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.

The obvious flaw here is that a single currency and a single interest rate rob member states of some of the tools they would normally use to deal with their slowing economies, and the union never implemented any other mechanism to replace them.

Earlier in the crisis I heard it suggested that perhaps the southern states would leave the euro and form a "euro south" union, and from what I've heard of negotiations in Brussels it might actually be easier than a better fix! I've never heard anyone suggesting that Germany should go it alone though, even if your statement seemed to suggest the idea Perhaps a less radical reading would suggest a New Deutsche Mark rather than a complete break with the EU... but there are still major problems with the idea.

Your video, World's first Brussels Sprout powered Christmas tree, has made it into the Top 15 New Videos listing. Congratulations on your achievement. For your contribution you have been awarded 1 Power Point.

I"m powered by Brussel sprouts right now, T-dinner roasted B-Sprouts with rosemary....mmmmmmBOOOOM!

Tags for this video have been changed from 'holiday, meal, food, brussels sprouts, idiot, wrong way, gravy, etiquette, buzzfeed' to 'holiday, meal, food, brussels sprouts, wrong way, gravy, etiquette, buzzfeed, zefrank' - edited by eric3579

What are you, 5 years old? It's not about being forced to do anything. Shit movies are still shit, regardless of whether I watch them. Pardon me if my comment insulted your tastes.

I wasn't aware that when one doesn't like things you like that makes one a 'hipster'. I guess if lots of people like brussels sprouts, and I don't, that also makes me a hipster.

Thats why: “Belgian firemen were protesting against national budget cuts for the fire department in Brussels on Monday. Firemen from all the country gathered in front of Prime Minister’s office with fire trucks and blocked traffic in Brussels’ ring road. They burned tyres in the streets and sprayed water and foam towards police guarding the protest. At some point police officers stood knee-deep in foam on the street. Talks are ongoing on the ministerial level on the new Belgian budget, and firemen are protesting against cuts in their insurance benefits and insufficient staffing.”

Those Belgian riot police gotta keep in practice-World Bank Brussels- Is there a more tempting target for crowds of angry peeps??

Wow, I think YOU need to give me recipes. I've been eating so simply. Roasted brussel sprouts with salt, pepper and olive oil is my favorite. Pillsbury crescent rolls are vegan, so I make little pizzas out of them on the fly or roll them up with sesame seeds and crumbled seaweed. I haven't gotten fancy with it, yet. I'm eating a lot of food, though. More than I ever ate with animal byproducts in the mix.

Seriously, send me recipes!

It should be stated that Brussels is an entirely different culture from the rest of Belgium. Brussels is surrounded by Flanders, where they all speak Dutch, but once you go into Brussels, it really is a different culture (not only ethnically, but also linguistically - French is spoken in Brussels instead of Dutch). Brussels has very large Moroccan and Turkish populations (~26%), which are machismo cultures on steroids.

Good to know all possible techniques though.

A friend's father just recently died from choking on a brussel sprout.

Choking on food is a ridiculous way to go, so any and all methods you can have in your head to get the food out are welcome.

>> ^ant:

dead -- "This video has been removed by the user..."
Fixed, thanks.

Tags for this video have been changed from 'police, firfighters, brussels, prime minster, water, hose' to 'police, firefighters, brussels, belgium, prime minister, water, hose' - edited by calvados

Big deal. I'm not eating any Brussels sprouts until everyone is required by law to get an abortion.

Yep, it's all looking good. Saturday's now looking 25 and mostly sunny - loving it.

Melbourne is our oyster. I have had a bit of a check, and most rooftop bars open around midday on Saturday.

http://www.au.timeout.com/melbourne/bars/venues/725/campari-house
http://www.au.timeout.com/melbourne/bars/venues/412/rooftop-bar
http://rooftopcinema.com.au/
http://www.urbanspoon.com/r/71/1621007/restaurant/CBD/The-Aylesbury-Melbourne
http://www.theage.com.au/entertainment/restaurants-and-bars/the-aylesbury-20111029-1mpah.html

As I said, I'm looking like 8pm and will contact Dag to find your whereabouts. If you do head to the rooftops, Mme Brussels and the Carlton Hotel are pretty close by Meyers Place. Brussels is a bit more showy and expensive than the Carlton, which is more of a 'beer on tap' kind of place. The rooftop bar on Swanston St is further away, but has a spectacular view.

If you are keen to eat before I get there, no worries - I'll meet you for drinks afters.