Found 2 comments on HN
glesica · 2015-02-17 · Original thread
I'm sorry, I realize that you're asking for clarification, but it is really frustrating to keep hearing this kind of crap. Greece the country didn't borrow all (or even most) of that money, private borrowers borrowed it from German banks (or Greek banks that borrowed it from German banks). The money ended up as public debt because the banks got bailed out.

The reasons for this were complex, but had a lot of do with German fiscal and labor policy. Once the loans turned out to be bad (because why on Earth did the banks expect that all of these funds could possibly to put to good, productive use, especially once credit standards were lowered), Greece was expected to deal with the situation. They did, and they bankrupted the country doing so (same with Portugal, Spain, and Ireland).

There is, of course, plenty of blame to go around, but this is not a situation where the Greek government borrowed a ton of money and wasted it. They borrowed a ton of money to bail out their banking system including a bunch of German banks (which is where a lot of the money originated). This is exactly what the global economic elites were telling everyone to do in 2008. Then, once things got ugly, those same elites decided that the Greek people should collectively pay the price for two bad economic policies that were only partially the fault of their government.

Suggested reading:

http://www.amazon.com/Austerity-The-History-Dangerous-Idea/d... - this book goes into great depth about what exactly happened in Europe.

http://blog.mpettis.com/2015/02/syriza-and-the-french-indemn... - blog post that describes how what has happened in Greece, Spain, and Portugal was effectively inevitable and not the fault of the respective governments so much as it was a result of a series of pan-European financial blunders.

glesica · 2015-01-27 · Original thread
No, Germany forced the Greeks into a program of austerity even though it has been shown, very clearly, that austerity simply doesn't work (see references). The economic forecasts on which the German (really the EC, ECB, and IMF) analysis relied didn't account for the fact that reduced government spending would cause a reduction in GDP.

They assumed that reduced government spending would somehow (magic?) increase private sector investment and result in economic growth. The forecast for the WORST unemployment would get was around 12%, and by this point the recession was supposed to be a distant memory. They were so, so, so wrong.

Greece probably made mistakes, but don't pretend the Germans are innocent and being painted as the "bad guys" unfairly. The Germans ignored all reasonable economic logic and forced austerity on Greece for ideological reasons. That's exactly the kind of thing "bad guys" do and the Greeks are justified in their anger.

http://www.amazon.com/Austerity-The-History-Dangerous-Idea/d...

http://www.theguardian.com/business/2013/jun/05/imf-underest...

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/01/03/a...

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