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.

claig ... the ECB providing short term liquidity to Greek Banks down to diddly squat cash and only bank note Euro 50 denominations is NOT "caving in" while negotiations continue.

I can not read the subscription only F.T. article link you provided, but I do see a headline "Markets prepare for a new Greek currency" and to put the Eurozone 18 Member Euro 323 billion Greek debt exposure into context, its about one fifth of the current UK National debt.

Clearly that will not be the total cost of a Greek exit, but I see no reason for Greece's continued membership within your overly optimistic posts.

P.S. The markets appeared to have already discounted a Greek exit, with a built in probability of leaving rather than staying.

P.S.S. Greek PM calls to Russia's Putin today appears to have fallen on deaf ears, what have you heard locally?

The ECB liquidity issue is not the caving in I am taking about. The ECB thing is just technical liquidity that the EU elite will withold to appear tough and to punish the Greek people. After they have had their fun with that, they will cave in and do a deal.

It all depends what the PPE plan is. Is the plan for Greece to exit and harm the Euro that way or is to t stay in and make Germany pay the other way. Either way, Germany and the EU elite are the losers.

'Greek PM calls to Russia's Putin today appears to have fallen on deaf ears, what have you heard locally?'

I haven't heard anything at the Dog and Duck where the People's Army meet under a life-size photo of Farage. But I could have told you that America won't stand for Russia helping Greece, because Greece is in the US orbit.

So ex Finance Minister Yanis Varoufakis has been replaced by his Chief negotiator Euclid Tsakalotos.

When I first heard the new name I thought the Greek government made it up and that Euclid was an anagram of elucid ...meaning 'enlightened'.

Apparent one of the Marxist Brothers but one that other EU Finance Ministers can at least talk to, as he comes without his predecessors negative attitude by constantly throwing his Greek toys out of his pram during negotiations.

But the Greek governments 'enlightenment' looks to have come too late, unless their next (last?) proposals this week, are accepted by their creditors.

Don't you realise that Germany has been set up and outplayed? Can't you see who the winners and losers are? The Greeks may have been advised to leave the Euro which will inflict huge damage to the entire Eurozone. Max Keiser said that he said all along that Varoufakis was stringing the Eu elite along and were heading for a Grexit and not paying the debt.

But now, Italy and France will start to panic (as they are on the losing side) and are staring into the abyss and the possible end of the Euro, so they will try and keep Greece in and Germany will have to pay. But Greece may have been advised to leave anyway.

We will have to wait and see what will happen. But it is clear that Germany are losing big time and the EU project is shaking.

The change in politicians is a typical Greek move. Greeks vote for people not policies and they see deals as achieved between individuals not based on facts. The charismatic personality of Andreas Papandreou got him re-elected again and again even in the middle of economic troubles, huge bureaucracy, endless nepotism, bribes and sex scandals in the 80s.

Why is the UK education so impressive? Many Greeks, almost all in the professions, have studied abroad. Look at any Uni like Reading and you'll find a 'frape' coffee machine in the Students Union and thousands of Greeks attending courses.

Euclid as in eucledean geometry. Not a common name but not a rare one either.

'Why is the UK education so impressive? Many Greeks, almost all in the professions, have studied abroad.'

You're right, but both Varoufakis and the new one come from a long term English education background, one of them with the significant three letters ... PPE. It's very significant, because it spells contacts. It's game, set and match over the Germans.

Are there any accountants on this thread who understand IPSOS accounting standards? They had someone, investor, former Goldman Sachs employee, Paul Kazarian, on BBC Radio 4 Today programme who said that Greek debt is in fact nowhere near as high as the elite state. He said it is below 100% of GDP, bot 180% of GDP and hugely short of 320 billion.

He says the reason is that the EU does not use international accounting standards and the debt relief they have already given with the low interest rates etc have not been adjusted according to real life accounting standards. He says that the EU uses a legal standard, not an accounting standard. he says the EU measures figures according to the legal Masstricht Treaty and not accepted international accounting standards.

The nuts and bolts of finance is not one of my strong subjects, I have more of a gloabl political geostrategic conspiracy theiory understanding of what's up. But if Kazarian is right, then from basic conspiracy theory this would be a classic ordo ab chao policy where the elite try to sting the unsuspecting public in order to create their own Hegelian dialectic synthesis from their own created thesis and antithesis.

Any thoughts from financial experts?

Sorry it is called IPSAS accounting.

Here is an FT article on Kazarian.

blogs.ft.com/the-world/2015/01/is-greek-government-debt-really-177-of-gdp/

He says Greek debt s closer to 68% of GDP, not 180% of GDP.

If true, then this looks like an elite confidence trick on the people in order to implement austerity on them. Classic 1%er strategy.

Even if you can apply accounting standards designed for corporations to a whole country, I think a lender is free to set their own terms based on whether they think they will be repaid.

I don't think Greece can argue now that they thought their debt would be measured differently.

'I think a lender is free to set their own terms based on whether they think they will be repaid.'

Can a car loan lender do that, or do they have to apply legal accounting standards?

'I don't think Greece can argue now that they thought their debt would be measured differently.'

The Greek PPE is not arguing that. They are playing along with the EU elite's figure of 320 billion.

IPSAS stands for International Public Sector Accounting Standards

I don't know much about accounting standards either but I understand that a lot of Greek longer term debt is at a very low interest rate and is therefore valued much lower if this is taken into account i.e. the net present value of the debt is much lower due to the lower interest rate and inflation will make the eventual pay off much more affordable than it seems. So yes, maybe in the long run their debt is sustainable? I still think they need reform though and to actually start collecting tax and reform their pensions.

However, it is also worth noting that Kazarian holds a lot of Greek junk bonds and stands to gain enormously personally from people accepting his viewpoint.

This is from the former chief executive of the International Federation of Accountants in May 2015

"Greece adopts IPSAS!

Greece’s decision to adopt International Public Sector Accounting Standards is significant and very welcome.

I have, in the past, been critical of the way Greece’s public debt has been accounted for, given its significance for the Greek economy and society and for the future of the eurozone. It remains a mystery how highly regarded commentators and institutions continue to refer to a debt-to-GDP ratio of 175%, when on an IPSAS basis the number would be around 70%. And even more of a mystery when account is taken of the €91bn in financial assets that Greece had at end 2013, which would reduce net debt to less than 20% of GDP!"

www.publicfinanceinternational.org/opinion/2015/05/greece-adopts-ipsas

Wow, you can't put it past the elite to pull a fast one on the people in order to impose austerity. We know the tricks the elite and the 1% are up to on climate change, so they could easily pull the same one on public finance.

Does anyone know how UK public debt is measured? Is it according to some international accounting standard such as IPSAS or by some other measure?

'from basic conspiracy theory this would be a classic ordo ab chao policy where the elite try to sting the unsuspecting public in order to create their own Hegelian dialectic synthesis from their own created thesis and antithesis'

I am trying to keep up but

Which is a polite was of saying, claig, you are talking rollocks again, no one cares as you try to find 'facts' to fit your view, could you please move on, before we all lose the will to live?

I think the people lending to Greece and the Greek finance minister are aware of the concept of net present value of debt.

suzannecanthecanthat was a bit of a joke to call it "basic" conspiracy theory, it is in fact "intermediate" level.

But "ordo ab chao" is the 33rd degree Masonic motto ich describes the strategy of creating a wished for order of the elite out of a chao that they artificially create. It's a classic New World Order mechanism.

The Hegelian dialectic is from the German philosopher, Hegel, much admired by Marx who developed the dialectic method. It is how the elite operate. They take two positions (thesis and antithesis, which they can also create artificially themselves) and from these opposites they create their desired synthesis which is what they want to happen. It is similar to ordo ab chao.

So under "intermediate" level conspiracy theory, the elite would create an artificial crisis using their own appointed actors and they would inflate debt figures in order to create a crisis for which their preferred solution is austerity. the unsuspecting public not being aware of the Hegelian dialectic believe what they are told by the 1%s actors and fall into their trap.

"It remains a mystery how highly regarded commentators and institutions continue to refer to a debt-to-GDP ratio of 175%, when on an IPSAS basis the number would be around 70%."

It's not a mystery if you uderstand he machinations of teh elite.

Note that Syriza's top people all come from wealthy families and have mainly had top educations. They call themselevs Marxists and the people probably think they are.

There is no 'correct' legal way for a lender to value debt. There are rules against loan sharks, but it is up to the lender to judge credit worthiness and they will usually use a number of measures.

merrymouse, how is UK and US public debt measured? Does it conform to international accounting standards or is it done by some other method?

As the former chief executive of the International Federation of Accountants said it is quite important for society

"I have, in the past, been critical of the way Greece’s public debt has been accounted for, given its significance for the Greek economy and society and for the future of the eurozone."

I have no idea. I imagine it would depend on who was doing the measuring and for what purpose.

Also, from a company point of view, how you show something in your published accounts, how you measure something internally and the information you give to prospective lenders aren't the same thing.

Claig thank you for such a detailed explanation :o
I know there are some who don't share your views and interpretations but you have been relentlessly good humored, and never seem to get pissy with anyone!

Sometimes elites do manufacture crises for their own ends, but I can't for the life of me see how that's happening here. The situation is a nightmare both for the Greeks and for the EU (and not great for the rest of the world), and the result of a lot of bad decisions and unintended consequences on both sides.

'I imagine it would depend on who was doing the measuring and for what purpose.'

But this is why we need international accounting standards, so that the figures are transparent and credible because they have a huge effect on the ordinary people's lives and determine the policies puhed and promoted by the political class. It seems that the EU's measurement of Greek debt does not conform to internationally accepted accounting measures and yet the media in large part keep quiet about it.

"It remains a mystery how highly regarded commentators and institutions continue to refer to a debt-to-GDP ratio of 175%, when on an IPSAS basis the number would be around 70%."

I am not sure it is a mystery, more like business as usual.