[panarky]

Why do news reports keep saying that Greece got bailed out?

Let's say you lend $100,000 to my startup. I have to pay you $10,000 a year until the loan is paid off. I hire a thief as a CEO who gives the $100,000 to his friends and family, and my startup has nothing to show for it.

Now my startup is bankrupt. I'm working as a waiter in a restaurant to pay the rent. I can't make my annual payments to you, much less pay back the principal. You've just suffered a $100,000 loss. That's the risk you take as a lender.

Surprise! Now the government steps in and gives you $50,000 to buy this bad loan from you. What a great deal! It would have been a total loss!

Then the government garnishes my wages from my waiter job for the next 50 years to reimburse the government.

Who exactly got bailed out here? Me (the Greek people), or you (foreign banks and bondholders)?

And what happened to the thieving CEO who stole the money in the first place?

[galfarragem]

It is not your lender's fault that you were careless and didn't audit your startup. While your CEO was making bad decisions you were having fun.

Now you think that your mistakes are your lender's responsability. Ok, just don't expect them, or anybody else, to lend you more..

[netcan]

Analogies are tricky.

The fundamental difference in my opinion is that you can't shut down a government. So, this startup is still going and it's still borrowing to keep itself afloat. Makes it harder to say 'lets move on.'

I agree though, the EU should have a bankruptcy for states. The problem is that introducing that in crisis time raises borrowing costs. France, Italy, and other countries would suffer a lot of immediate pain.

[panarky]

> it's still borrowing to keep itself afloat

That's not actually true. After the severe austerity, Greece is now running a "primary surplus". Excluding interest payments on the debt, revenues are greater than expenses[1].

The issue is not whether you can shut down a government. The issue is that the debt burden is too large to ever be repaid based on the revenue-generating capacity of the economy.

And austerity only makes that worse. Banks and bondholders freely made loans to Greece that now cannot be repaid. The people of Greece didn't benefit much from these loans, as the vast majority was siphoned off by corrupt officials.

Why were rich banks and bondholders bailed out, while generations of ordinary Greeks must suffer in poverty and unemployment?

[1] http://blogs.wsj.com/brussels/2014/04/23/greek-primary-surpl...

[Eleutheria]

Then you hire a new CEO who writes emotional letters to the creditors so he can steal more money from new credits.

While you keep working your ass off washing dishes and prostituting your children.

[macns]

But he already said he doesn't want more money.

The latest, 7 billion euro loan was declined by Greece. It's all over the news

[panarky]

My point is that each of these "bailouts", like the latest $7 billion euro "loan", don't benefit any actual Greek people.

It's an ECB "loan" that goes from one ECB account directly to another ECB account as "payment" on debt. Exactly zero euros of these go to Greek people.

If I was Tsipras I'd decline these "loans" as well. They do nothing to help Greek people, and they just obscure who is really getting bailed out.

[johnchristopher]

Now that's interesting because the French newspapers didn't mention it at all.

I wish we had a European press.

[bjelkeman-again]

It seems really hard to sell that. The Guardian Weekly is a good attempt, and it has articles from Le Monde and Washington Post in it regularly as well. Combined with Le Monde Diplomatique (In English), which you could get as hard copy bundled, it gave a much better European view.

Unfortunately they don't sell an electronic copy, which I would certainly subscribe to.

[dbdr]

http://www.lemonde.fr/europe/article/2015/01/31/la-grece-se-...

[johnchristopher]

Thank you, I stand corrected.