The big fat Greek bailout

[Regorium]

Originally Posted by Slava

I know its more fun to discuss how terrible the scenario is for the Greeks and things like that, but the new package they brought forward is essentially what the EU (Germany) wanted. In other words, the Greeks could've just accepted this type of deal weeks ago and saved their citizens the bank closures and pressures, but instead dragged it out.

While nothing is certain yet, it appears to be a solution and the markets are liking what they see at this point.

ETA link: https://www.washingtonpost.com/world...b78_story.html

Noone has reported how much the greeks want in terms of debt forgiveness though. I think that'll be the interesting part.

[Slava]

Originally Posted by Regorium

Noone has reported how much the greeks want in terms of debt forgiveness though. I think that'll be the interesting part.

I think its in that article? I know that I've read it somewhere. Its a sizeable chunk, but the plan on their end is to get this bailout, commit to some austerity and also get some debt forgiveness.

[EldrickOnIce]

I don't see the numbers on debt forgiveness anywhere either, but it must be really significant - as it seems the fiscal plan is actually harsher than the one the people overwhelmingly rejected last Sunday.
Or... I don't know what Tsipras has going on. Germany is skeptical

From the article above

Leading German politicians from Chancellor Angela Merkel’s Christian Democratic Union (CDU) and its sister party, the Christian Social Union (CSU), questioned the credibility of Greece’s proposals Friday. Hans-Peter Friedrich, deputy chairman of the CSU, pointed out the similarities between the new proposal and the one voted down on Sunday.

“Either the Greek government is fooling their own people or once again us,” he said in interview with public radio broadcaster Deutschlandfunk.

[CaptainCrunch]

Originally Posted by Slava

I think its in that article? I know that I've read it somewhere. Its a sizeable chunk, but the plan on their end is to get this bailout, commit to some austerity and also get some debt forgiveness.

Its funny, because I heard on two reports that it was a significantly smaller chunk then the 30% that the Greeks were demanding before.

I think that the concern has to be around why Tsiparis folded so hard, I know it doesn't seem possible but is the situation even worse then what's being reported bank finance wise.

The Gernam's are suspicious as hell because this deal actually cuts deeper supposedly then the one that was voted down by the Greeks before the Referendum.

If this goes through the Greek Parliment and the EU Parliament Tsiparis will be forced to resign.

He gambled, misunderstood his strength in these negotiations and then had to go back hat in hand.

[CaptainCrunch]

For those that are interested here's the supposed 13 page proposal

http://www.wsj.com/public/resources/...sals070915.pdf

[CaptainCrunch]

From the Wall Street Journal

http://www.wsj.com/articles/greek-ba...ays-1436520297

[Slava]

Originally Posted by Regorium

Noone has reported how much the greeks want in terms of debt forgiveness though. I think that'll be the interesting part.

Originally Posted by EldrickOnIce

I don't see the numbers on debt forgiveness anywhere either, but it must be really significant - as it seems the fiscal plan is actually harsher than the one the people overwhelmingly rejected last Sunday.
Or... I don't know what Tsipras has going on. Germany is skeptical

From the article above

Oh my mistake, I was thinking of the bailout amounts not the debt forgiveness. That hasn't come out...yet. That could still be a sticking point of course, but if I were gambling it looks like they will avoid the complete default and accompanying economic destruction at this point.

[CaptainCrunch]

I think that one of the pressure points for Greece is that their government payroll and pension payouts are due out today.

There were talks that they couldn't cover it, maybe this is the last one that they can cover.

Maybe that's what got them serious. Its all good to bluster in your negotiations, but when you're suddenly staring at a ton of checks bouncing in the next two weeks and an angry populace you tend to get serious in a hurry.

[Regorium]

Based on the proposal, they're not even asking for debt forgiveness.

I can't even understand how the other EU countries aren't thinking that this is just kicking the can down the road, yet again.

Bump this thread in 3 years?

[Zarley]

Originally Posted by Resurrection

fantastic column. even manages to turn it into a rah rah speech for trickle down economics. cuz that worked so well under bush. and bush. and reagan. basically the united states since 1980... where wages have frozen for virtually everyone and the wealth gap has exploded into making the usa a sort of oligarchy.

sorry i digress. a little off topic.

What specific issue due you have with his analysis of the Greek situation? and what would your thoughts on it be?

Coyne has a masters in econ from LSE and his dad was the governor of the Bank of Canada. He isn't overly partisan and typically has well informed opinions on these types of issues.

[FlameOn]

How can the Greek voter base and government be so delusional as to think they can get away scott free with no cutbacks? No one likes cutbacks, and every other country will do it if necessary to keep solvent and yet we see again that the Greeks/voter base aren't willing to at all and instead trying leverage their debt in the bailout negotiations. It's crazy.

If the Europeans bail them out for a third time, what guarantees are there the cuts and potential tax increases will happen? Or for that matter, what guarantees are their the Greeks will actually collect the taxes that they needed to and are actually owed by their people with when the last two times this didn't happen?? Seems like just another delay of the problem.

As for debt forgiveness in the German post WWII case, that seems like a totally different set of circumstances. Rebuild a war torn country vs. here which is fixing overspending and previous government's fraud that got them into the EU in the first place.

[FlameOn]

Originally Posted by renny

kinda whacky that Poland has Germany listed as Most Trustworthy and Least Trustworthy at the same time.

Of course that depends on which side those Poles came from... The Soviet side or the Nazi German side.

[EldrickOnIce]

Originally Posted by FlameOn

How can the Greek voter base and government be so delusional as to think they can get away scott free with no cutbacks? No one likes cutbacks, and every other country will do it if necessary to keep solvent and yet we see again that the Greeks/voter base aren't willing to at all and instead trying leverage their debt in the bailout negotiations. It's crazy.

If the Europeans bail them out for a third time, what guarantees are there the cuts and potential tax increases will happen? Or for that matter, what guarantees are their the Greeks will actually collect the taxes that they needed to and are actually owed by their people with when the last two times this didn't happen?? Seems like just another delay of the problem.

As for debt forgiveness in the German post WWII case, that seems like a totally different set of circumstances. Rebuild a war torn country vs. here which is fixing overspending and previous government's fraud that got them into the EU in the first place.

No cutbacks?I think you haven't read much of this.
Look at the chart above.
The Greek government appears to have agreed to EVERY austerity measure the troika demanded, save full cutbacks on the military.
The very thing the Greek people overwhelmingly said no to, the government has now agreed to... apparently.

[FlameOn]

Originally Posted by EldrickOnIce

No cutbacks?I think you haven't read much of this.
Look at the chart above.
The Greek government appears to have agreed to EVERY austerity measure the troika demanded, save full cutbacks on the military.
The very thing the Greek people overwhelmingly said no to, the government has now agreed to... apparently.

That's not the stance they went into the negotiation with nor what the Greek voters put Tsipiras into power is all I was saying.

[Slava]

The Greeks approved the bailout legislation.

[killer_carlson]

Originally Posted by Resurrection

fantastic column. even manages to turn it into a rah rah speech for trickle down economics. cuz that worked so well under bush. and bush. and reagan. basically the united states since 1980... where wages have frozen for virtually everyone and the wealth gap has exploded into making the usa a sort of oligarchy.

sorry i digress. a little off topic.

disagree with the topic, but Coyne is a solid reporter with a demonstrated past of good journalism.

Nothing wrong with this article or analysis.

[killer_carlson]

Originally Posted by Slava

The Greeks approved the bailout legislation.

Actually, I think an ongoing issue through this will be the following:

Greek Politicians approve bailout. Greek voters did not.

[Thor]

Personally the most frustrating thing is how Greece gives political capital to the right wing conservatives in the US and Canada.

"Oh you like Bernie Sanders! You must love Greece!"

No, I love Germany, France, Denmark Sweden, Norway, Finland, Belgium, Austria........

Fox news, "Bernie Sanders wants us to become Greece."

We have tried the trickle down, Greenspan, Friedman, nonsense and failed. Socialist Democracy with finance reform for campaigns is about the best we got at the moment.

[EldrickOnIce]

While the hammer is dropping on Greece, this is a compelling interview with French economist Thomas Piketty:
‘Germany Has Never Repaid its Debts. It Has No Right to Lecture Greece’

http://thewire.in/2015/07/08/thomas-...ecture-greece/

ZEIT: So you’re telling us that the German Wirtschaftswunder [“economic miracle”] was based on the same kind of debt relief that we deny Greece today?

Piketty: Exactly. After the war ended in 1945, Germany’s debt amounted to over 200% of its GDP. Ten years later, little of that remained: public debt was less than 20% of GDP. Around the same time, France managed a similarly artful turnaround. We never would have managed this unbelievably fast reduction in debt through the fiscal discipline that we today recommend to Greece. Instead, both of our states employed the second method with the three components that I mentioned, including debt relief. Think about the London Debt Agreement of 1953, where 60% of German foreign debt was cancelled and its internal debts were restructured.

[CaptainCrunch]

Originally Posted by EldrickOnIce

While the hammer is dropping on Greece, this is a compelling interview with French economist Thomas Piketty:
‘Germany Has Never Repaid its Debts. It Has No Right to Lecture Greece’

http://thewire.in/2015/07/08/thomas-...ecture-greece/

I don't think they're similar at all. After World War 1, The World punished Germany and it lead to the rise of an extreme government. After World War 2, it was all about rebuilding Germany so we wouldn't see the rise of German Militarism again.

And Greece, continually cooked the books, pursued what I would say is self destructive and corrupt behavior, and then went to the banks to bail them out.

I don't see where they're similar at all. Greece wasn't destroyed like Germany was at the end of WW2.