Who's going to be there the next time someone or country needs to borrow money, if not the creditors?

What is funny is that it's the suits in Brussels who are really going to pay the price if they decide to play hardball. Syriza is calling their bluff

Lenders can pay a price, but everyone pays a price if it come to that.

"The creditors don't need the money back. The Greeks do. Yet this issue of whether they default is set to cause the Union to disintegrate.

You reap what you sow. "

"The creditors shouldn't "reap what they sow,""

Thucydides, everyone

LITERALLY, destroy the EU, and we'll have a modern dip 2 situation on our hands (but greece wont be a SC, and Spain will be weaker)

Also, Thucy. I think you may not understand who "Creditors" are in most cases. Usually, they are hedge funds or mutual funds. The ultra-rich have private wealth management accounts with their bank and usually have specially tailored deals.

So, who contributes most to hedge funds and mutual funds? Pension plans. Your local city government, your local school district, labor union, firefighters, etc etc. If the mutual fund takes the hit, then its that much less available to your average retired worker who paid into it.

http://www.theguardian.com/business/2015/jun/29/joseph-stiglitz-how-i-would-vote-in-the-greek-referendum

^^Wouldn't you not vote in the Greek referendum because Greece is corrupt Thucy?

did I say I would vote?

You can compare Greece to Ireland all you want. The pure economic understanding is useful, too much austerity will cause a depression. If you take too much money out of people's pockets, and where is the line between what is enough and what is too much? That's not always clear - but what is clear is that Ireland's economy didn't suffer from too much (though we suffered a lot, and we'll see how the next election turns out) and Greece had too much.

It doesn't matter whose fault it is, creditors making bad investments in greece, greeks desperately trying to stay afloat. The current greek democracy is going to burn the creditors, because they troika are not willing to consider a massive restructuring of the debt.

Also: who are the creditors: ichef.bbci.co.uk/news/485/cpsprodpb/78 6/production/_83943903_who_owns_greeces_deb_v2_624.png

Chart from bbc, seems to my reading ( though i'm not an economist ) that this is largely other states bailout funds. With the ECB a smaller players...

Smaller still are private institutions, like pension funds and others. So of course these states negotiating are interested in being paid back. They are taking the hardline because this is a source of income, and they have their own loan repayments.

A default hurts all those states listed here. And hurts their citizens, especially if those states continue with Austerity policies.

Out of curiosity, how is simply extending the loans and at least getting interest considered as an option?

Don't expect the loan to be paid off but you never know, for now at least pay interest?

The Greeks did pay the interests so far, so all the creditors made money so far, and not a little. It is indeed a problem for Greece to pay back the actual loans. Just as a point of interest, Greeks dept has increased drastically since the austerity started, so maybe it is the wrong approach.

Take for example Japan, it is higher in debt then Greece, but the interest rates there are still very low, and no one is getting in panic there, they still get their funds to go on. (Debt of Greece: 197.3% of GDP, Debt of Japan: 199.6% of GDP).

The EU knew what they went in to when they took Greece in to the European union and in to the EURO zone, so they should not be surprised AT ALL, and therefore they may should accept the consequences of it.

Give Greece a break.

Actually, the title 'Greek Bailout' is wrong, it was, and is, ones again, a bank bailout. Before the 'crisis' all the dept was held by private institutions, now more then 80% where taken over by the EU and IMF, to save those banks, who borrowed the money to Greece, so much for a free, self regulating market economy, banks make bad bet's, and the EU/IMF come and save them. Ill be a banker in my next live......

No one should say those banks who loaned Greece in the first place did not know the risk, any loan IS a risk, no one can see in to the future, and therefore those lenders should have been prepared for the possibility that Greece maybe not able to pay them back, but as said above, they may knew, when i came to so far, they would be saved (again).

His English is crappy, but he's right about something: it was always about bailing out the banks, not the Greeks.

Is it not the case that the current system involves rolling debts (like paying off ine credit card with another?) where greece pays off one loan only with the money raised from another...

The bailout was a deal between the ECB, the IMF and various european nations to effectively buy up greek debts - lend the greeks money, which they spend paying off bank debts.

But you get a crappy rate, paying off 100% of the bank debts, because the fact that they are at risk means the original creditors shouldn't have gotten 100% back.

So the new loans are at a higher interest rate, because there is a greater risk of default, and the higher interest rate means greece needs more austerity to pay the interest.

Unfortunately GDP drops because the public sector has shrunk, and the direct knock-on effects hit every section of the economy. And hence the debt to gdp ratio goes up. (So even though greece has less debt now, it also has less ability to pay off that debt)

All while the people are suffering. And it is just going to get worse.

One thing confuses me: why would Greece agree to the same debt with higher rates? Why let Europe buy up all debt and ask an increased rate? Surely Greece would need to approve, at least if the rate is increased?

The conservative daiy telegraph weighs in.

And yes Steephie, i believe the greeks are asking for newly issued bonds to be at a rate more representative of the rates their creditors can borrow at (which for germany is pretty low)

"All while the people are suffering. "

Self-inflicted wound - who cares. They chose their government and the policies they live by. They may now suffer the consequences.

Look everyone, krellin does not care about your suffering if he thinks it's "self-inflicted."

Even if you're crying out for help. Presumably you would not rescue people who have attempted suicide then? You have a cold heart. Never mind that the wound isn't even self inflicted.

@ Krellin: I take it that means that if the US Government ever does something that harms you, and you complain about it, everyone else is entitled to reply: "Who cares? You chose your government and the policies you live by. You may now suffer the consequences."

@ Steephie: "One thing confuses me: why would Greece agree to the same debt with higher rates?"

Because it needed money *immediately* or the lights would go out.

I wouldn't complain about the rates Greece is getting.

http://www.pdma.gr/index.php/en/public-debt-strategy/public-debt/historical-characteristics/weighted-average-cost-maturity-of-annual-funding

Also, steephie, bonds don't work like loans. Loans are amortized over the course of the term. Bonds you *only* pay the interest (coupon) for the term of it, and then pay the full principal at the end. Either that or you pay nothing over the term over it and then pay the full principal + interest at the end.

Yes I know. Although loans don't have to be amortized.

Also, it seems to be a normal practice to pay off your current bond obligations by releasing new bonds onto the international bond market.

I don't see loans which are Amortized as being the same...

Also, weren't there war bonds - like from the Napoleonic war, which the British were still paying off in the 1990s?

Still today, according to Dutch Wikipedia.

stopwar.org.uk/news/first-step-for-greece-to-end-austerity-slash-its-monstrous-military-spending

While there may be some point when it comes to lending a country money so it can buy weapons from you... I think the idea of massive military cuts kinda defeats the purpose - that is more austerity; if those cut come from wages, they don't help the economy (on the other hand, if they come from equipment, i guess it does help, so long as you spend the money on increases to pensions, or similar payments)

Hooray, just made my €10 contribution :)