They have the rule of law in Greece? :hmm:
http://www.washingtonpost.com/world/in-greece-austerity-kindles-deep-discontent/2011/05/05/AFUQGy2G_story.html
QuoteIn Greece, austerity kindles deep discontent
By Anthony Faiola, Published: May 14
Athens — Already struggling to avoid a debt default that could seal Greece's fate as a financial pariah, this Mediterranean nation is also scrambling to contain another threat — a breakdown in the rule of law.
Thousands have joined an "I Won't Pay" movement, refusing to cover highway tolls, bus fares, even fees at public hospitals. To block a landfill project, an entire town south of Athens has risen up against the government, burning earth-moving equipment and destroying part of a main access road.
The protests are an emblem of social discontent spreading across Europe in response to a new age of austerity. At a time when the United States is just beginning to consider deep spending cuts, countries such as Greece are coping with a fallout that has extended well beyond ordinary civil disobedience.
Perhaps most alarming, analysts here say, has been the resurgence of an anarchist movement, one with a long history in Europe. While militants have been disrupting life in Greece for years, authorities say that anger against the government has now given rise to dozens of new "amateur anarchist" groups, whose tactics include planting of gas canisters in mailboxes and destroying bank ATMs.
Some attacks have gone further, heightening concerns about a return to the kind of left-wing violence that plagued parts of Europe during the 1970s and 1980s. After urban guerrillas mailed explosive parcels to European leaders and detonated a powerful bomb last year in front of an Athens courthouse, authorities here have staged a series of raids, arresting dozens and yielding caches of machine guns, grenades and bomb-making materials.
The anarchist movement in Europe has a long, storied past, embracing an anti-establishment universe influenced by a broad range of thinkers from French politician and philosopher Pierre-Joseph Proudhon to Karl Marx to Oscar Wilde. Defined narrowly, the movement includes groups of urban guerillas, radical youths and militant unionists. More broadly, it encompasses everything from punk rock to WikiLeaks.
"Many of these are just a few frustrated high school students with a Web site," said Mary Bossi, one of Greece's leading terrorism experts. "But as we continue to see, others have the potential to be dangerous."
Not ready for austerity
The rolling back of social safety nets in Europe began more than a year ago, as countries from Britain to France to Greece moved to cut social benefits and slash public payrolls, to address mounting public debt. At least in the short term, the cuts have held back economic growth and job creation, exacerbating the social pain.
And Greece is not the only place in which segments of society are pushing back.
Though unions and political movements have always used tough tactics in Europe, observers are particularly noting a surge in lower-grade militancy among a "lost generation" of young Europeans who have come of age in the aftermath of the global economic crisis. For most — like the Italian students who draped the Leaning Tower of Pisa and Rome's Coliseum in anti-austerity slogans last November — protests have become a cathartic outlet to express genuine discontent. For others, they have become an invitation for more radical acts.
In Greece, austerity kindles deep discontent
View Photo Gallery — Measures meant to shore up the country's finances have sparked protests that go beyond the bounds of normal civil disobedience and reinvigorated the anarchist movement.
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In Britain, for instance, 10 activists formed the UK Uncut group in a North London pub late last year, spawning a national wave of civil disobedience against spending cuts, bankers' bonuses and tax evasion by the rich. During a March protest, they used Twitter and text messages to organize a "flash mob" that saw hundreds occupy and vandalize London's famous Fortnum & Mason's food store. In recent months, other actions have forced at least 100 bank branches across Britain to temporarily close.
Last week, officials in the western city of Bristol said they uncovered a plot by violent demonstrators to throw Molotov cocktails at a supermarket and arrested 30 protesters after a pitched battle with riot police.
"There is a sense of general injustice, that the government bailed out capitalism and the citizens are footing the bill while the capitalist system is running like nothing ever happened," said Bart Cammaerts, an expert in anarchist movements at the London School of Economics. "And yet, things have happened. There are more taxes, less services, and anger is emerging from that tension."
'Edge of bankruptcy'
No country is under more pressure to roll back spending than near-bankrupt Greece, a once booming nation now saddled with 35 percent youth unemployment and facing the prospect of years of depressed growth. Buckling under a culture of tax evasion and rampant overspending, Greece received a $170 billion bailout from the IMF and European Union last year.
Since then, pensions have been cut, the retirement age extended and public sector pay slashed. Even so, Greece is still drowning in a sea of debt, and some analysts believe it may yet have no choice but to default on at least a portion of its bonds held by investors. To stave that off, Greece is reportedly in talks with the EU and IMF for a second massive bailout — one that would almost surely come with a requirement to slash domestic spending even further.
"In some countries, the rolling back is happening more gradually, but in Greece, with the nation at the edge of bankruptcy, it is happening like sudden death," said Yannis Stournaras, an economist who negotiated Greece's entry into the euro back in the late 1990s.
To be sure, polls show that a majority of Greeks — tired of waste, corruption and public largess — largely support the reforms. But without doubt, experts say, extremism is on the rise and could disrupt attempts to get the nation back on track.
As in many countries in Europe, fascist and far-right parties are strengthening, engaging in an increasing number of attacks against immigrants.
More often, though, angry young Greeks, such as 19-year-old law student Nikolas Ganiaris, are signing up with left-wing youth groups. After the government raised transit fares during the austerity drive, Ganiaris's group began jumping aboard public buses, blocking customers from punching their tickets as part of the "I Won't Pay" campaign. Organizers of the movement claim 10,000 supporters are now just saying no to transit fares and highway tolls in protest.
In Greece, austerity kindles deep discontent
View Photo Gallery — Measures meant to shore up the country's finances have sparked protests that go beyond the bounds of normal civil disobedience and reinvigorated the anarchist movement.
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"They are taking everything away from us," Ganiaris said. "What will happen when I finish law school? Will I only find a job making copies in a shop? Will I then need to work until I'm 70 before I retire? Will I only get a few hundred euros as pension? What future have I got now?"
The new avengers
Gallery
Stray dogs — tagged, treated and monitored by city authorities in Athens — survive on handouts, lay at the doorsteps of high end shops and hotels and generally receive pets from tourists and locals alike.
A radical minority is energizing the anarchist movement, a loose network of anti-establishment groups that sprung up in force in the 1970s in opposition to Greece's former military junta. Over the next two decades, anarchists would assassinate Richard Welch, a CIA station chief in Athens, as well as Greek politicians and a British military attache.
Greek authorities seemed to cut the head off the movement after the leaders of November 17th, the largest group, were arrested in the early 2000s before Greece hosted the 2004 Olympics. But it has been gaining new life. The December 2008 killing of a 15-year anarchist by a police officer in the Exarchia neighborhood of Athens sparked days of riots and became the impetus for a series of fresh attacks.
Since then, experts say, the economic crisis has helped the movement thrive, with anarchists positioning themselves as society's new avengers. Long a den of anarchists, the graffiti-blanketed Exarchia neighborhood is alive anew with dissent. Nihilist youths are patrolling the local park, preventing police from entering and blocking authorities from building a parking lot on the site. On one evening at a local cafe, an anarchist group was broadcasting anti-government messages via a clandestine radio station using a laptop and a few young recruits.
In the most recent attacks, only one person has been injured, a courier who handled a letter bomb, but over the past two years, anarchist attacks have claimed four lives in Greece, including a journalist and a minister's top aide. Left-wing radicals also appear responsible for the deaths of three civilians — including a pregnant woman — after a bank was firebombed during an anti-government protest last year.
Still, there is a line to be drawn between the far larger group of young anarchists hurling Molotov cocktails at street demonstrations and the smaller, more dangerous cells of urban guerrillas. But experts are increasingly concerned about growing militancy on the streets and the emergence of dozens of new anarchist groups on the Internet.
For some Greeks, like Nikos Galanos, a 20-year-old chain-smoking in an Exarchia cafe, the anarchist movement has become an outlet for anger. Last year, during a wave of government cutbacks, Galanos's mother lost her job as a guard at the ancient Acropolis perched above Athens. His father, also a government worker, saw his salary slashed by 15 percent and must now labor more years before meeting the retirement age, boosted last year to an average age of 63.
Galanos, an electrician, has few job prospects outside the massive black market economy in Greece. But with the nation's economy still contracting, even the off-the-books work he counted on to put himself through technical school has dried up.
Over the past two years, he has become more involved in the Anti-Establishment Movement, which, while it is among Greece's less militant anarchist groups, still wields firebombs during protests. The movement's rallies, which two years ago drew 2,000 to 3,000 young loyalists, now command small armies of 7,000 or more.
"I don't support violence for violence's sake, but violence is a response to the violence the government is committing against society," Galanos said. He later added, "It is now hard for any of us to see a future here. I feel it's my duty to fight against the system."
Special correspondents Elinda Labropoulou in Athens and Karla Adam in London contributed to this report.
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The Greeks have successfully made the Argentinians appear to be a hard working industrious noble people by comparison.
I am considering a venture I have called Anarchism In The Sun. It's a blend of island-hopping and demonstrations with a small helping of vandalism with a pinch of whining about how tough things are.
Tickets will be available shortly.
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When I have reunited Alexandros's empire, I will restore the freedoms of the Greeks! There will be ges anadesmos and chreon apokope!
The fact of the matter is that the Greeks have been this way since before the birth of Christ, and will be this way forever. They are history's analogue to the Jews: the most entitled nation with the weakest work ethic. They make Albanians look industrious.
Hell, they make me look industrious.
I like their yogurt.
I dated a Greek chick once. Well, she an American of Greek ancestry.
Since the day i frst joined paradox i learned greek people suck. it's like you took the worse of the turks and the slavs and stuck them in one spot.
They run some damn fine diners.
That they do, that they do.
Quote from: Scipio on June 29, 2011, 07:32:02 PM
The fact of the matter is that the Greeks have been this way since before the birth of Christ, and will be this way forever. They are history's analogue to the Jews: the most entitled nation with the weakest work ethic.
Are Jews not historical?
Quote from: HVC on June 29, 2011, 07:51:32 PM
Since the day i frst joined paradox i learned greek people suck. it's like you took the worse of the turks and the slavs and stuck them in one spot.
:lol: All those great Balkan fights.
Quote from: HVC on June 29, 2011, 07:51:32 PM
Since the day i frst joined paradox i learned greek people suck. it's like you took the worse of the turks and the slavs and stuck them in one spot.
You learned well.
Heh, I grew up around Greektown, and I still remember the ultra nationalism a lot of them put on. I remember calling one of my classmates to discuss a school project in grade 12.
Me: Is Jim there?
Jim's Dad: No. This is his father. Who is this?
Me: Well, my name is PP, I am Jim's -
JD: Are you Greek?
Me: No...
JD: So, how do you know my son??!
Me: We're classmates. I'm calling about a project we're working on.
JD: Classmates? [long, ponderous pause] Ok, I'll tell him you called. {click}
Fucking xenoi.
If they hated non-Greeks so much why would they leave Greece? :hmm:
Quote"They are taking everything away from us," Ganiaris said. "What will happen when I finish law school? Will I only find a job making copies in a shop? Will I then need to work until I'm 70 before I retire? Will I only get a few hundred euros as pension? What future have I got now?"
Cry me a fucking river, you lazy git. <_<
Quote from: Pitiful Pathos on June 29, 2011, 10:46:35 PM
Heh, I grew up around Greektown, and I still remember the ultra nationalism a lot of them put on. I remember calling one of my classmates to discuss a school project in grade 12.
Me: Is Jim there?
Jim's Dad: No. This is his father. Who is this?
Me: Well, my name is PP, I am Jim's -
JD: Are you Greek?
Me: No...
JD: So, how do you know my son??!
Me: We're classmates. I'm calling about a project we're working on.
JD: Classmates? [long, ponderous pause] Ok, I'll tell him you called. {click}
I admit, I'd be suspicious of a kid who called himself "PP".
"Yeah, you can come in, just don't go in any room with carpet."
Quote from: Valmy on June 30, 2011, 09:25:53 AM
If they hated non-Greeks so much why would they leave Greece? :hmm:
Just a guess, I don't think I know anyone of Greek ethnicity personally, but it was probably picked up after they came over.
You leave the motherland looking for greener pastures. You get there and find an uphill battle. People don't get you, you don't get them, your old ways are threatened. It's not an unusual reaction to circle the wagons.
The best Athens' protest sign, hands down:
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:D
I suppose that guy is simply confused as to where he actually is.
Quote from: Maximus on June 30, 2011, 09:34:29 AM
Just a guess, I don't think I know anyone of Greek ethnicity personally, but it was probably picked up after they came over.
You leave the motherland looking for greener pastures. You get there and find an uphill battle. People don't get you, you don't get them, your old ways are threatened. It's not an unusual reaction to circle the wagons.
I grew up in a an area with lots of Greeks - to the point that the next town over was Ypsilanti and we didn't think of gyros as ethnic food at all. I saw a fair amount of Greek pride (most of it false, based on ideas like that these people were descendents of Homeric and Classical Greeks), but no xenophobia or even dismay when their kids married people whose last names didn't end in "-opolis." PP's experience is more localized, I think, than generalized.
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Quote from: Martinus on June 30, 2011, 09:41:06 AM
The best Athens' protest sign, hands down:
(https://languish.org/forums/proxy.php?request=http%3A%2F%2Fwww.dawn.com%2Fwp-content%2Fuploads%2F2011%2F06%2FGreece_DebtCrisis_ThisIsSparta_Reuters_a_543x275.jpg&hash=eff6c9ada4ab2832b29a77a9e31c8dedd3c72fa5)
:D
Except they forgot the part about being Spartan.
Quote from: Admiral Yi on June 30, 2011, 05:18:29 PMExcept they forgot the part about being Spartan.
They're about to become more spartan.
I've a lot of sympathy for the Greeks. It must be difficult to see this austerity, see everyone's tax increased and the state cut with almost no hope of economic growth for several years. Apparently the Greek government are aiming to push through the sort of thing Eastern Europe went through in the 90s.
Quote from: Sheilbh on June 30, 2011, 05:41:16 PM
I've a lot of sympathy for the Greeks. It must be difficult to see this austerity, see everyone's tax increased and the state cut with almost no hope of economic growth for several years. Apparently the Greek government are aiming to push through the sort of thing Eastern Europe went through in the 90s.
Is there actually any hope for Greece? Perhaps they just need to default and be done with it. I read some opinions that no aid can help Greece get back to normal - it will just postpone the inevitable.
Quote from: Martinus on June 30, 2011, 05:43:57 PM
Is there actually any hope for Greece? Perhaps they just need to default and be done with it. I read some opinions that no aid can help Greece get back to normal - it will just postpone the inevitable.
The problem is the Greek normal isn't going to get them growing sustainably again. The Greek normal was a sclerotic, dysfunctional economy with massive inflation and constant devaluation. I think that Europe needs to provide them with long-term debt support while they actually push through the reforms necessary, rather than simply demanding more and more austerity - I think that's starting to happen.
I think there's hope for Portugal and even Ireland (despite reporting the 39th straight month of falling retail sales) I don't know if that's the case for Greece and I don't think defalt, withdrawal from the Euro or ever increasing austerity provide any answers.
Why was greece allowed into the EU in the first place? Weren't they always a teetering economy with huge corruption issues?
Quote from: HVC on June 30, 2011, 05:58:18 PM
Why was greece allowed into the EU in the first place? Weren't they always a teetering economy with huge corruption issues?
I don't know how much truth is in the anecdote but apparently they actually cooked the books. :blush:
Quote from: HVC on June 30, 2011, 05:58:18 PM
Why was greece allowed into the EU in the first place? Weren't they always a teetering economy with huge corruption issues?
They were let into the Euro for political reasons. Their national statistics are now being done by the EU because the national body's methodology was so shoddy and everyone knew their figures were dodgy at best. And everyone thought given how small their economy is they couldn't really cause any trouble...
Quote from: Martinus on June 30, 2011, 05:59:37 PM
Quote from: HVC on June 30, 2011, 05:58:18 PM
Why was greece allowed into the EU in the first place? Weren't they always a teetering economy with huge corruption issues?
I don't know how much truth is in the anecdote but apparently they actually cooked the books. :blush:
If that's the case you'd think the EU would have some accountants checking out the books before allowing admission :lol: if they did i hope they all got into trouble.
Quote from: Sheilbh on June 30, 2011, 06:00:51 PM
Quote from: HVC on June 30, 2011, 05:58:18 PM
Why was greece allowed into the EU in the first place? Weren't they always a teetering economy with huge corruption issues?
They were let into the Euro for political reasons.
"Screw you turkey"?
QuoteTheir national statistics are now being done by the EU because the national body's methodology was so shoddy and everyone knew their figures were dodgy at best. And everyone thought given how small their economy is they couldn't really cause any trouble...
stupid economists.
Quote from: Sheilbh on June 30, 2011, 05:55:07 PM
I think that Europe needs to provide them with long-term debt support while they actually push through the reforms necessary, rather than simply demanding more and more austerity - I think that's starting to happen.
What's the moral principle behind the belief that a country which has been living beyond its means deserves subsidization of its lifestyle?
Quote from: Martinus on June 30, 2011, 05:43:57 PM
Is there actually any hope for Greece?
I suspect not. Had I been in the Greek Parliament, I would have been strongly tempted to vote no.
Seems to me there are one of two ways out the mess. Number 1 is to leave the Euro and devalue, and reorganize the government debt with some sort of Brady Bond scheme involving a cut in principal or below market interest. But this is politically impaltable for most European nations and institutions.
Number 2 is that Eurozone holders of Greek obligations write them off - i.e. in effect transfer funds to Greece. Then on a going forward basis institute an aid program conditioned on various economic reforms like the old IMF system. But since this would involve the Bundesbank eating a multibillion euro loss, it is unlikely to happen.
What is being proposed now - a de facto rollover of debt that extends repayment without reducing principal and interest combined with a brutal austerity program that will continue to drag growth down, while at the same time keeping Greece trapped in an uncompetitive exchange rate -- seems like a clear recipe for disaster down the road.
Quote from: Admiral Yi on June 30, 2011, 06:18:57 PM
Quote from: Sheilbh on June 30, 2011, 05:55:07 PM
I think that Europe needs to provide them with long-term debt support while they actually push through the reforms necessary, rather than simply demanding more and more austerity - I think that's starting to happen.
What's the moral principle behind the belief that a country which has been living beyond its means deserves subsidization of its lifestyle?
That's what the EU does for shitty members.
Quote from: HVC on June 30, 2011, 06:02:10 PM
stupid economists.
To be fair, I don't think a single economist had a real voice in the political decision to allow Greece into the Euro zone without actually qualifying.
Quote from: The Minsky Moment on June 30, 2011, 06:47:08 PM
Quote from: Martinus on June 30, 2011, 05:43:57 PM
Is there actually any hope for Greece?
I suspect not. Had I been in the Greek Parliament, I would have been strongly tempted to vote no.
Seems to me there are one of two ways out the mess. Number 1 is to leave the Euro and devalue, and reorganize the government debt with some sort of Brady Bond scheme involving a cut in principal or below market interest. But this is politically impaltable for most European nations and institutions.
Number 2 is that Eurozone holders of Greek obligations write them off - i.e. in effect transfer funds to Greece. Then on a going forward basis institute an aid program conditioned on various economic reforms like the old IMF system. But since this would involve the Bundesbank eating a multibillion euro loss, it is unlikely to happen.
What is being proposed now - a de facto rollover of debt that extends repayment without reducing principal and interest combined with a brutal austerity program that will continue to drag growth down, while at the same time keeping Greece trapped in an uncompetitive exchange rate -- seems like a clear recipe for disaster down the road.
Is it possible to create an unofficial but effective Greek-only currency, something like the BitCoin (but produced with anti-counterfeiting technology) to help them deal with what is going to be a shortage of Euros (because no one will be buying overpriced Greek goods and services)? The Greek government could pay salaries partly in Euros and partly in these "New Drachmas" and accept the NDs for perhaps some taxes or whatnot, so at least the Greeks could afford Greek goods and services, even if the ND held no value outside Greece.
The result of austerity measures in Spain for the first five months is a 20+% fall in deficit (to 1.23% of GDP).
That looks quite good at a first glance. However, corporate tax revenue fell 11%, which speaks of the consequences of these measures for employment and growth ...
Quote from: grumbler on June 30, 2011, 07:43:17 PM
Is it possible to create an unofficial but effective Greek-only currency, something like the BitCoin (but produced with anti-counterfeiting technology) to help them deal with what is going to be a shortage of Euros (because no one will be buying overpriced Greek goods and services)? The Greek government could pay salaries partly in Euros and partly in these "New Drachmas" and accept the NDs for perhaps some taxes or whatnot, so at least the Greeks could afford Greek goods and services, even if the ND held no value outside Greece.
It wouldn't address the Greece's external competitiveness problem (ie the lack thereof). And it probably would be viewed as an unacceptable precedent to set from the POV of the Eurozone mandarins.
I'll give them 200 dollars for Laconia.
Quote from: The Minsky Moment on June 30, 2011, 06:47:08 PM
Quote from: Martinus on June 30, 2011, 05:43:57 PM
Is there actually any hope for Greece?
I suspect not. Had I been in the Greek Parliament, I would have been strongly tempted to vote no.
Seems to me there are one of two ways out the mess. Number 1 is to leave the Euro and devalue, and reorganize the government debt with some sort of Brady Bond scheme involving a cut in principal or below market interest. But this is politically impaltable for most European nations and institutions.
Number 2 is that Eurozone holders of Greek obligations write them off - i.e. in effect transfer funds to Greece. Then on a going forward basis institute an aid program conditioned on various economic reforms like the old IMF system. But since this would involve the Bundesbank eating a multibillion euro loss, it is unlikely to happen.
What is being proposed now - a de facto rollover of debt that extends repayment without reducing principal and interest combined with a brutal austerity program that will continue to drag growth down, while at the same time keeping Greece trapped in an uncompetitive exchange rate -- seems like a clear recipe for disaster down the road.
I'm not disagreeing with you, but option number 1 has the probable disadvantage of nuking Greek banks and insurance companies. With the loss of support from Europe, that may be difficult for an insolvent Greece to deal with.
From a Greek point of view, option number 2 is the best. And it seems to become more likely the longer the can is kicked down the road, with debt holdings increasingly being transferred to the eurozone members and IMF.
The status quo is obviously gross, but it seems unavoidable. I understand that even after all the cuts they have done, Greece still has a primary budget defiicit. The EU/IMF demand the cuts, and if you tell them to take a hike you lose your access to credit markets and have to balance the budget immediately (unless you want to leave the euro and just print the money to fund your government, which doesn't seem like a good strategy). A new exchange rate would help, but not in the very short term.
Quote from: Martinus on June 30, 2011, 05:59:37 PM
Quote from: HVC on June 30, 2011, 05:58:18 PM
Why was greece allowed into the EU in the first place? Weren't they always a teetering economy with huge corruption issues?
I don't know how much truth is in the anecdote but apparently they actually cooked the books. :blush:
Which was revealed to the shock and horror of other EU members, even though it was an open secret for a long time. You may not want to kick the tires of Italy too hard either...
It's not just Greece when it comes to financial incompetence; the European Court of Auditors has failed the EU's accounts every year for........well...........living memory.
But when I mention the Greek migrant labour of the 60s and how they almost en masse mysteriously developed back conditions after working the minimal amount of time required to be fully supported by the social security system, somehow I am a racist. :rolleyes:
Quote from: Admiral Yi on June 30, 2011, 06:18:57 PM
Quote from: Sheilbh on June 30, 2011, 05:55:07 PM
I think that Europe needs to provide them with long-term debt support while they actually push through the reforms necessary, rather than simply demanding more and more austerity - I think that's starting to happen.
What's the moral principle behind the belief that a country which has been living beyond its means deserves subsidization of its lifestyle?
I thought we were talking about economy, not moral principles. Where did that come from? :huh:
What was the moral principle behind the US government (both under Republicans and Democrats) pumping billions of dollars into failing, unprofitable entities during the last 3 years or so?
Quote from: Martinus on July 01, 2011, 02:00:31 AM
I thought we were talking about economy, not moral principles. Where did that come from? :huh:
What was the moral principle behind the US government (both under Republicans and Democrats) pumping billions of dollars into failing, unprofitable entities during the last 3 years or so?
The preservation of the banking system and hence credit. In the case of GM, Union votes.
Quote from: Richard Hakluyt on July 01, 2011, 01:12:23 AM
It's not just Greece when it comes to financial incompetence; the European Court of Auditors has failed the EU's accounts every year for........well...........living memory.
The US is there too.
So has anyone tried out the austerity Kindle? I know it's cheaper than the regular Kindle, but the small amount of savings isn't worth having ads on your e-reader :yuk:
http://www.amazon.com/dp/B004HFS6Z0/?tag=googhydr-20&hvadid=6071121567&ref=pd_sl_1btn594ibc_e
Quote from: derspiess on July 01, 2011, 09:31:10 AM
So has anyone tried out the austerity Kindle? I know it's cheaper than the regular Kindle, but the small amount of savings isn't worth having ads on your e-reader :yuk:
The austerity Kindle is fine. The ads don't show while you're reading, so it's totally ignorable.
Only saves you 25 bucks though.
Quote from: ulmont on July 01, 2011, 12:25:21 PM
Quote from: derspiess on July 01, 2011, 09:31:10 AM
So has anyone tried out the austerity Kindle? I know it's cheaper than the regular Kindle, but the small amount of savings isn't worth having ads on your e-reader :yuk:
The austerity Kindle is fine. The ads don't show while you're reading, so it's totally ignorable.
For now. Next thing you know there'll be an annoying pop-up every time you turn a page :P
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Quote from: Admiral Yi on July 01, 2011, 06:16:17 AM
Quote from: Martinus on July 01, 2011, 02:00:31 AM
I thought we were talking about economy, not moral principles. Where did that come from? :huh:
What was the moral principle behind the US government (both under Republicans and Democrats) pumping billions of dollars into failing, unprofitable entities during the last 3 years or so?
The preservation of the banking system and hence credit. In the case of GM, Union votes.
That's not a moral principle. These are pragmatic reasons. There are equally strong (if not stronger) reasons behind preventing Greece from defaulting while not to throttling its growth with austerity measures. Are you being deliberately obtuse?
Fucking Greeks. Apparently, the ferry and airline transport employees went on strike. Great idea, smother the only business sector that Greece can do reasonably well by pissing off thousands of foreign tourists.
Quote from: Martinus on July 02, 2011, 04:45:45 AM
That's not a moral principle. These are pragmatic reasons. There are equally strong (if not stronger) reasons behind preventing Greece from defaulting while not to throttling its growth with austerity measures. Are you being deliberately obtuse?
Let's assume for the sake of argument that I'm not being deliberately obtuse. What are these equally strong if not stronger reasons behind preventing Greece from defaulting while not throttling its growth?
Quote from: Admiral Yi on July 02, 2011, 07:31:00 AM
Quote from: Martinus on July 02, 2011, 04:45:45 AM
That's not a moral principle. These are pragmatic reasons. There are equally strong (if not stronger) reasons behind preventing Greece from defaulting while not to throttling its growth with austerity measures. Are you being deliberately obtuse?
Let's assume for the sake of argument that I'm not being deliberately obtuse. What are these equally strong if not stronger reasons behind preventing Greece from defaulting while not throttling its growth?
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.
Quote from: Martinus on July 02, 2011, 07:34:38 AM
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.
Quote from: Martinus on July 02, 2011, 07:34:38 AM
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.
What they do need to be worried about is whether a bunch of countries begin to view an EU bailout package as a solution to an ugly budget situation. If Portugal and Ireland begin to see this as an acceptable alternative, things could get expensive. If Spain or Italy take that view, there may not be the money to bail them out.
Quote from: grumbler on July 02, 2011, 09:42:32 AM
Quote from: Martinus on July 02, 2011, 07:34:38 AM
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.
Quote from: Iormlund on July 02, 2011, 11:04:51 AM
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.
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.
I'm not sure I see your point Iorm.
Quote from: Iormlund on July 02, 2011, 11:04:51 AM
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?
QuoteThose 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?
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.
Greece needs to be fusion bombed, and the remains can be given to Macedonia and Turkey.
Quote from: Martinus on July 03, 2011, 02:53:31 AM
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.
QuoteI 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.
Greek austerity measures: double the VAT on restaurant and hotel services. :frusty:
Quote from: Martinus on July 03, 2011, 09:18:07 AM
Greek austerity measures: double the VAT on restaurant and hotel services. :frusty:
Pay the germans back with their own money; how is that silly?
Quote from: Viking on July 03, 2011, 09:27:26 AM
Quote from: Martinus on July 03, 2011, 09:18:07 AM
Greek austerity measures: double the VAT on restaurant and hotel services. :frusty:
Pay the germans back with their own money; how is that silly?
Germans can go to Spain instead.
Quote from: Martinus on July 03, 2011, 09:35:28 AM
Quote from: Viking on July 03, 2011, 09:27:26 AM
Quote from: Martinus on July 03, 2011, 09:18:07 AM
Greek austerity measures: double the VAT on restaurant and hotel services. :frusty:
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.
Can't they just sell off some of those islands?
Quote from: Razgovory on July 03, 2011, 10:00:13 AM
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?
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.
Quote from: Admiral Yi on July 02, 2011, 06:07:35 PM
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.
:lol:
I suppose you could blame the bankers for lending money to Southern Europeans. Then again, if they hadn't, the EU would probably have mandated that they must.
Quote from: Neil on July 03, 2011, 11:11:09 AM
:lol:
I suppose you could blame the bankers for lending money to Southern Europeans. Then again, if they hadn't, the EU would probably have mandated that they must.
You are a retard. Did the US mandate the banks to lend money to Lehman's?
Quote from: Martim Silva on July 03, 2011, 10:49:12 AM
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.
Yeah, and that's why Germany and France and Belgium are also on the verge of default. :rolleyes: The Greeks (and the Irish, Portuguese, and Spanish) have nobody but to blame but themselves.
Quote from: Razgovory on July 03, 2011, 11:22:00 AM
Yeah, and that's why Germany and France and Belgium are also on the verge of default. :rolleyes: The Greeks (and the Irish, Portuguese, and Spanish) have nobody but to blame but themselves.
The rule of thumb is: weak links break faster. Which is why the countries with smaller economies are breaking first (before Southern Europe we had the very nordic Iceland collapse, and before that the Baltic States went into a Depression).
Have no illusions about German or French economic power. Germany is indeed benefitting from an influx of capital coming back from the peripheral countries, but it is only temporary. Nobody in Berlin has any doubt that things can turn very sour, very fast for everyone.
Oh, and Belgium is in serious problems: it has a mountain of debt and no elected government to take measures. Its interest rates have been rising, and if they don't do something, the country WILL be a trainwreck on the verge of default in less than 12 months.
The banks became far too leveraged in the last 20 years, and they managed to do so by convincing everyone to borrow far more than they could possibly repay. While you can eventually blame a sucker for being gullible enough to belive the lies of a con man, ultimately the blame lies squarely in the crook that started everything.
Btw, the US financial position isn't that bright, either. If the US were in the Euro, it would be requesting a bailout by now, too (and crashing the whole financial system with it).
Quote from: Martim Silva on July 03, 2011, 11:43:05 AM
The rule of thumb is: weak links break faster. Which is why the countries with smaller economies are breaking first (before Southern Europe we had the very nordic Iceland collapse, and before that the Baltic States went into a Depression).
Though, in our case we identified the problem, developed a plan to deal with it, gained popular consent by means of reasoned political discourse and modification of the plan, implemented the plan and now we'll be able to pay off all our debt with the property confiscated from the banks and the Icelandic economy is on it's way up again well before the P.I.G.S. even hit bottom.
http://www.oecd.org/document/16/0,3746,en_2649_201185_43946384_1_1_1_1,00.html
QuoteIceland is resolving the economic problems left by the financial crisis. It is well advanced in implementing the comprehensive programme agreed with the IMF to overcome these problems. Iceland is slowly emerging from a deep recession following the collapse of its main banks. The economy stopped contracting by late 2010 and a consumption and business investment-led recovery is projected to gather momentum, lifting economic growth to 3 per cent by 2012. Inflation is projected to remain low and the underlying current account surplus to be sustained.
Smaller economies shouldn't break any faster then larger ones so long as they borrow at the same proportions anyone else. The Austrian economy is doing better then the Spanish or Italian ones despite being nominally smaller. The bank collapse effected everyone, but the damage it causes is based on how the country was run. Economic crisis happen, it's a fact of life. Often you can't control that. You can control how you will deal with it. The Greek government acted irresponsibly, and now they going to suffer for it. The Greeks used to have a fable about the Grasshopper and the Ant. They would do well to take such stories to heart.
Quote from: Razgovory on July 03, 2011, 11:59:08 AM
Smaller economies shouldn't break any faster then larger ones so long as they borrow at the same proportions anyone else. The Austrian economy is doing better then the Spanish or Italian ones despite being nominally smaller. The bank collapse effected everyone, but the damage it causes is based on how the country was run. Economic crisis happen, it's a fact of life. Often you can't control that. You can control how you will deal with it. The Greek government acted irresponsibly, and now they going to suffer for it. The Greeks used to have a fable about the Grasshopper and the Ant. They would do well to take such stories to heart.
Yes and no. Smaller economies become unstable more easily because the cash balance required to do so is smaller.
Quote from: Martinus on July 03, 2011, 11:16:20 AM
Quote from: Neil on July 03, 2011, 11:11:09 AM
:lol:
I suppose you could blame the bankers for lending money to Southern Europeans. Then again, if they hadn't, the EU would probably have mandated that they must.
You are a retard. Did the US mandate the banks to lend money to Lehman's?
You're a faggot, and thus not a person.
Quote from: Viking on July 03, 2011, 11:53:31 AM
Though, in our case we identified the problem, developed a plan to deal with it, gained popular consent by means of reasoned political discourse and modification of the plan, implemented the plan and now we'll be able to pay off all our debt with the property confiscated from the banks and the Icelandic economy is on it's way up again well before the P.I.G.S. even hit bottom.
And Iceland was also such a small economy that it was not a big deal to give it an IMF loan, as well as a Nordic loan to help it out, and it is fairly easy to give a push to such a tiny economy (any investment will have a bid impact on its GDP).
Quote from: Razgorovy
Smaller economies shouldn't break any faster then larger ones so long as they borrow at the same proportions anyone else.
Imagine you're the manager of a big investment fund/Bank director. There is a world crisis and you need to protect your investiments. Where do you pull the plug first?
1) Big countries with large and diverse economies and 'AAA' ratings, which cannot collapse without putting everyone at risk.
2) Small countries with smaller and less diverse economies, with less than top-notch ratings whose collapse does not (appearently) creates such danger.
When credit contracts, small nations (bar exceptions like Luxembourg and Switzerland) are the first ones to take it up the chin.
Quote from: Martim Silva on July 03, 2011, 12:43:21 PM
Quote from: Viking on July 03, 2011, 11:53:31 AM
Though, in our case we identified the problem, developed a plan to deal with it, gained popular consent by means of reasoned political discourse and modification of the plan, implemented the plan and now we'll be able to pay off all our debt with the property confiscated from the banks and the Icelandic economy is on it's way up again well before the P.I.G.S. even hit bottom.
And Iceland was also such a small economy that it was not a big deal to give it an IMF loan, as well as a Nordic loan to help it out, and it is fairly easy to give a push to such a tiny economy (any investment will have a bid impact on its GDP).
Now that would be a perfectly solid argument if it weren't for the fact that we are about to pay all those loans back in the next year or two.
The "loans" to Iceland were given to cover deposit insurance. The assets of the banks in question are now being sold to pay back the loans. Icelanders pay their taxes, retire at 67 and work 60 hour weeks to pay for their extravagant lifestyles; unlike the Greeks who don't pay their taxes, retire at 55 and work 30 hour weeks while maintaining extravagant lifestyles funded by loans guaranteed by German taxpayers. You are confusing a cash flow problem (Iceland) with a debt and work ethic problem (P.I.G.S.). The Economist's comparison of Iceland to a hedge fund before the crisis is rather apt, since Iceland's solution to the problem was very similar to Goldman-Sachs, only in our case the Bankers didn't get bonuses and have gone bankrupt (as soon as we can trace down all their hidden assets).
Before I forget:
Quote from: Razgovory on July 03, 2011, 11:59:08 AM
The Austrian economy is doing better then the Spanish or Italian ones despite being nominally smaller.
Austria is in fact a massive headache for the EU. Austrian banks have loaned the equivalent of 70% of the country's GDP to Eastern Europe, and very little of it is coming back.
As a result, the country is a financial timebomb waiting to explode in the next few years (less if we let Greece default). It is a serious worry to the EU.
Quote from: Viking
Now that would be a perfectly solid argument if it weren't for the fact that we are about to pay all those loans back in the next year or two.
The "loans" to Iceland were given to cover deposit insurance. The assets of the banks in question are now being sold to pay back the loans. Icelanders pay their taxes, retire at 67 and work 60 hour weeks to pay for their extravagant lifestyles; unlike the Greeks who don't pay their taxes, retire at 55 and work 30 hour weeks while maintaining extravagant lifestyles funded by loans guaranteed by German taxpayers. You are confusing a cash flow problem (Iceland) with a debt and work ethic problem (P.I.G.S.). The Economist's comparison of Iceland to a hedge fund before the crisis is rather apt, since Iceland's solution to the problem was very similar to Goldman-Sachs, only in our case the Bankers didn't get bonuses and have gone bankrupt (as soon as we can trace down all their hidden assets).
While the actual amount that will be raised by selling the banks' assets is not accurately known (the projections are based on incredibly optimistic forecasts of the value of the assets, which include a dramatic improvement of the global financial system to make them attractive) and the Icelandic ability to repay them in short order is by no means sure, Iceland so far has done some things right. It:
1 - Nationalized its private banking sector (since it's the private banks that are at the root of the problem, they should be disposed of).
2 - Has a better system of internal governance than Southern or Eastern Europe.
Point 2 is extremely important, and it is one where the whole crisis in Europe hinges on. We need a common set of governance rules to make sure our nations are better prepared to withstand and recover from these events.
Now, it is true that Southern europeans did overextend themselves too, but we must also bear in mind that banks did their best to encourage people and companies to get into debt, and that countries which did less of it seemed to 'lag behind' the others that did.
Portugal is a good example of this: the country has stagnated since 2000 and has effectively been under austerity measures to reduce its deficit since 2005. In the meanwhile, Greece continued to indebt itself (under the wise counsel of Goldman Sachs). As a result, the economies of Portugal and Greece, countries with similar populations and sizes and usually similar economies, started to diverge in growth.
Greece's GDP became almost 30% bigger than Portugal's. What happened before the financial crisis? We were said to be 'lagging behind' the Greeks and there was much finger pointing as why we were 'losing the train'.
Internal comparisons did almost as much to stimulate endebtedness than the banks themselves.
Now, if we all had the same governance rules, these comparisions would not have occurred - neither the Greeks would have gone tremendously out of line, nor would european countries be under pressure to 'catch up' with the others through whatever means possible.
Quote from: Martim Silva on July 03, 2011, 12:43:21 PM
When credit contracts, small nations (bar exceptions like Luxembourg and Switzerland) are the first ones to take it up the chin.
"On the chin," "up the ass."
Quote from: Martim Silva on July 03, 2011, 02:04:13 PM
Quote from: Viking
Now that would be a perfectly solid argument if it weren't for the fact that we are about to pay all those loans back in the next year or two.
The "loans" to Iceland were given to cover deposit insurance. The assets of the banks in question are now being sold to pay back the loans. Icelanders pay their taxes, retire at 67 and work 60 hour weeks to pay for their extravagant lifestyles; unlike the Greeks who don't pay their taxes, retire at 55 and work 30 hour weeks while maintaining extravagant lifestyles funded by loans guaranteed by German taxpayers. You are confusing a cash flow problem (Iceland) with a debt and work ethic problem (P.I.G.S.). The Economist's comparison of Iceland to a hedge fund before the crisis is rather apt, since Iceland's solution to the problem was very similar to Goldman-Sachs, only in our case the Bankers didn't get bonuses and have gone bankrupt (as soon as we can trace down all their hidden assets).
While the actual amount that will be raised by selling the banks' assets is not accurately known (the projections are based on incredibly optimistic forecasts of the value of the assets, which include a dramatic improvement of the global financial system to make them attractive) and the Icelandic ability to repay them in short order is by no means sure, Iceland so far has done some things right. It:
1 - Nationalized its private banking sector (since it's the private banks that are at the root of the problem, they should be disposed of).
2 - Has a better system of internal governance than Southern or Eastern Europe.
Point 2 is extremely important, and it is one where the whole crisis in Europe hinges on. We need a common set of governance rules to make sure our nations are better prepared to withstand and recover from these events.
Now, it is true that Southern europeans did overextend themselves too, but we must also bear in mind that banks did their best to encourage people and companies to get into debt, and that countries which did less of it seemed to 'lag behind' the others that did.
Portugal is a good example of this: the country has stagnated since 2000 and has effectively been under austerity measures to reduce its deficit since 2005. In the meanwhile, Greece continued to indebt itself (under the wise counsel of Goldman Sachs). As a result, the economies of Portugal and Greece, countries with similar populations and sizes and usually similar economies, started to diverge in growth.
Greece's GDP became almost 30% bigger than Portugal's. What happened before the financial crisis? We were said to be 'lagging behind' the Greeks and there was much finger pointing as why we were 'losing the train'.
Internal comparisons did almost as much to stimulate endebtedness than the banks themselves.
Now, if we all had the same governance rules, these comparisions would not have occurred - neither the Greeks would have gone tremendously out of line, nor would european countries be under pressure to 'catch up' with the others through whatever means possible.
It's good you move to the more relevant factors other than size. Portugal and Greece were badly run countries with bad economic systems where a lack of responsibility for society by the people resulted in a lack of reform and a willingness to accept bad advice advising short term solutions.
The difference between countries which recovered quickly or were not affected (Northern Europe) and the countries which recovered slowly or were heavily affected (Southern Europe) is not size, it is governance. I suggest you try to stop blame shifting. Once the people and their elected representatives take ownership over the issue and make severe choices the problems will not be solved. Feeding your super-ego by blaming someone else, absolving yourself of blame and demanding that somebody else solve your problem for you will not help.
Quote from: Martim Silva on July 03, 2011, 11:43:05 AM
The banks became far too leveraged in the last 20 years, and they managed to do so by convincing everyone to borrow far more than they could possibly repay. While you can eventually blame a sucker for being gullible enough to belive the lies of a con man, ultimately the blame lies squarely in the crook that started everything.
Bankers are not only evil, they are incredibly stupid, running cons they know will inevitably result in their own loss.
Quote from: Admiral Yi on July 03, 2011, 02:28:32 PM
Bankers are not only evil, they are incredibly stupid, running cons they know will inevitably result in their own loss.
Exactly. They make such great super-villains because they behave, in real life, exactly the way they do in comic books. Helkl, if you drop a banker into a canyon 1,000 feet deep, he will just end up climbing out of a baker-shaped hole in the ground (or, at least, that is what the ambassador from Acme assured me at lunch Tuesday).
We only have to worry if the bankers get frickin' sharks with frickin' laser beams attached to their frickin' heads.
Quote from: grumbler on July 03, 2011, 02:57:46 PM
Quote from: Admiral Yi on July 03, 2011, 02:28:32 PM
Bankers are not only evil, they are incredibly stupid, running cons they know will inevitably result in their own loss.
Exactly. They make such great super-villains because they behave, in real life, exactly the way they do in comic books. Helkl, if you drop a banker into a canyon 1,000 feet deep, he will just end up climbing out of a baker-shaped hole in the ground (or, at least, that is what the ambassador from Acme assured me at lunch Tuesday).
We only have to worry if the bankers get frickin' sharks with frickin' laser beams attached to their frickin' heads.
is that the scuttlebut at the ambassadorial dinnerparties?
Quote from: Razgovory on July 03, 2011, 11:22:00 AM
Quote from: Martim Silva on July 03, 2011, 10:49:12 AM
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.
Yeah, and that's why Germany and France and Belgium are also on the verge of default. :rolleyes: The Greeks (and the Irish, Portuguese, and Spanish) have nobody but to blame but themselves.
As Martim has mentioned, Belgium is in very dire straits.
As for Germany and France, they were the FIRST to break the Stability Pact long ago, and the ECBs fixation on restarting their anemic, welfare-ridden economies was precisely the reason peripheral economies had such access to easy money.
There's blame enough for everyone here. The ECB for not paying attention to overheating economies, credit rating agencies for spectacularly failing in pretty much everything, banks for lending money without assessing the risk, national politicians for not enacting needed reforms or adequately shifting the influx of credit away from real state bubbles, individual speculators, etc ...
Quote from: Viking on July 03, 2011, 01:06:02 PM
You are confusing a cash flow problem (Iceland) with a debt and work ethic problem (P.I.G.S.)....
This is precisely the kind of attitude I was referring to when I was answering to Yi.
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.
And I believe those statistics because they match my experience. For example it is pretty much impossible to locate anyone at our suppliers in those countries when something fails a Friday afternoon and a whole factory comes to a halt.
Quote from: Iormlund on July 03, 2011, 04:17:42 PM
Quote from: Viking on July 03, 2011, 01:06:02 PM
You are confusing a cash flow problem (Iceland) with a debt and work ethic problem (P.I.G.S.)....
This is precisely the kind of attitude I was referring to when I was answering to Yi.
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.
And I believe those statistics because they match my experience. For example it is pretty much impossible to locate anyone at our suppliers in those countries when something fails a Friday afternoon and a whole factory comes to a halt.
Ah, so you define work ethic as being present after 3:15 on friday afternoons? The work ethic issue I refer to is the one you refer to above when you define (Ayn Rand style) Greek society into producers and leeches as belonging to the leeches. The Norwegian might go home at 3:15, but he did work hard all 6 hours 15 minutes of his work day and spent less than 30 minutes at lunch.
Quote from: Iormlund on July 03, 2011, 04:17:42 PMFor example it is pretty much impossible to locate anyone at our suppliers in those countries when something fails a Friday afternoon and a whole factory comes to a halt.
They want their siesta, too.
Quote from: Viking on July 03, 2011, 04:30:56 PMThe Norwegian might go home at 3:15, but he did work hard all 6 hours 15 minutes of his work day and spent less than 30 minutes at lunch.
Right, while the Spaniard was napping on a bench under the shade of his giant sombrero.
:lol:
Get off your fucking high horse.
Quote from: Iormlund on July 03, 2011, 04:40:24 PM
Quote from: Viking on July 03, 2011, 04:30:56 PMThe Norwegian might go home at 3:15, but he did work hard all 6 hours 15 minutes of his work day and spent less than 30 minutes at lunch.
Right, while the Spaniard was napping on a bench under the shade of his giant sombrero.
:lol:
Get off your fucking high horse.
I tried, but my spanish sub contractor that is supposed to help me with that took a siesta from 10:00 AM to 2:00 PM and I wanted to get off my fucking high horse at 10:15. Come on, there I was, the tourist trying to find a chemist/pharmacy at noon to buy some after sun and nothing was open. Later that day I tried to find some food, but all the restaurants were closed, only McDonalds was open!!!!11111oneoneoneoeneon
The siesta is REAL.
Pharmacies are regulated by law. I ASSURE you, there was at least one open pharmacy a few blocks from your location at any given time. You can find their locations in maps both at the Internet and on computer displays at any pharmacy.
As for your other example, I can't even begin to comprehend how can you fail to find somewhere to eat in Spain. It's a feat in itself to be able to avoid every single bar or restaurant in this country.
Quote from: Iormlund on July 03, 2011, 04:51:37 PM
Pharmacies are regulated by law. I ASSURE you, there was at least one open pharmacy a few blocks from your location at any given time. You can find their locations in maps both at the Internet and on computer displays at any pharmacy.
As for your other example, I can't even begin to comprehend how can you fail to find somewhere to eat in Spain. It's a feat in itself to be able to avoid every single bar or restaurant on this country.
Oh, so my anecdotal experience cannot be used to expand into a general understanding of society, just like your suppliers in Greece?
Quote from: Viking on July 03, 2011, 04:53:08 PM
Oh, so my anecdotal experience cannot be used to expand into a general understanding of society, just like your suppliers in Greece?
Your anecdotal experience merely points out you cannot properly read maps or recognize a restaurant.
My anecdotal experiences not only match statistics but involve actual engineers in relevant positions. And I know I reached them because they are more than willing to return your calls ... the next workday morning.
Quote from: Crazy_Ivan80 on July 03, 2011, 03:32:42 PM
is that the scuttlebut at the ambassadorial dinnerparties?
I'll show you some scuttlebutt!
Quote from: Martim Silva on July 03, 2011, 12:43:21 PM
Imagine you're the manager of a big investment fund/Bank director. There is a world crisis and you need to protect your investiments. Where do you pull the plug first?
1) Big countries with large and diverse economies and 'AAA' ratings, which cannot collapse without putting everyone at risk.
2) Small countries with smaller and less diverse economies, with less than top-notch ratings whose collapse does not (appearently) creates such danger.
When credit contracts, small nations (bar exceptions like Luxembourg and Switzerland) are the first ones to take it up the chin.
Er, this isn't some kind of conspiracy. They aren't looking to destroy countries. There is no cabal of bankers looking to "pull the plug". They sure as hell don't want Greece to default. What is happening is the Greeks simply borrowed more money then they can repay. Nobody made them do this. Nor has anyone made the Greeks lie about their economic status (which they have done for nearly a decade). I'm sure it's very comforting to abdicate responsibility, but these fairy tales about evil bankers don't impress anyone.
As I understand it, the issue isn't whether there's a break in the middle of the day or not, or whether people leave early on Friday afternoon.
The issue is entrenched cronyism and absent/ counterproductive/ poorly enforced regulation: http://europeanbusinessreview.blogspot.com/2011/06/blog-post_09.html
It's in Greek, but someone did a translation:
QuoteTHE GREECE OF 'UNCLE' KOSTAS IS GOING AWAY
The nostalgics & the actors of the favors-economy & customer-based political system ought to realize that they have bankrupted us. So, off they should go with our blessings...
by Athan. X. Panadropoulou
I met him in Andravida <a town in Peloponnisos>, 'Uncle' Kostas, after 20 or more years. He was at the kafenio where we first met. Party-organizer for the area, the now 80 years old farmer told me the times are changing.
He himself made a small fortune through agricultural subsidies from the EEC. One daughter was appointed by the local MP <parliament representative> at ATE <Agricultural Bank> & the other one works at the tax agency of Pyrgos <another town of Peloponnisos>. His son he managed to have appointed at the PPC <the country's state power company> of Patra <yet another town of Peloponnisos>, where he "excels as a union representative". Of his 2 sons-in-law one is a lawyer & the other an agriculturist at the Ministry of Agriculture. His daughter-in-law is a teacher at the elementary school of Gastouni <town, Peloponnisos, you know the drill>.
"Things were different in older times", 'Uncle' Kostas confessed to me. "The MPs could help us. But now...". "But well", I tell him, "if I understand correctly. 'Uncle' Kostas. all of you, with one exception, are state employees. You pulled two dimes from the EU grants & the rest of your family are employed in the government & public companies .... ". "So what, is that bad? I struggled for the party & my children support it. Shouldn't it do something for us? Without the votes we collect CH.G. <initials of some politicians or another> would never get elected as an MP. At the last elections he got voted-in for the third time and from what I see and learn he's been profiting well. "
"How many appartment do you have, 'Uncle' Kostas?". "Two in Pyrgos, two in Patra, and my house here. We have the fields as well, but no one is concerned with them anymore so I'm trying to sell them to anyone who wants to open a supermarket". "Have you taken any loans from any banks, 'Uncle' Kostas?". "Nah, now that i have paid-off the one from ATE and the one from ETE <National Bank>. I had gotten almost free loans from ATE and the 20% of those was stricken-off because of the fires. But the future is not looking bright. I get two pensions and I'm fearful I'll lose them... Those thieves are to blame for the bleak state we've reached...".
From 1982 to 1997 'Uncle' Kostas received 620,000 Euros from Community Funds. He borrowed from the ATE and ETE banks about an equal amount. He never paid anything in taxes, he receives a 2,350 Euros per month pension, he has a revenue of 1,100 Euros from two taxis he leases-off & during summer he rents to Germans three undeclared rooms he has in Katakolon <more Peloponnisos places>. During the period of 1975-1985 3 million Drachmas were stricken-off his loans to ATE and he collected some 500,000 for natural disasters.
"You made it fine, 'Uncle' Costas," I say to my partner. "What are you seeing your grandchildren doing?". "I don't see them staying here. The Greece we knew is finished, is leaving. And with it the most capable will also leave. Anyway, we will not be here to see the continuation. " "Yes, you're right" i answer. "Our departure is the most certain thing ...".
P.S. 'Uncle' Kostas -righteously, of course - is one of the "indignants". <the people who are up at arms, figuratively or literally at the streets, about the whole situation>
Quote from: Iormlund on July 03, 2011, 05:01:21 PM
Quote from: Viking on July 03, 2011, 04:53:08 PM
Oh, so my anecdotal experience cannot be used to expand into a general understanding of society, just like your suppliers in Greece?
Your anecdotal experience merely points out you cannot properly read maps or recognize a restaurant.
My anecdotal experiences not only match statistics but involve actual engineers in relevant positions. And I know I reached them because they are more than willing to return your calls ... the next workday morning.
So your argument is that you are smart and I am stupid and therefore you are right and I am wrong?
I'm not going to bother with linking to OECD reports or link to the consensus of almost all economy journalists in all the languages I speak. I'm just going to add a predjudice for you that I'll apply to your next post regardless of topic.
Quote from: Viking on July 03, 2011, 11:53:31 AM
Quote from: Martim Silva on July 03, 2011, 11:43:05 AM
The rule of thumb is: weak links break faster. Which is why the countries with smaller economies are breaking first (before Southern Europe we had the very nordic Iceland collapse, and before that the Baltic States went into a Depression).
Though, in our case we identified the problem, developed a plan to deal with it, gained popular consent by means of reasoned political discourse and modification of the plan, implemented the plan and now we'll be able to pay off all our debt with the property confiscated from the banks and the Icelandic economy is on it's way up again well before the P.I.G.S. even hit bottom.
http://www.oecd.org/document/16/0,3746,en_2649_201185_43946384_1_1_1_1,00.html (http://www.oecd.org/document/16/0,3746,en_2649_201185_43946384_1_1_1_1,00.html)
QuoteIceland is resolving the economic problems left by the financial crisis. It is well advanced in implementing the comprehensive programme agreed with the IMF to overcome these problems. Iceland is slowly emerging from a deep recession following the collapse of its main banks. The economy stopped contracting by late 2010 and a consumption and business investment-led recovery is projected to gather momentum, lifting economic growth to 3 per cent by 2012. Inflation is projected to remain low and the underlying current account surplus to be sustained.
Protestant work ethic as opposed to Latin Sloth. :hmm:
You can link at OECD reports all right Viking. Where do you think I looked to find out working hour statistics?
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.
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.
Quote from: Iormlund on July 03, 2011, 04:17:42 PMI 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.
Quote from: Iormlund on July 03, 2011, 05:26:47 PM
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?
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.
Quote from: Zanza on July 03, 2011, 05:38:31 PM
Quote from: Iormlund on July 03, 2011, 04:17:42 PMI 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.
Quote from: alfred russel on July 03, 2011, 05:51:04 PM
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.
Quote from: Viking on July 03, 2011, 05:55:41 PM
Quote from: alfred russel on July 03, 2011, 05:51:04 PM
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.
Quote from: Admiral Yi on July 03, 2011, 05:38:49 PM
Quote from: Iormlund on July 03, 2011, 05:26:47 PM
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.
Quote from: alfred russel on July 03, 2011, 06:02:19 PM
Quote from: Viking on July 03, 2011, 05:55:41 PM
Quote from: alfred russel on July 03, 2011, 05:51:04 PM
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.
Quote from: Viking on July 03, 2011, 06:13:29 PM
Quote from: alfred russel on July 03, 2011, 06:02:19 PM
Quote from: Viking on July 03, 2011, 05:55:41 PM
Quote from: alfred russel on July 03, 2011, 05:51:04 PM
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).
Quote from: alfred russel on July 02, 2011, 10:00:53 AM
Quote from: Martinus on July 02, 2011, 07:34:38 AM
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.
:yes:
The Balkans Are Not Worth The Bones Of A Single Pomeranian Grenadier.
:pickelhaube:
Call it a sovereign debt crisis if you wish, but it still remains a banking crisis at it's heart.
Quote from: jimmy olsen on July 03, 2011, 07:23:50 PM
Quote from: alfred russel on July 02, 2011, 10:00:53 AM
Quote from: Martinus on July 02, 2011, 07:34:38 AM
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.
:yes:
The Balkans Are Not Worth The Savings Of A Single Westfalian Industrial Worker.
Quote from: Viking on July 03, 2011, 06:13:29 PM
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. :P
Quote from: jimmy olsen on July 03, 2011, 07:23:50 PM:yes:
The Balkans Are Not Worth The Bones Of A Single Pomeranian Grenadier.
Why would the Poles get involved anyway?
Quote from: Zanza on July 04, 2011, 01:29:26 AM
Quote from: jimmy olsen on July 03, 2011, 07:23:50 PM:yes:
The Balkans Are Not Worth The Bones Of A Single Pomeranian Grenadier.
Why would the Poles get involved anyway?
Dunno. Ask Angela Merkel why she asked our government to chip in for the Greece aid.
I worked with a Japanese guy a few years. He confirmed that Swedes work a LOT less than Japanese but a LOT more efficiently.
Quote from: Martinus on July 04, 2011, 01:42:26 AM
Dunno. Ask Angela Merkel why she asked our government to chip in for the Greece aid.
European solidarity. :p If the Polish EU presidency wants to secure more funds for the structural cohesion funds, they should show support in the Euro crisis.
Quote from: mongers on July 03, 2011, 08:40:08 PM
Call it a sovereign debt crisis if you wish, but it still remains a banking crisis at it's heart.
Not anymore. They've been bailed. Now it's a sovereign debt crisis. If it blows up, it will become a banking crisis again too.
Quote from: Zanza on July 04, 2011, 01:28:21 AM
Quote from: Viking on July 03, 2011, 06:13:29 PM
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. :P
I think Viking's figure is the more relevant one. The difference primarily is due to intergovernmental accounting and is owed by the federal government to itself.
Basically social security taxes are designated for social security payments, and the taxes have exceeded payments frequently. That payroll tax money is used for general purposes, with an IOU from the general fund of the government to the social security fund of the government for the amount. But the government can avoid the transfer by just changing the laws regarding social security.
Quote from: alfred russel on July 04, 2011, 03:51:53 PM
But the government can avoid the transfer by just changing the laws regarding social security.
Which, as we know from a different thread, the Republicans can do with a snap of their fingers. :P
Quote from: Martinus on July 04, 2011, 01:42:26 AM
Dunno. Ask Angela Merkel why she asked our government to chip in for the Greece aid.
Probably wants someone to deliver the money more on the Greek's "level".
Doesn't look good.
http://www.msnbc.msn.com/id/43633233/ns/business-us_business/
QuoteGreece risks being judged in default on its debt obligations if banks are forced to bear part of the pain, Standard & Poor's said Monday, suggesting that current proposals for rescuing the euro zone's weakest member may have to be reconsidered.
In particular, a plan proposed by the French government and banks "could require private sector debt restructuring in a form that we would view as an effective default," S.&P. said in a statement.
The effects of a Greek default would be felt around the world. The country's debt of €330 billion might not be large enough in itself to set off a renewed financial crisis, but once the precedent of a euro-zone default had been set, investors would likely abandon the debts of other struggling members, including Portugal and Spain.
More worryingly, Western banks, including the giants of Wall Street, have built a tower of credit default swaps — essentially insurance — on the debts of those countries, and the cost of paying up in a default would be huge. While the French and German banks have the biggest direct exposure to Greek's debt, it is American banks and insurance companies that would have the largest obligations to cover payments to those holding the swaps.
A finding by the credit ratings agencies of default would also require the E.C.B. to impose discounts, known as haircuts, on the Greek debt it has accepted as collateral. That would inflict more financial pain on banks holding that debt.
Euro-zone finance ministers agreed over the weekend to provide Athens with financing of €8.7 billion, or $12.6 billion, from the €110 billion bailout agreed to last year, to help the Greek government function through the summer. The new aid eliminates the prospect of a near-term default.
But the finance ministers put off the question of how to provide a second bailout, reportedly valued at up to €90 billion, to keep the country operating through 2014, when it is hoped that Greece will be able to return to the credit markets.
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The thorny issue of how to share the pain with the private sector suggests that discussion of the second bailout could continue for months.
Nicolas Sarkozy, the French president, announced June 27 that French banks had agreed to a plan under which the banks would reinvest most of the proceeds of their holdings of Greek debt maturing between now and 2014 back into new long-term Greek securities.
"If it wasn't voluntary," Mr. Sarkozy said at the time, "it would be viewed as a default, with a huge risk of an amplification of the crisis."
Germany's biggest banks have also agreed to roll over some of their Greek debt holdings.
But Standard & Poor's said Monday that it "views certain types of debt exchanges and similar restructurings as equivalent to a payment default": when a transaction is seen as "distressed rather than purely opportunistic" and when it results "in investors receiving less value than the promise of the original securities."
Both conditions would appear to be met by the French proposal, it said.
S.&P. has already cut Greece's long-term rating to CCC, deep in junk territory.
European officials are anxious to avoid setting off a default, Gilles Moëc, an economist at Deutsche Bank in London, said, because that could lead to a crisis in relations with the European Central Bank.
The E.C.B., which itself holds billions of euros worth of Greek debt, has said it could only accept the participation of bondholders in any restructuring if it were "entirely voluntary."
The central bank — which has been helping Greece by buying its debt on the secondary market — "doesn't want to jeopardize publicly its balance sheet anymore," Mr. Moëc said. "It's one thing to say they'll accept Greek government bonds, it's another thing to have something on their balance sheet that has ceased to pay, which is the definition of default."
"It doesn't mean the Greek securities are not going to be paid," he said, adding: "The E.C.B. would be able to accept them if the final structure was relatively healthy. One thing the E.C.B. doesn't want is any infringement of its right to decide on the collateral that it accepts."
This article, "S.&P. Warns Bank Plan Would Cause Greek Default," originally appeared in The New York Times.
those banks knew the risks.
And risk means, afaik, that sometimes you don't get your money back.
Quote from: Crazy_Ivan80 on July 05, 2011, 12:59:17 AM
those banks knew the risks.
And risk means, afaik, that sometimes you don't get your money back.
Yes. This is known as a default. It ruins the credit of the creditor, but the creditor doesn't pay back all of the loan. The Greek government knew the risks of borrowing, and risk means, afaik, that sometimes people learn not to trust you, so you don't get to borrow money any more.
Quote from: grumbler on July 05, 2011, 03:41:18 AM
Quote from: Crazy_Ivan80 on July 05, 2011, 12:59:17 AM
those banks knew the risks.
And risk means, afaik, that sometimes you don't get your money back.
Yes. This is known as a default. It ruins the credit of the creditor, but the creditor doesn't pay back all of the loan. The Greek government knew the risks of borrowing, and risk means, afaik, that sometimes people learn not to trust you, so you don't get to borrow money any more.
Yeah. I think many people do not realize to what extent modern governments are financed by debt. The problem for a country like Greece, if it defaults, is not just that it will tell its creditors to go to hell - but that suddenly it will find itself in a huge cashflow problem.
Not just governments. Corporations do the same thing, except they usually have the assets to cover their liabilities.
Quote from: Neil on July 05, 2011, 07:46:14 AM
Not just governments. Corporations do the same thing, except they usually have the assets to cover their liabilities.
Yeah, but the banks have access to those assets in the case of a default. Sovereign debt is different.
Quote from: grumbler on July 05, 2011, 09:21:32 AM
Quote from: Neil on July 05, 2011, 07:46:14 AM
Not just governments. Corporations do the same thing, except they usually have the assets to cover their liabilities.
Yeah, but the banks have access to those assets in the case of a default. Sovereign debt is different.
Governments could offer their citizens as collateral.
Quote from: Razgovory on July 05, 2011, 11:31:37 AM
Governments could offer their citizens as collateral.
You're not far off.
Quote from: MadImmortalMan on July 05, 2011, 11:39:15 AM
Quote from: Razgovory on July 05, 2011, 11:31:37 AM
Governments could offer their citizens as collateral.
You're not far off.
Correct, governments offer the ability to tax the living daylights out of their citizens and companies as collateral.
But sometimes that may not be enough, as overtaxing can collapse an economy.
Quote from: Martim Silva on July 05, 2011, 11:41:50 AM
Correct, governments offer the ability to tax the living daylights out of their citizens and companies as collateral.
Countries stopped doing that with the end of the Ottoman Empire.