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[lorb]

[conspiracy theory]

It's unbelievable how you mistreat facts. The rescue makes the loan interests grow? It's the point of the rescue to make them fall.
Look:
Yield on 10 year Greek Bonds
Before the first bailout: 12.45%
After the first bailout: 7.24%

[Reelya]

The Euro has nothing to do with the debt Crisis. Non-Euro Britain is just as much in debt as Eurozone Germany or France. And only 4 out of

Any fuck the Greeks is all i can say since...

In early 2010, it was revealed that successive Greek governments had been found to have consistently and deliberately misreported the country's official economic statistics to keep within the monetary union guidelines. This had enabled Greek governments to spend beyond their means, while hiding the actual deficit from the EU overseers.

They brought it on themselves, nothing to do with the Euro, by deliberately lying to maintain political control. At this stage they basically deserve whatever repayment conditions are imposed on them, you can't go "boo hoo big bad Europe!" on this one.

"Because it was a setup" no it wasn't, the GREEKS were scamming everyone, and now they have their hand out. no one forces money into your hands.

[scriver]

Well you don't have the Euro for a start, so how's that going to affect you? and do you have data on them bleeding Sweden? Or is that just local tabloids?

Because the current proposition would allow them to regulate all members, not just Euro-countries, yet non-Euro nations wouldn't even get a pretend-say.

[ChairmanPoo]

The Euro has nothing to do with the debt Crisis. Non-Euro Britain is just as much in debt as Eurozone Germany or France.

Any fuck the Greeks is all i can say since...

In early 2010, it was revealed that successive Greek governments had been found to have consistently and deliberately misreported the country's official economic statistics to keep within the monetary union guidelines. This had enabled Greek governments to spend beyond their means, while hiding the actual deficit from the EU overseers.

They brought it on themselves, nothing to do with the Euro, by deliberately lying to maintain political control. At this stage they basically deserve whatever repayment conditions are imposed on them, you can't go "boo hoo big bad Europe!" on this one.

I think it's worth noting WHO set those conditions, and to WHOM's advantage. And whose banks kept lending the Greek goverment (...because it's not like the common people, the ones hit worst by the crisis now, were any less deceived, yknow?). And the Euro has quite a bit to do with this. If the currently indebted European nations retained divise control, they could try deprecating their coin to favor exports and investment. As it is now the only way to manage deficit they have is budget-slashing.

If you ask me the Greeks should pull an Iceland and send the Troika back home.

Well you don't have the Euro for a start, so how's that going to affect you? and do you have data on them bleeding Sweden? Or is that just local tabloids?

Because the current proposition would allow them to regulate all members, not just Euro-countries, yet non-Euro nations wouldn't even get a pretend-say.

It's not like Euro-countries as a whole have much of a say in the Euro's worth. All members are equal but some are more equal than others. Which is precisedly my point

[Reelya]

@scriver: You mean the proposition of not running deficits? I think all the countries will benefit from each other staying out of debt, even if there's a slight direct loss of control. You don't sell many exports if your trading partners have a financial crisis.

[Reelya]

@ChairmanPoo: would you favor different states in the USA having their own local currencies? Then indebted states could devalue to boost exports to the other states.

When you're talking Europe and the USA both the populations, GDP and debts are on the same scale.

[10ebbor10]

The Euro has nothing to do with the debt Crisis. Non-Euro Britain is just as much in debt as Eurozone Germany or France.

Any fuck the Greeks is all i can say since...

In early 2010, it was revealed that successive Greek governments had been found to have consistently and deliberately misreported the country's official economic statistics to keep within the monetary union guidelines. This had enabled Greek governments to spend beyond their means, while hiding the actual deficit from the EU overseers.

They brought it on themselves, nothing to do with the Euro, by deliberately lying to maintain political control. At this stage they basically deserve whatever repayment conditions are imposed on them, you can't go "boo hoo big bad Europe!" on this one.

I think it's worth noting WHO set those conditions, and to WHOM's advantage. And whose banks kept lending the Greek goverment (...because it's not like the common people, the ones hit worst by the crisis now, were any less deceived, yknow?). And the Euro has quite a bit to do with this. If the currently indebted European nations retained divise control, they could try deprecating their coin to favor exports and investment. As it is now the only way to manage deficit they have is budget-slashing.

If you ask me the Greeks should pull an Iceland and send the Troika back home.

You can't drop your coin worth when the bank sector is weakened. It would just collapse it.

If Greece hadn't been using the Euro, it currency would have collapsed, taking it's already weakened banking sector and much of the governement finances with t. Loan rates would have risen astronomically, and internal investement would have grinded to a halt. The Greek's can't do the same thing Iceland did. Iceland had a financial crisis, in Greece the entire country is effectively bankrupt.

A similair crisis is waiting to happen in the US, while the debt is not that bad and the economy is doing fine, you're deficit is almost as large (8.6% GDP vs 9.6 GDP)

[ChairmanPoo]

I don't think that analogy holds water - as far as I know, US Federal Law guarantees far more parity between union members than the EU does (and it's not heading towards greater parity precisedly - recent reforms give far more weight to the more populated countries). Also, insofar as I know US states do not engage in predatory financial maneuvers against each other. Now, things would probably be different if the EU was built differently, more along US lines, and with more parity between members - but it wasn't.

You can't drop your coin worth when the bank sector is weakened. It would just collapse it.

If Greece hadn't been using the Euro, it currency would have collapsed, taking it's already weakened banking sector and much of the governement finances with t. Loan rates would have risen astronomically, and internal investement would have grinded to a halt. The Greek's can't do the same thing Iceland did. Iceland had a financial crisis, in Greece the entire country is effectively bankrupt.

A similair crisis is waiting to happen in the US, while the debt is not that bad and the economy is doing fine, you're deficit is almost as large (8.6% GDP vs 9.6 GDP)

The way things are going everything is being set on fire in favor of the banks. It's not working out too well.

http://www.datosmacro.com/en/risk-premium/greece

http://www.datosmacro.com/en/risk-premium/portugal

http://www.datosmacro.com/en/risk-premium/italy

http://www.datosmacro.com/en/risk-premium/spain

I picked these four because they have been following the EU directives on deficit management for a while now -two of the... and they're going from bad to worse. So, sure, the Greek goverment years ago fucked up - but now they're following EU's orders religiously, and so are the other three, yet they are falling faster if anything. Surely now their EU advisors share at least  *some* of the blame for what's going on, right?


Also: http://www.nytimes.com/2012/10/12/opinion/krugman-triumph-of-the-wrong.html?smid=tw-NytimesKrugman&seid=auto&_r=1&fb_source=message&

[Reelya]

To keep within the monetary union guidelines, the government of Greece had also for many years misreported the country's official economic statistics. At the beginning of 2010, it was discovered that Greece had paid Goldman Sachs and other banks hundreds of millions of dollars in fees since 2001, for arranging transactions that hid the actual level of borrowing. Most notable is a cross currency swap, where billions worth of Greek debts and loans were converted into Yen and Dollars at a fictitious exchange rate by Goldman Sachs, thus hiding the true extent of Greek loans. The purpose of these deals made by several successive Greek governments, was to enable them to continue spending, while hiding the actual deficit from the EU. The revised statistics revealed that Greece at all years from 2000-2010 had exceeded the Euros stability criteria, with the yearly deficits exceeding the recommended maximum limit at 3.0% of GDP, and also the debt level clearly exceeding the recommended limit at 60% of GDP.

Why am I not surprised that Americans had their fingers deep in this scam? blame the Germans all you want, they're not making a profit from cleaning up this mess. There would have been far more profitable places to invest 250 billion Euros than propping up Greece after they imploded, no fault of anyone but themselves.

Hell, they could have just bought US Treasury bonds with that money instead.

On 21 February 2012 the Euro Group finalized the second bailout package (see below), which was extended from €109 billion to €130 billion. In a marathon meeting in Brussels private holders of governmental bonds accepted a slightly bigger haircut of 53.5%[121] Creditors are invited to swap their Greek bonds into new 3.65% bonds with a maturity of 30 years, thus facilitating a €110bn debt reduction for Greece, if all private bondholders accept the swap.[122] EU Member States agreed to an additional retroactive lowering of the bailout interest rates. Furthermore they will pass on to Greece all profits that their central banks made by buying Greek bonds at a debased rate until 2020. Altogether this is expected to bring down Greece's unsustainable debt level from 165% in 2011, to a more sustainable level of 117% of GDP in 2020,[123] somewhat lower than the originally expected 120.5%.[121] The deal is expected to be finalized before 20 March, when Greece needs to repay bonds worth €14.5bn or default on its debts.[124]

You see, all profits from buying the Greek bonds get sent straight back, and all debt to private creditors is knocked in half. With that going on, i find it hard to see how it's "predatory". Ask Latin America about predatory loans from the United States, i never heard of a deal to send all profits back to those countries.

Hell, they're loaning about 250 billion Euro, with the loan recipient to get all the profits back, and with a "free" 110 billion Euro debt-reduction.

[10ebbor10]

The images don't load for me, so I'm not sure what they are portraying. However, if it is what it thinks it is, it can be atributed by the mass panic about Greece, and the fact that Greek was much worse when the EU started to take charge then the other countries. Besides, the banks are getting losses too, I believe they had to drop a rather significan part of the loans, as well as postpone several others. At this point everything is being done to prevent an outright bankruptcy, which unfortunately, involves getting the loans back on track. Besides, the EU isn't the only one sponsoring Greece, the IMF owns a rather large share of the debts.

That being said, a currency Union is not nessecerially a bad thing, as long as everyone abides by the rules, which certain countries didn't. For example, Belgium and Luxemburg had a shared currency for about 2 decenia IIRC, and it never have us any problems, just benefits. Besides, there are quite some benefits to the Union. The Euro allows you to pay everywhere you go. I can cross internal borders without any problems. Internal trade in the Union is going strong, and at this point going back is basically not an option anymore.

The EU has as much blame for Greek crisis as the US. Both failed in respectively controlling Greece or the banking sector. Whitout the crisis, the Greek situation might have stabilized and would certainly be much better off.

snip

Why am I not surprised that Americans had their fingers deep in this scam? blame the Germans all you want, they're not making a profit from cleaning up this mess. There would have been far more profitable places to invest 300 billion Euros than propping up Greece after they imploded, no fault of anyone but themselves.

Hell, they could have just bought US Treasury bonds with that money instead.

I don't count a country with an 8.6% GDP debt as stable. I mean, at that point you'd better invest in Italy, or Belgium for the matter. More security and thanks to mass panic, better interest rates. Leave buying up US treasury bonds to the Chinese.

[Reelya]

Spoiler: ChairmanPoo on risk premiums (click to show/hide)

I don't think that analogy holds water - as far as I know, US Federal Law guarantees far more parity between union members than the EU does (and it's not heading towards greater parity precisedly - recent reforms give far more weight to the more populated countries). Also, insofar as I know US states do not engage in predatory financial maneuvers against each other. Now, things would probably be different if the EU was built differently, more along US lines, and with more parity between members - but it wasn't.

You can't drop your coin worth when the bank sector is weakened. It would just collapse it.

If Greece hadn't been using the Euro, it currency would have collapsed, taking it's already weakened banking sector and much of the governement finances with t. Loan rates would have risen astronomically, and internal investement would have grinded to a halt. The Greek's can't do the same thing Iceland did. Iceland had a financial crisis, in Greece the entire country is effectively bankrupt.

A similair crisis is waiting to happen in the US, while the debt is not that bad and the economy is doing fine, you're deficit is almost as large (8.6% GDP vs 9.6 GDP)

The way things are going everything is being set on fire in favor of the banks. It's not working out too well.

http://www.datosmacro.com/en/risk-premium/greece

http://www.datosmacro.com/en/risk-premium/portugal

http://www.datosmacro.com/en/risk-premium/italy

http://www.datosmacro.com/en/risk-premium/spain

I picked these four because they have been following the EU directives on deficit management for a while now -two of the... and they're going from bad to worse. So, sure, the Greek goverment years ago fucked up - but now they're following EU's orders religiously, and so are the other three, yet they are falling faster if anything. Surely now their EU advisors share at least  *some* of the blame for what's going on, right?


Also: http://www.nytimes.com/2012/10/12/opinion/krugman-triumph-of-the-wrong.html?smid=tw-NytimesKrugman&seid=auto&_r=1&fb_source=message&

That's not even making sense. The "risk premium" is a BAD thing, not a good thing. Notice how it went UP when the crisis started, but is going DOWN since the bail-out. Dropping is GOOD for this statistic. All the "crisis countries" had a "risk premium" that went up in about 2009, but are heading back down now.

Risk premium indicates how much above a "safe" market interest rates you have to offer as a return because the market expectation that you're going to default. If you're unlikely to default, your risk premium is low. The declining risk premium after the bail out indicates that markets do not view your investment as risky, so you don't have to offer so much "premium" (interest rates higher than the market rate).

Basically high risk premium means nobody trusts you to pay your debts, so you have to keep jacking up interest rates on treasury bonds, send you even MORE into debt.

===

Republicans, on the other hand, insist that the path to prosperity involves sharp cuts in government spending.
And Republicans are dead wrong.

The problem was that Greece was literally unable to finance further debt without offering 200% return on 1 year bonds! That's what the huge spike in risk premiums was about. Obviously a lot would take these offers, but it couldn't be a sustainable path. Basically they'd be doubling the deficit every 12 months until all lines of credit dried up or they'd be selling more bonds than the Greek economy is actually worth.

It indicates they would have face a hyper-inflation situation if they'd had their own currency and just printed the deficit, which totally closes the door to the idea of "devaluing" the currency as some magic bullet, or "spend your way out of the slump".

[GoombaGeek]

Good news, Alberta may balance its budget this year!

[lorb]

The way things are going everything is being set on fire in favor of the banks. It's not working out too well.

Sure. That must be the reason why all private holders (=banks) of greek governmental bonds had to accept a 53.5% hair cut. (Which is equivalent to a 75% net value loss.) So banks that have lend money to greece already lost three-fourths of it. (Which is one of the reasons why greece has to pay such a high risk premium.)
(Link to a Source.)

[scriver]

@scriver: You mean the proposition of not running deficits? I think all the countries will benefit from each other staying out of debt, even if there's a slight direct loss of control. You don't sell many exports if your trading partners have a financial crisis.

That's really funny, because the EU is pretty good at hindering Sweden from exporting goods as it is now.

[10ebbor10]

@scriver: You mean the proposition of not running deficits? I think all the countries will benefit from each other staying out of debt, even if there's a slight direct loss of control. You don't sell many exports if your trading partners have a financial crisis.

That's really funny, because the EU is pretty good at hindering Sweden from exporting goods as it is now.

We are?