Actually they said “Οχι” because they are Greek.
Greek voters reject bailout offer by 61% and the Euro bankers say there is no point in negotiating with people who won’t agree with them.
The voters have gone along with the Euro bankers for 5 years and things just kept getting worse.
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The Euro bankers haven’t negotiated in good faith at any point in this process. They want to punish the Greek people for perceived moral failings, and finish the job of looting the Greek economy in the first place (a process that started in 2002 when Greece joined the Eurozone, you can see all the abandoned manufacturing plants all around the country that were driven out of business when cheap Euro imports flooded the country), then they want to turn to the ECB and say “See? These people are scum!” and get their debts bought off by the ECB and written off.
So why don’t they give Greece the opportunity to do the same thing — have their debts bought off by the ECB and written off? Well, they are whining about how it’s the immorality of Greeks that is the problem, so the Greeks need to be punished, good and hard, until they are properly moral. It is the same moral tale that Southern slave holders said about black people, i.e., slavery was a moral evil but it was good for the black people because it taught them how to work hard and be Christian. (No, I am not joking). The Eurobankers have the same attitude towards Greeks that the white Southern slavers had towards their slaves — i.e., that it was only right that they, the superior people, crack the whip hard on those inferior people, because it is the only thing that will teach those inferior people how to behave properly like good Germans.
The problem is that banks are supposed to be businesses, not morality police, and this is bad for business all around. There’s no — zero — way that these loans can ever be repaid by Greece. Ever. It’s a mathematical impossibility. Offering a deal that included a significant haircut is the only way that they’ll ever get *any* of their money back. I cannot imagine an American bank doing something so lame-brained, because American banks are run by people whose morality is measured in dollars and cents. American banks did sell a lot of liar loans to people who had no business buying a house, but they never expected those liar loans to actually get repaid. That’s why they bundled them up as “good as Treasuries AAA rated” mortgage backed securities and sold them off to pension funds and 401(k) funds (SIGH).
If this was really a business decision they would have consolidated all of the debt, extended the length of the loan, and reduced the interest to the current market rates. This would have provided their ‘business’ with some return, so they didn’t have to write off the entire loan. Their real problem is that the ECB doesn’t really understand or believe in fiat currency.
As long as the entire purpose of the ECB is to protect the large German and French banks that made the bad investments, no reasonable plan is possible.
Actually, having read further, the ECB and IMF have purchased most of the loans in question already, only 15% of the Greek debt is still in private hands. The ECB could simply buy the remaining bonds from the IMF, give Greece E350B in freshly-printed bailout money, have Greece repay them E350B for the money owed, and be done with it. There is no — zero — reason why they should not do this. Other than the fact that the ECB is run by Germans, and Germans believe the Greeks are untermenschen, mere unseemly mud people, who must be taught their proper place or they will become lazy and immoral. Racism is such an economic pain… American business is anti-racism because it’s bad for business. In Europe, however, “bad for business” has never been a reason to avoid racism. SIGH.
They don’t seem to have figured out that if Greece leaves the Euro, every other country with the Euro is in trouble as are their markets. They seem more focused on the possibility that if Greece isn’t tortured the other ‘slaves’ will start getting uppity and want to re-negotiate their ‘bailouts’.
Of course, this may all become a footnote if the Chinese continue to go downhill. Together with the bursting of the oil price bubble and the general incompetence of the banksters,hedge fund hustlers, and market gamblers another global depression is a real possibility.
Greece won’t make the economy go bonk. The economy of Greece is about the same size as the economy of Atlanta, Georgia. We’ve had much bigger cities go bankrupt before and nothing much happened.
The Chinese, on the other hand. Their stock market is tiny, so their stock marking crashing is not a big deal. But their leaders appear to be forcing their banks to prop up insane valuations in their stock market with bad loans. That’s the same recipe that killed our banks back in 1929.
Nobody learns from history. Nobody.
SIGH.
– Badtux the Bummed Penguin
Frankly we both understand that what is happening to Greece has nothing to do with economics – it’s about power and the politics behind the power. The economies will survive, but the Euro and the EU may not. The UK is already taking a victory lap for not joining the Euro, and the Tories aren’t really enthralled with the EU. When the European Central Bank is so obviously bowing to the wishes of the politicians in a signal member nation, the other nations start to question the utility of that bank and its currency. The basic economies won’t fail on Greece, but the EU banking system could be in trouble.
China has bigger problems than its stock market. If you look a world commodity prices, especially oil, copper, and steel it is obvious that the Chinese economy is really slowing down. There are multiple bubbles that could burst at any point.
“Nobody learns from history. Nobody.” – Badtux
“… what is happening to Greece has nothing to do with economics – it’s about power and the politics behind the power.” – Bryan
You guys been reading Naomi Klein or somethin’? I’ve been reading her books, but I’m about to dig for some of her articles (The Nation and many other places) to find out her take on the Greek/Euro situation.
I get some info from my buddy L’Enfant de la Haute Mer, but Google Translate doesn’t deal with modern Greek as well as it might, and unsurprisingly most of her Greece-related posts are in that language.
Steve, history is the best source of knowledge, especially when it shows us a pattern of cause and effect that is totally consistent. When people substitute faith-based concepts like austerity for evidence and experience, failure is guaranteed. They give themselves away when they talk about ‘moral hazard’. Economics is not a religion.