If anyone can find the actual frontpage of Bild, I'd be interested to see it.

Wind power

I think we are long past the point of rationality. As you may know, Ireland needs to raise 5 billion from a sale of assets, you know, things government shouldn't own like electrical infrastucture and stuff, things you want to sell to the nice people who used to run Enron, 'cos like, they need a break....Anyway a couple of years ago there was a proposed deal I wwas involved in, whereby property rent roll was going to be turned into a bond, and sold on that way, separating the financial stream from the asset. If the dumb government set up an SPV, put the ESB, Bord Gais and the Natioanl Lottery into it, it has a demonstrable revenue stream of 5-600 million per annum. Ten year bond with a 20% coupon. Sell nothing, and get the money. Any reason this won't work...?

this is not necessary (we could let Greece default, let investor take their losses and nationalise banks that fail as a result) - indeed it is economically catastrophic, as we enter a vicious circle of deflation and recession, but it can be made to look satisfying to those who can be encouraged to feel smug about this, because they get others to suffer more than them.

Krugman: The Hangover Theory (Slate, 1998)

The hangover theory, then, turns out to be intellectually incoherent; nobody has managed to explain why bad investments in the past require the unemployment of good workers in the present. Yet the theory has powerful emotional appeal. Usually that appeal is strongest for conservatives, who can't stand the thought that positive action by governments (let alone--horrors!--printing money) can ever be a good idea. Some libertarians extol the Austrian theory, not because they have really thought that theory through, but because they feel the need for some prestigious alternative to the perceived statist implications of Keynesianism. And some people probably are attracted to Austrianism because they imagine that it devalues the intellectual pretensions of economics professors. But moderates and liberals are not immune to the theory's seductive charms--especially when it gives them a chance to lecture others on their failings.

Economics is politics by other means

The "sinners" moniker comes from Germany's EU Commissioner Oettinger: 'Deficit Sinners' Flags Should Fly at Half-Mast' (Spiegel, September 9, 2011)

Greece clearly needs help escaping from its financial quagmire, according to German European Union Energy Commissioner Günther Oettinger. In fact, the EU should consider using some "unconventional" methods to increase motivation among Greek officials for solving the country's problems, he told daily Bild on Friday.

"There has been the suggestion too of flying the flags of deficit sinners at half mast in front of EU buildings," the member of Chancellor Angela Merkel's conservative Christian Democrats told the paper. "It would just be a symbol, but would still be a big deterrent."

Another tactic for pulling the debt-stricken country out of crisis could be replacing "the obviously ineffective administrators" there, he added. Because Greek officials have failed at collecting outstanding taxes and selling state-owned assets as planned, Oettinger alleged, experts from other EU nations should be sent in to do their jobs instead. "They could operate without concern for resistance and end the inefficiency," he told Bild.

Economics is politics by other means

when you attach and tighten thumbscrews on people

FDP boss Rösler proposes toughening the deficit limits

As the German cabinet and Bundestag put their finishing touches to the legislative proposal to enhance the EFSF, economics minister and FDP leader Philipp Rösler proposed to toughen the  deficit limits in the stability and growth pact, Süddeutsche Zeitung reports. "I could for example imagine that we lower the current deficit limit of 3%", he said. "We must think about how we further tighten the budgetary thumbscrews".

Economics is politics by other means

Krugman column: The Bleeding Cure (NYT, September 18, 2011)

Doctors used to believe that by draining a patient's blood they could purge the evil "humors" that were thought to cause disease. In reality, of course, all their bloodletting did was make the patient weaker, and more likely to succumb.

Fortunately, physicians no longer believe that bleeding the sick will make them healthy. Unfortunately, many of the makers of economic policy still do. And economic bloodletting isn't just inflicting vast pain; it's starting to undermine our long-run growth prospects.

...

And the austerity has been real. In Europe, troubled nations like Greece and Ireland have imposed savage cuts, even as stronger nations have imposed milder austerity programs of their own. In the United States, the modest federal stimulus of 2009 has faded out, while state and local governments have slashed their budgets, so that over all we've had a de facto move toward austerity not so different from Europe's.  

Economics is politics by other means

An amazing graph in a front page post on DailyKos:

Everybody but a VERY SMALL elite is seeing sharp income drops. This is in the US, but Germany is one of the countries that has pushed wage stagnation the most in Europe. Are the 97% less educated all "sinners"?

Wind power

as a related side note, there is often a differentiation between (institutional) bond holders (who should share a part of the burden) and poor private citizens whose deposits should be protected.

Of course a default would not hurt the depositers directly, but an important question is, who has given the instutional investos the money to buy bonds? Often, us poor workers who are told to save money for retirement. That money goes to insurance companies / mutual funds who then buy bonds so essentially a debt haircut or default or whatever will hurt the poor worker again.

http://www.dailykos.com/story/2011/09/22/1019202/-Bleed,-you-sinners!

Slightly upgraded.

Wind power

Thrifty Northerners are offended by corrupt Southern free riders and want payback.

NPR.org: Speculation Grows: Greece Will Default On Its Debts

International lenders return to Athens next week to discuss the next installment of a vital $150 billion bailout. Otherwise, Greece will go broke and default on its debt. Meanwhile, there's growing resentment among Greeks toward their EU partners and many think default is not such a bad idea.

...

YANIS VAROUFAKIS: Greece must default, and the logic is very simple: when you have a huge debt buildup and a debt overhang following a financial crisis, it is impossible to repay your debts, even if you are extremely willing to do so, simply by cutting through austerity. Austerity will make the debt crisis worse, always has done, always will do.

POGGIOLI: Varoufakis is outraged by the divisions among the EU partners, and says their policies are just aimed at buying time. They refuse to acknowledge, he says, that the Greek crisis is just a symptom of a much bigger crisis within the European banking system.

VAROUFAKIS: Greece has not been bailed out, all the bailout money goes to the Greek state in order to repay the banks. Well, give it directly to the banks.

POGGIOLI: The contagion has started, says Varoufakis, affecting Italy, Spain, and France. He says this will ultimately force the EU to face the core issue the lack of political and fiscal unity behind the euro, the common currency.

Economics is politics by other means

This is in Deutsche Welle, German and Spanish edition. I can't find it in English.

Als Griechenland deutsche Schulden halbierte (23.09.2011)

London 1953: Deutschland verhandelt mit 22 Staaten. Die deutsche Delegation bittet ihre Partner um einen Schuldenerlass. Zu sehr drücken die hohen Verbindlichkeiten aus dem Marshall-Plan und den Reparationen, die noch für den Ersten Weltkrieg zu bezahlen sind.

Die Bitte der Deutschen wird erhört. Die 22 Staaten, unter ihnen Griechenland, erlassen den Deutschen die Hälfte der Schulden. Der Zweite Weltkrieg war erst wenige Jahre zuvor 1945 zu Ende gegangen und für die junge Bundesrepublik Deutschland war der Schuldenschnitt eine große Hilfe, sagt Jürgen Kaiser, Koordinator der Entschuldungsinitiative 'erlassjahr.de': "Deutschland hatte danach eine Schuldendienstquote, die deutlich unter dem lag, was heute Entwicklungsländer oder auch Griechenland bezahlen müssen."

...

Seit langem setzt sich die Initiative 'erlassjahr.de', eine Koalition aus mehreren christlichen und entwicklungspolitischen Gruppen, für Insolvenzverfahren ein. Das Londoner Abkommen aus dem Jahr 1953 könnte Vorbild sein, wie man mit überschuldeten Staaten umgeht, findet Jürgen Kaiser von 'erlassjahr.de': "Genau wie während der Schuldenkrise der 1980er und 1990er Jahre viele Dritte-Welt-Länder mit einer solchen Regelung besser gefahren wären als mit den sehr langsamen, häufig wirkungslosen Entschuldungsmechanismen von Weltbank und Internationalem Währungsfonds, genauso könnte das Abkommen heute ein Vorbild für die Situation von Griechenland sein."

De cómo los griegos perdonaron a los alemanes su deuda (24.09.2011)

Londres, 1953: Alemania negocia con 22 países. La delegación germana ruega a sus socios la condonación de su deuda. Además de las obligaciones contraídas por las ayudas del Plan Marshall, tenía préstamos para pagar reparaciones que aún debía de la Primera Guerra Mundial.

La petición es escuchada. Los 22 países -Grecia entre ellos- perdonan a los alemanes la mitad de lo que deben. "Para la joven Alemania, aquel gesto supuso una ayuda enorme", dice Jürgen Kaiser, coordinador de la iniciativa Año para la Condonación de Deuda (Erlassjahr.de): "El interés de su deuda de aquel entonces es comparable con el que hoy tienen que pagar países en desarrollo e incluso la propia Grecia."

...

Desde hace tiempo, la iniciativa Erlassjahr.de trata de que se implemente un protocolo de insolvencia. "El Acuerdo de Londres de 1953 podría servir como ejemplo sobre cómo actuar con países con sobreendeudamiento como Grecia", opina Jürgen Kaiser, de Erlassjahr.de. "Durante la crisis de deuda de los años 80 y 90, a muchos países del Tercer Mundo les hubiera ido mejor con un cierto protocolo de actuación, en lugar de con los ineficaces mecanismos del Banco Mundial y del FMI."

When Greece halved Germany's debts

London, 1953: Germany negotiates with 22 countries. The German delegation begs its partners to forgive its debts. In addition to the obligations contracted though Marchall Plan aid, it had loans to pay from WWI war reparations.

The request is heard. The 22 countries, Greece among them, forgive the Germans half of what they owe. "For the young Germany, that gesture was an immense help" says Juergen Kaiser, coordinator of the initiative Year for debt forgiveness (Erlassjahr.de): "The interest on the debt back then is comparable to what developing countries or Greece must pay today."

...

For some time, the Enlassjahr.de initiative is trying to get an insolvency protocol established. "The 1953 London agreement could serve as a model on how to act on overindebted countries such as Greece", says Juergen Kaiser of Erlassjahr.de. "During the debt crisis of the 1980s and 90s, many Third World countries would have been much better off with a given action protocol, rather than the ineffectual mechanisms of the World Bank and IMF."

Economics is politics by other means