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Comment by wesleyy | Hacker News Reader

'“We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” said a senior official.'

Wow, what an incredibly entitled attitude to hold.

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What's so entitled about it? The IMF is a creditor just like any other, and assumes risks when it makes loans. The duty of the Greek government is—without question—to its people. While you can certainly argue that default is not in the people's best interest, if the leaders honestly think that's the best option then that's what they should do.

They don't honestly think that. They know very well what they promised is stupid. It's just that left-wing people are a lot better at making promises than at living by them.

The IMF is a creditor just like any other, -> and assumes risks when it makes loans <-

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)

Note that "prices" here is an expansive sense of the word that includes wages.

Correct.

Because prices embed wage costs and ability of people to pay.

No, the IMF isn't a creditor just like any other. Its wikipedia page reads,

>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."

If you read up on IMF's track record, esp. in Latin America, you could be excused to roll your eyes approximately as hard with both versions. I understand that Wikipedia accepts the first definition because it's an official mission statement of the IMF. That doesn't make it any more true in practice.

The only reason the IMF (et al) had to step in was because no normal creditor was willing to assume the risks that came with lending money to Greece anymore. If the IMF was a normal creditor they would have never given any loans to Greece, and definitely not at this scale.

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.

They lent money so that Greece could service its existing debt. Whether that's for the benefit of Greece is arguable.

It's thrilling to see real democracy at work in the birthplace of democracy.

Democracy is still a radical concept.

So cheating others who lent you money out of their money is democracy. Indeed this is radical. But breaking contracts is not something to base your future on if you're not self-sufficient.

Defaulting on a loan is not "cheating" -- it's one of the core reasons (if not the core reason) why there's interest. Loaning money is a risky business, and defaulting is relatively common and certainly not criminal.

> So cheating others who lent you money out of their money is democracy.

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.

What is happening in Greece is the depraved child of democracy. Politicians, playing on people's insecurities and feelings with tub-thumping and misleading rhetorics, in order to clasp their fingers to executive power.

Seriously. Populism in utterly corrupt Greece is not an example of functioning democracy.

"Populism"? This seems to be a word for democracy you don't like.

Despite entering Government under the most difficult circumstances, to my mind Syriza haven't put a foot wrong. Say whatever you like about them, but if I was a Greek citizen, I would certainly have voted for Syriza.

But of course, right know the rest of the EU are probably cursing the ancient Athenians for inventing democracy...

I probably would also have voted for Syriza. But expected them to soften their ideologie and start reforming the burocratie for real. Just go on overspending using borrowed money cannot go on forever.

Greece has gone through massive pain with every cut. They can barely handle any more.

Really? There are no superfluous public servants that could be fired? No corrupt ones to be put in jail? No one who received unearned pensions? No ill-gotten land in the hands of the Church to tax or confiscate?

How about repealing or at least amending §103.4 in the overly long Constitution?

http://www.hri.org/docs/syntagma/artcl120.html#A103

The moment has passed for these cowering reforms designed to show Germany and others that Greece is going to behave now. The well being of the next generation of Greeks and the stability of the eurozone is at stake.

It's your only hope for the future. If you go bankrupt you still won't have any money so you /will/ have to reduce the size of the state, anyway.

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.

Yeah, it's not so much a left-wing government as it is an anti-EU governments. I can completely understand why and how it came to be, given the hard measures that were expected of Greece, but boy it is not going to be pretty to watch this unfold.

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.

> Yeah, it's not so much a left-wing government as it is an anti-EU government

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.

>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.

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.

This isn't a payday loan trap. Greece has a structural government AND trade deficit, not a payday liquidity problem. Even if the loans were forgiven today, they would have to loan again tomorrow.

Actually, Greece eliminated that deficit so that it had primary surplus on 4Q2013 and 1Q2014. Then an election campaign started.

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...

Well this is Greece. The locals are not to be ignored if history tells us anything. I think that's where the no-brainer comes from. These are elected officials doing the will of the electorate as far as I can see. The country doesn't want to pay back the money because they don't believe in the system backing the funds in the first place. They don't have faith in the Eurozone or the Western central banks.

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