[Mentar]

Oh lord...

Originally Posted by monsta666

I don't really like the terms Greek, Spanish, Italian bailouts etc because it implies that somehow the citizens are being bailed out when in reality it is the banks in those respective countries getting bailed out. The citizens do not receive any of this bail out money (or the amounts are so low to make it insignificant) and all they get is austerity and a reduced standard of living.

The citizens already have received money upfront, when their state was showering them with entitlements which they didn't earn enough money for. And no, it's not like only banks are bailed out - for example during the Greek crisis, they received a national debt haircut, which is effectively the same as being gifted money. Did you see the bloated state official apparatus there, where tens of thousands of officials received lavish pensions while doing nothing productive? Ever heard of the tens of thousands of pensions paid to people who had been dead for many years? This is where the national debt came from.

What's more none these austerity measures do not actually make them more competitive as suggested as they are all tied in to the same currency (the Euro) if they had their own currency and they could deflate their currency then they could make their exports more competitive.

monsta, when all you earn is 2000 Euro, then you CAN'T afford a lifestyle as if you earned 4000. And when you're forced to rein in your spending, of course that hurts. But who is supposed to pay for your excesses? The rich uncle (the EU)? For all eternity?

This "if they had their own currency, things would be better" nonsense is extremely short-sighted. Because then, due to their own currency becoming more and more worthless, the Greek couldn't afford many things anymore which they can purchase now since the Euro is relatively strong. Ever thought of that?

No, sorry man. The PIIGS nations need to actually learn to pay taxes and scale back their expenses until they match their real productivity. There is no other way around it.

[Lots of stuff about German banks deleted]

There was no special exposure of German banks in Greece. Particularly Cyprus went overboard here (which is one of the reasons why they're in trouble now, after the Greek debt haircut). France was in a ticklish spot before the ECB (coincidentally under French leadership by then) happened to massively buy these toxic papers all over the board as an emergency measure.

The German banks made a big mistake and now that these loans are going south are at risk of going bankrupt. Instead of facing the consequences of their mistake (as normal capitalism would dictate) they want a bailout so all these countries (who are their clients) get bailed out so they do not lose money from their bad deals.

Again, this is nothing special about German banks, but by banks all over the financial spectrum. The main reason why there is a European consensus to nationalize the debt of the local banks is to keep the problem manageable and avoid Lehman scenarios as much as possible. Cyprus is a special case, because relative to the size of the deposits, Cyprus as a state is a flea. They can't shoulder the debt, because they are too small.

The ECB like all central banks in recent is the big bad bank were all commercial banks sell their loser loans as no one else in the market is willing to buy those loans at prices that would keep them solvent. To me this strikes as more of a German or northern bank bailout (you could include France and other banks from the Northern countries) but to sell this bailout it comes under the guise of a Spanish, Italian bailout etc. The German taxpayer is footing the bill not to bail out other citizens but to bail out other banks. The big test will come when those southern states default. I have a hard time seeing how the German banks remain solvent.

As long as the southern countries stay on board and don't elect obstructionist clowns (see Italy), this won't happen. You can be sure that the ECB will always provide as much liquidity as required, but not more than necessary.

It is these type of reasons why the Germans lost their AAA credit rating in the first place.

You're misinformed. Germany didn't lose their AAA rating, they still have it.

Originally Posted by AmeNoJaku

@Mentar: I agree even more with the way you make your point now, save for the Weimar Republic analogy... my understanding is that it was crushed by WWI reperations, and thank gods the same mistake was not repeated after WWII. Also I don't disagree that Greece cheated to enter euro, but in way so did Germany, when they adjusted the targets for them (BBC should be OK).

That Greece massively cooked the books to pretend to meet the Euro convergence criteria is a proven, documented fact, so "cheated" is a simple factual description. You could make a point that the rest of Europe was purposely looking the other way and not trying to really investigate the wondrous numbers, but it doesn't change what happened.

Look as monsta666 wrote, it is unfair to attach political decision to the population, many of us know that not every German agrees with Bild/Focus and Merkel, but also not every Greek is a lazy crook, or Cypriot the whore of a Russian mobster.

You actually think that Merkel ever said that every Greek is a crook or Russians mobsters? Whatever you may think of her, she's way too much of a professional with amazing self-control to be caught dead saying that.

Look: When I say that Greeks need to start learning to pay taxes, I'm not implying that none of them don't, or even that the majority don't - but there are so many who don't that it's a big, big problem. But I do understand the underlying point you're trying to make, and I generally agree. These huge generalizations are not helpful.

Despite justification all solutions Germany and IMF enforced in troubled countries have made the problems far worse then before their intervention... just think how would you feel Germany had close to 30% official unemployment or if you went to your bank and saw that 10, 20, or even 40% of your company's capital disappeared... and all these not because you individually did something wrong, but because politicians of your own and allied countries were lying to you for a decade.

Real honest? I'd be angry, yes. But I honestly think that I wouldn't drop so low as to bite the hand who is putting food on my table, or go so far as to blame and insult it.

You think I haven't lost my job too due to company bankruptcy? Yes, I have also been forced to make adjustments in response, had to look around and take up a lower-paid job. So what? I wouldn't have been seen in strikes screwing over the rest of the country. And I find little respect in my heart for those who do.

I am just saying before blaming the demonstrators as stupid, try to understand the shock they have to overcome in order to react rationally, both Cypriot and German.

Yes. But I expect from a grown-up to be able to take bad news and adapt. This easy cop-out of finding someone to blame for your misfortune and using this as a shield against change is a sign of immaturity for me.

As for the solution and disaster you mentioned, these are to extremes, we blindly follow one in the justified fear of the other... I think that there can be a middle way, particularly if politics in every country begin to consider the well-being of all their citizens and not numbers that their "legal sponsors" only care about.

Agreed. I am generally receptive to EU-initiatives combating the worst results of the high unemployment, especially youth unemployment. I'm also open for opening the ECB coffers for them, as long as it's clear that they are time-limited and only for the transitional phases. That's a relaxation in austerity which I can live with. Still, this must NOT result in perpetual budget deficits.

PS: I found a mention for the 40% from a German source, citing CyBC here.

Okay, so the only source is the CyBC, so please excuse my scepticism. I doubt that Schäuble (who is another experienced professional) would seriously push such an extreme suggestion, since it would immediately be attacked by the SPD in the German elections.