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Greece votes OXI/No on more Austerity measures
- Thread starter Coriolanus
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what world devastating war did greece just come out of?
cubicle47b
Member
The war Greece has with paying their taxes?
I will look at it later. Thanks.
Yeah that is the same... all fire bomed cities etc etc.
Theonik
Member
I heard many Germans would rather they were annexed by Austria. Is this true?
Coriolanus
Banned
If you wanna go down that road, keep in mind that, unlike germany, greece didn't start any world wars either.
Why were they bombed again?My memory is sorta hazy there.
Yes, I understand this notion. Here's the thing, Germany is so used to being open about it's past and so well educated that it kinda isn't an issue here anymore. We don't think "how does this make us look like considering our dark past"?
I do agree that some Germans should remind themselves from time to time about this though. The general reaction about the reparation payments for instance was embarrassing. "WWII is over so get lost" is not an appropriate reaction.
A little (?) off-topic but German finished paying WWI debt in 2010...
http://www.bbc.com/news/world-europe-11442892
And the EU subsidies and bailouts Greece received already are far beyond the cost of the Marshall plan and Germany's post-war debt reliefs combined. Germany also paid the remaining loans plus reparations back in full.
It's not like Germany isn't giving back help they received in past.
Haha, no. We hate Bavaria because they're what foreigners typically think of "traditional Germany". I'm from the North, we're nothing like the Bavarians and yet people think we're wearing Lederhosen all the time. We're salty. But they make a lot of money, so we endure our saltiness with our Northern coolness.
Theonik
Member
I know. Pretty much the German version of hill-billies. RICH hill-billies. From what I heard they are closer to Austria culturally.
Yes, their music is equally disgusting.
But Austrian German is cute.
Bavarian German is torture and unintelligible for my correct German hearing ears.
SpacePirate Ridley
Member
Is this true?
They started some of the biggest shit ever, and they were helped after that becuase the world didnt want the same thing happen twice to Germany. But i always thought they payed their debts when the got up.
Thats why I always thought it was pretty ironic how Germany was treating other countries that needed help now, and if what you say is true (that i really hope not) its even worse.
Oh well, that sounds better, than god.
That depends drastically on which parts of Bavaria you're talking about. Munich, for instance, is nothing like rural Bavaria. Rural Bavaria tends to be more conservative than the German average. For Munich, it's the other way around.
SmoothBrain
Member
Can someone tell me what happened to the haircut in 2012? Wasn't there supposed to be a 50% one? Seems like this just vanished into thin air, I can't find anything on the aftereffects (if there were some) or if it really happend.
MadScientist
Banned
Even as a German, I find this a little too much skewed in our favor, especially the part about our alleged fiscal responsibility. The sad truth is that there is a law to prevent countries from overspending, but Germany was the first to break it without consequence, citing special circumstances.
However, it shows two important things that (in my opinion) have been falsely depicted in this thread:
a) When the smaller, southern countries joined the Eurozone, they did not do that because of political symbolism, lured into a trap by a nefarious German scheme that would make only Germany profit from a common currency. They did so, because they got an immediate economic advantage: The ability to borrow money at greatly reduced cost.
b) They used that money to spend more than they could afford long term. Spending cuts were therefore necessary to reduce spending to a sustainable level. That meant reducing services, lowering the number of public employees, selling state owned companies, etc.: Structural reforms
These reforms might not help in the short term, but are a requirement for long term financial stability and independence.
Now Greek wants debt relief to stop austerity, in other words to start borrowing and spending money again. If that would work it would not only be a slap into the face of its creditors, it would also inspire other countries like Spain and Italy to try the same approach - a much greater danger to the Euro than a Greek exit.
Deficit spending might sometimes be a viable choice, especially in a depression, a crisis of trust in the future economic development. It is not necessarily the right approach if the cause of a crisis is a bloated government and tax evasion. Economists may have different views on this, but there certainly is no mutual consent on that matter.
It is depressing to see Germany and Germans vilified and insulted for these views and criticized for our alleged dominance in the EU, a government like organization, where a single Greek vote almost weighs twice as much as a German vote.
Munich is the WOOOOOOOOORST.
Bars close at like 21:00!
Why?
Visiting Munich was a culture shock for us Hamburgers. We grew up on the Kiez.
https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts
Germany received a 50% debt relief of about 15 billion Deutsche Mark, applied to debt that it had already accumulated pre-war as well as the debt from loans it received post-war. The rest of the debt was paid back.
Huh? Bars in Munich are open well past midnight. The opening hours of regular shops suck ass, but that is the same in most of Germany.
You need to look at it in terms of gdp.
hydrophilic attack
Member
I don't know whether your numbers are true or not after adjusting for inflation.
But I'm pretty sure Greece would be OK with the conditions for payment that Germany got. From Wikipedia:
"An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germanys creditors a powerful incentive to import German goods, assisting reconstruction."
I'm pretty sure Greece would agree to similar terms.
SpacePirate Ridley
Member
That sounds much better than what they guy said, thats for sure. You also say that greece debt relief already surpasses the one that was given to Germany, so there seem to be not excuse with that.
EDIT
Welp, now I dont know what to think about it.
Its a dire situation, thats for sure.
Theonik
Member
Is this like some pubs in London. WTF BAVARIA.
Many things happened. The Greek public sector was called to pay much of it. They had public institutions with cash reserves invest their cash in bonds a week before the haircut then haircut those bonds primarily. Then some private banks took a small hit. But I don't think it was anywhere near 50% of the real bulk of the debt.
Your numbers are not adjusted for inflation and do not compare the relative size of the burden vs. GDP. Piketty is correct, if there was no relief Germany would still be paying up to this day.
No choice. Makes no sense to lend to them in this state.
Ether_Snake
å®å®å®å®å®å®å®å®å®å®å®å®å®å®å®
New article by Varoufakis
http://www.theguardian.com/commenti...rkel-crisis-global-minotaur-capitalism-europe
http://www.theguardian.com/commenti...rkel-crisis-global-minotaur-capitalism-europe
Up to this point, Greece hasn't had to pay any money that they received through the EFSF. These payments begin in 2020. The modalities of how to pay back that debt are not an issue at the moment.
They are adjusted for inflation. The total cost of the Marshall plan, including debt that was repaid, in today's currency is ~120 billion dollars. And that was the cost of the entire Marshall plan, not just of the fraction that Germany received.
Between the marshall plan and the UK debt forgiveness in current dollars it's around 200B.
Relaxed Muscle
Member
I kinda agree, but, keep asking for money when there's an humanitarian tragedy in the making and even the FMI agrees that Greece, can't simply pay up the debts, is either pure evil or just terribly misguided by whatever sickening political ideas behind it.
MonorailCat
Member
Advertisement for his book. This man knows no shame.
Coriolanus
Banned
This is tricky, but wrong.
Greece didn't magically get the ability to borrow money at German levels when they joined the euro. There's no law that requires banks to lend to all euro countries at the same rates. There's only a law that ALLOWS banks to consider loans to all euro countries to have the same level of risk.
Lots of banks chose to exercise their ability under this law to make huge loans to countries like Greece and Spain and consider them riskless investments (because banks are expected to manage their level of risk). But of course they weren't riskless investments! So those banks ended up in the soup. But instead of allowing them to take losses as a result of their poor risk management, the ECB chose to absorb those debts at face value -- a bank bailout -- and then use its power to press Greece, Spain, etc. for repayment at face value.
Understand that if the ECB didn't do this, these banks would definitely get haircuts. They don't have the power to force Greece to do anything. So the ECB's absorption of these debts, and the following push for austerity, should be understood as a deliberate attempt to transfer losses from poorly managed banks to Greek citizens.
On a wider level this is all part and parcel of the global financial meltdown we had recently. In the speculative housing bubble, there was a great hunger in the financial world for debt -- and so lots of banks acquired huge amounts of debt. To get that debt they offered extremely good terms and stopped doing risk management, which led to people and countries taking on debt they wouldn't be able to manage.
You can, if you want, consider this a failing on the part of the debtors and expect them to get soaked -- but keep in mind that that's kind of a revolutionary doctrine. Traditionally, it's the bank's job not to lend to people who are bad credit risks, not people's job to recognize that they are bad credit risks and not borrow. If a bank makes a bad loan, the punishment is that they don't get paid back. This is where banks get the motivation to identify good loans! Which, theoretically, is how they perform effective capital allocation and make society work.
When the bubble burst, all these banks who'd made bad loans suddenly realized they were holding piles of assets with very little value, and ran to the government for help. What happens next depends on what country you were in.
In Iceland, for example, they refused to support the banks, who then, unsurprisingly went broke. This was probably bad for Iceland's financial sector but overall they seem to be doing well.
In America the federal government stepped in as lender of last resort and bailed these banks out (mostly by acquiring their bad assets at a discount and patiently holding onto them until they got back to a value-related price). There's reasonable argument as to whether this was right or not, and obviously the debtors who didn't themselves get bailouts were pretty pissed, but it seems to have kept Wall Street running.
Only in Europe was the decision made to redirect the losses caused by ineffective bank management to the citizens of the poorest countries in the union.
D
Deleted member 231381
Unconfirmed Member
Germany and France are probably the main two contenders for the "Lifetime Most Debt Defaulted on Award".
petran79
Banned
http://www.greece.org/blogs/wwii/?page_id=299
they still have the Occupation loan and Occupation expenses Germany and Italy forced upon Greece during WWII . During that time it was 3.5 billion dollars. Even Hitler did acknowledge this debt had to be paid and he did start the process of repaying.
After the end of the WWII and the Paris Conference, Greece were to be compensated with 7.1 billion dollar, though Greece did demand 14 billion.
Italy and Bulgaria paid their dues to Greece, Germany paid reparations to Poland (1956) and Yugoslavia (1971)
Greece demanded that loan to be paid in 1945, 1946, 1947, 1964, 1965, 1966, 1974, 1987, and 1995. Germany still refuses. Even Chancellor Erhard (1964) promised Greece to pay the loan after Germany's unification, which took place 25 years later! He probably did not believe it would happen
Today this loan would amount to 163 billion dollars. Were we to include war reparations, it would be an additional 332 billion.
The damage of the Occupation was more severe to Greece. They lost 13 % of the population. Most deaths were from hunger and war crimes. Country was turned into a wasteland. 1700 vilages were destroyed and a lot of national treasures stolen
PdotMichael
Banned
Both countries aren't even close to that.
MadScientist
Banned
The vast majority of Germans and certainly all of the involved experts and politicians know the money that Greece borrowed is gone or mostly gone. But granting debt relief now while Greece remains in the Euro means allowing history to repeat itself.
If the Greek could reform their system to a degree the creditors believe is sufficient, debt could be reliefed a few years down the road, maybe over several years, so the budgets of the creditors are not hit too hard.
If the Greek could reform their system to a degree the creditors believe is sufficient, debt could be reliefed a few years down the road, maybe over several years, so the budgets of the creditors are not hit too hard.
Funky Papa
FUNK-Y-PPA-4
Nah bruh, Spain got this on lock with over a dozen of sovereign defaults since 1500. We've turned this shit into a sport.
WORLD CHAMPIONS, BABY!
All hail bad governance and military adventures conceived in vino veritas.
Coriolanus
Banned
If they did every single thing the creditors asked, theyd still be deep into debt fifteen years from now. Thats a red herring.
This doesn't make sense. Just because they share the same currency does not mean that the cost of food and shelter must be the same.
Compared to the US (which is not identical to the EU, but does share a common currency) food and shelter costs can vary wildly from region to region. A dollar is still worth a dollar, but the value of what that dollar buys can vary.
That's one reason why, for example, you see a lot of US retirees moving down to Florida. Aside from the ever amusing antics of Florida Man (tm), the cost of living (food, shelter, entertainment) is cheaper in Flordia than many other US states.
Just because the currency is the same does not mean that all costs are the same.
Wages should be locally based, not based on another region. If Greece is importing all of its basic goods, then yes, it will face higher costs, but things made locally should be cheaper. All of that factors in to cost of living.
Comparing to the US again, wages in the Midwest can easily be 1/4 or 1/6 of what they are in San Francisco, but food and housing is also cheaper. Wages don't need to be identical across all of the EU or the US as the cost of living isn't going to be identical.
A good chunk of that is likely due to the desirability of Greek land. Based on a question someone posed in the prior thread I looked up real estate in Athens and stuff is expensive. Greeks who own homes are doing well based on the home prices.
I ignored the high end, luxury prices, but looking at South Athens, 1 bedroom condos were priced at ~200-250k euro dollars and 2 bedroom places were going for ~250-400k euro dollars. Some were higher, some lower, but those prices seem to cover the majority based on scrolling through a few pages.
http://www.homegreekhome.com/en/search/results/residential/sale/r102/m102m?ref=homepageMapSearchSR
That kind of value isn't quite at SF levels of pricing, but it is still some pretty valuable housing.
Out on the islands land is a little cheaper, but it's also more difficult to access.
One question that does come to mind (as an American) is why haven't Greek housing costs corrected themselves and taken a downturn with the economy? While the housing downturn was painful for many in the US who had overextended themselves, as the economy went down so did the housing costs, which ultimately enabled many others to be able to afford their first home.
Granted we had some extreme cases (like Detroit) where the value pretty much went to zero and that wasn't the standard for the country, but housing values everywhere did take a nosedive.
And as the recovery has come (stronger to the SF area because it dropped the least and started rebounding first) we're seeing similar things locally where people simply can't afford the cost of living and are being forced to move out of the area to places with a lower cost of living.
I think a lot of countries (especially the likes of Germany, Austria, UK) have to finally decide once and for all if they really want an unified Europe or not. Because this joke of Europe now (with these stupid antagonisms like North vs. South or West vs. East) is heading nowhere but towards hell. This whole game of "we want to be Europeans but for local votes we are ready to hate on any other weaker country" has to end at some point.
If the Germans are too good for this Europe they should go back to DM and compete fairly.
And Greece has to default. It's the only healthy thing to do. No other solution will fix their structural problems in the economy.
If the Germans are too good for this Europe they should go back to DM and compete fairly.
And Greece has to default. It's the only healthy thing to do. No other solution will fix their structural problems in the economy.
I think the blame on Germany is too harsh, yes they are incredibly paranoid and their economics makes no sense (they know this) however the larger problem is France has totally acquiesced as a voice and opposing influence. Merkel is not a bully but no one else has stepped up to give a different voice and offer different leadership, she and the German's are reluctantly leading.
SpacePirate Ridley
Member
Nah bruh, Spain got this on lock with over a dozen of sovereign defaults since 1500. We've turned this shit on a sport.
WORLD CHAMPIONS, BABY!
All hail bad governance and military adventures conveived in vino veritas.
Holy shit! If this was a real sport, the stars they put on the shirts couldnt be contained in one shirt. lol
Care to explain why?
CSU
I don't know that it is "revolutionary" since most people know on a basic level that borrowing more than you can afford is a bad thing.
But at the same time, if credit card debt is anything to go by, most people also don't bother doing what they know is right when they have easy access to cheap credit.
If people (and governments) were naturally fiscally responsible, credit card companies would make very little money and there would be no rewards programs. But because people are naturally shit at finance (most think short term rather than long term), credit is abused on every level, from personal, to corporate, to government. Most pay for it, a few benefit.
A default seems like the most likely option.
I hate the CSU as well but I'm indifferent towards Bavaria itself.
Some truth to this for sure.
There was never any reason to bring the IMF into this for example, but they wanted an "arbitrary" party to oversee shit, also to pony up some $$, even though they (EU/ECB) can borrow/print there way out of it.
Well, somebody got to give them their 50%+ and it literally can't be any one else than the bavarians.
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