The solution for this is to extend a politician's salary for say 10 years after, and forbid them from accepting any money from any company for those 10 years. They can work for those companies for free if they want. They cannot get a cosy job after they've shown "good behavior" in their political career. The cost of this is a drop in the ocean compared to the perverse incentives this will remove. Say what you want about Dijsselbloem, but this is one thing that he gets right. https://translate.google.com/translate?sl=auto&tl=en&js=y&pr...
Initially, European banks had the largest holdings of Greek debt. However, this has shifted as the "troika" (i.e., European Central Bank or ECB, International Monetary Fund or IMF, and a European government-sponsored fund) have purchased Greek bonds. (...) Excluding Greek banks, European banks had €45.8bn exposure to Greece in June 2011, with €9.4bn held by French and €7.9bn by German banks. However, by early 2015 their holdings were minimal, roughly €2.4B.
https://en.wikipedia.org/wiki/Greek_government-debt_crisis#C...
330,000,000 (2015 numbers)
Fiscal transfer: €45.8B-€2.4B = €43.4B (your numbers :)
43.4B / 330M = €131.5 from each man, woman, child in the €zone.
Merkel is risking her legacy over this, and Schäuble's legacy in Europe is basically sealed - barring something truly crazy happening, he'll be remembered for this, and just this, outside of Germany.
And in the end the outcome - no matter what they do - is that Greece will not pay all its debts. Everyone knows this. The IMF have gone historically far in expressing public dissatisfaction with the Euro group and the ECB over their unwillingness to accept this.
Yet they appear to insist on sticking with the alternative that will cause the most pain and uncertainty for everyone involved just because further debt relief doesn't fit their ideology, knowing that the end result either way is that the money won't - can't - be paid back on the current schedule or in full.
We are far away from the climate pre WWI/WWII, but that is the direction we have chosen. Let's hope the next round of politicians are able to take a broader view, and that the current situation is reversible.
It's the "too big too fail" scenario, this time with the Eurozone playing the part of the federal government. Greece plays the role of the people getting mortgages that couldn't afford to repay post bubble.
The punishment of Greece (and other countries in turn, including France) will be used to clamp down on the German population in the end and keep them accepting of austerity and neo-liberal measures of their own.
It is a little bit if your wife threatens you with divorce and you say: OK, let's do it.
Your assumption appears to be that what they could hope for was a reasonable deal. But the way Schäuble has acted, it is by now clear that a reasonable deal is unlikely to be possible. For Germany this is all about ideology, not about economic rationality (amusing they accuse Tsipiras of being too ideological).
In that instance, what could they hope for? Their winning scenario is to demonstrate to their own constituency that they've tried everything. They've stretched extremely far. They've demonstrated to their home audience how Germany wants to humiliate them rather than get a fair deal.
They've further managed to create substantial cracks in the Euro group facade, with France in particular now openly having taken their side.
If they exit, then it is clear the Euro must be reformed if it is to survive.
They may in the end have permanently tarnished Merkel's and Schäuble's political legacies. Justifiably so.
Would any of this have happened if they had played ball and agreed to a toxic, unsustainable deal? The previous Greek government played ball, and what they got was a death sentence for the Greek economy. Playing ball with these opponents is a bad idea, since they seem intent of kicking in your knees first.
> It is a little bit if your wife threatens you with divorce and you say: OK, let's do it.
If you're told that to stay you will need to subject to daily beatings, then divorce is the right choice.
It was tired and strenuous, when it was published, but now it literally makes no sense. Sure he did Game Theory research, but LIFE != GAME. He said it so himself.
I haven't read a single unified explanation using game theory, that accounts for everything Greece government did during negotiations.
It's the Epileptic Trees[1] of the Politics.
[1] Epileptic Trees was one of explanations to why trees in Lost were shaking violently.
I wasn't expecting a deal, and lo - it seems a deal will not happen.
Greece could offer to sell its people into slavery, and it seems that still wouldn't be enough for certain elements in the European nomenklatura.
So Grexit it is.
If anyone is crazy, mad, and delusional, it's the German establishment. Schauble would rather rob his banks of any timetable for repayment than deal with financial reality like a rational adult.