Video So one currency Euro was a bad idea ??

[JohnnyAnger]

I'm curious about a government borrowing money and what if that government is gone.

Example:
Say Sadamm Hussein borrowed 1 Trillion dollars and he used the money for his own personal benefits.
Now, he is gone. Is the whole country responsible for his actions and need to pay back ????
I guess not, and things need to be re-negotiated.

Well the troika would probably argue that they would have to pay on old agreements. The Germans have told the Greeks that changes in government mean nothing to them, and that no one has the mandate to change their agreements to the point Varoufakis joked to them that southern Europeans should not be allowed elections. Dr Schäuble again just gave a stone cold look suggesting "If only we could get away with that."

 

[Telstra]

Well the troika would probably argue that they would have to pay on old agreements. The Germans have told the Greeks that changes in government mean nothing to them, and that no one has the mandate to change their agreements to the point Varoufakis joked to them that southern Europeans should not be allowed elections. Dr Schäuble again just gave a stone cold look suggesting "If only we could get away with that."

Expert economist John Perkins said cut all ties with the troika,
and find new partners like AIIB bank and start a fresh.

 

[kallipolis]

Expert economist John Perkins said cut all ties with the troika,
and find new partners like AIIB bank and start a fresh.

The issue is not how we have arrived at today's tragedy, but how we are able to repay the loans....Germany's answer is to shrink the Greek economy with further austerity measures...the IMF, US Treasury, and the Bank of England have "advised" Germany that such a remedy has not worked over the past years, and will not work over the foreseeable future to enable Greece to repay its debts...
further debt relief is the only way to resolve this matter.

Structural changes to the Greek Governments expenditure have been underway since 2010...and is work in progress...tougher reforms are being introduced as we exchange words...

 

[kallipolis]

Here's the IMFs Madame Lagarde's latest comments speaking to debt relief for Greece...and she is better qualified that most to add her support to the same advice being offered by the US Treasury, Bank of England and many respected experts in this field:

http://www.tovima.gr/en/article/?aid=723082

I quote:

The Managing Director of the International Monetary Fund Christine Lagarde has argued that the recent agreement reached between Greece and its creditors will not be viable unless a reduction of the Greek public debt is carried out. Mrs. Lagarde, who spoke to the Europe1 radio station in France, was asked whether the bailout agreement is viable and responded “quite categorically no”.

 

[bankside]

^ the lenders are villains or loan sharks then.
If they are not villains they are better off not lending any money and just help !!!

No, telstra, the borrowers are common thieves and fraud artists.

 

[bankside]

I'm curious about a government borrowing money and what if that government is gone.

Example:
Say Sadamm Hussein borrowed 1 Trillion dollars and he used the money for his own personal benefits.
Now, he is gone. Is the whole country responsible for his actions and need to pay back ????
I guess not, and things need to be re-negotiated.

When the leader is actually a tyrannical dictator holding the whole population hostage, you may have a point.

When the people keep voting for the leader in free and open elections, it is a bit different.

 

[bankside]

So i lend to my rich older brother and charge him zero interest rates.
And i lend to my poor younger brother and charge him 50% interest. This is morally stupid !!!

No, Telstra, I explained to you about the economic resiliency of different economies, and why investors are right to calculate a different risk premium, based on external factors that might stop the borrower from repaying, not based on the potential thievery of the borrower.

By the way if I give you $100, I am not supposed to profit from that, and you owe me nothing.
If I lend you $100, and you agree to borrow it, then I am supposed to profit from it. That means you have to give back more than $100 because I have to be able to earn something. If you don't pay it back, that is theft.

The lenders were supposed to profit from Greece, and Greece knew the lenders were supposed to profit , and Greece wanted the lenders to profit because Greece wanted to borrow.

The lenders did not come in after the money was lent and say "okay, we have changed our minds, now you owe us double." THAT would have been unfair, but that never happened. Greece knew what they had to repay up front, and the Greeks said "Yes, please, we want to pay back all of that amount, because we want to borrow the money now and we are sure we can pay it all back (or at least we want you to think so!)"

If they needed donations instead, they had to ask for donations instead.

 

[Miltiades]

When people talk about Greece's creditors, you do realize that the Eurozone member states are not lending any further money to Greece? That Greece's 'European' borrowings come from private financial institutions, which are merely guaranteed by the member states of the Eurozone?

That is not a trivial distinction, it is very important. Because the taxpayers of Germany and the 'core' European member states are not simply transferring revenues to Greece, even if that's what citizens in those countries mistakenly believe.

No. Taxpayers in these countries are merely providing a guarantee that in the unlikely event of Greece repudiating its obligations to the ESM (effectively a European Treasury), these states will cough-up. But given a unified EU legal system and the ease of litigation, as well as Greece's reliance on EU membership and European trade, it would be practically unthinkable for Greece to default in that way. That is why Yanis Varoufakis described the Eurozone as the Hotel California--you can check out, but you can never leave it.

It annoys me to hear this talk of Germany etc contributing money to Greece, when they are doing nothing of the sort. Although they did, 5 years ago, lend some money to Greece directly, this is now being refinanced by financial institutions via the ESM, and they have earned a handsome profit on that loan.

Much of the misunderstanding on this point is due to lazy media reporting.

 

[T-Rexx]

Germany opposes creation of a European Finance Ministry.

http://www.politico.eu/article/german-economists-eurozone-integration-crisis-eu-grexit/

Of course they do. That would subject Germany to regulators acting in the interest of Europe, not Germany.