Time to copy 1953 German Debt Write-Off?

jimmycrackcorm

jimmycrackcorm wrote: »

What has Greece got to export that would gain from the equivalent, olive oil and feta

Tourism, obviously.

golfwallah

sarumite wrote: »

The "pretend and extend" was a response to the Greek crisis, not the cause of it. The reason the Greeks are in such a sorry state is a result of years of financial mismanagement by successive governments. While I do not blame Syriza for the mess, having only been in office a few months, they have managed to make a bad situation worse in a surprisingly short time, Their Finance ministers incompetence at the negotiation table has been so bad he has all but been sidelined. Syriza has even managed to turn friends with a sympathetic ear into near enemies. While their central bank is run by a former opposition finance minister, it is still somewhat remarkable that he chose to so publicly rebuke Tsipras' crass handling of the situation.

To say Greece needs "genuine reform" is not the same as saying that no reform has taken place. That is a clear strawman. The fact is there has had been genuine reform, however Syriza seem intent on dismantling such reforms in favour of short term populist policies. I do agree the lenders need to be realistic about what Greece can repay, however the same applies to Tsipras. His election promises were unrealistic and sticking to them is irresponsible.

on edit:

To add a link of my own, here is news article from the BBC http://www.bbc.co.uk/news/business-33232074

The summary is thus

"The problem therefore is not so much that Greece is incapable of reform or does not know what needs doing, but that it has wasted five years of the bailout without making serious attempts to fix the structural problems that beset the economy - and in many cases it is actually going backwards.
If it had started five years ago it might have been seeing the results by now as countries like Ireland and Spain have done, but one of the reasons that the Greek bailout has reached another crisis point is that it has hardly started."

"Extend & Pretend" in the 2012 Greek Bailout was primarily a response to a French and German banking crisis - the markets showed that with an increase of 24% in French Banking shares on the very day the bailout was agreed! It should probably more correctly be described as part of a continuing Eurozone crisis as there have been mistakes made on all sides - not just the Greeks!

I'd agree that the Greek government has made mistakes - but, hey isn't that what happens when you become a performer in a public arena of any sort - particularly in the world of politics. There's no such thing as a perfect performance - all the newly elected government could do when their country's economy had shrunk by 25% with no prospect of ever being able to repay loans was try their utmost to re-negotiate a better deal which would enable them to put their economy onto a more long term, sustainable footing.

As for your point about Syriza making things worse than they were - I don't think that's how the Greek population quite see it. Sure they've rolled back on a few of the austerity measures implemented by their predecessors - but these are very small in the overall picture of things. By and large they have continued with the previous policies, whilst trying to negotiate more realistically achievable terms going forward.

At the end of the day, the Greek Government "are where they are", as they say, and can't run the clock back to where they should have been 5 years ago. They were democratically elected on a ticket to try to improve the lot of the majority of their countrymen, which they honestly seem to be doing, as far as I see. Prime Minister Tsipras and his government colleagues also have to live in the world of "realpolitik", in which they have to balance the demands of their creditors against those of the various constituencies that elected them. That's what they were put into office to do and that is precisely what they are doing!

I hope we eventually see a "win / win" solution that is more realistically achievable for all in the EU, as per this BBC News update.

Farmer Pudsey

There is an old saying neither a borrower nor a lender be. The meaning of this is this is that a lender is as much responsible as a borrower for the debt. It back to the story of a Monday morning and a lad asking you for a fiver you know after a while if he pay on Friday or not.

The issue with Greece is that yes they made mistakes but the government in power at the time hid it from Greeksas well as Europe. Truth ECB had an idea it was happening but turned blind eye to itasit suited Germany and France at the time. In reality Germany and France foisted a Franco/German banking problem on EU taxpayers just like Germany foisted the Irish Bark debt on the Irish taxpayer. The reason they got away with the Irish dealwas that we had a serious deficit mainly due to PS pay.

However Greek debt is a more serious issue. Some think the answer is to expel tbe Greeks from the Euro but this will expose the Euro to a weakness that trading markets are waiting for, that a country can be forced from the Euro. So tomorrow Greece, in a years time Italy .......maybe then Ireland.

There is no easy choices a Greek exit will have the law of unintended consequences

sarumite

golfwallah wrote: »

"Extend & Pretend" in the 2012 Greek Bailout was primarily a response to a French and German banking crisis - the markets showed that with an increase of 24% in French Banking shares on the very day the bailout was agreed!

I guess we will have to agree to disagree on this one.

As for your point about Syriza making things worse than they were - I don't think that's how the Greek population quite see it.

That is somewhat the crux of the problem of governments pushing short term populist agendas to buy support at the expense of medium to long term stability.

Sure they've rolled back on a few of the austerity measures implemented by their predecessors - but these are very small in the overall picture of things. By and large they have continued with the previous policies, whilst trying to negotiate more realistically achievable terms going forward.

They have rolled back on several important measures (labour market reform, privitisation) while promising to roll back on a lot more.

At the end of the day, the Greek Government "are where they are", as they say, and can't run the clock back to where they should have been 5 years ago. They were democratically elected on a ticket to try to improve the lot of the majority of their countrymen, which they honestly seem to be doing, as far as I see.

They have been anything but honest to their countrymen. They made promises without any idea of how they were to fufill those promises.

golfwallah

Most of the debate about the Greek Debt Crisis centres on high level fiscal issues (such as the need for more and more cuts in government spending plus the need to collect more in taxes), macro economic issues (such as the need for debt forgiveness, extended loan repayment dates), monetary policy issues (such as weaknesses in the design of the Euro).

Even the latest Greek proposals to its creditors are focussed increases in taxes and cuts in defence spending, according to this Guardian article. These may be needed to achieve short term fiscal targets but what about getting to the root cause of the problem?

It looks to me that with all this focus on the very high level economic stuff and blame game, finger pointing and theatrical posturing by all sides that the real point being missed somewhat?

I still believe that some form of debt forgiveness will have to form part of any further rescue package (if indeed that happens) but that needs to be accompanied by long term real structural reform in key areas of the economy.

It can take a lot of time to “scratch a little bit more below the surface” but even a cursory look at Wikipedia reveals:

Greece's main industries are tourism, shipping, industrial products, food and tobacco processing, textiles, chemicals, metal products, mining and petroleum. ............. However, the Greek economy also faces significant problems, including rapidly rising unemployment levels, an inefficient public sector bureaucracy, tax evasion, corruption and low global competitiveness.

And according to this apparently well informed LSE blog, at lot more attention is needed to sort out efficiency and quality issues in their public service:

Since the beginning of the financial crisis, Greece has implemented a number of deep spending cuts, including a reduction in the size of salaries and numbers of staff employed within the Greek public sector. Fotis Zygoulis and Elina Zagou write that although these reforms have had the intended effect of cutting spending, they have not been accompanied by effective policies geared toward improving overall levels of efficiency and the quality of services provided to citizens and businesses. They argue that this is having a negative impact on economic growth and that reforms which rationalise existing administrative structures should be a key priority.

In contrast to Greece, Ireland has been implementing continuous improvement in running public services (and we still have a long way to go) but very little is being heard in the public domain about tackling such inefficiencies in Greece. Such medium and long term solutions probably wouldn’t satisfy all Greek creditor demands but I would imagine that tackling real issues like these should account for a lot.

sarumite

Farmer Pudsey wrote: »

There is an old saying neither a borrower nor a lender be. The meaning of this is this is that a lender is as much responsible as a borrower for the debt. It back to the story of a Monday morning and a lad asking you for a fiver you know after a while if he pay on Friday or not.

It is actually a shakespear quote from act 1 of Hamlet in discussion between Polonius and his son Leartes (20 years later and still remember studying it for the leaving cert- the spelling of their names may be another issue!)

Within the context of the play, the quote was meaning that you souldn't loan money to friends as it can put a strain on your friendship, especially if the friends fails to repay the debt and you shouldn't borrow money as it can lead you into living an opulent lifestyle you cannot afford. Surprisingly apt in the context of the discussion on Greece I would say.

golfwallah

golfwallah wrote: »

In contrast to Greece, Ireland has been implementing continuous improvement in running public services (and we still have a long way to go) but very little is being heard in the public domain about tackling such inefficiencies in Greece. Such medium and long term solutions probably wouldn’t satisfy all Greek creditor demands but I would imagine that tackling real issues like these should account for a lot.

So essentially your point is that Greece has significant structural problems.

That's true but it can't be the entire picture. Italy and Greece have similar levels of corruption, as do many of recent EU accession states.

Italy, France and even Belgium are also "guilty" of many of the same structural inefficiencies as Greece: high wages, anti-entrepreneurial policies and inflated public sectors. But under threat of industrial or economic crises, those countries do demonstrate an ability to effect basic reforms.

There is something special about Greece. An almost unique type of political incompetence has managed to reign Greece for decades, perhaps comparable only with Ireland. Pasok's response to the Greek economic crash was characterised by irresponsibility and inertia. I'm not accusing Syriza of that, yet. They've only had five months of power.

So, it is not structural problems per se which distinguishes Greece from other troubled economies, but instead an egocentric political culture which has, until the election of Syriza, lacked any coherent ideologically-driven principles. And many people doubt whether Syriza is all that different.

Just as many would say about Fianna Fail, Pasok's only ideology was to keep the party going, and you can interpret 'party' either way.

golfwallah

A Tyrant Named Miltiades! wrote: »

So essentially your point is that Greece has significant structural problems.

That's true but it can't be the entire picture. Italy and Greece have similar levels of corruption, as do many of recent EU accession states.

Italy, France and even Belgium are also "guilty" of many of the same structural inefficiencies as Greece: high wages, anti-entrepreneurial policies and inflated public sectors. But under threat of industrial or economic crises, those countries do demonstrate an ability to effect basic reforms.

There is something special about Greece. An almost unique type of political incompetence has managed to reign Greece for decades, perhaps comparable only with Ireland. Pasok's response to the Greek economic crash was characterised by irresponsibility and inertia. I'm not accusing Syriza of that, yet. They've only had five months of power.

So, it is not structural problems per se which distinguishes Greece from other troubled economies, but instead an egocentric political culture which has, until the election of Syriza, lacked any coherent ideologically-driven principles. And many people doubt whether Syriza is all that different.

Just as many would say about Fianna Fail, Pasok's only ideology was to keep the party going, and you can interpret 'party' either way.

Indeed, Italy, France, Belgium, ourselves and others have many similar structural inefficiencies to those of Greece - but there is one big difference.

Greece is facing default on a significant portion of its sovereign debt next Tuesday. The gun is to their head in the form of default and the consequences thereof.

They have to do something and like US states and territories back in 1841 were told by their Federal Government, bailouts are being refused and they need to agree a way forward with their creditors. 5 of the 7 US states re-negotiated their debts (including partial write-downs), 2 didn't, repudiated their loans and suffered very adverse market consequences for a long time.

It's easy to be cynical about political parties - they are far from perfect and all have different constituencies that they have to try to satisfy. That's democracy, I guess, and at the end of the day we all get the politicians and government we deserve.

The only good thing about the current cliff edge negotiations is that politicians generally need to be faced with the abyss before they act to upset the status quo. This is certainly happening right now for Greece - squeaky bum time has arrived and it is, perhaps, a question of waiting to see who blinks first!

golfwallah

golfwallah wrote: »

Greece is facing default on a significant portion of its sovereign debt next Tuesday. The gun is to their head in the form of default and the consequences thereof.

Slightly pedantic point but there will be no default next week. Or the week after, or even the week after that. The IMF and the CRAs don't immediately consider arrears incidents on IMF debt to be defaults, so there's no new reason to say Greece will be insolvent after June 30th. Investors in Greeek bonds cannot avail of acceleration covenants, for example.

June 30 is just an arbitrary line in the sand, drawn by the institutions. It can be changed.

Anyway this is all a bit of a side-issue. The fundamental problems in Greece are indeed structural, but politically structural, more than anything. The economic structural problems (even indebtedness, when you consider the debt profile) are no worse than some other EU/EA states.

golfwallah

A Tyrant Named Miltiades! wrote: »

Slightly pedantic point but there will be no default next week. Or the week after, or even the week after that. The IMF and the CRAs don't immediately consider arrears incidents on IMF debt to be defaults, so there's no new reason to say Greece will be insolvent after June 30th. Investors in Greeek bonds cannot avail of acceleration covenants, for example.

June 30 is just an arbitrary line in the sand, drawn by the institutions. It can be changed.

Anyway this is all a bit of a side-issue. The fundamental problems in Greece are indeed structural, but politically structural, more than anything. The economic structural problems (even indebtedness, when you consider the debt profile) are no worse than some other EU/EA states.

I don't think many people would agree that a Greek default on sovereign debt is quite the innocuous event you describe. Any failure to repay a sovereign debt on the due date is a default, if not necessarily a repudiation on grounds, for example that such loans were odious or illegal in some way and should never be repaid.

All that being said, I think the consequences for Greece of a default could be very serious, including capital controls or a bank deposit tax along the lines that happened in Cyprus in 2013 - see attached link.

golfwallah

golfwallah wrote: »

I don't think many people would agree that a Greek default on sovereign debt is quite the innocuous event you describe

Any failure to repay a sovereign debt on the due date is a default

I didn't say it would be innocuous. I said that failure to pay the IMF next week is not technically a default, because of the IMF's procedures.

The IMF procedures in the event of non-payment allows for a very long grace period before a default arises. Maybe a year, maybe longer. Therefore acceleration clauses on other Greek paper or int'l loans cannot be invoked, and the usual chaos associated with hard sovereign defaults cannot arise.

The ECB can cut of liquidity anytime it wants, but lets see. It would seem like an over-reaction, and it would be quite an aggressively political act.

golfwallah

The plot thickens - IMF has just announced that it is unwilling to participate in any further Greek bailouts without debt relief and is at loggerheads with the EU about it - see this BBC article.

NorthStars

golfwallah wrote: »

The plot thickens - IMF has just announced that it is unwilling to participate in any further Greek bailouts without debt relief and is at loggerheads with the EU about it - see this BBC article.

Seems to me that the IMF have seen through the German quest for dictatorship.
Someone needs to put the brakes on.
If one country is allowed dictate to 27 others, we have a big problem with the EU.

FreudianSlippers

NorthStars wrote: »

Seems to me that the IMF have seen through the German quest for dictatorship.
Someone needs to put the brakes on.
If one country is allowed dictate to 27 others, we have a big problem with the EU.

Only 3 EZ countries have not agreed with Germany with regard to the Greece bailout. That's democracy last time I checked.

The IMF are talking a load of nonsense. Demanding debt relief from the Europeans whilst at the same time not offering any debt relief on the money owed to them.

Farmer Pudsey

FreudianSlippers wrote: »

Only 3 EZ countries have not agreed with Germany with regard to the Greece bailout. That's democracy last time I checked.

The IMF are talking a load of nonsense. Demanding debt relief from the Europeans whilst at the same time not offering any debt relief on the money owed to them.

The IMF is a lender of last resort. In reality it should not have become involved in EU bailouts. However Germany/ECB wanted its expertise/legitimicy to deal with the debt crisis within the EU. It should have refused after debt writeoffs were not going to be involved. refusing to offer debt writedowns, has limited it sucess in the process because it usually only gets involved in courties that have no other access to funds.

This means that usually it wrties debt down to a sustainable level and insists on internal reforms and devaulation's of currencys to stabilise a nations finances. Devaulation was not an option write downs were not allowed. Trying to turn indebted country's around by austerity alone may not be feasible. The IMF has highlighted that the Greek can has being kicked down the road again.

Other country's such as Spain, Portugal Italy, Ireland and even France cannot politically accept debt relief for Greece. This deal may come back to haunt the EU. What if after Reform if it happens that the Greek economy shrinks again by 25%+. Can the EU politically use the assets it holds in trust to recover its money. The other issue is I think the IMF will never again get involved in an EU bailout program.

It is highly likly that Greece will leave the Euro in the next 2 years. It givernment may have to put such a process in place in sceret. We should also remember that a load of major wars started in this region and over smaller issue than this. I think that a lot of EU politicians have forgot this but we should remember.

FreudianSlippers

FreudianSlippers wrote: »

The IMF are talking a load of nonsense. Demanding debt relief from the Europeans whilst at the same time not offering any debt relief on the money owed to them.

No, the IMF are behaving entirely sensibly.

Greece is the IMF's biggest debtor. If the IMF were to recognize a loss on its biggest debtor, it would amount to an actual capital flow to Greece. In effect, the poorest IMF subscribers like Malawi and Burundi would be subsidising the Greeks. That is unacceptable on every level.

Whereas if the Governors of the ESM-EFSF simply lengthen the dates on outstanding Greek debt through the ESM alone, there will be no cost to the European creditors, let alone poor nations outside of Europe.

Under the IMF's proposal, no government in Europe loses anything, but Greece regains a sustainable debt burden. The solution is incredibly simple and cost-free, and the only thing that will prevent it is widespread public stupidity and consequential political fear.

FreudianSlippers

A Tyrant Named Miltiades! wrote: »

No, the IMF are behaving entirely sensibly.

Greece is the IMF's biggest debtor. If the IMF were to recognize a loss on its biggest debtor, it would amount to an actual capital flow to Greece. In effect, the poorest IMF subscribers like Malawi and Burundi would be subsidising the Greeks. That is unacceptable on every level.

Whereas if the Governors of the ESM-EFSF simply lengthen the dates on outstanding Greek debt through the ESM alone, there will be no cost to the European creditors, let alone poor nations outside of Europe.

Under the IMF's proposal, no government in Europe loses anything, but Greece regains a sustainable debt burden. The solution is incredibly simple and cost-free, and the only thing that will prevent it is widespread public stupidity and consequential political fear.

I'll clarify: the IMF is perfectly sensible from their own point of view, but from a European taxpayer's point of view they can jog on.

FreudianSlippers

FreudianSlippers wrote: »

I'll clarify: the IMF is perfectly sensible from their own point of view, but from a European taxpayer's point of view they can jog on.

What have taxpayers got to lose, exactly?

If any taxpayer thinks it makes a blind bit of difference to their Exchequer whether Greece's debt has short maturity or long maturity, they can jog on.

When Greece repays its debts, whether in 2050 or 2080, the funds return to the ESM and then to investors. ESM lending comes from private industry, not taxpayers. Taxpayers simply put in the base capital that will always remain with the ESM.

NorthStars

FreudianSlippers wrote: »

I'll clarify: the IMF is perfectly sensible from their own point of view, but from a European taxpayer's point of view they can jog on.

Did Ireland tell the IMF to 'jog on'?
Last time I looked FG and FF welcomed them with open arms and did exactly what they were told to do by them.

Farmer Pudsey

FreudianSlippers wrote: »

I'll clarify: the IMF is perfectly sensible from their own point of view, but from a European taxpayer's point of view they can jog on.

Maybe but the IMF will be slow to get involved in EU countries that have finiancial issues. One of the first signs will be the next IMF head for long an European official. The Greek issue along with the Russian/Ukraine fiasco show how toothless the EU is. It shows it political inability to make the hard decisions.

The EU will still trough it funding of the IMF have to make up a large part of the shortfall however for what it is saving it has lost a lot of international goodwill. It will not be able to knock on the IMF door again

FreudianSlippers

NorthStars wrote: »

Did Ireland tell the IMF to 'jog on'?
Last time I looked FG and FF welcomed them with open arms and did exactly what they were told to do by them.

Last I checked we and the rest of Europe weren't currently looking for IMF support?

FreudianSlippers

Farmer Pudsey wrote: »

Maybe but the IMF will be slow to get involved in EU countries that have finiancial issues. One of the first signs will be the next IMF head for long an European official. The Greek issue along with the Russian/Ukraine fiasco show how toothless the EU is. It shows it political inability to make the hard decisions.

The EU will still trough it funding of the IMF have to make up a large part of the shortfall however for what it is saving it has lost a lot of international goodwill. It will not be able to knock on the IMF door again

That's kind of my point. It's time the EU actually stepped up and took a bit of control here, rather than let the IMF dictate what the roadmap is.

A Tyrant Named Miltiades! wrote: »

What have taxpayers got to lose, exactly?

If any taxpayer thinks it makes a blind bit of difference to their Exchequer whether Greece's debt has short maturity or long maturity, they can jog on.

When Greece repays its debts, whether in 2050 or 2080, the funds return to the ESM and then to investors. ESM lending comes from private industry, not taxpayers. Taxpayers simply put in the base capital that will always remain with the ESM.

Of course, I just don't see why the IMF is dictating the need for write-down without considering that a viable option for their own investment?

golfwallah

FreudianSlippers wrote: »

That's kind of my point. It's time the EU actually stepped up and took a bit of control here, rather than let the IMF dictate what the roadmap is.

Exactly, maybe the EU should produce such a roadmap as opposed to making it up as they go along!

Of course, I just don't see why the IMF is dictating the need for write-down without considering that a viable option for their own investment?

The IMF's Debt Sustainability Analysis of 14/07/2014 put it like this:

Greece’s public debt has become highly unsustainable. This is due to the easing of policies during the last year, with the recent deterioration in the domestic macroeconomic and financial environment because of the closure of the banking system adding significantly to the adverse dynamics. The financing need through end-2018 is now estimated at Euro 85 billion and debt is expected to peak at close to 200 percent of GDP in the next two years, provided that there is an early agreement on a program. Greece’s debt can now only be made sustainable through debt relief measures that go far beyond what Europe has been willing to consider so far.

It all seems to come down of differences between the IMF's economic analysis of debt sustainability V the EU's position as regards debt forgiveness.

Maybe all could benefit from looking back at the Versailles Treaty, which John Maynard Keynes regarded as a "Carthaginian Peace" that could only lead to uncontrollable social and political instability. We all know that this treaty never really worked, only a small amount of the reparations were paid, but this was enough to cripple the country economically and lead to even more disastrous consequences.

FreudianSlippers

FreudianSlippers wrote: »

Of course, I just don't see why the IMF is dictating the need for write-down without considering that a viable option for their own investment?

This has already been explained.

If the maturities are lengthened on the ESM side, nobody anywhere loses a penny, but the NPV of the Greek debt burden falls, improving sustainability.

If the maturities are lengthened or even haircut on the IMF side, it amounts to a fiscal transfer from third-world countries to Greece.

Why on earth would anyone, anywhere, prefer the latter?

golfwallah

A Tyrant Named Miltiades! wrote: »

This has already been explained.

If the maturities are lengthened on the ESM side, nobody anywhere loses a penny, but the NPV of the Greek debt burden falls, improving sustainability.

If the maturities are lengthened or even haircut on the IMF side, it amounts to a fiscal transfer from third-world countries to Greece.

Why on earth would anyone, anywhere, prefer the latter?

On a point of clarification, if the NPV of the debt falls, so too does the NPV of the repayment to the creditors.

This is a haircut by another name.

Don't get me wrong, I still think some form of debt forgiveness is inevitable, regardless of what is is called.

golfwallah

golfwallah wrote: »

On a point of clarification, if the NPV of the debt falls, so too does the NPV of the repayment to the creditors.

This is a haircut by another name.

No. The creditors (i.e. asset managers in banks) are repaid, and the ESM borrows longer money from the markets. The Greek debt is, in effect, evergreened.

Similarly, if IMF and GLF debt is transferred into the ESM, the original redemotions are met, but a new obligation is created to private-sector investors via the ESM, with long maturities, or further refinancing.

None of this affects ESM member governments nor their government debt. The NPV of Greek debt is irrelevant to them, they aren't lending it.

dlouth15

FreudianSlippers wrote: »

Of course, I just don't see why the IMF is dictating the need for write-down without considering that a viable option for their own investment?

How is anything the IMF have done "dictating"? The Eurozone, after all, is free to ignore the IMF it it wishes.

NorthStars

No wonder the Greeks are in trouble.

http://greece.greekreporter.com/2014/09/29/german-company-is-top-tax-evader-in-greece/

The irony shouldn't be lost......

dlouth15

golfwallah wrote: »

It all seems to come down of differences between the IMF's economic analysis of debt sustainability V the EU's position as regards debt forgiveness.

The former is based on economic considerations much like the considerations a business might make. We will not lend to a country whose debt is unsustainable as this neither helps the country nor does it enable us to get a return. Creditors must agree to a write-down if they wish for our further participation.

The latter is political. We realise that debt is unsustainable but we can't write it down because that would mean going back to our electorate and explaining to them that we were in error in lending in the first place. We also can't refuse to lend further because that would cause a default and, again, we would have to explain why our earlier lending and the conditions we imposed were in error.

golfwallah

dlouth15 wrote: »

The former is based on economic considerations much like the considerations a business might make. We will not lend to a country whose debt is unsustainable as this neither helps the country nor does it enable us to get a return. Creditors must agree to a write-down if they wish for our further participation.

The latter is political. We realise that debt is unsustainable but we can't write it down because that would mean going back to our electorate and explaining to them that we were in error in lending in the first place. We also can't refuse to lend further because that would cause a default and, again, we would have to explain why our earlier lending and the conditions we imposed were in error.

Couldn't agree more - meant to say "EU's political position" in my post - slip of the finger I guess!

So, basically it comes down to populist politics as played out in Greece V populist politics as played out in the rest of the EU, lead by Germany.

Political leaders in Germany and other EU states have been very critical of Greece for not having the courage to "be honest" with their people, whilst at the same time playing populist politics at home.

Surely when either an individual or country is insolvent, no amount of further loans can fix the insolvency problem. Simply defies common sense - it's like a doctor declaring a dead man to be alive, when everyone knows he is dead, or paying off huge credit card bills with yet more credit cards. Paying off debt with more and more debt can't be sustainable by any rational measure - but then, whoever said politics was rational?

We seem to be doomed to repeat the mistakes of the 2010 and 2012 Greek Bailouts with yet more bailouts - even though bailouts are not allowed under the Maastricht Treaty that we all voted for!

Wouldn't it be refreshing to see more EU leaders having the courage to practice what they preach as regards being honest with their electorates - most of us have the intelligence to see what is going on - yet they continue with the populism?