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Heroes Community > Other Side of the Monitor > Thread: Grexit
Thread: Grexit This thread is 5 pages long: 1 2 3 4 5 · NEXT»
Stevie
Stevie


Responsible
Undefeatable Hero
posted July 06, 2015 06:12 AM
Edited by Stevie at 06:56, 06 Jul 2015.

Grexit


Before the financial crisis, Greece did a lot of borrowing and used the money to invest in its public sector which ensured that the economy kept going, in hope that the debt would be later paid from the envisioned growth. However, the recession hit, borrowing money was now harder because of the higher interest rates, and the Greek government became unable to pay anything from wages to their loans as the economy kept shrinking. In case Greece defaulted, the private banks they borrowed from would have found themselves in a very problematic situation as they themselves would then face bankruptcy on account of their poor investments, which in turn would affect other banks, leading to a devastating domino effect which would leave the European economy crippled. To ensure that this wouldn't happen, the European Central Bank, the European Central Commission and the International Monetary Fund, also known as "the troika" have been issuing "emergency loans" to Greece to keep its economy, and implicitly the European financial sector, afloat. The price to pay, however, was quite high as the Greek government was now compelled to apply austerity measures in order to regain its fiscal balance. This took the form of increased taxes, pension cuts and other things having a significant impact on the Greek economy. With less money to spend, the government gained less from taxes, businesses went under and unemployment rates increased to over 25%.

At this point, Greece's economy is in a downward spiral from which it cannot regain stability, let alone produce the money to pay its debt. Because of that, the government sought to renegotiate its austerity measures and / or to be forgiven from some of its debt, obtaining a second bailout in 2012 which proved to be far from enough. But ever since, the troika has been uncompromising in its position, recognizing the fact that Greece is a very bad example for other countries in a similar situation like Spain, Portugal and Italy. With no light at the end of the tunnel in sight, the Greek people chose to put their faith in the hands of the left-wing party know as Syriza, and prime minister Alexis Tsipras which promised to not easily give in to the demands of the troika. On the other hand, the northern countries had a lot of press in regards to "money down the drain" and "lazy Greeks", so there is little reason to expect the troika to concede too much. The recent referendum in Greece resulting in a "no" to the current bailout proposal makes consensus seem even more unachievable.

And here we are. Greece is due to pay a big loan today to the IMF and it doesn't have the money for it. There's no deal for an emergency credit and we may see a default, leading to Greece exiting the eurozone. This would mean that the national currency would return from euro to a "new drachma", which has some significant implications. The beneficial one is that Greece would gain the power to print its own money again (which with euro would be exclusively in the hands of the ECB), meaning that it could pay its debt right away. However, this would cause severe inflation, effectively leaving the currency worthless. For this reason making lines in front of the ATMs has become the new Greek national sport as people want to withdraw their money in euro so that the value would preserve. This posed a problem for the banks which began running out of liquidity, leading to withdrawals restrictions of 60€ per week or shutting their doors completely. Furthermore, the Greek government would have to instate capital control so that large conversions leading to even more devaluing of the national currency would not occur.

For the financial Europe, this scenario happening now rather than a few years ago during the recession is a lot more acceptable. For the political Europe, however, this is a major blow which will go down in history as an infamous precedent. A country with an euro entry going bankrupt can only spell for a shaken confidence in the EU.

Personally, I believe this whole ordeal comes as a result of a lot of unnecessary things happening on both side. It's in times like these that we are reminded how incompetent our political leaders can be. Instead of seeking an amicable and reasonable solution with the best interests of everyone at heart, they pursue their own agendas and regard themselves as adversaries. And the only ones that have to suffer the poverty and hardship of the aftermath are the Greek people.

Please discuss.

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phe
phe


Famous Hero
Life and Freedom
posted July 06, 2015 08:51 AM
Edited by phe at 09:11, 06 Jul 2015.

Greece like many other countries with such problems should ignore debts (bonds, foreign debt and debt to IMF - result of dishonest financial lobby, impossible to pay back).
All social wellfare and pensions should be abolished as unfair, spending on army sharply cut (20% of Greek budget, in Poland 1%, unnecessary spending).
Education should be privitized, erased from budget forever, free e-education should be introduced.
Trade unions abolished, forbiden to exist, even punished.
Labour code should be abolished.
New currency should be created (however we have gold and other currencies).
Greece should leave EU.
Issuing bonds and making foreign debts should be forbiden.
Then there will be very fine economy and true wellfare.
GREECE REBOOT !!!

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Maurice
Maurice

Hero of Order
Part of the furniture
posted July 06, 2015 10:30 AM

phe said:
Greece like many other countries with such problems should ignore debts (bonds, foreign debt and debt to IMF - result of dishonest financial lobby, impossible to pay back).


So you say it's ok to loan money and then tell the one you're indebted to that you're not going to pay back? That's essentially the same as stealing. Establishing the fact that debts cannot be repaid should be an alarming signal that the system isn't healthy; the foundations on which the loans were extended weren't solid enough to begin with, opening the door to the disaster that's currently striking Greece. If anything, I can hope that this whole mess will serve as a prime example to prevent future loans on the same, shaky foundations to any country.

Quote:
Education should be privitized, erased from budget forever, free e-education should be introduced.


I doubt e-education (if I understand correctly that you mean education through the internet) is going to work. At the very least, nothing is ever free, there are always expenses that need to be covered one way or the other. If it's free for the people, the government has to cover expenses for it through tax income - which may mean taxes have to be raised to compensate.

Quote:
Trade unions abolished, forbiden to exist, even punished.
Labour code should be abolished.


So you want a return to the "slavery" that existed more than a hundred years ago, where the factory workers were all subjected to the whims of the employers and factory owners? Trade Unions and labour code exist to protect the interests of the workers, to make sure the working conditions are acceptable and better than slavery.

Quote:
Then there will be very fine economy and true wellfare.


Isolating Greece like this will only result in a "very fine economy" if it's able to stand on its own legs, in a financial and economical sense. And with the labour rights scratched as you seem to propose will mean the wellfare will only end up with the rich elite, not the common man.

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Salamandre
Salamandre


Admirable
Omnipresent Hero
Wog refugee
posted July 06, 2015 10:34 AM

phe said:
Greece like many other countries with such problems should ignore debts (bonds, foreign debt and debt to IMF - result of dishonest financial lobby, impossible to pay back).


If Greece does that, it is economy exit, no one will ever make deals, contracts or exchanges with. A country can not survive if alone. It took you much to come with such non sense?

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EnergyZ
EnergyZ


Legendary Hero
President of MM Wiki
posted July 06, 2015 10:44 AM

phe said:
Greece like many other countries with such problems should ignore debts (bonds, foreign debt and debt to IMF - result of dishonest financial lobby, impossible to pay back).
All social wellfare and pensions should be abolished as unfair, spending on army sharply cut (20% of Greek budget, in Poland 1%, unnecessary spending).
Education should be privitized, erased from budget forever, free e-education should be introduced.
Trade unions abolished, forbiden to exist, even punished.
Labour code should be abolished.
New currency should be created (however we have gold and other currencies).
Greece should leave EU.
Issuing bonds and making foreign debts should be forbiden.
Then there will be very fine economy and true wellfare.
GREECE REBOOT !!!


This post smells of anarchism.

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ChrisD1
ChrisD1


Supreme Hero
posted July 06, 2015 11:14 AM

Maurice said:


So you say it's ok to loan money and then tell the one you're indebted to that you're not going to pay back? That's essentially the same as stealing. Establishing the fact that debts cannot be repaid should be an alarming signal that the system isn't healthy; the foundations on which the loans were extended weren't solid enough to begin with, opening the door to the disaster that's currently striking Greece. If anything, I can hope that this whole mess will serve as a prime example to prevent future loans on the same, shaky foundations to any country.


I'll just add something else that is not ok here. Lending money to someone, who you ,very well, know can't repay you and then "force" him to sell out parts of his airports, or the electricity companies and other stuff like that...
Indeed I hope in the future they know where to lend money and stop experimenting with countries.

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Tsar-Ivor
Tsar-Ivor


Promising
Legendary Hero
Scourge of God
posted July 06, 2015 11:22 AM
Edited by Tsar-Ivor at 11:32, 06 Jul 2015.

Not the first instance of the IMF's imperialism, they did the same in Asia, Africa and many post communist countries, they think that because they provided funds they have the right to usurp a country's sovereign rights via soft-power (although not any less effective than hard-power mind you). Would be borderline acceptable if their policies weren't unintuitive garbage.
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"No laughs were had. There is only shame and sadness." Jenny

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kiryu133
kiryu133


Responsible
Legendary Hero
Highly illogical
posted July 06, 2015 11:31 AM

German world domination is on its way. Third time's the charm i guess.

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Darkshadow
Darkshadow


Legendary Hero
Cerise Princess
posted July 06, 2015 11:32 AM

Tsar-Ivor said:
they think that because they provided funds they have the right to usurp a country's sovereign rights via soft-power (although not any less effective than hard-power mind you).


Considering how those who turn to the IMF don't usually have other options left, I would expect them to be harsh and controlling to get actual reforms and paying back instead of becoming a free money institution.

Of  course, those countries can always just not turn to the IMF and collapse instead since there won't be any others to lend for them.
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ChrisD1
ChrisD1


Supreme Hero
posted July 06, 2015 11:35 AM

Darkshadow said:
Tsar-Ivor said:
they think that because they provided funds they have the right to usurp a country's sovereign rights via soft-power (although not any less effective than hard-power mind you).


Considering how those who turn to the IMF don't usually have other options left, I would expect them to be harsh and controlling to get actual reforms and paying back instead of becoming a free money institution.

Of  course, those countries can always just not turn to the IMF and collapse instead since there won't be any others to lend for them.

Well and IMF should know where to lend money as I said earlier. Faults lie with both sides. As for us we had a chance to "restart" back when but we were too spoiled to go through with it for a better future so here we are!
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Zenofex
Zenofex


Responsible
Legendary Hero
Kreegan-atheist
posted July 06, 2015 11:36 AM

EnergyZ said:
This post smells of anarchism.
It smells of libertarian voodoo economy.

I'll probably be among the last to feel sympathy for Greece's overspending throughout its life as a EU member. Still, the pile of **** system called "take a loan to repay your previous loan" starts to show its deficiencies on a large scale at last. Money can't make money in long term without underlying economy producing goods and loan interests are virtually profit made of thin air. So loans resulting in loans that need more loans to repay ultimately hit a wall somewhere, usually when an economic crisis hits the material sector badly enough. The sooner this house of cards collapses worldwide, the better. It will be far from painless however.

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ChrisD1
ChrisD1


Supreme Hero
posted July 06, 2015 11:38 AM

ChrisD1 said:
Darkshadow said:
Tsar-Ivor said:
they think that because they provided funds they have the right to usurp a country's sovereign rights via soft-power (although not any less effective than hard-power mind you).


Considering how those who turn to the IMF don't usually have other options left, I would expect them to be harsh and controlling to get actual reforms and paying back instead of becoming a free money institution.

Of  course, those countries can always just not turn to the IMF and collapse instead since there won't be any others to lend for them.

Well and IMF should know where to lend money as I said earlier. And they where harsh! Very harsh!!!! They actually continued to lend us money so we could actually pay the loan!!!!! Can we acknowledge that for a second?
Faults lie with both sides. As for us we had a chance to "restart" back when but we were too spoiled to go through with it for a better future so here we are!

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Tsar-Ivor
Tsar-Ivor


Promising
Legendary Hero
Scourge of God
posted July 06, 2015 11:44 AM
Edited by Tsar-Ivor at 11:45, 06 Jul 2015.

I can see how you'd think that, but there are many instances where a country is not to blame for the financial crisis that it faces, case and point would be Ethiopia. Great fiscal policies, had sufficient reserves to blunt out some of the damage caused by the financial crisis in the late 90s (the IMF wanted them to reduce the reserves lol...) and was actually recovering exceptionally well all things considered, but the IMF withdrew its money because they wouldn't adopt strict austerity measures that would've ruined the country.

IMF isn't in this for money, they're just following their imperialistic ambitions that have dictated its actions for the past two decades. The problem is that the criteria for funding is not determined by whether the fiscal/financial policies of a nation are responsible or not, but by how susceptible the country is to kiss the IMF's ass. It's humiliating and degrading imho, especially when the IMF policies only make things worse.
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Maurice
Maurice

Hero of Order
Part of the furniture
posted July 06, 2015 12:06 PM

Isn't it funny that when a person wants to loan money, (s)he is warned that "loaning money costs money" (at least that's the case here in the Netherlands)? To try and discourage that person from loaning in the first place, when its not expected they will be able to cover the expenses that come down the line?

But then when it involves countries, the IMF and ECB are more than willing to pump money into a country even if it doesn't have a stable economic system.

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OhforfSake
OhforfSake


Promising
Legendary Hero
Initiate
posted July 06, 2015 01:25 PM

It's a bit odd..

Generally it's considered beneficial if a lot of money gets circulated, people loan money which they invest, pay off loan while making money from said loan, etc.

However there are also bad loans, where the person can't afford to pay off from it.. but it's also partly the loaners responsibility.. was it ever feasible the person could pay off as agreed?

A lot of blame on the financial crisis that hit my country was put on irresponsible loans from the banks.. where they put blind faith on a financial increase, and when that went south a lot of people had horrible loans.
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Living time backwards

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phe
phe


Famous Hero
Life and Freedom
posted July 06, 2015 02:20 PM
Edited by phe at 14:38, 06 Jul 2015.

Maurice said:


So you say it's ok to loan money and then tell the one you're indebted to that you're not going to pay back? That's essentially the same as stealing. Establishing the fact that debts cannot be repaid should be an alarming signal that the system isn't healthy; the foundations on which the loans were extended weren't solid enough to begin with, opening the door to the disaster that's currently striking Greece. If anything, I can hope that this whole mess will serve as a prime example to prevent future loans on the same, shaky foundations to any country.




Everybody knows that it is impossible to pay back these debts.
If deal of making agreement were dishonest it is invalid.
Financial lobby and foreign government are dishonest by corruption so they are criminals.  
Banks like constant income so they lobby in dishonest way to make them.


Creditor countries which make them on purpose to control future debtors.

People suffer from these debts. Debts should be ignored. Finacialists and dishonest credit taker politicains severly punished.

Stupid are those who granted these loans. Loans should be never granted. And never again!

Maurice said:

I doubt e-education (if I understand correctly that you mean education through the internet) is going to work. At the very least, nothing is ever free, there are always expenses that need to be covered one way or the other. If it's free for the people, the government has to cover expenses for it through tax income - which may mean taxes have to be raised to compensate.


Internet isn't necessary for e-larning (one dvd or blue-ray disc is enough).
If you have free software in internet it doesn't mean that some govenment spent money on it.
Of course there is scant cost of computer purchase and energy provided but it's nothing in comparison to maintain schools and transport to school which is costly, dangerous and time consuming.
Maurice said:

So you want a return to the "slavery" that existed more than a hundred years ago, where the factory workers were all subjected to the whims of the employers and factory owners? Trade Unions and labour code exist to protect the interests of the workers, to make sure the working conditions are acceptable and better than slavery.


Trade unions and labor code are harmful.

They create unemployment. At certain wage we can hire so and so many people. We cannot hire more people at lower wage. Some have better, others are fired. Product of factory is more expensive, harder to sell. Unemployment occurs. Less work in other companies/factories too.
Moreover there are unsound relations among those who work: (homo)sexuall harassment, corruption etc. "come! I will give you a job. You must do this and that and become a member of trade union."
There is a slavery in trade unions.


Members of unions are protected better than others. They are mafia of workers. The rest of staff doesn't matter.

Maurice said:

Isolating Greece like this will only result in a "very fine economy" if it's able to stand on its own legs, in a financial and economical sense. And with the labour rights scratched as you seem to propose will mean the wellfare will only end up with the rich elite, not the common man.


That what is now leads to rich elites of parasites(they are making money providing us public contracts (education, infrastructure etc.; they have slaves in red tape and trade unions and some professions, who work but others do not).
NEVER AGAIN WHAT IS NOW !!!
Salamandre said:

If Greece does that, it is economy exit, no one will ever make deals, contracts or exchanges with. A country can not survive if alone. It took you much to come with such non sense?


They can deal with the rest of the world, not only debtor countries. Many countries have the same problems including Poland. They will follow. Advantages of this are greater than losses. Their own economies will become to develop rapidly for its own. Greece is very good place for these. Ships can sail all over the world. Thay can even sell their goods to debtor countries by individual companies or brokers etc(ok our governmnets don't like each other but our ships can meet somewhere and make a deal).  

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Tsar-Ivor
Tsar-Ivor


Promising
Legendary Hero
Scourge of God
posted July 06, 2015 02:56 PM

Quote:
Everybody knows that it is impossible to pay back these debts.
If deal of making agreement were dishonest it is invalid.
Financial lobby and foreign government are dishonest by corruption so they are criminals.  
Banks like constant income so they lobby in dishonest way to make them.



That is correct but it has to be that way. Modern money is a very volatile thing and only works because people have faith in their currency, i.e the whole debt thing is to keep things stable. Western countries simply do not produce enough (are not organised properly more like) creating a need for extra money, ofc you can't print more otherwise it'll cause inflation, so you borrow from yourself (national banks, sometimes even private banks).

Now you see why it's such a dumb idea to scrap the debt? Sure you could argue that it was kinda shortsighted to implement it in the first place but it's the legacy that we all inherited, most people don't even know what the debt is/or who it is we're paying it back to, they just know the figures.
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"No laughs were had. There is only shame and sadness." Jenny

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OhforfSake
OhforfSake


Promising
Legendary Hero
Initiate
posted July 06, 2015 03:02 PM

The debt shouldn't be scrapped. I think the EU should work in union, Greece is part of us, the money Greece has is family money, so we try to help the best we can and Greece only pays back in a manner that makes sense and is beneficial.
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Living time backwards

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Fauch
Fauch


Responsible
Undefeatable Hero
posted July 06, 2015 03:26 PM
Edited by Fauch at 15:39, 06 Jul 2015.

the problem is they don't have the sovereignty to make their own money. they have to buy it from private banks, and unless the inflation is high enough to neutralize interest rates, it costs more than you get. unfortunately, one of the main mission of ECB is to fight inflation.
others solutions to get money would be exportation, which means another country is paying for the money you get, or giving a loan to another country (though of course, you need money for that)
overall, the only way to keep afloat is to drain other countries dry.

Quote:
Trade unions and labor code are harmful.

They create unemployment. At certain wage we can hire so and so many people. We cannot hire more people at lower wage. Some have better, others are fired. Product of factory is more expensive, harder to sell. Unemployment occurs. Less work in other companies/factories too.


better productivity creates unemployment. I don't think it's a bad thing to be more efficient. do we need to create useless jobs so we can keep people busy and the growth going?
the problem is the obligation of growth, that is to say, the companies have to always make more profits to repay their loans.

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Ebonheart
Ebonheart


Famous Hero
Rush the rush
posted July 06, 2015 03:53 PM
Edited by Ebonheart at 16:29, 06 Jul 2015.

The problem with Greece is their dishonesty. They lied and falsified numbers and also took huge loans in order to stabilize their economy.
It seems to me that they have not yet understood that it is they who has done erroneous deeds.

As Maurice stated above. If one takes a loan and then basically tells the one you borrowed from to zod off. It is a way of stealing.
The problem is that most Western countries as of the late 80s started to borrow in order to cower up holes in their welfare systems. It has somehow always been assumed that the next generation will pay it back with interest while keeping a happy smile on their faces.
So one generation loans and enjoys the party while the next generation is the one stuck paying up for a feast they never got to attend or for that matter, was invited to.

The crux is this form of democracy. It allows for no misstakes or things that might upset your voters. Rather than biting in the sour apple and fix a problem, it is postponed via loans in hopes the next generation will sort it out.

Think of it as body with a wound from a shotgun blast. The body is bleeding out and will eventually collapse unless healed. Now instead of mending the damage, we pump in more blood (via accommodations) into the body and so allows it to live on while leaking blood. By doing this the situation might seem to be under control when in fact it is getting worse. Eventually the additional life support blood will be depleted and so one is back at square one. The body is bleeding out but this time there is no additional blood to be had in order to give time to ply the damage. Ultimately it is the coming generation that will pay the price for the unaccountable actions.

What is worse is the fact that in the very end it is not the banks, politicians or special organs that are responsible for this. While they had responsibility on their posts, the politicians with the power to change were elected by the people. By using this form of democracy countries might have managed to dig their own graves and at the same time nailing the final nail in the coffin from inside. There is no difference between one dictator and 349 elected men and women set to bask in the power to rule a country. By today's population measures, too few are allowed to decide the fate and future for so many people.

What astounds me is that there is no cap on how much of the GDP a country is allowed to borrow.

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