These bailouts in the past were signed from the greece government in the best interest of its people. A lot of people make it seem that we (non-greece european) somewhat forced theses agreements onto greece. In fact these bailouts where were unpopular in Germany, because it cost us a lot of our money, we could have spent on infrastructure, education, etc.

Therefore I would love Greece to give up the Euro currency and leave the European Union, so that these other 18 countries don't feel any obligation anymore to transfer more money to greece.

I believe that Europe will be stronger that way. Because a vision of a truly united European Union can only be reached if all countries play by the same rules and abide to their agreements.

Also "Greece" is not a single entity. Making Greece pay does not mean making the people that created the debt pay - it means taking the available money and you should know that "available money" is generally not rich people money.

So yes, you are right that you do not want to reward such behaviour. Letting the actual responsible get away with it and punish somebody else is not the way to do it though.

Besides - why should other countries be equally or more responsible for Greece's problems than the people of Greece themselves? It just doesn't make any sense.

There is no abdication of responsibility in a democracy and the Greeks should know that better than anyone.

AFAIK there are countries (NL?) that traditionally could not elect self-contained governments so parties were forced to cooperate with other, which in turn created politics of accommodation. I think this is healthier than blocking minorities out of parliament.

Syriza got elected with 36.3% back in January, while ~64% of Greeks voted.

Also, what happens if a voter agrees with none of the choices (parties)? Is he responsible for what their government does? (Legally yes, that's democracy, but ethically he should be given the right to object)

Oh, let's not forget that Greeks leaving outside Greece (some say we're another 10mil out here) were not given the chance to vote neither in the elections or referendum. We had to travel back to do so...

> The point of democracy is that the people appoint representatives to act on their behalf

in a perfect world, yes this should happen. But look around, the system isn't perfect. Look at america, money buys power. The money isn't evenly distributed. The system is broken.

You get history sadly backward. The no abdication of responsibility is what dragged the world in 2 world wars and what Europe is supposed to fix.

Typically a system works okish if only the people at the top skim, because they are rather few. If the rest starts showing the same behaviour, that's when the system crashes.

That's not how that works though. People one level under the top will try to get their cut too, then the level under until you get to the bottom. The system is ok-ish if the overall level of corruption is somewhat reasonable. In the case of Greece, the amount of corruption at the bottom level is not the cause, but the symptom of the fucked up state all the way up.

Now, there is a difference between the top and bottom. The whole bottom level is creating a black economy. Not as good as a regular market, but something that self sustain itself. See Greece pre-euro.

The few people a top though are the one that forged the accounts of Greece and pushed the country in its death spiral.

Perhaps everyone in Germany would be better off still re-paying that 50% that was just removed.

     I wonder what the EU expected.

The Euro was primarily a (french) political project to weaken Germany following reunification. This is strongly reflected on the ECB's board, where Germany has the same number of votes as Malta! In order to sell the Euro to conservative Germans who feared a "Transfer Union" (where they would perpetually have to bail out certain states that shall remain anonymous with a reputation for fiscal improbity) some vague promises were added about debt levels. But the promises were not accompanied by any enforcement mechanisms and soon fell by the way-side.

I used to ridicule Eurosceptics, seeing them as dinosaurs who are on the wrong side of history. But to my consternation, I have to accept now that most of their worst fears have come to pass.

As a historical aside, it is noteworthy that about a century ago a similar scenario played out: Greece (and others) crashed the Latin Monetary Union [1], a 19th-century attempt to unify several European currencies into a single currency that could be used in all the member states, at a time when most national currencies were still made out of gold and silver. It was established in 1865 and disbanded in 1927.

[1] https://en.wikipedia.org/wiki/Latin_Monetary_Union

European taxpayers aren't going to be willing to permanently transfer money to a country if they feel some of the government's problems are caused by widespread tax evasion.

[1] https://en.wikipedia.org/wiki/Greek_Financial_Audit,_2004

The risk/reward curve is the fundamental idea of investment. If we privatize reward but nationalize risk, the cost of bonds/mortgages/etc. will never reflect reality. I shudder to think of a system where governments are implicitly assumed to insure everything that's "too big to fail."

Do you feel an obligation to pay for the debts of Greece? No? Then why would a German, or me as a Dutchman feel such an obligation?

As a result, we don't have to "bail out" Mississippi so much as continually pay for its mismanagement.

And so, again, isn't "paying for mismanagement" part of what you sign up for when you try to unify Europe?

No, you tried to do that 203 years ago, but we burnt down your White House.

I'll give you that you unified somewhat less than half of the continent though. ;-)

In other words, if you ask whether the EU aims for a single financial and regulatory regime the answer is "yes and no"

Very few current EU countries signed up for a "unification of Europe", it started as a trading bloc and escalated from there.

For the Euro to work, the rich member countries must be willing to accept massive transfers from countries like France and Germany, to the Mediterranean countries. In addition, the ECB must be a lender of last resort.

Seeing as none of these criteria are currently (formally) met, the Euro can't function. The only way it could work was if the economies of the member states quickly converged. They didn't.

As for Germany... as Piketty told Die Zeit, Germany never repaid its debts and has "no standing to lecture other nations." They're hilariously wagging their fingers at far more responsible people. (https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...)

What that implies to external financing negotiations is that even if Greece's debt is forgiven (economists from across the spectrum seem to agree this should happen), unless Greece adjusts its fiscal policy --- inconveniently, to something more akin to what Germany is demanding --- the bailout just delays the inevitable.

What do you think about points like: "I am much more afraid that the conservatives, especially in Germany, are about to destroy Europe and the European idea, all because of their shocking ignorance of history. [...] Look at the history of national debt: Great Britain, Germany, and France were all once in the situation of today’s Greece, and in fact had been far more indebted. The first lesson that we can take from the history of government debt is that we are not facing a brand new problem. There have been many ways to repay debts, and not just one, which is what Berlin and Paris would have the Greeks believe."

Or how about the fast way for a state to leave delinquency: "Germany proved it in the 20th century. Essentially, it consists of three components: inflation, a special tax on private wealth, and debt relief."

Have you read David Graeber's book which he recommends elsewhere ("Debt: The First 5000 Years") which covers how debt is just a promise, and it's fetishized (more than say promises from politicians to their constituents) when it's a promise from the weak to the powerful?

I'm not moralizing debt. I am, however, according sovereign states and their constituent organizations the agency to decide whether or not to finance other sovereign states.

However much honor you accord to debt service, the prospect that (expensive) debt forgiveness will simply generate the need for more debt forgiveness in the future is actually material to the question of how to finance Greece.

(I am, in this instance, parroting something Tyler Cowen wrote yesterday; not that I agree with Cowen on everything [I'm not a libertarian].)

As for Greece's finances, that's exactly what the negotiations are about. A political issue. (After all, money is a purely social construct, not some law of physics. Underlying it is power relations and violence.)

Greece isn't simply arguing that, morality being relative and all, they've decided not to pay back their debts.

They are demanding more money from their creditors. It seems like they have to: they're running a primary deficit; they're losing money even before you take debt service into account.

Whatever the moral dimension of paying back their debt is has nothing to do with the question of whether Germany (ie, the EC) or the IMF (to whom Greece just defaulted) or the ECB (which doesn't want to be in this particular lending game to begin with) is going to give them more money.

If Greece can't persuade the EC, IMF, or ECB to lend them more money, it's doesn't look like they can just walk away from this whole scenario. "Oh well! Debt is just politics and morality!" That might be true, but if they want to allow people to retire in their early 60s, or pay half the nominal tax rate, or not regressively tax the poor through punishing VAT increases, they're going to need to convince someone in the world of some kind of compatible morality, right? They require additional financing, don't they?

The current hovernment wants to add at least 30% debt reatructuring (which Germany says it s off the table) and pay back only when reasonable primary surpluss has been achieved.

I think the history is full of misinterpreted debts, especially Germany's (Versailles > WWII...)

But I think one basic understanding of debt should not be discredited:

There's a difference between ...

- A debt that was agreed upon by both parties in a free market (Greece defaulted on that in 2012)

- A debt that was agreed upon by both parties's representatives as an act of embezzlement - i.e. favoring Europe's banks/Greek oligarchy (Greece is about to default on that right now)

- A debt that was agreed upon by the winners of a war over a defeated country

You can say what you want about a "level playing field" not being in place when battered Greece gets to negotiate with its Creditors, but even trying to compare that with a war-looser situation is disingenuous.

Enjoy the reading. Oh feel free to share the take-away.

Does the term European Union mean anything to you? Does the term common currency mean anything to you? If Greece fails, Do you really think Germans won't suffer any consequences?

Piketty: "When I hear the Germans say that they maintain a very moral stance about debt and strongly believe that debts must be repaid, then I think: what a huge joke! Germany is the country that has never repaid its debts. It has no standing to lecture other nations.(https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...)

Greeks make nearly nothing that anybody wants, but they want the goods everyone else makes. They are not adjusting themselves to the realities of the modern world. You want cell phones, computers, cars, shoes, t-shirts, refrigerators ... all these things ... but you want to not actually make anything ... just sit at desks in secure government jobs doing nothing productive. This has to stop.

But politically there is no will to stop it, because people there don't seem to understand that secure, easy jobs for life, where you don't make things, don't actually create wealth for the country. They think jobs are some thing where you just show up in the morning for work, do some paper shuffling and go home at night. And get your secure paycheck from government.

How do we change this attitude? The same attitude is in India's public sector too. The way is you have to cut off the money faucet for the government.

If the issue is poverty in Greece ... then let Europe provide basic needs for the Greek citizens as they reorganize the country. But feeding the Greek bureaucracy really shouldn't be done. Also continuing to perpetuate this attitude towards what employment is and what jobs are should also not be done.

You should have. It would have been better for Greece if the former Greek government had not been strongarmed into being the fall-guy for a rescue programme for French and German banks.

Is it better for Greece to give up the euro and return to the drachma? Quite possibly. Iceland successfully rebooted its economy after the financial crisis (with a lot of pain involved) because it was not tied to the euro. Of course, that required a huge amount of willpower and effort (which Greece has not shown yet).

Is it better for the EU and the rest of the world for Greece to give up the euro and return to the drachma? Probably not. Why? Because it sets a precedent for giving up the euro and/or leaving the EU.

Greece is a relatively small country, and the upheaval resulting from its financial recalibration could be fairly manageable.

If Spain or Italy tries to go down the same road, it is a different story. Take a look:

http://www.bbc.com/news/business-15748696

Italy owes France a LOT of money. France owes the UK a lot of money. The UK owes the US and Germany a lot of money.

Greece, as you can see, is a drop in the bucket. It's the precedent that's important.

I feel like I'm taking crazy pills when I see that no one from the financial sector went to jail for recklessly causing the biggest worldwide financial crisis since 1929, yet everybody is happily demonizing the Greeks, who in spite of having a made several errors were in no way responsible for the global crisis.

This shows how much journalism has been captured by financial interests, working hard to deflect attention from the true perpetrators.

I bet we would have voted the same if given the opportunity.

https://medium.com/@gavinschalliol/thomas-piketty-germany-ha...

Private debts were made public. You should ask Mrs. Merkel and Mr. Schauble, why you should pay for debts that were private.

What if a country destroys, literally, the entire continent killing around 80 million ppl, 70 years ago.

What should we do with this country? Should show some solidarity and pardon it's debt or "abide to the rules" and ask them to pay their dues to all the countries they created damages?

What I'm saying is that solidarity towards Germany was key in 1945. Now it's time to make a Marshall plan for Greece that will bring 'justice' to the country, fix our tax-system, etc. Every Greek would welcome that sort of change even it came from abroad.

The troika didn't do that at any point. It just sucked money from Greek tax-payers.

I don't believe that it sets any sort of precedence where everyone in the union can just not pay their debts. In society, we allow people to negotiate debt repayments in a way that isn't harmful to them and their families. People who can pay their debts and don't need this facility do so. That is the only precedent we should look at: if debt is unsustainable for individuals they are given the opportunity to restructure repayments in a way that is affordable to them without detriment to their life.

In Greece, this isn't what's happening. We see relentless spending cuts, stupidly high unemployment and a group of people who know what to do but are being told they can't do it.

That and I don't downvote based on something I don't agree with, I just wanted you to know I didn't downvote even though I don't agree with that approach, as much as I really want to. I use downvoting on comments without substance, especially ones that are overtly negative without substance.

Unfortunately, right now, everyone in Greece is paralyzed, because they don't know if, a few months from now, a new tax or law will be instituted that will kill their business, or mean they will no longer be able to feed their family (for the ones that still can). I think this prolonged uncertainty is the biggest problem right now.

The original Marshall plan was worth 5.2% of German GDP (of 1952). Greece has already received 185% of its GDP, in other words, other countries have given Greece already 36 Marshall plans!

The IMF already noted that the "plan" was wrong. Every single forecast was out by a huge margin, what exactly more do we need to die? Stop breathing?

WHat Varoufakis says is that we don't want money under terms the country can't honor, and the troika asks repeadetly for him to be removed. Maybe someone like Stournaras who signs any paper without asking questions would be more fit.

Suppose you have a €500 credit card bill. That bill represents euros you have spent (plus interest). If I pay that bill for you it frees €500, which would have previously serviced debt, for other things. It would be disingenuous to say "I gave the money to the bank, so it only helped them and not you."

French and German banks did get bailed out of their bad credit decisions. But Greece gained substantially from its borrowings in the short-run.

> blow the Euro

The financial markets are not convinced that a Grexit would harm Europe significantly [1]. In the long-run, the union may actually be strengthened.

[1] http://www.businessinsider.com/deutsche-bank-greece-contagio...

    Your money went mainly to your Banks, via Greece.

    your Banks

So French and German politicians did not want this to happen. Greece was not alone to have financial problems, Ireland, Spain and Portugal had some as well but after a long austerity cure they are now stable. But austerity just didn't work as expected in Greece.

This kind of schadenfreude against EU/EZ/Germany is very common in greece this week. In a few months, nobody will want to admit they voted for "no".

You were quite lucky you were only non-communist country in that region 30 years ago and you joined EU. EU for last 30 years was sending you approximately 6 billions EUR every year.

At least you are popular tourist destination. Good luck, I wouldn't want to be a Greek.

PS: I am not a German.

From all the arguments I’ve read this is the most hilarious. Dude, have you opened a map lately? Half of Middle East is in flames including parts of northern Africa. And we have no strategic position? Greece is what stands between Europe and legions of refugees from Syria, Afghanistan and Iraq. Not to mention the fuckers from ISIS who want to infiltrate Europe. Thank God we’re in NATO otherwise we could allow Russia to build a naval base in Greece and watch EU and US go ballistic.

It also funny you mention you are what stand between immigrants and Europe but I guess you forgot to mention you don't protect your borders anymore because you cannot afford it anymore so thousands of immigrants through your country is flooding Europe.

Serious question: Why do you think switching currency to Drachma will solve anything? From what I've heard and read, Greece can't spend its way out of this problem because it lacks trust among creditors.

But... there's nothing wrong with swimming! Sure, the drachma will plummet against the euro, dollar, etc. So no one will be able to afford an iPhone. But their factories, farmers, and fisherman will be ideally placed to produce for and export to the rest of Europe, because they'll be selling cheap. They'll issue bonds denominated in drachma, and sure those will have to yield more than euro-denominated bonds in the short term, but that won't last forever.

When entitlements are denominated in drachma as well, they don't have to borrow anything to pay for them. (If they issue bonds for the purpose rather than just printing money, that's more honest but it doesn't change anything.) Entitlement ppp value just naturally drops and rises with that of their national currency. So, it will hurt at first, but after exporters start ramping up it will get better.

Greece doesn't need the euro, the euro doesn't need Greece, and the Grexit won't turn Greece into the Congo.

The rhetoric against austerity seems to be that we don't want to hurt the people (especially the economically disadvantaged) but I don't see a bright future in the near-term whichever way the Greeks vote. (I know, this is such a terrible thing to say. Good thing I am not in politics.)

Yes high food prices are a problem but without tyrannical corruption like we see in Egypt this problem fixes itself over time.

"Austerity" seems like a red herring to me. The Germans were only too happy about Greek entitlements when they were driving Greek borrowing. Now that they're shutting off the tap (and why now rather than five years ago?), the Greeks themselves will figure out how to distribute the food. I'm sure they'll come up with something, and that plan will have come from Athens rather than Brussels or Frankfurt.

Also much of anger on the street has been due to lower living standards (euphemistically referred to "internal devaluation") So a true devaluation via an independent drachma won't go over well either.

Of course, the rich keep their money far away from Greece. It's the masses who will suffer.

Worse, any political instability will cause more problems for their critical tourism industry.

Enter inflation. It sucks, obviously, but it's a great way to spread the pain around evenly between workers, pensioners, and creditors. And it doesn't cause unemployment. It causes a bit of additional pain through things like menu costs but that's small potatoes compared to everything else happening.

Of course this is all presupposing a carefully calibrated monetary policy. It worked great for Iceland but I'm not sure I'd trust the current crop of Greek politicians not to give into the temptation to print themselves out of debt. That way lies hyperinflation.

EDIT: I tend to think it would be good if the Euro zone could be dissolved somehow and it would probably be good for Greece in the long term to leave. However, I'm not at all convinced that in practice the "no" vote will work out well for Greece or anybody else over the next decade or so.

[1]http://econlog.econlib.org/archives/2013/09/why_dont_wages.h...

All of those tools are used in countries with their own currency all the time. Monetary policies change to match the health of the economy. But in the Eurozone, monetary policy did not match what Greece needed, neither in their boom, or in their bust. Greece should have never, ever, joined the Euro, given how different their economy is from Germany. Unified monetary policy without a fiscal union doesn't make any sense.

The debate among economists is not whether Greece should have joined the Euro, but now that it's in, and in dire straits, if the very high cost of leaving the Euro is worth the advantages, or it's better to suffer yet a second consecutive bad decade trying to become competitive with Germany.

Still, Greece allowed it to happen by not facing reality.

Greece not failing to pay creditors is good for both Greece and Greek's creditors. I'm not sure why you feel that the two are mutually exclusive.

You may however start to feel very hungry soon holding a pile of worthless Drachma...