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Comment by paskster | Hacker News Reader

I am very pro Euro. But I don't like the fact that a single country in Europe feels that 18 other countries have to pay their debt.

These bailouts in the past were signed from the greece government in the best interest of its people. A lot of people make it seem that we (non-greece european) somewhat forced theses agreements onto greece. In fact these bailouts where were unpopular in Germany, because it cost us a lot of our money, we could have spent on infrastructure, education, etc.

Therefore I would love Greece to give up the Euro currency and leave the European Union, so that these other 18 countries don't feel any obligation anymore to transfer more money to greece.

I believe that Europe will be stronger that way. Because a vision of a truly united European Union can only be reached if all countries play by the same rules and abide to their agreements.

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Half-Australian and half-Estonian here; I can only agree with your sentiment. It seems to me that decades of corruption, tax avoidance and financial mismanagement is responsible for the position that Greece is in today, and I don't see why it is necessary for other countries to reward such behaviour with continued support and understanding. You don't like the terms of financial support offered by the EU? Well, maybe you should have thought about how your country has been run and realise that - sooner or later - that is going to cost you jobs and economic stability.

How much research did you do into all the fiscal decisions of the country you live in ? Are you even qualified enough to interpret the result at all ?It seems to me you are asking from the average Joe Greek more than professional actually did.

Also "Greece" is not a single entity. Making Greece pay does not mean making the people that created the debt pay - it means taking the available money and you should know that "available money" is generally not rich people money.

So yes, you are right that you do not want to reward such behaviour. Letting the actual responsible get away with it and punish somebody else is not the way to do it though.

Agreed, the people who mismanaged and/or stole the money in previous years are GONE. Why punish the average Joe in Greece? What will it achieve?

The point of democracy is that the people appoint representatives to act on their behalf -- as such, the public is indeed fully responsible for what their politicians do, like it or not, whether an individual voted for them or not.

There is no abdication of responsibility in a democracy and the Greeks should know that better than anyone.

> There is no abdication of responsibility in a democracy and the Greeks should know that better than anyone.

You get history sadly backward. The no abdication of responsibility is what dragged the world in 2 world wars and what Europe is supposed to fix.

I understand and don't know the specifics of how the average Greek voted, but here in the UK the government got in with less than 40% of the vote.

> The point of democracy is that the people appoint representatives to act on their behalf

in a perfect world, yes this should happen. But look around, the system isn't perfect. Look at america, money buys power. The money isn't evenly distributed. The system is broken.

The law that regulates elections in Greece is flawed (IMO). It assigns the percentages of small parties to the first one, to help it achieve majority in Parliament and be able to govern. This may sound wise, but motivates mainstream parties to not cooperate with smaller ones, and keeps minorities out of parliament.

AFAIK there are countries (NL?) that traditionally could not elect self-contained governments so parties were forced to cooperate with other, which in turn created politics of accommodation. I think this is healthier than blocking minorities out of parliament.

Syriza got elected with 36.3% back in January, while ~64% of Greeks voted.

Also, what happens if a voter agrees with none of the choices (parties)? Is he responsible for what their government does? (Legally yes, that's democracy, but ethically he should be given the right to object)

Oh, let's not forget that Greeks leaving outside Greece (some say we're another 10mil out here) were not given the chance to vote neither in the elections or referendum. We had to travel back to do so...

The problem is that it the average Joes in Greece also paid no taxes, got fake disability benefits.....

Typically a system works okish if only the people at the top skim, because they are rather few. If the rest starts showing the same behaviour, that's when the system crashes.

> Typically a system works okish if only the people at the top skim

That's not how that works though. People one level under the top will try to get their cut too, then the level under until you get to the bottom. The system is ok-ish if the overall level of corruption is somewhat reasonable. In the case of Greece, the amount of corruption at the bottom level is not the cause, but the symptom of the fucked up state all the way up.

Now, there is a difference between the top and bottom. The whole bottom level is creating a black economy. Not as good as a regular market, but something that self sustain itself. See Greece pre-euro.

The few people a top though are the one that forged the accounts of Greece and pushed the country in its death spiral.

I don't believe for one moment that corruption and tax avoidance has been eliminated from Greece. I would wager there are a number complaining about the 'harsh' EU treatment who have also not done the right thing by their government and fellow Greeks.

Besides - why should other countries be equally or more responsible for Greece's problems than the people of Greece themselves? It just doesn't make any sense.

So what do you think of https://en.wikipedia.org/wiki/London_Agreement_on_German_Ext... ?

Perhaps everyone in Germany would be better off still re-paying that 50% that was just removed.

Not even close to being the same thing.

I wonder what the EU expected. How is this morally different from the fact that most of the other 49 US states pay for the debts of Mississippi? If we hadn't been doing it on a long-term continual basis, and MS ran its own economy, we'd be talking about "bailing them out". But life support to MS is the long-term normal in the US economy.

The main difference is that much of the US taxes are collected at the federal level with compliance enforced by a federal agency.

European taxpayers aren't going to be willing to permanently transfer money to a country if they feel some of the government's problems are caused by widespread tax evasion.

Does the term "sovereign nation" mean anything to you?

Do you feel an obligation to pay for the debts of Greece? No? Then why would a German, or me as a Dutchman feel such an obligation?

No, but then my country is not part of a decades-long effort to unify the continent it resides on under a single financial and regulatory regime; we finished doing that roughly 150 years ago.

As a result, we don't have to "bail out" Mississippi so much as continually pay for its mismanagement.

And so, again, isn't "paying for mismanagement" part of what you sign up for when you try to unify Europe?

European politics is funny - EU treaties talk about "ever closer union" and the Euro was deliberately designed with no exit mechanisms; but at the same time politicians never talk about forming a "united states of europe" as it's deeply unpopular with voters.

In other words, if you ask whether the EU aims for a single financial and regulatory regime the answer is "yes and no"

Plenty of politicians in fact do talk about a United States of Europe and it is an ideology that is instilled in future elites to be in political scholarship programs etc.

No, but then my country is not part of a decades-long effort to unify the continent it resides on under a single financial and regulatory regime; we finished doing that roughly 150 years ago.

No, you tried to do that 203 years ago, but we burnt down your White House.

I'll give you that you unified somewhat less than half of the continent though. ;-)

Touché! :D

> when you try to unify Europe?

Very few current EU countries signed up for a "unification of Europe", it started as a trading bloc and escalated from there.

USA is totally different from the EU. And that's the point.

I’m from the US and say hell yes, we should pay Greek debt. We supported their authoritarian governments post-WWII. (https://en.wikipedia.org/wiki/Greek_military_junta_of_1967%E...)

As for Germany... as Piketty told Die Zeit, Germany never repaid its debts and has "no standing to lecture other nations." They're hilariously wagging their fingers at far more responsible people. (https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...)

You can't drop the mic on "Germany never paid the debts the Nazis racked up", because Germany is not insolvent, and Greece is. Greece has not only a large national debt, but also an ongoing primary deficit. It literally cannot pay for the public sector it commits itself to running.

What that implies to external financing negotiations is that even if Greece's debt is forgiven (economists from across the spectrum seem to agree this should happen), unless Greece adjusts its fiscal policy --- inconveniently, to something more akin to what Germany is demanding --- the bailout just delays the inevitable.

You responded 2 mins after I posted. Did you read the Die Zeit interview with Piketty which I linked to?

What do you think about points like: "I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history. [...] Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe."

Or how about the fast way for a state to leave delinquency: "Germany proved it in the 20th century. Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief."

Have you read David Graeber's book which he recommends elsewhere ("Debt: The First 5000 Years") which covers how debt is just a promise, and it's fetishized (more than say promises from politicians to their constituents) when it's a promise from the weak to the powerful?

Before responding, I skimmed the Piketty interview to verify that he was, in fact, talking about Germany's war debt, and not debt generated through insolvency.

I'm not moralizing debt. I am, however, according sovereign states and their constituent organizations the agency to decide whether or not to finance other sovereign states.

However much honor you accord to debt service, the prospect that (expensive) debt forgiveness will simply generate the need for more debt forgiveness in the future is actually material to the question of how to finance Greece.

(I am, in this instance, parroting something Tyler Cowen wrote yesterday; not that I agree with Cowen on everything [I'm not a libertarian].)

Debt is fundamentally about morality. Otherwise everyone would accord Greece the agency to shrug and ignore it, like politicians break promises to consituents, or big companies ignore their debts to smaller ones. Instead, children worldwide are condemned to misery ("austerity"), because of moral statements like "you have to pay your debts". Though they did nothing to deserve it.

As for Greece's finances, that's exactly what the negotiations are about. A political issue. (After all, money is a purely social construct, not some law of physics. Underlying it is power relations and violence.)

You're dodging my point.

Greece isn't simply arguing that, morality being relative and all, they've decided not to pay back their debts.

They are demanding more money from their creditors. It seems like they have to: they're running a primary deficit; they're losing money even before you take debt service into account.

Whatever the moral dimension of paying back their debt is has nothing to do with the question of whether Germany (ie, the EC) or the IMF (to whom Greece just defaulted) or the ECB (which doesn't want to be in this particular lending game to begin with) is going to give them more money.

If Greece can't persuade the EC, IMF, or ECB to lend them more money, it's doesn't look like they can just walk away from this whole scenario. "Oh well! Debt is just politics and morality!" That might be true, but if they want to allow people to retire in their early 60s, or pay half the nominal tax rate, or not regressively tax the poor through punishing VAT increases, they're going to need to convince someone in the world of some kind of compatible morality, right? They require additional financing, don't they?

No, the greeks don't demand more money. They want to make the debt viable, in order to be able to pay it.

I don't understand. Aren't the terms the Greeks are negotiating over additional financing from the EC, ECB, and IMF?

He has a point actually :-) Varoufakis does not accept the 7.2 billion of "aid" under current conditions because he believes that Greece has an insolvency problem and not a liquidity problem.

The current hovernment wants to add at least 30% debt reatructuring (which Germany says it s off the table) and pay back only when reasonable primary surpluss has been achieved.

greece had primary surplus last year http://www.globalizedblog.com/2015/02/greeces-primary-surplu...

If reason fails, wing out the Nazi-Bat.

I think the history is full of misinterpreted debts, especially Germany's (Versailles > WWII...)

But I think one basic understanding of debt should not be discredited:

There's a difference between ...

- A debt that was agreed upon by both parties in a free market (Greece defaulted on that in 2012)

- A debt that was agreed upon by both parties's representatives as an act of embezzlement - i.e. favoring Europe's banks/Greek oligarchy (Greece is about to default on that right now)

- A debt that was agreed upon by the winners of a war over a defeated country

You can say what you want about a "level playing field" not being in place when battered Greece gets to negotiate with its Creditors, but even trying to compare that with a war-looser situation is disingenuous.

I hope you don't need subtitles: https://en.wikipedia.org/wiki/Axis_occupation_of_Greece#Econ...

Enjoy the reading. Oh feel free to share the take-away.

The reason the U.S. economy can work at all is because people in the union accept large continuous transfers of money from rich to poor states.

For the Euro to work, the rich member countries must be willing to accept massive transfers from countries like France and Germany, to the Mediterranean countries. In addition, the ECB must be a lender of last resort.

Seeing as none of these criteria are currently (formally) met, the Euro can't function. The only way it could work was if the economies of the member states quickly converged. They didn't.

In U.S. you have a thing called fiscal policy. We don't have that in EU so that's why the thing you propose cannot work for us.

> Does the term "sovereign nation" mean anything to you?

Does the term European Union mean anything to you? Does the term common currency mean anything to you? If Greece fails, Do you really think Germans won't suffer any consequences?

Yes, the Germans won't suffer any consequences. The markets did not crashed yet, and they most probably won't because no sane private entity in the world was lending Greece any money. Except EU-minus-1's tax payers representatives. But then again, I was talking about sane entities...

But they were lending greece. And getting nice profit. When TSHTF, politicians made that private debt public.

Greece effectively lied its way into the EU. It doesn't exactly leave much place for any moral appeals.

[1] https://en.wikipedia.org/wiki/Greek_Financial_Audit,_2004

From what I've read, that appears to be a lie agreed upon: private banks in Europe had a major profit interest in securing speculative Greek debt.

This would seem to be a core evil of the situation: investors chased risky money but are apparently not expected to be capable of weathering a Greek default.

The risk/reward curve is the fundamental idea of investment. If we privatize reward but nationalize risk, the cost of bonds/mortgages/etc. will never reflect reality. I shudder to think of a system where governments are implicitly assumed to insure everything that's "too big to fail."

"lied". The rest of Europe knew very well that Greek books were cooked. They went along because the Euro is an ideology. It's destined to fail and it's going to fail. Like every attempts at a common currency. It doesn't work and Europeans are going to pay the price of that insanity. That's why I decided to leave the EU. That thing is so doomed.

     I wonder what the EU expected.

The EU didn't think it through.

The Euro was primarily a (french) political project to weaken Germany following reunification. This is strongly reflected on the ECB's board, where Germany has the same number of votes as Malta! In order to sell the Euro to conservative Germans who feared a "Transfer Union" (where they would perpetually have to bail out certain states that shall remain anonymous with a reputation for fiscal improbity) some vague promises were added about debt levels. But the promises were not accompanied by any enforcement mechanisms and soon fell by the way-side.

I used to ridicule Eurosceptics, seeing them as dinosaurs who are on the wrong side of history. But to my consternation, I have to accept now that most of their worst fears have come to pass.

As a historical aside, it is noteworthy that about a century ago a similar scenario played out: Greece (and others) crashed the Latin Monetary Union [1], a 19th-century attempt to unify several European currencies into a single currency that could be used in all the member states, at a time when most national currencies were still made out of gold and silver. It was established in 1865 and disbanded in 1927.

[1] https://en.wikipedia.org/wiki/Latin_Monetary_Union

Greece among others pardoned your Nazi debts and reparations in 1953, helping you rise. Greeks did nothing so terrible to "owe a debt". You owe them a debt which is far stronger than promises ("debt") held by investors, part of which was from the dictatorship and therefore odious debt.

Piketty: "When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.(https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...)

Pffff ridiculous. Can we starting calling this the Godwin's Law of economics? Economic policy intended to rebuild an entire continent after the most traumatic conflict in its history is necessarily going to differ from policy during times of peace.

So your solution is for greece to start WW3?

Ha. Is that a joke?

Not him but if I were my answer would be: not just a joke but a rather clever comment about the logic behind the idea that Greece would be more deserving of debt-forgiveness if they started a war on top of the current situation.

Greece must stop spending 50% of its GDP on bloated government bureaucracies. That is the bottom line. More money stops them from taking the hard steps.

Greeks make nearly nothing that anybody wants, but they want the goods everyone else makes. They are not adjusting themselves to the realities of the modern world. You want cell phones, computers, cars, shoes, t-shirts, refrigerators ... all these things ... but you want to not actually make anything ... just sit at desks in secure government jobs doing nothing productive. This has to stop.

But politically there is no will to stop it, because people there don't seem to understand that secure, easy jobs for life, where you don't make things, don't actually create wealth for the country. They think jobs are some thing where you just show up in the morning for work, do some paper shuffling and go home at night. And get your secure paycheck from government.

How do we change this attitude? The same attitude is in India's public sector too. The way is you have to cut off the money faucet for the government.

If the issue is poverty in Greece ... then let Europe provide basic needs for the Greek citizens as they reorganize the country. But feeding the Greek bureaucracy really shouldn't be done. Also continuing to perpetuate this attitude towards what employment is and what jobs are should also not be done.

Remember Germany's history of debt forgiveness and non-forgiveness. Don't know about it? Look at the treaty of Versailles, and John Maynard Keynes's polemic against it. Also look at the Marshall plan, and the debt forgiveness of 1953. And then consider how you want Greece to be treated. And consider how Portugal, Spain, Italy, France, and Germany should be treated when they run to big a deficit. Also read this post (unless you are extremely annoyed by vulgar language): http://www.interfluidity.com/v2/5965.html

> In fact these bailouts where were unpopular in Germany, because it cost us a lot of our money, we could have spent on infrastructure, education, etc.

You should have. It would have been better for Greece if the former Greek government had not been strongarmed into being the fall-guy for a rescue programme for French and German banks.

The problem is that you aren't considering second-order effects.

Is it better for Greece to give up the euro and return to the drachma? Quite possibly. Iceland successfully rebooted its economy after the financial crisis (with a lot of pain involved) because it was not tied to the euro. Of course, that required a huge amount of willpower and effort (which Greece has not shown yet).

Is it better for the EU and the rest of the world for Greece to give up the euro and return to the drachma? Probably not. Why? Because it sets a precedent for giving up the euro and/or leaving the EU.

Greece is a relatively small country, and the upheaval resulting from its financial recalibration could be fairly manageable.

If Spain or Italy tries to go down the same road, it is a different story. Take a look:

http://www.bbc.com/news/business-15748696

Italy owes France a LOT of money. France owes the UK a lot of money. The UK owes the US and Germany a lot of money.

Greece, as you can see, is a drop in the bucket. It's the precedent that's important.

So you have no problem with ECB spending at least one trillion to buy national bonds (including yours) but you do have a problem with writing off a portion of the Greek debt. And why exactly is that?

I'm Portuguese but I completely agree with you. Greeks have chosen their path. Farewell Greece.

Just wait until they come to us next.

I bet we would have voted the same if given the opportunity.

I'm Portuguese and I completely disapprove this message. We are deluding ourselves if we think that our situation is qualitatively much different from the Greek one. Were it not for Greece, Portugal would be the scapegoat for the Euro crisis.

I feel like I'm taking crazy pills when I see that no one from the financial sector went to jail for recklessly causing the biggest worldwide financial crisis since 1929, yet everybody is happily demonizing the Greeks, who in spite of having a made several errors were in no way responsible for the global crisis.

This shows how much journalism has been captured by financial interests, working hard to deflect attention from the true perpetrators.

"In fact these bailouts where were unpopular in Germany, because it cost us a lot of our money, we could have spent on infrastructure, education, etc." The money was provided as a loan, was not given for free, you even get a return on investment so that kind of comments are made by populist politicians and don't make any sense.

https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...

You are not paying for greece. You (and all european tax payers) are paying for Deutsche Bank.

Private debts were made public. You should ask Mrs. Merkel and Mr. Schauble, why you should pay for debts that were private.

> These bailouts in the past were signed from the greece government in the best interest of its people.

What if a country destroys, literally, the entire continent killing around 80 million ppl, 70 years ago.

What should we do with this country? Should show some solidarity and pardon it's debt or "abide to the rules" and ask them to pay their dues to all the countries they created damages?

War reparations are in no way related to repeatedly breaking the terms of bailouts.

There's no way any country in the world could keep up with troika's bailout terms given the damage these terms did to the economy.

The IMF already noted that the "plan" was wrong. Every single forecast was out by a huge margin, what exactly more do we need to die? Stop breathing?

WHat Varoufakis says is that we don't want money under terms the country can't honor, and the troika asks repeadetly for him to be removed. Maybe someone like Stournaras who signs any paper without asking questions would be more fit.

The funny thing is that now we will see whether that was true.

I haven't down voted you because this has been on the tip of my tongue but I've held it back because it's such a low-ball response which achieves nothing. I think this whole "look at X" is why we're in this chaos. We can point fingers this way ad infinitum but it's only served to keep the EU in stalemate over this issue.

You're free to down-vote me, I don't care :-) I can assure no hard feelings about it... I had expressed many unpopular opinions on HN and had been downvoted many times, never held me back from expressing my views.

What I'm saying is that solidarity towards Germany was key in 1945. Now it's time to make a Marshall plan for Greece that will bring 'justice' to the country, fix our tax-system, etc. Every Greek would welcome that sort of change even it came from abroad.

The troika didn't do that at any point. It just sucked money from Greek tax-payers.

I agree with you in that Greece's debt does need to be substantially restructured because it's unsustainable. I just think the whole "setting of precedence" is what's keeping us fixed in the same place.

I don't believe that it sets any sort of precedence where everyone in the union can just not pay their debts. In society, we allow people to negotiate debt repayments in a way that isn't harmful to them and their families. People who can pay their debts and don't need this facility do so. That is the only precedent we should look at: if debt is unsustainable for individuals they are given the opportunity to restructure repayments in a way that is affordable to them without detriment to their life.

In Greece, this isn't what's happening. We see relentless spending cuts, stupidly high unemployment and a group of people who know what to do but are being told they can't do it.

That and I don't downvote based on something I don't agree with, I just wanted you to know I didn't downvote even though I don't agree with that approach, as much as I really want to. I use downvoting on comments without substance, especially ones that are overtly negative without substance.

You're right, nobody is saying "screw it, we just won't pay". Hell, I'd be ecstatic if changes were instituted that reduced bureaucracy, made the public sector simpler and more transparent for citizens, and fostered entrepreneurship, rather than the current climate of uncertainty.

Unfortunately, right now, everyone in Greece is paralyzed, because they don't know if, a few months from now, a new tax or law will be instituted that will kill their business, or mean they will no longer be able to feed their family (for the ones that still can). I think this prolonged uncertainty is the biggest problem right now.

The reason the Marshall plan was put in place for Germany was to stop the Russians getting the upper hand in Europe. The choice was between letting Europe become a communist utopia or help the Germans and hence keep EU in the western world. Nothing in geo politics is done out of the goodness of our hearts but for a clear ideological purpose.

Let's look at the facts!

The original Marshall plan was worth 5.2% of German GDP (of 1952). Greece has already received 185% of its GDP, in other words, other countries have given Greece already 36 Marshall plans!

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