Something I meant to write the other day: the IMF dilemma has become quite intriguing over the last couple of days.

The latest IMF report, though still based on outlandish assumptions, marks a sizeable debt restructuring as a requisite for further involvement of the IMF in Greece. Germany, on the other hand, rules out debt restructuring of any kind, and haircuts in particular. However, Germany also insists on the IMF's continuing participating in the Troika, because a) noone else has the capacity to provide Orwellian monitoring of a countries' financial actions and b) to provide economic credibility. Of course, having a non-European patsy is always a good idea.

Nevermind the fact that the report was available prior to the last deal and held back intentionally -- I'm curious who's going to give way in this matter.

The IMF cannot back down much further without its members going apeshit at this disaster. They want no share of the blame that will inevitably be thrown around in good amounts once Greek reaches the end of the road. And Germany... well, constant propaganda has pretty much made sure that neither public nor parliament will accept any restructuring, unless it is plastered with a whole lot of make-up and maybe a Sideshow Bob hairpiece.

I am German myself and I am disgusted how the German media and politicians are only blaming Greece. Some conservative papers (like welt.de) are ticking out completely and are turning to phrases that are very close to our Nazi history and are not allowing overly critical comments.

How Germans could chop down wages so quickly and without much opposition from the people and other parties?
The main reason is Hartz IV. https://en.wikipedia.org/wiki/Hartz_concept
Its a reform for the unemployed people, which at first sight doesnt have much to do with wages of the working people. But it does have everything to do with it. Let me explain:
Before Hartz IV unemployed people didnt have much to fear from the state. They got their unemployment (Sozialhilfe) money every month which was enough to live without much fear of anything. It didnt mean much to be unemployed. But people found a job if they wanted to. Of course, like every country, it was exploited by a tiny minority. People were happy with it and many countries were envious of that system because it provided so much social security that people got very peaceful and crime rates were pretty much non-existent.

Hartz IV was planned to cut the massive costs of that social system. The left wing government (which turned out to be massive hypocrites), a coalition of a socialist party and a green party, claimed it would decrease unemployment rates massively and save lots of tax money and they would force those lazy useless unemployed people to get jobs. They emphasized on "the hard earning people whos tax money is stolen by lazy unemployed" and used the tiny minority of exploiters to get Hartz IV under way. Hartz IV was basically a cut for unemployed people where they would barely have enough money to live from or pay the rent from it. It also allowed the government to use many tricks to adjust the unemployment rate. They for example excluded people who were unemployed at a certain age or people who were send on useless trainings (like how you write a job application or how you use a PC), which were forced on them from the government. If they didnt attend, they would get cuts on the already not enough Hartz IV money.

They got it through the parliament (since there was no oppositon of mention thank to their "democratic" coalition) and it went all downhill from there. Unemployed people were suddenly massively discriminated, even by the politicians, because they had created so much hate against unemployed and built many stereotypes in the process, supported by stupid fake shows in the media, just to push Hartz IV through. As I said before, they only used the minority that exploited the system before in their arguments, and didnt care about the majority. That also lead to companies falling for the created stereotype and not employing people who had been using Hartz IV at one time and even going as far as them looking at older employees as inferior. They got rid of them in a massive purge, which also led to the trick of excluding old people near pension-age from the unemployment statistics. Pensions dropped because those old fired people didnt get a job anymore and had to use Hartz IV. That meant that they had to use up their savings before they get Hartz IV money (that rule is part of Hartz IV), which drained old people of their money and also caused them to get caught in an even worse trap:
After a few years of getting Hartz IV money, they dropped to the lowest pension rate, which was barely above Hartz IV. It didnt matter if they worked 40 years of their life in a well paid job. Now they were poor and would never get a pension that was appropriate to their former job. That lead to a massive shift in wealth away from the normal people (middle class and poor), to the rich people. The buying power of Germans was destroyed, and it became even worse after the socialist/conservative government (yes, a stupid coalition like that is possible here) increased the sales tax by 3% to a whopping 19%. As result of this living costs exploded and black labor skyrocketed. Cost of energy of any kind, taxes, food prices, gas, rents, every day stuff you need increased massively. The Euro was to blame too, because prices of many things (especially food) were just exchanged 1-1 to the Euro. So for example if there was cheese before that cost 1 Deutsche Mark, it would now cost 1 Euro, even though 1 Euro was worth 2 Deutsche Mark. Wages collapsed, while everything got much more pricy. Hartz IV made all that worse.
Now for the main reason how Hatz IV pushed wages down:
The fear of dropping into Hartz IV (for the reasons I mentioned) was massive. Nobody ever wanted to drop into Hartz IV because they knew then everything was over. So they accepted extremely low wage jobs, even if that meant they would get less money than they would from Hartz IV, which already was barely enough to live a crappy live from. They took 2, 3, 4 shitty paid jobs instead, and the companies loved it, because they saved a lot of money with that. The problem with that was that even well educated people had fear of Hartz IV and accepted lower wages because of it. Wages didnt rise for 20 years (and they dont rise much now either). Yet living costs, as I said, increased massively. It all came together.
Germanys economy was very low at one point, yet they still tried to tell us that the unemployment rate dropped again (even 2007/08 and every year after that). People started to learn how they manipulated us and now we are here. Companies making revenue records after revenue records, yet nothing is arriving at the people. The media claims everything is well, the statistics still lie to us that the unemployment rate is low, but its not.
And now they are trying to blame the Greeks for our problems. Just like the unemployed Germans before, and the stupid masses fall for it again.
Yet they still wonder why Germans are a dying breed (population has been dropping for years now), and dont get that having children is very expensive in Germany and only few people still have money or time for that (since both women and men have multiple jobs to be able to live) because of these developments.

If you can spare 20 seconds, watch this: https://www.youtube.com/watch?v=BYRHMODPK60#t=0m30s

That's the European Parliament. Wanna know what the discussion was about? Unified drivers licenses....

First of all, Flassbeck is the only(!) prominent economist in Germany arguing strictly against the madness of austerity. But he's living in the border region between France and Switzerland, so he's a European more than a German.

Among all the economic think tanks in Germany, only the union-sponsored IMK makes a credible case against this madness. Everyone else is more or less in line with the neoclassic perspective. Not a Keynesian in sight, much less a post-Keynesian group.

But now to the meat of the issue. There will be no major political shift in Germany in the near future. As Flassbeck stated, only a single party opposes the financial inquisition commonly known as the Troika. Unfortunatly, it's the socialists, and despite overwhelmingly popular policies, they are still an absolute no-go for large swaths of the demos thanks to the authoritarian regime in East Germany. Sucks, but it is what it is.

So it's up to the French people once again to save the continent from itself. Noone else has the balls or the influence to put an end to this misguided union. How likely is it for the French government to openly challenge German hegemony soon? I wouldn't bet on it. Which means the Greeks are fuuuucked².

In any case, what would it take for Greece to stabilise? And by stabilise I'm talking about a return to a manageable level of unemployment, a working healthcare system and social safety net. A conservative guesstimate would be a public deficit of ~10% of GDP for at least 5 straight years. Alternatively, the EIB would have to prop up Greece with €50b a year for the same number of years. To get a working bureaucracy, to undo four decades of nepotism, Greece would basically need a generation to reestablish itself as a state – and it would require appropriate financing.

Now remember which of Syriza's demands is painted as most controversial right now: debt restructuring. Debt restructuring, while neccessary at some point, is entirely pointless as long as the fiscal policy remains contractionary. Greece needs austerity to stop, right the fuck now. Greece needs to provide income-generating jobs for its people. All the talk about debt is utterly pointless, because at 25% unemployment, we're looking at permanent damage in every way imaginable. The social toll alone should be completely unacceptable within Europe if we truly gave two shits about human dignity.

So, even if Syriza get their way tomorrow, Greece would still be flushed down the shitter. Syriza's proposal is contractionary. Any primary surplus in this situation is contractionary.

Greece is done within the Euro. The use of a foreign currency makes it impossible to use appropriate fiscal policy on their own. Unfortunatly, but also intentionally, the currency issuer, the ECB, is placed outside the democratic control of the European Parliament, or any national parliament for that matter. Fiscal policy within the EZ was taken out of the control of our elected representatives to ensure that the neoclassic/neoliberal approach was irrevocably built into the system. We can thank Germany for that, by the way.

There is a shortage of spending in Greece. There is a shortage of spending in Spain. There is a shortage of spending in Portugal, Ireland, Italy, France. There is a shortage of spending in Germany, for fuck's sake. Put the ECB under control of the EP, add full employment (2-3% unemployment) to its mandate, and have them finance the appropriate programs at the national level. The output gap in Europe is so massive, the un(der)employment so vast, they could spend a trillion Euros and inflation would still not reach the agreed upon target value of 2%.

All it would take to change the rules is consent from every national parliament in the union. Might as well go skinny-dipping instead.

8:18 – "Germany is very financially responsible".

The clip makes a few good points, twists others and omits some central issues. But I want to comment on the quote above most of all, because it forms the basis for all kinds of arguments and recommendations.

The claim that Germany is financially responsible stems from what has been paraded around domestically as the "schwarze Null" (black zero), meaning a balanced budget. Given how focused most economic debates are around the national debt or the current budget deficit, it shouldn't come as a surprise that not running a deficit evokes positive responses in the public. If there has ever been an easy sell, politically, it's this.

However, it's not that simple.

For instance, the sectoral balance rule dictates, by pure accounting identity, that the sum of public balance, private balance and external balance is 0 at all times. In case of Germany, this means that the balanced public budget (no surplus, just a fat zero) requires a current account surplus of the same size as private savings – or an accumulation of private debt. For someone to run a surplus, someone else has to run a deficit. In this case, foreign economies have to run a deficit vis-á-vis Germany, so that neither the German government nor the German private sector have to run a deficit.

The composition of each sector is another topic entirely, but the point remains: no surplus in Germany without a deficit in the periphery. If everyone is to be like Germany, Klingons have to run the respective deficit.

My question: is it financially responsible to depend on other economies' deficits to keep your own house in order? Is it responsible to engage in this kind of behaviour after having locked yourself into a monetary union with less competitive economies who have no way of defending themselves through currency devaluation?

Second point: capital accounts and current accounts are two sides of the same coin. If Germany runs a current account surplus of X%, it also runs a capital account deficit of X%. Doesn't explain anything, but it's the same for the countries at the other side of these trade imbalances. Spain's current account deficit with Germany meant a capital inflow of the same size.

Let's look at EuroStat's dataset for current accounts. Germany had run a minor current account deficit during the late '90s and a small surplus up to 2003. From then on, it went up, up, up. Given the size of Germany's economy within Europe, that jump from 2% to 7.5% is enormous. Pre-GFC, the majority of this surplus went to... yap, PIIGS. Their deficits multiplied.

Subsequently, capital of equals size flowed into these countries, looking for investments. No nation, none, can absorb this amount of capital without it resulting in a massive misallocation, be it stock bubbles, housing bubbles, highways to nowhere or lavish consumption. Michael Pettis wrote a magnificent account (Syriza and the French indemnity of 1871-73) of this and explains how Germany handled a similar inflow of capital after the Franco-Prussian war: it crashed their economy.

As Pettis correctly points out, the question of causality remains. Was the capital flow a pull or a push?

The dataset linked above says it all happened at just about the same time, in all countries. It also happened at the same time as Germany's parliament signed of on "Agenda 2010", which is the cause of massive wage suppression in Germany. Germany intentionally lowered its unit labour costs and undercut the agreed upon inflation target (2%). German employees and retirees were forced to live below their means, so the export sector could gain competitiveness against all the other nations, including those in the same currency union. Beggar-thy-neighbour on steroids.

Greece overshot the inflation target. They lived beyond their means. But due to their size, it's economically negligable. France stayed on point the entire time, has higher productivity than Germany and still gets defamed as the lame duck of Europe. Yet Germany, after more than a decade of financial warfare against its fellow members of the EU/EZ, is hailed as the beacon of financial responsibility.

Mercantilism always comes at the cost of others. And the EU is living proof.

I just watched Paul Mason's interview with Varoufakis and it's been rather depressing. Most of what he says is perfectly reasonable given the structural confines of the EZ. But it's all based on a belief in "mutual interests", a belief that negotiations can, and will, lead to a "mutually beneficial deal" with the financial inquisition.

Not sure if he's just adhering to his role as FinMin or if he truly believes it. I'd say it's a questionable assumption at best. From over here, it certainly looks like the creditors' position is "pay up, bitch!", end of story. Schäuble is not going to compromise, the majority of parliament is all in on neoliberalism and most of the electorate either doesn't care or even consents. Merkel might agree to a deal, given how she holds no convictions whatsoever except that being in power is better than not being in power. But Schäuble cannot be reined it with half the party being in lockstep with his actions.

No deal worth signing. Either full capitulation or they'll continue this charade with their buddies from PASOK and ND.

Let's ignore for the moment what led to this current mess within the Eurozone. You point out, correctly, that Greece is too poor to service its debt. And yes, for the German government to do whatever is required to get back their loans is to be expected. However, Greece was incapable of servicing its debt five years ago. Yet the subsequent programs, all supported or even demanded by the German government, reduced Greece's ability to pay back at least portions of its debt. At the end of the day, goods and services are what it's all about. And by dismantling the Greek economy, nevermind the Greek society, they actively undermined what they publicly claimed to be working for: a self-reliant Greek economy, capable of financing the needs of Greece. And capable of paying back what is owed.

The question inescapably poses itself: was it done intentionally or are they blinded by ideology?

One doesn't have to be as far left as I am to see that it didn't work, doesn't work, and never could have worked. Even the likes of Krugman and Stiglitz are perfectly clear about it.

Varoufakis, as you note, has been just as clear about this at least since late 2010, when he published the first draft of his Modest Proposal with Stuart Holland. There was a very good discussion about it in Austin in 10/2013 under the topic "Can the Eurozone be saved?" Participants included Varoufakis, Tsipras, Flassbeck, Holland and Galbraith, amongst others. I submitted a short clip back then.

His argument that Germany won't see a dime when Greece is shoved off a cliff, as correct as it is, never had any bite to begin with. The German government, and large parts of parliament, are operating in a parallel universe, economically. Over here, mercantilism is the road to success. Monetarism works. Surplus good, deficit bad. Saving good, spending bad. Everyone should have a current account surplus.

It's horseshit by the gallons, and it's the official economic policy of the largest economy in the EU.

And we're not even getting into the political aspects of it. Throwing a member of the EU into debt bondage, suspending its democracy to please the gods of the market... that's a travesty and a half. Yet it's also inevitable if they insist on going down the road of neoliberalism.

Worst of all, Greece is just the canary in the coal mine, as Varoufakis likes to point out. Greece had plenty of issues before they joined the EZ, but when they chose to adapt the same currency as a much larger economy hell bent on competitiveness, which is the favorite euphemism for Germany's beggar-thy-neighbour policies, they were doomed to be crushed. The rest of the PIIGS are next in line, unless this whole mess explodes beforehand. Maybe Rajoy's Franco-esque repression techniques fail, maybe le Pen wins in 2017, who knows. Maybe Schäuble finds the 100k of bribes that he conveniently forgot about back in the '90s and chokes on them.

Last but not least, 208 billion Euros – that's the projected current account surplus of Germany this year. That's 208 billion Euros of debt foreign economies have to accumulate, so that the German public and private sector can run a combined surplus of €208b. That's the elephant in the room. Systematic undercutting of the inflation target through suppression of unit labour costs and a dysfunctional focus on exports.

If we take for granted the need for cost cutting, it would be only logical, if not an outright neccessity in a democracy, to leave the details up to the local representatives. Payment of X Euros expected by mm/dd/yy, figure it out yourselves.

Why do it any other way?

Well, you know the three most discussed possibilities as well as I do: shock doctrine, an attempt to force Syriza to commit political suicide, and bureaucratic automatisms.

During the first stages of this facade, I would have put my money square on shock doctrine. The measures are just too damn beneficial to the "there is no society" kind of thinking. It's horseshit, economically, and tremendously damaging, socially.

Replacing Syriza with the Old Guard seems quite appealing, given the behind-the-scenes deals with the nepotistic elite as a means to facilitate a smoother transitition once those pesky commies are out of the picture. The vitriol against Varoufakis is just staggering in this regard. News of the World got nothing compared to what our respectable media has hurled at Varoufakis and Tsipras.

My take on the automatisms on the other hand is rooted in how our politicians and our public has been arguing this entire time. Neoliberalism is the gospel, dissent is heresy. Privatisation is good, cutting wages is good, flexible labour market is good, taxation of wealth is bad, deficit is bad, surplus is good. They drank the kool aid, they are in it hook, line and sinker.

And as a result, the diagnosis is always the same, and so is the treatment. And fuck me for using this ass of a metaphor, given how the language used is the most subtle means of manipulation. "Rescue" the Greeks, "drowning" in debt, "tighten your belt". How about: food only on five days a week, grandma gets to croak on diabetes and your baby boy dies of diphtheria.

Yes, I had a fucked up day. The discussion in parliament about the "Greek problem" was a disgrace and high treason of the humanistic ideas that are supposed to be the foundation of the European Union.

Unknown.

If the ECB pulls ELA, the Greek banking system goes belly up. Again, consequences unknown, but Deutsche Bank for instance didn't seem particularly stable during the last months, so the denial of any contagion risk might have been premature. Additionally, Draghi is tasked with maintaining the stability of the Euro and taking away Greece's last lifeline might just be too far out of his mandate, even for him. Keeping ELA up without increasing the limit will achieve the same result within days though.

If Greece fails to make its payment to the IMF tomorrow, it's at the discretion of Lagarde whether she pulls the plug. Info has been somewhat contradictory, but there should be a 30 day window before the board has to call it a default.

If a default is triggered this week, it's up to the ECB and the EC again. They have shown unwillingness to let things go bust, all the recent months of muddling through should be testament to that.

They cannot have a failed state within Europe without feeding right into the anti-European parties on both ends of the spectrum; they cannot throw Greece out of the EZ; they cannot revitalise the Greek economy without doing a 180 against their own ideology; they cannot let Syriza pull Greece out of the shit without encouraging Podemos. It's an impasse alright.

Should the Greek people vote against the proposal, a proposal that is no longer on the table, it'll be back to negotiations. Should they vote in favour of it, and should it still be available to them at that time in the first place, Tsipras might even get a majority for it in parliament, but Syriza will blow apart right then and there. The left wing cannot agree to further enslavement.

If, however, everything goes sour and Greece does indeed exit the EZ, introduce a new Drachma, the whole shebang, then we're in uncharted terrorities. The situation in Greece would deteriorate even further, given how much they rely on imports, especially of fuel. And the EU, already shaky from the tens of thousands of bodies floating in the Med, the falling standard of living for tens of millions and the sustained unemployment of an entire generation; this fecking union cannot turn the cradle of democracy into a failed state and survive. The governments might be ok with it, but the French people would rip this shit to shreds one way or another, and rightfully so.

I've read two different explanations for opposing higher taxes. The kinder one is that the creditors realise how bad the Greek economy is and don't want to support measures to make it even worse. Alternatively they just don't believe that raising taxes will get more money (which is probably true).

That said though, since the measures they want to add would also depress the economy, it seems quite ideological.

The less kind explanation is that the creditors are tired of dealing with Tsipras, and are pushing for terms that they know he would be unable to get through parliament so that the deal will fail.

Neither side has really made much effort here, although in fairness to Greece they don't have nearly as much room to move.

Tbh, it pains me that a result like this happened AFTER a referendum on voting reform. If more people had realised that voting for the 3rd/4th/5th party was going to result in a majority Tory government with only a 1/3 of the votes maybe less people would have listened to Labour/Conservatives propaganda.

It's pretty funny how maybe a decade ago this narrow of a win would have been reported as vote of no-confidence for any party. This time around it seemed people were so relieved to not have a hung parliament that they seem to have let the blues off the hook completely while they enact their bonkers plans for austerity without a real mandate from the people.

ps. I totally predicted the election result and I'd just like to tell all those political pundits that I am ready to accept their resignation and yes I told ya so.

In theory, I would suppose so.

But in reality, the one entity tasked with enforcing the legal frameworks of the EU, the European Commission, is also the entity behind many violations in the first place. So tough luck, I guess.

We have a saying in Germany that fits the activities since the beginning of the crisis rather nicely: "legal, illegal, scheissegal". Legal, illegal, who gives a shit.

Just a few appetizers:

- EU parliamentary inquiry says troika acts outside of legal framework, without any oversight
- Special Rapporteur: cuts in Greece would have never passed EU parliament, had to be done outside of any democratic control
- Portuguese Supreme Court rules cuts unconstitutional, European Commission calls court a group of activists
- Troika forced an end of collective bargaining in Greece, in violation of ILO agreements
- Troika forced Greek minister to use decree to cut minimum wage, circumventing parliament entirely
- EC and ECB violate law by being part of the troika
- Eurogroup acts as enforcer for EC wherever law needs to be violated
- Troika forced sale of Portuguese BPN (bank) under extremely shady circumstances
- Bailout, nationalisation and later privatisation of four largest Greek banks equally shady
- Cyprus/Piraeus
- Just about everything the Spanish government has done in the last couple of years

Nevermind all the treaty violations vis-á-vis financing/bailouts, etc. But you won't find a court willing to touch any of this. Nobody wants to destabilize this mess even further, despite all the gross violations. TINA, all the way.

Frankly, I'd be satisfied if these calls were made by parliaments instead of unelected and unaccountable officials.

!!!

And yet, it's George Papaconstantinou in court, over that exact Lagarde list, and not Virvidakis.

Something which is often stated as fact is that if you try to tax the rich, they will up and leave. Well, maybe a few would, but most people are more settled than that. I think there is some chance we will get the question answered in Greece some time in the near future. I somehow don't see Varoufakis removing any names from the list... relatives or otherwise.

That video does reflect rather well on the new President of the Greek Parliament, doesn't it

Democracy in Greece, post-crisis, pre-Syriza:

https://www.youtube.com/watch?v=-AgwDfzZp6E

The one MP in opposition during this clip is now President of the Greek Parliament. She's also on record about the Lagarde list of 2062 Greek tax dodgers, 6(!) of whom were checked up on. The list was handed over in 2010, and it has been held under wraps at the bidding of the IMF.

Wall of text incoming. Again.

Sorry. Again.

tl;dr:

Debt relief right away was proposed, was neccessary, and was skipped to protect the European financial system.



You are 100% correct, we both are as convinced as one can be that a disorderly collapse would have been much worse for Greece. Might have turned it into a failed state, if things went really bad.

But the situation in Greece at the time the Troika got involved suggested a textbook approach would work just fine. Greece was insolvent, no two ways about it. A debt restructuring, including a haircut, was required to stabilise the system. Yet it was decided against it, thereby creating an enormous debt bubble that keeps growing to this day, destabilising everything.

Why?

People in Brussels, Frankfurt and Berlin knew in May of 2010 that Greece cannot service its current debt, nevermind pay it back. I remember rather vividly how it was presented to us, as it stirred up a lot of dust in Germany. They pretended as if the problem was a shortage of liquidity, even though they knew it was in fact an insolvency. And to provide an insolvent nation with the largest credit in history (€110-130b) is... well, we can all pick our favorite in accordance to our own bias: madness, idiocy, incompetence, a mistake, intent. They threw Greece into permanent indebtedness(?), and also played one people against another. People in Germany were pissed, still are. Not at the decision makers, but the Greek people.

Again, why?

Every European government, pre-crisis, drank the Cool Aid of deregulation, particularly with regards to the financial sector. When the crisis hit, they had to bail out the banks, a very unpopular decision in Germany, given the scandalous way it was done (different story). Like I pointed out before, when Greece was done for, German banks were on the hook for €17b+, and the French for €20b+. So no haircut for Greek debt.

It gets even better. The entity most experienced in these matters is, of course, the IMF. But IMF couldn't get involved. Its own regulations demand debt to be sustainable for it to become involved in any debt restructuring. Strauss-Kahn had the rules changed in a very hush-hush manner (hidden in a 146 page document) to allow the IMF to lend vast sums to Greece, even though they knew it would not be payed back. Former EC members are on record saying the Strauss-Kahn decided to protect French banks this way as a part of his race for President in France. So they changed IMF rules and ignored European law to bail out German and French banks, using the insolvent Greek government as a proxy.

Several members of the IMF's board were in open opposition. The representatives of India, Russia, Brazil and Switzerland are on record, saying this would merely replace private with public financing, that it would be a rescue package for the private creditors rather than the Greek state. They spoke out in favor of negotiations of a debt relief.

And if that wasn't bad enough, there's an IMF email, dated March 25th, 2010, that was published by Roumeliotis, formerly IMF. They put it very bluntly:

"Greece is a relatively closed economy, and the fiscal contraction implied by this adjustment path, will cause a sharp contraction in domestic demand and an attendant deep recession, severely stretching the social fabric."

Even the IMF, who chose parameters according to their own ideology, thought the European program to be too severe. That's saying something.

All that is just about the initial decision. The implementation is another story entirely, with unelected and unaccountable bureaucrats telling a democratically elected government what to do. There are former Greek ministers on record, telling how Troika officials basically wrote legislation for them. Blackmail was common, bailout money held as leverage. The Memorandum of Understanding was to be followed to the letter, and the Troika program was as detailed as a government program, so they really had their hand in just about everything.

The specifics of the program are a discussion of their own, with all the corruption going on. The Lagarde list (2000+ Greek tax dodgers) was held in secret by order of an IMF official – that alone should trigger major investigations. The nationalisation and sell-off of the four largest Greek banks, or the no-bid sale of the Hellenikon area to a Greek oligarch – all enforced by Troika officials.

The haircut of 2012, ~€110b wiped out, came two years late. As a result, it didn't hit any German or French institutions in a serious way. Most of the debt was in the hands of these four largest Greek banks -- NBG, Piraeus, Euro, Alpha – who subsequently had to be recapitalised by Greece to the tune of €50b. Cut by 110, up by 50 right away. Banks were nationalised and shares later sold again, at 2/3 the price. Lost another €15b, because the Troika demanded the sale to appease the markets.

The legal aspects of all this are nightmare-inducing as well. They violated numerous European laws, side-tracked parliaments, used governmental decrees, etc.

Let me just say this: when they forced Cyprus to give away two banks' branches in Greece for a fraction of their worth, Cyprus lost €3.5b, at a GDP of €17b, and those two banks went belly-up. It was pure blackmail, do it or you're out. Piraeus Bank received those €3.5b, and its head honcho had €150m of personal bad credit wiped clean right then and there, all at the command of the Troika. Those €3.5b had to be taken from ordinary folks by "suspending" the deposit insurance, perhaps the most stupid decision they had made so far.

Why did they do it? Because Greece was more important than Cyprus, and Cypriot banks were involved in shady deals with Russian oligarchs. Still illegal, and massively so.

Edit: I cut my post in half and it's still too long.