Quote:
Originally Posted by Yoko Takeo
^ It looks like Greece and the EU may have a fall-out if this keeps going. With so much confusion between EU countries (which are not really united if I may say so), it's no wonder Europe is practically in shambles right now. I don't exactly expect the Euro to die like the GBP, but it will fall pretty low. Eventually, the big guys in charge will understand how bad an idea it was to adopt the Euro.
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Adopting the Euro is not a bad idea actually. When it first came into use in the early 1990s in 16 of the 27 member states of Europe, it became the other currency to compete the US in terms of strength after the Japan bubble burst. It helps gather growing economies to contest the US's production and financial capability, forbidding the USD to have a total dominance in the forex market, and in such world trade then creating a monopoly, which is disastrous to global competition. How would you like it if you piss the SINGLE form of global credit off, and the country's banks/government pegs your currency so low against to theirs? It is as good as saying goodbye to your local economy.
Unless you want to adopt the RMB. Heck they don't even have proper security or protocols in printing their banknotes, that is why their valuation is crazy.
Quote:
Originally Posted by LynnieS
I'm actually surprised that a fallout did not already happen - making a bailout, should one be needed, impossible. The deputy prime minister, Theodoros Pangalos, made a statement about how Greece did not get compensation for being occupied in WWII and for having its gold taken in response to how Germany is viewing the crisis. Now considering Germany is being looked upon as one of its possible "saviors", that's not exactly a good thing to say in order to change people's minds. It's also in a bit of poor taste, IMHO, to talk about Italy's problems in comparison.
There were also strikes in response to the Greek government's plans to cut back spending, so any conditions placed on any kind of bailout to cut costs could be a problem and may be a nonstarter. Would the EU then just either (1) give the money or (2) backstop Greece without setting any conditions? Greece's sovereign ratings are looking to be lowered as well, so raising funds through selling debt, if that happens, will be more expensive. |
IMO they got their plan wrong. The Greeks think that 2 million euro is enough to backset a 2.5 million deficit. Sure, provided you invest every single cent of the 2 mil, and reap returns by the end of this year.
What the country needs is some form of production infrastructure. It can't rely on tourism to feed their country, neither can they rely on the Pope like Vatican. For a start, they can put some money into building microplants and manufacture stuff. For a start, they can make use of the lower cost of the Euro to get raw materials and convert them into something like steel plates or something. Invest in some form of local production capability first.
Secondly, make use of incentives instead of material rewards to stave off civil worker strikes. These people serve their country out of their own will, so the most importantly keep them happy until the economy picks up. They will back the government when the time comes.
Thirdly, a little socialism wouldn't hurt. Keep a reasonable percentage income tax instead of a fix amount, which means the richer will have to pay more, and the poor pay less. In turn, work with the private companies to reap income from overseas, give them incentives to invest locally rather than throwing their money outside (tax holidays, value/free-training for hiring locals/tax for hiring foreign workers). This gives the country a small financial boost, but not too small till negligible.
P.S I would suggest they look to Japan and offer to manufacture figurines. Or work with a certain anime company to create some Greek history related anime - Grecian history is rather rich and good source for generating a pseudoculture - which in turn helps to generate interest for tourism.