The Greek debt crisis....why?

[InDespair]

cant find another thread about this so.....

Before anyone accuses me of being thick or burying my head in the sand, I can';t always watch the news in full, and I dont read newspapers. (and Im sure others are wondering too).

Who exactly is in debt?

the people?

the banks?

How did they get themselves into this mess, and why and how do they expect a bailout?

what have they spent all their money on?

And what about tourism?

Laymans terms please.

the nub indeed, gemauve

I think, heart, that ordinary Greeks want to remain part of it because they see themselves as European. When they joined, they thought it would magically transform their country into a modern western state from a balkan basket case. Leaving europe would be a huge retrogade step.

"Greeks want to remain part of it because they see themselves as European"

And also because they like being on the receiving end of huge sums of ECB money.

If Greece leaves the EU, it will be a proper banana republic within a decade. Assuming it doesn't become a vassal state of Russia first, that is.

When they joined, they thought it would magically transform their country into a modern western state from a balkan basket case.

American isn't ashamed of being America. If you immigrate to the US, you're expected to integrate. And if, hypothetically, the US started admitting new states, they would be expected to play by the rules of being an American state. There's some exceptions to that (if you're part of the antebellum south you're cut some slack, because the Civil War isn't that long ago) but when Hawaii and Alaska were added as states (they're the two most recent, right?) they were expected to behave as full-fledged normal members of the country from the off.

The EU isn't willing to do that: post-colonial guilt, and the scars of WW2. So we have multi-culturalism in a way the US just doesn't, and Brussels/Strasbourg is/are not willing to stamp on EU members and tell them to get their shit together. Germany telling Greece, directly, has too many resonances: the Civil War is a lot longer ago than 1945.

Hence countries that join think they're going to become European, but they won't without doing the heavy lifting themselves. Fixing welfare, education, tax collection, political culture in general, is not something EU will do for you. Democracy and a scepticism about leaders who promise magic solutions is ingrained in this country, and learnt from bitter past experience in France and Germany and Italy. But strongmen with all the answers are recent history elsewhere, and a certain nostalgia for Salazar, Franco and the Greek Generals is like Russian nostalgia for Stalin: unrealistic, dangerous but seductive.

I am trying hard to understand this. Seems as if people are saying no amount of austerity is going to be able to pay back the debt so there is no point in austerity. But it is a bit annoying that Greeks can retire at 50 but the rest of Europe have to go on till they are a lot older. I heard one person of 50 saying she had to support 4 people including her children on her pension. Not exactly the purpose of pension. What a mess! They want to remain part of the Euro because they think there is a never ending supply of cash. IMHO.

If Greece leaves the EU, it will be a proper banana republic within a decade.

Without even the ability to export bananas for hard currency.

That is an interesting point Hully, so in the greek's mind and soul they wish to be part of a modern western movement, and see the EU as the gateway to this. That is an interesting thought.

Joining the shiny modern western clubs means far more than higher living standards and some new shiny buildings, for this transformation to take place in a deep and meaningful, permanent way the citizens would need to behave like modern westerners and pay taxes in orderly reliable ways, work long hours, work to a much older age (Uk is currently looking at plans to work until the age of 70) and to revitalise an old and decaying government into a super efficient, vibrant global heavy weight capable of producing policies that manage the finances in a clear and transparent way, dealing with tax evasion robustly and building confidence in the money markets, and showing the world Greece means business. It requires a great deal.
I have never seen Greece as a balkan basket case, and found their ways rather endearing but then I don't live there. France suffers similar problems, but somehow manages to blunder through (no doubt with help from their German friends)

My feeling is that Greece can not have its cake and eat it. Either tow the merkel line and close your eyes when the medicine tastes bad, or leave and give Greece the chance to be modern on its own terms.

yes it does heart, that's why it needs a chance to try...

Gemauve thank you for the example of the US as possible solutions to the EU problem. Absolutely every point you have made is correct ~ in fact I have enjoyed reading all of your posts.
The US as you say is politically united, and also the citizens in every state are supportive of one and another, and overall feel that they are above all else American, and not texan or a new yorker etc which is secondary. I can not begin to imagine the europeans giving up their identity in this way.

It is completely unworkable, not least because there is so much history and lets be honest two world wars are never going to be easily forgotten. The cultures vary widely, as well as the values etc. The US is united in every sense of the word, the EU is divided to the same degree.

Even great fans of the EU project have lost their enthusiasm for it, and although in some ways I feel personally that it is good to have a peaceful united europe, I can't help but feel that is no accident that Germany ended up running the show after all......

Hully Greece may find it does not need the EU to become a modern and advanced state, it is perfectly possible for Greece to retain it's drive for modernity but with independence. To its cost it has realised that there is a big cost attached to the EU club they so desire, and no guarantees of advances of anything besides more austerity. There is also the loss of traditional values, of dignity and not being able to move forward without direction from Berlin.

It is for the Greek people to decide on Sunday what direction they wish to follow, both paths have their dangers, both will require some repayment of loans, both will have its sacrifices and causalities. At the end there will be a brand new Greece I am sure of it, one that will at least start with a democratic referendum how refreshing. I applaud Tspiras for having the balls to hand the choice to the people.

"To its cost it has realised that there is a big cost attached to the EU club "

To whose cost?

From where I'm sitting, it looks like the cost is being dished out rather unfairly by the other EU states.

Is it the beginning of the end of the european empire?

I think it will end up a tight knit little group with Germany at the centre and the paupers at the castle gates.

Yes. Germany in charge. And not even by using force. What a surprise!

Vivenne ~ how effortless in the end. All very nicely done and dusted. For now...

Cote ~ the cost is not merely financial as you imply, the cost is enormous given that Greece no longer runs Greece. There sovereignty is in tatters, politically unstable, financially in ruins and can not be controlled by Athens, an exhausted and often suicidal nation ~ I would say that was a large cost. Wouldn't you?

The other EU states may not be enjoying propping up the other states, but that is all part and parcel of being in the EU club, so too bad if they don't like it. They have no choice as far as I can see. Just another benefit to the EU club is footing everyone else's bill as far as I can see. Regardless.

typo ~ there should read their

Hully, this has already happened. Do keep up.
Germany is already at the centre of the castle, they have already taken control of the drawbridge. It was always the case.
The empire in its current form may not last with some being cast out of the castle, and thrown into crocodile infested waters, however the empire will I am sure cling on to its power and come hell or high water, they have already invested too much.

"I applaud Tspiras for having the balls to hand the choice to the people."

It's not so much balls as lack of (to make the difficult choices). He got elected on a platform of "No more austerity", then realised that money doesn't grow on trees, they've got none in the coffers, and there is no other way to curb spending and get further EU money.

A politician with balls would go ahead and take the difficult and unpopular decisions according to the best of his ability, since presumably he was selected by the people because he is the best person to make these decisions. Turns out he is not.

How much does every Greek voter know about how economies react (positively or negatively) so the various measures outlined in the bailout terms to make a judgement on whether or not to accept it? It is completely unreasonable to offload the burden of this decision on 11 million people, most of whom know no more about these things than they do about the procedures for open heart surgery.

"the cost is not merely financial as you imply, the cost is enormous given that Greece no longer runs Greece"

Bless. You seem to think that Greece is the first country in the history of the world who has had to live by austerity rules dictated by its creditors.

Again, what is so special about Greece? Is it that you feel they are "one of us" and hence can't be allowed to suffer like all those lower-caste countries who have to pay back what they borrow?

www.ft.com/cms/s/0/927efd1e-9c32-11e4-b9f8-00144feabdc0.html

more interesting greek and german debt write off stuff

Cote, I think people are talking about greece specifically because er this thread is about greece.

The other bit is just plain wrong. They were elected on the basis that AUSTERITY HASN'T WORKED AND MORE OF THE SAME WON'T WORK SO LET'S FOR THE LOVE OF THE DEAR SWEET PANIYIOTA DO SOMETHING DIFFERENT THAT MIGHT ACTUALLY WORK. As agreed by bloody everyone including the IMF.

They have been firefighting for six months and attempting to get the above point recognised and the debt therefore readjusted. They are being true to their electoral promises (so rare no wonder you don't recognise it) and they won't commit Greece's suicide without a mandate from the electorate.

Cote

I think you know as well as I do that Greece can NEVER hope to repay the accumulating huge debts. It is naive in the extreme to think any amount of austerity will work! It is creditors SHOULD have acted responsibly and having looked at the numbers and realised this simple fact, should have been putting a plan together that could work. Both in the short term and longer term.

In a democracy Cote IF you are voted to govern with a mandate to STOP austerity, and to represent the people who voted for you (rightly or wrongly) and you can not implement the austerity anyway, working against every promise and assurance you have made to the people that trusted and voted for you. The last government did this in Greece and look where it got them! It is obvious in this situation that you must go back to the people, and not just simply perform 'open' heart surgery regardless, you must have permission from the PEOPLE to start any kind of serious surgery. I find your use of language interesting and slightly disturbing.

I am pleased that Greece is NOT a dictatorship that will just carry on with a meat cleaver regardless of the mandate they were appointed for, this was the right thing to do. A referendum for the people of Greece to decide what should come next, and given the seriousness of the the outcome I think personally he did absolutely the right thing.

Looks as if they will either have to write off or reduce the debt or Greece goes back to the Drachma in which case I read the debt will have to be written off anyway. Is this right all you experts?

Greece goes back to the Drachma in which case I read the debt will have to be written off anyway

No it won't. Greece can continue to pay its debt in the currencies the debts are denoted in (mostly Euro, but I suspect it might have some dollar debt as well), just as Argentina is still paying dollar debts even though it uses the peso.

Precisely Vivienne, I am no expert but I think that is the long and short of it. Leaving the Germans and other europeans with a very, very big bill indeed.

Surely it would have been better for the IMF et al to come up with something that was going to at least salvage some of the debt, and also keep a fellow member state within the fold, and limit the damage to the creditability of the EU which is now substantial. Not to mention the possibility of contagion. One can only wring their hands at the sheer ineptitude!
Oh, and leaving Greece nicely at the hands of Russia who can not wait to offer financial aid with conditions one or two air bases here or there in the centre of Europe....brilliant! What wonderful minds we have in the midst and depths of the EU, obviously their overindulgent dinners funded by the tax payer did not extend to actually thinking through the consequences of pushing Greece over the proverbial cliff.

their debts will be worse than ever and they will NEVER go away...