Please don’t call it a “Grexit”, thanks.
Here is a reader from Norway and I really didn’t get your point. And Novelty Bobble’s point is quite relevant.
Part of it is the reluctance to set a precedent for Portugal, Spain, Italy, and Ireland. So, yes, that does play in the Greeks’ favor.
Regards,
Shodan
The flip side of that argument is that giving significant concessions to the Greeks would also set a precedent for Portugal, Spain, Italy, and Ireland. So that cuts both ways.
Another argument against bailing out Greece is that it would be sending good money after bad, money that would be better spent bailing out Italy or Spain, who might be motivated to accept conditions because of the example made of Greece.
We’ve learned a lot in the past century and a half…
For example, ignorant economists would have let the major banks suffer a mutual and catastrophic bankruptcy during the early stages of the financial crisis. Who are they to predict whether that was good or bad? Except…they learned from the Great Depression that a massive collapse of the money supply leads to horror.
Similarly, a Greek default would not be unprecedented. There is a general consensus that in the short-term a default would be very, very bad for Greece. Having shattered trust in their solvency, they would be virtually unable to borrow money for a while. If, and it’s a big “if”, they can reform their spending to regain fiscal integrity, then they could borrow and function as a normal economy. If they stay in the Eurozone/EU, they have the buoy of their heavy-hitter friends in Germany and France, and would suffer little short-term pain.
The fact that the Greeks are willing to whine like petulant children and go over the cliff rather than fix the structural issues that plague their country goes to show that the hope of a “soft default” and long-term boom is sorely misguided. They are digging their own grave, and dancing in the streets as they sink.
Actually, something quite similar is happening in the U.S., the Puerto Rico Debt Crisis.
Matt Yglesias has a couple of good summaries on Vox, one with some detail, and one explaining it in 500 words, which notes:
I must note that, except for the somewhat vitriolic OP, this thread has a decidedly non-Pit flavor. In fact, it is probably the best explanation of the different viewpoints on the Greek debt crisis that I have seen.
[quote=“zoid, post:68, topic:724353”]
[/QUOTE] Would it fucking kill you to put some explanation of what the goddamn video is about? We need a new board rule for this bullshit.“You post a YouTube link, you explain what it is or suffer an automatic 30 day suspension.”
Yes, that’s why I explain where the name comes from. It comes from the same place that gave some of those who speak English “their” bologna.
Unless you’re Swedish and therefore used to them, but that’s part of the whole “abroad is full of foreigners with foreign customs” thing that CarnalK was handwaving. Even something like supermarkets varies from country to country, or even region to region. But yeah, picking up stakes to move to a different country is the same as moving from one town to another within the same county (there isn’t a missing r).
[QUOTE=Senegoid]
Telling all the creditors to go take a hike probably means they’re on the way out of the Euro, but at least offers them a glimpse of a possible light at the end of the tunnel, which may still be years away after much tribulation. The alternative would have been to be stuck in the austerity hell they are in, indefinitely. He suggests that dropping out of the Euro is probably the least awful option they have.
[/QUOTE]
This is something a lot of people don’t realize. After a while, the endless string of bailouts starts to look like economic slavery, a tool the rich nations use to keep the poor nations subservient. Once you realize that, the pro-default attitude becomes much easier to understand.
I speak English, BigT. Why could it be seen as a bad portent?
Baloney - meaning ‘bullshit’, having its origins from Bologna, supposedly.
Part of the argument that the creditors are at least in part to blame for the crisis is that you “can’t have irresponsible borrowing without irresponsible lending”. Well, it seems that now that the creditors don’t want to engage in such irresponsible lending anymore, they’re terrorists, and enslaving the Greeks. Can’t have it both ways.
Also, the analogy with The German post WWII debt forgiveness is flawed. It happened only once. Germany could be relied upon to pay back the remainder of the debt because they had (the makings of) a strong exporting economy. And the Germans accepted the pro market reforms that came attached with the 1953 London agreement.
Greece has been called the richest country that doesn’t make anything. It got that way in part by cooking the books and thereby becoming part of the Eurozone, and borrowing money it couldn’t really re-pay - spending it in ways that didn’t do much to build a real economy.
I believe that since its independence in the early 19 th century, Greece has been in some form of default for about half that time. Most of that time cannot be blamed on the Euro since it is only 16 years old, and Greece has only been in it for 14.
Greece did not join the Euro at its inception because it couldn’t qualify. 2 years later it was allowed to join ( after -surprise!-an austerity program and deep public spending cuts), but was warned that it still had a lot to do improve its economy (per Wim Duisenberg, prez of the ECB at the time). Looks like they only pretended to do that.
I think it’s clear that the Euro concept was entirely too far reaching, and that Greece never was an appropriate candidate for it. On the other hand, on the face of it neither were Spain an Portugal, and it looks like they may actually pull it off… So it was a worthy attempt. Just didn’t work out for Greece.
On Twitter:
**The smartest trick the devil ever pulled was making the German voters think the bank bailout was a Greece bailout.
**
Here’s how he did it:
Behind the scenes at the IMF on a fateful day in the Greek crisis
For a few million Euros, you can build a tiny bridge and get over yourself.
Oh, Norway, a tiny sliver of ice covered fiords that got lucky because it hit oil.
I’ve heard of you. Somewhere next to Sweden and near Denmark, right?
I applaud the wisdom of the Greek people. They have suffered 20%+ unemployment since the beginning of the financial crisis: continued austerity guaranteed more of the same. Only a credulous moron would stick with current policies.
Here’s a hint: stop hitting your head with a mallet. It hurts!
Oh but what about that debt? Well the Germans restructured massive debt away after WWII. In 1953 they signed an agreement cutting their debt effectively in half. That’s right: half. Germans Forget Postwar History Lesson on Debt Relief in Greece Crisis - The New York Times
Eduardo Porter: “The recurring, historical pattern? Major debt overhangs are only solved after deep write-downs of the debt’s face value. The longer it takes for the debt to be cut, the bigger the necessary write-down will turn out to be.”
Don’t like it? Tough. That’s why lenders need to practice due diligence, rather than throwing other people’s money at any bozo offering a couple of dozen basis points in additional yield.
Yay Greece!
I know this is the pit but you don’t have to take everything as an insult.
I was nothing but civil and factual in my reply. You made a simple mistake and were corrected.
I’ve had discussions before with people ignorant of Norway’s relationship with the EU and the euro so best to correct an error at source.
Except only Americans pronounce Bologna as Baloney or use it to mean bullshit. So BigT’s claim that this applies to “those who speak English” is unfortunately blatantly wrong.