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

[Pelranius]

Sounds pretty reasonable, considering that a lot of it is just implementing what they already promised to do.

Tsipras could have probably had this back in February, without all the brouhaha and near bank runs.

[His Divine Shadow]

Looks like Greece is fucked and we're out a shitload of tax payer money.

[Tribble]

Well I hope I'm wrong, but I have the nagging suspicion that everyone's just kicked the can down the road again. Let's hope that Greece actually starts recovering by the next election because otherwise the Greeks will probably vote in an even more extreme party. And let's hope that some of the bailout money actually goes into the Greek economy rather than circulating right back into the creditors pockets.

[aerius]

So the solution to a $300 billion debt problem is another $86 billion in debt, plus asset seizures and privatization. What's next, are you gonna tell me that someone who's passed out drunk can drink himself sober if you give him another bottle of whiskey? It's fucking laughable is what it is.

[Simon_Jester]

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.

Ah. Thank you.

I said "on the order of" 500 mL per month, which technically means "somewhere between 5000 and 50 mL per month," because I knew that the blood donation rates are conservative but didn't know how conservative.

If the rate is truly 1 mL per minute, then that translates into about 43.2 liters per month. So I was still off, and did not allow for enough conservatism on the part of the Red Cross.

That said, the rate at which the body generates blood is still three orders of magnitude less than the rate at which it pumps blood. So the example still stands; you still cannot supply a quarter million liters of blood a year, even though that is 'only' 10% of the total blood passing through your heart.

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.

Right- and that's not going to change for the foreseeable future, especially not with there being very minimal investment in Greek factories under the austeritarian status quo.

I'd expect that Greece isn't going to acquire a positive trade balance that would make it feasible for them to pay off gigantic foreign loans unless they turn themselves into a manufacturing powerhouse. Since high-end industry is not a practical option for them, that would mean lowering their standard of living until they turn into the Sweatshop of Europe.

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.

Agreed. The Syriza government should have either negotiated a better deal in February by making their willingness to submit to predatory lenders, or stuck to their guns and taken the perhaps riskier, but more pro-Greek, approach, and said "fine, boot us out of the Eurozone, we're not willing to commit to paying an unpayable debt in exchange for ripping out even MORE of the guts of our economy."

"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.

Even if it's not a private bank, this still boils down to the German finance minister demanding that the Greeks give him personally control of all their money.

It is no wonder that the Greeks were resistant on this point, and if Thanas' summary is correct, then that's one thing they did manage to salvage out of this mess.

[Thanas]

Even if it's not a private bank, this still boils down to the German finance minister demanding that the Greeks give him personally control of all their money.

To be fair, his track record with managing money has been far superior than any recent Greek finance minister. All sarcasm aside, how is this any different from the situation that will now happen, which is that the fund will be subject to European control...so Schäuble still sits at the table.

Giving the KfW control over this was most probably the best solution because they got a decent track record of rebuilding economies - the German one from the 40s-50s and the East German economy from 1990s. It probably is the institution one should put in charge of rebuilding ones economy. There is no equivalent institution with that kind of experience and track record. And unlike the Greek agencies, they do not have a reputation for being corrupt.

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?

Because the last time there was a debt forgiveness deal in exchange for reforms, the greek gov took the debt forgiveness and did none of the reforms they agreed to. Most of what is demanded now is something they agreed to earlier as well. The fear in most European nations is that they will simply take the money and run - again. That is why there are such strict demands for "implement before we give you anything".

[bobalot]

This deal is the beginning of the end of the Euro. The German neo-mercentile project will end in failure just as many economists predicted it would. A monetary union without fiscal union was always a doomed project.

These "reforms" (a complete surrender of sovereignty) will not return Greece to economic growth just like the last 5 years of austerity failed to do so. GDP will shrink while the debt-to-GDP ratio will continue to rise.

Default on all debts is now inevitable. It's only a matter of time.

The only consolation is that countries like Italy which have not grown since joining the Euro may see an upsurge in Euro scepticism and realise they ate better off with control of their own central bank and currency.

[Thanas]

This deal is the beginning of the end of the Euro. The German neo-mercentile project will end in failure just as many economists predicted it would. A monetary union without fiscal union was always a doomed project.

There will be no fiscal union without a political union, but Europe will never agree to weigh a German vote as much as it does weigh a Greek vote. And how are you supposed to get a democracy going if German votes are routinely undervalued in comparison to, say, Greek votes for the EU parliament?

[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.

The people who think #ThisIACoup are idiots not worth listening to.

Arguing with Twitter hashtags is like urinating into a hurricane, and a particularly stupid and self-righteous hurricane at that. But sometimes, you just have to do these things anway, and dry yourself off afterwards. So here goes: no, this is not a coup.

#thisisacoup has been trending in various parts of the world for several hours over the latest Greek talks. Let’s skim over the awkward fact that Twitter and public opinion are not the same thing and deal with the argument – such as it is – that lies beneath the hysteria and hyperbole. A coup is what happens when a group of people, foreign or domestic, seize power in a country by force or coercion. I’ll allow a bit of poetic licence in political conversation about Greece, so I won’t bother with the literalist argument that it’s not a coup because there are no tanks or guns or men in uniforms involved.

Instead, the argument seems to boil down to suggesting that because the Greek government is about to sign up to policies advocated by foreign governments and international organisations, Greek democracy has been thwarted. After all, the Greek people voted against something like the proposed deal in a referendum last week. Isn’t it undemocratic for that view not to prevail here?

Here’s a quick Politics 101 lesson for the #thisisacoup mob: Greece is not a direct democracy. It is a representative one. That means that the Greek people elect their governments to make decisions on their behalf. Referendums are not binding in Greece; they simply advise the government of the day on the views of the people. (That’s set out in the Greek constitution, a set of rules put in place by elected Greek politicians in 1975 after the country, er, got rid of its military rulers.)

To repeat: the Greek people elect their governments. Those governments do things, things like spending, taxing and borrowing. If the Greek people don’t like those things, they can sack their government and get another one. The things that Greek governments do, things like spending, taxing and borrowing, have consequences. One of those consequences is that Greece has run out of money and needs to get more money from someone else. Hence the negotiations in Brussels, where the people who will provide that money are asking for conditions before giving them that money.

Are those conditions extreme, draconian and potentially counterproductive? Quite possibly, yes. Is Greece under enormous pressure to accept them, and facing horrible consequences if it says no? Oh yes: the pressure is vast, the consequences truly terrible. And are the negotiations slanted against Greece, because Germany has more money and political clout within the EU than Greece? Yes. But so what? Germany is a bigger, richer country than Greece. That’s just a fact of life. Welcome to the real world, kids.

And while we’re on the subject of Germany, can I just suggest that the “voice of the people” argument cuts both ways here. Angela Merkel and her government are answerable to the German people, whose taxes are on the line in this deal. The Chancellor is doing the job she holds in the German democractic system, and she’ll be held accountable for her actions by German politicians and voters through that system.

Very few of the #thisisacoup crowd seem to be worried that the sovereign will of the German people is being ignored in the Greek talks, even though it almost certainly is: a referendum in Germany would very likely see German voters seeking even tougher conditions on Greece, or immediate expulsion from the Eurozone. When the pious hashtag brigade care as much for the Germans’ popular sovereignty as they do for the Greeks’, they’ll be worth listening to.

Instead, they seem to prefer childish and nasty references to the Second World War. On this point, I’d like to briefly set aside any pretence of courtesy or respect of the views of others and say this: if you compare the actions of the democratic German government led by Angela Merkel to those of Nazi Germany, you are not just an idiot but a hateful, small-minded and bigoted idiot.

Yes, Greece is under a lot of pressure to accept another bailout, and some of the conditions being attached to that bailout are stupidly harsh. But that is not the same thing as Greece being compelled by force to accept. If the Greek people do not like the deal that their current government is about to accept, they can sack that government and get another one, one that might chose to withdraw from the deal and pursue other policies, policies which would have consequences of their own.

This is not a coup. Anyone who thinks it is should grow up and join the real world.

[Purple]

There will be no fiscal union without a political union, but Europe will never agree to weigh a German vote as much as it does weigh a Greek vote. And how are you supposed to get a democracy going if German votes are routinely undervalued in comparison to, say, Greek votes for the EU parliament?

And as long as anyone looks at things that way there should be no political union. Because clearly people are not ready for it. This is not a case of your vote vs theirs. It's your vote to make them suffer vs theirs to not suffer. People who can not see how it is newer OK to allow one part of the group to vote the other into suffering should not be allowed into groups, let alone given a vote.

[Thanas]

There will be no fiscal union without a political union, but Europe will never agree to weigh a German vote as much as it does weigh a Greek vote. And how are you supposed to get a democracy going if German votes are routinely undervalued in comparison to, say, Greek votes for the EU parliament?

And as long as anyone looks at things that way there should be no political union. Because clearly people are not ready for it. This is not a case of your vote vs theirs. It's your vote to make them suffer vs theirs to not suffer. People who can not see how it is newer OK to allow one part of the group to vote the other into suffering should not be allowed into groups, let alone given a vote.

WTF are you babbling about? Go look up how the EU Parliament is elected.

[salm]

Even if it's not a private bank, this still boils down to the German finance minister demanding that the Greeks give him personally control of all their money.

It is no wonder that the Greeks were resistant on this point, and if Thanas' summary is correct, then that's one thing they did manage to salvage out of this mess.

Actually they never even demanded that the fund should be handled by the IOG. They said it should be handled by something like the IOG. A significant difference if you ask me.

[Purple]

WTF are you babbling about? Go look up how the EU Parliament is elected.

I am talking about how the political leadership of certain countries in the EU has repeatedly stated words to the effect of "The Greeks must be punished!" and "We want our money back (no matter the cost)". And that it would be a very bad idea for anyone to enter into a political union with countries such as those.

[Crown]

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.

So why not be upfront and be honest with 'give me all your shit' rather than 'deposit all your shit in tax haven Luxembourg under a shell organisation which I totally own'? Do one prat.

Looks like Greece is fucked and we're out a shitload of tax payer money.

Not yet, there's still hope that your right wing government rejects it (although I doubt your vote would be enough).

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.

The people who think #ThisIACoup are idiots not worth listening to.

Well a majority would happen to be European voters; do you live inside your bubble?

[aerius]

The people who think #ThisIACoup are idiots not worth listening to.

Well a majority would happen to be European voters; do you live inside your bubble?

Yup. You might as well ask a bunch of redneck Texans for their opinions on gun control and the 2nd Amendment.

It's not a coincidence that damn near every poster in this thread who isn't in the EU thinks the "deal" is a complete fucking crock.

[Crown]

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.

Jesus fucking christ, you're the type of dumb cunt who would be blaming Cassandra for Troy's destruction and not Paris if you think Varoufakis was the 'problem' in this!

[aerius]

I'd agree that Tsipras and Varoufakis were poor negotiators. Their correct course of action once it became clear that the Troika was just going to milk Greece for all it's worth was to give them the finger, put default on the table, tell the creditors to go fuck themselves, then ask the EU what the fuck they're going to do about it since there's no procedure in place for kicking out a member.

[Crown]

I'd agree that Tsipras and Varoufakis were poor negotiators. Their correct course of action once it became clear that the Troika was just going to milk Greece for all it's worth was to give them the finger, put default on the table, tell the creditors to go fuck themselves, then ask the EU what the fuck they're going to do about it since there's no procedure in place for kicking out a member.

Yeah, on that part their naivety of not having a plan 'fuck you' was absolutely culpable.

EDIT :: Mind you, running theme with Greek politicians; Papandreou should have walked, and brought the whole Euro down with him than sign up to the second 'bailout'.

[Fingolfin_Noldor]

Soo big questions. Will Tsipras survive this? If the government collapses, who on earth who has any shred of credibility is there left, other than the Neo-Nazis, to run the government?

The Greeks are scrapping the bottom of the barrel when it comes to finding a party to run the country. The Opposition, in my opinion, is frakking spineless, which is why Greece is even in the rut at all.

[Edi]

Very good, Crown and Aerius. And then what would Greece have done, with its economy completely in the toilet, zero trust from anyone from the outside and unable to do much of anything? They'd have gone more or less into an immediate death spiral since all of the basic building blocks for having a sound economy had been rendered dysfunctional by systemic corruption.

They would have needed the kind of reforms I've been talking about since the beginning of this thread and what Thanas has also been advocating in order to be able to fix anything with their economy. Or else go the way of Zimbabwe.

We've been looking at five years of the same bullshit song and dance of promises in return for aid and none kept, even the ones that would have been in their own unalloyed best interest (the tax reforms, census reforms, statistics bureau reforms, real estate registry reforms etc).

And now it came down to "If you want any help at all, promises aren't enough, you need to show actual results before you get a dime". Can't say I'm surprised. Papandreou and the others who preceded the Syriza government were corrupt fucks, sure, and don't seem to care if they burn Greece down around them. Tsipras and Varoufakis, instead of looking into a constructive discussion around the issue, decided to take an antagonistic tack and vague promises and then go for blackmail, with the result that they managed to alienate everyone.

So in that respect I am not the least bit surprised that quite a lot of people are taking the attitude of "Fuck them and let them burn". I see it all the time at work on a smaller scale, those who want to actually try to constructively fix things if they've fucked up and had bills pile up get help to do it and a plan is worked out. Then there are some people who simply do not give a fuck and ignore all attempts at helping them and they get cut, written off as a loss and then they can simply go fuck themselves. Unless they have cash up front, they get nothing.

[aerius]

Well let's see, Greece was running a budget surplus if the debt interest payments are subtracted out. Default on all the debts and that money can now be put to use and invested into improving the nation. You don't need any drastic reforms, because the system, imperfect as it is was working well enough to keep Greece going were it not for the EU leeching off it.

[Fingolfin_Noldor]

Very good, Crown and Aerius. And then what would Greece have done, with its economy completely in the toilet, zero trust from anyone from the outside and unable to do much of anything? They'd have gone more or less into an immediate death spiral since all of the basic building blocks for having a sound economy had been rendered dysfunctional by systemic corruption.

They would have needed the kind of reforms I've been talking about since the beginning of this thread and what Thanas has also been advocating in order to be able to fix anything with their economy. Or else go the way of Zimbabwe.

We've been looking at five years of the same bullshit song and dance of promises in return for aid and none kept, even the ones that would have been in their own unalloyed best interest (the tax reforms, census reforms, statistics bureau reforms, real estate registry reforms etc).

And now it came down to "If you want any help at all, promises aren't enough, you need to show actual results before you get a dime". Can't say I'm surprised. Papandreou and the others who preceded the Syriza government were corrupt fucks, sure, and don't seem to care if they burn Greece down around them. Tsipras and Varoufakis, instead of looking into a constructive discussion around the issue, decided to take an antagonistic tack and vague promises and then go for blackmail, with the result that they managed to alienate everyone.

So in that respect I am not the least bit surprised that quite a lot of people are taking the attitude of "Fuck them and let them burn". I see it all the time at work on a smaller scale, those who want to actually try to constructively fix things if they've fucked up and had bills pile up get help to do it and a plan is worked out. Then there are some people who simply do not give a fuck and ignore all attempts at helping them and they get cut, written off as a loss and then they can simply go fuck themselves. Unless they have cash up front, they get nothing.

I will be fucking blunt. If this was the tack that IMF took in the 97 Asian Economic crisis, we would be looking at a huge failed state of 500million people possibly splintering in many different direction and creating a complete nightmare fore neighbouring states. But no that was not done. Mind you, Indonesia looks like a complete pig's breakfast when it comes to corruption compared to Greece. Thanks to complete carte blanche mismanagement by all sides from the very fucking beginning, this entire crisis has been allowed to snow ball into a blackhole, and allowed everyone to start erecting fences and start waving national flags in the name of austerity and what not.

There should never have been any conversion of bank debt into national debt, and the banks that were in this perfidious lending should have been punished according, but no, apparently defending the integrity of their monetary systems took precedence. And by converting the debt to national debt, they converted a moral hazard problem for banks into a moral hazard problem for citizens who would naturally vote with their feelings and their flag.

Greece should have been allowed to leave the Eurozone way back 2008-2010, taken a default and forced into austerity while allowing their currency to devalue. Instead, in the name of the Europe Project, they were not. If this latest attempt to fix Greece's economy does not work, I say, Good Luck and Fuck ye All.

[Crown]

<snip>

What are you fucking smoking?

My god, how fucking dumb can you be! The Eurogroup, we know categorically and unequivocally, tried to suppress the IMF report which basically read 'we done fucked up'. There was never any agenda other than complete and utter subjugation of Greece by the Europgroup irrespective of Tsipras or Varoufakis or SYRIZA's behaviour. To say otherwise is to basically admit that the current 'bailout' is more punitive than necessary just out of sheer spite.

There was never any sound economic basis for what was done to Greece and her people buy these bunch of misanthropes.

[bobalot]

The people who think #ThisIACoup are idiots not worth listening to.

Well a majority would happen to be European voters; do you live inside your bubble?

Yup. You might as well ask a bunch of redneck Texans for their opinions on gun control and the 2nd Amendment.

It's not a coincidence that damn near every poster in this thread who isn't in the EU thinks the "deal" is a complete fucking crock.

Indeed, the EuroTards are out in force wailing about how terrible Greece is but don't seem to want to acknowledge everybody, including those radical socialists at the IMF,
say that Greece's debt is mathematically impossible to pay off without major debt restructuring. It's almost unanimous opinion among economists, like Nobel Prize winners like Krugman and Stiglitz, that these austerity programs have been and will be a complete failure.

Surpluses of 3.5% of GDP is something that no non-oil exporting nation in Europe has ever consistently achieved.

In exchange for a complete destruction of a country's sovereignty and complete humiliation and impoverishment of its people, the wise Germans (let's face, who are calling the shots) have set a completely impossible goal. No amount of moralising about lazy Greeks or masturbation about how Syriza didn't solve all of Greece's problems within 6 months will change this.

What the EuroTards don't realise is that in countries like Australia, America and Canada people don't give a shit that there are constant fiscal transfers to the weaker states like Mississippi without any promises of repayment. For the most part, we love our countries and think nothing of it. The idea of completely humiliating and impoverishing a member state for years or decades on end is completely repellent and would never be seriously considered. For this reason, the Euro and the EU's response to Greece is a complete inditement on what a failure the whole economic zone is.

You can almost feel the smugness of the EuroTards like Thanas in this thread. Their dicks gone hard with the idea of punishing and humiliating Greece but blind to the obvious truth to outsiders that this course of action will destroy any possibility of a political / fiscal union and therefore consigning the Euro to inevitable failure.

I can't wait for the day that Germany will return to having it's own currency, which will rocket in value, and make their exports drop and bring a whole host of problems that German avoids by having a weak EU and captive uncompetitive Southern export markets. Finally, the rest of us no longer have to listen to their self-serving bullshit.

[salm]

You can almost feel the smugness of the EuroTards like Thanas in this thread. Their dicks gone hard with the idea of punishing and humiliating Greece but blind to the obvious truth to outsiders that this course of action will destroy any possibility of a political / fiscal union and therefore consigning the Euro to inevitable failure.

I can't wait for the day that Germany will return to having it's own currency, which will rocket in value, and make their exports drop and bring a whole host of problems that German avoids by having a weak EU and captive uncompetitive Southern export markets. Finally, the rest of us no longer have to listen to their self-serving bullshit.

So, basically your dick would go hard with the idea of punishing and humiliating Germany.