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Not being a graduate if the LSE, im at a loss to try to understand why on earth we (europe) would entertain any plan from Greece to pump more money into their economy.. Can anyone put into layman's terms why this is the case?
I think thats the whole point...... in order for us to LOAN them more money, they need to demonstrate that they are fiscally responsible.
The money isn't going into the Greek economy it goes to the French and German Banks that lent them money in the first place. It's not so much a Greek bailout but another bank bailout.
I'm fairly sure the usual plan b or letting them go broke and sending in the bailiffs won't work. If Greece goes then the chance of seeing anything gets much lower. It's keeping them running in hope that they can patch the holes and get back afloat.
I wonder how many of the people on the streets being interviewed protesting paid close to the right amount of tax...
Seems the government says they can be but practically, for the people of Greece, this this may require sacrifices they are not prepared to make
The money isn't going into the Greek economy it goes to the French and German Banks that lent them money in the first place. It's not so much a Greek bailout but another bank bailout.
Well, yes - they are borrowing money to service loans, but it's loans that they have already received yes.
listening to an interview just now on BBCR4 this morning, I was struck by the similarity in the argument between Greek debt and some butterfly habitats.
Mandmade landscapes have encouraged butterfly species to thrive and adapt to a very specific set of environmental conditions that might not otherwise be naturally occurring.
But those environments being not naturally formed must be maintained by man or the habitat is lost and the butterfly colonies would die.
Those that create an environment in which others have adapted to live, have a duty of care not to destroy that habit, and even maintain it.
The interviewee emphasised the recognition that Greece taking full advantage of "German Sovereign Debt pricing" of their own € loans was not a natural phenomenon. Things will and are changing. But if the Euro system pulls the synthetic habitat from them with no recognition of what that environment created, then they are ignoring their obligations and duties to what they created.
The Common currency created the Greek problem. They were told it would happen. They did not modify the design to reduce the risk. This is the bed they made 16 years ago.
What happens, practically speaking, if Greece can't pay? Do we repossess it, turf them all out and sell it to Russia or something?
The Common currency created the Greek problem. They were told it would happen. They did not modify the design to reduce the risk. This is the bed they made 16 years ago.
Did it? (Genuine question) Because when we used to go there on holiday 30 years ago, one of the local residents explained that the reason they all left the rebar ends sticking out the top of their houses was to avoid a tax that was levied only when the building was complete.
not being snarky - my impression was that the culture of tax evasion/avoidance has been around for a while
What happens, practically speaking, if Greece can't pay? Do we repossess it, turf them all out and sell it to Russia or something?
Not quite. I reckon Russia might offer to sort out Greece's mess in return for a few military bases on Greek territory though.
If you owe your lender £1,000,000 and have trouble repaying it, you are in trouble. If the amount is £1,000,000,000,000 they are in trouble...
I hope the Greeks default and bring whole euro sham crashing down.
Well said Stoner!
I hope the Greeks default and bring whole euro sham crashing down.
Because that will have no effect on the rest of Europe or the world will it.
Europe is being done by Europe not for Europe (the people) politicians no longer listen to the electorate they believe there uni degrees give them carte blanche to do as the see fit.
Because that will have no effect on the rest of Europe or the world will it.
As opposed to the risk-free strategy of pumping billions of Euros into a bankrupt country just so your banks can claim that their previous pumping of billions of Euros into a bankrupt country has paid off. Rinse and repeat.
Did it? (Genuine question) Because when we used to go there on holiday 30 years ago, one of the local residents explained that the reason they all left the rebar ends sticking out the top of their houses was to avoid a tax that was levied only when the building was complete.
Perhaps, rather than butterflies, the Greeks could be compared to Pandas - determined to live and carry out their financial affairs without any attempt to adapt to the reality of situation/habitat they find themselves in.
The Euro is very much at fault in the current crisis - it was always a triumph of political will and ego over the laws of economics, but the Greeks have not really attempted to become a European country- having continued with corruption, tax evasion and voting for whomever feathered their nests the best whilst ignoring the reality that it was all done on a 0% balance transfer credit card.
Well the collapse of the Euro won't be a nice thing to be around..... neither is risk free, just the risks of one probably greatly outweigh the risks of the other.
The money isn't going into the Greek economy it goes to the French and German Banks that lent them money in the first place. It's not so much a Greek bailout but another bank bailout.
This ^^^
The money that normal men/women on the street are being screwed for is paying off interest, not the capital, it does not go into the Greek economy to improve infrastructure or pay for collapsing health/social services..People moan about the NHS, pray you never have to use a Greek public hospital.
I wonder how many of the people on the streets being interviewed protesting paid close to the right amount of tax...
^^This is the easy thing to point the finger at, the average man/woman on the street are PAYE, they don't have a way of screwing Taxes, it's taken from source. And again, this is why people (probably like most of us on here) are very upset, because they were always paying their taxes and they have been hit the hardest because they were easy targets. I saw my take home salary drop by nearly 300 euro's a month in extra taxes, not to mention, taxes being backdated by a year, so I had to pay even more on top, plus paying extra luxury tax because my car was a 2000CC engine....I don't think you could class a 5 year old S-Max as a luxury motor..but hay, still cost me an extra 500 odd euros a year...on top of the road tax, which again, was around the 400-500 mark.
There are lots of dodgy taxes by private business owners, Dr's Lawyers etc...but these are hardly the average bods on the streets.
The Government (pretty much most parties) and the tax collection services are corrupt to the core...that's where the problem lies, the people, no matter what party they vote in get screwed.
Stoner....wise words mate, you've hit the nail on the head.
Politicians (Greek and EU with the bankers in the background) have created a situation which they now realise is a complete and utter balls up...In their quest for ultimate power they have created a monster they cannot control or is capable of existing in a stable state.
Countries have issues with certain areas that are financial wastelands and they have problems sorting those places out.....
Hey, maybe I'm just too simplistic about these things, but whoever thought you'd be able to put a mega economy such as German's together with a much smaller Greek economy really didn't think things through. From the very beginning they have bent rules and tried to plaster over the cracks to make something work, which, with all the good will in the World, won't.
Who suffers, the man/woman on the street, who just wants to work and provide for his/her family.....
That's why people really are fed up. I lived there for 9 years, I put up with the financial worry and stress for 3 years and it was hell. Another 3 years have passed since I left and I can fully understand the pressure and worry it's put on the people. They have had a knife to their throats for 6 years.
Well the collapse of the Euro won't be a nice thing to be around..... neither is risk free, just the risks of one probably greatly outweigh the risks of the other.
I totally agree about the risks, just not about which option is on which side of the balance. The risks of a Greek exit possibly outweigh the risks of just giving them more money [i]at this present point in time[/i]. Give it another couple of bouts of kicking the can down the road and I suspect a Greek default and the resultant EZ fallout will be much, much more palatable than the alternative, i.e. a crash of the entire world banking system.
Where do you think the money comes from to extend Greece's death throes?
Not being a graduate if the LSE
Well, that is no impediment to being a finance minister of an EU country (step forward Irish former school teacher Michael Noonan) or indeed president of the Eurozone (step forward Dutch non-Cork economics graduate Jeroen Dijsselbloem). Indeed in that post you can then give lectures to university economics professors (Varoufakis) and Oxford PPE graduates (Tsakalotos). You can hobnob with IMF chiefs like Rato (arrested for fraud) and Strauss-Kahn (arrested for rape). The future is yours!!
Oh, as to your question - basically what growinglad said.
Why are they so insistent on bailing out Greece?
Because if Greece goes under, the tide will soon be lapping at the doors of Spain and Italy...
I heard it described as a humanitarian disaster, not an economic crisis last week. That adds a whole new perspective on things and the help the Greek people need.
When Greece goes under it'll be cut loose, re adopt the Drak and move on in it's own sleepy way like it did before the EU took over. Don't forget they have benefited from EU handouts, enabled the country to absorb itself in the gravy train of handouts and infrastructure projects.
If it was me, I'd send the Bailiffs in.
If the EU don't bail out Greece that nice Mr. Putin is waiting with his wallet open. I imagine that has some relevance to the discussions.
Do folk really believe that (for instance) leaving buildings with bits sticking out is ultimately responsible for the mess we're watching?
Extraordinary. Given the reams and reams of news print and web pages you can read on subject?
Not being a graduate if the LSE
Good for you, economists are part writers of fiction and part Darren Brown's lottery prediction trick. They are about as close to science and fact as homoeopathy practitioners.
The Common currency created the Greek problem
Hardly! Greece should not have been accepted in as their economy and political system did not pass the stringent criteria at the time. There was a great deal of fudging to allow this to happen. They were in difficulties at the time and the Euro offered them a chance to continue and avoid reform for a number of years and they have only been able to stay solvent by being bankrolled by Europe.
Reform has been too slow and the rest of Europe has become frustrated with the pace. The fact that people at the "bottom" are feeling the pinch is very sad but not untypical. Despite some pension reforms over recent years they started from a bad position and have only changed it partly.
Do folk really believe that (for instance) leaving buildings with bits sticking out is ultimately responsible for the mess we're watching?
Well trying to distill it into one thing doesn't create a strong counter argument. It is/was one very clear indication of quite a significant failure.
[i]Reform has been too slow / and have only changed it partly.[/i]
again, do your research? 😕
do your research?
Rebuffed by the copiousness of yours 🙂 Why dont you try to provide your own instead ?
Apparently if
is not part of the problem then what is?leaving buildings with bits sticking out is ultimately responsible for the mess we're watching?
Not being a graduate if the LSE
Judging by the grasp of economics desmonstrated by the spokeswoman for the Greek government on Five Live yeterday, I wouldn't trust her to nip down to Aldi for a few essentials, and manage to work out the change.It was all a bit...
Kenneth Clarke, who is very pro-Europe, but anto-Euro, summed up yesterday, in one sentence, the whole problem with the common currency and Greece (and most of southern Europe, come to that)...
"Whoever lent the Greeks all that money at interest rates based on economic figures for the German economy, must have been out of their minds"
Judging by the grasp of economics desmonstrated by the spokeswoman for the Greek government on Five Live yeterday, I wouldn't trust her to nip down to Aldi for a few essentials, and manage to work out the change.It was all a bit...
On the contrary - it has been the Greek side which has actually addressed the real economic problem(*), as opposed to the troika who have just made a random shopping list of things to cut, with the opposite results to what they forecast.
For balance DrJ - I wouldn't trust any of the other lot to nip down to Aldi for a few essentials, and manage to work out the change either. 😉
But seriously, it was quite staggering how clueless she was about the simple fundamentals of the situation Greece was in
But seriously, it was quite staggering how clueless she was about the simple fundamentals of the situation Greece was in
I didn't hear the piece, so I don't know who you're referring to, but as I noted above, the Greek side does not lack qualified economists, as opposed to the EZ amateurs.
I think we can agree DrJ that whoever came up with the initial suggestion of having a common currency that would work for both the economies of Germany and Greece should have been taken outside and given a shoeing for being so bloody stupid, not alllowed to dictate the future economic policy for an entire contitinent
DrJ - MemberOn the contrary - it has been the Greek side which has actually addressed the real economic problem(*), as opposed to the troika who have just made a random shopping list of things to cut, with the opposite results to what they forecast.
The thing that mystifies me, is that the IMF admitted they got their maths and their assumptions, and that the cuts they forced on greece in the initial bailout were counterproductive and damaging. No surprise to many but supposedly a surprise to them. And then they say "But pay us money anyway for the damage we caused", and they're still in the driving seat. Surely the right thing to do is work out the cost of those errors- however many tens of billions of quid it may be- and knock it off the debt?
It's like the bike shop that trashed your bike demanding that you pay extra to repair the damage they did- and then afterwards, still being the only people allowed to work on your bike.
The big problem is, the damage has been done now so Greece are left with either trying to deal with that, or defaulting in a worse position than they were in 2010. The people who gained don't care, and the people most responsible for it are immune to criticism.
Well said Stoner!
Has to be post of the day!
Latest footage in of the Greek negotiating team at work:
Surfer, guilty as charged 😳
It just astonishes me that the oft repeated tropes about Greek laziness and tax avoidance are cited as soley why Greece finds itself in the situation it now does.
[url= http://www.cityam.com/218456/eu-dead-grexit-crisis-has-laid-bare-europe-s-inability-rescue-itself ]John Hulsman analysis[/url]
The big problem is, the damage has been done now so Greece are left with either trying to deal with that, or defaulting in a worse position than they were in 2010. The people who gained don't care, and the people most responsible for it are immune to criticism.
Fortunately, it's mostly poor people who speak a funny language who are affected, so I don't think it matters does it?
So long as the nice rich people get their money back, it's all fine, surely?
+1 for Stoner - echoed in the Hulsman analysis.
oldnpastit - MemberFortunately, it's mostly poor people who speak a funny language who are affected, so I don't think it matters does it?
It's all right, we can just say it's their fault for spending beyond their means- even the ones who weren't born, they should have made better arrangements and been born into a rich family in Britain.
Greece spent the money propping up some pretty unsustainable polices and papering over their long term problems
Historic high levels of inflation
Lack of economic policy credibility, pensions, tax collection etc
Greek governments have run excessive budget deficits even in the good times
Lack of competitiveness of the Greek economy
Extremely large and inefficient public administration sector
None of which arent problems in other countries but once the world wide crisis hit 08 - 09 the Greeks werent in a good position to weather the storm because of their long term unaddressed underlying problems.
Without significant meaningful financial reform they should not get any more cash
stoners post? what the one with the pretty butterfly analogy?
turn that round and someone creates an environment where rats thrive, do they still have a obligation to maintain that environment?
stoners piece should be prefaced with "One might say....."