Can you, in one paragraph or less, tell me what's going on with Greece?

[Raelbo]

In short:

Greece consistently spent more on social welfare (pensions, government subsidies, education, healthcare etc) than they could afford.

Normally countries would not be able to do this like Greece did, because running your economy that way has detrimental effects on your currency. But because they were using the Euro, the inflationary effects of their reckless spending were basically neutralised by the responsible policies of the rest of the EU. In effect Greece was reaping the rewards of the hard work and responsible economic policies of countries like Germany.

At present they owe over 320 Billion Euro to various creditors including several European countries and banks.

The only way they can repay it is if they start running their economy in a sustainable manner. That means reducing government spending and increasing tax revenue. Unfortunately the Greek citizens refuse to do this. They voted for a government that rejected these austerity measures, they voted in a referendum rejecting the notion of making the sacrifices.

The Greek people (obviously) don't want to pay more to live the way they do. While this is understandable it's also not realistic or feasible.

The situation for the Greeks atm is that their country has no money, which means that their people can't access money, which means they can't spend money. This is pretty disastrous. The ramifications for the owed nations is that they will probably have to write off the debt. This will hurt Greece far more than it's creditors.


Think of this analogy:

Imagine you have a relative who you have lent money to. You earn well, but your relative is struggling financially. They come to you and ask for a loan - to which you agree - because you can lend it to them much cheaper than the bank will (let's say you charge 1% interest but the bank would charge 10%).

Your relative uses this loan to live a lavish lifestyle - new cars, bigger house, parties, good food and wine etc. His wife spends the money on clothes, and jewellery, his family go on nice holidays, the kids have lots of nice toys. But when it comes time to pay you back, he asks instead for more money because he is struggling to make the car payments and the mortgage on his house. So you comply. But he continues to live lavishly, and instead of repaying his debts, he just keeps getting further into debt. His wife and kids are always finding new ways to spend the money and when he asked them to start cutting back they simply said "no".

Eventually this will catch up with him. You will put your foot down and say, no more. He will default on his car payments, his mortgage. So he will lose them. He and his wife and kids will have to suck it up and live a lot more modestly. And the longer they continue to live it up on money they don't have, the worse it will be when crunch time comes.

[announced]

ya Raelbo's post sums it up very nicely. basically Greece shouldnt be given a cent. they should all starve and die out due to their own stupidity of not knowing how to spend money responsibly. its almost like there were no adults in Greece to teach kids how to be smart with their money and live within their means. if the citizens of Greece dont want to do this they should be cut off from all communication to the outside world.

[Authary]

Greeks elected unbelievably crappy politicians (even by politician standards) for years. They didn't even have a working tax collecting system. Shit hit the fan during the economic crisis so they borrowed money under the promise that they would improve their state (or just, you know, have one in the first place).

They started slowly (because they are still greeks) implementing reforms like "not having everyone working in the public sector doing nothing", "collecting taxes" and "actually having a land register instead of individual people saying this particular rock was theirs and building the road on their property anyway". That together with the lack of money made life pretty shitty(er) but it was slowly getting better. That's when they made their worst mistake ever.

In January, they elected communists. Not the american "omg you damn commie" socialists but real, true communists (politely called "far left"). Those guys promised to stop "austerity" (which is no more than the revolutionary idea of not spending money you don't have), re-hire people in the public sector and improve salaries. Essentially "if you vote for us we will give you more money and stuff and life will be cooler just trust us". The problem is that those guys are ideologs.

Ideologs, by definition, do not deal with facts, logic, reason, emotions or moral. They are all about their ideology. Their particular ideology (I'll simplify a bit but the idea is there) is that capitalism is "bad" and communism... uh... "far-left", sorry, is "good". It's a classic "us" vs "them" system. They have been working at convincing the greek people that they were "us" and that the rest of the EU (who gave them money under reasonable conditions) was "them" using a classic rhetoric :

- The foreign elite ("them") has a plan to fuck the people ("us") up to get more money (money is "bad")
- The government ("us") is fighting against the foreign elite ("them") and will win with the support of the people (that was the referendum supposed to "empower" Tsipras)

Understandably, the rest of the EU does not like being insulted and called "terrorists" by people they have tried to help but they do not really want to see a whole country explode so they are still trying to help them. The thing is, they are dealing with a government that does not care whether their citizens live or die. They do not care whether you can buy food or gas. What they care about is that they win their imaginary war, they get rid of capitalism and the country adopts a fully communistic system. Because ideology.

Personally I'd like the EU to stop giving them money so they start dieing a bit. Knowing the greeks, they will quickly and violently overthrow their government, install some kind of military junta and start working on their economy a bit.

[Raelbo]

Their economy went to shit because they had no contorl over their currency (euro) and they ahve borrowed huge amount of money in order to keep things going but the situation hasnt turned and now they have depts up over their ears.
The downside of sharing a currency with other countries is that you as a country cannot control your own economy to prevent things like this.

A more accurate description is that the EU controlled their monetary policy (how much they could borrow, at what interest rate, the effects of this on inflation), while they still held control of their own fiscal policy (tax vs expenditure).

Greece wanted the benefits of EU monetary policy without ever bothering to adjust their fiscal policy accordingly. It was entirely under their own control, they just failed utterly as a nation when it came to excercising their collective self control.

- - - Updated - - -

ya Raelbo's post sums it up very nicely. basically Greece shouldnt be given a cent. they should all starve and die out due to their own stupidity of not knowing how to spend money responsibly

whoa. A bit harsh there don't you think?

I agree that they shouldn't be given any more money. They don't need to starve and die though. They just need to start living lifestyles more appropriate to the amount of wealth they actually generate. Unfortunately, left to their own devices, it seems that Greece will never do this. They will spend whatever they can today without thinking about the future. It seems to me the only way they will learn is if their creditors get tough.

You can't live the lifestyle of a rich person when you're earning the salary of a poor person.

- - - Updated - - -

Those guys promised to stop "austerity" (which is no more than the revolutionary idea of not spending money you don't have), re-hire people in the public sector and improve salaries. Essentially "if you vote for us we will give you more money and stuff and life will be cooler just trust us". The problem is that those guys are ideologs.

Well put. Greece is guilty of voting for what they want without ever stopping to consider the consequences of it.

Given the choice, most people want to work less, earn more, retire younger, get lots of free stuff from government but pay less taxes. Unfortunately the reality of life is that you can't have all those things at the same time because they are directly related. If you want to work less, you need to accept that you will earn less. If you want your government to provide stuff for you, taxes need to be higher.

You can't get anything for nothing. Greece tried to do that by borrowing money, but it was always going to catch up to them eventually.

[Bakis]

I can say it with one word: corruption

[Holofernes]

Greek comes to eurozone. European banks put huge amounts of money into greece via loans. Greek people buy stuff from Europe, they actually cant afford, but they get the cheap loans anyway. Loans dont get payed back.

EU governments bail out their own banks with tax money and guarantees.

Eu goverments put the blame (and the bill) on greek government.

Eu forces greek administration to undergo a very brutal saving policy, financial system and tax stuff and huge cuts in spendings to make sure greek pays interest, together with "helping" them (actually the most money from the fonds that are in media refered to as "helping greece" went directly to the institutes that had loans in greece, and not greece itself, so mostly they were helping themselfes).

Result is 60 % of under 30 year old greeks have no job, academics work 12 hour a day for 500 Euro a month (this is a 3rd to a 5th what would be appropiate), pensions were cut between 50 and 30 %. No social welfare at all, the majority of greek people dont have acess to health care and cannot afford medicaments.

This was after 5 years of "force administration" from European Union, were reforms were austered under the promise that things will become better (which clearly didnt become true at all).

6 month ago, general elections in greece, and people said no to this brutal saving politics. They want a debt cut and an economic newstart, as the debts are so high that it is impossible to ever pay back, even if they had the best economy in the world (which greece surely doesnt, the GDP of greece sank be 25 % in the last 5 years).


Eu doesnt want a debt cut, they want greece to brutally save and therefore further destroy its economic base
, to be able to pay the next interest, despite of the humanitarian catastrophe it wants. Main problem is the governments that bailed out the banks 5 years ago, are still in charge mostly, and back than the assured that no money will be lost with this guarantees for greek bonds. (but it was quite clear that it is lost, and was back than to most people who are able to do math). So they fear their own voters mostly.

Greek wants a longterm solution that is aimed at obtaining a self-sustainable greek without needing any spendings from the EU, basically this needs a debt cut and a investion programm compared to the marshall plan.
In the negotiation Greek politicians were not seen as even-leveled (the government is a construct of far left and far right parties) or as "speakable" partners in a Negotiation, they wanted to further force administer greek politics, and the new government was put in a corner, and than they made the greek people vote again wich course they prefer.
Sustainable longterm solution or month - to month struggle and continuation of the current (not working) system of emergency loan after emergency loan to be able to pay the next interes loan.

In my country it is a crime to take a loan to pay back an old loan if it is obvious that the whole sum can never be payed back realistically. its called "insolvenzverschleppung" (dictionary says it is "failure to file for insolvency in due time). But basically this is what eu forces greece to do.

And greeks dont want it any more, because the whole situation is getting worse and worse over time with this current system.

[Bakis]

The number 25% can be found in terms of more than the GDP fall in 5 years.
25% is also the missing amount of taxes due to tax evasion during the 'golden years'.
~25% is also the size of the Greek shadow economy.

25% is a golden number in Greece.

[Tuor]

If I recall correctly there was "creative accounting" used by other countries' too like Spain, Portugal, and Italy. In fact, take all the countries that "fibbed" their way into the EU out of it? And there wouldn't have been one to begin with. That wouldn't have mattered if Greece and their creditors had foreseen the financial meltdown. Of course most didn't and suddenly the EU finds itself in a financial fourth reich.

Portugal did not faked any accouting. Actually we are part of the eurozone since day 1, january 1 1998, that is the day were all national coins got a locked exchange rate. Greece only entered in the eurozone a few month's before the phisical euro bils and coins got released.

Also, if you not european, STOP TROLLING THE FUCKING THREAD.

[Wezmon]

How can you have less than one paragraph?

[Deleted]

"A country and it's citizens getting fucked over by the false belief of the EU in austerity." - paraphrased from european bank directors.

Why would you treat greece like part of your country?

[obdigore]

Essentially, the previous people in Power in Greece lied to get into the EU. Once there, things were found out and they begged and pleaded for a bunch of money, and agreed to pay it all back on a pretty bullshit-level payment plan. Then there was that whole financial near-collapse and the powers that be in the EU pretty much forced everyone to go on Austerity, which set everyone back even farther. The people of Greece finally had enough of the bullshit their previous government was doing, and voted in a left wing government, who came to the EU and said 'you can see our accounts, there is no way we can pay this money back, we need to figure something else out' and the EU pretty much said 'fuck off', so the new government of Greece held a vote to say, essentially, 'do we keep paying at the current rate (which we literally can't do) and the people of Greece said 'no, fuck off'. Even the IMF admits that if anyone wants to get any of their invested money out of Greece, they need time to get their country and finances back on track before people should be demanding repayment. Also, the problem was completely exasperated by bankers who kept loaning the 'old' Greece money and knew they wouldn't be able to pay it back.

Its sort of long but it is a paragraph.

[Bakis]

Essentially, the previous people in Power in Greece lied to get into the EU. Once there, things were found out and they begged and pleaded for a bunch of money, and agreed to pay it all back on a pretty bullshit-level payment plan. Then there was that whole financial near-collapse and the powers that be in the EU pretty much forced everyone to go on Austerity, which set everyone back even farther. The people of Greece finally had enough of the bullshit their previous government was doing, and voted in a left wing government, who came to the EU and said 'you can see our accounts, there is no way we can pay this money back, we need to figure something else out' and the EU pretty much said 'fuck off', so the new government of Greece held a vote to say, essentially, 'do we keep paying at the current rate (which we literally can't do) and the people of Greece said 'no, fuck off'. Even the IMF admits that if anyone wants to get any of their invested money out of Greece, they need time to get their country and finances back on track before people should be demanding repayment. Also, the problem was completely exasperated by bankers who kept loaning the 'old' Greece money and knew they wouldn't be able to pay it back.

Its sort of long but it is a paragraph.

I knew you would cheat with the length.

[Deleted]

Look what my perspective and speculationos are:

Greeces gets support from BRICS or Russia/China. Then IMF/ECB joins/gets money from BRICS New Development Bank which opens today i think and then the entire EU joins BRICS (and leaves NATO?). Then the Domino effect on debts etc goes back to US Federal Resevere? And joins BRICS too and when BRICS takes over the world we will finally have a "revolution"/Change and the sheeps/slaves will wake up pretty fast but surely, because that new bank is not gonna work on corruptive foundation/ideas and people will suddenly realize stuff like "oh we dont have to make money to make more money?" or "Oh we can share things with others to make humanity progression?"

kk xD

[Xandrigity]

Socialism at its finest.

[Bakis]

Socialism at its finest.

Clearly you are clueless about the history of the crisis

[obdigore]

Socialism at its finest.

Well no, the major Greek problem is corruption and embezzling being riddled throughout their government.

But you go ahead and tilt at those windmills.

[Machismo]

It's a little story of people choosing to live in willful ignorance. Their country has been run poorly for a very long time, and the debt has finally gotten too big for them to hide. Others are tsick and tired of their shit, and demanded to be paid. The Greeks did what they do best, hide their heads in the sand, and pretend to act like they are victims. Basically, it's a perfect example of a failed welfare state.

[Deleted]

Ok.

Germany is in massive debt following WW1, has its debts written off by generous countries.

Germany is in massive, crippling debt following WWII, has its debts written off in 1953 by generous countries (including Greece).

Germany and France, pushing the EU ideal fudge the figures and let in economies that are not ready for integration into the EU monetary union.

Global financial crisis.

Germany and others enforce austerity program on economies that cripple them, whilst making a massive profit off them by giving loans as massive interest rates. Germany makes money off countries struggling to cope with debt, and push them deeper into it.

Germany takes somewhat hypocritical stance that debt is morally bad, and forgets that everyone else forgave their debt (after a war in which they invaded these countries and committed staggering atrocities), including Greece.

Greece, quite rightly, stands up for the democratic will of the people. They want to pay their debts, but in a manner which does not cripple them for decades, and instead lets them recover to actually generate money to pay off debt! Germany wants unelected institutions to rule and dictate financial policy for nation states...


There you go, a quick summary.

[Deleted]

Greece was not ready to adopt the Euro. Their economy was not strong enough.
Due to political reasons, they were given access to the euro.
Banks now gave more money to Greece than they did before because Greece was in a monetary union with countries like Germany and France, who have a strong economy, and banks decided to profit on this by attacking the weaker parts of the Euro zone, like Greece.
Greece fell for it since politicians wanted to be re-elected and only thought about the present and getting rich. You see, in Greece the corruption is high.
When the world crysis happened, banks didn't have enough money to give to Greece anymore, so Greece couldn't pay all the things it has acquired through loans.
So Greece started falling, and, just as predicted by banks, Germany (mostly) had to pay for Greece due to the monetary union.
However, Germany did not want to pay for Greece unless Greece imposed austerity.
Greece doesn't want to.
Basically, Greece wants all the benefits of the EU, and others paying for them, without them giving anything back. Due to its weak fiscal policy, banks can prey on it and affect the entire EU, and, in turn, the world. But Europe is too nationalistic to unite into a federation of sorts.

[cFortyfive]

The amount of bullshit in those greece threads is always entertaining it's like skimming through pleb comments on bild.de