Greek Referendum Poll

[The Minsky Moment]

Of course the tab would have been different.  Less austerity means bigger tab.

???
Austerity made the debt problem *worse*

I don't understand.  Conditionality means that Greece gets free money but Portugal doesn't?

Conditionality means its not free.
Assuming that there was "free money". Which there wasn't except for former holders of Greek sovereign bonds.

[Zanza]

What's the point of these comparisons to Germany after the World Wars? Is the argument that the situation that Greece is currently in is somehow comparable?

If so, the only conclusion one can draw from that is that Greece should just unilaterally default on its external debt and create a currency change (after WW2) and/or hyperinflation (after WW1) to destroy its internal debt. That's what Germany did after all. After WW1 it was only after Germany defaulted a few times already that its creditors lowered its debt. After WW2 Germany also didn't honor its debt and restructured it in the debt conference in 1953.

The Greek government doesn't seem to have the stomach for the consequences though. Which in Germany's case were actual occupation by the way, not just some kind of Troika sitting in ministries in the capital.

But I think the main difference is that Germany was actually able to finance itself after it got rid of its debt. Greece couldn't in 2010, can't now and most importantly won't for the time being. The Greeks know that. Otherwise they would never have come back to the negotiation table. No country takes a humiliation like the current deal if it doesn't have to.

[crazy canuck]

The Greek government doesn't seem to have the stomach for the consequences though. Which in Germany's case were actual occupation by the way, not just some kind of Troika sitting in ministries in the capital.

But I think the main difference is that Germany was actually able to finance itself after it got rid of its debt. Greece couldn't in 2010, can't now and most importantly won't for the time being. The Greeks know that. Otherwise they would never have come back to the negotiation table. No country takes a humiliation like the current deal if it doesn't have to.

The main difference is that the Cold War no longer exists.  Therefore there is no political will in the West to make sure Greece succeeds.  Quite a different circumstance for Germany from about 1947ish on. 

[Admiral Yi]

???
Austerity made the debt problem *worse*

So?  This doesn't change the fact that no austerity means more money is needed.

Conditionality means its not free.
Assuming that there was "free money". Which there wasn't except for former holders of Greek sovereign bonds.

So by conditionality you mean austerity.

And your ECB money would be free.  If you don't earn it or pay it back, it's free.

[crazy canuck]

Here is an interesting site I found.  I compares the debt and deficits of all Eurozone Countries.

http://www.debtclocks.eu/public-debt-and-budget-deficits-comparison-of-the-eu-member-states.html

[Crazy_Ivan80]

Therefore there is no political will in the West to make sure Greece succeeds.

Greece will only succeed if the Greeks want it to succeed. So far they haven't. No amount of Western money will change that if they Greeks themselves don't change their attitude towards their state. So why waste more money?

[crazy canuck]

Therefore there is no political will in the West to make sure Greece succeeds.

Greece will only succeed if the Greeks want it to succeed. So far they haven't. No amount of Western money will change that if they Greeks themselves don't change their attitude towards their state. So why waste more money?

You make a good German 

Greece didn't succeed because they didn't want to?  The extreme austerity of the past years had nothing to do with the failure? 

[The Brain]

  Greece doesn't want to have healthy fundamentals. If it did it would (it's a democracy).

[The Minsky Moment]

So by conditionality you mean austerity.

No.  Commitment to a structural reform program yes.  But not a sharp decrease in net spending.

And your ECB money would be free.

What the ECB holds is a legal right to *receive* money from Greece.  If it elects to alter that right so that it receives less, that is not the same as *paying* money to Greece.

If you don't earn it or pay it back, it's free.

Countries don't earn money. 

[Zanza]

Greece didn't succeed because they didn't want to?  The extreme austerity of the past years had nothing to do with the failure?

Greece was already very sick when the doctors from the Troika prescribed their blood-letting. Austerity surely made matters worse, but the root cause of Greece's malaise is way older than 2010.

[Admiral Yi]

No.  Commitment to a structural reform program yes.  But not a sharp decrease in net spending.

Then the perverse incentives remain.  Belgium or whoever can go on a three year Visa card binge, then expect the ECB to pay it off, in exchange for new shopping hours laws.

What the ECB holds is a legal right to *receive* money from Greece.  If it elects to alter that right so that it receives less, that is not the same as *paying* money to Greece.

It's exactly the same.

Countries don't earn money.

In most countries the residents who pay taxes do.

[The Minsky Moment]

Austerity surely made matters worse, but the root cause of Greece's malaise is way older than 2010.

For example, there was an attempt to reform the much maligned pension system in 1998, in which various schemes were consolidated; however, the result was to increase the overall pension entitlements.

Response: Greece was then admitted into the Euro.

In my business we call that comparative negligence.

[crazy canuck]

Greece didn't succeed because they didn't want to?  The extreme austerity of the past years had nothing to do with the failure?

Greece was already very sick when the doctors from the Troika prescribed their blood-letting. Austerity surely made matters worse, but the root cause of Greece's malaise is way older than 2010.

No argument.  I like your metaphor. Like Middleage medical practitioners, once the Troika became involved the chances of a positive outcome diminished significantly.

[Norgy]

???
Austerity made the debt problem *worse*

If you cut public spending in most European countries, you also take away purchasing power that keeps people in jobs in the private sector and amount to economic growth and tax base.
Austerity measures only worsen and excerberate the consequences of economic crisis. One things' declining exports, but if you can't keep national demand up, where are you going to get revenues?

[Zanza]

Austerity surely made matters worse, but the root cause of Greece's malaise is way older than 2010.

For example, there was an attempt to reform the much maligned pension system in 1998, in which various schemes were consolidated; however, the result was to increase the overall pension entitlements.

Response: Greece was then admitted into the Euro.

In my business we call that comparative negligence.

Your point being? Greece and the Eurozone should solve their matters according to concepts of American private law? If so, it's Chapter 11 and liquidation for Greece I guess.