
Ask HN: How to solve the problems of greece? - anonyfox
It seems to be a tricky situation right now, and I honestly have no idea by myself how to solve it in a way so that investors don&#x27;t lose their money and the people in greece don&#x27;t end up in massive poverty.<p>Currently my own ideas are very extremistic in one way or another:<p>a) intervene with military force and set up a temporary government that pushes much needed laws, ensures that taxes are paid without exceptions and fights corruption without mercy. This way the society can be transformed and modernized.<p>b) All EU states give up their antique national mindsets to form the united states of europe, this way all dept is combined into the EU entity and a new central government can deal with it on large scale effectively. I personally would love this, no matter the circumstances.<p>c) Increase lendings massively without the austerity politics, so the greece folks can actually start to invest and trigger positive economic signals. But I think this delays just the fundamental problems...<p>So, what do HNers think about this topic? Is there any viable solution for the current situation?
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argumentum
I'm over this horror of the investors (creditors) not getting repaid. When you
make an investment, you are taking a _risk_. If it doesn't work out, accept
it, learn and move on.

The fact is the EU currency union was deeply flawed from the beginning, and
favors exporting economies like Germany over a tourism/shipping economy like
Greece. Greece was the fastest growing economy in Europe for decades prior to
joining the Euro, and given its immense advantages, there's little reason to
suspect this wouldn't have continued in a fair and equitable union, _despite_
corruption & overspending.

Invading Greece to recoup the losses of large banks is not only insane and
unethical, but will undoubtedly be met by the bloody resistance of a proud
people. It would probably lead to a third world war, which the EU was created
to prevent. Your option B is a better union, but it seems very unlikely to
happen.

The best bet is what is going to happen anyway .. Greece will leave the Euro,
struggle to get back on its feet, but once it does it will prosper as currency
devaluation will play to its strengths as the most enticing per capita tourism
mecca in the world.

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pvaldes
> This way the society can be transformed and modernized.

Sorry by the bitterness but this sound exactly like the big plans for Irak.
"The new Greece, now with 40% more of democracy kindly carried for our
troops... and only cost US a few extra billions!"

Sometimes the right solution is simply to let fall the speculators. Military
intervention just raise a new debt in an endless circle. Nobody can win
always, not even banskters.

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anonyfox
But how does one overcome a society with a deep level of corruption that
renders all attempts useless? Is there another solution to this?

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TheM00se
At this point there is no easy fix and an international market calamity is
unavoidable. The only thing to do is to minimize the damage and make sure that
creditors won't freak out. Markets will take a dip regardless of what happens
because Greece has gotten to a point that the ECB did not want Greece to get
to. The actual ideal solution depends on what is to prioritized. If Greece's
economic growth is to be prioritized the solution will be to actually forgive
portions of the debt and screw over the investors. This will help the Greek
economy, but it will piss off investors who will be much less likely to invest
in Greece or the EU in the future which is why this scenario is just out. If
repayment is the priority and keeping creditors happy, the ECB will have to
pony up more cash for Greece, and Greece will have to find a way to get its
finances under control which is a difficult task. The difficulties lie in two
areas for Greece. The first is that a vast percentage of the population in
Greece is employed by the government and as such the #1 employer will have to
cut back which is going to cause problems for Greece who has no strong
industry but a very strong currency. The second problem Greece has is that it
has a culture of tax evasion. Greeks don't feel that it is their duty to pay
taxes, as a matter of fact there is a strong culture of avoiding ones taxes.
This means that Greece will have to find a way to insure it gets its revenue,
even while its population does worse off. At the end of the day, Greece
shouldn't have been given the money it was asking for, but we are well past
that point.

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argumentum
Ultimately the way for Greece to get investors in the future is to be a
productive growing economy. While Greece's existing creditors may be "pissed
off" for a while, they aren't the only people in the business. Smart investors
won't care so much about the past that they'd miss out on a good investment.

Greece should leave the EU, and the debt should be forgiven. It should have
never joined and will be much better off outside, like Switzerland (a
structurally similar economy).

The idea that Greeks have a "culture of tax evasion" is simplistic. A lot of
this has to do with the government's cozy relationship with Greek oligarchs.
You are less inclined to pay taxes if they are perceived as propping up a
corrupt government.

For all its flaws, Syriza doesn't seem to be as corrupt. I also don't see it
as the "far-left" ideologically socialist party it's often portrayed as. They
seem to be people that will learn fast where and when government should
intervene productively.

~~~
anonyfox
As a german, just letting billions of € go while our infrastructure and social
system could need more money, this just doesn't feel right.

If we would be the united states of europe this would be a different story,
but currently it seems that greece just tries to leech as much money as
possible while openly offending us. And by the way, there are poorer states
than greece that will pay it's share of the bill in the eu. Am I wrong?

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icu
Hi, IMHO a really great question.

My comments:

a) By force isn't going to happen. The EU integration was about preventing
wars by greater integration, especially economics.

b) That is probably where the EU is heading in many, many years to come... but
not now.

c) I doubt any of the lenders want to throw anymore good money after bad.

So yeah... what the heck to do?

I really hate to say it but that leaves only two things Greece can do:

1) Greece has to leave the Eurodollar but is still a member of the EU, or

2) Greece leaves the EU completely (including the Eurodollar), and

...only one thing the creditors can do:

1) Extend better repayment terms.

So why would I suggest the above? Well for one thing the reason the UK is
doing well economically is because the Bank of England has greater control
over fiscal and monetary policy AKA the UK still has the pound (GBP).

My take on things is that Greece won't get out of this mess until they get a
handle on fiscal and monetary policy and the main way to do that is by
controlling your own national currency.

Also to my knowledge no Government has ever been allowed to go 'Bankrupt'.
Essentially fiat currency is backed on the tax intake of a nation... but in
the case of the EU... on the tax intake of the entire EU block.

There is some German poster who got down voted on what seems like the basis of
a negative stance on Greece's predicament, however by linking all the
currencies together the German politicians were tacitly agreeing to back
Greece. Therefore IMHO it's not wholly Greece's fault that this mess got this
far... the ECB and EU member nations should have tightened things up but then
again France, Spain and Portugal are basket cases as well. And don't get me
started on the fact that the EU's books aren't even audited... never the less,
the point I was making is that it seems like the mood in the EU is to stop
supporting Greece financially which means that Greece needs it's own currency
again.

And I don't just say this matter the factly... what I'm suggesting will have
huge ramifications and destroy lives, families, businesses--it's be total
economic chaos until the market can sort itself out again (because by linking
the different currencies together the market has been allowed to distort).

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Gustomaximus
Why not let them fold and rebuild? I'm sure it's going to be tough but I see
it more like the band-aid choice: it's better to pull it off fast than to try
and remove slowly. A little simplified but there is a strong history of a
'creative destruction' theory that I feel would serve Greece well:
[https://en.wikipedia.org/wiki/Creative_destruction](https://en.wikipedia.org/wiki/Creative_destruction)

In regards to military intervention, I would never support this. Where do you
draw the line when a nation invades because we believe we can run the country
better, largely in a world where everyone think they are correct in their
thinking.

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mangoLover
hello, In my opinion, I think a) and c) would be the beginning of a solution.
but B) not really because I honestly think EU is a "joke" since Germany is the
reason why it still exists (economically speaking of course). I believe Greece
should get out of the EU, and inject money in its economy through some
quantitative easing. I know it will cause the money to loose its value but it
might be meaningful if the greeks could produce greek and consume greek maybe
live in autarchy for a couple of year why not ?? But the only thing I see is
that the solution will not come from the EU and for investors, let's be
honest, they re nowhere near recovering their full investments. I apologize
for my english as I am not an native english speaker. . .

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gesman
When everyone is screaming "disaster!" watch the price of gold and bitcoin for
that matter.

Both are being pretty stable right now.

Clearly big guys are not buying this BS and this game is going to get played
safe for a while for now not matter what news outlets are wanting crowd to
believe.

Non-event for people who know.

