A Greek, a German, a Latvian and an Estonian went once to play Euro- Poker...
Not long ago a Greek, a German, a Latvian and an Estonian went to the club to play a hand of poker – for money, of course. The club had a somewhat peculiar name – "European Financial Stability and Solidarity" or something similar – but otherwise it was a respectable closed establishment and all the participants were excited about having a good time and boosting their egos and bank balances with expected gains.
The regularity discovered by renowned scholar Vilfredo Pareto that 80% of resources is distributed among 20% of the participants on an unregulated market was interpreted by each of the players in a distinctively self-centred manner; moreover, it wasn't the first time for them to play poker together – most of them had ended up broke at one time or another. They could also recall unexpected gains and believed that previous losses had added to their wisdom and that this time they would leave the table winners.
Each of them had 1000€ in their pocket – altogether they had 4000€ then. They started playing and by the end of the first hour the Greek had nothing left, the Estonian had 900€, the Latvian 950€ and the German 2150€. It was furthermore bizarre, because the Estonian in particular had thought several times that he had had the best hand. They argued, whether it's better if the Greek leaves the table or to lend him some money and go on playing. Finally, everybody was in favour of lending him money on the condition that it's the German who offers the Greek some credit, as he was the only one who could afford it.
Their motives were different, though: the Greek was hoping to recover his losses; the Estonian and the Latvian, on the other hand, were hoping to turn their fortunes around, but they could only do it at the expense of the Greek – who wasn't playing all that well – because there was no way of beating the German. The German, however, understood that without the Greek at the table the Estonian and the Latvian wouldn't agree to play either.
In any case, the German lent back the money that he had won from the Greek with a 10% interest rate and the game went on. After the second hour the losses were identical to the ones after the first: the Greek had lost everything, the Estonian had 800€ left, the Latvian 900€ and the German 2300€. They all decided that it's in their common interest to the repeat the transaction. The third hour ended with the same result as the first two, as did the fourth, the fifth and the sixth – and each time the Greek was granted another loan, of course.
After midnight they decided to tally everything up. The Greek had nothing but 5000€ + 500€ (interest) in debt – more money than there had been in the game in the first place. The Estonian had 400€ left – could be worse – and the Latvian 700€. The German had in his pocket his own thousand, the Greek's thousand, the Estonian's 600€ and the Latvian's 300€ – altogether 2900€ – plus a 5500€ claim against the Greek.
The Estonian and the Latvian started looking for their coats and making their way to the door, but the German and the Greek stopped them half-way and explained that something needs to be sorted out before they leave. Namely, that the Greek had no longer money to pay his debt and that it was unfair that the burden of the Greek's outstanding debt should only be carried by the German – especially considering that they all had voted for granting the loans as well as shared in the pleasure of the game.
The German proposed that everybody contributes 20% of whatever they have left to the Greek's Debt Servicing Fund that will then disburse the creditors. This arrangement was necessary to ensure that debts and interests are respected and that everybody plays responsibly, the German said. "Otherwise it will be the end of our poker nights as well as our friendship," he warned. So they all nodded and also decided that the voting power over the Fund is weighed according to their contribution.
Everybody paid up on the spot: the Estonian 80€, the Latvian 140€, the German 580€ the Greek himself 0€. The German pointed out that as he was contributing more than all the others combined – which was true – he should also have exclusive rights to decide the matters of the Fund. The first pay-out was therefore pretty straightforward – the German got all 800€, but it only covered the 500€ interest and 300€ principal of the loan. Nevertheless, the German was a kind-hearted man, so he gifted 100€ to the Greek for being such a good sport.
They all agreed to take up the repayment of the rest of the principal as well as the current interest as soon as the Estonian and the Latvian had put in a hard day at work. It was also agreed that they meet up to play another hand soon, while everybody insisted on inviting the Greek, although he had no money. They say these days that the Estonian already has a plan for the next time how to turn his previous incidental losses to a solid winning streak.
Published 25 January 2016