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

[Simon_Jester]

Mm.

Not sure I like that- "odious debt" refers to debts incurred by tyrants or by governments acting against the will of the people. To my knowledge there's not a lot of evidence that the elected government of Greece was borrowing against the will of the people. Granted there's evidence that the borrowed money was spent in part on corrupt ends that served the interests of the government and its cronies- but not ALL that money was thus used.

[J]

Mm.

Not sure I like that- "odious debt" refers to debts incurred by tyrants or by governments acting against the will of the people. To my knowledge there's not a lot of evidence that the elected government of Greece was borrowing against the will of the people.

Well, other than a lengthy series of mass protests and riots...
https://en.wikipedia.org/wiki/Anti-aust ... _in_Greece

[K. A. Pital]

Probably not, but it wouldn't put all the problems on business.

What business? What does Greece produce? What does it export? What is consumed domestically?

You know full well what I meant, don't fucking pull this stupid stunt unless you really are of the opinion that Greece has no business whatsoever, in which case I am quite frankly astonished you are in favour of protecting them, as it means they are worthless parasites siphoning resources of the working classes of Europe.

You know that Greek industries have been annihilated in the current crisis and EU bailout could not save them. So unless you want to persist in boneheaded stupidity, you better reconsider your stance. Once again: what does Greece produce and export? How can there be a revival of their economy without restoring the industry, and if it is going to be restored, how? You seem to worry a lot about the Greek industry. A bit hypocritical, considering that EU austerity basically killed it. And with no way out of the Euro, there is no way to make it competitive again.

[Edi]

Greece has, for five years, refused to actually implement a working tax system, as well as numerous other things they could have done, which would have mitigated the impact of those things that they did do. They have consistently negotiated in bad faith, so it's no wonder the rest of Europe is quite ready to say "fuck them". If they are given more money now just to stave off an instant collapse, do you really think that is going to make them really do anything other than demand yet more without doing anything in return?

Compare to places like Latvia, which went through a massive crash, did structural reforms and actually got their shit together because they knew they must. They had less resources to work with than Greece and they pulled it off, so what's the Hellenic excuse?

[Kinyo]

http://www.bbc.co.uk/news/world-europe-33307263

Greek banks are to stay closed all week.

[K. A. Pital]

Greece has, for five years, refused to actually implement a working tax system, as well as numerous other things they could have done, which would have mitigated the impact of those things that they did do. They have consistently negotiated in bad faith, so it's no wonder the rest of Europe is quite ready to say "fuck them". If they are given more money now just to stave off an instant collapse, do you really think that is going to make them really do anything other than demand yet more without doing anything in return?

Compare to places like Latvia, which went through a massive crash, did structural reforms and actually got their shit together because they knew they must. They had less resources to work with than Greece and they pulled it off, so what's the Hellenic excuse?

I am not of the opinion that accumulation of further debt is going to help Greece. I think that by preventing a shock devaluation and exit from the EMU, the former governments of Greece did a bad service to their own nation. Energy costs in Greece are exorbitant, for example, but allowing steel mills to procure energy at a discount constitutes "government subsidies". In this type of environment, especially with the global demand for steel experiencing shocks due to a "race to the bottom" and falling demand, this insistence is just boneheaded. So are many other things.

Latvia is a joke of a nation. "Got their shit together"? They have a third of the population at risk of poverty, one of the most unequal societies in the EU-27, and a massive wave of youth emigration (considering youth unemployment stood at over 20% last year and is over 15% this year, hardly surprising that people run like rats from this place). Hell, I am surrounded by runaways from Latvia. These people are well-educated, but they do not want to work in Latvia, there is no work for them there. So they make use of the European passport and freedom of movement laws to leave Latvia as soon as they can.

Greece is a bit bigger than Latvia's two million people, too, which are set to turn into 1,5 million over the next decades. Technically the entire Latvian non-economy could live off remittances when all young emigrate immediately upon graduation, but the same is not possible for Greece.

[FTeik]

Mm.

Not sure I like that- "odious debt" refers to debts incurred by tyrants or by governments acting against the will of the people. To my knowledge there's not a lot of evidence that the elected government of Greece was borrowing against the will of the people.

Well, other than a lengthy series of mass protests and riots...
https://en.wikipedia.org/wiki/Anti-aust ... _in_Greece

Since when are protests against austerity the same as protests against borrowing?

Also regarding the main industries of Greece, if I understand it correctly they are shipping and tourism. Shipping doesn't seem to contribute much, because it isn't taxed enough and considering how the greek government behaved in recent months I'm not surprised a lot of tourists from Northern Europe decided to vacate elsewhere.

[K. A. Pital]

1. Tourism is not an industry and you literally cannot expect to feed and occupy a nation entirely with tourism, which is just one occupation in the tertiary sector.
2. Most people in Greece were employed by industrial manufacturing (concrete, steel, pharma, other metals, rebar production), which was followed by construction. The unemployment is so high because these industries are the bulk of employment and they are barely breathing now. Shipping brings money but, sadly, not nationwide employment, as it employed only one fourth of the employed in manufacturing and construction.
3. Shipping contributes quite a lot to GDP (around 7%), more than to employment.

[Thanas]

You know that Greek industries have been annihilated in the current crisis and EU bailout could not save them. So unless you want to persist in boneheaded stupidity, you better reconsider your stance. Once again: what does Greece produce and export? How can there be a revival of their economy without restoring the industry, and if it is going to be restored, how? You seem to worry a lot about the Greek industry. A bit hypocritical, considering that EU austerity basically killed it. And with no way out of the Euro, there is no way to make it competitive again.

No, I worry a lot about Greek small business, which Tsipras is apparently looking forward to kill.

3. Shipping contributes quite a lot to GDP (around 7%), more than to employment.

Still untaxed profits. Richest shipping firm pays 200k in taxes. And shipping will not continue like this for much longer because other nations are eyeing it as being massively subsidized and will respond in kind.

Greece has, for five years, refused to actually implement a working tax system, as well as numerous other things they could have done, which would have mitigated the impact of those things that they did do. They have consistently negotiated in bad faith, so it's no wonder the rest of Europe is quite ready to say "fuck them". If they are given more money now just to stave off an instant collapse, do you really think that is going to make them really do anything other than demand yet more without doing anything in return?

Compare to places like Latvia, which went through a massive crash, did structural reforms and actually got their shit together because they knew they must. They had less resources to work with than Greece and they pulled it off, so what's the Hellenic excuse?

Amen. Hey, how many names have they got off the lagarde list? 20 investigated, Tsipras plans to pardon the remainder. Pension system, with over 40% retiring before 50? Meh, reform will start in 2040.

I am not of the opinion that accumulation of further debt is going to help Greece. I think that by preventing a shock devaluation and exit from the EMU, the former governments of Greece did a bad service to their own nation.

So what, they should have ignored the wishes of the populace?

Energy costs in Greece are exorbitant, for example, but allowing steel mills to procure energy at a discount constitutes "government subsidies". In this type of environment, especially with the global demand for steel experiencing shocks due to a "race to the bottom" and falling demand, this insistence is just boneheaded. So are many other things.

Let us not act as if energy costs are the only think killing them, for example their industry is so inefficient that when Siemens considered buying the main electrical coal plant they found it a bizarre construction unable to operate and not having been modernized for 30 years. Which just reminds me - where did the money go that was earmarked by the EU for infrastructure development?

Latvia is a joke of a nation. "Got their shit together"? They have a third of the population at risk of poverty, one of the most unequal societies in the EU-27, and a massive wave of youth emigration (considering youth unemployment stood at over 20% last year and is over 15% this year, hardly surprising that people run like rats from this place). Hell, I am surrounded by runaways from Latvia. These people are well-educated, but they do not want to work in Latvia, there is no work for them there. So they make use of the European passport and freedom of movement laws to leave Latvia as soon as they can.

Sounds a lot like Greece.

[Thanas]

Juncker press conference via guardian liveblog:

We saw egotism, tactical games, populist games. says Juncker - after my efforts, I feel betrayed.
Playing one democracy against the other 18 is not worthy of the great Greek nation, and not fair on Greece’s citizens.
I have done everything I could, others did everything they could, and we do not deserve the criticism aimed at us.
We've been patient waiting for Greek proposals, which were often delayed, deliberately altered

The last bit is very true, considering the "the proposals are in the mail, for sure" routine Varoufakis has been playing for the first four months of the year.

EDIT: More:

Yes, it was a demanding package, says Juncker - but also a fair one.

We did not propose pension cuts...this was never, ever on the table, and it is wrong to claim that it was, says Juncker (another attack on the Greek side).

The Greek government had the ability to substitute measures, he add.

And we also pushed for structural changes to tackle vested interests, Juncker insists:

It took some times, hours, to persuade the Greek government to impose a less-favourable tax regime for ship owners, even though this is common sense.

Juncker adds that Greece suffers from a lack of competition, meaning that energy and commodity prices are among the highest in Europe. We wanted to tackle that.

it would be advisable if the Greek government told the truth.

Ah yes, Syriza defender of wealthy ship magnates.

Though Juncker is lying on the pension cuts - cutting health insurance contributions is an indirect pension cut.

[Thanas]

More from Juncker:

I ask the Greek people to vote Yes in Sunday’s referendum, says Juncker. Vote Yes to stay in the euro.
I say to the Greek people, you should not commit suicide because you are afraid of death.

So it seems Europe will treat this as a referendum on the Euro.

[K. A. Pital]

Look Thanas, I understand your criticism, but where is the plan for Greek revival? A shock exit, which is it seems what Tsipras finally offered with this referendum, is perhaps the lesser evil. Wages have already hit rock bottom, youth unemployment is absolutely crazy. Greek industrial bubble was a European creation, just as its bursting is. But if the price of rescue is so high, maybe Greece should go its own way. We will see what the results of this referendum are. I think that "no" would be good for Greece (troubled nations outside the EMU seem to avoid insolvency, at least), but in any case Tsipras was right to bring the matter up for a vote. He was elected to end austerity. He campaigned on this platform and now he cannot deliver anything but austerity.

[Thanas]

Guardian:

When the full tale of the eurozone crisis is finally written, the last hour deserves a special mention.

Jean-Claude Juncker, president of the European Commission, has made a remarkable intervention into the Greek crisis in what looks like desperate, last-gasp bid to prevent the country ploughing out of the eurozone.

He has effectively told the Greek people that they are choosing between the euro and the exit door on Sunday, that their government have lied to them, and that he has been their friend and ally at the negotiating table.

Underneath it all, the desperate fear that the European project is swerving off course and about to lose its first member.

He has confirmed the claim that Greece’s creditors were prepared to discuss debt relief as part of a future aid deal, before Alexis Tsipras shattered hopes of a breakthrough last weekend.

A clearly wounded Juncker spoke of feeling “deeply distressed and saddened by the spectacle that Europe gave last Saturday”.

In a single night, the European conscience has taken a heavy blow. Goodwill has somewhat evaporated.”

Crucially, Juncker is not offering a new compromise -- instead, he is arguing that the Commission was making a fair proposal - not “stupid austerity” - for the Greek people.

But his comments on the referendum are jaw-dropping -- telling Greeks to vote Yes in Sunday’s referendum is one thing, but warning “not to commit suicide for fear of death” is another level altogether.

And he has raised the stakes in Sunday’s referendum to the highest level possible, by warning that “the whole planet” will see a no vote as a declaration that Greece wants to leave Europe.

[Thanas]

Look Thanas, I understand your criticism, but where is the plan for Greek revival? A shock exit, which is it seems what Tsipras finally offered with this referendum, is perhaps the lesser evil. Wages have already hit rock bottom, youth unemployment is absolutely crazy. Greek industrial bubble was a European creation, just as its bursting is. But if the price of rescue is so high, maybe Greece should go its own way. We will see what the results of this referendum are. I think that "no" would be good for Greece (troubled nations outside the EMU seem to avoid insolvency, at least), but in any case Tsipras was right to bring the matter up for a vote. He was elected to end austerity. He campaigned on this platform and now he cannot deliver anything but austerity.

The referendum is a fucking joke, the last gasp by a populist demagogue. They are voting on a referendum where the "no" vote is all but a foregone conclusion.

A legitimate referendum would have a clear offer from the creditors - Tsipras has none, because the debate papers of Friday are not final offers. The latest papers released by the EC might be one, but it is not what is asked about in the referendum. Tsipras has offered no alternative either. So the questions is not "vote for Plan a or plan B", the question is rather "Do you approve of a non-finalized offer that is no longer on the table anyway, yes/no?". Do you think that is how a legitimate Government conducts business? This referendum is rigged and not worth anything.

You say Tsipras was elected to end austerity - with what, 36% of the vote? While a majority of Greeks (over 70%) wanted to stay in the Eurozone. Well, how is he going to accomplish austerity?

A commentator on reddit put this the best:

Syriza ran on an anti-austerity platform, knowing [1] the dates and amounts of repayment of Greek debt, [2] the condition of the Greek economy, and [3] that Greece's creditors had never stated that they would agree with Syriza's anti-austerity platform and [a] change the amount of the loans due, change the dates on which the loans were due, or [c] offer Greece more money even if it did not pay its loans in full and on time. Syriza gambled with the Greek people as its chips and bet that 3a, 3b, or 3c above would occur simply because of the intimidating, bullying, insulting and narcissistic tactics of Varoufakis and Tsipras.

In the end, Syriza lost its bet because Greece's creditors refused to be intimidated, and they said: "Fine, Varoufakis and Tsipras, you keep your anti-austerity platform; we'll keep our money. Have a good day." Syriza has what it told Greek voters they would have: anti-austerity. Therefore, about what can Syriza and those who voted for it complain?

Syriza has only itself to blame - as do those Greeks who voted for Syriza. They shall have no future loans from creditors, and they shall be responsible for finding the money to run their anti-austerity economy. Where will Syriza find such money to run their anti-austerity economy? Nowhere, because the money does not exist and never existed: Greeks do not and shall not pay taxes, so there is no revenue, and no private or governmental lender will loan Greece money.

In the end, and ironically, Greece shall have its anti-austerity, but it shall not have an economy and, therefore, its economy shall be the greatest anti-austerity economy in the world. If any Greek Erinyes are searching for someone to blame for this, they can start with Varoufakis and Tsipras. And what shall happen next? "Let all the poisons, which lurk in the mud, hatch out." Robert Graves, I CLAUDIUS.

I agree with everything except the last two paragraphs.


The plan for Greek recovery from what I can piece together was as follows:
- commit further funds to infrastructure (35bn in EU funding)
- 12bn less austerity
- slash the bureaucracy and make it easier to hire people and to build business (yes, there can be abuses, but as Germany shows, it can also include more jobs)
- try and make the pension system sustainable (for how dire it needs a reform, see this - 75% of Greek pensioneers have early retirement, with plans more generous than Germany and 32% retire between ages 26-55)
- force Greek shipping magnates to pay taxes (Hooray, Syriza did not want that either)
- get an efficient revenue service
- finally make efficient documentation about land ownership, who owns buildings etc.
- go after the Lagarde list

This is not a bad plan IMO. Even if everything else below Nr. 5 is most likely a pipedream, it still would have been better than Grexit. Especially because the debt is serviceable. They pay less per GDP than France. They pay less per any other country of the PIGs.


Tsipras was completely irresponsible in how he promised to end austerity but had no plan whatsoever to accomplish that. This is just plain irresponsible demagoguery, nobody responsible will ever run on that platform. Then came the stalling and lying, which IMO only had one plan - either hope Europe capitulates or get a referendum anyway. Seems that all of this was just a tactic to squeeze out more money from the ECB.

So what is actually Tsipras plan in case of a Grexit? Greece currently imports 26% of its food. Have fun trying to buy that with Drachma. Greece imports most, if not all, of their medicine. Have fun keeping the Hospitals running. And have fun getting a pension when the state defaults and will be unable to pay pensions, and have fun getting money out of the bank accounts. This is all very irresponsible. Tsipras fails to realize that the ones getting hit harder than anybody else will be the elderly, the poor and the weak. I don't know, but I will take a 5-8% cut in healthcare over a 80% cut in savings value and pension value everytime. Because does anybody here really believe Greece will recover outside the Eurozone that quickly?

Greece has demographic problems, the brain drain is enormous, the motivated and young are leaving the country. How does Tsipras expect that economy to perform? Here is what I think will go better:
- tourism (it is a bit funny how both defaulters and euro-loyalists expect it to be the saving grace)
- agriculture (which I think will actually work, maybe Greek can get enough food to feed their own)
- textile industry (if drachma is devalued so much that the cotton industry can get going, but I doubt that it will manage to outproduce Turkey as investment has not happened in Greece for the last twenty years in efficient cotton production).
- shipping (maybe, but not that likely as the EU will introduce measures against that).

So that is that. What else?

In essence, Greece in the event of a Grexit will hope that they can go against the trend of the last 80 years that they will be able to import enough high-tech products by exporting low-tech products en masse. But how is that going to work? They have to compete with both Bulgaria and Turkey for that. They have to compete with China. That will not turn out well.

Look at Argentina. They had a positive export balance. They had Export goods, they had natural resources, beef, agriculture, woods etc. And they are one of the 20 biggest economies in the world. And even with all that, their default hit people very hard.

This does not bode well for Greece.


That being said, maybe Tsipras is right and everybody else in the Eurozone is wrong. Economists seem to be split. Still, I can't help but wonder how a Grexit is going to work. Stas, can you show me how?

[K. A. Pital]

Because a "Grexit" is the exit from the EMU, but not necessarily the European Union? You seem to bundle the two, but there are many countries which do just fine outside the EMU, but inside the EU and the customs union. This means that theoretically, the devaluation will only reach a certain level and when their economy returns to growth, currency will appreciate. This is what happened with Poland after the devaluation in the 2008 crisis. It is dishonest to say Greece will not have investment in the future when even pathetic failed states start attracting investment once their currency devalues enough and their government rules stabilize.

The debt may look serviceable to you, but it is not - not with their nonexistent economy.

I think that you confuse the fact that the EC keeps tweaking its proposals even after talks collapsed with "no proposal". This is dishonest on part of the EC and ECB, because it seems as if they are offering concessions now because they are scared shitless of the referendum in Greece.

Finally, considering that countries used to live and many even thrived without the EMU, I find the juncker statement about suicide preposterous fearmongering of the worst kind. If exiting the EMU is so dangerous, how come the countries that never entered the EMU due to special circumstances, do not seem to be wiling to do so now? It does not look like they are terribly unhappy with their forints or kronas.

I find your contempt for democracy dangerous. Tsipras was elected to end austerity. Whether that could be accomplished by forcing the EU accept a lower budget surplus or by some other means is irrelevant. The creditors did not budge - the question is now brought to the people's judgement. People have the right to vote irresponsibly and suffer the consequences, no? Otherwise it is a very strange kind of democracy, where you cannot vote for certain goals.

[Thanas]

Because a "Grexit" is the exit from the EMU, but not necessarily the European Union? You seem to bundle the two, but there are many countries which do just fine outside the EMU, but inside the EU and the customs union. This means that theoretically, the devaluation will only reach a certain level and when their economy returns to growth, currency will appreciate. This is what happened with Poland after the devaluation in the 2008 crisis. It is dishonest to say Greece will not have investment in the future when even pathetic failed states start attracting investment once their currency devalues enough and their government rules stabilize.

What would investors invest in? New factories? Nonstarter due to the infrastructure and bureaucratic hurdles. And an even bigger non-starter when you can just as well invest in Poland or states that are even poorer than Greece.

The debt may look serviceable to you, but it is not - not with their nonexistent economy.

So, you are saying that a Government that can spend 19% of GDP on pensions alone and 4% of GDP on the military can't spend 2.3% on debt service? Doesn't strike me very logical.

I think that you confuse the fact that the EC keeps tweaking its proposals even after talks collapsed with "no proposal". This is dishonest on part of the EC and ECB, because it seems as if they are offering concessions now because they are scared shitless of the referendum in Greece.

Tsipras walked away while negotiations were ongoing. The talks were scheduled till Sunday evening, he walked away on Saturday. So no, there were no finalized proposals.

I find your contempt for democracy dangerous. Tsipras was elected to end austerity.

He never got a majority for that though. He got 36% of the vote. That is it.

Whether that could be accomplished by forcing the EU accept a lower budget surplus or by some other means is irrelevant. The creditors did not budge

On the contrary, they budged plenty. For example, take your primary surplus. Creditors agreed to lower it from 3 to 1%.

People have the right to vote irresponsibly and suffer the consequences, no? Otherwise it is a very strange kind of democracy, where you cannot vote for certain goals.

I think a legitimate Government would have tried to get a final offer and then put it towards a referendum, not passing some proposals who nobody knows if they were final or not off as a final offer.

[Thanas]

Highlights from Merkel/Gabriel press conference:

Merkel:
- legitimate right of Greece to call a referendum
- legitimate right of others to react to such a referendum
- we have basics on which the euro is founded. The Euro is based on trust.
- Europe can only act due to those basics and principles.
- self-reliance and solidarity are two sides of the same coin
- compromises are important, nobody can get 100% of what they want
- creditors compromised by making far more generous offers than the 2nd program
- Greek Government showed no willingness to compromise

Sigmar Gabriel, Social Democrat:

- Primary surplus offer was lowered from 3-1.
- Germany offered Greece to cut military spending, Greece was unwilling
- Greece never had any willingness to compromise and wanted unconditional money
- europe and germany cannot hand out money unconditionally
- Germany has to justify spending money to its own populace
- Unlike the other 18 countries, Greece was working against a compromise
- Greece rejected offer because they wanted a completely different eurozone for ideological reasons
- This blackmail could not be accepted
- Euro will not fail due to Greek referendum
- Euro will continue to be a sucess due to more rules, not less rules
- Greek Government has no right to imperil entire eurozone and to imperil European economy

[Edi]

Fun thing is that if, as it seems, they default and the current framework that has been negotiated terminates, Greece will have to negotiate future agreements completely from square one. Are they going to get as much generosity then? No.

[Thanas]

The EC has released the offer the Greeks walked away from:
http://ec.europa.eu/news/2015/06/20150628_en.htm

[K. A. Pital]

Hmm... So what I see there is that primary surplus keeps rising (in 2018 they expect 3,5% already). I'm not the only one to notice it:
http://www.theguardian.com/business/201 ... referendum

Of course, the economics behind the programme that the “troika” (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the country’s GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greece’s rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europe’s leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greece’s debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troika’s target in the snap referendum to be held this weekend.

In terms of transforming a large primary deficit into a surplus, few countries have accomplished anything like what the Greeks have achieved in the last five years. And, though the cost in terms of human suffering has been extremely high, the Greek government’s recent proposals went a long way toward meeting its creditors’ demands.

But of course Stiglitz is in cahoots with stupid radical leftists sabotaging. Or is he?

[Thanas]

^Then they should really be able to service the debt and there is no excuse for them not to pay, outside of being crooks and thieves.

That said, I am not trusting anybody who claims the bailout did not go to the Greeks and that it all went to the banks. Even if it did - which it did not - then where did that money go that was lent to Greece?


And Tsipras has got to be taking the piss now:

"The Greek prime minister made it clear that “impeding the democratic expression of the Greek people by closing banks is outside the democratic tradition of Europe.”

“He also told the president of the commission that he, himself, as as European citizen ought to defend the traditions of Europe so the Greek people can decide on Sunday undistracted.”

“With this in mind, he [Tsipras] asked [Juncker] to help so that the [bailout] programme could be extended by a few days and liquidity restored to the country’s banking system.”

Right, because it was Juncker who walked away, closed the banks and called a referendum. Greek government demands EU extend bailout so they can hold referendum to vote no on terms of bailout. Righto.

[Crown]

^Then they should really be able to service the debt and there is no excuse for them not to pay.

Except they can't since the surplus that Stieglitz is referring to occurs before any debt payments.

That said, I am not trusting anybody who claims the bailout did not go to the Greeks and that it all went to the banks. Even if it did - which it did not - then where did that money go that was lent to Greece?

I have posted it before, and every economist who isn't a Euro technocrat or financier have all said the same thing; the money was laundered through Greece to exposed German and French banks. Everyone knows this, the fact you're still in denial over this is amazing to me.

The EC has released the offer the Greeks walked away from:
http://ec.europa.eu/news/2015/06/20150628_en.htm

Cuts, cuts, cuts and oh a fire sale on all Greek assets ... no wonder they walked. Where is the stimulus package? Where are the job creation schemes? Where are the proposals to decrease GDP surplus targets which would make the debt 'serviceable'?

Oh, and here's Varoufakis response in full; source. I've quoted the some of the pertinent parts below;

What makes it impossible to pass the institutions’ proposal through Parliament is the lack of an answer to the question: Will these painful measures at least give us a period of tranquillity during which to carry out the agreed reforms and measures? Will a shock of optimism counter the recessionary effect of the extra fiscal consolidation that is being imposed on a country that has been in recession for 21 consecutive quarters? The answer is clear: No, the institutions’ proposal is offering no such prospect.

<snip>

At the same time, we do not have a mandate to turn down the institutions’ proposals either, cognizant of the critical moment in history we find ourselves in. Our party received 36% of the vote and the government as a whole commanded a little more than 40%. Fully aware of how weighty our decision is, we feel obliged to put the institutions’ proposal to the people of Greece. We shall endeavour to spell out to them fully what a Yes to the Institutions’ Proposal means, to do the same regarding a No vote, and then let them decide. For our part we shall accept the people’s verdict and will do whatever it takes to implement it – one way or another.

By the way, to those reading this and wondering what's going on, Thanas mentioned the Guardian live stream as a source for some of his quotes earlier; I highly recommend this as if for nothing else you will get the reaction of actual Journalists to some of the double-speak-two-faced-shyster-talk coming out of the Troika's mouth.

[Thanas]

^Then they should really be able to service the debt and there is no excuse for them not to pay.

Except they can't since the surplus that Stieglitz is referring to occurs before any debt payments.

Which are 2.3% of GDP. If they run a 3.5% of GDP primary surplus that still is more than enough to pay the debt service.

I have posted it before, and every economist who isn't a Euro technocrat or financier have all said the same thing; the money was laundered through Greece to exposed German and French banks. Everyone knows this, the fact you're still in denial over this is amazing to me.

You're not getting it. What happened to the money that created the debt in the first place? Greece received that one, what did they do with it?

[K. A. Pital]

http://www.macropolis.gr/?i=portal.en.t ... 62qbY.dpuf

The brutal belt tightening meant that only just over 15 billion euros of troika loans were used for state operations. Combined with some other government financing needs (mostly relating to repayments of arrears that accumulated in the first two years of the crisis) the combined allocation to the Greek state’s operating needs was just 11 percent of the total funding, at circa 27 billion euros.

Fuck, even magazines like Forbes said - all the way back in 2012 - this is basically a recapitalization and not a reduction of the debt burden, and that it's a bailout of the banks - to give Greece time to avoid default, so that the banks could reduce their exposure to Greek debt. Which they did.

Happy now?

[Crown]

Except they can't since the surplus that Stieglitz is referring to occurs before any debt payments.

Which are 2.3% of GDP. If they run a 3.5% of GDP primary surplus that still is more than enough to pay the debt service.

J put it into context for you in a previous thread (here) that the only western nations to ever do what was demanded of Greece in the last 20 years were Russia, Norway and Finland and two out of those three did it due to large sustained oil exports when oil was trading at +$90 a barrel. What is being demanded of Greece wasn't achieved by Germany, Canada or Australia (the only developed economy that didn't suffer a recession during the GFC - and coincidently didn't do any of that austerity malarky either); so in what universe does this seem like a credible plan?

You're not getting it. What happened to the money that created the debt in the first place? Greece received that one, what did they do with it?

No; you're not getting it (and neither will Greece's creditors either now). Greece's burden of debt in ratio to it's GDP has only increased since the bailouts! The risk of exposure to Greek debt has been removed from the German and French banks and rather unceremoniously foisted upon the tax paying people of Europe, while the burden of repayment of an increase in debt has been put on the Greek taxpayer; a taxpayer who can never pay this debt back!

Because the neo-liberal agenda of privatise profits and socialise loses has been ruling under the guise of 'adult' austerity the biggest fucking robbing of a taxpayer in Europe's history has just occurred.