Behind Germany’s refusal to grant Greece debt relief

Re:Behind Germany’s refusal to grant Greece debt relief by jules on Saturday July 11, 2015 @08:41PM (#9872116)

The banks counted on other countries to bail out any other in the eurozone, so they provided as much risky debt as they could. Maybe I'm cynical, but however this ends, it will probably end up being a wealth transfer from the european taxpayers to the banks. We've seen this time and time again recently: socialize private risk. The only way this ends is by letting the banks go down eventually, otherwise they will continue risky behavior, counting on the public to save them when things go wrong. Unfortunately the system is such that this is not in the interest of the politicians. Politicians with "good behavior" get cosy high paying jobs in the financial sector after their political career. Just look up any ex politicians and I bet you he or she is now working in the financial sector.

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...

[ Parent | on HN ]

Re:Behind Germany’s refusal to grant Greece debt relief by icebraining on Saturday July 11, 2015 @09:13PM (#9872206)

"End up"? It has already happened. (From Wikipedia, but well sourced):

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...

[ Parent | on HN ]

Re:Behind Germany’s refusal to grant Greece debt relief by igravious on Saturday July 11, 2015 @09:30PM (#9872260)

Euro area population: http://www.tradingeconomics.com/euro-area/population

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.

[ Parent | on HN ]