Why give Greece more cash?

dragon – Member

Oh well teh IMF apparently aren’t keen on the new proposals as they see them hampering Greek growth.

And they view that as their job, and took offence? Looks like a joke, isn’t.

It is no surprise Greek GDP is down massively as so much of it was a fraud. There are no economic measures which can replicate the prior GDP as so much economic activity was and still is imported from the rest of the EU via Greece’s borrowing.

Ireland and Portugal have implemented reforms and got their house in order. Greece had a chance to do much more and did not take it. Syriza could have stepped up tax collections but the opposite has happened, more tax is being evaded, less tax is being collected. These comparisons to Germany are WW2 are irrelevant, Greek chose the place its in, it borrowed money and paid the majority of that to its own citizens. Greece has had a bailout and in the past 5 years it could have implemented reforms and started collecting taxes but they have not done so.

The IMF want out, the EU/eurozone will lend Greece money to allow the IMF to be repaid and then they will determine the outcome for Greece on their own. It will be a gigantic political fudge.

Like I said thank God we are not on the hook, well not directly anyway.

It’s obvious that the narrative that the Greek government have been pedalling of plucky underdogs fighting to retain their dignity in the face of the nasty overbearing German overlords who want to humiliate this proud nation, is gaining some traction.

But with regard to both parties

Greece just borrowed a load of cash it knew full well it could never pay back, to keep its citizens in a lifestyle they couldn’t afford because they don’t want to pay any tax.

The mainly German banks were stupid enough to lend them all this Wonga to allow them to keep buying BMW’s, and to further their programme for a federal superstate led by guess who?

There are no good guys here.

At the end of the day, as I said earlier in the thread, Ken Clarke nailed it…

“Whoever lent Greece all that money at German levels of interest must have been out of their minds!”

What did they think was going to happen? Greece transform its economy into a mini-Germany? Seriously? They deserve everything they (don’t) get (back)

This isnt a bail out the greek economy. Its a bailout of the banks who were daft enough to lend the banks the money.

The latest crisis is to lend greece money so it can pay its loan from the IMF back. How does that actually help anyone or anything. Its like loansharks lending you money to clear the credit card bill.

This is all about protecting those people companies, and institutions that lent the money in the first place.

Ken Clarke nailed it…

“Whoever lent Greece all that money at German levels of interest must have been out of their minds!”

If that is what he said, then amazing that a europhile doesn’t understand how the whole thing works. No wonder the project is in so much trouble. And an ex chancellor of the exchequer too…..bizarre.

binners it’s a massive oversimplification to say the German banks where the primary lenders to Greece, major lenders yes as where the French but that makes sense as the two largest economies in the euro. It’s a matter of degree, the Greeks could have borrows less, collected more tax and reformed their economy during the good years and actually ended up in an ok place.

DrJ see @nick’s shopping list, seems about right. You’ve argued against me when I’ve discussed corruption amongst the professional serves like Doctors and here by your own personal history you’ve been part of it, I appreciate you have to be pragmatic and do what you have to get the care required but in itself is the problem. A vibrant black market for healthcare by-passing the government and the collection of taxes. It is a country with institutionalised levels of tax avoidance which is expecting foreign taxpayers to pay the bills it thinks are not their responsibility. I haven’t visited the country in 25 years due to my views of the level of corruption, I didn’t consider for a second spectating at the Athens Olympics. I so not see why Greece should get concessions and additional resources that could be sent to more deserving members of the eurozone. Greece has had many chances and they have abused them. My view will not prevail at the EU as a political fudge will be found and the Greeks will still whine quite incorrectly about being the victim. I don’t expect a reply.

and for some of the other issues in Greece
http://www.abc.net.au/news/2015-06-24/greeks-move-to-melbourne-to-flee-economic-crisis/6569186
When those who can leave have left who is there to make an economy

Indeed @mike another of the very real costs of Greece ignoring the corruption within their country for so long. Interesting the Greek relatives I have who have been in the UK for 20 years have little sympathy for the situation there, they told me they don’t even follow the news.

More discussions today. Germany says they won’t vote on the package until the Greek parliament has approved it first. Pension reforms: retirement age to 67 will be phased in over 10 years. No crises, no rush guys, take your time.

Sypras called to Brussels this morning, being reported he has been been told the Greek proposals are not acceptable.

Apparently most recent Greek proposals have been rejected by creditors.

Euro has slipped back out to €1.401 against £.

IMF rejects Greek proposals. Makes sense to me as IMF is a hard-nosed lender, it wants out. IMF lost money on Argentina default and the banker responsible was fired/early retired. Good news as the UK contributes to the IMF, I want our money back.

Short term extension will be agreed allowing IMF to be paid off. EU/eurozone then free to agree (or not) a political fudge. Tax payers of the following countries then on the hook if their governments agree, otherwise no deal;

Slovakia
Slovenia
Cyprus
Latvia
Lithuania
Estonia
Finland
Malta
Ireland
Portugal
Spain
Italy
Austria
Belgium
Luxembourg
France
Germany

Apparently most recent Greek proposals have been rejected by creditors.

And the EC asked the leader of To Potami – a party which got 6% in the last elections – if he is ready to form a government. Is that what they call “democracy”? Looks more like a coup d’etat to me.

Yep… it looks like the EU is taking its usual approach to democracy. If you don’t deliver the result we want, you can go away and do it again until you do. Very much like Robert Mugabe’s approach to democracy, without giving away other peoples farms as bribes

All this democracy BS? The Greek’s don’t have to pay, it’s their choice not to. The Syriza electoral mandate was to end austerity but stay in the euro. They can only deliver half of that democratic mandate at best, ie stay in the euro or neither. Austerity outside the euro will be much worse

IMF markup of the Greek proposals was leaked. They quite rightly don’t buy the Greeks calculations that their tax rises will deliver close to €8bn. The IMF quite rightly knows that tax rises are questionable as to revenue delivery especially in a country like Greece where evasion is rife. What counts are spending cuts, when the government stops,paying the savings are immediate and real.

eurozone ministers and going home early, Schauble knew it he didn’t even books hotel room.

Greek opposition are worried as they now what a disaster is unfolding. Greece is ejected from the euro/EU, Syriza is decimated at the polls and they have to try and pick up the pieces.

If anything this is a perfect example of democracy, people have voted for chaos and they are getting it in bucket loads

All this democracy BS? The Greek’s don’t have to pay, it’s their choice not to.

The EU has previously installed an unelected banker (ironically) to the post of Greek Prime Minister.

So what do the pundits think will happen to the euro then in Greece exit? Will it tank? Take the pound with it?

The EU has previously installed an unelected banker (ironically) to the post of Greek Prime Minister.

Totally irrelevant. The Greeks have repeatedly elected governments which offered them the biggest handouts

Reported that the Greek proposal was 90% tax rises and 10% spending cuts, IMF wants to see a majority of budget changes be spending cuts. Cuts are real, tax rises are uncertain.

I smell capital controls being imposed soon. When Greeks cannot get their money out of the banks and the government cannot pay their wages they will see the folly of their “democratic” decision

They’ll probably use the pound sterling. I mean it’s not as if they even need to bother asking us 🙂

Totally irrelevant. The Greeks have repeatedly elected governments which offered them the biggest handouts

Except when the European Commission and the IMF installed an unelected banker to head the Greek government and do as they dictated, ie, impose hash austerity. So what happened then ?

Care to explain why he didn’t sort the mess out ?

Or is that “totally irrelevant” ?

So what do the pundits think will happen to the euro then in Greece exit? Will it tank? Take the pound with it?

A number of different views, probably the most consensus is a sharp fall initially before a medium term recovery to a stronger position. Short term fall due to markets panicking a bit before exchange rate improves as the euro has lost its weakest member. The alternative extreme view is that a Greek default triggers the eventful collapse of the euro which can only be negative until the independent currencies are restored. A euro collapse would see money repatriated, ie German investors pull out of other euro countries and invest at home, so assets like property and other financial instruments will increase in value sharply.

I’d wager a Grexit would have negligable long term affect on the Euro, bit of turmoil for 6-12 months then everything back to normal.

I’d wager a Grexit would have negligable long term affect on the Euro, bit of turmoil for 6-12 months then everything back to normal.

In itself you’re probably right. Question is if it leads to Spexit, Itexit, Porexit etc.

Can’t see it, nobody’s going to say any of those words out loud

In 2010 the worst of the financial crises had spread to governments as we had bailouts of Greece, Ireland and Portugal. The danger of contagion was very high. Now that’s past, Ireland and Portugal have recovered and the eurozone is in much better shape. A Greek exit would not lead to issues with Ireland, Portugal, Spain or Italy. In fact if the Greeks had got a sweet deal it would have lead to major political problems in other countries, I mean if the Greeks don’t have to pay back their debt as they voted left wing why don’t we all try that ?

In itself you’re probably right. Question is if it leads to Spexit, Itexit, Porexit etc.

Doubtful. I reckon the plan now, given that Greece is – and has been for a number of years – a lost cause as far as the EU/Euro is concerned, is to prolong the agony for as long as possible, to make the eventual exit so utterly, utterly devastating for Greece, that eternal subjugation to the EU is preferable to just saying, “f*** it, we’re off” regardless of what that means for democracy, sovereignty and the population affected.

Question is if it leads to Spexit, Itexit, Porexit etc.

They’re no where near as screwed as Greece though, yes they’d benefit from debt relief but they don’t *need* it and will choose to stay in the Euro and just get on with life.

It should do. Lessons need to be learned. Th current system cannot work by design. You either need full monetary and fiscal union or a looser free trade zone. What you cannot do (although the Germans think that they can) is have this half way house, taking the benefits but none of the fiscal responsibility that goes with it. To succeed the “project” requires fiscal transfers, yes including to those profligate Greeks, because that is how it works. The myopic german attitude (also displayed by those who argue this is all the Greek’s fault) is as bad and reprehensible as the Greeks position. At least th latter is based in a democratic mandate, however flawed.

This is interesting off the BBC news website just now,

Eurozone finance ministers will work on a financing for reforms deal with Greece on the basis of proposals put forward by its creditors, which a senior official of Greece’s ruling Syriza party attacked as “blackmail” earlier. Negotiations with Athens have produced no agreement euro zone officials have said. They will start talks in Brussels at 13:30 (12:30 BST) on the basis of an offer agreed in Berlin at the beginning of June between Germany, France, the European Central Bank, the International Monetary Find and the European Commission. Also on the table will be a list of reform Greece has to enact before any money can be released to Athens, prepared by the creditors

So basically, balls to you Greece. You do what the creditors want, and that’s that.

So basically, balls to you Greece. You do what the creditors want, and that’s that.

That was always the story, in fact – like a boss who has run out of logical arguments saying “because I’m the boss”.

Tell you what, lend me fifty quid at say, three percent interest and tell a nice generous friend of yours to just keep lending me more money to pay you back the interest when it’s due, for the rest of my life, eh?

What could be fairer than that?

What could be fairer than that?

No idea. Nor of the relevance. Simple analogies with household finance don’t have much validity.

You do what the creditors want, and that’s that.

Yup get over it.

Well, let’s see. The Greeks lied about their finances so that the mugs “controlling” the Euro would let them join in the party.

When they were in, they started borrowing as much as they could to fund their top-heavy government-subsidized workforce to beyond the hilt whilst not bothering to collect any avoided tax money from the population, including the swimming-pool disguising rich.

When the interest started becoming due, they just borrowed more money from the stupid chumps who lent them the first tranche, knowing that they could just keep kicking the can down the road.

Unfortunately, as a strategy, it hasn’t lasted and now the conned are starting to make demands.

“Non-simple” enough for you?

How many more rounds of ‘can kicking’ do we think then? I reckon some kind of fudge for this month’s 1.6billon, but where do they get next month’s 4billion, (IIRC) from?

No that’s a gross oversimplification.

Tell me which country abided by (then and now by) the Maastricht criteria for starters. The founder members lied about their finances too. And they created a one way system that was uniquely in their benefit. Devalue your currency and then create artificial demand through cheap money for foreigners to buy your goods. Guess what? You run a nice current account surplus – yippee! And how do you make your balance of payments balance? You run a capital account deficit. Yippee to start with because you are controlling the rate and then boo hoo, my irresponsible lending is now biting me on the bum. Boo hoo. So instead of taking my medicine I will use taxpayers to bail out my banks and implement a suicide economic policy on the debtors that will condemn them while bearing no responsibility myself. Teutonic brilliance in a can.

Verstanden Sie?

There are always two sides to the story despite the “current Greeks are lazy tax dodgers” narrative. Political and economic myopia. But that sums up a lot about Europe.

Tell me which country abided by (then and now by) the Maastricht criteria for starters

Finland and Luxembourg IIRC

wow, I agree with THM on something!

It won’t last. I agreed with Junkyard once, a statistical anomaly I say.

DrJ Greece’s stance has been so ridiculous even the placid Lagrange described them as children (by implication). The Greeks have offered nothing credible so now the EU is saying, here is what we are prepared to offer (having agreed on it in advance). The Greeks are free to reject it, they are free to negotiate around it.

tmh there is quite some daylight between Greece and the rest of the EU when it comes to truthfulness

So instead of taking my medicine I will use taxpayers to bail out my banks and implement a suicide economic policy on the debtors that will condemn them while bearing no responsibility myself. Teutonic brilliance in a can.

Germany had a choice in 2010, it could bail out Greece or its own banks after they had forced a Greek default. I think the choice they made makes sense, it gave Greece a chance, 5 years in which they could have tried to tackle tax evasion, corruption and the restrictive nature of their labour market.

“There is an important creditor concession in the pension reforms, too, though. Creditors have been trying to get rid of a “solidarity grant” programme that provides a top-up bonus to poorer pensioners, know by the Greek acronym EKAS, by 2017 at the latest.”

Just a minute – this can’t be right – the IMF and EC have both been claiming that they had no plans to cut the pensions of poorer pensioners, and that Tsipras was misrepresenting them to claim otherwise. Now the truth is made clear. And Christine Lagarde’s nose is longer than ever.