Pretty much this. Part of the wishlist is about extracting diplomatic concessions that make it easier for foreign companies to compete, which have to do with helping creditor nations, not debtor nations and part of it is standard right-wing "free market solves everything" boilerplate which has to do with ensuring that socialism never gets credit for economic recovery. It's the European center-right anxiety about the rise of their left-wing opposition, which has a transnational aspect to it. Syriza getting major concessions and succeeding on the basis of anything other than austerity/reforms will reignite the left in a way that poses a serious threat to the European center-right and ruling elite.

So what exactly is Merkel's incentive to bankroll Syriza's deficits unconditionally for an unspecified period so that the European far-left can score a political triumph against her party? Even taking it as a given that the Syriza plan would work and show up those capitalist fatcats, it's kind of a dumb plan in that it depends on extremely generous support from the very capitalist fatcats who are going to be shown up by it. I guess that's kind of what you're saying, but what is the point that you draw from this? The conclusion I draw is that Greece is going to leave the euro and go through some rough economic times because there's no negotiated agreement to be had between Syriza and the rest of the eurozone as their aims are fundamentally inconsistent.

Telling the Greeks of today they need to pay their bills (they haven't made debt payments with their own tax collections for some time) is not punishing them. It's telling them to stop spending beyond their means.

They can vote against that all they want but rest of Europe is not obliged to indulge.

The debt was rendered irrelevant as debt a long time ago. Every round brought more refunds and extensions that brought down present value and burden. It was always a political lever to force Greece to implement reforms that it apparently had no political will to implement on its own.

And the Greeks aren't obliged to make any more debt payments. And it looks like they won't unless Europe forgives some of the debt.

Yes, it's their choice to commit national economic suicide.

It's the only way they can get the money they're owed, well most of it anyway. Europe probably didn't have to bankroll anything if they were sufficiently supportive of Syriza early. Of course now, it's going to be hugely expensive because they've completely shaked the confidence out of the Greek economy and the Greek banking system has all but collapsed.

Right, just like Argentina committed national economic suicide in 2001

I'm not sure what it is that you want Greece to do here? Do you want them to nationalize/confiscate all private wealth or something? What can they do that's legal that will give them the money to make the payments? That ship has sailed. Also, they already missed a payment right?

Also, how is the debt irrelevant or when not making payments is national economic suicide?

Merkel gets merked at the Poles if she is seen as soft on Greece in this spot.

The debt's mostly unpayable even in the rosiest scenarios, and it's not really that much money to the EU governments. From a German politician's perspective, about the best scenario imaginable is for Greece to blow off the debt entirely in a way that makes it easy to blame those crazy leftists. It's not Angela Merkel's money, what does she care? Now Greece is going to crater, but Germany's going to be just fine.

I think we're mostly in agreement here - European politicians are playing around and generally being irresponsible with other people's money without any thought given to maximizing the return and using the leverage to inflict unnecessary pain on the Greek people for purely political gain.

Compare them to someone like Varoufakis who left comfortable private sector jobs to return home to a completely ridiculous situation in hopes that his counterparts will, like himself, will also put the welfare of their country ahead of their own career, and that there's common ground to be found.

For years, the debt was held as a political weapon to force reforms. Greece hasn't serviced it's debt with their own money for years. Pass reforms and get relief. Pass reforms and get relief.

It was always that simple. Then Syriza reneged on reforms and tried to get relief with no strings attached.

You're talking about these right?

https://en.wikipedia.org/wiki/Sevent...ckage_(Greece)

Increase taxes, cut benefits and salaries, lay off people. Exactly what the doctor ordered. How are these working out?

The primary deficit is way down. .

Greece doesn't have a burgeoning Chinese economy to bail it out.

Nor a Chavez unless Putin steps in.

Deficit was way down. And before Syriza came to power, it was beginning to grow.

I'm really kind of curious what newsletter you get all this nonsense from...

So Greece has borrowed like $240b or whatever so far, but it doesn't have the capacity to pay back that public debt because it's economy just isn't strong enough to generate the requisite tax revenue. But where exactly has the $$$ that Greece owes gone to? Someone's got it (in the private sector/households), right? We all know the story about the Greek welfare state being too big and unsustainable, but wouldn't that mean that the economy would be fine cause the money would be what's making up Greeks' pensions? And yet their economy isn't healthy, and I don't really understand why.

I get that in 2008 much value simply evaporated from the world economy and in the US in particular because it was held in the form of credit, backed against non-liquid, overvalued assets like houses that became worth far less than their mortgages when the housing bubble burst. But I don't think that's happened in Greece.

Of course during this period the world economy recovered in a major way and this happened in many countries without any kind of austerity. The US primary deficit went from 1.1T (2010) to 0.2T (2014) over this period. I don't have the primary deficit #s for Greece but in terms of total budget deficit as % of GDP, they went from -15.7% deficit (2010) to -12.3% deficit (2014)

Compare these:

http://www.tradingeconomics.com/gree...ernment-budget

http://www.tradingeconomics.com/unit...ernment-budget

http://www.tradingeconomics.com/unit...ernment-budget

What am I missing? In the mean time, their economy shrunk thanks to all that austerity, so their debt burden grew dramatically, right?

Edit: actually looks like I read the graph wrong and those #s are from 09 to 13; 2010 to 2014 was -11.1% to -3.5%. But the point remains the same.

First, Greece runs a large trade deficit, so the money doesn't have to be in the country. For example:

http://www.irishtimes.com/news/world...ibes-1.2034844

Second, one of the things I tend to agree with conservatives is that tax increases have to be well thought-out because tax rates are essentially prices and there's a point where you start losing customers. This is almost certainly part of what's going on - some of the economy has probably gone underground partly in response to punitive tax rates.

Yeah I read that it will be tough for Greece to even implement tax collection reforms, because if the real tax burden was collected so many of their small businesses would go belly up.

Jeez their economy is really a mess, seems beyond fixing quite frankly.

A structural deficit that was 15% of GDP.

When you collect your dead grandfathers pension for 30+ years and retire from working at age 50, and avoid paying taxes with what seems like religious fanaticism, you are going to have a baaaad time.

Sounds like a pretty good time to me