Greece draws up drachma plans, prepares to miss IMF payment
telegraph.co.uk
telegraph.co.uk
It seems appropriate to point out that it is public knowledge that the EU was/is irrationally hostile towards Greece during the Eurozone crisis.[0]
Now they have to play high stakes fiscal politics with a very clever bunch of largely unrestrained leftists. Frankly, they can't blame anyone else for this problem.
[0] http://www.telegraph.co.uk/finance/economics/11226828/Tim-Ge...
Yes, very "irrational", after discovering that Greece had blatantly lied about pretty much everything relevant to the Eurozone.
Wars have been fought over a lot less.
Let's not forget the Germany and France were the first to break the Euro's rules and the rule were changed so they weren't fined.
It was like 7 years ago. Now there's a difficult situation (a debt realistically impossible to pay) and different people in charge (not thieves and Goldman Sachs anymore [1]). Let's focus on viable solutions.
[1] http://www.spiegel.de/international/europe/greek-debt-crisis...
Another viewpoint is: It is "public knowledge" that the same "bitter EU medicine" worked well for Ireland, Portugal and Spain. So from the "Pigs" countries - only the "g" refuses to take it. That is their right. But then don't blame/insult the doctor.
Spain has an unemployment rate of 23% for starters.
We should also take a look at Iceland, where going a different route to the EU medicine worked well for them.
http://stats.oecd.org/index.aspx?DataSetCode=REV
In 2013, Spain's tax revenue was 32.6 % of GDP. Compare that to Germany 36.7 %, Netherlands 36.3 % and Finland 44.0 %. Also consider that these as proportion of tax revenue to official GDP, and it's pretty safe to assume that Spain has more in grey economy (not in official statistics) than northern Euro countries.
What you speak about is a completely different thing, Portugal has very old and deep structural problems but they were not caused by this particular crisis, they just got more exposed. Solving them is another story, I don't even think that our democracy (as we know it) is able to do it.
In the end we arrive to the same conclusion, EU/IMF/whatever trust Portugal enough to bail us out again.
But I understand where you want to get: "we are behaving like good boys" and making everything that "Germany" says. Would you prefer an atitude like the Greek one, "acting like a spoiled kid"? As Greece, we are a small and periferical country without any power to negotiate by ourselves - we need to associate with others - and sincerely I prefer Portugal to associate with Germany than Greece. Our best way to get through this is by being "the good boys" and man up.
I'm simply skeptical that any of those parties (private lenders or EC/IMF/ECB) lend us money because they trust us to pay it back, and so I have to wonder why else would they lend us money.
Regarding 'trust' in Portugal: Draghi's 'whatever it takes' statement and actions are mainly what fixed this.
You need to be careful about definitively attributing an outcome to a particular action - hey, maybe you fixed borrowing costs by eating weetabix for breakfast one day in 2010, and now Portugal has low borrowing rates.
We are also of course only considering one very limited measure of 'success' - you did not mention unemployment or GDP, for some reason ...
> maybe you fixed borrowing costs by eating weetabix for breakfast one day in 2010, and now Portugal has low borrowing rates.
Portugal has low borrowing rates because it didn't break promises and contracts. This allowed Portugal to be trusted again, not Draghi's statements. If so they would have worked with Greece also..
'Trust, not money, is the currency of business and life.' - David Horsager
Global interest rates being historically low isn't a cause now?
No, you say, it is because of something that was the same before, during, and after the main crisis point - that promises and contracts were not broken. (Not that promises or contracts need necessarily have been broken had other courses of action been taken).
Meanwhile e.g. Germany, who broke the rules on borrowing early in the life of the Euro, has of course suffered economic collapse, and cannot borrow money at any interest rate. And Iceland, they are back in the stone age now.
Portugal needs energy from the exterior to survive. Would anybody trust us enough to sell energy (at a reasonable price), not knowing if we would pay it [1]? By the other hand, Iceland doesnt't need the exterior as much as we, they can afford to not be trusted [2].
[1] Or we could associate to Russia, like Syriza tried..
[2] 'By harnessing the abundant hydroelectric and geothermal power sources, Iceland's renewable energy industry provides close to 85% of all the nation's primary energy - proportionally more than any other country - with 99.9% of Iceland's electricity being generated from renewables.'
Iceland never had much deficit. It has a healthy public economy. Iceland had a boom of financial industry which then went bust, but it wasn't a significant part of the country's real economy.
When the banks went bust, foreign customers who lost money in the crash insisted that Iceland, the country, should compensate. The government felt they didn't, because it was not the Icelandic government that was in bankruptcy. And that was fine.
The public deficit in Greece (and, to lesser extent, Portugal, Ireland, France, Italy and now Finland) is a very different problem.
If Portugal behaved like Greece, it couldn't borrow at those rates from the market. Greece can't, without others underwriting the debts.
Compare Greece: http://www.tradingeconomics.com/greece/government-bond-yield
to Portugal:http://www.tradingeconomics.com/portugal/government-bond-yie...
Notice how the figures have same form, but quite different scales.
The best comparison would be to Portugal had it and the EU/ECB adopted different policies. Admittedly this is hard since we do not see that.
You are choosing to compare Portugal to Greece. Greece alas is a complete basket-case. Starting in a much better situation than Greece, and claiming success for policies that leave you less worse off than Greece, is a very low bar.
At the same time, you argue that we can never compare Portugal to Iceland - not even as a counterexample to 'a country must not break promises or contracts, otherwise the economy goes down the drain'.
Why the Iceland case is different - and Iceland has not lost serious trust in eyes of lenders - is that Iceland did not run a serious public deficit and it did not fill such a deficit by borrowing.
Still, the economic crisis brought a shock to Icelandic economy in form of huge devaluation. If Portugal would have gone from EUR to its own currency, how much would it have devalued?
ISK halved its value practically overnight: http://www.tradingeconomics.com/embed/?s=usdisk&d1=20050101&...
There are people who argue that the New Deal did not help end the Great Depression: 'it was ending anyway' or 'the second world war ended it'.
The Obama stimulus was (a) useless (b) helpful but insufficient (c) just right. Do you think history will reach a consensus on this?
Regarding your 'another viewpoint': Greece has implemented eye-wateringly bitter medicine.
Like medieval doctors, when bleeding fails to cure the patient, they call for more bleeding, blame the patient for not being devout enough, and say that the suffering is a punishment for past crimes.
The fact that bleeding did not manage to kill their other patients clearly demonstrates it was a success, and that Greece is the one at fault, not the doctors.
Good article on this from Foreign Affairs: http://www.foreignaffairs.com/articles/143294/david-gordon-a...
Some quotes:
"Yanis Varoufakis, the Greek Finance Minister, for one, singled out Italy for having debt that was “unsustainable,” which served only to infuriate Italian Finance Minister Pier Carlo Padoan"
"Within a day of winning the Greek election, he (Tsipras) called the Russian ambassador and protested the EU’s statement condemning Russian-backed Ukrainian separatists for an attack on civilians in a Mariupol market"
"But even then, Greece could have survived its mistakes were it not for one other fatal decision: to move forward with its electoral platform before renegotiating its debt, increasing government spending without the requisite funds and reversing or stalling key reforms (...) All these factors positioned Greece to buckle in its negotiations. It was simply hemorrhaging far too much money far too fast to hold its position."
For Greece? Greece will recover, and it's hard to do worse than it is currently doing. And as others say, a floating currency will help correct the imbalance of an exporter like Germany dominating the EU.
And bizarrely, I suspect investment will be quick to return if Greece is seen as being out from under its cloud. Investors seem to care less about previous behavior than about future prospects.
> It's a really bad strategy in that it doesn't prepare the Greek people for anything bad happening.
No... Germany stands to lose the most, because the likely eventual outcome is the collapse of the entire monetary union, and the wide markets that Germany has enjoyed.
So short term Greece's social problems will be exacerbated - and that is the problem, arrogance suggests that there won't be a problem. The government may be looked back on a different light in 5-10 years time, but when there is renewed rioting in the streets in a month that isn't so good.
For Greece? Take a look at Argentina.
(just like one can be in favour of the freedom of speech to say X without agreeing with X)
From Wikipedia
"Populism is a political doctrine that appeals to the interests and conceptions (such as hopes and fears) of the general people, especially contrasting those interests with the interests of the elite."
Democracy: Cheap Education Populism: Easy-to-get student loans
Democracy: Low taxes on essential products Populism: High taxes on essential products, then "stamps", "aids", or low taxes/subsidies on a very specific range of said essential product
Also similar to the Roman Strategy of Bread and Circuses
This only seems like a bad thing because it is viewed in terms of money and debts, rather than human cost. The reality is that Syriza must do some spending if only to hold Greece over and stem the rise of the far-right. Greece has had 7 years of "reforms". They need to also spend some money sometimes.
When you hear about, or say, "greeks don't pay their taxes", you should also get informed about how much that taxation really is. That's extremely difficult, even for someone living here. To give the slightest of many examples, you may read that income from real estate is taxed with 33%. That's true, but it glosses over ~30 more "small" taxes on real estate, and many other general laws that affect it. ..You read "I don't pay my taxes of 33%", my what-really-happened, extremely simple, just did a division, calculation, is 90%. ..Have a good day. Cause I'm having bad years.
I think (A) is more applicable in Greece's case. The Euro has favored export economies, such as Germany's, for the past decade. Greece needs a currency that will support its economy, which is much different than Germany's. The Euro's benefits of easier inter-Europe trade and increased European power in the global currency markets have been far outweighed by its inability to cater to the very different economies of the various EU nations.
It's important to look at who owns Greece's debt to see who is really pushing for repayment. [0] The EFSF owns 45% of the government's 315bn Euro debt. Amazingly, according to the EFSF's last financial statement in 2013: "As at [sic] 31 December 2013, the EFSF as an issuer has been assigned an AA rating by Standard & Poor's, an Aa1 rating by Moody's and an AA+ by Fitch Ratings and the highest possible short-term rating from all three major credit rating agencies — Standard and Poor's (A-1+); Moody's (P-1) and Fitch Ratings (F1+)." Germany, Italy, and France own the largest number of shares of the EFSF with Germany at 771k, France at 579k, and Italy at 509k. Most of the other countries own anywhere from 5k-100k shares. [1]
I just wonder if people are going to get greedy/desperate enough to pull a vulture bank maneuver and start seizing real assets - see the seizure of an Argentinian Naval Vessel by hedge fund Elliot Capital. [2] Now that would be a very messy affair.
[0] http://www.bloomberg.com/news/articles/2015-02-02/greece-see...
[1] http://www.efsf.europa.eu/attachments/EFSF%20Financial%20Sta...
[2] http://www.nytimes.com/2012/10/19/world/americas/seizure-of-...
That would be basically be war, but fought with economic weapons. I like to think that Europe is not at that stage yet (and hopefully never will be).
You should go back in time, and read the "details". The debt was owned by german and french banks. What essentially happened is that those banks were bailed out with the money of all the european tax payers. (Greek, german, french, etc.)
It does make getting contracts in the future much more difficult though.
Many others also consider the long-term negative consequences of breaching contracts to be worse than short-term positive consequences. If they consider short-term thinking at the cost of the long-term to be immoral, they would consider breaching contracts to be immoral.
To you, breaching a contract might just be another IF-THEN which is implicitly or explicitly coded into the contract, but others consider it to have moral weight.
I want a rate that is reasonable to the risk, because if I insist on a lower rate, I won't be able to borrow at all.
I don't think anybody who would use the golden rule as a moral tool would really interpret it that way.
The government is a coalition of right wing nationalists and left wing - nationalistic - marxists. Not sure why this should be called a left wing government. Calling the government left-wing is marketing to get sympathies with leftist people in Europe.
So I'd rather call the government nationalistic populist.
However, what's written seems not far from truth. Other sources have been reporting how Greece is running out of cash.
Feb 6: http://www.wsj.com/articles/greece-could-run-out-of-cash-in-...
Mar 23: http://business.financialpost.com/business-insider/greeces-g...
Apr 2: http://www.reuters.com/article/2015/04/02/us-eurozone-greece...
And now, with "finance ministry officials are categorically denying any suggestion that Greek representatives said the country would run out of cash" I think could be confirmed that Greece is running out of cash. http://www.theguardian.com/business/live/2015/apr/02/greece-...
However, this article - and especially the headline - make things sound quite imminent.
It wouldn't be the first to mention capital controls or something else happening the weekend following this one, but they make it sound much more probable than others have.
How is this different to the https://en.wikipedia.org/wiki/Nixon_Shock?
A better solution would be to integrate the Greek economy into a paneuropean federal country, that simply eats the losses of Greece. I am certain some states in America are net beneficiaries of federal spending (more government dollars flow into it than are retrieved through taxes.)
This is likely a lot better solution than local currencies: I would back a (metaphorical) 'civil war' (being on the side of the North of course) in Europe in which countries are really kind of shoehorned back into a federal European country under centralized rule, a central constitution, and with limitations on 'state rights'. (Note that all the while, as in the analogy, this central federal paneuropean country would remain democratic.) I've never heard anyone else express this opinion though.
EDIT: I don't mean civil war literally of course, and have edited to clarify. I was just drawing an analogy with the South seceding from the union. Obviously there is 0 chance of any actual war, nor would anyone want one for a minute. The difference between past wars is that there actually are democratic European institituions - i.e. the EU - just as America remained democratic through and after its civil war.
What you're suggesting is a United States of Europe, which many of use in Europe don't want and certainly not by force.
However they are not necessarily going to go hand in hand - but I cannot think of a case where they did not. Mostly cos political conquest in empires lead to wealth "sharing" - the common idea was transaction costs dropped under one empire increasing the wealth beyond taxation costs.
This is something Eurozone has done well without actual war - but it seems to have reached the point where we are either all in for the Euro (total fair wealth sharing) or just give up.
However selling "total state level socialism" (from States that have to states that do not) is a hard sell - even if right here and now, that's how Greece looks the best solution.
However every country thinks it needs to keep it's own wealth and not give up it's sovereignty - but this is like tribes who used to live in the countries themselves - they have up Independance for security and prosperity.
It's a hard sell.
Dissolution of EU and abandonment of common currency is the only long-term solution for situations like Greece.
Greece would be fortunate to have Mississippi's economy about right now, they have a 26% unemployment rate; Mississippi is 7.x%.
Greece has 100 times as much government debt as Mississippi.
Greece has a ~$200b economy, $20k per capita GDP, and 11 million people. Mississippi has a $110b economy, with just 3 million people, and a per capita GDP of about $37k or soon to be twice that of Greece.
If Greece does everything right for 30 years, they might catch back up to Mississippi.
Their actions so far are rapidly leading them toward being a second tier European economy, in the category with Slovakia, Czech, Slovenia, Russia, Poland etc. instead of being with eg France, Italy and Germany. In fact they're already there, the question now is how much further are they going to fall - the likely answer is they'll lose at least another 1/3 of their real economy.
Greece has an amazing history. That history won't feed or employ people, or keep Greece economically competitive such that their children have a good future.
When you talk to people from Bulgaria, Ukraine, Moldova, Macedonia, etc. they tend to be very focused on economy and money, and there's a good reason for that - they're trying to survive.
To give a couple other examples - why is 'separation of concern' better than a 'god object' in programming? Why is democracy better than monarchy? Why is an ecosystem of smaller companies better than a monopoly? Because centralization is unmanageable (too many dependencies in one place), brittle (single point of failure), inefficient (lack of locality means solutions are sub-optimal) and (when humans are involved) creates perverse incentives.
Better -- for whom?
You will already find that debtor states (at the national level) find it much harder to generate sympathy within the nation if they consistently, repeatedly and unchangeably show that they cannot manage their finances.
So please, explain it to me like I'm five:
How do you think those with money would be willingly convinced to part with it, if they don't even give it up for their own kin?
I was (i) considering the cascading effect of a Greek exit from the Euro, and (ii) thinking in relative terms: I'm not arguing that Germany will be worse off, but perhaps it has more to lose at this point.
Re: the cascading effect:
http://yanisvaroufakis.eu/2011/08/04/why-italy-why-spain-and...
I'm aware that this article describes the dynamics of countries going to the receiving side of EFSF, not of countries leaving the Euro altogether, but I think the perverse dynamics described apply to the latter too.
Relying heavily on exports, as Germany does, may mean you have more to lose in a crisis like this. Consider what happens after a few more European countries stop generating demand for German goods, at the same time that demand from the US is weak too. Demand from the rest of EU and from the US was a big part of what made Germany 'a country like Germany'.
https://www.destatis.de/EN/FactsFigures/NationalEconomyEnvir...
Yes, imports would be unaffordable for Greece with the new currency and that will generate a lot of pain (not that devoting a big share of the national budget to servicing debt is helping a lot), but that will also force the country to correct that imbalance, making what's left of local industry more competitive. That pain would be a price to pay for adapting to a more self-reliant setup, while the one currently being endured (mostly on ideological grounds, I claim) seems more pointless.
Re: tourism, having their own currency to devaluate might help with that.
Re: standard of living, it's not like Greece's current situation, and their prospects within the demands of the memorandum are rosy either.
Corruption and nepotism won't help, but they aren't helping within the Euro either. If anything, those problems are made worse in colonial economies, which the deficit countries in Europe have been, for good and ill, to a large extent.
All in all, a Greek exit from the eurozone is a big lose-big lose proposition for anyone. I don't think it matters a whole lot who stands to lose more. But to the extent that it matters, I think it must be considered in relative terms. Overall, Germany has a better deal in the Eurozone than Greece, and it has more to lose.
You're right though that this discussion of who will hurt more is irrelevant. What has become clear is that a monetary and political union does not result in a more stable Europe. Perhaps the goals should be scaled back to the original goal of increasing trade by reducing transaction costs, rather than trying to have Europe follow the US model.
Would Greece have to exit from EU when it exits euro?
BTW lots of Europeans do tourist trips to Turkey, even though it is not in EU.
Lots of Europeans do travel to Turkey. Funnily enough I am currently on a trip from the EU to Turkey. Here's a few facts to consider:
- I have to exchange Euros to Turkish Liras, and for tourists the exchange rates are not good. - A flight to Turkey cost me about €200 while a flight to Greece is far cheaper even thought he distance is similar. - It's very expensive to call my family from Turkey. Calling from Greece is cheap due to the EU. - My bank card is not accepted everywhere, whereas in Greece I believe it would be. - I have to get a visum for Turkey. - Travel insurance for Turkey is more expensive. - An european car trouble emergency service membership works in Greece but not in Turkey. - The prices in Turkey are far cheaper than in Greece. Greece could adjust their prices to Turkish levels (and likely would have to) after leaving the euro and EU, but then they earn far less of course.
Subjectively I do feel safer in Greece because they are in the EU. Also perhaps some Europeans would not travel to Greece because of perceived anger from Greeks to the rest of the EU, or they wouldn't travel to Greece out of spite if they default on European debt.
BTW at least in Istanbul - not necessarily elsewhere in Turkey - you'll shop in many places with cash euros. But yes, there are some places where you actually do need liras. For exchanging cash, I've for a long time depended on withdrawing cash from an ATM; the rate is better than in kiosks in almost any country (particularly better than the rip-offs at my home airport which is close to a scam).
Higher flight prices are possibly due to airport taxes and such things, or just random air ticket pricing quirkiness, probably not EU. From where I live, flights to Istanbul that I sampled are slightly cheaper than flights to Athens (distance is practically the same).
It is interesting that Turkey requires a visa from a number of EU countries. A visa seems really simple to get, though (on arrival at airport).
The recent Greek hyperbolic anger against Germans is one thing that discourages me from going there as tourist (I'm not German, but I might be mistaken for one). In that, Tsipras and his crowd are not doing a great service on their country. But maybe it was what they needed to do in order to win elections and then explain why things don't start improving overnight.
BTW, Turkey recently changed the rules regarding visas; now you cannot get a visum at the airport any more, you need to apply and pay online and print out the application form, which you exchange for a visum at the border. It's still easy, but these small hurdles do add up.
http://www.forbes.com/sites/robertlenzner/2013/11/25/the-fed...
Add to which Keynes original idea is to bury the money in bottles and any form of monetary supply increase is good.
I think I agree with downthread - finances as a form of control - it's a banker mentality.
Not sure that this helps those countries that depended on credits most (like Greece).
I'm also not sure if it is the best strategy for Greece to bite the hand (EU as the IWF is just the beginning) who transfered billions of $ to Greece over the last decades. If the Greece government has a plan to not depend on credit and EU subsidies in the future, hurray to them. Perhaps with the new Russian conflict they could trade in EU subsidies and wealth transfer to renting bases to Russia. But they will find out it's much harder to break a 100 year contract for a Russian base in Greece than a contract with the IWF.
If not, this looks like a bad move.
No one gives away any amount of mouney, let alone billions of them. I think you should inform yourself better before forming an opinion.
Much of modern government is about giving away other people's money.
It isn't a base currently, it is natural gas pipeline ("New Blue Stream"). Bolgaria - under pressure from US/EU - has recently refused "South Stream" and thus Russia's acute need for new way into Europe met Greece's souring relationship with EU. And yes, gas pipeline is a contract which is pretty hard to break.
The EU sacrificed Greece to save their own skins
https://www.opendemocracy.net/can-europe-make-it/thomas-fazi...
I even saw one mainstream newspaper use the phrase "economic aid" when referring to the loans given to Greece to service their existing debt!
much the same perversion as the 2008 bailouts going to predatory lenders instead of bankrupt US homeowners
I'm not necessarily saying this as an advocate of Basque or Catalan independence. That is a question for the Basque and Catalan people. But a modern, moral, Western country would at least allow a binding referendum, as the UK has done in Scotland and as Canada did in Quebec. If Catalonia has a referendum and they choose to stay part of Spain, that is their choice. But the Spanish government refuses to grant them that choice.
I'm sure EU policy makers on the other hand love small regions becoming independent and wanting to join the EU as they're easier to push around.
There have been clear overtures in that direction already and key party officials already have long-standing relationships with one of Russia's most extreme and influential ideologues [1].
Not to mention that the article itself clearly mentions the visit to Putin on 8th of April; one day before the possible default.
[1] http://www.rferl.org/content/greek-syriza-deep-ties-russian-...
The solution is for Greece to either (1) cash out of euros into another nation's currency for the time being or (2) create their own currency and start stocking the Greek banks with it. Not sure what kind of purchasing power a new Greek currency would have outside of Greece though. I'd say the more likely option would be for them to default, sell their remaining Euros for USD (further undermining the price and credibility of the Euro). Not sure if this is possible and it would likely get really messy.
Why do they need a monetary partner? As opposed to reverting to what they had before euro, their own currency?
I can see how Greece might try to threaten other Euro countries with "if you don't give us more money, we will give military bases to Russia and prevent EU from helping Ukraine", but that's not really a monetary partnership with Russia.
For 70 years no German Government could win on a nationalistic ticket. The vast majority of German elites were pro-Europe. The majority of people saw the billions of $ wealth transfer to the southern and eastern countries as moral compensation for the war.
With comparing the elected German chancellor to Hitler, comparing the finance minister to a concentration camp manager and the talk of reparations, Germans felt insulted and black mailed and Greece created cracks in the above narrative.
The Greek government achieved that the next German government and generation of conservatives will win on a nationalistic ticket to fend of right wing anti European parties like the AfD (Alternative For Germany). Which is good, as the best for Germany is not a political union like the EU but TTIP and something like NAFTA combined with a China style currency policy. The EU helps small countries gain disproportional power and poor countries gain money transfers while it binds and hinders Germany and France. The US does what's best for the US for the last 200 years. A proud symbol to learn from.
Next step could be the UK EU exit, FN in France will help, TTIP and with Polish NAFTA love this could be the first stepping stones for an unpolitical economic union.
Wow, what an incredibly entitled attitude to hold.
Exactly this
All that Greece and the institutions that lent money to them did was to push the problem forward and make it worse
Greece has basically two options: deflate their prices in Euro (what austerity ends up doing) or have a currency that can float. It's that simple
(Or having a stronger fiscal union in the Eurozone, but that's hard as well)
Because prices embed wage costs and ability of people to pay.
>The International Monetary Fund (IMF) is an international organization headquartered in Washington, D.C., in the United States, of 188 countries working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
I realize that you might consider it simply marketing text, so that you may likewise read the same thing about Goldman Sachs. I can imagine reading this text in an advertisement:
>Goldman Sachs is an American multinational investment banking firm working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
But I wouldn't take it at face value. Do you really think there is no difference between the first sentence and my version with Goldman Sachs in it?
This is an open question. Personally, I read the first versoin (with IMF, taken from its WP page) at face value, whereas I would roll my eyes if I saw the version with Goldman Sachs in it and would consider it to be content-free marketing written by an ad agency with no relationship with Goldman Sachs, nor is there any chance the second version would be accepted by Wikipedia as a neutral point of view.
Basically, I am saying that in my personal opinion and Wikipedia's, the IMF is not "a creditor like any other."
So disregarding the IMF now with a claim of "they are just a creditor and knew the risks" seems a bit unfair. They lent this money to support Greece, not because anybody thought it was a good investment.
It is essentially a nightmare scenario, since Greece is doing what the rest of the EU was trying to avoid by borrowing money to Greece, which is having Greece having to default. So now we both get Greece to default and lose a lot of money on top of that.
I wonder what the long-term effects will be for Greece.
Syriza is pro-EU, but the EU officials and the Troika have been acting anti-EU towards Greece for years. If the EU had acted earlier instead of watching for years as Greece paid up to 38% or so in interests (to french and german banks, so it was very profitable to "watch"), this would never have escalated.
logical end to a typical "payday loan trap". The only difference is that borrower is a sovereign state with its own army, so some typical ways of debt collecting just can't be applied here.
http://sdw.ecb.europa.eu/quickview.do?SERIES_KEY=121.GST.Q.G...
The surplus was apparently achieved with some helpful interpretation by the "troika", in order to support Greece: http://blogs.wsj.com/brussels/2014/04/23/greek-primary-surpl...
Democracy is still a radical concept.
well lending money doesn't guarantee you're going to get that money back. It's business and business is risky. I'm sure you believe in free market right? so that's free market in action for you, creditors didn't do their due diligence, nobody's going to cry for them.
But of course, right know the rest of the EU are probably cursing the ancient Athenians for inventing democracy...
How about repealing or at least amending §103.4 in the overly long Constitution?
Besides, there is nothing "cowering" about firing corrupt public servants or no longer sending pensions to people who are long dead.
The stability of the Eurozone is actually not at stake. Not any more. Playing chicken with the rest of Europe won't work -- you'll just drive yourselves off a cliff.