situation where, to pay off a debt that is only a 'little' bigger than their GDP and is only growing a 'little' faster than their economy, the Greeks don't just have to commit 7.2% (or whatever) of their economic output to benefiting foreigners and foreigners alone. They might be committing a lot more of that.

I think.

Am I getting this right, or at least not horribly wrong?

[aerius]

...So almost any single person, except for those in such absolute poverty that their basic needs are not met, CAN manage to make debt payments that allow them to ultimately pay off debts considerably larger than their annual income.

Why doesn't this generalize to nations, then?

Nations are more like a corporation than an individual person. They need to make the equivalent of capital investments, pay employee salaries, R&D investments, pension costs, healthcare costs, and all that other fun stuff so that the company/country can continue to operate, let alone grow. If a nation doesn't invest in infrastructure or education for instance, it's fucked. Once you account for all those expenses, you'll find that most corporations, and pretty much all nations have very little free cash flow in relation to their income. Back when Canada had a budget surplus, it was around 1% of our GDP.

So you end up in a situation where, to pay off a debt that is only a 'little' bigger than their GDP and is only growing a 'little' faster than their economy, the Greeks don't just have to commit 7.2% (or whatever) of their economic output to benefiting foreigners and foreigners alone. They might be committing a lot more of that.

I think.

Am I getting this right, or at least not horribly wrong?

That's pretty much how it goes.

But that's not important. The important part is that to pay the interest alone requires Greece to run a budget surplus of at least 3.2% of its GDP. Which as has been pointed out multiple times, has never been accomplished on a sustained basis by any EU country that isn't a large oil exporter with oil at over $100/barrel.

[Simon_Jester]

Also noting that this isn't 3.2% of the nation's budget, that's 3.2% of its GDP.

Doing a bit of arithmetic... A comparable feat for the United States would be to take in 530 billion or so dollars in taxes over and above what is necessary to balance the budget of what the government actually spends. And hand it over to foreign banks. Every year.

Those 530 billion dollars have to come from somewhere, which means 530 billion dollars of goods and services leaving the US economy and not coming back, in exchange for nothing. Economically that's the equivalent of, say, a disaster that wipes out 530 billion dollars in assets, every year. And that's the amount of pain you'd have to inflict just to keep paying the interest. To pay back the debts in any reasonable amount of time you'd have to raise (and expend) extra hundreds of each year. Several hundreds of billions.

This would, yes, probably be more than enough to wipe out any plausible economic growth the US could ever experience...

[Please note, any Europeans or other non-US citizens in the audience, that I am not choosing this example out of American exceptionalism; you could perform the same exercise with any country on Earth]

[FTeik]

For once something we could all agree would be a good thing:

http://www.independent.co.uk/news/world ... 81926.html

Goldman Sachs faces the prospect of potential legal action from Greece over the complex financial deals in 2001 that many blame for its subsequent debt crisis.

A leading adviser to debt-riven countries has offered to help Athens recover some of the vast profits made by the investment bank.

The Independent has learnt that a former Goldman banker, who has advised indebted governments on recovering losses made from complex transactions with banks, has written to the Greek government to advise that it has a chance of clawing back some of the hundreds of millions of dollars it paid Goldman to secure its position in the single currency.

The development came as Greece edged towards a last-minute deal with its creditors which will keep it from crashing out of the single currency.
Read more: Tsipras tells creditors what he's prepared to do
EU comes round to US demands to scrap Greek debt
Athens blinks first, promises to 'immediately implement' reforms

The deal is based on fresh economic reform proposals submitted by Athens which bear a striking similarity to the creditors’ offer rejected by the Greek people in a referendum last Sunday – sparking claims that Prime Minister Alexis Tsipras has effectively executed a huge U-turn in order to avoid a catastrophic “Grexit”.

Greece managed to keep within the strict Maastricht rules for eurozone membership largely because of complex financial deals created by the investment bank which critics say disguised the extent of the country’s outstanding debts.

Goldman Sachs is said to have made as much as $500m from the transactions known as “swaps”. It denies that figure but declines to say what the correct one is.

The banker who stitched it together, Oxford-educated Antigone Loudiadis, was reportedly paid up to $12m in the year of the deal. Now Jaber George Jabbour, who formerly designed swaps at Goldman, has told the Greek government in a formal letter that it could “right historical wrongs as part of [its] plan to reduce Greece’s debt”.

Mr Jabbour successfully assisted Portugal in renegotiating complex trades naively done with London banks during the financial crisis. His work helped trigger a parliamentary inquiry and cost many senior officials and politicians their jobs. It also triggered major compensation payments by banks to the Portuguese taxpayer.

Mr Jabbour, who now runs Ethos Capital Advisors, has also helped expose other cases including allegations against Goldman Sachs and Société Générale over their dealings with Libya relating to financial transactions that left the country’s taxpayers billions of dollars out of pocket. Both banks deny wrongdoing.

Based on publicly available information, he believes the size of the profit Goldman made on the transactions was unreasonable. Scrutiny and analysis of the documents and email exchanges could give Greece grounds to seek compensation and assess if the deals were executed for the sole purpose of concealing the country’s debts.

Greece’s membership of the euro gave it access to billions of easy credit which it was then incapable of paying back, leading to its current crisis. Lenders took its euro membership as a stamp of creditworthiness, but the true state of its economy was far less healthy.

Under Ms Loudiadis’s guidance, Goldman swapped debt issued by Greece in dollars and yen for euros which were priced at a historical exchange rate that made the debt look smaller than it actually was. The swaps reportedly made about 2 per cent of Greece’s debt disappear from its national accounts.

The size and structure of the deal enabled the bank to charge a far bigger fee than is usual in swap transactions, and Goldman persuaded Greece not to test the transaction with competitors to ensure it was getting good value for money.

Such deals were not uncommon among smaller countries attempting to enter the eurozone club, but they were stopped by the EU economic statistics agency Eurostat in 2008. Eurostat has said Greece did not report the Goldman Sachs transactions in 2008, when it and other countries were told to restate their accounts.

Two of the men in charge of the debt management agency of Greece at the time have argued the department did not understand what it was buying and lacked the expertise to judge the risks or costs.

One, Christoforos Sardelis, told Bloomberg news agency that Ms Loudiadis offered one swap which had what is known as a “teaser rate”, or three-year grace period. But the Greek official realised three months after signing the deal that it was far more complicated than he first thought – a situation exacerbated by the 9/11 attacks’ downward impact on global interest rates. While Goldman reworked the deal, Greece continued to lose heavily.

Saul Haydon Rowe, a partner at Turing Experts, a team of former bankers who advise in court cases involving bank derivatives, said: “Greece would have to unpick the trades completely and look into what advice was given, and how much Goldman might have expected to make over the course of the transaction.

“For a legal action to go ahead, Greece would have to show that Goldman Sachs said something it knew was untrue or which it did not care was true or not.”

Goldman said its transactions were in accordance with Eurostat rules. It said they reduced Greece’s foreign denominated debts by €2.37bn, or 1.6 per cent in terms of debt-to-GDP ratio, adding that they had “minimal effect on the country’s overall fiscal situation.”

[Simon_Jester]

Soberingly, the Congressional Budget Office thinks we'll be in exactly the same position I just described (having to extract at least 530 billion dollars a year from our economy in interest payments on existing government debt) by the year 2020.

http://blogs.wsj.com/economics/2015/02/ ... -spending/

The US economy is somewhat fortunate compared to Greece in that only about a third of this debt appears to be held by foreign nations.

http://www.factcheck.org/2013/11/who-holds-our-debt/

So at least the other two thirds of the interest payments go back into circulation.

[Mange]

N/m.

[Crown]

Just so we're all on the same page, the EU (i.e. Germany) basically just gave Greece 2 options;

1. All your bases are belong to us
2. Grexit

#ThisIsACoup is now tending across twitter.

[Starglider]

The rate at which the body generates blood isn't 5000 mL a minute, or 500 mL a minute... it's on the order of 500 mL a month.

Actually the sustained rate of blood cell and platelet generation is equivalent to about 1 mL per minute. Red blood cells only circulate for three months maximum and human blood volume is about 5 litres, so clearly it has to be at least 2000 mL a month or you'd die even without injuries. Blood donnation regulations are obviously very conservative, as they aim not to put any unusual stress on the system.

Anyway as you say for debt where so much of it is international, the country's trade balance becomes critically important. Greece's trade balance is pretty bad, mostly due to importing manufactured goods.

[Crown]

Just so we're all on the same page, the EU (i.e. Germany) basically just gave Greece 2 options;

1. All your bases are belong to us
2. Grexit

#ThisIsACoup is now tending across twitter.

I need to correct option 1; All your bases belong to Wolfgang Schäuble

The Guardian reports;

Incidentally, our readers flag up that the organisation which could take control of €50bn of “valuable Greek assets” is linked to none other than Wolfgang Schäuble himself.

"The Press Project has done some digging on the Luxembourg "Institution for Growth" to which the 4-page eurogroup paper demands that €50bn of Greek state property must be transferred. Guess what. This Luxembourg "institution" is wholly owned subsidiary of German KfW and the chairman of its board is a certain Wolfgang Schäuble."

The Institution for Growth was announced just two years ago, by Schäuble and Greek PM Antonis Samaras.

Mother of GOD, how brazen can a cunt get?

[bilateralrope]

The more I hear, the more I wonder when Greece will decide that Grexit is the least painful option available.

[Steve]

What I want to know is... what's preventing a simple deal of debt forgiveness and debt payments being deferred in exchange for definite Greek tax reforms? If Greece needs money now as well, then do it Marshall Plan style. Instead of just giving them money that gets circulated right back into the banks, the money gets earmarked for vital services and investments Greece needs to repair its economy and get moving again. Then when tax reforms and a stronger economy allow Greece to start repaying, the debts start coming due. I mean, even if takes Greece a century to pay them off, that's not unheard of. It was just in the last ten years Germany paid the final reparations over WWI, as I recall.

[Elfdart]

The more I hear, the more I wonder when Greece will decide that Grexit is the least painful option available.

As I wrote earlier, they should have done it already. It's like a debtor being harassed by bill collectors non-stop when there's no realistic chance of paying the debts owed: pull the pin, file for bankruptcy/default and get on with your life. Negotiating with predatory lenders only whets their appetite. The way Alexis Tsipras postured like he was going to tell the Eurozone to go play in traffic, only to drop to his knees faster than Alexis Texas only made him look weak and pathetic. Greek voters who voted NO have to be thinking "What was that all about?"

Yes, it is a coup -not much different from ones attempted against Chavez and Maduro in Venezuela. Were I a betting man, I'd wager another coven of right-leaning Colonels will get rid of Tsipras if the banker coup doesn't overthrow the current government by the end of the year.

[Vendetta]

What I want to know is... what's preventing a simple deal of debt forgiveness and debt payments being deferred in exchange for definite Greek tax reforms?

Ideology.

On several levels.

One is that the steps you're talking about would demonstrate that the prevailing economic theories that govern Europe are foolish lies. If investment is what repairs Greece's economy then austerity is a lie and everything that has been done on the economic stage in the past seven to ten years in Europe was the actions of an incompetent ideologue.

Another is that Greece elected the "wrong" government and must now be punished. This isn't about practical solutions, this is about making an example, that's why the "necessary" terms get worse every time, not because the level of the debt gets noticably worse in those few weeks, but because Examples Are Being Made lest Spain elect Podemos and also rebel against their rightful technocratic masters.

Also, the holders of Greece's debt would suffer politically at home if they entered into any debt forgiveness deal because they used their taxpayers' money to bail out the original lenders, insulating them from the cost of their poor risk assessment, and because they've persistently relied on a narrative of "lazy tax dodging greeks" to sell the necessity of that.

[Mange]

Breaking news: An agreement has been reached.

[K. A. Pital]

Seems like a draconian deal. Maybe Greece should have left.

[BabelHuber]

Seems like a draconian deal. Maybe Greece should have left.

I agree. But there must be some line of reasoning for Tsipras - why does he want to stay in the Euro-zone at all costs? He cannot be satisfied with the deal at all...

Also, the Greece parliament must pass some laws in the next days - if they can't do this, we have the GREXIT.

Finally, I think we all can agree that Tsipras and - especially - Varoufakis were very bad negotiators - I'd even say they are the worst I am aware of. They could have made a much better deal in February. But instead they alienated their European partners until the Greek bank closed and the country ran out of money. Why? They should have seen this coming, really.

[salm]

"The Press Project has done some digging on the Luxembourg "Institution for Growth" to which the 4-page eurogroup paper demands that €50bn of Greek state property must be transferred. Guess what. This Luxembourg "institution" is wholly owned subsidiary of German KfW and the chairman of its board is a certain Wolfgang Schäuble."

The Institution for Growth was announced just two years ago, by Schäuble and Greek PM Antonis Samaras.

Hmm... this looks worse than it is. The KfW is a publicly owned bank which was founded after WW2 to handle the rebuilding of Germany and later to handle the German Reunion. Schäuble is the chairman because he is the financial minister.
So no matter what ones opinion on this is the Guardian article looks rather misleading to me.

[Thanas]

Just so we're all on the same page, the EU (i.e. Germany) basically just gave Greece 2 options;

1. All your bases are belong to us
2. Grexit

#ThisIsACoup is now tending across twitter.

I need to correct option 1; All your bases belong to Wolfgang Schäuble

The Guardian reports;

Incidentally, our readers flag up that the organisation which could take control of €50bn of “valuable Greek assets” is linked to none other than Wolfgang Schäuble himself.

"The Press Project has done some digging on the Luxembourg "Institution for Growth" to which the 4-page eurogroup paper demands that €50bn of Greek state property must be transferred. Guess what. This Luxembourg "institution" is wholly owned subsidiary of German KfW and the chairman of its board is a certain Wolfgang Schäuble."

The Institution for Growth was announced just two years ago, by Schäuble and Greek PM Antonis Samaras.

Mother of GOD, how brazen can a cunt get?

The KFW is the official state development bank of Germany. Of course the German Finance Minister is the chairman of this wholly state-owned bank. Look up the British Business Bank for a comparison, you idiot.

[Thanas]

As to the terms of the agreement:

Demetrios Efstathiou of ICBC Standard Bank says that Greece has been comprehensively routed by Germany in Brussels this weekend:
- Tsipras had to concede on almost every point.
- Merkel comes out as a winner, and should be able to get the deal though the German parliament.
- Germany’s extremely tough position would serve as a warning to other Eurozone nations. There are arguments that she even pushed too far.
- Varoufakis may have gambled, Tsipras and Syriza may have lost, but Greece may be the ultimate winner - Greece has a golden opportunity to implement in record time the drastic reforms that it desperately needed and which successive governments have been unwilling to commit to.
- The formation of a national unity or special purpose government to pass the reforms in the tight time-frame is now required. Elections would have to follow at a later stage.
- The debate will now move on to the reaction of the Greek people. There is no easy answer. Only time will tell. The way I see it is that the Greek people will be relieved to see their banks reopen, their pensions and savings to be still denominated in euros, and the tourist season not destroyed. They should also be celebrating the implementation of structural reforms, but I doubt that.
- Greece must now push through parliament, by Wednesday, July 15th, a series of legislations that include the streamlining of the VAT system, and pension measures.

As to the terms of the agreement: (my comments in parenthesis)

New legislation

The Greek parliament must approve the deal before the German bundestag votes. It must also start passing legislation straight away to implement the agreed measures.

Creditors have insisted on immediate action on:
1. Streamlining VAT (Read: Tax exemptions for church, military and Islands to be gone)
2. Broadening the tax base (Read: FINALLY Tax shipping, reduce church privileges)
3. Making further reforms to the pension system
4. Adopt a code of civil procedure (HOW THE FUCK DID THEY NOT HAVE ONE?)
5. Safeguarding of legal independence for Greece ELSTAT — the statistic office (You mean, they were so incompetent that their stats office was not independent?)
6. Full implementation of automatic spending cuts (This one is odd and I don't know what the terms mean)
7. Meet bank recovery and resolution directive (probably means the fusion of several bankrupt banks and/or privatisation of state bank assets)

And also get the ball moving on another five points:

8. Privatize electricity transmission grid (Finally. Good god, they agreed to break up this state monopoly five years ago.)
9. Take decisive action on non-performing loans
10. Ensure independence of privatization body TAIPED (They were so incompetent that this was a political body?)
11. De-Politicize the Greek administration (Very necessary)
12. Return of officials from its creditors to Athens (hopefully they will not "leak" their identities to the press again)

Greek assets transfer
Up to €50bn (£35bn) worth of Greek assets will be transferred to a new fund, which will contribute to the recapitalisation of Greek banks. The fund will be based in Athens, not Luxembourg as the Germans had originally demanded.

The location of the fund was a key sticking point in the marathon overnight talks. Transferring the assets out of Greece would have meant “liquidity asphyxiation”, said the Greek prime minister, Alexis Tsipras.

Bridging finance
Talks will begin immediately on bridging finance to avert the collapse of Greece’s banking system and help cover its debt repayments this summer. Greece must repay more than €7bn to the ECB in July and August, before any bailout cash can be handed over.

Debt restructuring
Greece has been promised discussions on restructuring its debts. The German chancellor, Angela Merkel, said the Eurogroup was ready to consider extending the maturity on Greek loans. There is now no need for a Plan B, she added. (Translation: Deliver and we maybe will be generous)


Radical reforms

Tsipras pledged to implement radical reforms to ensure that the Greek oligarchy finally makes a fair contribution. The agreement thrashed out overnight would allow Greece to “stand on our feet again”.
Implementation of reforms would be tough, the Greek prime minister said, but: “We fought hard abroad, we must now fight at home against vested interests.”
He added: “The measures are recessionary, but we hope that putting Grexit to bed means inward investment can begin to flow, negating them.”

EDIT: There will also be not only the bailout itself (supposedly 86bn over three years) but also a 35bn program for the Greek economy.
Full summit statement here.