In Greece, austerity kindles deep discontent, breakdown in rule of law

[Jacob]

That and the unregistered economy (and thus abysmal tax revenues) is the problem from what little I understand. When you take your breaks is pretty irrelevant.

[Zanza]

I know it comes as a bit of a shock, but setting aside widely publicized exceptions like public servants, working hours are MUCH longer in PIGS economies than "hard-working" countries like Germany, Denmark or the Netherlands.

With much lower productivity though.

[Admiral Yi]

Jake, precisely what I am trying to convey is that there is a dual system in place in these countries. The disparity between public workers and private employees is very noticeable in Spain and from the sound of it completely out of hand in Greece. But these are a minority (in Greece a very sizable minority). You can't put everyone on the same boat.

I can well imagine there are Greeks in the private sector who work like hamsters on a treadmill.  What I don't get though, is your assertion that these people, who are ostensibly innocent in Greece's crisis, are the ones going to be hurt by austerity.

If Uncle Kostas' family all gets laid off, lose their pensions, and see their tax bills go up, how does that punish our hard-working Greek?

[alfred russel]

Greece has public debt somewhere around 150% of GDP, and has been running deficits in excess of 10% of GDP. They also don't control their currency.

I thought that was the cause of their problems. Whether they take siestas or work on Saturdays seems tangential to the fact they aren't an attractive lending partner.

[Iormlund]

I know it comes as a bit of a shock, but setting aside widely publicized exceptions like public servants, working hours are MUCH longer in PIGS economies than "hard-working" countries like Germany, Denmark or the Netherlands.

With much lower productivity though.

What little I've read about this issue (focusing on Spain now) leads me to believe it comes mostly to our lack of innovation and prevalence of labour-heavy instead of capital-heavy activities, which sadly is only going to get worse as R&D budgets have received savage cuts under austerity plans.

On the anecdotal front that matches what I'm told by those who left for greener pastures up north (admittedly it's a very small sample of mostly engineers). You don't really work any harder. You work more effectively, which if you ask me is the smart way to go.

[Viking]

Greece has public debt somewhere around 150% of GDP, and has been running deficits in excess of 10% of GDP. They also don't control their currency.

I thought that was the cause of their problems. Whether they take siestas or work on Saturdays seems tangential to the fact they aren't an attractive lending partner.

Yes, and the work ethic issue is why they have 150% debt and 10% deficits.

[alfred russel]

Greece has public debt somewhere around 150% of GDP, and has been running deficits in excess of 10% of GDP. They also don't control their currency.

I thought that was the cause of their problems. Whether they take siestas or work on Saturdays seems tangential to the fact they aren't an attractive lending partner.

Yes, and the work ethic issue is why they have 150% debt and 10% deficits.

No, I don't see things that way. Work ethic doesn't directly correlate to fiscal responsibility. Look at the US and Canada for an example--similar cultures, but very different government fiscal situations.

[Iormlund]

Jake, precisely what I am trying to convey is that there is a dual system in place in these countries. The disparity between public workers and private employees is very noticeable in Spain and from the sound of it completely out of hand in Greece. But these are a minority (in Greece a very sizable minority). You can't put everyone on the same boat.

I can well imagine there are Greeks in the private sector who work like hamsters on a treadmill.  What I don't get though, is your assertion that these people, who are ostensibly innocent in Greece's crisis, are the ones going to be hurt by austerity.

If Uncle Kostas' family all gets laid off, lose their pensions, and see their tax bills go up, how does that punish our hard-working Greek?

Oh, the Kostas will suffer slightly, surely, though I doubt they will be affected that much. There will be layoffs in the public sector, yes, but not related to people as well connected as this Kostas guy. No, those who entered the public sector via corruption will remain. Those who did on merits will suffer. That's how these things work.

[Viking]

Greece has public debt somewhere around 150% of GDP, and has been running deficits in excess of 10% of GDP. They also don't control their currency.

I thought that was the cause of their problems. Whether they take siestas or work on Saturdays seems tangential to the fact they aren't an attractive lending partner.

Yes, and the work ethic issue is why they have 150% debt and 10% deficits.

No, I don't see things that way. Work ethic doesn't directly correlate to fiscal responsibility. Look at the US and Canada for an example--similar cultures, but very different government fiscal situations.

iirc the US national debt is approaching 70% after the bailouts (most of which will be repaid at a profit iirc). Greece is performing at nearly an order of magnitude worse without fighting two wars.

[alfred russel]

Greece has public debt somewhere around 150% of GDP, and has been running deficits in excess of 10% of GDP. They also don't control their currency.

I thought that was the cause of their problems. Whether they take siestas or work on Saturdays seems tangential to the fact they aren't an attractive lending partner.

Yes, and the work ethic issue is why they have 150% debt and 10% deficits.

No, I don't see things that way. Work ethic doesn't directly correlate to fiscal responsibility. Look at the US and Canada for an example--similar cultures, but very different government fiscal situations.

iirc the US national debt is approaching 70% after the bailouts (most of which will be repaid at a profit iirc). Greece is performing at nearly an order of magnitude worse without fighting two wars.

I wasn't drawing a comparison between Greece and the US. I was drawing a comparison between the US and Canada, which have very similar cultures, but not similar fiscal situations (with Canada better off).

[jimmy olsen]

Immediately:
Collapse of Euro.
Second financial crisis.
Double-dip recession.

More hypothetically, a potential social, economical and political powder keg in the heart of Europe.

The question isn't whether Greece should be saved but whether it can. Certainly, by requiring it to further reduce public spending and national consumption, we are making sure the recovery - if at all possible - becomes even less likely.

Greece is a very small country that makes up a miniscule portion of the economy of the eurozone (or EU). Its debts are reasonably large and held by institutions (public and private) that matter to the eurozone, but beyond that Greece is too small to really matter. From a practical (not moral) point of view, I don't see why France or Germany needs to be particularly concerned if Greece recovers anytime soon (and it seems they are not). Western Europe is one of the most stable places politically in the world. They aren't going to be destabilized because of some anarchists in the balkans.

The Balkans Are Not Worth The Bones Of A Single Pomeranian Grenadier.

[Habbaku]

:pickelhaube:

[mongers]

Call it a sovereign debt crisis if you wish, but it still remains a banking crisis at it's heart.

[Viking]

Immediately:
Collapse of Euro.
Second financial crisis.
Double-dip recession.

More hypothetically, a potential social, economical and political powder keg in the heart of Europe.

The question isn't whether Greece should be saved but whether it can. Certainly, by requiring it to further reduce public spending and national consumption, we are making sure the recovery - if at all possible - becomes even less likely.

Greece is a very small country that makes up a miniscule portion of the economy of the eurozone (or EU). Its debts are reasonably large and held by institutions (public and private) that matter to the eurozone, but beyond that Greece is too small to really matter. From a practical (not moral) point of view, I don't see why France or Germany needs to be particularly concerned if Greece recovers anytime soon (and it seems they are not). Western Europe is one of the most stable places politically in the world. They aren't going to be destabilized because of some anarchists in the balkans.

The Balkans Are Not Worth The Savings Of A Single Westfalian Industrial Worker.

[Zanza]

iirc the US national debt is approaching 70% after the bailouts (most of which will be repaid at a profit iirc). Greece is performing at nearly an order of magnitude worse without fighting two wars.

It's actually 98.6% gross public debt by now.

If you only consider net public debt, Greece has a much lower percentage too as a lot of their debt is held by institutions like the ECB, EFSM or EFSF. Arguably the IMF or Greek Public Pension Fund loans would also not qualify for net public debt. By that measure, Greek debt is constantly decreasing as more and more is bought by EU institutions.