[Closed] Why give Greece more cash?

Greece has had 5 years of bail-outs, all conditional on it making fundamental changes to its economy to bring it into line with the real world. Privatisations, changes to the pensions and benefits system, actually bothering to get people to pay their tax, that type of thing.

Every time it has taken the money, and agreed to these reforms, only to immediately forget about these committments, and carry on exactly as before until it runs out of money again, and goes cap in hand to Brussells.... again.

Will anything be any different this time? What do you think?....

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Will anything be any different this time? What do you think?....

I know the answer to this one = Nope.

All the proposed 'reforms' are for higher taxes on business and VAT, while making no efforts to tackle the public sector. All the while more money pours out of Greek banks. Nuts.

Im not sure which is more fatuous: My goldfish example or your determination to spoil for a fight over a whimsical analogy?

But if it's a country, it's totally reasonable to expect unborn children to pick up the tab for their entire lives.

What @binners says (nice film analogy), this latest deal is for a 6-7 month extension and during that time we'll have to do this and more all over again. @Pawsy in my view if the deal get done (I expect it to be fudged) in the 6 months the Greeks will be able to deliver very little. If you look at their proposal most of the tax rises are projected to bring an material uptick in income only in 2016. So I agree with your point, this latest can kicking excersize will not change much at all before a longer term deal needs to be negotiated.

Thank God we are not in the euro

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What @binners says (nice film analogy)

Not correct jambas - it's exactly the taxpayers that must foot the bill (along with creditors in the case of debt restructuring/default etc). This abdication of responsibility for the required fiscal transfers between nations is what is condemning the € to its ultimate demise. The Germans are as much at fault at the Greeks (and many parties ARE at fault) but you cannot create a monetary union with a fixed exchange rate and not have fiscal transfers between regions or in this case counties ie taxpayers in some regions need to transfer funds to those in weaker regions.

The Germans believe that they can create 3/4 of the required framework and then live with it- largely because it bestows benefits on them eg artificially low exchange rate, artificially cheap acces to credit for consumption in other countries which import their goods and free trade etc. But there is a quid pro quo.

Blaming the Greeks unilaterally is simple economic and political myopia.

Except in the film, Bill Murray uses the opportunity to better himself and make amends

only after the mid film epiphany

THM - Will Hutton came out with an interesting comment - that the only way that the Euro could work as a currency woul be for Germany to leave it, as it is so out of kilter with every other European economy that it can never work with Germany as a member. It is just skewing everything so dramatically for everyone else, who's economies need completely diffferent conditions for growth

jambalaya - Member

It should not be the tax payers and unborn children of Slovakia, Portugal, Ireland etc who should be paying the bill

So what is it about this accident of birth that makes you conclude that unborn greeks should pay the price but unborn kids elsewhere shouldn't? Have they sinned in a past life?

You seem to want to appeal to some sense of justice but it just makes no sense. We have the capacity to inflict this on people who had no part in it, and we probably will, but we can't pretend it's right. Let's at least be honest and say to them "global powers beyond your control have chosen to crush your generation, for something you had nothing to do with. You will pay the price for other people's mistakes, for no good reason at all"

You seem to want to appeal to some sense of justice but it just makes no sense

But it is at least consistent with jamba's world view, in which Palestinian children should be fried in white phosphorous because of what someone somewhere else did at another time.

Lovely item this morning on the telly news - the Greek "government" decided that a good way, for tax purposes, to tell if a person had a tidy amount of cash, was to see if they had a swimming pool or not.

So they did a survey of Athens and it's suburbs and came up with the surprisingly tiny figure of 30 swimming pools.

Deciding that this must be an error, they tried to correct it by doing a survey from the air, by helicopter.

To their surprise, they found that there was actually more than 300 swimming pools!

The reason for this was that the residents had built them on the roofs of their buildings to escape detection from the ground and avoid tax.

Their response to the aerial survey?

Covering the swimming pools with camouflaged roofing...

(But of course it's the fault of the rest of the Euro-countries for lending them all that money in the first place, right?)

Europe is being done by Europe not for Europe (the people) politicians no longer listen to the electorate they believe there uni degrees give them carte blanche to do as the see fit.

Why do you think China is on its way to becoming a superpower that will make the USA look quaint? Short answer - They aren't governed by the will and short termism of their uneducated masses.

Replace this chap with EU ministers

DrJ interesting comparison in that the future of the children, born and unborn, is primarily driven by the actions of those adults alive today, their parents, uncles and aunts.

The EU is doing the Greeks a massive favour by providing a lifeline which they don't warrant.

Greece has had a massive handout from the rest of the world for the last 25 odd years, with wages, pensions and wealth creation they have not warranted. Greece's economy really supports wages and GDP closer to Bulgaria, Slovakia, Turkey etc. However they have been paying themselves more like Portugal, Spain and Italy. Greek pensions as a portion of GDP are nearly double those of the UK, how much sense does that make ?

TMH did you see Ken Clarke on Newsnight last night? As Clarke said the euro could have worked, it has worked where countries have at least roughly abided by the rules. The euro project will be stronger if Greece is ejected as the cost of breaking the rules and of a massive deception will be clear to the other periphery members. You and I both know it makes no sense for Greece to borrow at the same rate as Germany, it should never have been able to do so. Greece's debts where never guaranteed by Germany or the rest of the eurozone, a Greek default should always have been possible. However that does not mean Greece should have gone hell for leather to max out debt and hide the amount it borrowed in companies like the railways and/or just plain lie about debt levels.

Mr Whoppit, the abuse of the swimming pool tax is far worse than that and has been known about for years and years. Another classic example where Greeks don't pay and the government doesn't collect taxes actually due.

Its certainly an interesting aproach they've said they're going to adopt this time too, to balance the books. Adress the actual structural problems. Hell no. Faced with an economy that has already contracted by 25%, they intend to plug the mahooooosive hole in their finances by taxing business more

Yep... that sounds like a great idea!

In the few times I've been to Greece I was always amazed by the level of tax dodging, everything was 'cash in hand' (big hotels, bars, cafes, boat hire, pretty much everything except multinational car hire companies) and the culture seemed to be you were stupid to pay tax, as there was no need. That's why self employment is 250% higher than the UK, so it just seems that they are now at the point of reaping what they have sown over the last few decades.

Yes its shitty that the children have to pay for their parents mistakes but that's how the world works.

Greek pensions as a portion of GDP are nearly double those of the UK, how much sense does that make ?

@jamba I have addressed that fallacy before and can't be arsed repeating it here.

In the few times I've been to Greece I was always amazed by the level of tax dodging

@richc As a casual visitor I don't really see how you can form an opinion of tax evasion.

Adress the actual structural problems. Hell no. Faced with an economy that has already contracted by 25%, they intend to plug the mahooooosive hole in their finances by taxing business more

Yep... that sounds like a great idea!

@binners Address your comments to the creditors - they are the ones insisting on the current measures. Greece has proposed reforms to address the underlying issues but they were dismissed as "not adult".

Dr J - here are some ideas the Greeks could adopt, none are that hard but they refuse to budge whilst asking for the eurozone to pay their bills

Audit every self employed Doctor, extend to all self employed blue/white collar job
Car sales are up 20% (high value hard asset you can drive to another country and sell in the event of a euro exit). Audit every purchaser to find out where the money comes from
Accept Germany's offer of 500 tax inspectors
Accept Troika as being responsible for calculating official statistics working onsite in Greece. Accept the reality that no one believes a single figure that comes out of the Finance Ministry or any other government department
Audit every restaurant to check number of tables / customers against declared revenues and VAT
Minimum retirement age 65 for state pension with immediate effect (Troika aren't asking for pension cuts they are just asking for an end to ludicrous early retirement. Greek government has implemented job cuts in government departments by increasing early retirement further bloating pension bill)
Second home/foreign owners tax
No new military spending

Greece has proposed reforms to address the underlying issues but they were dismissed as "not adult".

The fundamental problem include;
State wages and pensions are too generous - in some cases wildly so,
Greeks don't pay their taxes - they are seen as optional,
Labour laws and unions ensure many markets are totally noncompetitive and overpriced/paid
State owned businesses are not run at all econmically, no matter the losses the government will pay

Binners, I don't often agree with Button but he is correct - although this would still leave the issue if the euro zone not fulfilling the criteria for a single currency union.

MrW - walk down street in most UK towns (ex those built in the last century) and you will se windows bricked up to avoid the window tax. Nothing unique or surprising about the Greek pool behaviour.

No I didn't see it jambas but given the comment about other countries abiding by the rules, I clearly don't need to. Clarke is an unashamed europhile and has been proved wrong on most things on the subject. The idea that any nation did or has abided by the rules is fanciful at best and grossly deceitful at worst. It certainly doesn't add to informed debate. I am puzzled by your venom towards the Greeks though!!

@jamba - I started to respond to your post point by point, but really, it's not worth it. You seem to have formed a judgement based on anecdote and misunderstanding. I have pointed out many times the mistakes of fact and logic that you continue to repeat but you take no notice - it isn't worth my time to try to convince you, and I suspect others have also made up their minds.

You want the stage to yourself? go ahead ... be my guest.

@richc As a casual visitor I don't really see how you can form an opinion of tax evasion.

OK, from personal experience of a few holidays and weddings, I experienced:

Never getting a receipt for the following:

Hotel's - Preferring/demanding cash (card would be more)
Holiday villas - Cash only
Taxi drivers - Cash only (and explaining its due to high taxes).
Bar bill for Wedding having to be paid in cash which which was a lot of cash (only payment method accepted)
Boat hire - Cash only
Bars - cash only
Cafe's -cash only and most of it never made it to the till.
Restaurants - Cash only

From speaking to a very small and limited sample of people, everywhere I've been this appears to be how it works as tax avoidance is the cultural norm as people don't want to pay for public services as you don't need too as they are there regardless.

In all my visits to Greece the only receipt I have ever got it for car hire.

Seems to be the reported norm as well, and has been for a while as this is the same story year after year:
2012:
http://www.economist.com/blogs/freeexchange/2012/09/tax-evasion-greece

2013:
http://www.chicagobooth.edu/magazine/35/2/feature1.aspx

2015:
http://www.wsj.com/articles/greece-struggles-to-get-citizens-to-pay-their-taxes-1424867495
http://www.theguardian.com/world/2015/feb/24/greece-collecting-revenue-tax-evasion

Useful quotes are:

Revelations of widespread tax evasion came as no surprise to many jaded Greeks, who say off-the-books payments were as part of the culture as fishing and olive oil. Evasion was taken for granted and almost considered beneficial

"If you go to the doctor you are going to have to pay under the table or you're not going to get health-care service,"

They found that self-employed, highly educated professionals such as lawyers, doctors, and accountants evaded more income tax than lower income occupations. In sum, tax evasion by the self employed was worth at least a stunning total of $38 billion (€28 billion) in 2009.

Greece doesn't need a bailout it needs to get all of its citizens to pay whats due, and the problem will go away.

If only it was that simple....

it would be a start at least, as the current plan isn't working as only the poorest as being hurt.

@richc - I don't doubt for a second that tax evasion is a huge problem in Greece. I have experienced it probably at closer hand than you, for example, when my father in law was dying with cancer in hospital in Athens, my MiL had to go to the hospital with a bag full of cash to distribute to get people to do their jobs. So if you think I am going to defend that mentality, you're obviously wrong. But appalling as it is, it isn't the whole picture, and it has complex roots that aren't fixed overnight.

As you say, the current plan just leads to the poorest being hurt. Consider that the biggest offenders are shown to be doctors and lawyers - and then look at the professions of members of the previous ND government. Syriza are at least trying to change things, and they would have got a lot further if a) the creditors had considered their proposals in terms of what is good for growing the Greek economy, and b) they hadn't had to spend so much of their time and energy on negotiations.

By my limited research Greece has defaulted (for various reasons) 6 times excluding the present crisis. To me this gives clear guidance on the future of the country.

Tis a shame for the very poorest and in particular the young.

Germany has defaulted 3 times, the last due 2 WWII. They were massively helped by others to rebuild, perhaps Germany should take that as an example.

and b) they hadn't had to spend so much of their time and energy on negotiations.

They didn't have to do this at all, they could have just stuck to the original payment plan and saved a whole lot of grief. Instead, they've lost a load of good will, humiliated themselves, nearly created a run on their banking system and still not made any concrete progress.

They didn't have to do this at al

Yes they could have just lain down in the middle of the road and died. But they wanted to change things and to do that you have to fight. They made the mistake of thinking that the troika could be influenced by rational argument, but instead found out that they are only intent on inflicting their own agenda on Europe regardless of the suffering they cause, and that they prefer to follow their own policies even when they admit they failed (as the IMF did). Syriza didn't humiliate themselves, unless you consider it humiliating to do your best to improve things and not succeed as you'd hoped, and the bank run was arguably caused by the Bank of Greece governor (surprise surprise since he is ex-ND finance minister) and the usual selective leaks from the ECB.

They made the mistake of thinking that the troika could be influenced by rational argument,

Not sure they've tried rational arguments yet, so far they just seen to be ranting, threatening and blaming every one else for what is, after all their own mess.

Yes the Troika's strategy of growth through cuts hasn't quite worked out how they'd planned (no surprise there, but then we can hardly criticise as it's also our own chancellors strategy).

This seems quite rational to me:
http://yanisvaroufakis.eu/2015/06/18/greeces-proposals-to-end-the-crisis-my-intervention-at-todays-eurogroup/

DrJ, no I have formed my opinion based on my experience and from the experience of others. In 30 years of being a banker/asset manager I have never once lent any money to the Greek government, a Greek bank or a Greek company. It's hardly a fallacy to point out Greek pensions are unaffordable is it ? I spent a lot of time trying to pursude my ex-wife's niece to relocate to the UK (her Greek husband had left her and she didn't want to return to South Africa), offered to house her and her daughters so they could escape the country and that system but that's their home and they wanted to stay. What future those kids have no I can only imagine but it's pretty bleak.

Greeks bear collective responsibility for playing this game for so long. Eurozone taxpayers are going to lose billions sooner or later, their fault for ignoring the corruption and tax dodging for so long. Syriza can "change" Greece if they wish but they where lying to the people if they told them they could do this inside the euro/EU. They cannot.

They made the mistake of thinking that the troika could be influenced by rational argument,

The only way Greece can recover is through true reform. Syriza is a massive step backwards in that regard.

Yanis is great on the BS DrJ, he is short on practicality and details. He is such a timewaster the eurozone finance ministers won't deal with him, he's been totally sidelined. The piece you linked to sounds great but its the numbers which don't work, the detail which is absent. Yanis's entire strategy is one based on a game theory, the EU will back down because if they don't they'll have to face losses in the 100's of billions and the future of the EU will be jeopardy.

Yanis's entire strategy is one based on a game theory, the EU will back down because if they don't they'll have to face losses in the 100's of billions and the future of the EU will be jeopardy.

Which is flawed as they'll have to face losses even if they stay as they can never repay the debt.

Likewise, the EU could quite happily survive a Grexit, it just doesn't want to, which seems very irrational.

Basically Greece has to exit the Euro and then sort itself out (or more likely exit the Euro and then not sort itself our and just carry on as a 2nd world country tagged onto the edge of Europe).

[i]DrJ the only financially rational thing for the EU to do is to stop lending, to pull the plug[/i]

Weird that the Germans got bailed out in 1948 (and again in '53, but that was mostly because everyone else was broke as well, sound familiar?) after, y'know, starting a war that slaughtered millions, but the "only rational thing to do" for the greeks, who haven't (as far as I'm aware) starting gassing Jews recently is to cast them aside?

Germany, as a country, is morally bankrupt if that's the case.

End of the day Yani's is an academic and we all know what that means in the real world 🙄

Weird that the Germans got bailed out in 1948 (and again in '53, but that was mostly because everyone else was broke as well, sound familiar?) after, y'know, starting a war that slaughtered millions, but the "only rational thing to do" for the greeks, who haven't (as far as I'm aware) starting gassing Jews recently is to cast them aside?

There we have it Godwin's law.

Because Greece pissed away a large fortune and now wants to avoid paying it back in a reasonable time frame, the Germans must be Nazi's.

[i]the Germans must be Nazi's.[/i]

A moment ago Jam was espousing a "sins of the fathers" viewpoint as a valid one for re-payment of early generation's debts.

End of the day Yani's is an academic and we all know what that means in the real world

Well, I gave a link to a long set of proposals he made. Instead of just throwing insults it would be more convincing if you indicated which of them you consider to be invalid, and why.

@jamba - as I said, I'm not coming out to play. You want to tell yourself you're "100% right", go ahead.

Weird that the Germans got bailed out in 1948

You're aware that the UK got more money out of the Marshall plan than Germany?

Difference being that Germany spent it in rebuilding their industrial base, we spent it on the armed forces, council houses and creating the NHS.

It's irrelevant what I think of them, it is what the people he is negotiating with think of them and so far it is a big fat No.

TBH reading that blog link it is all frilly language but little in the way of concrete details.

Oh well teh IMF apparently aren't keen on the new proposals as they see them hampering Greek growth. It's almost like Syriza are going for a scorched earth policy of destroying Greece, very weird behaviour.

So, dragon, just dodging the question.

The IMF and EU have never been in agreement over what they wanted Greece to do, which made the job of satisfying both of them a bit tricky. Syriza have been forced to accept measures which will have a bad effect on growth, there's no point now blaming them for the consequences.

dragon - Member

Oh well teh IMF apparently aren't keen on the new proposals as they see them hampering Greek growth.

And they view that as their job, and took offence? Looks like a joke, isn't.

It is no surprise Greek GDP is down massively as so much of it was a fraud. There are no economic measures which can replicate the prior GDP as so much economic activity was and still is imported from the rest of the EU via Greece's borrowing.

Ireland and Portugal have implemented reforms and got their house in order. Greece had a chance to do much more and did not take it. Syriza could have stepped up tax collections but the opposite has happened, more tax is being evaded, less tax is being collected. These comparisons to Germany are WW2 are irrelevant, Greek chose the place its in, it borrowed money and paid the majority of that to its own citizens. Greece has had a bailout and in the past 5 years it could have implemented reforms and started collecting taxes but they have not done so.

The IMF want out, the EU/eurozone will lend Greece money to allow the IMF to be repaid and then they will determine the outcome for Greece on their own. It will be a gigantic political fudge.

Like I said thank God we are not on the hook, well not directly anyway.

It's obvious that the narrative that the Greek government have been pedalling of plucky underdogs fighting to retain their dignity in the face of the nasty overbearing German overlords who want to humiliate this proud nation, is gaining some traction.

But with regard to both parties

Greece just borrowed a load of cash it knew full well it could never pay back, to keep its citizens in a lifestyle they couldn't afford because they don't want to pay any tax.

The mainly German banks were stupid enough to lend them all this Wonga to allow them to keep buying BMW's, and to further their programme for a federal superstate led by guess who?

There are no good guys here.

At the end of the day, as I said earlier in the thread, Ken Clarke nailed it...

"Whoever lent Greece all that money at German levels of interest must have been out of their minds!"

What did they think was going to happen? Greece transform its economy into a mini-Germany? Seriously? They deserve everything they (don't) get (back)

This isnt a bail out the greek economy. Its a bailout of the banks who were daft enough to lend the banks the money.

The latest crisis is to lend greece money so it can pay its loan from the IMF back. How does that actually help anyone or anything. Its like loansharks lending you money to clear the credit card bill.

This is all about protecting those people companies, and institutions that lent the money in the first place.

Ken Clarke nailed it...

"Whoever lent Greece all that money at German levels of interest must have been out of their minds!"

If that is what he said, then amazing that a europhile doesn't understand how the whole thing works. No wonder the project is in so much trouble. And an ex chancellor of the exchequer too.....bizarre.

binners it's a massive oversimplification to say the German banks where the primary lenders to Greece, major lenders yes as where the French but that makes sense as the two largest economies in the euro. It's a matter of degree, the Greeks could have borrows less, collected more tax and reformed their economy during the good years and actually ended up in an ok place.

DrJ see @nick's shopping list, seems about right. You've argued against me when I've discussed corruption amongst the professional serves like Doctors and here by your own personal history you've been part of it, I appreciate you have to be pragmatic and do what you have to get the care required but in itself is the problem. A vibrant black market for healthcare by-passing the government and the collection of taxes. It is a country with institutionalised levels of tax avoidance which is expecting foreign taxpayers to pay the bills it thinks are not their responsibility. I haven't visited the country in 25 years due to my views of the level of corruption, I didn't consider for a second spectating at the Athens Olympics. I so not see why Greece should get concessions and additional resources that could be sent to more deserving members of the eurozone. Greece has had many chances and they have abused them. My view will not prevail at the EU as a political fudge will be found and the Greeks will still whine quite incorrectly about being the victim. I don't expect a reply.

and for some of the other issues in Greece
http://www.abc.net.au/news/2015-06-24/greeks-move-to-melbourne-to-flee-economic-crisis/6569186
When those who can leave have left who is there to make an economy

Indeed @mike another of the very real costs of Greece ignoring the corruption within their country for so long. Interesting the Greek relatives I have who have been in the UK for 20 years have little sympathy for the situation there, they told me they don't even follow the news.

More discussions today. Germany says they won't vote on the package until the Greek parliament has approved it first. Pension reforms: retirement age to 67 will be phased in over 10 years. No crises, no rush guys, take your time.

Sypras called to Brussels this morning, being reported he has been been told the Greek proposals are not acceptable.

Apparently most recent Greek proposals have been rejected by creditors.

Euro has slipped back out to €1.401 against £.

IMF rejects Greek proposals. Makes sense to me as IMF is a hard-nosed lender, it wants out. IMF lost money on Argentina default and the banker responsible was fired/early retired. Good news as the UK contributes to the IMF, I want our money back.

Short term extension will be agreed allowing IMF to be paid off. EU/eurozone then free to agree (or not) a political fudge. Tax payers of the following countries then on the hook if their governments agree, otherwise no deal;

Slovakia
Slovenia
Cyprus
Latvia
Lithuania
Estonia
Finland
Malta
Ireland
Portugal
Spain
Italy
Austria
Belgium
Luxembourg
France
Germany

Apparently most recent Greek proposals have been rejected by creditors.

And the EC asked the leader of To Potami - a party which got 6% in the last elections - if he is ready to form a government. Is that what they call "democracy"? Looks more like a coup d'etat to me.

Yep... it looks like the EU is taking its usual approach to democracy. If you don't deliver the result we want, you can go away and do it again until you do. Very much like Robert Mugabe's approach to democracy, without giving away other peoples farms as bribes

All this democracy BS? The Greek's don't have to pay, it's their choice not to. The Syriza electoral mandate was to end austerity but stay in the euro. They can only deliver half of that democratic mandate at best, ie stay in the euro or neither. Austerity outside the euro will be much worse

IMF markup of the Greek proposals was leaked. They quite rightly don't buy the Greeks calculations that their tax rises will deliver close to €8bn. The IMF quite rightly knows that tax rises are questionable as to revenue delivery especially in a country like Greece where evasion is rife. What counts are spending cuts, when the government stops,paying the savings are immediate and real.

eurozone ministers and going home early, Schauble knew it he didn't even books hotel room.

Greek opposition are worried as they now what a disaster is unfolding. Greece is ejected from the euro/EU, Syriza is decimated at the polls and they have to try and pick up the pieces.

If anything this is a perfect example of democracy, people have voted for chaos and they are getting it in bucket loads

All this democracy BS? The Greek's don't have to pay, it's their choice not to.

The EU has previously installed an unelected banker (ironically) to the post of Greek Prime Minister.

So what do the pundits think will happen to the euro then in Greece exit? Will it tank? Take the pound with it?

The EU has previously installed an unelected banker (ironically) to the post of Greek Prime Minister.

Reported that the Greek proposal was 90% tax rises and 10% spending cuts, IMF wants to see a majority of budget changes be spending cuts. Cuts are real, tax rises are uncertain.

I smell capital controls being imposed soon. When Greeks cannot get their money out of the banks and the government cannot pay their wages they will see the folly of their "democratic" decision

They'll probably use the pound sterling. I mean it's not as if they even need to bother asking us 🙂

Totally irrelevant. The Greeks have repeatedly elected governments which offered them the biggest handouts

Except when the European Commission and the IMF installed an unelected banker to head the Greek government and do as they dictated, ie, impose hash austerity. So what happened then ?

Care to explain why he didn't sort the mess out ?

Or is that "totally irrelevant" ?

So what do the pundits think will happen to the euro then in Greece exit? Will it tank? Take the pound with it?

I'd wager a Grexit would have negligable long term affect on the Euro, bit of turmoil for 6-12 months then everything back to normal.

I'd wager a Grexit would have negligable long term affect on the Euro, bit of turmoil for 6-12 months then everything back to normal.

In itself you're probably right. Question is if it leads to Spexit, Itexit, Porexit etc.

Can't see it, nobody's going to say any of those words out loud

In 2010 the worst of the financial crises had spread to governments as we had bailouts of Greece, Ireland and Portugal. The danger of contagion was very high. Now that's past, Ireland and Portugal have recovered and the eurozone is in much better shape. A Greek exit would not lead to issues with Ireland, Portugal, Spain or Italy. In fact if the Greeks had got a sweet deal it would have lead to major political problems in other countries, I mean if the Greeks don't have to pay back their debt as they voted left wing why don't we all try that ?

In itself you're probably right. Question is if it leads to Spexit, Itexit, Porexit etc.

Question is if it leads to Spexit, Itexit, Porexit etc.

They're no where near as screwed as Greece though, yes they'd benefit from debt relief but they don't *need* it and will choose to stay in the Euro and just get on with life.

It should do. Lessons need to be learned. Th current system cannot work by design. You either need full monetary and fiscal union or a looser free trade zone. What you cannot do (although the Germans think that they can) is have this half way house, taking the benefits but none of the fiscal responsibility that goes with it. To succeed the "project" requires fiscal transfers, yes including to those profligate Greeks, because that is how it works. The myopic german attitude (also displayed by those who argue this is all the Greek's fault) is as bad and reprehensible as the Greeks position. At least th latter is based in a democratic mandate, however flawed.

This is interesting off the BBC news website just now,

Eurozone finance ministers will work on a financing for reforms deal with Greece on the basis of proposals put forward by its creditors, which a senior official of Greece's ruling Syriza party attacked as "blackmail" earlier. Negotiations with Athens have produced no agreement euro zone officials have said. They will start talks in Brussels at 13:30 (12:30 BST) on the basis of an offer agreed in Berlin at the beginning of June between Germany, France, the European Central Bank, the International Monetary Find and the European Commission. Also on the table will be a list of reform Greece has to enact before any money can be released to Athens, prepared by the creditors

So basically, balls to you Greece. You do what the creditors want, and that's that.

That was always the story, in fact - like a boss who has run out of logical arguments saying "because I'm the boss".

Tell you what, lend me fifty quid at say, three percent interest and tell a nice generous friend of yours to just keep lending me more money to pay you back the interest when it's due, for the rest of my life, eh?

What could be fairer than that?

What could be fairer than that?

No idea. Nor of the relevance. Simple analogies with household finance don't have much validity.

You do what the creditors want, and that's that.

Yup get over it.

Well, let's see. The Greeks lied about their finances so that the mugs "controlling" the Euro would let them join in the party.

When they were in, they started borrowing as much as they could to fund their top-heavy government-subsidized workforce to beyond the hilt whilst not bothering to collect any avoided tax money from the population, including the swimming-pool disguising rich.

When the interest started becoming due, they just borrowed more money from the stupid chumps who lent them the first tranche, knowing that they could just keep kicking the can down the road.

Unfortunately, as a strategy, it hasn't lasted and now the conned are starting to make demands.

"Non-simple" enough for you?

How many more rounds of 'can kicking' do we think then? I reckon some kind of fudge for this month's 1.6billon, but where do they get next month's 4billion, (IIRC) from?

No that's a gross oversimplification.

Tell me which country abided by (then and now by) the Maastricht criteria for starters. The founder members lied about their finances too. And they created a one way system that was uniquely in their benefit. Devalue your currency and then create artificial demand through cheap money for foreigners to buy your goods. Guess what? You run a nice current account surplus - yippee! And how do you make your balance of payments balance? You run a capital account deficit. Yippee to start with because you are controlling the rate and then boo hoo, my irresponsible lending is now biting me on the bum. Boo hoo. So instead of taking my medicine I will use taxpayers to bail out my banks and implement a suicide economic policy on the debtors that will condemn them while bearing no responsibility myself. Teutonic brilliance in a can.

Verstanden Sie?

There are always two sides to the story despite the "current Greeks are lazy tax dodgers" narrative. Political and economic myopia. But that sums up a lot about Europe.

Tell me which country abided by (then and now by) the Maastricht criteria for starters

Finland and Luxembourg IIRC

wow, I agree with THM on something!

It won't last. I agreed with Junkyard once, a statistical anomaly I say.

DrJ Greece's stance has been so ridiculous even the placid Lagrange described them as children (by implication). The Greeks have offered nothing credible so now the EU is saying, here is what we are prepared to offer (having agreed on it in advance). The Greeks are free to reject it, they are free to negotiate around it.

tmh there is quite some daylight between Greece and the rest of the EU when it comes to truthfulness

So instead of taking my medicine I will use taxpayers to bail out my banks and implement a suicide economic policy on the debtors that will condemn them while bearing no responsibility myself. Teutonic brilliance in a can.

"There is an important creditor concession in the pension reforms, too, though. Creditors have been trying to get rid of a “solidarity grant” programme that provides a top-up bonus to poorer pensioners, know by the Greek acronym EKAS, by 2017 at the latest."

Just a minute - this can't be right - the IMF and EC have both been claiming that they had no plans to cut the pensions of poorer pensioners, and that Tsipras was misrepresenting them to claim otherwise. Now the truth is made clear. And Christine Lagarde's nose is longer than ever.