[illuminati1911]

"Last year Greece stopped the European Union from criticising China’s human-rights record at a UN forum. Hungary and Greece prevented the EU from backing a court ruling against China’s expansive territorial claims in the South China Sea. Faced with such behaviour, it is only prudent for Europeans to be nervous."

Well that's one way of saying thanks for all those bailouts they received...

[Al-Khwarizmi]

I hope you are being ironic. The EU and the IMF pretty much screwed up Greece, this has even been admitted by the IMF themselves.

https://www.forbes.com/sites/johnmauldin/2016/08/23/jthe-imf...

So I'm honestly not surprised that they turn to China, maybe the EU should treat their own countries decently (and I say this as a non-Greek EU citizen).

[Merem]

Greece screwed up Greece before they even joined the eurozone. They weren't even eligible for that but still managed to do so by cooking the books (with the help of the likes of Goldman Sachs etc).

[timrichard]

Which was well known to the EU, happy to have them on board regardless. Expansion at any cost.

[ksec]

And they were hoping it would be fixed, which obviously didn't happen. So to be fair You can't solely blame EU for that.

[charlesdm]

The same reason much of the corruption is tolerated in Eastern Europe. Expansion at all costs -- must have a buffer between Russia.

[emn13]

Na, I don't think Russia played into this all that much. Excessive ambition, overzealous idealism, and internal politics were much more relevant. Don't forget that when these decisions were made Russia wasn't perceived to be the threat it's seen as today, at least not by the EU of that day. E.g. poland joined in 2004, but much of the talks were in the 90s- and thus in an era when Russia was far from threatening. Putin didn't become president until 2000. So while the EU certainly wasn't looking for a buffer, it's much more plausible that the new members were less sanguine about future Russia (and how right they were), thus seeking to cement their independence from the USSR.

It's somewhat ironic, for instance, to consider that it was the UK that particularly pushed for expansion. Not only did they lobby hard internally beforehand, they were (IIRC?) only EU country to immediately grant free immigration from the new members, without any transition period - how times change!

[disgruntledphd2]

Ireland also did this. Mind you, they probably just copied whatever the UK was doing, as was the style of the times (spare a thought for the poor Irish public servants, who will be forced to transpose their own European directives into law from next year, rather than just copying the UK).

[RobertoG]

I suppose it depends of your definition of screwed up.

The emigration, life expectancy, and growth data don't say that. Not even the public debt data say that.

[RobertoG]

It seems I'm being down-voted.

I will clarify in case the reason is that I didn't explain myself properly: the data don't say that Greece screwed up so much before the current crisis.

It has been always a country with problems but the statistics were improving until they get "rescued".

[growlist]

A whole generation's life chances ruined across several countries?

[village-idiot]

If you’re looking for someone who came out of the Greece/EU saga looking good, you probably won’t find it.

The Greeks themselves somehow made a society with a shocking amount of tax dodging.

The Greek government allowed this, and lied its ass off while applying to the EU.

The EU either didn’t do due diligence or didn’t care. Once the time bomb did it’s inevitable thing, they were “shocked” and proceeded to punish Greece with forced austerity measures.

EU citizens from their part expressed some pretty ugly sentiments against the Greeks, IIRC.

Pretty much everyone came out of this looking far worse.

[nske]

> The Greek government allowed this

To understand the tax mentality of Greeks, it's worth pointing that not a single Greek government existed in modern history that didn't have multiple corruption scandals and blatant misspending/mismanagement incidents come to light. And only a small percentage of those incidents probably ever came into light. The last two generations got used to knowing that tax money vanish into a black hole, needless public sector hires, ridiculous under-the-table contracts, etc, all while the public health system was suffering to the extent that bribing the doctors to receive decent service became the norm. That practice extended everywhere: you'd bribe for your driving license or you'd likely fail even if you did everything right, you'd bribe the tax inspectors or you'd face fines even if everything was in order, etc. Not saying that this makes tax evasion a good thing but it does feed some interesting thoughts about how hard it is to change a system that keeps mishandling tax money while failing the people and how the natural urge of the people in these cases is to just avoid contributing into it however they can.

[village-idiot]

Indeed. As I said, nobody came out looking clean.

I think the kindest thing you could say is that the Greek populace basically gave up on good governance and decided to make do with what they had, which is kind of damning with faint praise.

[secfirstmd]

Greece pretty much screwed up Greece.

Source: I'm Irish, we screwed up Ireland.

[soVeryTired]

Hot money flowing into a country does crazy things to it. It takes both an irresponsible borrower and an irresponsible lender to make an irresponsible deal.

[Brakenshire]

Ireland was surely screwed up by loose Eurozone monetary policy in the middle of its massive housing bubble.

[barrkel]

There are ways to mitigate that - e.g. increased taxes based on land value and stronger legislation around lending. Trouble is, rising house prices are more popular to politically powerful groups.

[Brakenshire]

Yeah, can’t really see that being politically viable.

[secfirstmd]

Yep

[jessaustin]

Ireland could hardly pursue appropriate monetary policy as a member of the currency union. Euro monetary policy is totally driven by Germany's needs. So are we saying that the real screw-up was joining the currency union?

[jessaustin]

Yes all this "news" we're hearing this morning on this topic is just Germany realizing that Greece have decided they prefer an abusive relationship with China to their previous abusive relationship with Germany. Germany protests!

[jayalpha]

Yeah, good luck when the Chinese will confiscate your assets.

https://www.nytimes.com/2017/12/12/world/asia/sri-lanka-chin...

Make a list of islands you want to give away for 99 years.

[coldtea]

Yeah, unemployment at 40%, massive GDP drops, German banks happy, all kinds of anti-labour laws passed, exorbitant taxation, 5% of the most productive/young population left the country to work abroad, political supervision, those Greeks sure benefited much by those bailouts.

https://eu.usatoday.com/story/money/2015/08/11/greece-debt-c...

https://www.reuters.com/article/us-eurozone-bailouts-idUSBRE...

https://global.handelsblatt.com/finance/germany-profits-from...

[gutnor]

I'm personally not exactly happy how the EU handled Greece, especially the harsh social consequences on its citizen that the EU could have smoothed and the lack of proper management of Greece "creative" accounting that let Greece join the EURO.

But the EU did not cause the massive hole Greece dug for itself for years/decades. Reckoning was coming. The EU agreement was harsh, I think there could have been a softer version available, especially had Greece not been in the EURO.

But outside the EU entirely, Greece would have eventually defaulted on its debt, and considering the insane amount of debt and massive budget imbalance that caused it in the first place, that would have sent the Drachma spiralling out of control. Without the backing of the EU, Greece would have had a hard time coming up with an economic and social plan to earn back some international credibility. It is unlikely it would have maintained inflation in control, but even if it did, high inflation would have been dramatic in an economy so reliant on import for basic necessities. It is extremely doubtful they would have been better off.

One way (in the EU) or another Greece was looking at terrible consequences for their politicians mismanagements.

[coldtea]

>But the EU did not cause the massive hole Greece dug for itself for years/decades.

I think that has several causes:

1) Greek politicians (and Greek elites complicit with them) consumed a lot of infrastructure money from EU in BS overpriced public works projects. That said, Greece infrastructure wise is a totally different country from Greece in 1980. But those infrastructure projects didn't and could't themselves generate money.

2) Greek economy was traditionally based on smaller production units (SMEs). When global outsourcing (and later China and co) became an option for everything of that kind, Greece competence in the area dropped to 0. The small business owners at the time didn't have the savvy to market their products as premium goods and justify higher margins (like e.g. Italy does at least for some things), neither did they have the brand name to assist them in moving production abroad (and continue selling). The quality+price points they competed at were no longer possible. Tons of such Greek industries died off in the 80s and 90s with no replacement.

(Add to the mix a bevy of EU policies that were in fact protecting interests of major EU nations (Germany, France, mostly), against competition from the South).

3) Even so, Greece had control over its debt, which was never a major part of GDP before 2001, using its monetary policy. The inflection point was the switch to the Euro, when suddenly a volatile economy was tied to a "strong" currency, with no room for corrections (imagine the US debt if the Fed couldn't print dollars and the world didn't accept dollars as a de facto exchange currency -- now imagine that with an much weaker economy to begin with).

[pas]

The 2008-2010 crisis never would have left Greece standing, EUROzone or not.

Their debt might have been okay in 2001, but don't forget how reckless they have been with spending (photos of sport related infrastructure the 2004 Olympics is a nice reminder), and they put off reforms for decades.

Infrastructure projects are a must have for a globally competitive economy, profit generating or not. Upkeep is an issue of course, but for some reason Greece wanted to not go back to sheep herding.

[intended]

As I recall, the Greek public sector was a large part of its economy, and jobs available through connections over merit.

[coldtea]

Smaller public sector than e.g. Denmark. But worse management.

[soVeryTired]

I think one major point is that a devaluation in the drachma would have made Greek industry more competitive again. Inflation goes up, yes, but imports decrease and exports increase.

Greece would have experienced market discipline instead of discipline by government fiat. The latter is much more dangerous politically, as we saw with the election of Syriza.

I think it's telling to contrast the fate of Greece with the outcome for Iceland.

[cinquemb]

>But the EU did not cause the massive hole Greece dug for itself for years/decades. Reckoning was coming.

Yes, and that "reckoning" was a digging bigger hole. The real reckoning is when European sovereign yields go through the roof when the ECB runs out of ammo…

[RobertoG]

The ECB can't "run out of ammo", but you are right that they could stop, for political reasons, financing the Euro countries covertly in the secondary market like they are doing now.

Or maybe they just will keep that gun to the head and they will use that thread for running the show and impose more counter-cyclic policies. In that case the answer will come from the voters (like it's happening in Italy now).

[pas]

> In that case the answer will come from the voters (like it's happening in Italy now).

Could you expand on this please, what's happening in Italy, how that connects to the ECB open market policies?

[RobertoG]

I can try..

The Euro is basically a foreign currency, so Italy have lost any saying in its monetary and fiscal policies. Austerity in times of recession is craziness, but is the order that come from Brussels.

The new government in Italy is basically anti-euro. Those so called "populist" governments don't happen by accident but when the people is very unhappy with the economy.

As the Euro is, in essence, a foreign currency, there is really a risk that Italy and others could be in the situation where they can't finance themselves. That would be the end of the Euro.

In the year 2012 that almost happened. There was a public debt crisis that finished the (and this is not an exaggeration (1)) exact day that the ECB decided to finish it.

What the ECB is doing now (since 2012), is buying the public debt of Italy, Spain and others in the secondary markets (2).

They can't do it directly because is forbidden. This has to be done, because, otherwise will be the end of the Euro.

Interestingly, buying in the secondary market is also against the treaties (3) but they hide it in technicalities.

At the same time, this is used as leverage for dictating the economic policies of those countries from Brussels.

The result of those policies is what bring the "populist" to the government.

(1)-https://www.telegraph.co.uk/finance/financialcrisis/9428894/...

(2)-https://www.bloomberg.com/view/articles/2015-12-04/the-ecb-s...

(3) https://elpais.com/elpais/2012/10/24/inenglish/1351097206_05...

[thefounder]

I don't think defaulting could have turned out better. Once you take money you have to pay back. They got debt reduction as well so it's not like they are pay back the full amount. It's simply the result of bad governance that pilled up over the years.

[coldtea]

The worse estimation of defaulting (by people warning against it) where still better than today's numbers. And defaulting would have started a path towards reconstruction, whereas Greece now is just indefinitely held in life with an "artificial lung".

(And the debt is actually the same than it was when the crisis started, so all the "bailout" did was to save the banks exposed to it using European's people's money, so instead of DB and other private banks now it's owed to ECB, the IMF and so on -- the same debt but under a much worsened infrastructure and economy, so even less chance of ever coming over).

[timrichard]

Which kinda sorta looks like German/French state aid, except that's completely against the rules...

[disgruntledphd2]

It was a bailout of large banks by stealth, much like what happened in Ireland.

Timoty Geithner apocryphally refused to even countenance burning any bondholders in Ireland (or anywhere really) out of the risk of contagion. Now, Ireland has the 3rd highest debt per capita in the world, just after Japan and the US. Note that Japan and the US can print currency, while Ireland cannot.

tl;dr totally a bailout by stealth.

The worst part was that it created this horrible dynamic between different European countries, when really we should just have been blaming the banks.

[jayalpha]

Maybe they should never have joined the Euro? They already cheated to join with the help of Goldman Sachs.

Not paying taxes, retirement with 50, not playing by the rules, people go blind very quick: https://www.csmonitor.com/World/Europe/2012/0430/Greek-islan...

There are only two options:

1. Leave the Euro (not the EU). See, what your new Drachma will be able to buy you.

2. Keep the Euro, negotiate a hair cut. Change how things are done in Greece.

[elorant]

As a Greek I hardly blame EU for all of these. They are the result of incompetent politicians who stubbornly refuse to reform and a general population that has learned to live way past their means.

And we haven't turn to China. It's just that our (incompetent) government has ties to communist parties because of their legacy. On the other hand, Greece-US relations are at their best phase in the last 40 years or so. We are and will always be a country that belongs to the West. Fuck China and fuck Russia too, and any other oppressive regiment out there.

[illuminati1911]

The fact that they fucked up their economy again (even with unconditional free money) doesn't change a thing. They still received extreme economical help from the EU and the least they could do is not cause anymore trouble. Not to mention paying the money back.

[coldtea]

>The fact that they fucked up their economy again (even with unconditional free money)

Yeah, just not unconditional, not free, and no money.

They got credit (e.g. not money but another loan), under severe conditions (e.g. not unconditional), foreign analysts have compared to those signed when you're defeated in a war, and even IMF officials have admitted they were "the wrong solution"), and it had to go directly to repayments (e.g. not free).

So in effect, the German-led EU paid the German banks and major private investors holding most of the debt, with EU money, still keeping Greece in debt (from the new credit), making some good money in the process (see linked articles above), and imposing their economic agenda on top.

>and the least they could do is not cause anymore trouble

A, those pesky Greeks always causing trouble. And ungrateful at that.

Not, like e.g. a galant nation invading their country, causing the death of a million people (including almost all Greek Jews), taking a "loan" to itself from the occupied government it had setup, bombing Greece's ports and infrastructure before leaving, and then refusing to pay recuperations...

[YorkshireSeason]

   paid the German banks and major 
   private investors holding most 
   of the debt

As far as I understand, see e.g. [1], the biggest debt-holders by far (in absolute terms and even more so relative to GDP) where Greek banks. The biggest foreign debt-holders (in absolute term) were French banks. Relative to GDP the biggest foreign debt holders were banks from Belgium, followed by France. Moreover, Greek debt held by German banks was spread over a 11 banks, rather than concentrated in 2 (Belgium) or 4 (France), hence less systemic risk.

In the light of this data, I do not think it's reasonable to speak as you did above. It was primarily a bailout of Greek, French and Belgium banks.

Aside, if Yanis Varoufakis' account is to be believed, the core reason why Germany accepted the bailout was political and twofold:

* The governing coalition under Merkel had elections upcoming, and staked its entire reputation on the EU and the Euro. A new Euro-Critical party (Alternative fuer Deutschland AfD) emerged. It was felt that Greece dropping out of the Euro and defaulting would be seen by the voters as a vindication of the Alternative fuer Deutschland.

* Powerstruggle with France: if Germany went soft with Greece, it was felt that that would give France an excuse to tap German money even more than it already does.

[1] https://www.theguardian.com/news/datablog/2011/jun/17/greece...

[RobertoG]

There is a very simple fact: in order to develop an economy you need investment, not austerity. There is not democratic country that would accept for its population what the Europeans have forced on Greece.

You want Greece start thinking in the EU like "us" when they deal with China, but, at the same time, we Europeans, talk about how "they fucked" it.

You can't have it both ways: or Greece are "us" or Greece are "they".

In my opinion, the debt crisis showed them, and others, clearly that it's not* the former.

*edited: added the 'not'.

[thefounder]

As long as there is no fiscal union you can't simply share the loss between member states. Is as simple as that. We can talk about we and the "EU budget" all time long but if we want to talk about "our" money and "our" debt the we need some kind of fiscal union. We can't talk about "our" money only when we get bankrupted.

[pjc50]

Without a fiscal union there should never have been a monetary union.

[RobertoG]

..and many economist warned about it.

[thefounder]

You would think that and here we are.

[RobertoG]

That's precisely my point.

You can't talk about "our" European exterior policy and then, when the time arrive impose a bigger austerity, in part of the population of Europe, causing a bigger and longer crisis that the Great Depression.

Never mind Greece previous sins, that would never be done to a German land or a USA state, for instance

Ergo, there is not "we".

If something, Brussels, has show to be the antagonist to the Greeks (and not only the Greeks).

[saiya-jin]

> in order to develop an economy you need investment, not austerity

That's a nice theory, but considering all the stuff that came out about how dysfunctional Greece, on outside they were just bunch of liars. How can any politician justify to voters such a decision?

If you lend somebody money to improve his life, and he burns through them by doing stupid things and lying to you, and has no way to pay back, do you lend them more "in order to develop"?

Btw if I recall correctly your suggestion is what Obama did - pumping more money into economy after 2008. From what I read it was very ineffective and basically trillion(s) were mostly wasted without lasting effect

[RobertoG]

For an alternative economic explanation of what happened, you can read other posts (mine and other) in here. Basically what it has been done is saving, by an indirect route, the Germans and French banks exposed to Greece without improving (worsening actually) the life of the people there.

Consider that, theoretically, the problem to be solved was the public debt and now, many years later, and after forcing the solution on the patient, the debt is the same or worst.

I have to say, that I find totally alien the moral perspective from wich somebody can say something like "they are a bunch of liars" about an entire country.

Who is the liar? the taxi guy in Athens? the children of the school in the corner? the old people that miss the drachma? the young people that had to leave the country?

Never mind where you are from, a little of introspection (and some history reading) will show you how you could be easily any one of them.

[rcMgD2BwE72F]

>They still received extreme economical help from the EU

The EU only tried to get Greece to pay back most its debt, at all costs (social/political/economical...). Who do you think they were helping the most: the big banks or the Greek citizens?

[sgift]

The banks obviously. If someone here says we "helped" Greece they either don't know better or lie. Plus, the bailouts were all credits. We Germans get money from the markets for 1% (or whatever the rate is at the moment), give it to Greece for 5%, make money as a lender (as long as Greece pays it back and we did make sure that they do, didn't we? First order: You pay back every credit. People are hungry? Irrelevant. First pay back credits) and then we have the audacity to call that a bailout and demand gratitude.

[Arn_Thor]

The money was very much conditional. Mandatory austerity, for example, which crippled the state and economy as a whole with effects that could last a generation

[tanilama]

I think those EU money will need to be paid back one way or another.

EU has a fundamental problem: it is a now a unified economical entity, but not a political one. Using Germany's money to bailout other countries' economy is frown upon by both sides, thus can't sustain.

[wott]

> The fact that they fucked up their economy again

Uh? Their economical politics have been dictated by EU since the crisis.

> even with unconditional free money

Uh? You mean mostly extra loans that they had to repay, like any loan. And it was not unconditional either, since they had to apply the economical politics of EU, so that EU was sure they would repay.

[netcan]

That's an EU problem, not a China problem really. The EU (we) never really formed a polity. A constitution people believe in, a democratic process people are engaged with. Without that, it's very hard to have a core of collective (political) values. So, whether it's EU members playing realpolitik and preferring powerful friends to moral high grounds, or some members drifting away from liberal democracy... the EU is not really equipped to do anything.

I've long thought that the EU has focused far too much on combining bureaucracy and too little on combining actual politics.

Now that we're facing political challenges, there is no EU polity to deal with it. If we're faced with any major political or military conflict, the members will fall on multiple sides and the EU will be split.

[LoSboccacc]

> all those bailouts they received

most of the bailout money went straight to Germany to buy back outstanding bonds in possession of their central bank ensuring they'd be insulated from further deterioration of the Greek economy.

https://www.esmt.org/where-did-greek-bailout-money-go

[expertentipp]

> Well that's one way of saying thanks for all those bailouts they received...

It's the banks and institutions from the bailing out countries who received the bailouts.

[Vinnl]

Those bailouts were not given out of the good of the rest of Europe's hearts; the rest of Europe also benefits from these countries keeping themselves together. I don't think it's fair to subsequently expect them to just bend over and act on the whims of the other countries. We're a union, and we're in this together, as equals.

[icebraining]

Go read your Machiavelli. Even if it would be warranted - which is rather doubtful - gratitude has no place in geopolitics.