Dear Greece. Just bail, and stop taking good money after bad.

Papandreou would not be silly enough to accept such a request, so I can't see why, European creditor countries would ask for Greece to put some islands up as collateral because there is simply no chance of that happening. If any such a deal was struck, there would be a revolution in the country. Not a civil war, but a revolution.

The Greeks are a dying people, they've come full circle.

""I want to add one thing on which we are very sensitive: to ask us for an island or a monument as a guarantee is nearly an insult," Papandreou told Italy's"
Maybe better than asking for your Pants, Mr Papandreou ... which is the request that's just around the corner.

"Athens has announced a list of state assets, from airports to motorways, that will be sold off to raise €50bn over four years, but there are concerns that the process has stalled"

I would advice Greeks against that. There's no future in someone eating your dinner, off your back, while buggering you in the shower ( for 50 years)

Default - throw the dice, and see what comes out in the wash.
Greece is 1/3 Trillion away from break-even... and that, basically, is the end.

http://www.youtube.com/watch?v=3VNmEywst1U

So what happens now that Strauss-Kahn has been arrested in New York (for alleged sexual offenses)? No meeting with Merkel? Will the browbeating/throttling of Greece be worse without his (restraining) influence?
Just a happy thought. Strauss-Kahn naked, pursuing the hotel maid.... Did he think he was in Greece, by any chance?

Forgot to give the link to the report in the Guardian http://www.guardian.co.uk/world/2011/may/15/france-dominique-strauss-kahn-lifestyle
Really worth checking out for the other details of the Strauss-Kahn lifestyle and wealth.

Sell it all off to repay the debt. Then nationalize it all back by force if needed four years later.

If can't do the time don't do the crime.

We're talking about allot of money here. Someone should be held accountable. Why should Greece retain income generating assets whilst other countries pour money into their pot?

I see no reason holding such assets in a EU leasehold arrangement until such times that the Greeks demonstrate their ability to repay their loans. Once agreed all assets should be returned but not beforehand.

Yes, they will be upset but an example has to be made.

Greece :

1) DEFAULT. You can't pay ultimately, so just don't.

2) Fiscal transfers - yes, the Germans and others contributing to the EFSF won't be happy. Tough. They need to be made aware that in fact Greece should have been defaulting on prior sovereign debt, to those who had been receiving a stream of interest payments previously, mainly domestic and foreign banks. The EU/IMF jumped in to ensure their financial sector wouldn't get too badly burned, by rolling over private & bank owned greek debt with a bunch of debt from EU taxpayers. When the music stops (i.e. default) financial elites walk away with their greek debt made good while EU taxpayers end up carrying the can. Socialised losses? Where have we heard that before?

3) Austerity? Cuts, cuts, cuts, that great neoliberal idea that cutting state spending (investment) is the recipe for growth. Snake oil of a similar nature to the insane idea underlying homeopathic medicine - i.e. massively diluting active ingredients - actually makes them more effective. Down is up, war is peace etc ...

4) Be transparent and comprehensive in your accounts. Previous efforts : F. Getting better now.

5) Collect some more tax though. But at the same time, bear in mind that it is harder to collect tax if : a) you are cutting services, b) you are turfing people out of jobs, and c) you are disproportionately going after the little people who vote for you instead of the rich tax-evaders.

Greece has a lot going for it - cultural heritage, tourism, shipping etc. Now is the time for a bit of investment, and that will be easier if the new investors know they don't have 110bn of prior debt that will likely sink any new debt added. Better still - default on any unrolled-over private debt outstanding, not the EFSF stuff, so that the other EU taxpayers know its their money going into the investment and they will get it back with a bit of interest over time. It'll get much better support that way.

Well Turkey must have a wry smile on its face as they watch this slow car crash..... and as the Greeks spent a large part of their GDP on a Military budget far greater than any other EU member.

The old military Greek junta of the 70s that tried to oust all Turks from Cyprus to unify Cyrpus with Greece is an old arguement since the days of Troy... forcing the humanitarian response from Turkey in 1974 to create a safe haven (like NATO in Kosovo) in Northern Cyprus.

Never the twain will agree on any common ground but will the financial crisis force a new view? Or will the problems continue like the blocking of Turkey joinign the EU, when Turkey agreed with the UN plan for re unification of the island and Greece promised they woud support it, if Cyrpus joined the EU/Euro then afterewards went back on their word.

Remember 'what goes around comes around'

Turkey will happily pay your debt in exchange for South Cyprus and 12 Islands in Aegean Sea. Instead of getting angry and accusing others of insult, take action and sell the islands. Mr Papandreu, you fooled everyone for decades and sat on the big treasures. Now you will pay. Stop attacking people, markets are efficient and rational. Markets know you are screwed. Sell the 12 islands, you took them from Italy for free anyway.

@Violet.

Did a Greek man break your heart? or did you perhaps get food poisoning from some Greek food? Maybe you're married to a Turkish man.

Your ignorance on Greek territorial issues is beyond anything I would even know where to start correcting you on.

markets are efficient and rational. Markets know you are screwed.

You sound like you have some experience with markets....
Did you lose your house during the financial crash? did you burn your fingers on the stock exchange? Maybe you should look closer to home and and at the big banks that dragged your own country under. Or maybe you're a self-righteous banker yourself.

If Greece does not clean its mess itself, whether or not and what it has to give as collateral is not for it to decide.

Greece has over €100Bn as state assets. It probably only collects less than 50% of the taxes its citizens owe it. It has the largest military budget in Europe. Most of its industries and professions are ludicrously regulated to prevent competition and new entrants.

Greece could fix its problems overnight, if it had the will. Until then, stop whining about collateral. Fix the problems or give up Rhodos. And forget about the Elkin marbles.

@andr3wuk

Good conspiracy, the clue lies in the markets parts

"I want to add one thing on which we are very sensitive: to ask us for an island or a monument as a guarantee is nearly an insult,"

Mr. Papandreou is being very, very, diplomatic here. It is not "nearly an insult". It is very much an insult, and I think it's meant as such. His government, no government would survive even been seen to discuss it as an option. If they were so idiotic as to actually try and do it, there would, as andr3wuk says, be a revolution.

@Baccalieri

The Greeks are a dying people, they've come full circle.

That's what they used to say about the Chinese.

The very idea that Greece won't be able to discipline themselves sufficiently to come out of their economic mess and become a financially secure and efficient nation is about as unlikely as, say, the head of the IMF being charged with a serious offence against a New York chamber-maid.

@qed007

Greece could fix its problems overnight, if it had the will.

Indeed: default, take the hit, accept that you're going to be poorer than you once imagined (but more sovereign and quite possibly no less happy) and move on.

The other EZ countries wouldn't like this at all, of course.

Don't be fooled! Papandreou's comments are dictated by the troika PR machine, so that when state assets, such as airports and motorways, are pledged as collateral, the Greeks will all breathe a collective sigh of relief that it wasn't their islands or monuments. "It could' ve been worse"...

The Germans have benefited from the likes of greek taking out massive amounts of debt to buy German services and goods.

The Greeks, Irish and the rest should default and return to their own currencies.

Otherwise what we will see is the gradual asset striping of sovereign nations.

As anyone who is in contact with the Greek community in Central London will attest to, proclamations of a Greek's "word" on the question of corrupt money being sufficient will laugh out loud at this. Just hang around Marylebone High Street any day of the week and you will see a shady, rich Greek walk into an estate agents and demand to buy a £1million house, in cash. I wonder where this money came from. Maybe we should ask for Corfu back.

@andr3wuk

If any such a deal was struck, there would be a revolution in the country. Not a civil war, but a revolution.

So, can we assume that Greek revolutionaries are rich enough to pay out $500 billion debt? As far as I remember, last time a coup (lets call it revolution) happened, it lasted only until Turkey's intervention of Cyprus. Yes, revolution, that sounds cool, then you will beg for funds, just like revolutionaries in Libya. Turkey paid Ottoman debt for 30 years, until 1950, despite rejecting her Ottoman past. You will definitely pay for this, there's no way to elude.

The stand on the islands is to reassure the Greek people they won't be given away. This has always been a sensitive issue because (some) Turks happen to think the Aegean is half theirs. It may seem so from a cursory glance at the map, but a read of the history books is enough to establish that the Aegean is a Greek sea, not a Turkish one.

There is no insult in asking those who are not credit worthy for collateral.

Turkey will be in meltdown soon enough. Everyone knows that is just a bubble being pushed bigger and will be made to suffer when the river of money starts reversing.

If Greece sells money-making assets, how the hell will it be able to pay back any of its debt?

Myconos on Ebay....what fun. I offer 200 Drachmas and a kebab

Their public sector is going to stay if they can sell enough islands. The public sector are doing a better job than Hitler.

you've got nothing else unfortunately. EU is not a Non for Profit organization, that's the truth. They have given to you millions and they want a warranty just in case that it happen again what happen with all previous crisis funding. It is the decision of the Greeks to accept it or not. They should vote for a referendum. I hope that they don't accept it and that they may find their way out of the EU. They should face reality as soon as possible. No one is going to give them money for free.

"The people expect our word and our actions are a sufficient guarantee."

Ha ha ha!!!

The Greek sense of humour.

I'd like my Island, including villa with Ionic pillars and caryatids, gift-wrapped please.

"'To ask us for an island or a monument as a guarantee is nearly an insult'"

It sounds a perfectly reasonable compromise .... but if Greece does not want any financial bail out, then perhaps We should simply wish them well.

Greek Islands must be offered as colateral & any other assets they have likewise with the Irish

As the PUBLIC elected these Politicos, etc they will have to pay the price for such incompetent Governemnt
with Greece they wiht Gs and other bankers raped the countr not much different in Island except the builders hid in Lonon / Monaco Geneva etc and no one yes no one has been arrested charged etc

Today Krolll siad in the USA some bankers etc should be CHARGED for the 2008 failures

well we should be pursuing the same in Uk Ireland Greece Spain Portugal etc but here when bankers are bad - they become head of the ECB yes we rewrad them
like with Fred the Shredder why has he not been arrested for many errors and questionable decisions to plase his prior greed and his friends

Greek Islands must be offered as colateral & any other assets they have likewise with the Irish

As the PUBLIC elected these Politicos, etc they will have to pay the price for such incompetent Government
with Greece they with GS ( God's Bankers ) & other bankers raped the country not much different in Ireland except the builders hid in London / Monaco Geneva etc and no one yes no one has been arrested charged etc

Today Krolll said in the USA some bankers etc should be CHARGED for the 2008 failures

well we should be pursuing the same in Uk Ireland Greece Spain Portugal etc but here when bankers are bad - they become head of the ECB, French ex CL banker and now we are about to promote the Italian to the same job, when he was at an institutuion that raped in fees Greece 1 Billion euros for what !! yes we rewrad them
like with Fred the Shredder why has he not been arrested for many errors and questionable decisions to plase his prior greed and his friends

@violet24 .....

i think that you misunderstand the concept of a "default"...

and the whole cyprus/turkey/greece thing that you keep insisting on bringing up. wrong newspaper article, dearest.

"I want to add one thing on which we are very sensitive: to ask us for an island or a monument as a guarantee is nearly an insult," Papandreou told Italy's Corriere della Sera newspaper. "The people expect our word and our actions are a sufficient guarantee."

Let me get this straight because I am incredulous. Mr Papandreou thinks it is an insult to ask for islands or monuments as collateral because he assumes that Greece is so honorable that merely saying they will repay should suffice.

What planet does this man live on?

If I want to borrow €250,000 to buy a house but refuse to allow the house to be used as collateral no bank would lend me the money.

The fact that the Prime Minister of Greece is so demanding suggests that his government and perhaps the country has an attitude of entitlement. The whole thing reminds me of spoiled child.

Greece is on 'international welfare'. It has its begging bowl out asking for charity due to its own past profligacy, inept economic policies and gross corruption. The EU is helping it out (an act of self interested charity but charity nevertheless). It's only reasonable to ask for collateral for 100s of billions of Euros and more so in the light of the country's past reluctance to pay its debt.

(I think the welfare analogy is apt - Greece should be treated like someone who has run up credit card bills to buy designer clothes they cannot afford and has subsequently lost their job due to throwing a large chair at their boss. Such a person may get welfare from the state but clearly needs tight supervision.)

[FYI: Greece (that honorable country that always keeps its word) has defaulted on its debt five times in the past). http://www.usatoday.com/money/perfi/columnist/krantz/2010-05-24-greece-default-history_N.htm

Greece has been in default on its debt more than half the time since it's modern founding.
http://www.npr.org/blogs/money/2010/02/_this_graphic_requires_version.html

Transparency International (TI) estimated that the on average, a Greek family pays €1,355 in bribes per year. (The study said that the figures show only a small portion of corruption in Greece because many people did not admit to paying bribes)
http://www.spiegel.de/international/europe/0,1518,681184,00.html ]

@drite the operation you refer to can hardly be described as 'charity' given the nice interest rate charged on the funds borrowed...

Dear all

Successive Greek governments, the Greek state, and the Greek nation as whole bare the primary responsibility for Greece's economic and political turmoil.

However, it would be conveniently disingenuous for any not to look beyond the frontiers of Greece to fully rationalise the events in Greece and to appreciate how these came to be.

Before one puts the microscope on Greek maladministration, they need to acknowledge that most of the developed world is to a greater or lesser extent in the same sinking boat.

When the United States (world's sole super power) is on the brink, when much of Western Europe is teetering on the edges, when Japan is still in a perpetual decade plus malaise, why is Greece supposed to be any different?

Greece's economic resources are meagre by comparison as is her political and economic clout in the world.

Why is not some of the blame apportioned to the EU, the European Commission, and EU member states? If Greece was a drug dependent person prepared to say and do anything for a fix (i.e. lie on economic affairs), should others oblige and give handouts willy nilly? Where were the check and balances Europeans? There is a perverse logic which suggests that if you were derelict enough to lend without checks and balances, then perhaps you should expect to lose your money! Furthermore, Greece should rightly take legal action against you for aiding and abetting their toxic dependency (damages).

Notwithstanding rightful criticism directed to Greece and successive Greek governments, Greece is nevertheless one symptom of a larger cancer afflicting the 'developed' world.

Whereas Greece bashing may take the attention of some elsewhere from where it should be, it will hardly redress the underlying issues in question.

To those that covet Greek sovereign land as collateral, try getting yourselves... I would like to see how far you will get...

As to most of you living and working in the UK, take some time to reflect on the state of affairs in your neck of the woods... With the burden of the Olympics still not fully appreciated, you better brace yourselves...

Notwithstanding present economic affairs, Greece has showed greater commitment to the cause of European unity than you (the UK). Conversely, you play it both ways... Committed to Europe during the day and, come night time, off to retire to the US embrace.

er , how about Sasseno ?

@petran

Given the fact that the interest rate being charged is well below the market rate, and given that there is a very high probability of default the 'loan' truly is charity.

@violet24
I would really like to think that the statements you make are only due to your age and not your mental capacity. Please bother to read a history book and spare us your (completely off-topic) comments about Greek/Turkish/Cypriot history.

@maxsceptic1
"Beware of Greeks bearing gifts". In the meanwhile, maybe you should consider changing your username to "maxopportunist1". And even though this is off-topic, there's a caryatid at the British Museum for you to see, while waiting for your island. From the days not so long ago when things were called by their names, and monuments acquired without disguising them as loan collateral.

Wouldn't it be lovely to establish such a precedent for all countries that make their economies work with huge budget deficits? If I understand correctly, that also includes the UK. Maybe next time the British government borrows money, they can offer Stonehenge and Big Ben as loan collateral. You can build great things on that... (for the mentally challenged ones: http://en.wikipedia.org/wiki/Sarcasm)

Urrutia @15 May 2011 10:21PM

"Beware of Greeks bearing gifts"

Gifts? We're paying for them!

Anyway, enough mutual teasing.

More seriously, I note that the IMF's Strauss-Kahn is "helping the NYPD with their enquiries" and has been replaced by his American deputy.

As a non-European, this deputy is unlikely to look kindly on easy terms for extending further loans to Greece just to support the 'European Project'.

I think you Greeks are going to have to return to your ancient virtues of hard work, self-sufficiency and self-reliance. It wasn't 300 Eurocrats who stopped the Persian hordes at Thermopylae.

@WiseSpartan. Very well said!

And just to you know, add to this for everybody that seems shocked that Greece would not want to put its islands for collateral.

Greece is not demanding loans and at the same time refusing to put its islands up as collateral. We're simply saying that: If the conditions for more loans are islands as collateral, then it's a: thanks, but no thanks, situation, we'll do without your money!

It's really not that shocking. If the UK was in the same situation, and a rich creditor country goes: yo, we'll give you cash if you give us cornwall or jersey (/ put them as collateral), you'd tell them where to stick it!

We're not being irrational, we're just saying that there are limits to what we'll put on the line for the sake of the Euro, and our sovereign territory is beyond those limits, end of!

They should offer the Elgin Marbles as collateral.

I dont even know who comes up with that crap. Souvereign territory is not for sale, people are no collateral. Those days are thankfully long gone, may they never return. No sane person (and no sane german I know) would ever demand such a collateral. Its just pandering to the dumb by the yellow press and it is danngerous talk. In this time, when everything seems to have a price, territory and cultural works must remain untouchable. Whats next? Selling people into slavery?

donellan, It's from a Theo Angelopoulos film. I forget which one, probably Ulysses Gaze.

violet24 is trying to mix foreign policy and finance (her interests), dizzy little thing.

A couple of points:
1. Gandalf- go back to playing your board games and your make believe stories in middle earth. Next you'll be telling us (just as the Turks do) that they have no ambitions in the Aegean (though they violate Greek airspance and territorial waters daily) and that they are not responsible for the wholesale slaughter of millions of Armenians, Jews and Greeks. The invasion of Cyprus was nothing more than an act of imperialism and aggression, opportunistic and without regard for the consequences for the people of Cyprus, be they Greek or Turkish, both of whom have suffered terribly since then. If Greece spends a lot on defence it is because it has to deal with its neighbour's acts of aggression on a daily basis.

2. Nobody would seriously ask for monuments or islands as collateral. These are known in law as 'rei publica' - public objects which are also 'extra commercium', i.e. not capable of being traded. Any contract which purported to trade or encumber them would be null and void on these grounds and probably many others.

3. It is not in Greece's interest to default. It's banks will collapse and its people will be left without their savings and nest eggs in a country which would battle to provide basic utilities. It is in it's interest to clean up its act and reduce its unwieldly civil service. It is currently making earnest efforts to do this and these will pay off int he long term for Greece. It has the will to pay its debts and hopefully in time, also the means.

Greece should switch back to the Drachma and tell everyone else to kiss their donkey.

@Hyperzeitgeist

Very constructive comment. Nice idea, however, the Elgin Marbles have already been stolen by you. Next time bother to check. (And I use "you" the same way people here use "we" and "the Greeks").

The idea that Greece should use its monuments or islands as collateral is probably a bad joke, not a serious idea. But there is a history of land sales or swaps

The Louisiana Purchase from Napoleon gave the US the territory for several states and it also bought Alaska from Tsarist Russia.

Scotland got the Orkneys from Denmark/Norway as part of a dowry - in fact, it was the collateral and was taken when the cash wasn’t forthcoming if Wikipedia is correct J

So while it would be an insult to Greece to pledge any territory it could be workable.

But the fact that the EU may be unwilling to lend further sums without some form of “collateral”, though probably promises to privatise state companies rather than outright pledges (don’t think anyone could enforce ownership in court against a sovereign anyway) shows just how bad Greek public finances are.

There is almost no chance of Greece issuing new long-term bonds to private financial institutions at an interest rate it can afford. The original EU loan thought this would happen in 2012. So it has to be revised with more money to keep Greece functioning and prevent a default that would trigger sovereign CDS payouts – officials are worried about what this would do to financial markets.

I guess what it means is that Greek debt will be “reprofiled” so that maturities are stretched out, giving more time for weak banks to run down their holdings and transfer the risk to European taxpayers outside Greece. Then Greece can be allowed to further restructure debt with a loss to creditors (again, mostly other EU states)

It’s going to be very painful for the Greek people in the meantime and especially those working in the state sector. They deserve sympathy even though the problems originated in part with the culture of tax evasion. It’s easy to call for reforms to boost productivity and cut labour costs, as per the official German view. In the long run such reforms would help Greece become richer. But it’s not easy to implement them when you simultaneously squeeze the domestic economy through austerity.

The only way to avoid an eventual Greek default would be for the Euro-zone to become a full fiscal & political union. Germany keeps resisting this but it is German, French and UK banks that will lose from an early default and German (and other) taxpayers from whatever the final result will be.

Any views from Germany or France?