I did. And I'm happy with the way things are going generally. At least, regarding Joe Biden.


Big picture: there's a lot of terrible things happening in the world. My own half-assed-survey based on personal experience: most people don't follow passing laws and what the executive branch really does with any kind of seriousness. They may self-proclaim they "like reading the news" But most people who say things like that are content with a surface understanding of what's happening.

I mean, you know inflation is up AROUND THE ENTIRE PLANET right? https://www.pewresearch.org/fact-tank/2022/06/15/in-the-u-s-and-around-the-world-inflation-is-high-and-getting-higher/


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Besides Israel, other countries with very large increases in inflation between 2020 and 2022 include Italy, which saw a nearly twentyfold increase in the first quarter of 2022 compared with two years earlier (from 0.29% to 5.67%); Switzerland, which went from ‑0.13% in the first quarter of 2020 to 2.06% in the same period of this year; and Greece, a country that knows something about economic turbulence. Following the Greek economy’s near-meltdown in the mid-2010s, the country experienced several years of low inflation – including more than one bout of deflation, the last starting during the first spring and summer of the pandemic. Since then, however, prices have rocketed upward: The annual inflation rate in Greece reached 7.44% in this year’s first quarter – nearly 21 times what it was two years earlier (0.36%).

Annual U.S. inflation in the first quarter of this year averaged just below 8.0% – the 13th-highest rate among the 44 countries examined. The first-quarter inflation rate in the U.S. was almost four times its level in 2020’s first quarter.

Regardless of the absolute level of inflation in each country, most show variations on the same basic pattern: relatively low levels before the COVID-19 pandemic struck in the first quarter of 2020; flat or falling rates for the rest of that year and into 2021, as many governments sharply curtailed most economic activity; and rising rates starting in mid- to late 2021, as the world struggled to get back to something approaching normal.

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The pattern of rising and falling inflation happened because that flu that "will just go away like a miracle" ended up affecting the whole world's economy in a somewhat predictable pattern when it comes to inflation. Maybe the people who only casually glance at the news when they are flipping channels don't know better, but come on - you know that inflation rates in the United States are not specifically Joe Biden's fault right?


You still think they are? OKAY - HOW? Exactly. Point to legislation passed or not passed and the timeline of inflation in the United States.

Something like "Here you can see inflation beginning to spike, and it's the result of XXXXXXXXX that Joe Biden did, here's exactly how what he did affects inflation in this way."


Who wants to bet $20 that I'll get some response like that? What should the odds be set at if I am 100% certain all I'll get is just some snarky bullshit from an old bullfrog.

Haven't seen this one in circulation yet:

Dear Chancellor Merkel,

The never-ending austerity that Europe is force-feeding the Greek people is simply not working. Now Greece has loudly said no more.

As most of the world knew it would, austerity has crushed the Greek economy, led to mass unemployment, a collapse of the banking system, made the external debt crisis far worse, with the debt problem escalating to an unpayable 175% of GDP. The economy now lies broken with tax receipts nose-diving, output and employment depressed, and businesses starved of capital.

The humanitarian impact has been colossal – 40% of children now live in poverty, infant mortality is sky-rocketing and youth unemployment is close to 50%. Corruption, tax evasion and bad accounting by previous Greek governments helped create the debt problem. But the series of so-called adjustment programs has served only to make a Great Depression the likes of which have been unseen in Europe since 1929-1933. The medicine prescribed by the German Finance Ministry and Brussels has bled the patient, not cured the disease.

Together we urge you to lead Europe to a course correction before it is too late for Greece and for the Eurozone. Right now, the Greek government is being asked to put a gun to its head and pull the trigger. Sadly, the bullet will not only kill off Greece’s future in Europe. The collateral damage will kill the Eurozone as a beacon of hope, prosperity, and democracy, and could lead to far-reaching economic consequences across the world.

In the 1950s Europe was founded on the forgiveness of past debts, notably Germany’s, which generated a massive contribution to post-war economic growth, peace, and democracy. Today we need to restructure and reduce Greek debt, give the economy breathing room to recover, and allow Greece to pay off a reduced burden of debt over a long period of time. Now is the time for a humane rethink of the punitive and failed programme of austerity of recent years and to agree to a major reduction of Greece’s debts in conjunction with much needed reforms in Greece.

We urge you to take this vital action of leadership for Greece and Germany, and also for the world. History will remember you for your actions this week. We expect and count on you to provide the bold and generous steps towards Greece that will serve Europe for generations to come.

Yours sincerely,

Heiner Flassbeck, former State Secretary in the German Federal Ministry of Finance;

Thomas Piketty, Professor of Economics at the Paris School of Economics;

Jeffrey D. Sachs, Professor of Sustainable Development, Professor of Health Policy and Management, and Director of the Earth Institute at Columbia University;

Dani Rodrik, Albert O. Hirschman Professor of Social Sciences at the Institute for Advanced Study in Princeton;

Simon Wren-Lewis, Professor of economics, Blavatnik School of Government, Oxford University

όχι, bitches!

Or as a cartoon, if you prefer.

Edit: With all the nasty fearmongering by the Greek private media and the corrupt elite, it takes balls of steel to basically tell them to fuck off. The Greek economy is fucked³, politicians from the entire Eurozone were arguing for, even demanding the Syriza government to step down, so they can resume business as usual with either the old nepotic elite or freshly installed technocrats. Piss off, the demos replied.

The result itself doesn't matter that much. The process itself, like the Scottish referendum, might have set into motion a development that cannot be stopped nor undone.

Edit #2: the vitriol and pure hatred from the conservatives and many social-democrats is despicable. What champions of democracy they are. Tsipras and Varoufakis should channel their inner FDR and welcome their hatred.

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.

Greece accumulated debt in a foreign currency (Euro). Had they been using a free-floating currency with Greece as the sovereign issuer, it would have been much less of a problem. But that's a different discussion.

You brought up retirement benefits. These benefits have been a major talking point over here in mercantilistic Germany. Unfortunatly, a lot of inaccuracies crept into the debate over time. A closer look reveals that it's not as black and white as it is made out to be. One point at a time...

The effective retirement age, if we look at OECD stats, is basically the same for men in Greece and Germany. The age of 56 is often thrown around as the expected average retirement age for workers in Greece, but that's only for the totally messed up public sector. The average for the private sector is significantly higher, as the OECD numbers indicate.

Yet the size of retirement benefits is even more controversial. There are, in fact, some very dubious practices going on in Greece, which result in rediculous retirement benefits for a select group of people, even at very young ages. Decades of nepotism, that's what it produces. But even so, pension expenditure as a % of GDP was not significantly higher in Greece before the GFC than in Germany. When Greek GDP collapsed, expenditures as a % increased, naturally. Some have gotten absurd benefits, but the majority got a pittance. And as if that wasn't bad enough, Greece doesn't have a social safety net, unlike Germany. There is no welfare. Many people have to take early retirement at reduced benefits to have any income at all.
So I'll say it's bad in Germany. Last decade's changes to our retirement system have a metric fuckton of people (~40% of workers) heading straight into poverty when they retire. It's social security for them, and nothing else. Still, it's bliss compared to what the plebs in Greece now ended up with.

However, even all those beautiful OECD stats have to be taken with a grain of salt. Germany has a working bureaucracy. Everything is documented. Greece is a mess. Therefore, all comparisons are guesstimates at best.

Finally, as long as the Greek economy produces enough goods and services, it is for them to decide how to distribute their wealth. If they want a lavish retirement system, so be it. Our governments opted to create a true underclass of the working poor, and gutted a retirement system that made it through two world wars unscathed. If German retirees want to bitch about their benefits, it should be aimed squarely at our governments and their intentional deconstruction of our social welfare state.

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.

That's what's left on the table, isn't it? I'd divide the exit option into orderly and disorderly, but the core of it remains the same.

Yet we have to keep in mind, Syriza was elected on a program diametrically opposed to the troika demands. And an EZ exit is equally far outside its mandate. Not to mention that a significant portion of Syriza is made up of former PASOK supporters, who would need a whole lot of convincing to vote for an EZ exit.

A referendum sounds decent enough, but they should have a strategy in place for the post-EZ time. Merely getting rid of the Euro won't get them out of the shit. In fact, I'd argue that a clear strategy is an absolute neccessity to even get a "favorable" outcome from any referendum. The public needs to have a clear picture of what awaits them behind any choice they might be presented with.

For starters, they should be perfectly clear about what it would take to get the Greek economy started again. Greece has very little to offer at this time, so every effort must be made to improve the domestic market. Plans for rebuilding its productive base should be worked out prior to any referendum. Industrial policy spanning at least 5-10 years would be needed.

Question is: can a non-EZ Greece muster up enough political capital to run the vast fiscal programs required to pull the economy out of the shitter? Or would they be stuck with a recessionary focus on balanced budgets, just like the rest of us?

In any case, within the constraints of a monetary union with neo-mercantilist Germany, Greece will not get the fiscal expansion it needs and will remain a shithole, just shy of a failed state.

It's a bit hard to say whether the fabled Grexit would have been more damaging than The Austerity, has anyone actually done the calculations?

What we can see, fairly clearly, is that the projected outcome of The Austerity by the Austerity freaks has been completely the opposite of what actually happened. Somewhere there was a nice graph showing projected growth vs actual, but the summary is that where they projected growth in year 4, in actual fact the Greek economy actually just kept contracting. (@radx, did you see the graph?)

The reports I saw of the reform proposals were exactly what you suggest, a credible plan to tackle corruption and to use some of the savings to fund social programs and tackle the humanitarian crisis caused by The Austerity. The Grauniad summarised reactions to the proposal as a sensible compromise between the Greek government’s promises and the demands of its creditors.

@RedSky

Selling assets and, to a certain degree, the reduction of public employment is an unreasonable demand. There's too much controversy about the effects it has, with me being clearly biased to one side.

Privatisation of essential services (healthcare, public transport, electricity, water) is being opposed or even undone in significant parts of Europe, since it generally came with worse service at much higher costs and no accountability whatsoever. Therefore I see it as very reasonable for Syriza to stop the privatisation of their electricity grid and their railroad. There are, of course, unessentials that might be handed over to the private sector, but like Varoufakis said, not in the shape of a fire sale within a crisis. That'll only profit the usual scavengers, not the people.

Similarly, public employment. There's good public employment (essential services, administration) and "bad" public employment. Troika demands included the firing of cleaning personnel, who were replaced by a significantly more expensive private service. And a Greek court decision ruled the firing as flat out illegal. For Syriza to not hire them back would not only have been unreasonable financially as well as socially, it would have been a violation of a court order. Same for thousands of others who were fired illegally, according to a ruling by the Greek Supreme Court.

Troika demands are all too often against Greek or even European law, and while the previous governments were fine with being criminals, Syriza might actually be inclined to uphold the law.


On the issue of reforms, I would argue that the previous governments did bugger all to establish working institutions. Famously, the posts of department heads of the tax collection agency were auctioned for money, even under the last government. Everything is in shambles, with no intent of changing anything that would have undermined the nepotic rules of the five families. Syriza's program has been very clear about the changes they plan to institute, so if it really was the intent of the troika to see meaningful reform the way it is being advocated to their folks at home, they would be in support of Syriza.

Interventions by the troika have crashed the health care system, the educational system and the pension system. Public pension funds were practically wiped out during the first haircut in 2012, creating a hole of about 20 billion Euros in the next five years.

I would like to address the issue of taxation specifically. Luxembourg adopted as a business model to be an enabler of tax evasion, even worse than Switzerland. In charge at that time was none other than Jean-Claude Juncker, who was just elected President of the European Commission. He's directly involved in tax evasion on a scale of hundreds of billions of Euros every year. How is the troika to have any credibility in this matter with him in charge?

Similarly, German politicians are particularly vocal about corruption and bribery in Greece. Well, who are the biggest sources of bribery in Greece? German corporations. Just last week there was another report of a major German arms manufacturer who paid outrageous bribes to officials in Greece. As much as I support the fight against corruption and bribery, some humility would suit them well.


As for the GDP growth in Greece: I think it's a fluke. The deflation skewers the numbers to a point where I can't take them seriously until the complete dataset is available. Might be growth, might not be. Definatly not enough to fight off a humanitarian crisis.

Surpluses. If everyone was a zealous as Germany, the deficit would in fact be considerably narrower, which is a good thing. Unfortunatly, it would have been a race to the bottom. Germany could only suppress wage growth, and subsequently domestic demand, so radically, because the other members of the Eurozone were eager to expand. They ran higher-than-average growth, which allowed Germany to undercut them without going into deflation. Nowadays, Germany still has below-target wage growth, so the only way for Greece, Spain, Portugal and Italy to gain competetiveness against Germany is to go into deflation. That's where we are in Europe: half a continent in deflation. With all its side effects of mass unemployment (11%+ in Europe, after lots of trickery), falling demand, falling investment, etc. Not good. Keynes' idea of an International Clearing Union might work better, especially since we already use similar concepts within nations to balance regions.

Bond yields of Germany could not have spiked at the same time as those of the rest of the Eurozone. The legal requirements for pension funds, insurance funds, etc demand a high percentage of safe bonds, and when the peripheral countries were declared unsafe, they had nowhere to go but Germany. Also, a bet against France is quite a risk, but a bet against Germany is downright foolish. Still, supply of safe bonds is tight right now, given the cuts all over the place. French yields are at historic lows, German yield is negative. Even Italian and Spanish yields were in the green as soon as Draghi said the ECB would do whatever it takes.

The current spike in Greek yields strikes me as a bet that there will be a face-off between the troika and Greece, with very few positive outcomes for the Greek economy in the short run.

QE: 100% agreement. Fistful of cash to citizens would not have solved any of the core issues of the Eurozone (highly unequal ULCs, systemic tax evasion, tax competition/undercutting, no European institutions, etc), but it would have been infinitely better than anything they did. If they were to put it on the table right now as a means to combat deflation, I'd say go for it. Take the helicopters airborne, as long as it's bottom-up and not trickle-down. Though to reliably increase inflation there would have to be widescale increases in wages. Not going to happen. Maybe if Podemos wins in Spain later his year.

Same for the last paragraph. The ECB could have stuffed the EIB to the brim, which in return could have funded highly beneficial and much needed projects, like a proper European electricity grid. Won't happen though. Debt is bad, even monetised debt during a deflation used purely for investments.

>> ^rougy:

@bcglorf,
The problem I have with your point of view mainly rests on the presumption that the people who were defrauded "got what they deserved." I just don't see it that way. It's sort of justifying the bankers actions.
When somebody who is in a position of power and respect, as are most bankers and investors I would say, you can't blame John & Jane Doe for trusting in their advice.
The bankers and investors should have known better, and the vast majority of them did, but that didn't stop them from spreading the lies and conning people into signing their lives away.
P.S. - I hope Greece defaults. Something is rotten in Denmark when entire countries must go bust in order to satisfy Wall Street.


The people I figure were defrauded were the ones investing in the companies that were carrying terrible bad mortgages but calling themselves grade A safe investments. Those investors were defrauded and have very serious cause for concern as they were outright lied to by people wanting to profit off them.

As for the people buying homes at inflated prices, I would say they hold some blame and some plain old bad luck. The ones that took on mortgages they could only afford if the home increased in price I do blame pretty readily. They took a big risk, and risk were they were informed. They knew that they were betting on housing prices increasing. They knew the terms they were betting under and what it would mean if they won or lost the bet. They lost and should take the loss. The banks encouraging and focusing on those bets lost as many times over as they had customers lured in. The difference is the banks were pocketing more profit and got tax payer assistance to cushion their loss while the customers were left to deal on their own. I'd prefer both were left to deal with the consequences.

As for Greece, I've only scratched beneath the surface still, but it is looking like their debt problems run much deeper than just social services spending. I'm very curious were the real turning/tipping point in this was. If anyone has any good advice aside from the lead Rougy already threw out that'd be great. My current trail is the 40% of the Greek economy that was purely public sector jobs. That makes for a house of cards that's very vulnerable to government cut backs. My province(Manitoba) is in that very same boat and it is federal transfer funds from the federal government alone that is keeping us afloat.

>> ^rougy:

>> ^bcglorf:
Can someone explain the Greek riots to me? I've only followed far enough to have picked up that they are in opposition to the austerity measures being enacted by government? What I've heard sounds like the government spent so much on social services that it went bankrupt, and the protesters are angry that the government is now attempting to cut back it's social services.
I'm not of strong opinion on this like I am in many other situations, but the balance of what I've heard sounds like the anti-austerity protests are so much whining that everyone wants their free money and maybe if we shoot the messenger the economy will recover.

The brunt of it is that Greece is in trouble, and the majority of people who will have to pay for it, or endure "austerity" as the fatcats like to say, had nothing, zero, to do with the trouble.
I've been trying to find out what went wrong there, but I see a lot of smoke and few specifics.
Naturally, any time the blame can be laid on social programs, then that narrative will be most promoted among America's mainstream media.
Frankly I think it was a combination of things, and some of it may have been related to the same CDO swindle that bankrupted Iceland.
But I'm sure you'll agree that if Greece went nuclear, all of their problems would be solved...just like Japan's....

EDIT:
Two words: Goldman Sachs.
Goldman was criticized for its involvement in the 2010 European sovereign debt crisis. Goldman Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.[76] In September 2009, Goldman Sachs, among others, created a special credit default swap (CDS) index to cover of high risk of Greece's national debt.[77] The interest-rates of Greek national bonds have soared to a very high level, leading the Greek economy very close to bankruptcy in March and May 2010 and again in June 2011.
(Wikipedia)


Thanks Rougy, that's the kind of starting point I was looking for. I was hoping getting the opinions of few folks on here who'd already researched the matter was a faster place to start than wading through the sea of information out there blindly.

Still sounds as though Sachs role in this was to help the Greek government irresponsibly spend itself into oblivion. I'm still curious, and will have to dig, what that money was spent on. I know even in my country(Canada) our social services are scaled well back from Greece's, and ours are already at the breaking point of what our tax revenues can bear. Added into that is our taxes are generally higher than those in Greece and it seems that Sachs helped them postpone the inevitable, and made it worse. None the less, it also sounds like the population were the recipients or targets of the majority of the money and are now more angry at the slowing of the spending than at the debt load.

Again I'll have to look at it further. As one poster tried to call me out, I am not strongly convicted and convinced my opinion on this is correct or accurate, I have merely expressed without hedging or hiding what I hold to based on what I admit as my limited information and am asking to be proven wrong to speed my process of correcting my opinion should it be based on wrong assumptions. Rougy's pointed a big path I wasn't aware of. Anyone else have some more? Particularly around where Greece's government revenues come from and were they are spent? My perception that most of it is going right back to public services is pretty central to my opinion and I'd love to know if I'm wrong on it.

>> ^bcglorf:

Can someone explain the Greek riots to me? I've only followed far enough to have picked up that they are in opposition to the austerity measures being enacted by government? What I've heard sounds like the government spent so much on social services that it went bankrupt, and the protesters are angry that the government is now attempting to cut back it's social services.
I'm not of strong opinion on this like I am in many other situations, but the balance of what I've heard sounds like the anti-austerity protests are so much whining that everyone wants their free money and maybe if we shoot the messenger the economy will recover.


The brunt of it is that Greece is in trouble, and the majority of people who will have to pay for it, or endure "austerity" as the fatcats like to say, had nothing, zero, to do with the trouble.

I've been trying to find out what went wrong there, but I see a lot of smoke and few specifics.

Naturally, any time the blame can be laid on social programs, then that narrative will be most promoted among America's mainstream media.

Frankly I think it was a combination of things, and some of it may have been related to the same CDO swindle that bankrupted Iceland.

But I'm sure you'll agree that if Greece went nuclear, all of their problems would be solved...just like Japan's....



EDIT:

Two words: Goldman Sachs.

Goldman was criticized for its involvement in the 2010 European sovereign debt crisis. Goldman Sachs is reported to have systematically helped the Greek government mask the true facts concerning its national debt between the years 1998 and 2009.[76] In September 2009, Goldman Sachs, among others, created a special credit default swap (CDS) index to cover of high risk of Greece's national debt.[77] The interest-rates of Greek national bonds have soared to a very high level, leading the Greek economy very close to bankruptcy in March and May 2010 and again in June 2011.

(Wikipedia)

The other part of the problem with the Greek economy is that very few citizens pay taxes. There is such widespread mistrust of the government due to corruption that they just don't bother.
http://news.bbc.co.uk/2/hi/programmes/from_our_own_correspondent/8509244.stm

Just throwing money at Greece is probably not going to be a long term solution, they have bigger fish to fry.