Greece, what the fuck?

[barbos]

Correct me if I'm wrong, but the money lent to Greece isn't actually coming out of anybody's savings, right? It is fiat money created out of thin air. The only reason Greece needs more borrowing now is to pay interest on their debt, they don't need it to carry on living. So what if it the interest payments slow down a little? The only thing that would hurt would be the Central Bank's balance sheet. The troika want payments because for them it is pure profit. Why do the they need to make a profit from the carcass of a struggling EU member state? Is that what the EU is about?

Because Greek carcass ls not alone in EU, there are few more (Italy, Spain, Portugal), and they are bigger too. And people have doubts about Greece actually living on their own currently.
I tend to believe troika more than greeks.

 

[dismal]

It's not clear to me how this is going to allow them to spend other people's money

They don't need other people's money to pay their expenses since they've been running a primary surplus.

If ksen says it, it must be true. I shall inform the rest of the world they have it wrong, and there is no "crisis".

 

[ksen]

If ksen says it, it must be true.

Words to live by my friend, words to live by.

 

[Nice Squirrel]

If ksen says it, it must be true.

Words to live by my friend, words to live by.

Ksen ist meinen Furher.

 

[dismal]

If ksen says it, it must be true.

Words to live by my friend, words to live by.

You need to drop an IM to Tsipras and tell him it's OK, he can stop asking for money.

 

[ksen]

Words to live by my friend, words to live by.

You need to drop an IM to Tsipras and tell him it's OK, he can stop asking for money.

Sure thing, as soon as your ECB buddies stop asking Tsipras for the money he needs help paying back.

 

[Axulus]

Why's the focus on Greece?

It's the Troika that is being unreasonable.

What in particular is unreasonable about these proposals?

In the interest of transparency and for the information of the Greek people, the European Commission is publishing the latest proposals agreed among the three institutions (European Commission, European Central Bank and International Monetary Fund), which take into account the proposals of the Greek authorities of 8, 14, 22 and 25 June 2015 as well as the talks at political and technical level throughout the week.

See the full list here:

http://europa.eu/rapid/attachment/IP-15-5270/en/List of prior actions - version of 26 June 20 00.pdf

- - - Updated - - -

You need to drop an IM to Tsipras and tell him it's OK, he can stop asking for money.

Sure thing, as soon as your ECB buddies stop asking Tsipras for the money he needs help paying back.

Tsipras is the one asking for 7.2B euro from the troika due under the bailout agreement, the agreement which Tsipras says Greece will no longer honor.

 

[ksen]

What in particular is unreasonable about these proposals?

In the interest of transparency and for the information of the Greek people, the European Commission is publishing the latest proposals agreed among the three institutions (European Commission, European Central Bank and International Monetary Fund), which take into account the proposals of the Greek authorities of 8, 14, 22 and 25 June 2015 as well as the talks at political and technical level throughout the week.

See the full list here:

http://europa.eu/rapid/attachment/IP-15-5270/en/List of prior actions - version of 26 June 20 00.pdf

I'm looking at the list you provided and the heading says "Greece Prior Actions". Does that mean it's a list that Greece already agreed to? I'm not clear what the list actually is.

Either way policy 1 requiring a prmary surplus of 3.5% of GDP seems pretty unreasonable.

You need to drop an IM to Tsipras and tell him it's OK, he can stop asking for money.

Sure thing, as soon as your ECB buddies stop asking Tsipras for the money he needs help paying back.

Tsipras is the one asking for 7.2B euro from the troika due under the bailout agreement, the agreement which Tsipras says Greece will no longer honor.

Is he asking for 7.2B euros?

Isn't what he's asking for to be used to help make the debt payments being demanded?

 

[dismal]

What in particular is unreasonable about these proposals?



See the full list here:

http://europa.eu/rapid/attachment/IP-15-5270/en/List of prior actions - version of 26 June 20 00.pdf

I'm looking at the list you provided and the heading says "Greece Prior Actions". Does that mean it's a list that Greece already agreed to? I'm not clear what the list actually is.

Either way policy 1 requiring a prmary surplus of 3.5% of GDP seems pretty unreasonable.

You need to drop an IM to Tsipras and tell him it's OK, he can stop asking for money.

Sure thing, as soon as your ECB buddies stop asking Tsipras for the money he needs help paying back.

Tsipras is the one asking for 7.2B euro from the troika due under the bailout agreement, the agreement which Tsipras says Greece will no longer honor.

Is he asking for 7.2B euros?

Isn't what he's asking for to be used to help make the debt payments being demanded?

Some of it is, yes.

It would be silly of him to only ask his lenders for enough to meet his needs other than paying the lenders.

That's the thing about lending money. People like to be paid back.

 

[ksen]

Isn't what he's asking for to be used to help make the debt payments being demanded?

Some of it is, yes.

It would be silly of him to only ask his lenders for enough to meet his needs other than paying the lenders.

http://www.businessinsider.com/repo...-the-troika-didnt-accept-his-proposals-2015-6

Athens is trying to unlock a €7.2 billion ($8.2 billion, £5.16 billion) bailout tranche to make debt repayments on June 30 to the IMF and on July 20 to the ECB.

It sounds like the 7.2 billion is an already negotiated amount and it is exclusively for debt repayment but maybe this story isn't being that clear.

 

[fromderinside]

Its clear to me that the money had already been spent without adequate vesting by lenders. Why should lenders get their payments when they didn't even bother to investigate whether Greece has/had the ability or will to repay. Now the cows are out and the EU fat cats wants Greece to pay to bring them back in - most of the cows are dead along the road of the past several decades - at their expense. Not likely to happen. Also not likely to happen is a dramatic change of culture or restructuring of economy to make payment possible.

Recommendation. Take losses, reset to repayment level which Greece can grow and change over, say, about 15 years.

But no. Fat cats think money grws on trees in Greece too.

Grow up EU.

Again, Greece wants to borrow more money.

It turns out that squawking all the time how your evil lenders do not deserve to get paid back is not a good way to convince your lenders to lend you more.

They want to borrow more money because they were put in the position of having to pay back what they really don't need to pay back to be a member of 'the club'. Unless you get that point you won't be very forthcoming in any discussion about whether government does or does not equal economy which is what this mess is all about.

 

[Axulus]

Some of it is, yes.

It would be silly of him to only ask his lenders for enough to meet his needs other than paying the lenders.

http://www.businessinsider.com/repo...-the-troika-didnt-accept-his-proposals-2015-6

Athens is trying to unlock a €7.2 billion ($8.2 billion, £5.16 billion) bailout tranche to make debt repayments on June 30 to the IMF and on July 20 to the ECB.

It sounds like the 7.2 billion is an already negotiated amount and it is exclusively for debt repayment but maybe this story isn't being that clear.

1.5 billion payment is due June 30th. Only part of the 7.2 billion is for debt repayment.

http://www.businessinsider.com/afp-imf-says-it-expects-greece-will-make-june-30-payment-2015-6

 

[NobleSavage]

Four years old, but still funny.

 

[ksen]

http://www.businessinsider.com/repo...-the-troika-didnt-accept-his-proposals-2015-6

Athens is trying to unlock a €7.2 billion ($8.2 billion, £5.16 billion) bailout tranche to make debt repayments on June 30 to the IMF and on July 20 to the ECB.

It sounds like the 7.2 billion is an already negotiated amount and it is exclusively for debt repayment but maybe this story isn't being that clear.

1.5 billion payment is due June 30th. Only part of the 7.2 billion is for debt repayment.

http://www.businessinsider.com/afp-imf-says-it-expects-greece-will-make-june-30-payment-2015-6

Greece has 8.5 billion in debt payments in July: 5.5 billion to IMF/ECB/EIB and 3.0 billion to treasury bill holders.

http://graphics.wsj.com/greece-debt-timeline/

 

[Jokodo]

Do you ECB fanboys even understand what a 3.5% primary surplus means? During a recession?

It's draining 3.5% of the total output of the economy away from domestic consumption and investment. Macroeconomics 101 says that's a bad idea. It's something you can do when the economy is thriving, something that might even be a good idea under exceptional circumstances to avoid a bubble from forming, but during a recession, it's suicide.

Yes, moving away from that surplus target means Greece will be unable to meet its credit repayments on schedule. Insisting on it means crippling the Greek economy to the point where it probably will never be able to repay. Unless you already believe that Greece will never be able to do so and derive satisfaction from letting the Greek people suffer for the sins of previous governments (without actually expecting any return for doing so, and sacrificing whatever chance there is that you might get back some of your money if you let the Greek economy recover), that's a tremendously stupid thing to do.

BTW: http://lmgtfy.com/?q=greece+primary+balance+2015

 

[ksen]

The Syriza government wants to raise taxes and cut spending less. The Eurozone wants less taxes and more spending cuts.

http://www.businessinsider.com/repo...-the-troika-didnt-accept-his-proposals-2015-6

The Wall Street Journal managed to get hold of the full text of the IMF's response to the Greek proposals — you can take a look at it here. In general, they want more spending reductions and fewer tax increases, as well as wanting measures to be brought into force more quickly than Athens does.

Basically the Eurozone wants to turn Greece into Kansas.

Sounds like a good plan.

 

[dismal]

Do you ECB fanboys even understand what a 3.5% primary surplus means? During a recession?

Greece has not been running a 3.5% primary budget surplus. And, in the real world where interest payments count as part of a budget, it has been running a good old fashioned deficit.

The country’s budget deficit was 3.5% of gross domestic product in 2014, figures from the national statistics agency, Elstat, showed. The European Commission has previously forecast a 1.6% of GDP deficit.

...

Greece posted a primary budget surplus of 0.4% of GDP, excluding interest payments, statistics showed, missing a 1.5% target set out as terms of its bailout package.

Public debt reached 177% of GDP in 2014, the statistics office said.

http://www.wsj.com/articles/greece-falls-short-of-budget-target-1429114735

Say hello to all that Keynesy goodness.

If racking up massive Keynsey Debts were the true key to prosperity, Greece must be superprosperous already.

 

[Jokodo]

Greece has not been running a 3.5% primary budget surplus. <snip>

I didn't say it has. I said that's what the Eurogroup is demanding, and that it's an unreasonable demand accepting which would be suicidal, and not even helpful for the creditors unless they're sadists who want nothing more than seeing the Greek people suffer.

 

[dismal]

Greece has not been running a 3.5% primary budget surplus. <snip>

I didn't say it has. I said that's what the Eurogroup is demanding, and that it's an unreasonable demand accepting which would be suicidal, and not even helpful for the creditors unless they're sadists who want nothing more than seeing the Greek people suffer.

Doesn't sound like they have been "demanding" it all that hard as the last target was 1.5%, and more to the reality, it doesn't sound like they have been getting anything close to it.

So it seems odd it would be much of a factor in their lack of Keynesyness.

 

[Jayjay]

I'm not convinced that Greece is running a primary surplus. It has cooked the books before, and is probably cooking the books now.

It has cooked the books when everyone wanted it to show a good balance, when it was run by a mainstream conservative government they trusted. Cooking the books when everyone's waiting for your first mistake is quite a bit harder to do.

Not necessarily, if the creditors are in on it:

Two weeks ago, the European Commission said Athens managed to achieve a surplus of 1.5 billion euros ($2.08 billion) in 2013 and could now hope for further support from its creditors. Help would likely include lower interest rates on debt and a longer debt repayment period.

But a number of economists warned ahead of the meeting in Brussels that Greece's primary surplus was merely the result of very resourceful accounting applied with the knowledge of, and endorsed by, the creditors themselves - notably the European Union, the European Central Bank and the International Monetary Fund.

Even Greek economists acknowledged their country had a primary deficit of 16 billion euros last year, but the Troika of creditors agreed to not include one-off items in the calculation, such as a special 19.7-billion-euro shot in the arm for Greece's ailing banks.

"You can always make a budget sheet look good by just ignoring a number of spending items," said the president of the Munich-based IFO economic think tank, Hans-Werner Sinn. But applying such methods is not very helpful as it distracts people's attention away from the huge debt load Greece is still grappling with, he added.

Also, I seem to recall reading somewhere criticism that Greece used some accounting trick to include local government funds in the state budget to bring it to black, but unfortunately I can't find that source right now. The main problem however is that Greece has only had a surplus when including the massive bailout packages it has received.

But even if Greece was running a primary surplus, that was during the last government. Is that still the case with Syriza being in charge and reverting many of the austerity measures?

Yes. Google it.

I did. Financial Times, May 4th 2015:

According to two officials present at a contentious meeting of eurozone finance ministers in Riga last month, Mr Thomsen said initial data the IMF had received from Greek authorities showed Athens was on track to run a primary budget deficit of as much as 1.5 per cent of gross domestic product this year.