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Banks lend out to high risk borrowers with loans secured on land.
Poor countries borrowed to improve their countries.
After the 2008 crash:
Banks said to rich governments bail us out with your money. Governments borrowed from huge corporations and the rich - with interest - as there was no one else to borrow from, and bailed out the banking corporations. Governments borrowed from the corporations and the rich to bail them out of the economic mess they produced. Yes, this happened.
Ireland, Spain, Portugal, Greece, etc, said to the EU what the sub-prime borrowers said to banks - we cannot pay back our debts.
The EU banks also used this money to bail out the likes of Greece, etc.
The corporations and the rich thought the governments are borrowing so much money they feared they may not be able to pay them back.
The Greek government said you are right we cannot pay it back.
The big banks in the USA and UK but mainly in Germany and France realised they may collapse if the Greeks do not pay.
The French and German banks realised if the Greeks do not pay, they will need to be bailed out "again", as the Spanish, Italians, etc, will not pay.
The Greeks asked Angela Merkel and Nicolas Sarkozy for help. They said we cannot do it twice as the first time we were deeply unpopular for doing it causing unemployment in our countries. If we did we get voted out.
So Merkel and Sarkozy devised a plan. Get international institutions, the IMF, European Central Bank and European Commission (now known as the Troika) to lend money to Greece. Fabulous.
But Troika said to the Greeks you cannot use the money to get your country out of the mess, as a responsible government would do, it is to pay off private banks who change massive interest, so Merkel and Sarkozy do not have to bail them out.
Troika did lend, which meant the private banks didn't face collapse. This kind of hustling is called high finance.
Greece realises it is no better off, instead of being in debt to mainly German and French banks it is in debt to international institutions. No more than a shift, like shuffling the same furniture in the room.
The people of Germany and France asked who has to come up with the money if Greece, etc, do not pay back the international institutions? The answer was "you do".
Merkel, Sarkozy had been voted out in France, fearing her political career, said we are going to make an example Greece, even though the Greeks never created the 2008 crash.
The Germans said you are not going to have pensions or keep drinking ouzo and the German media was full of propaganda saying Greeks were lazy, which is not true. Greeks work very long hours.
Merkel said we are going to squeeze you, so you will not spend on your hospitals, schools, etc so you will have to use the money to pay back the loans so German citizens are fine.
In January a new government came to power in Greece, with a massive vote and pledged not to pay back.
The Germans said you are going to do what you are told; you are going to have poverty, few public services, etc, so you will have to pay back the loans which we negotiated with a government you just voted out.
Rich Europe was now leaning to crushing poor Europe.
A referendum in Greece voted against paying the money back.
Merkel said we do not care less, so stopped delivering Euros to the Greek banks.
Greece put severe money restrictions in place.
Merkel said we will stop delivering all money to Greece. This would cause total collapse meaning food, fuel, medicines, etc, would be short. Transport will not run, power cuts, etc, causing great civil upheaval.
The Greek government agreed despite a referendum stating they should not do.
Poverty continues in Greece with its essential young people leaving in droves making matters worse.
I hate long posts. I disagree with the few points I've read and I'll reply to them.
"Merkel, Sarkozy had been voted out in France, fearing her political career, said we are going to make an example Greece, even though the Greeks never create." Merkel is risking her political career by not be harder on the Greeks. And it's Hollande who is trembling and it's not because of Greece but because of his own failings. When Merkel looks at Denmark, Great Britain, Hungary, the Baltics, she realizes her position has been rewarded by voters over and over.
"The Germans said you are going to do what you are told; you are going to have poverty, few public services, etc, so you will have to pay back the loans which we negotiated with a government you just voted out." The Germans actually said you will do what you agreed to do. They also said you will from now on have to PAY your taxes! Few public services apparently found room to rehire 2100 Greek state radio workers.
'Ireland, Spain, Portugal, Greece, etc, said to the EU what the sub-prime borrowers said to banks - we cannot pay back our debts." Ireland, Spain and Portugal took their medicine and are recovering. Greece didn't and it's sicker.
"The Germans said you are not going to have pensions or keep drinking ouzo and the German media was full of propaganda saying Greeks were lazy, which is not true. Greeks work very long hours." The is partially true. German workers said why should we work till we're 65 so Greeks can retire at 50? Or even 40 many times. Or, that tiny island with 600 even younger "blind" early retirees? (I've seen pictures of Greeks working, most selling imported nuts, imported clothes, imported olive oil, etc. But most pictures of I've seen are of Greeks playing beach volleyball, hanging out is spirit bars or shopping. Did you know it's cheaper for Germany to import Greek olives and make their own oil than it is to import the oil from Greece?)
Greeks are not stupid. PASOK and the others knew all along their prosperity was nothing but running up the credit card. They elected to party on.
I've seen pictures of Greeks working, most selling imported nuts, imported clothes, imported olive oil, etc. But most pictures of I've seen are of Greeks playing beach volleyball, hanging out is spirit bars or shopping.
Greeks retire at 67 and early retirement at 58. Retirement in Greece increased to 67 in 2015 from 66 in 2014. Averaged 64.29 from 2009 until 2015.
The pension are and have always been poor paying below the poverty level. Monthly pensions have gone down to an average of €833 ($924; £594) from an average of €1,350 in 2009.
You are so wrong it is not worth engaging on other points.
most greeks in public sector retire at 50 even at 40 with pension sometimes to 3000 euro a month.greece dont produce nothing and thery dont deserve a montly pay over 300 euros.a once proud nation the comunists who elected at1981 trasnform it to a nation of gypsys who like to live an handouts and not to work.this is true only for the public sector workers.the private sector works like slaves and pay taxes so the public sector workers can retire at 50.sorry for my english
I posted the figures. I never made them up. Capitalist propaganda was spewed out to paint the Greeks as lazy and takers, which is not the case. The banks wanted their money back with massive interest, so their machine went into motion isulting the Greek people.
Greeks retire at 67 and early retirement at 58. Retirement in Greece increased to 67 in 2015 from 66 in 2014. Averaged 64.29 from 2009 until 2015.
The pension are and have always been poor paying below the poverty level. Monthly pensions have gone down to an average of €833 ($924; £594) from an average of €1,350 in 2009.
Anyone who makes a loan take a risk that they may not be paid back. Large financial institutions lend freely to governments as they see they pay back in 99.99999% of the time. The banks took a risk lending to Greece, they cannot pay back - hard luck. The people of Greece should not be impoverished to make banks rich.
but in most loan cases, a lien is placed on an item
Does that mean the banks now own Greece and can start selling parts of it off?
How would that affect the citizens?
If they could they would sell parts of Greece off. The banks took a risk. Sometime you lose when you take a risk. Millions of people should not suffer to keep risk takers solvent.
Europe is now a land of disgrace. This was their problem. They created it, then they made it only worse. Right-wing economics has failed there, just as it failed so miserably here. But pay attention -- the villains will learn no lessons from it.
well, they learned they can get away with it, so they will tried harder the same thing that didnt work and never know where it went wrong
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