do you seriously believe Greece is capable of that if they are to go on their own path? What industry is there to speak of in Greece? What goods or resources are they willing to trade or offer to the rest of the world?
And why do you feel the need to make this into a political argument and not of economics? Of course you can pay back the debt without starving it's own people if they could, but they can't. There's nothing that I can see or EU believes that Greece could pull itself out of debt and they are in for some deep amount of money. Did you really expect EU to give them another get out of jail card like they have all this time?
I'm just an observer, I don't work for EU.
Racist much? Greece has a import/export deficit (excluding oil) of around -1%. They have a large tourism industry, a strong (worldwide competitive) shipping industry, and they export food products, minerals (ores?) and lots of other things besides.
>And why do you feel the need to make this into a political argument and not of economics?
Because Economics 101 already says the plan imposed and followed for 5 years is illogical and doomed to failure. Check any leading economist on the issue (except those serving in political positions in involved countries). Heck, there's even an IMF report saying exactly that.
>Did you really expect EU to give them another get out of jail card like they have all this time?
"Get out of jail" card? Perhaps you should read some more into the history of all this. The "card" Greece was shown for the last 5 years lead to a 25% GPD fall, 30% unemployment (50% youth unemployment), huge pay cuts (over 40%), and several other measures besides.
The only one who ever took a "get out of jail free card" in Europe was Germany, who's national debt and war reccuperation payments were slashed over 60% (including war reccuperations to Greece, for destroying infrastructure and leading to the death of 700.000 people, on top of getting a forced loan from the Greek state while it was occupied they never repaid).
It's like throwing a money boomerang at someone, and each time it comes back claiming that they owe you another 50 billion
When South Korea defaulted, the entire country came together to pay off the debt. People even brought their herilooms and personal jewlery to melt to gold bars to help the country pay back the money to IMF. Businesses and large conglomerates were not bailed out but allowed to fail so that they pick up their shit. Now we get smartphones, tv, components, kpop, cars, ships, all sorts of wonderful stuff. And greece? What the hell have they produced in the past 100 years? South Korea has only been around half that.
Why should Germany put up with this kind of attitude? Where does this sense of entitlement come from in Greece? Do they seriously believe that the rest of Europe owes them something? If they are this arrogant then let them fail and see just how quickly Greece will downspiral into a failed state.
Unless of course they get greedy and start making ill-advised, unsecured bad loans. Then their greed is going to come back and bite them in the ass when the debtor can't pay.
Lets not forget the Goldman Sachs helped Greece to cook the books to get into the Eurozone in the first place.
Two possibilities exist: The EU knew what they were getting into and they deserve this mess, or they didn't know what they were getting into and they aren't qualified to run a multinational currency with zero flexibility.
Or a third option, they were manipulated into getting to this mess by a 3rd party who stands to make an awful, awful lot of money from it.
What kind of logic is that?
This is especially true with central banks, where every € you receive comes with debt attached. How do you repay the interest on those debts? You have to borrow more €'s from the central bank, which also come with more debt attached. And so your debt burden increases exponentially until you're crippled by interest repayments. It is mathematically impossible to repay debt in these circumstances.
It takes two parties to get into a mess like this. As the old saying goes, "if you owe the bank $50 thousand, you're in trouble. If you owe the bank $50 billion, you're in it together".
Why the hell would anyone give out loans in first place if they are going to get zero to negative interest rates? Even Islamic banking takes equity or other ways of making sure that they are rewarded for lending money.
I'm just trying to see it from your view but you simply demonize EU and Banks because it gives the borrower a hard time without considering that it's also the lender's money and opportunity cost at stake here. It's not very convincing.
Good question, ask the ECB - http://www.telegraph.co.uk/finance/comment/jeremy-warner/115...
> "you simply demonize EU and Banks"
Wow, after all your Greece trash talk you accuse ME of demonizing? This is no longer a rational conversation.
The most likely thing that would have happened is that at some point Greece would have entered a financial crisis, devalued its currency, and gone off as usual. As it's happened countless times in other places.
They have the unemployment rate they have thanks to the unsustainable - something even the IMF admits - austerity measures.
> When South Korea defaulted, the entire country came together to pay off the debt.
South Korea was never subject to the kind of ludicrous austerity demands that Greece got, had their own currency and so were able to improve their export competitiveness much more easily, as well as was able to - and aggressively did - restructure many of the banks and businesses that dragged their economy down because they were not detail-controlled to nearly the extend Greece has been.
> Businesses and large conglomerates were not bailed out but allowed to fail so that they pick up their shit.
Greece is not allowed by the Troika to choose how to reform their economy, so this option is not on the table for Greece unless it exits the Euro.
> Why should Germany put up with this kind of attitude?
Because the alternative is they get nothing? Debt always comes with risk. The interest rate is meant to price that in. If you can't deal with the risk of a restructuring, don't lend money. Except the lenders in this case learned a different lesson: your risks get socialised by the tax payers, and your government will then act like mobsters to try to recover the money, instead of letting the banks that took the risk also take the losses.
Why should Greece put up with the kind of attitude Germany has shown? Why should Europe?
It also doesn't help that there has been no innovation or large industries creating jobs in the first place. Blame austerity all they want but EU is not responsible for job creation or the livelihood of individual countries, I think that's up to the leaders of each country, and being competent helps.
> South Korea was never subject to the kind of ludicrous austerity demands that Greece got, had their own currency and so were able to improve their export competitiveness much more easily, as well as was able to - and aggressively did - restructure many of the banks and businesses that dragged their economy down because they were not detail-controlled to nearly the extend Greece has been.
You are downplaying the fact that there are other countries that were in South Korea's position never really recovered. It's not something that can be done easily, of course in hindsight it's always obvious. However, the fundamental problem is that there simply is no major global player industry in Greece to start, of course it's going to have a harder time getting back up. By no means was South Korea given an easier time, the debt payments were just as harsh if not worse. Jobs were destroyed, society changed but in the end they were able to pull themselves out by actually focusing on getting back on their feet.
> Greece is not allowed by the Troika to choose how to reform their economy, so this option is not on the table for Greece unless it exits the Euro.
So you are telling me Greece is not allowed to save itself? This is ludicrous. This is akin to saying I'm homeless because I'm not suppose to help myself. I don't blame the Greek people however, they just don't know of any other option other than the one that has been prescribed to them for close to a century.
> Because the alternative is they get nothing? Debt always comes with risk. The interest rate is meant to price that in. If you can't deal with the risk of a restructuring, don't lend money. Except the lenders in this case learned a different lesson: your risks get socialised by the tax payers, and your government will then act like mobsters to try to recover the money, instead of letting the banks that took the risk also take the losses. Why should Greece put up with the kind of attitude Germany has shown? Why should Europe?
Why shouldn't Germany feel bitter about having to keep Greece on lifeline out of their own pockets? I mean you make it sound like Germany has had it easier but from the rubbles of Allied bombing, as it emerged as an economic powerhouse and leaders of EU. When a tenant continues to be delinquent on rent, they get kicked out. Of course they blame the land lords but does it improve their situation? Does it win them a ticket back in? Here, we'll let you keep living on our dime while everyone else makes regular payments.
having said that do they seriously expect greece to ever pay back the debt or even let alone feed their citizens? When was the last time you heard something made in Greece that wasn't in ancient history textbook and encyclopedia of Gods? I also feel irked by the lack of rationalism from EU.