
Greeks Reject Bailout Terms - xmpir
http://www.nytimes.com/2015/07/06/world/europe/greek-referendum-debt-crisis-vote.html?hp&action=click&pgtype=Homepage&module=span-ab-top-region&region=top-news&WT.nav=top-news
======
littletimmy
What's most interesting to me in this entire crisis is the moral discourse
surrounding debt. More often than not, you'll hear stuff like: "Of course
Greece must pay its debt", "You mean to say you can just take money and not
pay?", "Why should taxpayers bail Greece out?"...

All the while, there is absolute ZERO condemnation for banking entities making
risky loans. There is not even a tacit nod towards acknowledging that if banks
make loans that fail, it is their loss to eat. Not a whisper about how
taxpayers have been surreptitiously bailing out banks, and not Greece.

Somehow, a creditor is deemed morally superior to the debtor. What repulsive
rhetoric!

~~~
Lazare
> All the while, there is absolute ZERO condemnation for banking entities
> making risky loans. There is not even a tacit nod towards acknowledging that
> if banks make loans that fail, it is their loss to eat.

Not sure you really understand the situation. Everything which you said "isn't
happening" already happened. There was already a massive haircut on privately
held Greek debt (but _not_ the publicly held greek debt), and the banks
already ate a huge loss. Something like 80% of Greek debt is now owed to the
"troika", with much of the remainder held domestically.

The reason that EU governments focus on debt repayment, and why people talk
about taxpayers is because _they_ own the debt, and it's _their_ taxpayers who
will eat the loss.

> Not a whisper about how taxpayers have been surreptitiously bailing out
> banks, and not Greece.

Probably because that didn't happen. Private investors lost something north of
75% of the value of the loans they've made; what haircut has the IMF or French
government taken on their holdings of Greek debt? (Hint: Zero.)

~~~
landryraccoon
Do you have a citation for this? I looked on Google and didn't see any
evidence that creditors were asked to take a haircut on Greek debt. In fact
this article on cnbc seems to suggest that Europe is resisting any suggestion
of a haircut:

[http://www.cnbc.com/id/102371294](http://www.cnbc.com/id/102371294)

I could definitely be wrong, just want to know where you're getting your
information from.

~~~
Lazare
From the wikipedia overview[1]:

"A year later, a worsened recession along with a delayed implementation by the
Greek government of the agreed conditions in the bailout programme revealed
the need for Greece to receive a second bailout worth €130 billion (including
a bank recapitalization package worth €48bn), while all private creditors
holding Greek government bonds were required at the same time to sign a deal
accepting extended maturities, lower interest rates, and a 53.5% face value
loss."

When you do the math (the maturity extension and interest rate cuts were
steep), the total haircut was 75%+, with the bulk of the losses absorbed by
French banks. It got a _HUGE_ amount of press back in 2012—at least in the
financial press. Google for "greece", "2012", "bond swap", "haircut", "debt
swap", etc., you'll find hundreds of articles. Many of which boiled down to
"um, if the troika doesn't take a haircut too, it won't fix the core problem,
and we'll be right back here in another 2-3 years". They were right too. :(

Edit: Your link is part of that. All that's left is government held debt, and
they __STILL __insist on avoiding any haircut, just as they have been this
entire time. They were happy to see other people lose their money, but by now
we 're out of people with skin in the game. All that's left is the troika.
Their insistence on avoiding a haircut is _why_ everyone else had to have a
75%+ haircut..and why even that wasn't enough.

[1]: [https://en.wikipedia.org/wiki/Greek_government-
debt_crisis#2...](https://en.wikipedia.org/wiki/Greek_government-
debt_crisis#2010.E2.80.932014)

------
yc1010
Fairplay to them, the whole point of the EU project was to make us all
"Europeans" and to prevent constant disastrous fighting between states and
people of the continent.

Sometime in the last 10 years many people and the media in the "core"
countries got all smug and uppity towards those lazy "peripherals" and so on
forgetting exactly why the project was started, overnight we stopped being
"Europeans" and became "undustrious Germans", "smart and holier than thou
Nordics", "lying Greeks", "lazy Spanish" and in case of my own little
peripheral island country "reckless Irish".

Yeh :(

~~~
brightball
It's a similar issue that we see in the US. There are a number of people (and
the entire Constitution) that pushes for state level decisions unless it's
absolutely necessary at the Federal level. This approach creates a more
unified country because people are able to make their own decisions and live
with them.

States are able to compete economically. People are able to move within the
country to states with policies more in line with their own views. States have
to have balanced budgets while the Federal government...well...doesn't.

There's a push in this country lately to do everything at a Federal level
though, which creates constant tension because effectively people are trying
to push their views on each other rather than simply pushing them on their own
states and bearing the consequences internally.

At the same time, people become righteously offended at this concept. For
every New Yorker I ask "Would you like Texas to govern New York?" I get
another who is determined that New York should be able to dictate policy in
Texas.

The cognitive dissonance is maddening.

~~~
CamperBob2
_The cognitive dissonance is maddening._

It's a little more complicated than simply accusing the other party of
cognitive dissonance. There actually is a right answer and a wrong answer to
some of these questions.

K-12 education, for instance, has no business being a state-level issue. It is
grossly unfair if a kid in New York learns about evolution while her cousin in
Texas learns that Jesus rode a dinosaur to work. (Especially considering the
disproportionate influence that Texas has on the textbooks that every other
state must buy.) Yet Federal control of educational standards is one of the
most contentious issues of all.

~~~
omni
> K-12 education, for instance, has no business being a state-level issue.

This is contentious because there's no constitutional basis at all for the
Federal government having any say over education per the 10th Amendment.[1]
The Constitution doesn't mention education at all, which means the states
should have control. This was mostly the case until the 1980s.

[1]
[https://en.wikipedia.org/wiki/Tenth_Amendment_to_the_United_...](https://en.wikipedia.org/wiki/Tenth_Amendment_to_the_United_States_Constitution)

~~~
CamperBob2
It doesn't mention marriage, either. Just saying.

------
davidf18
The _real_ problem is that banks lent to Greece without doing their due
diligence evaluating risk. Instead the bankers collected their fat fees for
making the loans. Usually when banks make bad loans they have to write them
off but when in 2010 the Troika (Euro Community, IMF, ECB) took over the Greek
debt they paid 100% instead of insisting on the banks taking a "haircut" of
say 50%. In truth some of the smaller members of the IMF did ask that they
banks take a hit but the larger members turned that down.

The problems with the Greek economy that lenders are complaining about now,
about the lowest tax collection rate in Europe, the "overly generous"
retirement plans all existed _before_ banks made the loans and fixing these
problems should have been made a condition of making the loans in the first
place.

It will be impossible for Greece to pay off the debt and now instead of the
bank management (and the shareholders who appointed them) taking the hit for
their incompetence in making the loans the taxpayers will take the hit.

The German and other taxpayers should not have a problem with Greece, but
rather that Merkel and other governments decided to pay off the banks 100%
instead of insisting that they take a large "haircut."

Ideally, the banks should have been made to take a "haircut" on the loans and
the shareholders should have fired the management. Instead Merkel and other
leaders let the banks off the hook putting the burden on the taxpayers. Now
the taxpayers should fire Merkel and the leadership of other countries that
OK'd the 100% payout to the banks in the next elections.

~~~
fredkbloggs
This is so common that it already has a name: extend and pretend. That's
exactly what was done with Greece; the interest rate was lowered to a
scandalously generous level, maturities extended to practically forever
(Merkel and co. will be long dead by the time most of it is due), and everyone
got to pretend things were fine. As usual with this approach, things weren't
fine, and when it was time to extend and pretend again, someone decided they
weren't going along with it.

Japan has been extending and pretending for about 25 years now. They are far
more indebted than Greece but their interest rates are even lower. There is no
conceivable way that Japan is ever going to repay that debt, and it's still
growing at a pretty rapid pace. The circumstances are different (very few JGBs
are held by foreigners, and Japan issues its own currency), but it's pretty
clear from experience that extend and pretend leads to lengthy periods of
anemic economic activity. The question is whether default and workout will be
any better; the record there is mixed at best.

~~~
jbapple
If Japan owes debt in its own currency, can it just print money to pay off the
debt? If Greece can't devalue its currency this way, is its situation
materially different by even just this fact alone?

~~~
cperciva
_If Japan owes debt in its own currency, can it just print money to pay off
the debt?_

That's effectively what Japan is doing, by having its central bank loan money
at 0.1%.

~~~
jbapple
>That's effectively what Japan is doing, by having its central bank loan money
at 0.1%.

Does that make it more conceivable that Japan will eventually pay down its
debt?

~~~
cperciva
Yes. Economists often refer to "explicit" sovereign defaults (where the debts
don't get paid back) and "implicit" defaults (where the debts get wiped out by
a policy of deliberate inflation or devaluing of the currency). Greece's
inability to effect an implicit default is why they've ended up with an
explicit default.

In the case of Japan, since most of their debt is held by residents, it's even
a stretch to call this an implicit default; a better characterization would be
"wealth tax effected by inflation". Either way, if the Japanese government
could maintain a balanced budget, their central bank policy of flooding the
market with Yen would eventually allow them to pay off the existing debts.

~~~
ucho
Japan is now in a trap - they want to go from deflation to moderate inflation
to boost economic growth but won't be able to handle the dept if cost of
borrowing money raises. Also their demographics situation is one of the worst
in the world - if they don't repay the debts now how will they do it when
number of people in production age drops.

------
paskster
I am astouned by all the comments, who say that "Greeks were getting a shitty
deal" or that the bailout terms were somewhat "unfair".

Facts are: Greece had a spending deficit for several decades now. This
spending deficit accumulated to such a big dept, that no investors were
willing to lend greece any more money. 18 european countries transferred
billions of euros in the last couple of years to greece, to help the country
and the people. In return they had an agreement that greece would cut their
spending. Greece never lived up to the agreements it made. In the last weeks
18 european countries offered greece another bailout, where greece would
receive several bilions again. In return they asked greece to finally cut
spendings.

Now greece voted against this bailout. There are a lot of people in europe
(myself included, I am from Germany by the way) who are not willing to
transfer further billions of euroes to greece, just so that a socialist party
can fullfil its "promises" and increase their deficit.

~~~
atmosx
The fact that you are convinced that Germany acted in Greece's best interest
is what sets us apart.

Your money went mainly to your Banks, via Greece.

Concluding, I'd rather go back to the Drachma and blow the Euro project than
die starving becuase it suits your country's political class.

ps. Even if Greece doesn't put the last nail on the coffin of the EU-project,
I'm 100% sure that the UK will.

~~~
paskster
I am very pro Euro. But I don't like the fact that a single country in Europe
feels that 18 other countries have to pay their debt.

These bailouts in the past were signed from the greece government in the best
interest of its people. A lot of people make it seem that we (non-greece
european) somewhat forced theses agreements onto greece. In fact these
bailouts where were unpopular in Germany, because it cost us a lot of our
money, we could have spent on infrastructure, education, etc.

Therefore I would love Greece to give up the Euro currency and leave the
European Union, so that these other 18 countries don't feel any obligation
anymore to transfer more money to greece.

I believe that Europe will be stronger that way. Because a vision of a truly
united European Union can only be reached if all countries play by the same
rules and abide to their agreements.

~~~
tptacek
I wonder what the EU expected. How is this morally different from the fact
that most of the other 49 US states pay for the debts of Mississippi? If we
hadn't been doing it on a long-term continual basis, and MS ran its own
economy, we'd be talking about "bailing them out". But life support to MS is
the long-term normal in the US economy.

~~~
makeitsuckless
Does the term "sovereign nation" mean anything to you?

Do you feel an obligation to pay for the debts of Greece? No? Then why would a
German, or me as a Dutchman feel such an obligation?

~~~
tptacek
No, but then my country is not part of a decades-long effort to unify the
continent it resides on under a single financial and regulatory regime; we
finished doing that roughly 150 years ago.

As a result, we don't have to "bail out" Mississippi so much as continually
pay for its mismanagement.

And so, again, isn't "paying for mismanagement" part of what you sign up for
when you try to unify Europe?

~~~
cperciva
_No, but then my country is not part of a decades-long effort to unify the
continent it resides on under a single financial and regulatory regime; we
finished doing that roughly 150 years ago._

No, you tried to do that 203 years ago, but we burnt down your White House.

I'll give you that you unified somewhat less than half of the continent
though. ;-)

~~~
cpach
Touché! :D

------
hal9000xp
Here is Bloomberg animation for european debt crisis:

[https://www.youtube.com/watch?v=C8xAXJx9WJ8](https://www.youtube.com/watch?v=C8xAXJx9WJ8)

I kept this in my bookmarks more than a year.

Euro is failed project by its core because monetary policy without fiscal
polity doesn't work.

~~~
haberman
This is awesome, thanks!

There is one big part I really don't get though. Why would Greece's creditors
assume that Germany was going to cover a Greek default, just because they are
both in the EuroZone? That would be like my bank assuming that the US
Government would cover my mortgage if I default, just because it's denominated
in dollars. That line of reasoning makes no sense to me.

Related to this, the video says: "The problem is, somebody has to pick up the
tab, or else every country in the Euro area will suffer." I don't get this
either. That would be like saying that me defaulting on my mortgage will make
all my neighbors suffer, just because our mortgages are in the same currency.
It doesn't seem like a Greek default should hurt anybody but Greece and their
creditors.

~~~
fredkbloggs
Yeah, this. I've never yet seen an explanation for this, in either the MSM or
the financial press. There is an assumption everywhere that no one in the
eurozone can default. My thinking is that this must have something to do with
the ECB's rules on collateral; if the Greek banks have nothing but defaulted
securities to offer, then they cannot meet their reserve requirements and
therefore cannot obtain euros from the ECB or other banks within the system.
That would result in all Greek banks going bust and being unable to operate,
unless the Bank of Greece stepped in (by implication, issuing loans to banks
in drachma in exchange for defaulted or new public debt securities). But this
is speculation on my part; I have never seen the mechanism explained in any
detail. Kind of amazing that in 7 years of "crisis" everyone has been happy to
parrot the same default == grexit mantra without once explaining the
mechanics, but here we are.

~~~
haberman
Yes, the default == grexit line of reasoning is also under-explained, I agree!

Maybe an even simpler explanation for that link could be: a Greek default
would make their borrowing costs so high that the government simply could not
operate without being able to print money and inflate their currency.

------
HSO
At the risk of being a moralizing bore, may I remind everybody that "Germany",
"Greece" etc. are not people, and that people are not countries? I am
surprised by the national coloring, however faint, of some comments here and
there
[https://news.ycombinator.com/item?id=9835433](https://news.ycombinator.com/item?id=9835433).
"I am a German" or "Greek here" should have no relevance to the ideas put
forth. "Your money" and "your banks" are not really "my money" and "my banks"
once I have paid the tax and don't own the bank!

The theory of complex systems reminds us that aggregates can have properties
that are not traceable to any individuals themselves. Game theory tells us
that incentives and constraints can get so messed up that developments take on
an eigendynamic which was nobody's intent nor interest.

Please, be civilized and don't let yourselves be infected by nationalistic
passions.

Your moralizing nanny...

(No seriously, I am starting to get concerned.)

~~~
abandonliberty
Yes, we are interpreting the nations of individuals, rather than nations
composed of many individuals.

If I buy a home and am forced to eat ramen to pay for it, that's entirely
separate from my estranged uncle's mafia loan shark forcing me to eat ramen.

Modern day slavery - debt bondage - also passes from generation to generation.
You don't choose where you are born.

This is a very complex and ambiguous situation.

------
endymi0n
I'm astounded at the fight here between pro and contra austerity. It's not
about to save or not to save - it's about where to save. Greece could (have)
bailed out itself with just a semi-decent stab against rampant corruption,
without endangering the common people at all. Switzerland offered to collect
billions of Euros of Greek tax offenders on Swiss accounts on their own. The
List with the names "disappeared", and some years and dozens of questions
later, reappeared with half the names removed. Switzerland's still waiting for
Greece to make a move. While the last weeks were all about the 1.5 bil EUR
rate, Greeks moved 3 bil EUR out of the country every fricking day. Greece
infamously doesn't even have a register who owns which property and real
estate.

Greece is still in the top 5 state: of military spending per capita, and the
list goes on.

No matter how much money you pour into this banana republic, it's just going
to evaporate on the way there.

Still, their best option is probably where they are going already: a proper
default and return to a weaker currency, just as it helped iceland.

[http://netrightdaily.com/2015/06/icelandic-default-could-
sav...](http://netrightdaily.com/2015/06/icelandic-default-could-save-greece/)

Still won't help, if they don't tackle corruption as well.

------
brianmcconnell
The Greeks were getting a shitty deal, and knew they were getting a shitty
deal. Good for them for decisively telling the Germans to get stuffed (who
conveniently forget about their WWII related debts being forgiven).

Iceland demonstrated that it's possible to say no to perpetual debt peonage
and go on to do well. If Greece has to leave the Euro, so be it. The Euro made
sense as the Deutschfranc, but that's about it.

~~~
spiralpolitik
By leaving the Euro Greece will have the opportunity to put their country back
together without 20 years of crippling austerity. They still need to fix their
broken tax system and keep spending with their means but they have a much
better chance of doing this on their own terms rather than under the cosh of
the Troika.

If only other countries could be so brave.

~~~
tptacek
What is the difference between "crippling austerity" and "keeping spending
within their means"? Isn't the biggest financial problem in Greece the
relative enormity of the public sector? Wouldn't fiscal reform basically
amount to slashing entitlements and public sector employment?

~~~
tormeh
A public sector can be enormous without damaging the economy. In Scandinavian
countries it's about 50% and used to be higher. The problem is that the Greek
government is both bad and weak. The Greek public sector's purpose is not
really to provide utility to the populace, but to buy votes from the unions.
It's very hard to pay for because it does not enrichen the private sector
nearly as much as it should. And because the Greek oligarchs own the media
(and many parliamentarians) so taxing the rich is absurdly hard.

Greece is not just insolvent, it's also practically a failed state.

~~~
quonn
> Greece is not just insolvent, it's also practically a failed state.

Syria, Iraq - those are failed states. Greece just managed to organise a
democratic referendum peacefully and efficiently - within a week. A failed
state looks different to me.

~~~
corin_
I don't entirely agree with the concept that it's a failed state, but the fact
that it doesn't look like other "failed states" doesn't mean much. If two
companies go out of business and one had a crazy employee go on a killing
spree you wouldn't say the other company hadn't failed because all it's former
employees were still alive.

------
beloch
A Greek friend once told me that, in Greece, "only idiots pay 100% of the
taxes they owe". His perception of his fellow Greeks' attitude towards taxes
wasn't wrong. In Greece, tax evasion is endemic.

[https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_...](https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_Greece)

It's hard to be surprised by the financial troubles of a government that is so
utterly feckless when it comes to collecting taxes that members of it's own
finance ministry are suspected of hiding their funds abroad. It is also hard
to have sympathy for Greeks, most of whom apparently view tax evasion as a
virtue.

Now that they've burned Germany and the EU, where is Greece going to get the
money it can't collect from it's own citizens?

~~~
vacri
I have also had a Greek friend tell me, well before this crisis started, that
tax avoidance was almost a national sport in Greece, and there was a social
stigma to paying all your taxes. He said it with a mixture of pride and
sadness.

------
elorant
OK let me say this as clear as I can after reading most of the comments. Yes
we have a dysfunctional economy. We have a lot of red tape and corruption
going on in the public sector. We spend a lot of money in pensions and
salaries, more than any EU country. We have an inefficient to say the least
tax collecting mechanism. And many other problems.

But. You expect us to change all that in just five years. This is fucking
impossible guys. Please, get a grip of reality. Countries don’t just change in
five years. And then you get disappointed and become nihilists arguing that we
haven’t implemented any reforms. All the effort Greece has done in the last
five years, moving from a 14% deficit to 1% surplus doesn’t get enough credit.
All we get is been constantly hammered for our failures. No wonder the NO vote
took 60%. People here are so fucking tired. Six years of recession and we have
the Troika constantly down on our throats without cutting us any slack. If EU
leaders had shown some flexibility things would have turned up a lot better
for everyone. We could extend the maturity of some loans, achieve a
sustainable surplus and start repaying. Instead we’re facing the nuclear
option of defaulting on most of our debt. How does that help anyone?

And if you think Tsipras is radical wait until Le Pen wins the French
presidency. She has an open agenda of exiting the euro. Then we can talk what
compromises Germans are willing to do.

~~~
peterfirefly
> You expect us to change all that in just five years. This is fucking
> impossible guys. Please, get a grip of reality. Countries don’t just change
> in five years.

October 7, 1989, DDR celebrating its 40th anniversary:
[https://www.youtube.com/watch?v=CeePo6BGmHc](https://www.youtube.com/watch?v=CeePo6BGmHc)

October 3, 1990, reunification of Germany:
[https://www.youtube.com/watch?v=e4kpqKBbdic](https://www.youtube.com/watch?v=e4kpqKBbdic)

Who are The People in Greece? Mad Communists or people who want freedom and
prosperity and liberation from the old political class?

------
chx
I have been collecting links for days now, here are a few. The picture is
_really_ not pretty and while you can place some blame on the Greeks, for the
last five years at least it would seem they are not the one to blame.

if you want a very simplified slightly hilarious explanation,
[https://www.reddit.com/r/OutOfTheLoop/comments/3bhwij/what_i...](https://www.reddit.com/r/OutOfTheLoop/comments/3bhwij/what_is_going_on_in_greece/csmlkp1)
this will do.

[https://twitter.com/cstross/status/617775611642257408](https://twitter.com/cstross/status/617775611642257408)
[http://faculty.chicagobooth.edu/anil.kashyap/research/papers...](http://faculty.chicagobooth.edu/anil.kashyap/research/papers/A-Primer-
on-the-Greek-Crisis_june29.pdf) [http://www.truth-out.org/news/item/26112-an-
economic-hit-man...](http://www.truth-out.org/news/item/26112-an-economic-hit-
man-speaks-out-john-perkins-on-how-greece-has-fallen-victim-to-economic-hit-
men)
[http://www.interfluidity.com/v2/5965.html](http://www.interfluidity.com/v2/5965.html)
[https://twitter.com/AP/status/616622654234169344](https://twitter.com/AP/status/616622654234169344)
[http://www.irishtimes.com/opinion/who-will-dare-say-out-
loud...](http://www.irishtimes.com/opinion/who-will-dare-say-out-loud-emperor-
has-no-clothes-1.2267032)
[http://www.forbes.com/sites/niallmccarthy/2015/03/13/contrar...](http://www.forbes.com/sites/niallmccarthy/2015/03/13/contrary-
to-what-most-people-think-greeks-work-the-longest-hours-in-europe-
infographic/) [http://www.theguardian.com/business/2015/jun/30/greek-
debt-t...](http://www.theguardian.com/business/2015/jun/30/greek-debt-troika-
analysis-says-significant-concessions-still-needed)
[https://fsaraceno.wordpress.com/2015/06/27/its-the-
politics-...](https://fsaraceno.wordpress.com/2015/06/27/its-the-politics-
stupid/)

------
christkv
I think one of the core problems in the whole euro zone disaster was the
ability of previous governments with low credit ratings suddenly going from
paying 8-10% on their bonds to 2-3%. Basically the lenders completely ignored
historic risk, counting on the richer euro countries to bail out any country
that abused the cheap credit.

I think we are seeing the effect of that policy. For the people who are
demonizing the Greeks I would like to remind them that it takes two to party.

The drunk sailor who wastes all his money, and the fool who lends him more
money, expecting to be repaid.

Either there is a full currency union with the transfers (meaning more and
more federal like rule) or we will get some sort of collapse of the euro zone
at some point in the future.

------
vmorgulis
"Europe exemplifies a situation unfavourable to a common currency. It is
composed of separate nations, speaking different languages, with different
customs, and having citizens feeling far greater loyalty and attachment to
their own country than to a common market or to the idea of Europe."

Milton Friedman, The Times, November 19, 1997

[https://en.wikipedia.org/wiki/Optimum_currency_area](https://en.wikipedia.org/wiki/Optimum_currency_area)

------
dageshi
Effectively a vote of confidence in the greek government. If they do decide to
leave the euro then they now have the political cover for it.

~~~
skwirl
Didn't the Greek government promise that voting "no" was the only way to STAY
on the Euro? From what I have seen both sides were promising the same outcome,
so the vote was all about who you believed more.

~~~
dageshi
My interpretation is that this referendum effectively forces the ball into the
EU's court. The Greek public rejected the last deal, if they don't get a
better one then it will be the EU pushing the Greeks out of the euro and not
the choice of the Greek government to leave.

------
sktrdie
I know I will be treated as an extreme futurist, but we live in this little
tiny spec called Earth and we're all in this together. The idea that there are
laws about environmental protection in one country and none in others, calls
to the idea that we should just have a single unifying country called "world"
and keep the current separation only for cultural reasons.

The EU was a step in this direction but it seems that yet again centralization
of power ended up making things worst. So from one end I'm happy that Greece
gets to go its own way and escape centralization that forced it into a shitty
situation. On the other hand though, this breaks the dream I had of building a
system which would allow better collaboration between nations, and most of
all, better understanding of the real issues that we're facing as a species
(overpopulation, climate change, food scarcity, etc..).

~~~
jqm
I've sometimes thought there should be exactly two levels of government...
International (non-optional and all countries participate) and County (~2500
km2 and several thousand to maybe 10 million max people).

The world has gotten smaller and the effects nations have on each other
larger. It's dangerous and it's not efficient. At the same time people have
their local customs and laws (and spending habits). So let that be. But
enforce bans on slavery, genocide, trade route monopolization, nuclear
weapons, pollution etc. At an international level.

As it is, it seems national governments are in general problematic... both to
local communities and to the global community. I think eventually they can be
done without.

------
woodpanel
Ahh, the nytimes. If there are two biases the NYT is guilty of, then its being
stubbornly progressive and subconsciously anti-German.

Take this for example: "... financial carpet bombing. The European Central
Bank severely limited financial assistance to Greek banks, ... making it hard
for retirees ..."

Calling it "financial assistance" helps in framing it as an assault on a
guaranteed right the Greek Banks have. Especially if it's something that was
"severly limited" by that evil Frankfurters.

I know perspectives fluctuate quite heavily from country to country. It is
actually the reason why I read as broad as possible (including NYT) to get to
know a possible different viewpoint on pending issues.

But the american progressive view on the Greek-Bailout-topic is so much flawed
that I might call it derailed. It is not simply flawed by ideology but that
ideology also decides what details are to be amplified over the distance-
caused resistance. And more importantly, that ideology decides what details
are not to be amplified.

The ECB is still lending money, it is just not legally allowed to issue new
credits (credits are what those "financial assistances" really were) to a
benkrupt country. And the whole american-progressive story of Germany/Rich-
Europe enslaving the poor Greeks is just as stupid as the european-progressive
story of America enslaving the third world. The world is not that simple to
just blame everything on the fat cats.

And actually those uninformed progressive world-views (wether it be european
progressives judging american foreign policies toward third parties or vice-
versa) bear something deeply anti-progressive in them: framing a whole nation
evil, accepting illiberal leaderships as long as they are anti-<evilnation>
and often calling for harsh intervention.

Or in the case of the Greferendum: Making it a progressive virtue, that nation
A's tax €s utilization ought to be decided by nation B's voters.

------
parley
I'm not a financial expert and can't speak to what's true or not, but here's
[1] a short interview with Swedens former Tax Agency chief who was apparently
part of a small task force to evaluate Greece's tax collection and aid in its
improvement.

He claims that removing corruption is not the only problem, and that the rest
of the EU are underestimating the lack of tax collection competence with
regards to modern methods and processes, as well as the powerlessness and
political isolation of the Greek tax chief, making his/her job impossible -
e.g. by not even being allowed to pick his/her own employees.

Again, I don't know what's true or not, just providing the opinion of a former
Tax Agency chief of a country that collects _a lot_ of taxes and who
apparently had the opportunity to take a closer look at Greece's tax
collection.

Google Translate does a decent job with the article translation.

[1]
[https://translate.google.com/translate?sl=sv&tl=en&js=y&prev...](https://translate.google.com/translate?sl=sv&tl=en&js=y&prev=_t&hl=en&ie=UTF-8&u=http%3A%2F%2Fwww.dn.se%2Fnyheter%2Fforre-
skattechefen-domer-ut-grekiska-skatteverket%2F&edit-text=)

EDIT: Grammar.

------
lifeisstillgood
An analogy I used with my wife trying to explain / argue Greece. It struck a
chord.

Fiscal Union:

    
    
      Would you lend me 10 million dollars?
    
      No
    
      If I was Warren Buffets adopted son (!) would you lend it to me?
    
      Maybe.
    

Well that's how the rest of the world's investors saw Greece. Despite all the
protests that it was separate debt no one believed them. And Greece is about
to prove them right.

Debt restructuring (ie fiscal Union "just this once")

    
    
      If I am having to spend five months negotiating with the Bank Manager to get an overdraft that will let me pay him the next months mortgage payments with that overdraft, then we should stop talking about the cuts I need to afford the overdraft and look at how to deal with the mortgage.
    

I don't like the situation Europe is in - but it was clear in the 1970s where
this was all going - just because it is not politically palatable right now,
Euro zone countries are going to have to become responsible for each other's
debts, and that means negotiating on fiscal policies across Europe.

Stuff TIPP - that's a serious agreement to hammer out. And don't do it in
secret.

------
imaginenore
I really hope EU doesn't propose any more bailouts / help to them until they
sober up and go through the withdrawal and all the grief stages.

~~~
tomp
Greece doesn't actually need any more bailouts (at least, it didn't until last
week). They run a primary budget surplus, so all they need from the EU & IMF
is some kind of debt restructuring so they can stop all debt payments for a
few years while they pass the necessary reforms and their economy recovers.
They also need a guarantee that the banks are safe by the ECB to restore
confidence, but that doesn't cost any money.

~~~
imaginenore
"They run a primary budget surplus" if you don't count the payments on all the
loans.

Sorry, but if I borrow a million dollars, build some business that generates
profits which are less than the payments on the loan, it's not a surplus. It's
called default.

~~~
quonn
> if you don't count the payments on all the loans.

That's the definition of primary surplus.

> but if I loan a million dollars, build some business that generates profits
> which are less than the payments on the loan, it's not a surplus

Greece does not get the loans now - that money is already gone. The key
insight from the "primary surplus" is that a haircut would work, because
Greece could be self-sufficient once the debt burden is gone.

~~~
imaginenore
It's semantics, at the end of the day Greece owes money, and you simply
cherry-picked a term that doesn't contain that debt.

> _The key insight from the "primary surplus" is that a haircut would work,
> because Greece could be self-sufficient once the debt burden is gone._

And so would my hypothetical business that can't even cover the monthly
payments on the loan. If we magically erase the debt, just like that, I got a
profitable business I can brag about.

> _Greece does not get the loans now - that money is already gone_

Wow, just wow.

------
PythonicAlpha
After 5 years of "rescuing" that did lead the country into ruins, no wonder!

It is a widespread knowledge (at least the US has it), that forceful saving in
a crisis, will deepen the crisis.

As a German, I know that Germany got a dept-cut after the second World war,
that the German nation could rise from misery. We should have allowed the
Greek the same luxury.

Instead, the governments cared only for the banks.

~~~
Lazare
That...couldn't be more wrong.

Back in 2012 it was determined that Greek debt was unsustainable, and a large
haircut was needed. But because the EU governments were unable/unwilling to
accept any haircut on their holdings of Greek debt, that write down was borne
entirely by private sector lenders.

> Instead, the governments cared only for the banks.

The banks lost 75%+ of their loans. The governments lost 0%. There's no way
you can realistically spin that as a bail out of the _banks_.

~~~
PythonicAlpha
The question is, when the banks "lost 75% of their loans". To my knowledge,
this happened much later, when the banks that initially where in danger
already got rid of the most toxic loans. Those loans either went to the EU
"Rescue Umbrella" or where sold (with discounts).

When those sold loans later where haircut, than the lost value of 75% was on
papers, but the value that those holders really lost very likely much smaller
(if any), because they bought the loans with huge discounts.

------
saool
Good for the Greeks to stand up against bullying and remaining somewhat
dignified (as much as they could be after years of destroying their society at
the whim of the "austericides").

That said, the vote means lots of pain coming their way, and Euro or not,
their economy will take the hit now and the North will pretty much be able to
buy half of the country at garage sale prices. Talk about some value investing
for "deserving" German and French banks: you lend recklessly, get bailed out
by your debtors, then you buy the damn farm.

------
univalent
No matter which way this went this whole referendum seemed like a political
stunt. It was a huge distraction, frayed nerves and made everyone more
entrenched in their negotiation positions. A good deal and compromise is
generally negotiated behind closed doors without making loud speeches that you
can't walk away from. I feel sorry for the Greek people. They deserve better
from their own leaders.

------
vamur
Good for Greece. What they now need asap is digital drachma with automatic tax
on incoming transfers, capital controls on imports, default on debts to ECB,
haircut on deposits above 100k, exit Schengen/Russia sanctions and currency
swaps with Russia and China/India. Next they need to improve balance of trade
by devaluing drachma, removing expensive imports, replacing EU imports with
imports from China, encouraging local food and energy production, exporting
fish/fruits/vegetables to Russia and China. Also cut defense expenses with
defense pact with Russia vs attack by Turkey and sell old military equipment
to Iraq. Once all of this is done, they can start fighting corruption and
waste, which can be done by cutting max pensions, reducing the public sector
and centralizing government services.

------
chuckcode
Pretty amazing lack of leadership on all sides to let this degenerate into a
game of political chicken with no good endings for anyone. Clearly the Greeks
were going to have an exceptionally hard time paying back their debt and
certainly the Germans who were in a similar situation after WWI should have
realized the depth of the problem [1]. Anyone who honestly thought that the
situation would get better under the austerity program despite all economic
history to the contrary should have realized a couple years in that it wasn't
going to work. After a few years the debts would be even more difficult to pay
after Greek GDP shrunk by 25%[2].

From my personal it seems like if Europe had really wanted to help Greece
tackle their debt they should have used the crisis to change Greek laws to
make it easier to start and run a business there. Currently Greece is by far
the hardest country in the Euro currency to run a business as it ranks just
before Russia (61 vs 62) in the World Bank's "Ease of Doing Business
Index"[3]. The other economies that are held up as examples of recoveries like
Iceland and Ireland rank 12 and 13 respectively.

Having a monetary union without a political union is a questionable
undertaking in general [4]. Given that the leaders of Europe know that they
should either be working to get closer to a political union with similar laws
and workings or looking for a way to gracefully exit economies that aren't
working out. The current approach of bashing Greece with no real alternative
to grinding economic suffering seems like the worst sort of denial about the
reality on the ground.

[1]
[https://en.wikipedia.org/wiki/Treaty_of_Versailles](https://en.wikipedia.org/wiki/Treaty_of_Versailles)
[2]
[http://www.slate.com/blogs/moneybox/2015/02/18/how_bad_is_gr...](http://www.slate.com/blogs/moneybox/2015/02/18/how_bad_is_greece_s_economy_these_charts_will_tell_you.html)
[3]
[http://data.worldbank.org/indicator/IC.BUS.EASE.XQ](http://data.worldbank.org/indicator/IC.BUS.EASE.XQ)
[4] [http://www.euro-know.org/europages/articles/rmu.html](http://www.euro-
know.org/europages/articles/rmu.html) [5]
[http://www.theatlantic.com/business/archive/2014/05/which-
st...](http://www.theatlantic.com/business/archive/2014/05/which-states-are-
givers-and-which-are-takers/361668/)

------
dmckeon
Here is a fairly detailed rundown of the situation:

[http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/05/7...](http://www.washingtonpost.com/blogs/wonkblog/wp/2015/07/05/7-key-
things-to-know-about-greeces-debt-crisis/)

~~~
tosseraccount
The uncollected tax receipts graphic is shocking: 89%. No wonder they can't
afford their spending.

~~~
nailer
Greece needs to get their house in order: the stats on tax avoidance are huge.
There was a greek restauranteur on the BBC earlier complaining that due to the
ATM shutdown he couldn't pay his suppliers, even though he had the money,
since they preferred cash. In the UK you wouldn't dare say that about your
business on TV.

However that's a generational change: Greece can't and won't be fast enough to
do this and will never be able to meet it's creditors. Greece shouldn't have
been admitted into the Euro in the early 2000s, this is now the result of that
unwise decision.

~~~
quonn
True, but let's keep in mind that they managed a primary surplus despite this
huge tax avoidance. This actually should make everyone bullish on Greece:
These are not insurmountable problems. I still think that ΣΥΡΙΖΑ is the first
party ever that would be fully willing to implement the right reforms (e.g.
collecting taxes, etc.) if - and only if - the EU gives Greece a future by
restructuring debt. It makes me sad to observe that the so-called institutions
let this opportunity pass for stupid reasons (As far as I can tell, the fear
of the German/French parties of their electorate and the fear of the
established parties in the 'periphery' of newcomers like Podemos). It was the
best shot we had to make real progress in Greece, imho.

~~~
sigzero
I doubt very much anyone is going to be bullish on Greece. They lent Greece
money on the condition they stop deficit spending and guess what, Greece
didn't do it.

~~~
quonn
They did and it has destroyed their economy. That's the whole problem.

------
williesleg
Who cares? The USA overspends by how much Greece owes every WEEK. Never gonna
pay it back, ever.

------
ryandrake
The failure and shame should be shared by the lenders. If you really want a
risk-free investment, you should be willing to accept a risk-free return. You
receive a return on a loan commensurate with the risk of default. Sovereign
debt should not be special.

------
rdl
What does this mean for startups/tech industry? I assume not very much as long
as it is limited to Greece, but more so if it spreads to Portugal, Spain,
Italy, right?

------
stagas
An entire nation, rejected being oppressed into austerity. This is all that
matters. Goodbye, capitalism.

------
pinaceae
all those useless emotions.

simple facts can't be avoided.

nobody is willing to lend greece money besides the ECB. tsipras tried putin
and china, both turned him down.

the greek-style of socialism (coalition with the extreme right
notwithstanding) relies on foreign capital. once that runs out, it is over.

greece has never built up any robust, modern facets of statehood. there is no
central database of landownership. parties act like clans, hand out positions
based on loyalty, not merit.

it's a second world country that thinks of itself as the leader of the first
world, as witnessed in endless, tiresome discussions with various greek
representatives. they're all so smart, yet their economy doesn't produce shit.

spain, portugal, the eastern europeans all got their act together and worked
out plans to move along. greece decided to call the people they're borrowing
money from nazis and terrorists.

greece never qualified as a member to the EU, it was a historic mistake to
accept them. grexit, now. let the rest of europe govern and prosper in peace.

------
jotm
Ready your breakfast and eat hearty... For tomorrow, we dine in hell!

------
NumberCruncher
You folks are deep in the Group Trap. You should read more Harry Browne and
think less about politics...

Not because I say so but because it makes your life happier.

