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

[Iormlund]

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.

If this is so certain, why are you doing it?  You would seem to be defeating yourself.

Politics. Other Europeans are pissed and want the lazy Greeks to suffer. You can see that in this or any other discussion about the state of Greek finances.

The reaction is understandable but completely idiotic. Those who stand to suffer these austerity measures the most are the ones who already can't retire young, lack the security of a cushy gov job and whose salaries are easy to tax. Precisely the kind of Greeks who did NOT create this problem in the first place.

[Admiral Yi]

The reaction is understandable but completely idiotic. Those who stand to suffer these austerity measures the most are the ones who already can't retire young, lack the security of a cushy gov job and whose salaries are easy to tax. Precisely the kind of Greeks who did NOT create this problem in the first place.

I don't get how you came to this conclusion.  Seems to me increasing the retirement age hurts exactly those people who currently can retire young.  Just as eliminating cushy government jobs hurts those who currently hold them, and broadening tax collections hurts those who currently are escaping payment.

[Iormlund]

Those examples are structural reforms, not mere cuts. That should be precisely the only focus of these rescues.
Cutting pensions, making it more expensive to go to work every day or freezing payments to private contractors fixes nothing.

[Admiral Yi]

I'm not sure I see your point Iorm.

[grumbler]

Politics. Other Europeans are pissed and want the lazy Greeks to suffer. You can see that in this or any other discussion about the state of Greek finances.

The reaction is understandable but completely idiotic.

So you really, truly believe that the IMF and ECB bankers who insist on the austerity measures in order to get more loan payments do it out of spite?

Those who stand to suffer these austerity measures the most are the ones who already can't retire young, lack the security of a cushy gov job and whose salaries are easy to tax. Precisely the kind of Greeks who did NOT create this problem in the first place.

Do the torturers really care whether their victims are Greek or not?  And did the kind of Greeks you mention vote in elections that brought to power the people who did create this problem in the first place? 

[Martinus]

Greece has immense problem with something that is called "the grey zone economy" in Polish (I don't know the proper English phrase - a "black market" would be close, but this goes beyond that). It's essentially a problem of enforcement, and systemic corruption and graft. There are people running businesses, hiring employees etc. and managing to keep it away from the state (which means no taxes are collected at any level of it).

Greece needs to crack down on these practices, but also create incentives for people who have operated like this for years to move back into the "white zone". Raising taxes will have a doubly opposite effect - it will increase the burden on people who are already lawful businessmen and pay taxes, and will serve to push even more of them into the "grey zone".

It is just one illustration of the point Iorm was making - that Greece needs structural reforms, and not just "austerity measures".

I wonder if Greece should hire Polish economists (like Balcerowicz) to help them, as we have been through exactly that kind of stuff in 1989.

[The Brain]

Greece needs to be fusion bombed, and the remains can be given to Macedonia and Turkey.

[grumbler]

It is just one illustration of the point Iorm was making - that Greece needs structural reforms, and not just "austerity measures".

Actually, Iorm is saying that austerity measures are being required of Greece out of spite and a desire to see suffering, not out of a desire to see Greece get out of this mess.  I think that you are correct that Greece needs structural reforms, but don't see what that has to do with the issue at hand; nothing in the IMF/ECB requirements for Greece precludes structural reforms or demands that the Greek people suffer.  If the Greek government met the demands of its creditors through structural reforms, that would be terrific.  It hasn't, though.  It may be possible that it cannot.

I wonder if Greece should hire Polish economists (like Balcerowicz) to help them, as we have been through exactly that kind of stuff in 1989.

That was an argument I was holding in reserve:  that temporary austerity to achieve longer-term prosperity had proven the best route for the former communist countries, esp comparing Poland to Russia.

[Martinus]

Greek austerity measures: double the VAT on restaurant and hotel services.

[Viking]

Greek austerity measures: double the VAT on restaurant and hotel services.

Pay the germans back with their own money; how is that silly?

[Martinus]

Greek austerity measures: double the VAT on restaurant and hotel services.

Pay the germans back with their own money; how is that silly?

Germans can go to Spain instead.

[Viking]

Greek austerity measures: double the VAT on restaurant and hotel services.

Pay the germans back with their own money; how is that silly?

Germans can go to Spain instead.

The the Spanish can pay the Germans back with the Germans own money as well.

[Razgovory]

Can't they just sell off some of those islands?

[Viking]

Can't they just sell off some of those islands?

don't tell me you are that desperate to hand over guam, wake and hawaii to the red chinese?

[Martim Silva]

Iorm, the measures on Greece have nothing to do with punishing Greeks. Trust me, all european governments are well aware of who truly created this mess (the bankers), and do not harbour any resentment towards the Greek (and Irish, Portuguese, Spanish) populations.

I don't get how you came to this conclusion.  Seems to me increasing the retirement age hurts exactly those people who currently can retire young.

Though Iorm's argument is incorret, I would like to point out that retirement age changes will take place over decades, so people in their late 40s-early 50s will not be really affected.