Greece Economic Crisis

[Lutz2]

Originally Posted by Vallen Chaos Valiant

I will blame neither. The EU project was almost like trying to get two strangers married by making them to live in the same house. There was no reason that living together would lead to marriage, but that was the logic the EU project was using. That hoping by magic, if the nations could get closer then eventually a Federal Europe would appear one day.

Can see it that way, or the EU is more like a big House, there are living a lot of different People in there that put Rules together so they can live pretty good together, not really in Harmony but at least they don´t kill each other.

[Vallen Chaos Valiant]

Originally Posted by Lutz2

Can see it that way, or the EU is more like a big House, there are living a lot of different People in there that put Rules together so they can live pretty good together, not really in Harmony but at least they don´t kill each other.

The main issue is that with currency union but no fiscal union, things go sour immediately when the hard times come. And that is really what's wrong with the EU; it couldn't survive when tested, and that's really the only thing that matters. Any system of government would work if the economy is good, it is only in bad times do you know if the system is strong enough to survive.

[Eisdrache]

Originally Posted by Vallen Chaos Valiant

Varoufakis made it clear that for as long as he remained the finance minister, Greece will maintain a budget surplus. The population understand they can't borrow again in the foreseeable future.

Greece never had a budget surplus in the first place, that's just Varoufakis' creative accounting. What he actually means is that their primary balance is positive. Primary balance is (income - spending) while NOT taking into account any debt interest etc.

Originally Posted by Vallen Chaos Valiant

The main issue is that with currency union but no fiscal union, things go sour immediately when the hard times come. And that is really what's wrong with the EU; it couldn't survive when tested, and that's really the only thing that matters. Any system of government would work if the economy is good, it is only in bad times do you know if the system is strong enough to survive.

Let's not act as if the EU is dead already, it is not.

The EU is in principle a good idea and anyone who tells you otherwise is simply wrong. One of the biggest problems is that in times of economical crisis the radical parties are gaining more and more supporters. Their 'solutions' usually shoot against anything that includes long-term planning, helping others, cooperation with other states, and so on. This includes fighting against EU-supportive measures if the country doesn't profit from them.

[JokerD]

Not sure why the PM thinks that he can force lenders to keep lending Greece money on his own terms. If I am the lenders I would just refuse to take his phone call and insist on repayment on current loans.

[Xellos-_^]

a bit off topic

Anyone where Mentar went? He usually has some good insights at least form the German perceptive in this issue.

[Anh_Minh]

Originally Posted by Xellos-_^

a bit off topic

Anyone where Mentar went? He usually has some good insights at least form the German perceptive in this issue.

Banned. I don't know why.

[Lutz2]

Good Morning everybody just drinking my Coffee right now and read this:

http://money.cnn.com/2015/07/06/news...gns/index.html

Varoufakis is leaving, are the Rats leaving the sinking Ship, or does Tsipras thinks with this he can make a better Deal with the other States? What do you Guys think?

EDIT: This is interesting, on 03.07.15 the German People say with 85% NO to a better Deal with Greece http://www.heute.de/mehrheit-gegen-w...-39126218.html

The Question was: Greek reform measures: Should the EU have done other concessions? 10% Yes / 85% NO

[SaintessHeart]

Guess someone said "Varousfakthisshit".

[Vallen Chaos Valiant]

Originally Posted by Lutz2

Varoufakis is leaving, are the Rats leaving the sinking Ship, or does Tsipras thinks with this he can make a better Deal with the other States? What do you Guys think?\

This confirms that Varoufakis had been silenced in the last month by his own party. And now they are silencing him officially. A pity because he clearly is very smart. Well, the no vote is cast and we will see what happens, Varoufakis did what he feel he had to do, whether people liked him for it or not.

Greece never had a budget surplus in the first place, that's just Varoufakis' creative accounting. What he actually means is that their primary balance is positive. Primary balance is (income - spending) while NOT taking into account any debt interest etc.

But of course. Because currently debt interest is IMPOSSIBLE to pay back, so without another haircut it is pointless to even mention the debt interest.

[Eisdrache]

Varoufakis left after a >no? After he publicly stated he would step down after a >yes before the tally? The (ex) finance minister continues to be a joke.

Greece has not repaid a single debt within the last 5 years while basically living on European money. Now the country is the first developed state to default on international obligations and has joined Somalia, Sudan and Zimbabwe for being in arrears with the IMF.

Varoufakis and Tspiras are both delusional in their belief that the EU needs Greece and therefore will do anything to save the country. This is proven by asking for a third bailout right after the referendum. Funnily enough for the EU to agree to a third bailout it will most likely demand largely the same things it asked for in its previous package - something Tspiras seems not to have realized yet.

The EU is completely aware that Greece will never be able to repay its current debts. But what happens if the EU cuts the debts by a significant margin or a restructuring? It is but a naive illusion that Greece will suddenly be able to repay debt interest afterwards.

The EU is now tired of Greece's inability to stabilize their own economy. Not just that but they basically gave the EU the middle finger with the no vote in the referendum last Sunday. Tspiras and Varoufakis are the captains of a ship that is directly headed to the Stone Age. One of them has already disembarked while the people still believe that he achieved a victory and the other one will follow soon.

[Libros]

On Reddit the answer I've seen to the question I'll ask you guys is for the most part: 'War', 'Declaration of war' or 'Bombing of the mint' and any and every variant. However I've not seen any details as to why so I wanted to ask you guys for your opinions. The Question: What would happen if Greece decided to print Euros and use them as their official currency without the ECB's approval?

[jpwong]

Originally Posted by Libros

On Reddit the answer I've seen to the question I'll ask you guys is for the most part: 'War', 'Declaration of war' or 'Bombing of the mint' and any and every variant. However I've not seen any details as to why so I wanted to ask you guys for your opinions. The Question: What would happen if Greece decided to print Euros and use them as their official currency without the ECB's approval?

Well, if Greece basically started minting the drachma V2, it would really undermine the government's position that they want to stay in the EU with renegotiated terms. It would basically be a fast track for them to either exit or otherwise be kicked out of the group since the ECB would no longer be in control of the overall monetary policy.

It might be a good idea for them to do from an economic and competitive standpoint, but it also seems to be a move that would diametrically opposed to what the Greek people want. Internally it's not too much of an issue, but externally the question would really become, would any international supplier accept the currency if it was brought to them for payment? The stuff would basically be worthless at least initially.

[Eisdrache]

Greece cannot print euros as euros can only be printed in ECB approved facilities that are very strictly controlled. Any euro that is printed outside of an approved facility is flat out counterfeit money.

Also Greece cannot print the drachma right now as they destroyed the machines when they adopted the euro.

[Anh_Minh]

Originally Posted by Vallen Chaos Valiant

This confirms that Varoufakis had been silenced in the last month by his own party. And now they are silencing him officially. A pity because he clearly is very smart. Well, the no vote is cast and we will see what happens, Varoufakis did what he feel he had to do, whether people liked him for it or not.

So when he called the rest of Europe "terrorists", he was being silenced? What do you think he didn't say?

Originally Posted by Libros

On Reddit the answer I've seen to the question I'll ask you guys is for the most part: 'War', 'Declaration of war' or 'Bombing of the mint' and any and every variant. However I've not seen any details as to why so I wanted to ask you guys for your opinions. The Question: What would happen if Greece decided to print Euros and use them as their official currency without the ECB's approval?

Some would say counterfeiting money's an act of war. It's certainly been done in actual wars.

[Irenicus]

Originally Posted by Eisdrache

The EU is now tired of Greece's inability to stabilize their own economy.

Scorched earth austerity doesn't help. The Greeks undertook it at a brutal cost to their GDP, and what do they have to show for the primary balance positive they eked out?

Nor, incidentally, do the bailouts really help. European taxpayer money are being used to loan out to Greece to pay back loans that were previously there, in a never ending cycle of destruction.

And the individual unemployed Greek citizen sees nothing of it and their lives are getting closer every day to a humanitarian crisis. They have every right to be much, much angrier than you are in your quoted post, though not at you.

Greece urgently needs structural reforms and stimulus, both preferably intertwined such that one is essential to another. The EU help packages are not helping them with it. I would have thought the Bright Minds of Europe, at least the few in the Central Banks that have yet to be poisoned by Thatcherite propaganda and German moralism on debt, should be pressuring Syriza for long term structural reforms in exchange for stimulus, term packages with some precedents from the 1953 forgiveness of (half) of German debt. That is, if they are actually serving the vision of a better Europe for all, a decade or two from now, rather than the interests of the creditors, now.

The Greeks bear much of the blame, yes, but you don't fix problems by blaming and especially not by Lutheran sermons on the immorality of debt. You fix them by the kind of paradigm shift that require a wholesale shifting of incentives. Fundamental behavioral changes. Stronger institutions. A bloated public sector that needs culling, but also a better tax system. And most of all Greece needs breathing space, not a permanent leech on any success they may achieve. Fuck the creditors. They can eat the pain. They invested in a trouble case and now they want to have the Greek public essentially put in a giant debtor's prisons for it. Of course the Greeks are angry. They know it's perpetual quagmire and wage slavery they're being forced into.

[Xellos-_^]

Originally Posted by Irenicus

Greece urgently needs structural reforms and stimulus, both preferably intertwined such that one is essential to another. The EU help packages are not helping them with it. I would have thought the Bright Minds of Europe, at least the few in the Central Banks that have yet to be poisoned by Thatcherite propaganda and German moralism on debt, should be pressuring Syriza for long term structural reforms in exchange for stimulus, term packages with some precedents from the 1953 forgiveness of (half) of German debt. That is, if they are actually serving the vision of a better Europe for all, a decade or two from now, rather than the interests of the creditors, now.

half of the greek debt was already forgiving in 2012. How many more forgiveness of half the debt does greece need?

The Greeks bear much of the blame, yes, but you don't fix problems by blaming and especially not by Lutheran sermons on the immorality of debt. You fix them by the kind of paradigm shift that require a wholesale shifting of incentives. Fundamental behavioral changes. Stronger institutions. A bloated public sector that needs culling, but also a better tax system. And most of all Greece needs breathing space, not a permanent leech on any success they may achieve. Fuck the creditors. They can eat the pain. They invested in a trouble case and now they want to have the Greek public essentially put in a giant debtor's prisons for it. Of course the Greeks are angry. They know it's perpetual quagmire and wage slavery they're being forced into.

85% of current of greek debt are held by other Eur countries. Fuck the creditors means fuck the taxpayers of other euro countries.

Mentar mention this before, one of the other Euro country (not Germany) offer to help Greece setup a more efficient tax system but was told to go to hades.

And the current Greek gov despite being call left wing still isn't willing to tax the shipping industry. The shipping industry (correct me if i am wrong) in Greece don't pay taxes.

[Anh_Minh]

Originally Posted by Irenicus

Greece urgently needs structural reforms and stimulus, both preferably intertwined such that one is essential to another. The EU help packages are not helping them with it. I would have thought the Bright Minds of Europe, at least the few in the Central Banks that have yet to be poisoned by Thatcherite propaganda and German moralism on debt, should be pressuring Syriza for long term structural reforms in exchange for stimulus, term packages with some precedents from the 1953 forgiveness of (half) of German debt. That is, if they are actually serving the vision of a better Europe for all, a decade or two from now, rather than the interests of the creditors, now.

The problem with "long term structural reform" is that the Greek have been promising such for years - since way before 2008 - and don't seem to have started on the important bits.

[Vallen Chaos Valiant]

Originally Posted by Xellos-_^

half of the greek debt was already forgiving in 2012. How many more forgiveness of half the debt does greece need?

As many as it takes until they have debt that is actually manageable. The IMF had, in the last few weeks, admitted that Greece needed more debt forgiveness in order to recover. It doesn't matter how many times they were already forgiven for debt, what matters is their debt is still too large.

If you think they don't deserve any more, you are making a moral argument but not an economical one. The fact is Greece needs more debt forgiveness, and if you refuse to give it any then it will leave the EU and Euro. This is why Varoufakis annoyed so many; he speaks only in terms of economic facts, but the politicians just want to talk about emotional decision making. Give Greece more debt relief or it would HAVE to leave the EU, this is not a threat, this is the way it is.

[Eisdrache]

Originally Posted by Vallen Chaos Valiant

As many as it takes until they have debt that is actually manageable. The IMF had, in the last few weeks, admitted that Greece needed more debt forgiveness in order to recover. It doesn't matter how many times they were already forgiven for debt, what matters is their debt is still too large.

That's basically equivalent to giving Greece a free pass to just continue making debts since they will just get forgiven.

Originally Posted by Vallen Chaos Valiant

If you think they don't deserve any more, you are making a moral argument but not an economical one. The fact is Greece needs more debt forgiveness, and if you refuse to give it any then it will leave the EU and Euro. This is why Varoufakis annoyed so many; he speaks only in terms of economic facts, but the politicians just want to talk about emotional decision making. Give Greece more debt relief or it would HAVE to leave the EU, this is not a threat, this is the way it is.

Let's get rid of this illusion that it's a privilege for the EU to have Greece as a member. The EU can survive without Greece. But can Greece survive without the EU? I don't think so.

Also the reason why Varoufakis annoyed literally everyone is because he was boasting about his economical knowledge while smack-talking the other (finance) ministers at the same time publicly, essentially stir up the illusion that this is a Greece against the EU war. These days the Greece see themselves as the poor victims of a corrupt constitution that decides on an emotional basis without having the knowledge or the ideas to solve this crisis. What they're really shocked about is that they were living for decades over their budget and are now suddenly cut down to the level of where they actually should be. This creates the aforementioned problems but the EU is not the big bad jerk that is responsible for all the Greece problems. All these people voting for Syriza and everyone who voted no in the referendum want to go back to the past and just continue spending. That. is. not. possible. but apparently this has not been realized by some.

Whether or not the bailouts were the right way to save Greece is debatable (although it seems they're not) but without them Greece would have been insolvent in 2010 already. That is 5 years of living on borrowed money. 5 years and perhaps even more. When I look at the internal problems Greece had 5 years ago and now, I still see the same ones despite continual promises of the government to take measures to solve them. No wonder the EU is getting more and more impatient with their demands, they are played for a fool by a government that is unwilling to enforce many of the necessary regulations.

[Kafriel]

And the current Greek gov despite being call left wing still isn't willing to tax the shipping industry. The shipping industry (correct me if i am wrong) in Greece don't pay taxes.

Indeed, the shipping industry is tax-free...and people working in it have stated that they'll leave the country should a tax be imposed on them, go figure. The Church is also relieved of taxes.

There are many issues that don't help either, for example the current state of toll booths: constitutionally speaking, you can't privatize a road (all Greek citizens are free to walk within its borders uninhibited), the tolls are ridiculously high (a 4-hour trip to my village and back costs €36 in tolls), their construction cost is roughly three times higher than in any other european country, the toll booths lack construction certificates (and as such, are illegal) and the money they earn doesn't seem to be going to road maintenance.

Speaking of illegal buildings, this is (IMO) the greater cause of tax evasion. Considering the fact that the most recent taxes were introduced for real estate property, it makes sense that this is also the department where counterfeit blueprints and permits would thrive, while there are many cases of buildings being entirely off the grid.