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Nice, that this third-rate Marshall plan propaganda is still around - guess, that's why they call the (hi)story secret
Perhaps the brights that rehash that nonsense should take a look at ECA/MSA (so-called Marshall plan) of 1948-52.
Greek participated with 693,9m $ (UK 3442,8m, France 2806,3m, Germany 1412m).
Per capita and in relation to their GDP the Greeks got multiples of the other countries.
Besides, war damages were only fractions of those in the other countries.
Can you help answer these questions from other members on NexusFi?
After the bailout, what do you think about renaming this thread or would you prefer a new thread
for the post-bailout era? (websouth who started the thread hasn't been around for a while.)
Creditors take risks. We do not live in a risk-free world, and taking on risk -- and calculating it wisely -- is how they make their money. Sometimes they will need to write off a loan and move on.
The original lenders to Greece calculated unwisely, assuming, in effect, that the peripheral European countries would be, under the umbrella of the Euro, as safe as the northern countries who were also in the Euro. This was exuberant at best. The various Greek governments calculated very unwisely also, and often, taking on debt with no way to repay it (and sometimes falsifying their true condition.) The present creditors also calculated unwisely, by advancing more loans to Greece, essentially to allow it to pay off the original creditors, a disguised bank bailout.
What needs to be done now is not a matter of pointing fingers or blame (of which there is much to go around), but simply to make a business decision. The loans will not be repaid in full; they may not be paid at all. The creditors will end up writing them down, whether sooner or later.
This is simply business; it happens all the time. In this case, both the creditors and the debtors misjudged the risk. It is better to deescalate this from a question of blame to a matter of recognizing the business reality and making the best decision now.
It is unfortunate that the Greeks have gone through a crushing depression as their governments accepted austerity as a condition for more loans, and it is unfortunate that the taxpayers of the other European countries will have to take a loss on the loans. But there is no way forward except to recognize reality and move on.
This will be settled eventually by the arithmetic.
By now, the whole Greece situation may have been beaten to death, but I did see this piece, which brings in some of the overall monetary context of the Euro itself.
Since the Greek government is very left-wing and many of the European governments and institutions negotiating with them are to some degree more conservative, and are, in any case, putting forward a somewhat conservative position regarding debt repayments and economic austerity, it may appear that the issues are left-vs-center or even left-vs-right. It may also appear that some of the economic arguments that are critical of the European institutions are somewhat left-wing or even radical fringe as well -- and perhaps some are. But not all.
This piece is by Greg Mankiw of Harvard, a prominent economist long associated with Republican (conservative) policies in the US; he cites Milton Friedman of the University of Chicago, an American conservative economist of world stature, and Martin Feldstein of Harvard, who was chief economist to Ronald Reagan and no leftist, either. He does not take a position that is hostile to the Greeks, however.
The essence of the argument is that the nature of the Euro itself contributed to the problem. Because the member states no longer had control of their own currencies and because there was no real fiscal union, nor political union, member states had neither the self-determination of separate currencies, nor the fiscal support of rest of the union.
Quoting:
"...Greece finds itself overwhelmed by its accumulated debts. To be sure, it bears primary responsibility. The Greek government borrowed too much, and for years it hid its fiscal problems from its creditors. Once the truth came to light, a large dose of austerity was the only course left. The result was an economic downturn with a quarter of the Greek labor force now unemployed.
"Making matters worse, however, was the common currency. In an earlier era, Greece could have devalued the drachma, making its exports more competitive on world markets. Easy monetary policy would have offset some of the pain from tight fiscal policy. Mr. Friedman and Mr. Feldstein were right: The euro has turned into an economic liability that has exacerbated political tensions. For this, the European elites who pushed for the currency union bear some responsibility....
"Yes, the Greeks have every reason to be contrite. But it might also be wise for the rest of the world to show some mercy."
The message may not be comfortable, particularly in Europe, and may not be right, but the fact remains that, outside of the EMU, Greece would have had a better path to recovery. (And, realistically, may not have gotten the initial loans in the first place, either. ) It also is possible that their path will end up being out of the Euro anyway, although now the transition, if it comes, will be chaotic at best.
Outside of the EMU, the way would certainly be easier for the Greeks and cheaper for the rest of the E(M)U.
The question Greece is facing is if it would change anything for the better.
In that sense, the brink of national bankruptcy is a chance for Greeks to be honest with themselves.
Concerning chaos:
From the end of the 1990s to the late 200x's, Germany had the highest unemployment since the foundation of the state,
an economy that was depressed by the follow-up costs of the German reunification, a collapsing healthcare and retirement
benefits system, mutinying labor unions, complete industries breaking down (e.g. steel) etc. etc. etc.
For years, there were demonstrations, strikes, strike calls, street fights with the police, and all that.
The international reactions hovered between disinterest, shouting defiance, and open gleefulness.
Nevertheless in the early 2000s a (left-wing) government implemented a massive reform agenda for the labor markets and the
social system to which you can attribute much of Germany's strong economical position today.
