With regards to Greek pensions, rather than go into lengthy theoretical arguments or statistical data comparisons, I will describe my personal example. As a Greek ex-CEO and professor of economics and management, I received at the age of 65 a monthly pension of about 700 euros from IKA , which is the Social Security Organization for employees of the private sector (though I admit that public employees receive somewhat higher pensions). It would be interesting to compare my pension with Mr. Issing’s, or with German or other northern European pensions…

As to his previously mentioned article:

Everything he denies in the first paragraph of his article (namely that other EU countries will follow if Greece collapses, that speculators, and I should add their collaborators, are doing their work and have identified the next candidates, -as Ms Lagarde and Mr Zapatero’s recent comments have confirmed-, that the EMU is at risk, and that solidarity is needed to rescue the Euro) are all now firmly established as facts in the minds of serious economists and policy makers.

As to his claim that “a bail-out would violate EU treaties, I refer him to Article 122 of the Lisbon Treaty, or Art.119 of the EU Foundation Treaty.

What he says in paragraph 4 of his article about the structural design flaw of establishing a monetary union without economic and political union, or “putting the cart before the horse”, as he says, and that what is now at stake is “the viability of the whole (EU) framework” contradicts his entire article. Indeed the Greek crisis is an opportunity for the EU to put the horse before the cart. And “solidarity” to Greece would be the first step. Anybody who is against solidarity is logically against the unification of Europe.

The responsibilities of successive Greek governments have been amply reported in the media, and I will not deny many of the allegations, although there have been many other gross exaggerations, half-truths, omissions, or even inaccuracies, in addition to the ones I have already mentioned above. E.g. failure by many to focus on the responsibilities of Germany and other developed countries for the global and internal EU imbalances, the beggar-thy-neighbour currency and trade policies of major countries, the “deficit fetishism” of the EU commission and some EU governments, the strong-euro monetarist policies of the ECB, the fact that many countries have similar deficit and debt figures as Greece, the questionable record of the rating agencies and their role in all of this, that the EU will not bail out Greece because they love the Greeks but for their own self interest (over 200b. euros worth of Greek bonds and other receivables are held by EU banks and companies), the fact that the currency swap with Goldman-Sachs was arranged after Greece had joined the EMU, not before, and that it was then acceptable by Eurostat, and was used by many other EU countries, that there are still no clear, uniform and standard accounting rules for national budget preparation to be followed by all EU countries, or procedures to monitor them, and therefore budgets are not comparable, or “credible” for that matter, etc.

With respect to the issues raised in Mr. Issing’s article and Mr. Barber’s post, and in support of my comments here, I do want to refer you all to some very important recent interventions by US economists, such as Rogoff, Stiglitz, Eichengreen, Feldstein and Krugman .

In the Guardian (Jan. 25, 2010), Professor J. Stiglitz says that “A principled Europe would not leave Greece to bleed. Unless it is one rule for the big and powerful and another for the small, the EU must stand behind Athens’ new leadership”.

Professor P. Krugman has also made useful contributions to the problem. (See “Anatomy of a Euromess” Feb. 8, 2010 in his NYT blog, and “The real reason for the euromess” in the Guardian Feb.15, 2010, with the subtitle “Greece and other European nations are in trouble because policy elites pushed the continent into adopting a single currency”.

In Project-Syndicate (02/15/2010), Professor B. Eichengreen in his article “Europe’s Trojan Horse” says that “Germany is not innocent of responsibility for this crisis (and goes on to explain why.)“ (Germany) has benefited enormously from the creation of the Euro. It should repay the favor”. Also: Europe “will have to get over its past.” And Mr. Barber refers to “Greece’s horrific experiences under Nazi occupation” in WWII. Finally, it is true that in the Greek parliament, an MP has reminded the world that Germany has yet to pay the war reparations to Greece, which, I may add, would amount to about a quarter of the total Greek debt. As one whose father was among the 1390 civilians executed in Kalavryta in 1943, I think I am entitled to say: Yes. I agree that present-day Germans are not to blame for those atrocities. And, I also agree that we must get over our past, if only people like Mr. Issing will let us.

What I see as problematic is the direct transfer of money from the EU to Greece because the Greeks have proven to be unwilling to do fiscal austerity. Moreover, there are the Spanish and the Irish and the Portuguese who would want equal treatment.

Let’s see what happens but I have already heard that the German government is distancing itself from the recent ‘bailout’ talk and are looking for other avenues of support.

If the Germans (or all members of the eurozone) guarantee the greek bonds that is a bailout IMHO.

I’d even do an arbitrage deal with greek bonds. Get some money (Bund) at 3% and buy greek bonds at 6%.

(In fact that’s the kind of deal the greek banks have been doing for quite a while now: they lend their money at the ecb at 1% and buy greek bonds that yield 6% (well they did this a bit too early, but even at 3 oder 4% this was quite a good deal …))

http://www.calculatedriskblog.com/2010/02/report-euro-zone-agrees-to-bailout.html

They’ll probably try to disguise it, but I’m sure most of us know that Germany and France are the pillars supporting this bailout.

Didn’t really sound like a bailout. Germans aren’t very happy about that. (at least me and the few who commented on wallstreet-online.de)

http://www.spiegel.de/international/world/0,1518,676157,00.html

but that’s not all

http://www.spiegel.de/politik/deutschland/0,1518,676826,00.html

a happy day for german taxpayers

http://www.ftd.de/politik/europa/:rettung-fuer-eu-land-deutschland-will-griechenland-retten/50071966.html#utm_source=rss&utm_medium=rss_feed&utm_campaign=/

Sadly there is (at least for now) no specific info about *how* this help will look like. My guess is a Euro-bond that is guaranteed by all nations in the Euro-zone that should bring back Greece’s yield to normal levels.
Greets from Germany.