
Greek PM calls referendum on bailout terms - antouank
http://www.theguardian.com/world/2015/jun/26/greece-calls-referendum-on-bailout-terms-offered-by-creditors
======
pjc50
Well, this is going badly; lots of grey top-level comments.

The real underlying issue is: who has budgetary authority in Greece, and what
does that mean?

State debt does not usually come with strings attached. Even if the repayments
cannot be made, debtors don't get to make policy. The big exception is the
IMF. The ECB is now also trying to take on that role.

The ECB is trying to run Greece like a chapter 11 bankruptcy. Not only a
repayment plan, but dictating who wins and who loses in Greek society. The
critical issue is pensions, which are considered "high" despite that not
really being true: [http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-
sys...](http://blogs.wsj.com/brussels/2015/02/27/greeces-pension-system-isnt-
that-generous-after-all/)

There is an extra factor in the pension system that out-of-work benefits are
really not generous or even functioning at all:
[http://greece.greekreporter.com/2014/06/16/85-in-100-unemplo...](http://greece.greekreporter.com/2014/06/16/85-in-100-unemployed-
do-not-receive-benefits/) So it has become common for elderly people to
support younger ones. Cutting pensions too deeply will blow up the
unemployment problem.

The question is really poverty+independence vs vassal status. Quite a lot of
people are saying they are willing to put up with poverty to preseve their
dignity.

~~~
chappi42
It's not poverty+independence, it's

    
    
      - poverty+bad_government+continued_corruption+leftish_dreaming+failure
    

vs.

    
    
      - poverty+listen_to_advices+reform+better_life
    

The 'quite a lot of people' might want to think about their ego and should not
confuse it with dignity. It's Greece vs. the whole of EU. And do you really
think one is independent if one is broke?

~~~
DominikR
Wow, you simply presume that they (the Greek) are wrong and the West is always
right with their good advices and reforms.

Just look at what kind of better life the "good advice" and "reforms" of the
West has brought the people in Africa, the Middle East and the various western
supported military dictatorships around the world.

This way of thinking (we are always good and mean good) is the fundamental
underlying issue in the conflict between the west and the east that has been
raging now for more than a thousand years.

Western way of thinking is all about superiority, cruelty and power disguised
as good advice because we know best whats good for others.

~~~
cpncrunch
I don't think that word means what you think it means. Greece is actually the
founder of western civilization, so Greece is the "West".

~~~
johnchristopher
I don't think OP implied Greece was the east in its comparison and
description.

That way of thinking also applies to west entities: the powerful one is always
right.

------
rsp1984
What is actually happening here is that Tsipras is simply trying to save face.
Attempting to get the Troika (EU, IMF, ECB) to bend in the negotiations was a
suicide commando in the first place.

Now he realizes that his plan failed and is trying last minute to shift
responsibility to the Greek public (i.e. "let them decide what the right path
is"). In any outcome event (Greece leaving Eurozone or Greece accepting Troika
terms) he would be able to point to the referendum and tell everyone that it
wasn't "his fault".

~~~
TillE
Given that he and his entire party are loudly supporting a "no" vote, I don't
think this is the case. Their position is clear.

They simply don't have a democratic mandate to accept continued, worsened
austerity. Everyone basically agrees that if the vote is "yes", that will be
the end of the Syriza government. If it's "no", well, then they have the
support to continue rejecting austerity.

~~~
return0
> They simply don't have a democratic mandate

they were elected this January (democratically)

~~~
vacri
A mandate is an authorisation to do something, not an open-ended power. The
rest of that quoteed phrase references what the mandate was about - they were
elected on a campaign to do the _opposite_ course of action.

~~~
return0
Then whats the point of the referendum. If they insist on non-austerity, make
a plan outside the euro.

------
Alkim
It is interesting to think about the motivation of the Greek elected
officials. To me it looks like they are trying to avoid the responsibility of
making a painful decision. It also appears quite likely that the Greek
citizens will vote against reducing pensions, etc.

So with that in mind, what happens after 5 July? The rest of the EU will be
placed in the uncomfortable position of either caving to the demands of the
Greek citizens or somehow taking the position that the referendum is
irrelevant--which will look very undemocratic. But to cave to Greece would
mean the rest of the EU taking on an indefinite financial drain.

I don't see how this ends any way other than Greek banks collapsing or Greece
leaving the EU.

~~~
return0
They are looking for the easy way out. The greeks will predictably vote for
euro and they 'll be called to resign, which they will. Bubble popped, new
coalition government accepts bailout terms and reality resumes.

~~~
junto
And if that happens we are back to square one. Greece can't pay this back.
Whether it was wrong of them to accept a loan they couldn't pay back is now a
mute point. Greece are bankrupt. Everyone just needs to accept that fact.

A new government that accepts the terms of yet another loan they can't pay
back is just going to end up in the same mess two years down the line.

Germany wants them to turn into some German style mini-clone. Germany needs to
accept that other states are like children; naively, you think you can bend
them to your will and force them to behave in this bmanner you think is
acceptable, but you are a fool if you believe that to be the case.

------
lifeisstillgood
This is a huge deal, and is a make or break time for the European Project. We
are now asking (a second time) for a democratic mandate to negotiate against
an unelected (but appointed by elected officials) economic central bank.

I honestly did not expect this one :-)

Inhave spent some time trying to wrap my head round this and it does seem that
the Greek government, fairly or unfairly, is going to have have its legs
broken over this, but if serious fiscal Union of other steps towards solving
the fixed exchange rate and debt issues across all of Europe are not included
then the ECB is at fault - they need to turn round to the rest of the council
of ministers and say "you need to include this - we don't have the authority"

------
acd
I picture a visual picture of Newtons falling apple towards the ground with
gravity as the rising debt in comparison with Greece ability to pay those
debts. It is certain that the apple will fall to the ground its just a matter
of time vs distance until it gets there analogy with the ability to pay of the
debt. The Greece debt default are inevitable unless the Greece people suddenly
behave like German productivity wise which is quite unlikely. The latest
wording was that Greece needed the new loan to be able to pay off the old the
old IMF loan payment which is coming up end of June. That to me sounds very
much like something similar to a Charles Ponzi scheme, you need new
participants in the scheme in this case a new loan to keep it rolling.

A programmer spelled it out on a blog entry, its the same currency the Euro,
German productivity is rising with x percent per year versus the Greece are
falling in comparison with Germany. Combine that with unwillingness to pay
taxes in Greece and you have bad funding, non efficient government with high
debt.

My suggestion, let the Greece people default on their debts, let the original
bond holders take their investment losses on the investment. Give the Greece
people back their local currency the Drachma it will then become a cheap
country to have a vacation in and people will go there instead of other
countries.

~~~
ZeroGravitas
The original lenders were in so deep they'd have crashed the French and German
economies, and taken the rest of the EU with them, if not bailed out. But the
politicians don't like talking about this as a northern European bank bailout,
preferring to blame the Greeks.

The Greeks have issues, just like a lot of homeowners got in too deep, but if
your bank, or your banking sector can't deal with bankruptcies then its not
really the bankrupts fault, They took the deal they were offered with interest
on one side balanced against risk on the other.

------
evanpw
There is no moral dimension to this situation: Greece is not morally obligated
to pay back its existing debts, and the rest of Europe is not morally
obligated to loan more money to people they don't believe will pay them back.
(If you think that Greece "needs" the money and Europe should give it to them
because they're suffering, there is a list of 140+ countries poorer than
Greece here:
[https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)...](https://en.wikipedia.org/wiki/List_of_countries_by_GDP_\(PPP\)_per_capita)).

It seems like a bad idea to _me_ to default and leave the Euro. It will almost
certainly be economically worse for the Greeks in the near-term than accepting
the Troika's conditions for more loans, but it could be rational if the Greeks
value independence very highly compared to maintaining their current standard
of living. If you're going to do something with such dire consequences,
though, a referendum seems like the way to go.

------
return0
Amateur move at best. Should the germans and the french follow suit with a
referendum whether they should bail out greece again?

The government that acted like nagging teenagers doesn't want to grow up, and
chooses to bail. It saddens me that i voted for them.

Truth be told, the EU is forced to look in the mirror this time: Despite all
the rhetoric and despite most europeans liking the idea, the greeks do not
become more like germans and the germans do not become more like spaniards.

~~~
konstruktor
> Should the germans and the french follow suit with a referendum whether they
> should bail out greece again?

Yes, and they should have done so much earlier. If the other Eurozone
governments would have listened to popular demand, Greece would not have been
bailed out, and the default would not affect their taxpayers as much as it
does now. The whole bailout programme was hubris, and it is time to call the
bluff.

~~~
bornabox
Well, it's politics. A lot of the big lenders were german banks. So it made
sense for the german government to support more loans to Greece, because those
were used to keep paying back german Banks. Grossly simplified, but that's
what has been happening in the last years.

------
venomsnake
That is the right move. Also Germany should stop talking about fiscal results
and demand political reforms. Clean corruption in the administration and good
fiscal results will follow on their own.

And Germany should elect finally someone competent. Merkel is a joke.

~~~
chappi42
You are right but 'demand political reforms' is easier said than done. Greece
is paralyzed since 7 years without progress. Motte: blame others do nothing,
cry.

Merkel is no joke, she is the most intelligent and gifted politician around.
(Of course this is as subjective as your statement, but I'm right :-)).

~~~
venomsnake
> she is the most intelligent and gifted politician around.

She is entertaining Cameron's crazytalk of secession. Instead of just saying -
go on, let me see you. And that means she has no idea what she is doing.

~~~
ZeroGravitas
Cameron doesn't want to leave the EU. He represents business interests, who
overwhelmingly benefit from EU membership so he's fighting to stay in.

But his party also has lots of people who cling to dream of the British
Empire, and don't like social democracy, who dislike what the EU stands for.
Those people were threatening to defect to a smaller party, which under the
UK's ridiculous first-past-the-post system meant that those single issue
voters could heavily influence policy despite their relatively small numbers.
As a result we're going to have a referendum, that Cameron didn't actually
want to have, and which he's going to campaign on the pro-EU side for.

So Cameron needs to make it _look_ like the EU is making concessions, so that
he can return to the UK and campaign to stay in and make it seems like he's
won some great victory. Note that he's being very vague about what he wants
from the EU, this is because he's going to claim victory whatever happens, and
he knows probably nothing will happen.

Merkel also knows this, and knows he knows, and so the only thing she needs to
do is not embarrass Cameron too much in order for the UK to vote strongly to
remain in the EU. Calling his bluff and exposing this nonsense for what it is
would be fun, but not particularly smart.

------
tomp
It's really sad that it has come to this.

------
nextweek2
The real solution is that Germany leave. The Euro could then devalue for the
benefit of all the weaker Eurozone members: Greece, Italy, spain, Portugal and
Ireland.

~~~
XorNot
Germany really really doesn't want to leave the Eurozone. A strong Deutschmark
would tank their export economy.

~~~
mafribe
That is rather questionable. German exports did very well before the Euro. And
neighbouring countries not in the Eurozone are also doing well. Switzerland,
UK, Denmark etc.

~~~
XorNot
It's not like they'd take a hit. But that's not the point - the investors
leveraging themselves into the millions of the basis of fractional %
improvements/decrements care very much about any possible, natural contraction
you might expect from a German mark holding very high value.

------
tsotha
Of course he wants a referendum. That way whatever happens people can't blame
it on him.

IMO that's the sign of a weak leader.

~~~
mrweasel
I don't think so, quit the opposite actually. He can't give the Greeks what
they want, it's not within his means, not without breaking promise he made
earlier on. Arguably he may have made promises that where perhaps never
realistic.

The people want two contradictory things, based on the anti-austerity and "We
want to stay in the Euro" protests. It seems fair to ask the people "Do you
want the Euro, regardless of what austerity measures that might require" or
"Do you want to avoid austerity and risk having to leave the Euro"?

~~~
tsotha
>I don't think so, quit the opposite actually. He can't give the Greeks what
they want, it's not within his means, not without breaking promise he made
earlier on. Arguably he may have made promises that where perhaps never
realistic.

If you put it that way he's not a leader at all. He's just an opportunistic
liar taking advantage of a bad situation.

