Comment by twobits | Hacker News Reader

Comment by twobits | Hacker News Reader

The basic idea:

BMW wants to sell more cars to greeks. Greeks don't have enough money so they can't buy. Deutsche Bank (DB) gives "free money" in loans. (And of course DB knows that greece isn't exactly "strong" economically.) We are talking about a greek population that never ever had a loan before, while the prime minister talks about the "powerful (economically) greece". They also thought that the world "stock markedt" was some kind of chinese recipe. Greeks, with "free money", buy BMWs. BMW is happy. Profits. Eventually, of course, TSHTF.

And then, would you expect that?

THE PRIVATE DEBTS BECOME PUBLIC.

That means the bad loans of DB become the burden of all the taxpayers of europe. Germans pay, greeks pay (decimated basically, with ~-20+% GDP, +5x taxation, etc), italians pay, french pay, etc. The TAXPAYERS.

To put it simply:

BWM: Happy. DB: Happy. Europe's taxpayers: F*cked.

The billions that greece "got" as "help", it never saw. They went ~98% back to foreign creditors.

Basically:

The politicians (cue, under the table payments for Mrs. Merkel, Mr. Schauble, Mr. who-was-PM-of-greece-then), took money from all european taxpayers, and gave profits to BMW and DB. (With their cut.) Now, they sell a nationalistic "those southern states are lazy".

PS: It was german and french private banks, and german and french industries. It's just that DB was the biggest, and BMW is big and symbolic.

Truth. German and Greek taxpayers are paying back rich creditors that made dumb loans. The Greek people get especially screwed. The current shot-callers have little interest in long-term political stability and the well-being of citizens. They just want their money back and are glad to turn this into a morality play. What makes it worse is that Germany is just about the worst actor to be preaching from the pulpit of economic morality. They have benefitted multiple times in the past from debt forgiveness and the chance to rebuild. There was a time when the world realized the error of exacting retribution through economic penalties. Hence the willingness of allies (primarily the US) to dump tons of capital into rebuilding Germany, even after they started WWII. Then a ton more debt was forgiven later since Germany could NOT afford to service their debt and build their economy- a deal Greece would kill for. Instead Greece wants to run a slightly lower surplus so they can provide services, a social safety net and some stimulus... bastards /s.

One problem with this conveniently simplistic good and evil narrative is the timescale - chosen i presume to be able to blame the Germans. Greece hasn't balanced its books since 1974. Greek levels of government debt has risen faster than the EU average for 30 years.

Secondly unless 20% of the Greek adult population are driving brand new BMWs, your thesis does not explain what Greece spent the borrowed money.

Yes there was a transfer of private debt to governments but this took place after applying one of the steepest haircuts to holders of government dept in recent times. The only way the other governments could help Greece without having the money swallowed by interest payments was to take over the debt and slash the interest rate on it. You seem to be suggesting the other governments should have stood back and allow Greece to implode with a messy default just so private bondholders take a hit. The fact is they did take a huge hit.

We are now seeing the results of two different approaches: one involved painful cuts (austerity) and reform but supported by your economic partners and one (screw all the creditors) resulting in banks running out of cash, economic freeze, looming shortages of medicines and fuel, imminent IOUs instead of money for government workers, etc. Neither pleasant options admittedly but the latter is a catastrophe for the ordinary Greek.

Germany also never repaid the money that the Greek Central Bank was forced to lend to the occupying Nazi regime in WWII.

Germany is not the same thing as Nazi Germany.

Germany is the direct descendant of Nazi Germany, just like Russia is the direct descendant of USSR.

Only in films. They are totally different people.

Is the same oversimplification as to say that Greek people is the same thing as Goldman Sachs plus a few corrupts in Greece.

> Only in films.

Are you trying to say that the current Germany is not the direct descendant of the Nazi Germany? Then how did it come into existence? Is it a brand new nation conjured out of thin air after the Yalta and Potsdam conferences?

Pay attention please that I did not say that it is the same nation, but that it is the direct descendant. Surely the majority of living Germans had nothing to do with NSDAP, because they were born after 1945.

Yes, I'm saying exactly that.

> Then how did it come into existence?

I thing that inmigration played a role. Unless you count the 2 millions of german-turkish people and 200.000 german jews as nazis in disguise of course (This will explain the big suspicious moustaches, otherwise). And italian, spanish, greeks... lots of croats also.

See 'gastarbeiter'.

s/thing/think/

And German banks are not the same thing as the current Germany

I agree. Bringing back those ghosts from the past, is just bad taste. We all have learned our lessons from that, and it is time to move on now. That is why I don't like it when they throw around the "nazi" argument, every time Germany is is being mentioned the debate. Why not mention Goethe instead?

Who bought the BMWs in that scenario? If you are offered a credit card with a $20k limit, do you max it out with no intent to pay it back?

The Greeks who were forced by their strong desire to buy BMWs are victims. Do you want to blame the victims?

so why settle on a bmw if bentleys are even nicer, and you should not be blamed for such urges?

The ECB is like payday loan companies minus the required common sense?

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