Greece Rejects EU Terms

New submitter Thammuz writes: With almost all ballots counted, Greeks voted overwhelmingly "No" on Sunday in a bailout referendum, defying warnings from the EU that rejecting new austerity terms would set their country on a path out of the euro. Figures published by the interior ministry showed nearly 62% of those whose ballots had been counted voting "No", against 38% voting "Yes". "Today we celebrate the victory of democracy, but tomorrow all together we continue and complete a national effort for exiting this crisis," Greek Prime Minister Alexis Tsipras said in a televised address.

Comments

Good for greece

[Crashmarik]

One size doesn't fit all, so it should come as no surprise that a currency made for industrial nations doesn't work so well for a tourist economy.

Re:Good for greece

[Anonymous Coward]

One size doesn't fit all, so it should come as no surprise that a currency made for industrial nations doesn't work so well for a tourist economy.

Umm... that wasn't what this referendum was about. The Greeks will never accept an exit from the Euro. Even though they thoroughly deserve to be booted out.

Re: Good for greece

[Anonymous Coward]

Eu has been very cruel to Greece and the Greek people.

Imf and troika already admitted through internal and leaked reports that Greek debt needs to be restructured. Yet they purposely are throwing Greece under the bus in an act of financial war. (to make them fall in line through force)

Hopefully this is the first step in dismantling the unelected eurocrats in ecb and troika who are destroying the European continent.

Greece will stay in Europe and the euro but start the process of fixing the euro so that it works for the piigs too.

Re:Good for greece

[Impy the Impiuos Imp]

The City of Detroit's property taxes are ridiculously high -- as property values collapsed, they kept bumping it up to keep up the city income, helping to drive out further business.

Re:Good for greece

[Rei]

Finally you can stop robbing the eurozone with "loans" that you never planned to repay. (And let's stop this "The loans are impossible to repay" nonsense - Greece's loans are less than the total value of its state assets. Now obviously nobody in Greece wants to sell off their assets - just to pick one category, a military without any hardware isn't much of a military. But the concept that Greece can't pay back its loans is a lie.)

Now, Greece "can't" without selling off extensive assets that nobody would realistically expect them to ever consent to selling... but the only reason for that is because Greece's worker productivity is so terrible and tax collection so pathetically low. Mind you, it's not the fault of Greek workers that productivity levels are low - you work more hours per week than most of Europe (including Germany). But you make a lot less with those hours. You have a highly inefficient economy, and the extensive tax fraud just makes it worse - businesses have disincentive to grow (and thus gain better economies of scale) because it makes it harder to avoid paying taxes. And your military is a financial black hole. Even if everyone just wrote off 100% your debt tomorrow, if you kept trying to live like the rest of Europe (let alone better, like you try to do in a number of respects), you'd be back in the hole in short order.

Anyway, enjoy having your money (both in the banks, and your salaries) devalued to a small fraction of its former value while the cost of all of your imports shoots up, without a corresponding export boost because you hardly export anything compared to the size of your economy - also, a non-Eurozone economy in chaos isn't exactly a good recipe for a healthy European tourism sector, so don't expect the tourism boost from a devalued currency that you may be envisioning. Just don't think that people are sad to see you go - they're just mad for having dumped so much money into your economy when it was obvious that you planned to weasel your way out of ever paying it back.

(Note: the Troika isn't faultless either. In exchange for loans, rather than focusing on trying to improve the raw numbers with austerity, they should have been focused 100% on trying to force you to fix your structural problems so you can be competitive enough to stay in Europe. They tried to tackle the root problem in a totally counterproductive way and ended up earning a lot of hate for that.

Re:Good for greece

[Rei]

Europe appears to be prepared to maintain the current minimal level of bank support going until the 20th (yep, these bank runs are happening even with the banks still receiving some support, just not as much as they were before). On the 20th Greece will miss a payment that will give then the grounds to withdraw the remainder of the support propping up the banks - any banks still around then will probably collapse immediately (assumedly being nationalized). If Greece doesn't resort to printing currency (whether they call it an "IOU" or not) before then, they will have to at that point.

Greece has a press in Athens to print 20 euro notes and has recently started talking about using it to make up their Euro shortfall. They're seriously playing with fire here, as that would be counterfeiting if they're not authorized to do so. There's talk about launching lawsuits to try to get the courts to grant them the right to print more euros. But how far they're willing to play that risky game if they don't get any sort of authorization... well, only time will tell. If Greece prints counterfeit euros, there's really no limit to how extreme this thing could escalate - Europe would be forced to wall off trade with Greece and even potentially travel restrictions to avoid them getting into circulation. The calm, measured response on Greece's part would just be to introduce a parallel drachma currency rather than printing euros, but Syriza isn't exactly famous for calm, measured responses. And nobody has a drachma press - it takes longer to set up a press for mass production of a new currency than one might think. Really, where this all could lead is hard to speculate....

Re:Good for greece

[drinkypoo]

just to pick one category, a military without any hardware isn't much of a military. But the concept that Greece can't pay back its loans is a lie.)

Greece can't pay back its loans and basically remain Greece. You never give an order which you know will not be followed. And you should know ahead of time whether your orders will or will not be followed.

(Note: the Troika isn't faultless either. In exchange for loans, rather than focusing on trying to improve the raw numbers with austerity, they should have been focused 100% on trying to force you to fix your structural problems so you can be competitive enough to stay in Europe. They tried to tackle the root problem in a totally counterproductive way and ended up earning a lot of hate for that.

Notably, austerity tends to shut down the economy, which will only lead to further financial insolvency.

Re:Good for greece

[IamTheRealMike]

They have demonstrated perfectly why democracy is a failure, even while being a shining beacon of it.

Democracy is not a failure, don't be silly. There are lots of democratic countries that have managed to get a grip on public spending. Most obviously, Germany. Less obviously, the UK just went through an election where the party promising more austerity won a clear victory. California went through a massive crisis where they took their state to the brink due to referendums allowing the creation of unfunded mandates, but last I heard they had learned their lesson and got that problem under control. And so on, and so on.

What's more, it's not like dictatorships are all paragons of budgetary discipline. Far from it.

So whilst undoubtably there will be many further spending crises in advanced nations, democracy is not the problem - it just means a society has to learn to control their borrowing impulses as a group.

Re:Good for greece

[blue trane]

Remember AIG and the $85 billion bailout the Fed gave it? Then remember how the Fed restructured the loan twice more, giving AIG something like $150 billion in total? Remember Neil Barofsky's testimony before Congress, that the US government made $23.7 trillion available to financial institutions during the crisis? Greece is small potatoes compared to the amounts the Fed created to bail out the very banks that are pressuring Greece now. Shameful.

Re: Good for greece

[whoever57]

It's not Germany's fault that Greece didn't live within their means. And once they got in trouble they could have simply reformed by spending responsibly, cutting pensions, and accepted austerity fully. But no, they chose not to do that either. Now the mean people are shutting off the teet.

If you lie to get a mortgage [join the Euro-zone], it's your own fault when things go wrong. What if the bank knows that you are lying? It was common knowledge that the figures Greece used to justify joining the Euro-zone were not realistic. Those bureaucrats must have known. Who is at fault now?

The real problem here is not Greece, but the precedent that it sets. There are much larger economies in the Euro-zone that may need a bail-out in the future.

Re:Good for greece

[Solandri]

Notably, austerity tends to shut down the economy, which will only lead to further financial insolvency.

The fundamental problem here is that Greek pay (in Euros) is disproportionately high compared to their productivity vs other Eurozone nations'. "Austerity" is simply reducing wages to bring that wages-to-productivity ratio back in line with the EU norm. The reforms the EU was asking for addressed the other half of this ratio - increasing average Greek productivity. The growing Greek debt is created by this imbalance - people were being paid more Euros than they were producing via their labor. Greece was covering up this imbalance by borrowing, which is totally the wrong reason to borrow money. You borrow it to purchase things which will help increase your productivity so that you will no longer be running a deficit. You don't borrow it to continue to operate in arrears.

By rejecting austerity and failing to implement reforms, you don't leave many choices. The simplest is to boot Greece off the Euro. Then they can do whatever the hell they want with their economy, pensions, and pay, and it will automatically balance itself out via the Drachma falling in value vs. the Euro. You can either take a 30% pay cut in Euros, or you can switch to the Drachma and the Drachma declines in value 30% vs. the Euro. The end result is the same - "austerity". (Ideally Greece would increase their average productivity by 30% - then wages wouldn't have to drop. But they seem hell bent on refusing to do anything the EU suggests that could improve productivity.)

Re: Good for greece

[Rei]

I'm not from Macedonia, although I know people there. Both of your sides need to read up on your history. Macedon was located between the traditional Greek city-states and the Thracian tribes (and others like the Illyrians), and had a culture and language closer to that of the Greeks but with strong Thracian and Illyrian influence (for example, they used both Greek, Thracian, and Illyrian names). The ancient Macedonians sought recognition as "Greek" from their southern neighbors, as Greece was the heart of wealth and culture; by contrast, the ancient Greeks debated heavily among themselves whether Macedonians were actually Greeks or not and many were not willing to accept them. The issue was only settled they were conquered by Philip (obviously not wanting to say that they had been conquered by barbarians ;) ) The Macedonian leaders' habits of adopting the cultures of the countries that they conquered made it a relatively moot point anyway. Macedon was near present day Thessalonica. The country of Macedonia's claim to the history of Philip and Alexander is pretty weak; they did not extend their empire particularly far up the Vardar / Axios (at the time, Illyria), and where they did they stayed near the river. However, future rulers of Macedonia did. By the time of the Roman conquest, what was Macedonia had become modern Macedonia plus modern Albania and the northern half of Greece. This become the Roman province of Macedonia, which existed for hundreds of years. Classical Greece remained its own separate entity under Roman control, Achaia.

Let's repeat: Modern Macedonia was the center of the Roman province of Macedonia for hundreds of years. Yes, they have a right to the name.

During the Byzantine times, a series of waves of Slavic invaders (the most powerful being a later wave, the Bulgars) moved into the area, overrunning not just today's Macedonia, but the entire interior of Greece. Their control of these areas lasted hundreds of years and they interbred with the local populations. Greek speakers retained control of the coasts, and eventually re-expanded back into the interior; the populations there were subsequently re-Helenized.

The area that is modern day Macedonia was subsequently traded off between one empire and the next all the way up to the modern period. Greece, after gaining its independence from the Ottomans (again, initially only in the southern portion of of what is modern Greece - the part that was traditional, pre-Macedonian-era Greece), progressively took over Ottoman lands to the north and northeast in the 1800s, expanding into the area formerly occupied by the city-state of Macedon, and even the areas once occupied by the Thracians. These areas were steadily Helenized, especially in the 1920s with the influx of large numbers of Anatolian Greek refugees - 270 thousand in Thessaloniki alone.

The basic summary of it is: there are no ancient Macedonians anymore, and nobody has a "pure" claim on the name. But both sides have ancient Macedonian "breeding". Neither speak the ancient Macedonian language (even the ancient Macedonians stopped speaking their language by the 3th century BC), although Greek is certainly closer. Both Greek Macedonia and the Republic of Macedonia are located in the heart of areas called Macedonia for centuries - Greek Macedonia being the heart of the original Macedonian empire, and the Republic of Macedonia being the heart of the later kingdom and the Roman province of Macedonia. So yes, you have every right to criticize the Republic of Macedonia's cooption of Alexander and Philip. But you're in the wrong when you try to act like they have no claim to the name.

Re: Good for greece

[murdocj]

So you are saying Greece lied, therefore the fault isn't with Greece, it's with the other EU countries? You're making my head hurt.

Re:Good for greece

[JeffAtl]

AIG had the capability to pay its bailout money back, Greece does not. AIG received $180 billion in loans and paid back $205 billion in 4 years.

Re: Good for greece

[FatLittleMonkey]

Germany will return to the DM, which all the sensible people in Europe will shift their savings and investments to, at which point the "new drachma", as the euro will be called then, won't be worth the paper it's printed on.

The vast majority of German exports are to Europe, and the majority of those to the Eurozone.

If Germany had a separate currency, it would appreciate relative to the rest of Europe. That would result in German exports being effectively becoming much more expensive. Similarly, with a drop in the value of the currencies (or joint currency) of the PIIGS countries, their own exports would suddenly become much more competitive and their wages much lower (without the pain of internal deflation).

That is the whole freakin' point of floating currencies. It allows effective inflation/deflation without internal real inflation/deflation, allowing the system to respond much more fluidly and rapidly. For example, German sovereign debts would have appreciated in cost (relative to other currencies), while Greek sovereign debts would depreciated sharply (relative to other currencies).

Switching to the Euro froze that, pushing all revaluations back internally, but the Eurozone failed to implement the internal corrective mechanisms that nations use (Federalised revenue and payment systems to compensate for regional downturns.)

Essentially, Germany has been gaining a huge advantage from the Euro. It prevents them pricing themselves out of the European markets via currency appreciation, while simultaneously not having to pay for failed regions within Europe. All the advantages of Euro-Federalisation with none of the costs to Germany that true Federalised economies like the US have.

Even better, Germans can play this bullshit "holier than thou" game when the system finally collapses in on itself.

Re: Good for greece

[buybuydandavis]

Interesting usage of "force": refusal to float an infinite supply of loans that will never be paid back.

The eurocrats are of course thugs, but limiting how much they'll shake down the rest of their subject citizens to subsidize Greece is not a great example of their thuggishness.

Re: Good for greece

[blue trane]

The Fed right now has $1.7 trillion in "toxic assets" on its balance sheet. In return, primary dealers got $1.7 trillion in deposit accounts at the Fed. No one else was going to lend to those dealers; they were tapped out, couldn't roll over their funding. But the Fed extended its unlimited safety net to them. Why not give Greece the same courtesy?

Re: Good for greece

[BradMajors]

No one forced Greece to accept the IMF and EU bailout. Greece could have restructured its debt before its bailout, but decided against it. Somehow I am missing how the IMF was cruel for offering loans to Greece and then expecting to eventually get the money paid back.

Re: Good for greece

[Aighearach]

Why? It's the person who believes the lie, or knows that's it's a lie and uses it for profit that creates the problem. Liars are liars. The profiteers are criminal.

Excellent job paraphrasing the Greek position. However, don't expect the bankers to forgive loans on the basis of, "it's your fault you loaned it to me, you should have known I was lying."

It is a rather funny position. If you attempt some long-term thinking and address the problem without country names, it should be pretty obvious that without the loans they would be poor, and they're guaranteeing increased future poverty by refusing to live within their means. Even if you believe in the moral position, it should be obvious that the bankers won't agree, and won't give handouts on that basis.

Total fail even if you agree with the position! That is some seriously deep fail.

Re: Good for greece

[lakeland]

Let's continue whoever57's analogy.

Your family have lived in a house for generations. A few years ago the house needed a bunch of work adding rooms and generally upgrading it to fit your new status as members of the respectable middle class. You didn't have the cash but you had the status and rates were cheap, so you took out a bank loan to cover it. As that loan came due, your husband lost his high paying job and had to take a cut.

So you begged with the banks and eventually they agreed to lend you more money, but at a higher interest rate. Paying more interest on less money is tough, the house continues to need work to keep it in good repair and you continued to not quite make ends meet. You go to the banks and beg for more money so you can keep paying the interest and repairs but the banks say no, they say you need to live within your means.

You promise to do that, and you quickly 'adjust' your finances to show how it's all going to work out. The bank sees through the farce immediately but he's a greedy fellow and with you agreeing to add 200 more basis points onto the rate, it's gotta be good for him. If you default, your cousin will probably cover it anyway so it isn't much risk.

You keep struggling, and you have to beg the banks for money every month. This starts to annoy and worry the banker, so he starts taking an increasing interest in your life. Don't do a good repair here, just leave the window broken... Don't send your kids off to uni, educate them at the local community college. These things save a little cash, but they also lead to you having to spend a whole lot more time looking after the house instead of making money. Even worse, your kids having a lower level of education means they can't get such a high paying job to help out which is a real problem since your grandparents have now retired and are moving back in.

You get desperate and crawl to the bank begging for more and more. They look over the situation and say, well, maybe, but you have to cancel all expenditure. House repairs, who needs them? Further education, completely abolished!

You hold a family conference. What to do? Give in to what the bank wants and destroy your family's future? Or default and have the bank potentially take possession of your family home. Put like that, it isn't such a hard call, you tell the bank to f. off and wait too see what will happen.

Who's at fault? You for living beyond your means? Yep. You for lying to the bank? Yep. The bank for accepting such an obvious lie? Yep. The bank for loaning money to someone that couldn't possibly pay it back? Yep. The bank for insisting on austerity measures that will have a negative long term fiscal impact, yep.

Does that help?

Re: Good for greece

[gnasher719]

Why is there no production capacity shortage to keep Greek pensioners at a decent standard of living?

The problem really is that 57 year old German workers don't want their money, earned by hard work, going to 57 year old Greek pensioners.

Re: Good for greece

[Mostly a lurker]

I think much of your analogy is flawed, but accepting it at face value, the correct move now is to sell the house that is inappropriate for the family's financial circumstances, and move into an apartment or much smaller house. If this solution is refused, the creditors (in this situation, I am sure the family has other debts) are within their rights to seize the family's assets, including the house, and leave the family to fester.

In most countries, there is a bankruptcy process that can ameliorate the consequences somewhat. There is no bankruptcy process for countries so, if they upset their creditors too much, they can expect truly unpleasant consequences.

Drop the hammer on them.

[Anonymous Coward]

I am Belgian. Greece owes me, my wife and children over 3000 euro. We fronted it out of our taxes and if they don't pay us back, we'll pay it back out of our taxes. Now, I am all for social solidarity... anybody who has spent time here in Belgium knows how easy it is for an IT worker to do independent contracts under the table. I declare all of my side activities and pay my taxes specifically because I believe in helping those who are down on their luck.

But solidarity is a two-way street. Greece was bailed out once, in 2010, in exchange for reforms. They were slow in reforming and in 2012 we had to bail them out again... and they still haven't reformed and here we are in 2015 and they want more money. The reforms that our governments are asking are not onerous. It basically comes down to "don't spend more than you can pay". The Greeks for some reason seem to think that the rest of the Eurozone should pay for armies of useless bureaucrats and pensioners whose median pensions are higher than ours make more than my parents. Now, Greece is small and strategically important, so maybe every Belgian should just give them 600 euro and call it a day.

But then Podemos in Spain will be asking for the same thing. Then the Five star movement in Italy will want their free money. I'm sorry, but fuck you guys. I work my fucking ass off to support my family and my countrymen. Greece threw my good will in my face. They can go become lackeys to the Russians for all I care, fight a civil war, I don't care. I hope my government refuses to give them another cent.

Re: Drop the hammer on them.

[IamTheRealMike]

Second, in Greece there have been traffic budget cuts, and everything was fine according to what was asked, it's just that the European plan was futile

The European plan wasn't actually implemented. Basic things like, hey guyz, why don't you put together a land registry so people know who owns what? Yeah, that didn't happen. Ever. Been talked about since the 90s. Every other modern economy has one, Greece doesn't.

What about relaxing the labour rules? In most parts of the world it's possible to fire people for incompetence. In Greece, it's so hard to fire a civil servant that there is a case of a man who literally murdered the town mayor with an Uzi, went to prison ....... and wasn't fired, in fact, he continued to draw a salary whilst locked up! This is so absurd it's unreal yet, this is Greece.

There are tons of reforms that would actually be good for Greece in the long run, but Syriza seems to think every single reform is a bargaining chip.

Re:Drop the hammer on them.

[hey!]

"Drop the hammer on them."

That's the easy part. The hard part is dealing with what happens after the hammer has been dropped.

Someone once said that the definition of a bad policy is one that leads to a place where you have nothing but bad options. I believe everyone (not just the Greeks) thought back in 2000 it woudl be good policy to bring Greece into the Eurozone. But now we've now reached the point where otherwise rational people are talking about "dropping the hammer", as if having an incipient failed state in Europe is a small price to pay for 600 euro in your pocket. The frustration is understandable, but the the satisfaction of dropping the hammer on Greece would be short-lived -- possibly on the order of weeks depending on the scale of financial disruption.

The unhappy truth is that bad policy choices fifteen years ago means all the options available today lead to long-lived, complicated, and expensive consequences.

Re:Drop the hammer on them.

[goose-incarnated]

I am Belgian. Greece owes me, my wife and children over 3000 euro. We fronted it out of our taxes and if they don't pay us back, we'll pay it back out of our taxes.

You're blaming Greece for this? Why the hell did your country bail out Greece's creditors and take on Greece's debts? If your country had acted responsibly they would have let Greece's creditors fail.

The situation now is that we have Creditor A lending money to debtor B which Creditor A knows in advance that debtor B cannot pay back. So Creditor A then sells the debt that they already know cannot be paid back to EU countries. The only question in all this is: why did your country agree to this?

The people you should be mad at are the ones who bailed out the creditors. Once the loans were made to Greece, the "austerity measures" imposed +- five years ago were simply a blind to get the private creditors paid. Greece owed money to private creditors; your country (part of EU) decided to loan Your Money to Greece on condition that Greece paid back the private creditors. I feel no sympathy for any of the current creditors.

Re:Good deal!

[phayes]

Well goody for Greece where a majority thinks that that they can vote themselves out of responsibility for borrowing themselves into a hole. Now it's the turn of everyone else in Europe to decide whether to continue throwing good money after bad. The Greeks claim that the banks & everyone else are the problem. We'll soon see how well they do without either.

Citizen of Belgium here

[Anonymous Coward]

Citizen of Belgium here. That is totally cool with me. Please pay back the 660 euro per person that you owe us on your way out, though (in Euro, not Drachma)

Re:Citizen of Belgium here

[Anonymous Coward]

Translation: My government and my country's banks exhibited an utter lack of fiduciary responsibility. Please help me continue to deny their responsibility.

Re:Citizen of Belgium here

[OrangeTide]

Thanks for the translation, it was all Greek to me!

Re:Citizen of Belgium here

[Anonymous Coward]

Meh. As a Dutch citicen I say everyone got what they deserved.
The EU beurorats let in a country that clearly has no business in the EU.
Banks and countries lent money to a country that clearly had no possible way of paying back.
Now they want their money back, and greece wants the handouts to continue.
Yeah, that's not how it works.
When I give a begger some money I do so with the understanding that I won't get it back.
But if he keeps asking for more I'll get pissed and stop giving.

Re:Citizen of Belgium here

[Anonymous Coward]

Oh cry me a river. Our country was completely ravaged in both those wars (ever heard of the fields of Flanders or the battle of the Bulge?) and we're not crying about war reparations. Why? Because it is over. I was not alive then, you were not alive then, probably your parents weren't even alive then. World War II's impact on your economy is astonishingly small compared to all that has happened since.

You have countries in Eastern Europe with lower standards of living than you loaning you money out of solidarity. That you refuse to pay us back, and try to wave your moral obligations away by trying to appropriate the suffering of people long dead is disgusting.

Re:Citizen of Belgium here

[Lennie]

'funny' fact is, it's a US-bank that started this whole Greece in the EU thing.

Obviously it could only be Goldman Sachs and they made a lot of money on this.

People have been dying in Greece because of budget cuts for more than 3 years.

This really needs to stop.

Re:Citizen of Belgium here

[LynnwoodRooster]

The population of Germany was about 10 times that of Greece. The typical German got about 40% of the typical Greek.

And we Americans financed the whole thing. You're welcome.

Re:Citizen of Belgium here

[geoskd]

Central banks are not funded by taxpayers. The IMF for example was funded by the US in a budget-neutral manner, as an exchange of assets. Translation: the IMF's money is created out of thin air. That the IMF won't give Greece any of their created money is shameful, sociopathic, criminal, and utterly unnecessary.

That is just plain asinine. Money doesn't come from nothing. Even wall street isn't that far out of touch with reality. If there is value there, it came from something. Consequently it is funded by something. Even if the money was printed and then given to the IMF, the moment the money was printed, the value it has came from devaluing all of the other money in circulation. In the case of the IMF, it is funded by the countries that are its members

Re:Citizen of Belgium here

[kosmosik]

Solidarity. Yes. I love and up your comment. I live in Poland which by Greek standards is kind of poor. I see poor people everyday, I also face hard working people daily. The ones which build up the economy on which Greece can now bargain for details - please also think about us who lend you the money. We are a community.

Re:Citizen of Belgium here

[Anonymous Coward]

Dude, you just don't get it do you? You don't get to appropriate the glory or suffering of your (supposed, claimed) ancestors and assign blame to the (supposed) descendants of another group of people that wronged your (supposed, claimed) ancestors. That world view has a name: nationalism. It is completely and utterly discredited (largely by the Nazis in the second war) as an effective paradigm within which to govern the world. It is furthermore pretty well discredited by anthropologists, historians and geneticists.

If you insist on taking a nationalistic world view that prizes historic myths over reality, please feel free to pay the Anatolians eleventy gazillion gold coins in reparations for the sack of Troy. Since there are a bunch of Turks living in Germany today, you can send their share directly to the German government. I am sure that in the name of bureaucratic efficiency, the Germans would be happy to accept payment in the form of you never talking about the WW2 thing again. Meanwhile I am Belgian and don't really care about your beef with the Germans.

Now, we are back where we began. I am Belgian and I loaned you money out of solidarity. You are not going to pay it back even though you could if you chose to. That is disgusting and I hope my government does everything it can to make a pariah out of you.

Re:Citizen of Belgium here

[Electricity Likes Me]

This is an incredibly stupid idea borne of holier-than-thou moralizing about currency valuations. You know why Germany wanted everyone in on the Euro? Because sans Euro, German exports drive the Deutschmark through the roof, German exports promptly tank, and everyone else has a fair shot of attracting investment, business and industry to setup those export economies in "weaker" nations.

The Euro doesn't work because it's an economic union without political union to match it. The currency represents a bizarre aggregate of political goals, rather then allowing the efficacy of policy in individual regions to drive it. What's really going to bend people's minds is when Greece exits the Euro and then runs a mini-economic boom on the back of cheap Drachma making investment suddenly very attractive again.

Re:Citizen of Belgium here

[AmiMoJo]

The pensions and benefits thing is just a red herring that certain media loves to repeat. The reality is that Greeks who can't find a job, which is about a quarter of them, are extremely poor and the benefits amount to very little. Even those in work are low wages, part time hours and little hope that things will improve if they continue down the road they are on.

Their position is reasonable. Some of them voted for the irresponsible policies, but many of them, particularly the young, did not. Okay, the problem must be dealt with, but austerity is not the only way. Look at what Obama did in the US, he stimulated the economy with massive spending and is paying it off now things have recovered. Greece wants to fix its economy and get back on the road to recovery before settling its debts, so that ordinary people don't suffer unbearably.

If you want to vote "no" on your credit card bill go ahead, just declare yourself bankrupt. At some point that is a better option than trying to continue servicing your debt. No-one wants that, least of all the creditors, so why push you to that point if they can agree better terms and eventually get their money back?

Re:Citizen of Belgium here

[Afty0r]

Translation: My government and my country's banks exhibited an utter lack of fiduciary responsibility. Please help me continue to deny their responsibility.

This.

It's hard to convince your average European citizen what ACTUALLY happened to "their" money which went to bailout Greece - it actually went to Greece and then within days returned to European banks, predominantly French and German (a few others, but French and German banks account for the vast majority of it).

YOUR MONEY DIDN'T GO TO THE PEOPLE OF GREECE, IT WENT TO THE SHAREHOLDERS OF DEUTSCHE BANK AND BNP PARIBAS. IT WENT INTO THE BONUSES OF EXECS AT COMMERZBANK AND CREDIT AGRICOLE.

If Greece defaults on its' loans, these banks and their shareholders are out a ton of money - like an actual ton of money whether you weigh it in Gold, Diamonds, whatever. It was even worse a few years ago - before recent regulations requiring banks to deleverage and store more capital, a total Greek default would have brought these banks to their knees, some did not have enough liquidity to stay open if Greece defaulted on all it's commitments. Nowadays it's not QUITE so bad, but a lot of rich people stand to lose a lot (from their balance sheet) if Greece defaults.

The average Greek person might be a little more lazy and corrupt than others in Northern/Western Europe (see retirement age, hours worked, estimated percentage of people paying correct amount of income tax) but this situation is not all their fault. Their old government cooked the books and flat-out forged documents to get into the Euro, then started borrowing and spraying money around with a hosepipe.

The people who loaned them that money are to blame - they failed to do their due diligence and now their investment is at risk they have found a way to make all of us citizens provide free insurance for their investments.

Make no mistake, this is the fault of incompetent bankers, and almost identical to the banking crisis bailouts of major banks, except that this time the money changes hands briefly before arriving at the banks.

Greece should never have been allowed to join the Eurozone for so many reasons - the quicker they get out the better for everyone, but it will be a rough ride for a year or two in Greece, and we will need to pay them to keep migrants out - but that's OK, we've done that elsewhere...

Pay Your Debt!

[Anonymous Coward]

Now they seem to be wanting a 30% discount on their debt. Funny that!
You give up now the 30%, and tomorrow they will put together another act like this to have another 30% cut.
Never negotiate with Debt Terrorists!
There are rules to be in the Euro zone. Nobody forced anybody to accept those rules.
If Greeks now they finally came to reality that retiring at 50yo might lead to shortage of pension funds, and they want "discounts", they should be booted out of EU.

Re:Pay Your Debt!

[drinkypoo]

Never negotiate with Debt Terrorists!

Fully agreed! Bomb the IMF! Even their name sounds like a terrist organization. International Monetary Front

Re:Good

[Zapotek]

You're right in general, but regarding the remark about gettings things for "free"; can we switch the generic "Greeks" to "Greek politicians"? Because us Greeks in general have gotten jack shit for free, if anything, we've been paying for everything twice.

Free health care: passing doctors money under the table to get them to work on you.
Free education: Having to spend tons of money and time for private tutoring.
(In both cases, with a crumbling infrastructure.)
Democracy: Pretty much the same stacked 2 party system as any other nation, with extra corruption sprinkled on. I'm talking about major parties, not nutty ones with inconsiderable amounts of supporters. The currently governing party did shake things up though, broke the 2 previous major parties' taking turns, not sure if that is for better or worse, we'll found out in a few days.

And it's not like we've had it easy on taxes either, middle class families having their income taxed in half and paying out of pocket for all the things those taxes should have bee going to in the first place.

Maggie was right

[kimanaw]

Whatever your opinion of her otherwise, The Iron Lady saw this coming

Re:Good

[Zapotek]

Also, as an addition to my previous comment, you should have said 60% of Greeks "can't seem to come to terms with reality".
40% of us tried to be reasonable and play it safe with a matter of such importance.
I know gross generalizations sound cool when you're on your soapbox, but give credit where credit's due (pun intended).

Re:Good deal!

[alvinrod]

Greece is screwed either way. We can argue about blame all day (and there's plenty to go around) but Greece is not Iceland. They keep voting for more bread and circuses and then collectively refusing to pay taxes for it. If they go back to the Drachma, the government isn't going to suddenly get their shit together and fix the country's problems. They'll just end up printing more and more money and drive the inflation levels out of control.

Re:Good

[AchilleTalon]

Explain why a structural reform of the economy cannot be performed in parallel with austerity. Greece owe 300 billion euros to other european countries and there was 390 billion euros on the table to sustain Greece until 2020. That's the deal they refused. Explain us how Greece will now find someone willing to lend them more money at better conditions than the dead deal? How this referendum result has given Greek govt a better position to negociate with its partners?

Re:Good

[geoskd]

But it was all good-and-well when Greece, amongst 20 other nations, forgave Germany a massive swathe of her crushing debts following World War 2 [news.com.au]

The alternative was to set up the exact same conditions in Germany that lead to the rise of the Nazis. The German people are an industrial people. Much like the Americans, the harder you try to keep them down, the stronger they become. Had the Allies not saddled Germany with crushing debts post WWI (a war which Germany did not start mind you), there could have been no rise to power of the Nazi party, and would probably not have been a second world war.

Germany’s debts were unjustly forced upon them as a result of loosing a war for which they had only marginally more responsibility than any other nation. Greeces debts are the result of internal mismanagement. In spite of that, the other nations of Europe including Germany had made concerted attempts to help Greece. Like a concerned parent however, a condition of the assistance was / is demonstrating fiscal responsibility by not wasting the money. This was especially important given Greece's well earned reputation for corruption. The European nations had absolutely no desire to line the pockets of the corrupt in an attempt to help the Greek people. Greece promised a lot of things, but failed to deliver, and is being petulant about it to boot. Time for some tough love. Cut them off, and post signs at the borders: Let that be a lesson to you.

Re:Good deal!

[IamTheRealMike]

We'll soon see how well they do without either.

Very badly, without a doubt. A humanitarian crisis is now looking not just thinkable but downright likely. The EU will pay vastly greater sums before the Greek crisis is over, if only because a failed state within the Schengen zone would make the current EU migrant problems look like a Sunday picnic in comparison.

Waves of starving Greek refugees who cannot afford food fleeing a country beset by blackouts and riots is something that Europe cannot afford, and thus, there is really no option but to continue massive wealth transfers into Greece. The only question is how the EU will ensure the Greek government is replaced with a proxy government, without triggering even greater problems.

One thing is for sure. All the people who voted OXI in the referendum thinking they would be taking control of their own destiny are deluded. Greece is about to fall apart. They will end up grabbing any lifelines the EU gives them regardless of how they voted.

Re:Honour to the Greek People

[AchilleTalon]

Pretty silly. They owe money to other European citizen, not to banks. The banks are just the convenient intermediate here. They owe a total of 300 billion euros to other european countries. I don't know how devaluation of the drachma will help here, there is a limit on the amount of olives and feta cheese I can eat. Getting paid in monopoly money won't help neither to reimburse any debt in euros. And you are wrong, they have no budget surplus now. They still need to borrow money to meet this month's end obligations.

Austerity fails again

[sjames]

It doesn't help that Greece was forced into an austerity plan in their last bailout. Essentially that kicked off a death spiral. Austerity has already been well discredited (see here, here, and here. Original paper here) yet it keeps being foisted off on citizens everywhere.

I'm not suggesting that Greece should spend money like a drunken sailor on leave, but following a faith based economic theory even after it has been disproven (even to the satisfaction of the writers of the original paper) is not the answer.

Re:Austerity fails again

[sjames]

You'll need to do some googling, I can't teach a full econ class here. But the TL;DR version is that every country that tried austerity has recovered more slowly than every country that didn't. That and the entire justification for austerity was in that one spreadsheet that turned out to have a glaring error.

A big opportunity for the rest of Europe!

[fustakrakich]

All EU citizens should demand a referendum asking if the taxpayers should pay this 'debt' created by derivatives and fraudulent market trading, or tell the bankers to write it off, suck it up, and never again be allowed to put depositor funds at risk on this commodities shell game ever again. And I have no trouble using some form of asset forfeiture against them to recover some of the stolen funds.

printing more money

[gl4ss]

that's what the greek people expected to happen. just printing more money.

NOW essentially what the goverment can do is to tax all money that is being held in greek accounts, almost the same as just printing new money.

they can't just print more money since they're in the euro, but the people still expect (and syriza promised to !) to pay money as usual. they expect that the government pays out more money than it has because that's "democratic".

also a confusing ballot is democratic according to syriza.. with an unlawlully short campaign time to boot. not that it matters, the cash is going to run out anyways. it's like the prime minister and finance minister either deliberately try to run the country into a crisis or they don't have even cursory knowledge of how things work.

Re:printing more money

[hjf]

Back in 2001 here in Argentina the government couldn't print more pesos than what was in the central bank reserves as US dollars. Provinces needed money (because some provinces subsidize others through federal taxes). So what did most provinces do? Print their own "money": bill-sized bonds with face values of 2, 5, 10, 20, 50 and 100 pesos. The federal government responded by printing their own bonds. So basically every province had their own "quasi-currencies" that were valid only within their boundaries, and they were accepted at a value of 80-90% face value, and only up to a certain amount for your shop (usually up to 50% in bonds). (Except LECOP, the federal bond, which was accepted at full face value up to 100%).
These bonds had (I think) a 10-year payout at 3% yearly. They were largely forgotten when Argentina exited the "convertibility" system that tied the Peso to the USD, and the bonds were "recalled". People quickly traded their bonds for true Pesos at the bank. But of course, the banks kept these bonds and cashed them 10 years later.
This is one of the possibilities for Greece, assuming Greece has any sort of local production to feed their people (Argentina does. We don't need to import food, but we do import most other things)

Re:and here we have the real reason

[Aighearach]

Well gosh, I don't see how refusing to "live within your means" will get you living above your means even after your credit rating hits 0 and you can't borrow other people's money.

Moralizing gets you what? It gets you living withing your means, because nobody will loan you anything. ;) Oh, and a crashed economy too. And decades of poverty.

Borrowing everything you can to live outside your means doesn't get you the good life. It increases your poverty. It decreases the "means" that you have to live by.

People think when we say to "live within your means" we're engaging in some sort of moralizing. We're not. It is a physical statement. It is like saying, "eat within what you can get your hands on" or "eat what you can grow or buy or earn or otherwise acquire." Live within your lifespan. Walk within your speed capabilities. Don't bite off more than you can chew. Fly within the flight capabilities of your aircraft. You can't get a free lunch.

Blaming the Germans for your poverty won't put any food on your plate.

Plenty of differences

[Sycraft-fu]

A big one is just that the US controls both its currency and its monetary policy (meaning taxing and spending). That manes that it can take the steps it feels necessary to deal with loan repayments, such as increased inflation and/or a weaker currency. It doesn't have to convince other countries of it, it runs the currency.

An even bigger one at this point is that the dollar is the world's reserve currency. Things are settled in dollars on the international stage, meaning that the US can't have a current account crisis. It makes the dollars, things are paid for in dollars, so it can make more dollars to pay for things. It is unique in that situation. While it could change, that is how it stands.

In fact, that is part of the reason the US is able to borrow so much, and in some ways needs to. People and nations want to put their money in what they see as a safe reserve, and the dollar is one they seek. To make that possible, the US has to issue debt instruments. They have to be able to buy US dollars.

Yet another difference is that the US has high tax compliance. Most people in the US pay their taxes. There are those that cheat or outright evade, but they are the minority. That, combined with a generally quite low tax burden (compared to most first world nations the US has very low taxes), means that raising taxes in the US is a very valid strategy. People won't be happy, but they'll pay. Greece has real issues with tax avoidance which makes tax increases problematic.

Still another difference is in what the economy produces. Despite what you may have heard on whiny online sites, the US makes a lot of stuff. It is the #2 producer of durable goods after China, and only slightly. It builds lots of things that others in the world want. A good example would be microprocessors. Both Intel and AMD are US companies, and Intel fabs most of their newest CPUs in the US. The chips that run most computers in the world come from the US. Makes the economic situation rather different than a place that relies heavily on tourism.

Finally there's the issue of who owns the debt. Most of the US's debt, about 65%, is owned by the US itself. Of that a large part is intragovernmental holdings, and then debt held by the federal reserve. Of the nations that do hold US foreign debt the two largest, Japan and China, do so for strategic reasons to keep their currency cheap compared to the dollar and thus have a strategic interest in keeping that debt. Greece on the other hand, owes most of its debt to other countries.

It is far to simplistic to look and say "Oh this is all the same!" Public debt is actually a pretty complex issue.

As a Greek, disappointed from slashdot

[periklisv]

As a Greek, I am stunned, and disappointed, by the level of criticism (and hate!) in slashdot. What I clearly see is that fellow Europeans are being told huge LIES about the Greek crisis, and what this referendum means. I'll try to put things in perspective:
1. The money fellow European governments are giving us, are not free; They are loans, that we happily repay, even if the interest rate is a highway robbery compared to what they are paying.
2. Nobody said about "writing off the debt". What we ask is for the due date to go further in the future and the interest rate to be lower.
3. If the rest of the European governments cared at all to be repaid, then they wouldn't insist on "reforms" which have been 100% proven wrong, such as tax increases and pension/wage cuts. These are the stuff we object to. Many of the other important reforms (early pensions, unemployment benefits) are already imposed for quite some time now. I could write a book about how increasing taxes can't increase a country's GDP but guess what, there are even now so many books that prove this.
4. Especially to my Belgian friends: The 2 bailouts of Greece helped repay loans given by private sector banks. In effect, we traded private sector loans with state loans. In other words, you people lended us money so that your banks didn't lose their money. Now we owe you money (instead of your private banks) AND you think that this was a mistake. We do too, so we agree on this.
5. Greece doesn't need more money to "keep spending above its limit". We've had a more or less balanced budget for the last couple of years, apart from the loan interest payments. So we need you to lend us money so we can repay the loans you already gave us. Is this more reasonable than what we're asking? (To postpone the pay off date and decrease interest rate)
6. You are angry because we tricked our selves into the eurozone. You are right. We are angry too that you tricked us into the eurozone. There was nothing good for us there, no reason at all to be part of it, yet our politicians agreed with your politicians that we need to be part of it, no matter what. And they, all together, agreed to put Greece into the Eurozone, what a huge mistake that was and oh how many lies were told so we believed them (you did too). They made a ton of money out of it. Then they made a ton of money from the debt crisis itself. Meanwhile, half the Europe suffers from austerity (with Greece being the most hardly hit country, but Spain, Portugal, Ireland and Cyprus got a great feeling of what austerity means) and the other half is being taught that "lazy Greeks are asking to be given for more money).

Friends, stop hating each other, we're passed beyond this. The people is suffering, not only in Greece, but in other nations too. A Polish fried says "you should see my country", and some other said "we're poorer than you". And why is this? Who is benefiting? Does this mean that Poland et.al. have to double their taxes and cut their wages in half and pensions by 60%, destroy their healthcare and educational system, sell out everything that can be sold, just to become "richer"? Would anyone really suggest that? Then why is it a must-have for Greece? How on earth will this help repay the loans? Up until now, it has created a 27% unemployment and 99% misery.

So, please people, don't believe what your media say. You're not giving away money, we're not asking for free money. Greece has paid the price, and was punished hard, for decades of poor planning, bad habits and outrageous corruption. But it's time for other countries to stop hiding behind the propaganda and be realistic, just like we are now.

Re:Good

[Paul Jakma]

Because the debt is not sustainable. It will leave the Greek economy with huge interest payments that will cripple its economy for decades to come.

It is in Greece's interests to at least significantly restructure the repayments (much longer terms, with 0 interest on much of it for significant periods). Ultimately, they can do this unilaterally - "default" - in which case they might as well give themselves the best possible terms.

The vast majority of debt is owed to EU member states and institutions, and France and Germany in particular. It suited France and Germany for Greece to take on massive public debt in a bailout in 2010, because a good chunk of that money went to repaying *French* and *German* banks which risked becoming insolvent and collapsing otherwise - as Greece didn't have the money. The 2010 bail-out was as much, if not more, about saving *French and German* banks as about bailing out Greece. Indeed that bail-out broke IMF rules, but the IMF made an exception because of the exceptional systemic risk to global finance and the fears of another Lehman Brothers like collapse.

The sane solution for Greece in 2010 would have been to privately negotiate debt restructuring with its creditors, and unilaterally restructure payments where ever agreement couldn't have been reached. However, Greece was instead heavily pressurised by the rest of the EU to *not* do the sane thing, but instead take on *more* debt, because some of its creditors might have gone bust had Greece done the sane thing. Greece did this under pressure, and took this on to *save European banks*. Its own banking system got about €48 bn, to recapitalise, and its government got perhaps €20 bn to €30bn for operational needs (though even some amount of that went on financing costs).

Greece has been made to pay, very heavily, for the mistakes of the French and Northern European banking sector. Further, those who were *least* responsible for this crisis in Greece have been made to suffer the most - the poor, the young. This is fundamentally unfair.

Greece acted in solidarity with EU partners in taking on this bailout of, largely, *OTHER* European banks. The bailout was simply too big to be sustainable for the Greek economy, which has collapsed amid one of the largest recessions ever seen in the modern world. Instead of acting reasonably and recognising the solidarity the Greeks showed in 2010, several EU nations have - cowardly - instead tried to paint this as all the fault of lazy Greeks, which is an objective falsehood.

The EU *needs* a deal with Greece, because, as with all the previous deals, they are protecting *their own* banks, above all else. The Greeks now are saying any such deal also has to stop punishing them.

Six of one, half dozen of other

[Roger W Moore]

It's the person who believes the lie, or knows that's it's a lie and uses it for profit that creates the problem.

Greece lied to get into the Euro because it thought it was going to be richer with a stronger currency. The EU turned a blind eye to it because they wanted the Eurozone to be as large as possible. Both are now going to suffer because of it. The Eurozone countries are not going to get their money back and Greece is almost certain to exit the Euro and very possibly the EU since there is currently no legal means to drop the Euro while an EU member. At this point the best thing to do is make this happen as quickly and painlessly as possible.