To think that Greece should have some debt forgiveness

[ReallyTired]

I would like Greece to leave the Euro and have help in rebuilding their ecomony. Remaining in the Euro and having high taxes will mean that no one will be able to go on holiday there. I feel that giving more loans to Greece will just make their problems worse. There is simply no way that Greece will ever be able to pay those loans back.

Brutal repatations after the first world war cause untold hardship in Germany. It is thought that the brutally of the reparations on ordinary German people was a factor in the rise of Hitler and the Nazi party by some historians. In 1953 many European countries including Greece, Spain, Italy and Ireland to mention a couple wrote of a sizable chunk of German debt. These countries helped to build the sucessful post war German ecomony. Those countries forgave Germany for far more serious things than not paying loans back.

Germany is one of the countries most resistant for giving Greece a debt haircut. I feel that Chancellor Merkal should be reminded of the parable of the debtor. Its is morally repudgent to have an EU country reduced to third world status. If Greece had a debt haircut then there would be more chance of getting loans paid back. There is no way that Greece can afford the interest payments yet alone pay off any of the debt. The international monetory fund says that the level of debt is totally unsubtainable for the Greek ecomony.

I think there has to be some debt forgiveness. I can't see another way out. But I also think there has to be some change in mindset amongst the Greeks - they have to pay their taxes, they can't expect the generous pensions that were apparently the norm. I do feel desperately sorry for them - it's such a great country.

"If your country's government was corrupt, and used your tax money to provide benefits to themselves, to the detriment of you and your family, at what point would you stop paying your taxes. The only power citizens have to reduce corruption and the size of their government is to cease funding it"

Oh please. Most (if not all) countries have governments that line their own pockets, at least some of the time. I have NEVER heard that this is reasonable grounds for tax evasion.

Apologists of Greece are starting to sound a bit ludicrous.

Cote Unless you've lived and worked in a country with endemic corruption, you can't hold them to your country's moral code. And please tell us just how much money has gone to the Greek people over the past 10 years? How much has actually gone to Greece?

Umm I have lived in a country with endemic corruption which also had very high inflation all through my childhood & teenage years. Trust me when I say that I do know what it's like.

STILL that is no excuse for not paying taxes. And retiring at 50. And expecting everyone else to bail them out while electing a set of clowns who promised they will end austerity measures, then fucked up previous gains, then lost time with a nonsense referendum, and then accepted even worse conditions than the ones voted on in the referendum in true banana republic style.

They've been sold a lie. No wonder they're furious. Who wouldn't be.

I agree that the government was elected on something that was never going to be delivered - however it wasn't so much sold as bought imo.

I can't believe they are all that fucking stupid, I mean honestly what did they think was going to happen? That he would just say "No we don't want to pay you back, just keep giving us more money" and everyone else was going to say "aye go on then, that works for me" ! Seriously?

"fucked up previous gains"

What previous gains? The economy contracted by a quarter thanks to the implementation of austerity measures.

You can imagine the AIBU, Greek style. "My husband and I have both lost our jobs, and our redundancy money will just about pay our mortgage for a couple of months but after that, who knows? We've asked our children where we're going to go on holiday this year, and they've voted for Disneyworld, flying first class. AIBU to ask my neighbours to pay, as after all, the children's democratic rights must come first?"

"What previous gains?"

In the last 5 years, Greece's exports increased 19% in EUR terms while imports decreased by 12%, leading to a 34% lower deficit. Capital Account Balance improved by 24%. External debt is in much better shape now, with much of short term debt restructured to very long-term obligations. Even their Reserve Assets are 10% higher now than they were 5 years ago.

"The economy contracted by a quarter thanks to the implementation of austerity measures."

Of course it did, down from levels artificially inflated by enormous amounts of debt.

It's like you saying "I used to live really well while maxing out my ten credit cards. Now banks won't give me any more credit so I'm forced to live like a poor man. This shows their policy of making me limit my expenses hasn't worked."

The answer to that is: Well, you are now back to living within your means. Of course that means you can't live like a king on borrowed money anymore.

The first flaw in each of these arguments is the presumption that people control what happens within their country. People do not control what happens in their country, any more than we control what happens in ours. If we really had any control at all over what happens in our country, why would any of the posters on this thread be debating the pros and cons of the austerity budget, or the problems in the NHS?

Countries are not controlled by governments. Countries are controlled by financiers. Governments are in placed to enact law within those jurisdictions. Just because the people get told they matter and get to tick a box every four or five years to say, 'yes I want to matter' doesn't mean they in any way have any control over their government, their country or their destinies.

So basing your argument on falicy to begin with doesn't really bode well for the underlying logic or fact.

"People do not control what happens in their country"

People control the people who govern them - that is what representative democracy means, a fact I'd like to think Greeks of all people know rather well.

Greeks voted in the clowns who govern them at the moment knowing full well that they did not intend to cooperate with EU and IMF. That makes the voters fully responsible for what happened as a result of their government's lack of cooperation and general clownish behaviour, up to and including their Finance Minister calling EU countries who have repeatedly bailed Greece out "terrorists".

"So basing your argument on falicy to begin with doesn't really bode well for the underlying logic or fact"

There is no fallacy here. What you mean is 'falsehood' or possibly 'error', and even that is wrong.

I could reply to your statement above by saying "You not even knowing how to write fallacy doesn't really bode well for your understanding of fallacies in general", but such comments are not considered good form on MN so I won't

cote Having already slated the whole nation for being corrupt and dishonest, are you genuinely then trying to use figures posted by the bank of Greece to back up your argument?

So, everyone in Greece is either a lazy corrupt public official, early retiree or tax dodger, except those in your profession (IIRC from a previous thread)... Finance.

Are you genuinely trying to hold up the Bank of Greece as an example of honesty while claiming the whole of the country's people are lazy, dumb and corrupt?

People control the people who govern them - that is what representative democracy means, a fact I'd like to think Greeks of all people know rather well. No they don't. We have no control over what happens in government. We do not get to choose who governs us. But the fact that you think you do is testament to a really good state school education. We have taught you well.

Europe must be mad if they let this bailout go ahead. They're already planning strikes. They should be left to sort out their own problems. It's the only way to make them realise they can't go on the way they have done. Somebody was on TV the other week saying there was no point in raising taxes because nobody paid them anyway.

I haven't claimed any such thing. FYI, Straw Man is a logical "falicy" [sic].

There is no other way to talk about the economy of a country than through the figures published by its central bank. In Greece's case, that is Bank of Greece. If you can't even understand why I'm quoting Bank of Greece figures, you really shouldn't be trying to take part in a discussion about a country's economy.

We have a house in Greece and have been paying a lot of attention to what has been going on.

The tax hikes are outrageously unfair and crippling to small businesses and farmers. I am stunned that they were even suggested as they are completely incompatible with the regrowth of the Greek economy. These sanctions

The problem is that the RICH (not the farmers and small business owners) simply do not pay any tax. If they were able to crack down on business owners with high (hidden) salaries, they would never have got into this mess in the first place. Their social spending was well in line with the tax revenue they OUGHT to have been bringing in, but they probably only ever get about 60% of the tax they ought to be getting in any given year.

These sanctions will only drive up the number of tax evaders, because nobody could pay those taxes and survive.

Was the Greek finance minister pretending to be mad?
www.bbc.co.uk/news/33507250
This article is interesting. It suggests that the Greek government calculated that Europe would regard Grexit as so unpalatable they would cave eventually. It was a miscalculation. The markets have been half expecting it, the banks wrote down their Greek debts years ago and I am strongly suspect the wealthy have their money offshore. Maybe for some EU politicians telling their tax payers there will be another bail out is the unpalatable option.

There is no other way to talk about the economy of a country than through the figures published by its central bank. In Greece's case, that is Bank of Greece. If you can't even understand why I'm quoting Bank of Greece figures, you really shouldn't be trying to take part in a discussion about a country's economy.
But you offer no evidence that the figures are factual, or accurate. Are these figures as factual and accurate as the UKs 1% inflation rate by any chance? Are you honestly trying to tell us that data published by the central bank is not manipulated?

The IMF report states that the Banks governance is "lamentable" .

People should not forget that it is only 40years since Greece was a military dictatorship . They are no where near as mature a democracy as the UK or France .The legacy of that period is still there in politics today , it was also the divisions arising from the German occupation in the war that caused the military coup in1964 and many pensioners were alive then .

It's all very well to tell people to pay tax but the methods of collection are no where near as sophisticated as the UK , they simply to not have the secure civil service with the wherewithal to effect collection . I am in a Greek island at the moment and the till in the local supermarket is always open but most sales are added up on a pad of paper , who can blame them in the current climate .
In my previous life as an accountant I have had wealthy Greeks as clients , their assets are not inGreece , tax works almost on a self declaring basis for the wealthy , there's no HMRC following your every move . How exactly is a cash starved public sector going to establish these controls .

The whole situation is a mess but driving average Greeks who cannot change the system into poverty whilst the wealthy and educated flee abroad will not help the creditors get their money back in the long run.

The only way to pay back the debt is to rebuild a strong economy to generate the money to pay them back

People should not forget that it is only 40years since Greece was a military dictatorship

Yeah. And in 1985, it was only 40 years since Japan was not only a military dictatorship but had had two nuclear weapons and a vast amount of conventional munitions dropped on pretty well every city bar Kyoto and had suffered the impact of "Operation Starvation", probably the most effective strategic air campaign you've never heard of. Japan in 1985 seemed to be doing OK economically, wouldn't you say? Honda, Sony, that sort of stuff?

Yes Japan were but the long and the short of it was that Greece aren't and weren't . We can argue forever that they have been irresponsible ( which they have ) but that doesn't solve the problem for the future does it ?If you reduce a country to an economic rubble you will not get your money back .

You can raise corporation tax to 50% of profits but if the profit is zero then 50% of it is also zero, tax receipts will not rise .

I have met Greeks who have got concerns about the military taking over again if chaos reigns in Athens . A military dictatorship in Europe now that will make things interesting

So to all the Greek apologists on here, at what point do the Greeks actually become responsible for their actions? There are serious mental acrobats going on here to absolve the nation of any wrong doing, blaming the IMF, ECB, zee Germans, anyone but the Greeks!

The Greeks had half their debt written off 5 years ago (no such luck for the Irish). The original lenders took a massive haircut at the last negotiations and withdrew. Because, following that haircut, no private lender would want to lend money to Greece, the financial institutions of the Eurozone (i.e. its taxpayers) as well as the IMF (i.e. the tax payers of its member states, at least for the democracies) had to step into the breach. They did so in order to stabilise Greece, to avert a national bankrupcy and to prevent further speculation against other states such as Spain, Italy, Portugal, Ireland or even France. They succeeded in stabilising Greece, but the Greeks did not use the lull prudently (as they had promised as a condition of the bailout) and failed to improve tax collection, stamp out endemic state corruption, improve the business environment and so on. In fact, they have shown time and time again that they'd rather continue the lifestyle that led them to this disaster, and have shown no inclination whatsoever to improve their situation. They have not run a surplus budget in over 40 years. Needless to say after calling your main lenders terrorists and Nazis and utterly failing to implement much needed and promised reforms the German people are getting a bit fed up with the Greek position yet they are being called the bad guys! Weirdly, a clear majority of Greeks still seems to want to stay in the eurozone, even though it (along with their own monumental national profligacy and personal unwillingness to contribute) is one of the chief architects of their current reduced circumstance.

Yes everyone knows Goldman Sachs gave Greece a helping hand to 'qualify' for the entry criteria into the Eurozone, but since then, the Greeks have had 16 years and ample chance, to put it bluntly, get their sh*t together and make moves to becoming the advanced European country they aspired to be but instead ignored the very evident structural problems of their economy and went on cheap debt fueled binge.

Blaming external third parties is a bit like the drunk waking up in a hedge covered in his own p*ss and vomit deciding to blame the barman for his predicament.

So again, at what point do you think the Greeks should take ownership of their plight?

Although of course Japan has had one of the longest periods of recession and deflation in the world and is still struggling in a macro scale

Was the Greek finance minister pretending to be mad?

No. He was mad. Or utterly incompetent. It doesn't really matter which. Whichever, the Dunning–Kruger effect was in full spate.

Oddly enough, if a bunch of incompetent naifs from a small country with a corrupt political class and a dysfunctional electoral culture promise free sweeties to all to an electorate with a history of wanting and getting free sweeties, get themselves into office, and then attempt to stare down Germany, the EU commission and the IMF with their "game theory" crap, it ends very badly indeed.

Much was made of their finance minister being a professor at the University of Texas.

Firstly, in American universities pretty well everyone on a three-legged (lecturing, teaching, admin) lecturing contract is a professor.

Secondly, Varoufakis wasn't even that, he was a visiting professor: that's someone paid on a per-hour contract to come in and teach a course or collaborate on some research. It isn't in US terms "tenure track" or anything close to it.

Thirdly, University of Texas is a very good university. It's one of the original members of the loose grouping referred to as "public ivy" universities - state-funded institutions such as California, Virginia, Vermont, North Carolina which are approaching the prestige of Ivy League places like Yale and Princeton and the elite non-Ivy private universities like Stanford. But for economics it absolutely isn't Stanford, MIT or Yale (or LSE, Sorbonne...).

So if someone were a visiting lecturer who did a couple of courses at Aston University Business School, would that make you think he was an elite guru who should be trusted with the country's economy on that basis alone?

Although of course Japan has had one of the longest periods of recession and deflation in the world and is still struggling in a macro scale

It's hardly comparable to Greece, though.

I totally agree that they are a mad load of idealogs etc etc however surely we should be focusing on the future and how to rebuild Freece and not just going on about what has happened , we can do nothing about how stupid they have been but we can do something about the future