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.

Well said, Moustache.

It's so cringey watching a woman try to dismiss another woman's arguments as "emotional".

There's a good reason most women no longer take that shit from men who try to pull it.

This is Econ 101. I'm not saying anything terribly difficult or remotely controversial here.

Right on the first, wrong on the second.

And either you know that, or you are lying.

I only know what I've read in a few articles and on TV. And I did read that France and Germany would be less likely to be paid back if Greece reverted to the Drachma hence their great interest in keeping Greece in. That sounds very plausible to me. They owe this IMF so much by tomorrow. They can't pay it. Europe won't bail them out unless they agree to more austerity so they're having a referendum. Seems just delay delay and more delay.

"Would such paper because, wait for it, EuroEuros (by extension of Eurodollars and Euroyen)?"

Sorry, I don't understand what that sentence means.

Vivienne - EU's interest in avoiding Grexit isn't because they won't get paid if Greece has the Drachma. It's because of the expected economic and political fallout, and especially how this will affect the other struggling countries like Portugal.

Countries with different currencies issue bonds in Euros and Dollars all the time, and they get paid back in those currencies.

"a woman try to dismiss another woman's arguments as "emotional""

It is not even an argument when it is all about "Ooh those poor people. Do you want them to sell their kidneys?"

And it is not anti-feminist to say so.

Hully made some good arguments that you haven't managed to counter.

A you've done is call her a silly little woman.

Maybe you think that means you are winning the argument.

It doesn't.

No one here has made a pro Greece argument that European taxpayers 'should throw good money after bad' as all they do is bend facts e.g austerity wasn't working for Greece, and appear to say the Greeks have the right to dictate further funding terms, on democratic and 'not fair' grounds.

There is the real world out there folks and CoteDAzur has explained very well why Greece since the Syriza government came in, has screwed itself - but people aren't taking on the hard facts, at some stage the lenders had to protect themselves against further loses - and with Greece's last 'masterplan' to grow the economy/pay off debts via the tax receipts PUBLIC sector, that time is now.

That is no doubt why the lefties try to deflect and turn the debate personal "silly little woman", that's what they always do on here. Pathetic.

BathtimeFunkster .... is that all you have, or do you have anything more 'technical' to offer to the debate?

BubaMarra … re your last post to me, you keep on about people should not have lent to Greece, but your time line is all over the place, your knowledge of how the fund management investment industry works doesn’t exist, neither does your knowledge of country defaults, which have happened over the past 40-years with NO soft landing.

• Which ‘investors’ are you going on about, government bond investors, or loans by other banks and sovereign nations?

• You talk about Greece being a pre crash risk investors should have been wary about, are you aware ‘investment grade’ is AAA down to BBB, Greece didn’t go below until 2010/11, but I remember back then the only real buyer of Greek government bonds, were Greek banks needing to park funds at a good return. Oooops.

• Buying a government bond is a borrower contractual obligation to PAY the lender an annual interest rate and the principle amount on maturity, not the other way around, duh. The only contractual obligation of the lender, whether to Greece or those financing our £1.5 trillion National Debt, is to the investment bank it bought/sold the government bond from, usually for a 2-day settlement.

• Has Greece borrowed the money or the Daily Mail, the creditors seem to think that their loan contracts were with Greece, and they have the prudential right to cut their loses, something the Greek government and other lefties just can’t get their head around.

There is talk Greece will take the EU to court for all sorts, how good is the case fro breaking the EU rules, how long will that last; can the people and financial system of Greece wait years for a ruling?

How sad for the people is a government lashing out and thinking Greek democracy trumps the rights of those funding them.

Sorry, I don't understand what that sentence means.

It was a weak joke. As I understand it, dollar-denoted bonds issued by European countries (or more generally not the US Treasury) ere called Eurodollars. Ditto yen-denoted bonds, called EuroYen. So if a country outside the Eurozone issued Euro-denoted bonds, would they by EuroEuros? Obviously not, but...OK, I'll get out of standup.

"As Beveridge said, he shut the consultants up by stuffing their mouths with gold."

I have very little to contribute to this thread, but can I just point out it was Nye Bevan who said that, not Beveridge?

As you were.

I knew that :-)

Not enough coffee.

Gemauve ... re your little josh, you DO actually have a point.

There is Greek government debt issued in Euros and Greek NON government debt issued in Euros i.e. Greek banks and companies.

And we tend to concentrate on the Greek government debts.

But if/when Greece comes out of the Euro, those non government borrowers will have service their Euro loans/bonds debt (via annual interest/coupons) and on maturity pay back Euros - but their base currency and earnings will be in the greatly devalued Greek Drachma - hugely increasing those liabilities costs.

Cote et al, please explain why you think more of the same will work when it hasn't for the past five years?

Just out of interest.

And the point about selling kidneys is valid. Entire families live on one pension per family, cut those and people will starve. Their is no welfare system comparable to ours. Because the entire system has run on corruption and patronage since the demise of the Ottomans it will take time to set up functioning democratic systems, and that time and breathing space is what Syriza asked for. If they carry on with austerity it will be the end of the country and all debt etc will be wholly irrelevant.

And everybody knew how Greece worked when they threw money at them. Caveat Emptor, or lender.

Hullygully ... Greece owes Euro £323 billion, nearly Euro 200 billion is via European loans; the European Stability Fund and Greek Loan Facility

WHO is this 'everybody', the EU institutions that loaned this money or the taxpayers they represent who did not vote on it?

How much of the Greek debt is held by private fund managers who ARE big & ugly enough to look after themselves?

If investors followed your Caveat Emptor with no rights, the UK in May 2010 under a clueless Labour government - with £1,500,000,000,000 (£1.5 trillion) of Nation Debt would have been totally Donald Ducked - with an annual £87 bil overspend and no plans to pay the ND down by 2020, if (unprotected) investors asked for their money back.

P.S. 'Investors' certainly know NOW Greece isn't good for the loans, so by YOUR argument, they should loan no more and ask for their money back.

You can't have it BOTH ways.

But Greece wants to be. It's v simple: keep them afloat while they create a modern state and are able to pay back what they owe in a manageable framework.

Since when have taxpayers had any say in how any of their money is spent? I don't remember anyone asking me if I wanted Trident. That argument is disingenuous.

Philip Inman: Only a small fraction of the €240bn (£170bn) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.

Most of the money went to the banks that lent Greece funds before the crash.

Unlike most of Europe, which ran up large budget deficits to protect pensioners and welfare recipients, Athens was then forced to dramatically reduce its deficit by squeezing pensions and cutting the minimum wage.

Live Greek debt crisis: day of decision for Alexis Tsipras - live updates
Greece faces deadline for reaching deal with creditors and making €1.6bn IMF payment, otherwise it will lose €7.2bn bailout funds
Read more
The troika of lenders first stepped in during the spring of 2010 after Athens could no longer afford to finance €310bn borrowed from a wide range of major European banks.

Two years later, the International Monetary Fund (IMF), European commission and European Central Bank (ECB) came up with a second bailout that centred on a €100bn debt write-off by private sector lenders.

Private bondholders saw the value of their bonds drop by 53% and took a further loss by exchanging the debt for securities with a lower interest rate.

This eliminated about €100bn of debt, but €34bn was used to pay for various “sweeteners” to get the the deal accepted. That €34bn was added to the Greek debt. Greek pension funds, which were major private lenders, also suffered terrible losses.

Then €48.2bn was used to bail out Greek banks which had been forced to take losses, weakening their ability to protect themselves and depositors.

Lastly, €140bn has been spent on paying the original debts and interest.

Less than 10% of the bailout money was left to be used by the government for reforming its economy and safeguarding weaker members of society.

Greek government debt is still about €320bn, 78% of it owed to the troika. As the Jubilee Debt Campaign says: “The bailouts have been for the European financial sector, while passing the debt from being owed to the private sector to the public sector.”

RBS anyone?

Apols for odd line in the middle. Cut and paste peril.

Hullygully ...

Any High Street ban would ask for a viable business plan to lend/refinance to a borrower, WHERE is the Greek/Tsipras evidence of this "modern state plan - which to most looks like yer average failed socialist cunning plan, to have the State bigger than the Private Sector supporting it?

Re Greek debts, it matters not a jot what they did withthe money, OTHER citizens, pensioners, savers from outside of Greece are PAYING for it, there is the other side of the balance sheet, within a Eurozone of governments struggling with growth, debts, unemployment - where this money could be better spent with a BETTER more viable country economic model.

So are YOU say, Caveat Emptor.

P.S. The last UK government wasted £trillions I never had a say on and re Trident, what £100 billion over 30-years, you will soon complain if/when Putin's threats ratchet up to higher levels and without a nuclear deterrent, we will be his bitches. Or maybe not.

Fascinating thread. Just had a very enjoyable 30mins reading some very informative posts (thanks to Isitme and Gemauve). Makes a lovely change from LTB and 'go NC' which seems to dominate everything else

Cote, Isitme etc, your frankly absurd pro-austerity stance is transparent. Obviously the figures Cote quoted from whatever banks are going to be spun to benefit their own agenda.

Greece since austerity has seen a decline of 25% gdp.

You and your establishment lobby can quote on economic theory ideology till the cows come home.

Does not change the fact that the capitalist experiment of Europe has failed, but most of all it has failed the people, those of us without capital. Those of us going about everyday lives with everyday needs.

Exploited and crushed by the undemocratic, unelected, wholly unaccountable Central Banks who are responsible.

This effects all of us.