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[Piecake]

There’s been a familiar script since the Greek debt crisis erupted seven years ago. Athens balks at austerity measures, but eventually caves to European demands to stay solvent. Europeans tire of Greece’s political leaders, but tolerate them to keep Europe whole.

Now, the storyline is about to change. European finance ministers are set to blow through a deadline Monday to release a $7.4 billion in bailout funds. Greece needs the money to pay a bill in July, but the International Monetary Fund won’t pony up the cash unless Europe forgives some of Athen’s debt. Germany refuses to do so.

Wolfgang Schäuble, Germany’s finance minister and a close ally of Merkel, has said Greece must abandon the euro in order to get debt relief. He has also made clear he will not seek parliamentary approval to release more tranches of the $91 billion Greek rescue fund without the IMF on board. Yet the IMF won’t sign off on a deal unless Greece’s creditors give it a break on what it must repay. The IMF insists that Greece meet GDP projections two percent lower than Europe before it begins to pay back money it has borrowed.

The Greek government concurs with the IMF’s forecast that it cannot reach a budget surplus of 3.5 percent, a European demand. Alexis Tsipras, the Greek prime minister who led his country through the 2015 crisis, has warned Germany to “stop playing with fire” and grant him relief

http://foreignpolicy.com/2017/02/20/dont-look-now-but-theres-another-greek-debt-crisis-brewing/

I am absolutely shocked. Shocked I tell you

 

[Skellig Gra]

What's the point of all these bailouts if they want them to abandon the currency? Stay strong Greek GAF.

 

[andythinkpad]

They could have quit Euro and stoped and ever lasting bleeding.

Is it me or most Southern European coutries have very weak and ineffective governments?

 

[Ogodei]

They could have quit Euro and stoped and ever lasting bleeding.

Is it me or most Southern European coutries have very weak and ineffective governments?

The only issue with the bleeding is that Grexit would have "re-priced" Greece's goods to match the weaker Drachma, making their exports more competitive, but the transition would have been financial chaos: nobody would have wanted to hold their savings in Drachmas and there would have been insane capital flight.

Once you've got debt denominated in somebody else's currency, it's very hard to pay it back because you can't print money to pay down your own debt, that's how hyperinflation happens.

The only way out is a writedown, and Schauble's not going to do that. That's why SDP needs to win in Germany, they *might* be more reasonable about this crap.

 

[Freeza Under The Shower]

They could have quit Euro and stoped and ever lasting bleeding.

Is it me or most Southern European countries have very weak and ineffective governments?

A surprising amount -almost all actually- of European countries were dictatorships until recently (1945, 1975, 1990). Spain and Greece had Franco and the Junta respectively (1975), the entirety of eastern Europe had Soviet backed dictators (1990), and only the loudest one in Germany (and companion in Italy) was utterly defeated and replaced with a democratic system (1945).

Recovering from a dictatorship takes time, effort, and for the old ways and the old hurt to die off. Most of Europe is really only just getting used to having young, brittle democracies as it is. That's actually one of the reasons the EU is so damn important to maintain. One new fascist sweep and we're right back at 1935, with most of Europe either in or going into a dictatorship (which is also ignoring the one in the USSR, but okay).

Greece may be in a bad place, but the attempts to blame them wholesale for their position within the Euro are really silly and willfully ignoring both history and that a new monetary union would be facing trials like this at some point anyway.
Restructuring Greece's debt should always have been the play, and it's unclear why Germany in particular (but also the Netherlands) has chosen to play hard-ball on the matter. We did no such thing on other past defaults, which makes this whole thing really odd to observe.

 

[TheSecondSpitter]

No problem, Tsipras will have another secret meeting with the Rothschilds and all will be hunky dory.

Greece may be in a bad place, but the attempts to blame them wholesale for their position within the Euro are really silly and willfully ignoring both history and that a new monetary union would be facing trials like this at some point anyway.
Restructuring Greece's debt should always have been the play, and it's unclear why Germany in particular (but also the Netherlands) has chosen to play hard-ball on the matter. We did no such thing on other past defaults, which makes this whole thing really odd to observe.

There is not a single economic theory that states a country like Greece adopting the Euro is good idea. However, there are several that state it's a bad idea. Add the fact that Greece wasn't audited properly by the ECB in fulfillment of their Eurozone entry obligations (mainly for political reasons) and the result is the clusterfuck we find ourselves today.

 

[SmartBase]

I had a good laugh at Europe's (well, Germany's) "3.5% budget surplus" demand, absolutely bonkers.