UKC

1) The Greeks borrow a shitload of money

2) They then refuse to put measures in place to be able to afford to pay it back.

3) They default on the payment.

5) They demand more money.

6) They still refuse to put measures in place to even make the attempt to pay it back.

7) They blame everyone else for their problems with claims of "Blackmail" and "Financial Terrorism"!!

If I tried this with any money lending organisation what are my chances of getting away with it??

In reply to mgco3:
What was point 4) ?

In reply to Trevers:


4) They hold a referendum about whether or not to accept an offer which is no longer even on the table.

In reply to mgco3:


But poor Greeks. "Yes" vote, they're f*****. "No" vote, they're f*****. Me, I'm stockpiling olive oil and feta cheese.

In reply to abseil:
Don't forget the Greek yoghurt....

In reply to dale1968:


Right!!

Anyway let's give them the Elgin Marbles back. "Every little helps".

In reply to Trevers:

I think I was using the "Greek" counting system where you ignore any number you don't like!! ho ho

In reply to abseil:

They maybe F***** either way but they did it to themselves. That probably makes them w*****s..

In reply to abseil:

It is probably pointless giving them the marbles back as they might only have to sell them to get some cash!!

Kebab anyone?

In reply to mgco3:
Always got enough money to smash plates ....

In reply to mgco3:


No problem at all. They can sell them back to the British Museum.

In reply to mgco3:

mgco3! Attention! Someone is going through this brilliant/ genius thread disliking all of our wise comments! (I suspect some underground sleeper UKC Greek agents). What is one to do?!?!?!?!

In reply to dale1968:


That's why they're in such a state now,years and years of wasting money on crockery and scorched shoes from dancing around in a fire.

In reply to mgco3:


About the same as your chance of printing £400Bn and using that to pay off the loan.

In reply to mgco3:

Yes, it's all the Greeks fault. Every single one of them, children included. Let's make them all pay, because the poorer they are the more they will work hard to pay back the impoverished bankers of Europe. There is no flaw to this method, no precidence of this in history - one group in Europe being blamed for all the financial problems.

In reply to Philip:

How much of their debt are you willing to pay for them? (note it is about 500e for everyone in the EU)

In reply to mgco3:




The world's banking system have been doing this successfully for quite some time. They even got away with it when the sub prime market went tits up.

In reply to mgco3:



Oxi

On both counts

In reply to mgco3:

Is paying your taxes a concept that the Greeks understand? Because it seems that the main cause of their current predicament is that no one has been paying their taxes and no one has been enforcing payment. Probably because the potential enforcers weren't paying theirs either.

I understand that other shakey economies in the EU suffer from a similar lack of understanding as to what taxation is all about.

It's much easier to borrow money you have no intention of paying back.

In reply to abseil:

My money's on Dave 'the Rave' Popadopolous

Currently in his shed ,belly dancing his way through his Demis Roussos CD collection.

In reply to andymac:


Thank you very much for this. I will look into this after tea.

In reply to MG:

Willingness is irrelevant.

If the Greek economy can't pay then the debts aren't enforcable so whoever made the loans or holds those debts will pay, possibly triggering a bailout by taxpayers.

The question is how the debt holders will pay - write down, debt forgiveness, repayment holiday or further loans etc and whether it will be an agreed deal or a unilateral Greek decision.

In reply to elsewhere:

You're right up to a point. However it's a two way process (and power struggle). Greece needs to meet creditors with good will and compromrise. Not the blatant antagonist tactics of late. Otherwuse they will get no support and the downward spiral will continue.

In reply to MG:
It looks like a downward spiral regardless so i'm not sure what incentive the Greeks have to cooperate.

In reply to elsewhere:
One spiral has no visible bottom, the other does. Basically the message is stop screwing around, make changes to stop a repeat and we will help. Otherwise you are on your own.

In reply to MG:

ie adhere to the euro rules that were ignored when Greece joined the euro. Seems unlikely but I hope I am wrong.

In reply to mgco3:
Greeks vote 'No' - early results
http://www.bbc.co.uk/news/world-europe-33403665

In reply to elsewhere:

Very relevant as the money loaned to the Greeks is European money not bank money.The banks are not really involved.

In reply to MG:

I think there is very much more to this than it's all the Greeks fault.


1) Who was encouraging them to join the Euro, when it was bl**dy obvious to everyone that Greece's (and the other PIGS for that matter) economies were nowhere near the Maastricht requirements? 2) What was the money spent on? Well, quite a lot was spent on arms, encouraged by - ahem - Europe, as Greece was (and is) not so far from all sorts of trouble spots. Part of the incentive to get Greece firmly within Europe was to act as a buffer. 3) And of course, how convenient that they had Euros to buy lots of nice shiny weaponry from other Euro countries including, of course, France and Germany. 4) Who lent them the money? Had they ever head of something called 'Due Diligence?' 5) Who benefitted from the depression of the Euro due to the presence of the PIGS? Why step forward France and Germany; if they had still been trading in francs or marks, then their economies would not have been anything like as successful as they were with a lowest common denominator currency like the euro.

So it's all a bit more nuanced than ' the Greeks are idle, tax evading b*stards who deserve a bit of pain.'

In reply to Rob Exile Ward:

Very well put.

In reply to Rob Exile Ward:
I agree with most of that. But a) they still borrowed the money and lied to do so, and b) have gone out of their to piss everyone off, unlike Cyprus, Ireland Portugal etc. So I don't have much sympathy, really.

Although I am concerned about a potential failed state on Europe's borders with the situation in Russia, Syria, Libya etc

In reply to Rob Exile Ward:




Greek defence spending in 1981 when they joined the EU was 5.1% of GDP and has steadily reduced to 2.5% for 2013 and estimated 2.2% for 2014. Anyway don´t let facts stand in the way of a good rant
(Incidentally shiny weaponry isn´t quite the word either, when I lived there after the unification of Germany they received the clapped out equipment from the DDR army in preparation to fight off the Turkish hordes.)

In reply to MG:


Who is "they"?

In reply to Mr Lopez:

The Greeks, obviously.

In reply to MG:


What, ALL of them?

In reply to mac fae stirling:

Yes, they have made decisions as a democratic country.

In reply to M

Unlikely.

In reply to MG:


Well, i've just asked my mate Yannis and he said he did none of that. I also find it unlikely that any Greek under 18 years of age would have managed to pull off a massive loan no mayter how much they lied.

Are you sure it was all the Greeks?

In reply to Mr Lopez:
Obviously not all Greeks support government policy, that's not what I said.

In reply to jimtitt:

I agree with you about the weaponry, but on my one trip to Kalymnos I remember being surprised by the number of new Mercedes taxis on both Kos and Kalymnos, obviously bought from the Germans at low euro interest rates.

In reply to mgco3:

I'm alright Jack.I've got some drachma in an old jam jar (and some deutchmarks)!

In reply to Rob Exile Ward:



Arms were a sideshow. Low Euro interest rates kept demand strong in Southern Europe, notably Greece, for all sorts of goods which were, coincidentally, manufactured largely in Germany and sold at at an "exchange rate" which suited the Germans. If the DM had still existed it would have gone throughout the roof and put up prices of German goods.

In reply to Rob Exile Ward:

I dislike the disparaging tone of your use of the abbreviation PIGS. It is gratuitously offensive and also lumps Ireland into the same category as Greece. Interesting that you then claim to be aware of "nuanced" economics.

In reply to goatee:

Crikey - you're a sensitive one. You think Ireland is - and always has been - a model of corruption free, sustainable economics? Everyone is a PIG, ultimately; it's just a question of who's left standing when the music stops.

It's the politics, stupid.

In reply to goatee:

It was PIIGS as I recall - Italy were in there as well.

In reply to Postmanpat:

Er yes, I think I already made the point that the German economy massively benefitted from the low Euro. Payback time, folks.

In reply to goatee:

>

It's a bog standard phrase. Why is it particularly inappropriate in this usage?

In reply to Rob Exile Ward:


Yup, fair do's. Greeks are hardly blameless however. Basically the Euro elite cobbled together a deal for political reasons and self interested reasons which completely ignored the economic pitfalls.

In reply to Trangia:


Sounds like a British voter's wet dream.

In reply to Postmanpat:

'Greeks are hardly blameless however'. No they're not. Nor were the Germans when they were bailed out in 1945 by the Marshall plan. It might not have been 'morally right' (God knows we were shafted at Bretton Woods) ; it worked for Germany though.

Time to get real; no democratic government could possibly implement the measures that the Greeks are being asked to, it's not possible. So either the terms change, with some delicacy, or democracy in Greece takes a back seat to (pretty corrupt) international finance.

In reply to MG:


But since you said above that you 'don't have much sympathy', I assume you are ok with millions of Greek men, women and children suffering for the actions of those they did not support?

In reply to Rob Exile Ward:


No, but neither can the rest of the "PIGS" justify to their electorates why they went through an austerity programme only for theGreeks to be "let off". So, "getting real" mean a massive anti euro backlash both in the "PIGS" and in the rich north whose taxpayers will finance the Greek haircut.
It's not about "corrupt international finance". The banks have already been protected. It's about taxpayers,electorates, and the Europroject.

In reply to Postmanpat:

Yes, it's going to be difficult. The reunification of Germany seemed a pretty big deal, economically and politically; this seems comparable.

The alternative is to have Greece exit the Euro and have a potentially failing state in geographical Europe.

Time for Angela to step up to the plate, methinks.

In reply to Rob Exile Ward:




I think the German unification was simpler. The West Germans were prepared to finance other Germans for all sorts of cultural reasons.
If Merkel "steps up to the plate" she is potentially finished. There could be an anti EU backlash across Europe.

But,as you could say, if Greece leaves it could "fail" and end up with some sort of neo fascist or Marxist State in cahoots with Putin. Or it could reboot and thrive like post ERM Britain…..

In reply to Postmanpat:

And indeed it could become significantly cheaper as a tourist destination than the majority of western European countries, as used to be the case before the euro.

In reply to mgco3:

It's starting to look like Hobson's choice for the rest of Europe either give Greece a loan on "soft" terms or face the possibility of giving them millions in humantiarian aid.

Either way it is going to cost......

In reply to John2:


Exactly, I'm still hoping for a Kalymnos trip in October. As long as there's food in the restaurants I'll be there!! With moslem countries looking dodgy so cheap Greek tourism could boom.

In reply to Trangia:



Yes, but possibly the "aid" approach may be preferable. It doesn't undermine the Euro or set a precedent in bailouts, but it give the Greeks an opportunity to "reboot".

In reply to Postmanpat:

You may well see me there. The population outside the tourist centres will have a hard time, but then they already are.

I really think that Syriza have managed to piss off the rest of the euro nations so badly that they will be booted out of the euro. What next? Levies on bank deposits as in Cyprus? The next few months will be desperate.

In reply to abseil:


Didn't they sell them to Lord Elgin already?

In reply to John2:

In the overall scheme of things selling a few Mercedes taxis to Greece is hardly likely to keep the Germany economy rolling. The German economy strikes me as doing pretty well even if you excluded overall sales to Greece. The UK economy is far more important to Germany than tiny Greece.Let us get some perspective on this point.

In reply to mac fae stirling:

Up to a point, yes. There are a democratic country and make decisions as such. If that results in some people suffering, that is largely a matter for them.

That said, I don't want to to see the Greek state collapse, partly out of humanitarian concern, partly because I support the idea of EU solidarity, and partly, as above, because there is enough mayhem around at the moment without a country within the Europe adding more.

In reply to abseil:


Stavros, Spiros stop clicking the dislike button and pay your ruddy debts!

In reply to Philip:

The Democratically elected Greek government are responsible.

As the Greek people elected them then the Greek people collectively need to take responsibility for the state in which they now find themselves.

That is , perhaps , the "down" side of democracy.

It is a simple cause and effect situation. If you borrow money and are unwilling to meet the agreed repayments then you cant complain when the lenders wont give you more money!!

In reply to Trangia:


> It's much easier to borrow money you have no intention of paying back.

I like your way of thinking. Any chance you could lend me 50 quid?

In reply to dale1968:

If they vote no (oxi ) then they cannot complain about the repercussions. If the majority of a democratic country make a decision then so be it..

Methinks this may be a new meaning for the word OXI-moron !! A greek who votes no( OXI) and that no vote will lead to their financial downfall..

In reply to MG:


You summed it up nicely!!

In reply to neilh:


Now that is the case. initially though the banks were very heavily involved. A cynic might think the entire punt it down the road approach was more about letting the banks time to get out.

In reply to neilh:

It wasn't just Greece they were selling to - it was the entire eurozone. Without the euro the deutschmark exchange rate would have been stratospheric and the interest rates at which the minor eurozone nations could borrow to pay for their exports would have been equally high.

In reply to mgco3:

They're trying. More than one economic strategy exists and ever tighter austerity hasn't worked well so far. What's the definition of madness... doing the same thing over and over again expecting different results.


There's nothing simple about it, if you don't borrow money then you can't invest in rebuilding your economy or collecting taxes or paying the pensions half your population are dependent on. If you stop borrowing people start dying within days. People with the skills and right to travel/work freely in other European countries that can import food and medication, pay wages will leave en masse and take their earning potential with them.

Unable and unwilling to repay are different things. Greece is on it's knees and it's creditors have no interest in helping it back up, they want what they can get now and f*** the consequences for the Greek people. Good for them for trying to stand up for themselves, for those who still see a future for their country they're willing to fight for. I'd have left. Poor bastards.

In reply to John2:

Part true. But also most of the globe buys into the german brand ie good german products for which they will pay a price. I question this assumption that a low valued euro helped the german economy.

Strikes me that most people seem to what to pay premium prices for most things german.

In reply to jkarran:


This isn't so. The creditors are mainly the national governments via the EFSF, ECB and other institutions. They know that 1)They will get next to bXXXXr all if they let Greece go, and 2) They are never going to get most of it back anyway 3) most of them also have a commitment to keeping the Euro together.

It's simplistic to think there is a simple solution. If the European governments keep bailing Greece without more in return out they undermine the credibility of the Euro, its institutions and its laws and likely provoke a backlash across the continent.
If they don't bail them out they likely provoke mayhem in Greece (short term, at least)
an undermine the credibility of the Euro, in addition to having to write off most of the debt.
Actually in other PIGS austerity may have "worked" but in Greece it is so far down the road that it seems unlikely to help much now.

Basically what we have learnt is that if a country has low productivity and doesn't pay taxes then it will be poor. Lending it lots of money will only work if it changes its modus operandi. The Greeks failed to do this so it is now poor, with more roads, but lots more debt.

In reply to mgco3:


Maybe, hopefully not. I don't think Varoufakis's attitude was helping negotiations so with him gone maybe they will move towards the debt relief for structural reforms that it needed.

In reply to John2:


This is so, currently German exports to Greece are effectively unimportant (less than 0.5% of the total). The only thing we export in a big way to them is money at the moment
The Euro was introduced decades before it was scheduled in order protect the other European countries from the percieved threat of a unified Germany and the DM dominating the European economy. The EU were warned at the time (by their own organisations amongst others) that prematurely introducing a common currency without a common finance policy and increased centralised political control would be a disaster but the French in particular ignored this (Mitterand reportedly made the Euro a condition of agreeing to reunification).

In reply to neilh:

But the Greek taxi drivers would not have been able to afford their Mercedes if there had been a normal deutschmark / drachma exchange rate and normal drachma interest rates.

The Germans are currently behaving like the doorstep lender who gives money to people who can't afford to pay him back then threatens to break their legs. They seem to have forgotten that after the second world war their international debts were halved, and that part of the reason their economy recovered so quickly after that war is that they were not initially allowed to maintain a standing army.

In reply to mgco3:

Not really they were encouraged by others to go down this road
(and some of the very ones who are complaining about them now )

In reply to John2:

>
But the other part of the reason was that they invested wisely and productively and paid the taxes to finance the type of welfare State that they wished to have.
The Greeks have signally and serially failed to do this.and show little sign of changing.

It was obviously mad for the Euroelite to imagine that by everyone signing up to the Euro and the fiscal rules associated with it then they would all suddenly turn into mini Germanys, but that is what they imagined and everyone, especially the greek people, are now paying the price.

It's all been resolved.

The Greeks have turned up at the ECB with a large statue of a horse worth twice what they owe. They have asked for it to be stored in the ECB vault as a surety until Greece can transfer the cash.

In reply to John2:

The Germans are acting like good housekeepers and saying get your house in order and the money is yours. Sounds reasonable to me.

In reply to Postmanpat:

I'm suggesting that since it is impossible for the Greeks to pay off all their debts in the normal course of events, the failure of the Germans to countenance some form of debt write-off is as misguided and unrealistic as the terms on which the euro was originally created. In fact I believe there is some division within Germany on this issue, but Merkel realises that it would be electoral suicide to write off debt.

In reply to John2:

There is a logic in this, and of course it's what has been done in the past from many countries. The problem is that Greece is part of the Euroblock which means that:
1) Other members of the block have reasons for not thinking they should get favourable treatment (not least the East Europeans)
2) If they stay part of the Euro then the Euro block has an ongoing commitment to support them-but the Euro block has lost all trust the the Greeks will reform. So the expectation is that they'll just be back for more.
3) Greece will not get the benefits of a currency devaluation to aid a recovery post a "haircut".

In reply to Postmanpat:

As I said, the terms on which the euro was originally created were misguided. Perhaps Greece would be better off outside the euro, but the immediate future is looking pretty grim for the man on the Athens omnibus.

In reply to John2:

Agreed. Increasingly I think they might be better off leaving the Euro.

In reply to John2:


Maybe not if he's heading for the airport to become the man on the London omnibus.

In reply to Postmanpat:

How would that work? Greece starts printing drachmas once they have run out of Eros (assuming they can find someone to print them, and willing to accept a non-existent currency as payment.)

Greek businesses trading abroad still accept payments in Euros, in fact they have to because no customers are going to buy drachma which will inevitably devalue, probably catastrophically. Will they risk putting those euros in Greek banks? Will Greek banks be able to accept them?

Local businesses will continue to accept tourist Euros.

Unfortunately all those lovely Euros are not available to the government as they need to collect taxes in drachmas; businesses and individuals are only going to exchange their Euros at silly exchange rates, which the government can't then in fact use to buy anything, apart from to throw at pensioners by the barrow load.

We're looking at a German or Zimbabwe style meltdown.

In reply to Rob Exile Ward:

"Greece starts printing drachmas once they have run out of Eros (assuming they can find someone to print them,"

Word on the street is De La Rue have already been instructed....but this would be completely secret due to the implications and opportunity to make money....so how anyone would know this and put it out in the public domain means it should be taken with a pinch of salt. But seems entirely plausable.

In reply to mgco3:


You are not a country. However understandable your incredulity at the Greek financial situation may be, do not fall in to the trap of comparing running a household, or business, economy with that of running a country. This was a very effective tactic on the part of the Conservative party during the general election. It's bollocks.

In reply to planetmarshall:


There are some notable differences, and some obvious similarities, and mgco3 has hit on one of them. Saying it's 'bollocks' is a trap many on the left fell into before the election... I say that as someone who wishes the left had come up with better arguments.

In reply to Rob Exile Ward:






Very difficult I agree. Printing isn't a problem. They have their own presses. But getting them into circulation will be a problem and you're right, nobody will want to use them except to pay the government.
Most money is electronic anyway so it would just be converted 1 to 1. The coins etc could come later.
Clearly the new drachma would fall quickly but what happens after that would be in the hands of the Greek central bank.Probably capital controls would be introduced but that is happening anyway.
I agree it would be incredibly messy and risky but long term it might still be a better option.

In reply to Mike Stretford:


As there are with any analogy. For the analogy to be useful, the differences should be negligible, or not pertinent to the argument. However, as we are talking about government borrowing, the differences - namely that a private individual cannot raise taxes or implement monetary policies such as quantitative easing - are crucial. Economics within the Eurozone are further complicated by the fact that some, but not all, of this is under the control of the European Central Bank rather than individual states.

None of this means that the Greek government is blameless in the situation that they now find themselves, but I find the private banking analogy overly simplistic.

In reply to Postmanpat:


It is quite simple to imbue the Drachma with value. The Greek government just need to mandate that all taxes be paid in Drachma.

In reply to planetmarshall:


Well said.

In reply to planetmarshall:


Taxes are 'income' to a government so I don't think that one is too relevant, as any organisation or individual can have income and may be able to raise it, or may not. The big difference is monetary policy, but in that sense Greece being in the Euro does make it more analogous to a household.

In reply to Shani:


Yup agreed, hence my comment about "using them to pay the government". But they could still end up running parallel economies, a drachma one and a euro one, I'd have thought.

In reply to Postmanpat:


Yep. There are lessons from Brazil which ran parallel currencies (a phantom and a 'real' one - very interesting: http://www.npr.org/sections/money/2010/10/04/130329523/how-fake-money-saved...

On a wider note, we have to remember that Argentina has been through this loan-default position - short term it is painful, but it is a recoverable position, especially when you have very strong ties to wealthy countries around you. I recall how Iceland was told that going bankrupt was bad news....but it defied the mainstream economists and has a superior economic outlook to Ireland. Politics and economics are more art than science.

In reply to Mike Stretford:


Fair point, albeit a household with the capability of borrowing at an interest rate of 0.5% or thereabouts.

In reply to Mike Stretford:

No, planetmarshal is correct; it is bollocks because it fundamentally misrepresents the role of debt within economies e.g. that it is almost always 'bad'; precisely why it is a favourite analogy of politicians et al. pushing austerity.

Here is a brief critique of the 'households-are-like-economies' analogy from a US pov; http://www.rooseveltinstitute.org/new-roosevelt/federal-budget-not-househol...

In reply to planetmarshall:

Greece's problem is that it cannot implement monetary policies and can't or won't raise taxes so in reality it is bit like a household.

In reply to Postmanpat:

Not in any reality I know of.

In reply to mac fae stirling:


For a more UK-Centric position, here's Krugman's view. It's not uncontroversial, but his prediction about right-wing parties using "government spending=bad" rhetoric to demonize the welfare state appears to be coming true.

http://www.theguardian.com/business/ng-interactive/2015/apr/29/the-austerit...

In reply to mac fae stirling:


No that's a straw man. Engage with people and you can explain that borrowing can be 'good'.... it can put a household in comfortable accommodation, you can invest in your own skills and qualifications.

Describing any comparison as 'bollox' is a gift to the right.

In reply to planetmarshall:


Eh? Greece has to borrow at high rates , that's now part of the problem.

In reply to Mike Stretford:


What is a 'straw man'? Note my use of 'almost always'. Actually, the anaolgy is [mis]used by both left and right. It has become part of 'common sense' thinking about the economy and it is bollocks. {where my understanding of bollocks is something which is not very good/a bit crap, in which case I will stick with it for now}.

In reply to mac fae stirling:

I don't think debt is automatically, or 'almost always' bad, and people in general don't... that's obvious, people are used to borrowing to get on in the UK. ie you're arguing against a position I haven't adopted.


I interpret 'bollocks', as 'completely wrong', and I don't think the analogy is. The big difference is monetary policy, but that is a mitigating factor, not a get out of jail card.

In reply to mac fae stirling:


Well, three of the main differences between household economy and a national economy are the ability of the latter to "print money" and to raise taxes. The other is that a country never "dies" so it never has to repay its debt.

So Greece meets two of those criteria.

What are the differences that you are thinking of that Greece does not meet?

In reply to Trangia:



I know of a few tradesmen in Sheffield who'll grumble about the economy and the general state of things, and then help each other out in getting (non work related) things at trade prices for each other to avoid paying VAT. It's not just the Greeks. The guy who did my pesticides course was of a similar ilk too.

If tax wasn't chased up like it was in the UK, I'm sure many people would pay less of it, given the choice...

In reply to Mike Stretford:

Well, it does now, yes. My mistake in including the 0.5% figure - that only applies if you're Germany.

However the prices of Greek 10 year bonds in the past year has been historically low - in the 5-6% region, within a percentage point of pre-crisis levels. The point is that when you can borrow at such a low rate, it can make better economic sense to borrow than not.

In reply to planetmarshall:


It's also been as high as 35% within the last few years. You could say brief fall to 5% vindicates pre Syriza policy, but I expect the Greeks had had enough by then.

In reply to Mike Stretford:

No, not buying your straw man analogy. You said the the economy as household analogy was not bollox whereas I think it is bollocks. And i think it will continue to be relentlessly deployed in a completely bollocksy way for the foreseeable. Depressingly.

In reply to Timmd:

'If tax wasn't chased up like it was in the UK, I'm sure many people would pay less of it, given the choice...'

Actually, speaking as someone who has been self employed for 25+ years I definitely get the feeling that the UK austerity measures, which have extended to tax collection, have resulted in rather less rigorous tax inspections than in the past.

I have a suspicion that we're on a slippery slope: fewer tax inspectors, and an increasingly complex tax code, mean that tax liabilities are increasingly based on a subjective 'that seems plausible' type calculation rather than an arithmetically unassailable position.

I don't think we should be too smug about UK tax collection.

In reply to jkarran:

I have to disagree with you it is VERY simple.
The Greeks have failed to collect taxes and manage their economy for years. Now the crunch has arrived they still refuse to put in sufficient measures to even attempt to repay the debt.

I do however agree with you on the difference between unwilling and unable. By their refusal to put measures in to place they have proved that they are just unwilling to pay.

As for being poor bastards, they are, collectively, the masters of their own downfall. No on else is to blame. Europe has repeatedly attempted to assist Greece financially but Greece has repeatedly reneged on the deal.

In reply to Mike Stretford:

I think Varoufakis was hoping for a "Yes" vote so that he could appear to "Resign with dignity" . Now that the vote went the way he wanted he has , like the rat leaving the sinking ship, jumped..

In reply to Jim C:

You appear to be suggesting that they were "conned" into borrowing billions..

They were up shit street and thrown a lifeline. That lifeline was on the condition that they got their act together and sorted their finances out.

This they have refused to do. I think the creditors have good right to complain.

In reply to planetmarshall:

I can assure you that I have fallen into no trap. I was merely using household finance as a metaphor.

However some of the rules apply to both. Don't borrow money if you don't intend to pay it back is a universal rule applicable to any and all situations.

In reply to mgco3:


As a metaphor, it is bollocks.

In reply to mgco3:



Nope, not a 'universal' rule that applies to economies. Or even all households for that matter.

In reply to mgco3:

You make it sound like a playground. How much do you think the average Greek understood what was happening when they were welcomed into the Eurozone with open arms, despite it being blindingly obvious that to equate the Greek economy with the German was a recipe for unmitigated disaster, motivated (at best) by a desire for a strong financially and politically coherent Europe, at worst driven by a self sustaining bureaucratic wet dream of a European superstate. Germany has benefitted hugely by being in currency union with the PIIGS, you could argue that they are as responsible for this crisis as any Greek bar owner fiddling a few euros; the reckoning has now arrived.

This is the ugly side of the European project - bureaucrats hand in glove with global finance, bending over backwards to accommodate capital's demands. Well you know what? International capital needs economic growth, within a safe haven, within a stable political system, within a strongly entrenched rule of law - Europe, say - much more than Europe needs international capital. Where exactly will your Saudi princes and UK pension funds prefer to invest their money/your pension? Time to take a haircut, get Europe back on track or move capital to ... where exactly? Russia? China? The Philippines?

In reply to andymac:



You were half right , but it was Nana Mouskouri that was making me shed rock, and not through belly dancing !

In reply to mac fae stirling:

In what alternate reality would anyone condone borrowing money with no intention of repayment FFS and then expect to continue maintaining financial credibility??

Name one!!

In reply to mgco3:



What about the taxman?

In reply to Rob Exile Ward:

You seem to imply that that average Greek is thick!

I believe they had, and have now, as much understanding of their situation as anyone else.

They are democratically responsible for their situation.

In reply to mgco3:


In what alternate reality would anyone condone borrowing money with no intention of repayment FFS and then expect to continue maintaining financial credibility??

I am not condoning anything really.
I posted this link above, discusses how economies can maintain almost permanent levels of debt ; http://www.rooseveltinstitute.org/new-roosevelt/federal-budget-not-househol...

In reply to Dave the Rave:

When does the taxman "Borrow" money?

With my tax payments there is no inference of borrowing. In fact I can almost hear the word "Yoink" when it disappears.

In reply to mac fae stirling:

Good link. However, even though some countries debts are still "on the books" hundreds of years after the initial sum is borrowed there never is an intention not to "pay up".

In reply to mgco3


So, by your reckoning, were we, as UK voters, responsible for the financial crisis or various botched military interventions not so long ago here in the UK? Can we assume that in all democracies the majority must be in favour of everything their government does, once it is elected?

You reckon that because it's a democracy, that means the majority understand the complex financials? Idealistic at best.

In reply to mgco3:

'You seem to imply that that average Greek is thick! '

No more than the average UK punter who believes house prices will always rise, or the average Frenchman who believes everyone has a God-give right to a 30 hour week, or the average German who conveniently forgets that their economy was rebooted with billions of overseas aid and believes that everyone wants to work a 40 hour week, and shuffle off this mortal coil with their shroud pockets stuffed with euros.

In reply to 1234None:

What complex financials? If you borrow money you have to repay it!! If you are struggling to repay then you have to increase taxes/ make cuts. What is complex about that?

You also appear to be implying that the average Greek cannot understand the concept of borrowing and repayment!!

In reply to mac fae stirling:




See my post of 17.18. Can you spy the obvious difference between the US and Greece?

In reply to Rob Exile Ward:

You are making a lot of assumptions about "average" people.

In reply to mgco3:



Or you can print more money, or you can inflate your way out of it.

In reply to mgco3:



Complex or not...are the Greek people really responsible for their government's handling of the financials just because they vote in elections? What hideous things does this then make us, as UK voters, responsible for? Everything our government chooses to do? Saying that the Greek people are responsible as they voted Their government into power suggests that they were all fully informed and involved in every decision thereafter. I'm sure you know that this isn't how it works...

In reply to mgco3:


I disagree.

In reply to mac fae stirling:

Let's look at an example of fiddling the books closer to home... why yes, step forward HMG!

Let's not mention PFI.

Let's talk about student loans. In 2010(?) they introduced tuition fees as a way of reducing govt expenditure, paid for by student loans. For every £1 the government lent to students - and theoretically avoided paying out of taxes - they gained an 'asset' of a £1 - the debt the student owned. So suddenly, govt 'expenditure' on education declined. Austerity!

Except they it didn't. Because student loans are only repayable over a certain threshold - and are written off after 20 years - most student loans will NEVER be paid off. Fortunately it's not the tax payers of today - us - who will suffer, it will be the taxpayers 20 years down the line who will have to take the haircut and borrow money to fill the gap left by the written off loans.

This is conscious policy by HMG, designed to placate international finance, Daily Mail readers and swivel eyed tories. and we point the finger at Greece...?

In reply to Rob Exile Ward:


You keep saying this but "international capital", the types of entities you list, are no longer exposed. They were "bailed out" over the last three yeas for fear of a European Lehman.
85% of Greek debt is now held by Government or quasi government institutions, most of them European. As such it is the taxpayer who will take the haircut, not "international capital".

In reply to mgco3:

Varufakis has an enviable reputation as a macroeconomist. He has an excellent academic reputation, is published, and has held professorships in Greece and the US (where he was highly rated and popular with staff and pupils). The IMF eventually conceded to him regarding debt relief being at the heart of negotiations a mere 5 months after he proposed it. Remember, he was not the architect of Greece's problem, he is proposing a viable solution.

He is a smart guy and an increasing number of economists are lining up to support him. He has called out the illiteracy of European leaders and correctly identified the incompatibility of political solutions to a macroeconomic problem. He has pwned the EU politicians and they are terrified of him. THAT is why he has resigned, because the EU dare not negotiate with him around as his superior intellect is a threat to them and the EU politicos need to save face.

His greatest triumph was not only proving he was a smarter economist than any other advising the EU, but he also proved to be a more savvy politician, correctly identifying a possible consequent loss of democracy under austerity. This is exactly the path the EU bovinely followed in an effort to punish Greece for reckless German and French lending.

One last point is that Varufakis pointed out that incessant and chronic tax evasion in Greece was part of a wider tax evasion problem in Europe (aided and abetted by Junker). Varufakis requested reform and transparency to tackle this - pointing out quite rightly that it could only work if the reform and transparency was Europe wide. The finance ministers of several major industrial nations immediately crapped themselves - along with several global banks. Varufakis hurt them with the truth and the EU just wanted to get rid of him from that moment on. As always, follow the money.

In reply to Rob Exile Ward:



That wouldn't surprise me.



I wasn't being, more just thankful that it's relatively better than in Greece.

In reply to mgco3:


Actually you dont. You can declare bankruptcy/negotiate new deals etc. The former being likely if the latter isnt done. Push too hard and the debtor will collapse and you get pennies in the pound.

Generally if someone has managed to borrow badly then someone has lent badly.

In reply to mgco3:


Well it seems beyond you to recognise there's more than one way to increase tax income so perhaps it's not quite as simple as you make out.

jk

In reply to mgco3:

Not at all, the 'Road' I was talking about was them joining the Eurozone in the first place. Not any subsequent borrowings
( That said I do think Germany can be implicated in this too, and they got a lot of that money spend in their economy (as did the French)

However, back to the joining the Eurozone, is clear that without others help, they would never have got in in the first place , and it is clear that those others turned a blind eye to the fact that they were not eligible to join.

In reply to Shani:

Whilst you offer several points that appear to colour Varoufakis in a favourable light you offer glaring contradictions.

He resigned because the EU dare not negotiate with him !!! I have been trained in negotiation by the Chester Karras organisation so I can say with some experience that a good negotiator NEVER gives up on negotiation. The negotiator that gives up is a failure!!

His enviable reputation has done absolutely nothing to improve the Greek financial situation.

He called out the illiteracy of European Leaders - yet his "superior" abilities have failed to even improve the Greek financial situation. Playing the "pointy finger blame game" only goes to show his weakness.

Greatest triumph !! You cannot be serious. He has led Greece down a cul de sac , left them there and jumped ship. Your interpretation of triumph is to say the least concerning.

Reckless German and French lending! Once again the pointy finger blame game.

You point out that he AGREES that there is chronic tax evasion in Greece but, despite agreeing to this, did nothing to correct this.

Here is a potential solution (even if only a part solution) to the problem. He admits that Greece is not doing enough to recoup taxes. Money that they desperately need to get themselves out of the situation..

So what does this "Brilliant" negotiating economist do presented , by his own admission, with a way forward?

He gives up and blames everyone else.

Truly a great man!!!

In reply to dissonance:

The lending was done on the condition that the Greeks put their house in order to fix their unbalance economy.

Something that they refused to do despite having the means to do so.

If two parties agree a deal with clearly defined conditions and one party reneges on that deal how is it the fault of the other party?

In reply to jkarran:

The minutiae of how Greece recoups tax income / cuts costs was, and is still ,down to the democratically elected Greek government. They have agreed that they are not collecting taxes to the full and yet did nothing to correct the problem. Sorry but that in my book, is simple.

In reply to Shani:
Varukis was appalling and it was reasonable to foresee that he would not last a year never mind 5 or 6 months.

As an example his boss Tsipras at least has the decency to dress like a Prime Minister , Varukis could not even be bothered to look serious by dressing reasonably to the other negotiators in the room.These things at this level matter. It implies you are serious in govt to govt negotiations. To brush them aside shows you are " frivilous". Of all people - as he has studied Gaming- he should know this.

Then there was the famous photographs of him and his wife at their villa in some glossy magazines a couple of months ago.That must have gone down really well with the people on the streets.

A man of style, but no substance.

In reply to mgco3:

So you deem that the EU are not good negotiators then as "the EU dare not negotiate with him"!


Austerity caused a sharp contraction in Greece's economy during six years of recession and pushed unemployment to 28%. Austerity certainly was not working. I am not sure what you think Varufakis should have done, save to say that Greece's position is impossible - a point made by Varufakis and reaffirmed by the IMF. If anything, Varufakis has forced a conclusion to an otherwise slow economic death.


The Euro model is at fault. Merkel pointed the finger of blame when she said that Gerhard Schroeder had been wrong to support Greece's membership and that it had been wrong to relax strict budget rules designed to underpin the currency. So Varufakis repeating Merkel's assertions cannot really be deemed a weakness, more a sharp analysis.


Greece were already down an economic cul-de-sac. That is what he was putting an end to by drawing attention to the Emperor's new clothes - with the support of the Greek people and the authority of the democratic process. Are you suggesting that Greece should have sacrificed its democracy?


As Merkel said, they relaxed the rules so failure was baked-in from the outset. so yes, "Once again the pointy finger blame game" - but it is Merkel pointing the finger at Germany. To quote her directly:

"...one should not have accepted Greece into the eurozone ... Chancellor Schroeder accepted Greece and weakened the stability pact,...Both were fundamentally wrong and are the reasons for our problems today."


Yes he did. He suggested transparency and reform of EU tax arrangements so that he could find Greek monies hidden in secret European bank accounts. This EU declined his offer.






I don't think you understand what you are typing and I don't think you understand the full scale of the problem. You naively think this situation is comparable to personal debt, but Greece is only the tip of the EU debt iceberg. To quote Varufakis:

"All this talk of what to do with the Greek debt must be seen against the background of Europe’s continued commitment to remain in denial of the simple truth that this is not a Greek debt crisis; that Greek debt is the tip of the iceberg. It is, I submit, inconceivable that the Greek debt can be dealt with while leaving the Irish, Portuguese etc. debt crises (as well as Europe’s Great Banking Conundrum) in abeyance hoping that they could go away magically. It only takes a second’s thought to come to the conclusion that schemes of this nature could not possibly address the systemic crisis at hand."

In ten years time you'll see that once again he is ahead of the game.

In reply to neilh:





So a professional and widely respected economist is "A man of style, but no substance" because of how he dresses and because he appeared in Hello? Ah, ok....

In reply to mgco3:


Which lending is that? the one by the banks or the one by the EU etc? If the latter then its fairly clear the conditions didnt matter beyond giving the time to bail out the former.

In your eyes, plenty disagree.


ermmm, for offering a deal in the first place under conditions that were highly unlikely to work.

In reply to mgco3:


Which says more about you than Greece's problem I suspect.
jk

In reply to mgco3:



The reduction of the Greek primary deficit was large and fast, and achieved in a economy in depression. The only problem is that this super austerity strategy was the wrong one for obvious political and economic reasons.

In reply to Shani:

In political terms yes and this is serious stuff they are discussing.( peoples futures and lives are after all part of the picture here). Of all people he should know this if he was so brilliant.

There are games to play at this level and he was not treated seriously. His replacement for example is equally a brilliant economist etc,but I bet he plays this one more seriously.

In reply to Postmanpat: Correct....and France have done pretty well out of it

"The €110 billion of loans provided to Greece by the IMF and Eurozone in May 2010 enabled Greece to avoid default on its obligations to these banks. In the absence of such loans, France would have been forced into a massive bailout of its banking system. Instead, French banks were able virtually to eliminate their exposure to Greece by selling bonds, allowing bonds to mature, and taking partial write-offs in 2012. The bailout effectively mutualized much of their exposure within the Eurozone.
The impact of this backdoor bailout of French banks is being felt now, with Greece on the precipice of an historic default. Whereas in March 2010 about 40% of total European lending to Greece was via French banks, today only 0.6% is. Governments have filled the breach, but not in proportion to their banks’ exposure in 2010. Rather, it is in proportion to their paid-up capital at the ECB – which in France’s case is only 20%."

http://blogs.cfr.org/geographics/2015/07/02/greecefallout/

In reply to neilh:


Varufakis took his role seriously - there is no evidence otherwise. What annoyed the politicians is that he was one step ahead of them.

"Merkel must now take a stance that is the opposite of the one her finance minister has pursued to date. Schäuble is undoubtedly one of Europe’s towering political figures, but his strategy for saving the eurozone by pushing Greece out was misguided." http://bit.ly/1eBARXD

Euclid Tsakalotos has a posh English voice and so sounds the part, and also has serious academic hustle but I bet you that Varufakis is not too far behind the scenes.

In reply to Shani:

The evidence is in the plight that Greece now finds itself in.How much value has the economy shrunk over the past few months and the banks are closed.That really is a sign of him being ahead of the game.

In reply to neilh:

In fairness to Shani (and Verufakis)..Greece were always going to be in this situation regardless of who was finance minister. I think Shani is making the point that Verufakis was adept at exposing the great EMU lie and this didn't sit well with the negotiators on the otherside. They want a "yes" man, not a smart man (not saying a yes man isn't or cannot be a smart man)

Verufakis well understands the adage "If I owe the bank a thousand pounds, I have a problem, If I owe the bank a billion pounds, the bank has a problem"

I have no idea if Shani or your own opinion is correct on the man...but I don't think he was disliked because of his t shirt and jeans apparel

In reply to neilh:


I am not sure if I detect an element of sarcasm here! If none was intended, I apologise. If you are being sarcastic then remember that Syriza have only been in power for a matter of months.

Since 2010 Greece has done most of what the Troika asked of it - and the effects have been economically disastrous:

"When Greece’s insolvency was clear, Kostas Karamanlis’s New Democracy government had left a public sector wage bill of 30.7 billion euros, almost 13 percent of GDP. In 2013, that same wage bill did not exceed 21.8 billion euros, representing a 29 percent reduction in just four years.

Social benefits in 2009 had risen to 49.1 billion euros from 36 billions in 2006. This was brought down to 38.4 billion in four years, a 27 percent reduction.

The task was made even more difficult by the continuous reduction in revenues as people were losing jobs by the thousand each month.

To make this effort Sisyphean, the troika decided in 2012 to push down the minimum wage by 22 percent as part of the internal devaluation process. This reduced wages in all collective agreements and enterprise level wage decisions which used the minimum wage as a benchmark. In turn, this sucked tax revenues and social insurance contributions out of the system.

Contributions dropped from 30.7 billion in 2008 to just 24.3 billion euros in 2013, down 21 percent. At the same time, taxes on income were reduced to 18.7 billions in 2013 from 20.2 in 2009 in spite of the repeated revenue-raising measures that the governments introduced.

Given the magnitude of the effort and that the task was undertaken in an environment where a quarter of the economic activity disappeared while the labour force was also depleted by more than a quarter, it is ludicrous to suggest that there was something lacking in the fiscal consolidation effort. After all, this is an area of the Greek programme where the troika exercised its full authority and the numbers are there for all to see."

http://www.macropolis.gr/?i=portal.en.the-agora.2268#sthash.nHaO4Ecu.dpuf

In reply to Shani:


I'm sure he did, but like many idealist from privileged background, he didn't seem to care about the consequence of his actions on the people he was purporting to help. Accusing the creditors he was negotiating with of 'terrorism' was never going to help.

He was pushing for EU wide reform while Greece is far behind most European countries on the sort of reforms being discussed. It was clearly a diversionary tactic that wasn't going to resolve the situation. Varoufakis now get's to 'wear the creditors loathing with pride' without having to suffer the real consequences many Greeks will.

Hoping the new guy is less ego, more pragmatist.

In reply to Mike Stretford:

Ah - the old "if your wealthy then you're a hyprocrite" response. I agree that he might well be arrogant and his rhetoric at times dramatic - but this is in response to his awareness of 5-8 years of crushing and grinding poverty on Greek people. Austerity was NOT helping people. You seem to think that worse is to come. It has been 'worse' for the past 5 years.



The Greeks are already suffering massively (http://ind.pn/1edwpH3). Why do you think that the Greeks supported Syriza in the referendum? Why are the endorsing Syriza's approach? This is democracy in action. You need to respect the wishes of the Greek people (unless you disapprove of democracy).


I will concede the point about ego - but Varufakis IS the pragmatist. Debt relief is the pragmatic (and IMF endorsed) position.

In reply to Shani:

"..As always, follow the money."

Or for a bit more fun (donning tin foil hat), follow the main players...specifically Mario Draghi, head of the ECB.

Who hid Greece's debt levels via a swap with the Greek government to adhere to Masstricht criteria?...Goldman Sachs. Who was Vice Chairman and managing director at Goldman Sachs at the time?....Mario Draghi. Things that make you go Hhmm

And a great quote from Greek debt management agency boss at the time Christoforus Sardelis "It was a very sexy story, between two sinners, but the European crisis is not the child of the sex we had with Goldman Sachs"

There could be some fantastic skeletons hiding in some cupboards somewhere....

In reply to Shani:

I din't call him a hypocrite, I said his idealistic stance is damaging, in as many words.


It's getting worse by the day. If Grexit happens it will be very painful for Greece's poor.


Yeah I agree, but you've also got to respect the democratic wishes of the rest of Europe. Germany has a tradition of fiscal prudence, and the other relatively poor countries were never going to be too happy about Greece being the recipient of a huge bailout.

Everyone with a bit of insight knows that the best way forward was substantial debt relief coupled to serious structural reform in Greece. There was a slow dance in progress aimed at eventually achieving that without upsetting other parts of Europe too much. That dance now seems to have turned into a stand off.

I don't blame the Greeks for loosing patience, however, I do think Syriza's approach has worsened the situation, too much divisive rhetoric, making it harder for other leaders to sell a deal to their own democracies.

In reply to Bjartur i Sumarhus:

There are indeed skeletons in cupboards. Varufakis has repeatedly shone light on European kleptocracy - and how the people are made to suffer the consequences.

But best we just get rid of him and blame those lazy Greek people eh?

In reply to Mike Stretford:

'Germany has a tradition of fiscal prudence, ' er except when it goes to war, obviously, and let's not forget that its post war 'economic miracle' was not founded on austerity so much as a massive stimulus - the Marshall plan - the like of which had never previously been seen.

In reply to Bjartur i Sumarhus:
Draghi is not the only bogeyman. Let us not forget that Jean-Claude Junker was challenged by Margaret Hodge to explain whether he personally authorised tax avoidance schemes that were rife in Luxembourg during his premiership of the principality!

So Greece MUST clamp down on tax avoidance schemes....but European Commission president appears to be complicit in facilitating tax avoidance schemes. Meanwhile, senior European finance ministers and bankers declined Varifakis' request for audit materials that would assist him tracing Greek monies on which tax is owed.

If this was a principle of household economics then you'd conclude the residents dysfunctional and inherently corrupt.

In reply to Rob Exile Ward:

Obviously, though most would consider the defeat and destruction of Germany as the start of a new era, the one I was referring to.


The Marshal Plan was Europe wide and West Germany didn't get that much relative to other countries and the state they were in. Their collective experiences have brought about a national mindset the rest of Europe has to deal with, that's the reality.

In reply to Mike Stretford:


Really? I didn't know this. Have you got a source?

Even if it is true, I would be surprised that debt relief was on the agenda prior to Varufakis putting it center stage. All evidence I can see is that Germany/EU were obstinately AGAINST further debt relief. Merkel explicitly said so back in January:

"There has already been voluntary debt forgiveness by private creditors, banks have already slashed billions from Greece's debt," Merkel told the paper, adding: "I do not envisage fresh debt cancellation."

(http://bit.ly/1Cmww5T).

As for Syriza worsening the situation, remember that within weeks of Syriza being elected, Varufakis said:

“No one understands better than the people of this land how a severely depressed economy, combined with a ritual national humiliation and unending hopelessness, can hatch the serpent’s egg within its society. When I return home tonight, I will find a country where the third-largest party is not a neo-nazi party, but a nazi party,” he said, referring to the far-right Golden Dawn. “We need the people of Germany on our side.” (http://bit.ly/1CkauRa)

In reply to mgco3:

No time to read the entire thread, so apologies if some points have been made before.

First, we (as in the rest of Europe) are not bailing out Greece, we are bailing out Greece´s creditors.

The European governments, the ECB, and the IMF threw good money after bad, allowing the private creditors (Deutsche Bank over here, but also many other large banks and hedgefunds elsewhere) to be paid out largely in full through money borrowed by Greece and guaranteed by the European taxpayers (yes there was a cosmetic haircut a couple of years ago, but even that was structured in a way to prefer private creditors). Now that all debts held by private banks have been replaced by publicly held bonds, Greece is dropped, but not after stripping the state and the population of all assets available.

This would be a crime in any other context (delayed filing of insolvency and being an accessory to this, don´t know the exact legal terms in English). Essentially, the European governments stole money from the European taxpayers to serve the financial interests of their paymasters in the city.

What pisses me off most in this context is that this could even have been justified (not that I agree with this, but it is point worth being made), as the creditors include e.g. pension funds, whose survival could arguably be in the public interest. However, this should have been argued from the beginning, and the either accepted or rejected.

Instead, it was always argued that we have to "help Greece" as the part of European project, which has become discredited by association.

Worst of all, in Germany, this scam was pulled of by an effing East German who came late to the party, was handed an entire shiny new state paid for by the West after running the old one against the wall, and now has the chutzpah to lecture others about the benefits of austerity.

I can´t half eat as much as I want to throw up when I see Merkel´s insincere face in the news.

CB

In reply to Shani:

The real issue for me is a that prior to the election in Jan/Feb the Greeks had just started to turn the corner. Thats what really irkes me about the last few months, all the effort/hardwork/reconstruction had started to slowly take effect. And they threw it all away and made it worse( its going to be been even more expensive to sort out the last few months).

Portugal, Ireland and Spain had taken their bitter sweet medicine and turned the corner. Even the left wing ( is it Pamodos) in Spain is now saying- we are not Greece.

In reply to cb294:

I heard on the radio that they can't let Greece default on the money owed and fully leave the Euro as Greece's creditors won't get their money back, that in that sense it's in the interests of Greece's creditors to be accommodating.

In reply to neilh:

Is that really true? The electorate don't seem to have been aware of it.

In reply to neilh:


The 'Great Success Story' narrative has and does bubble up every few months. Varoufakis put this narrative down quite firmly back in 2013:

http://yanisvaroufakis.eu/2013/05/22/greek-success-story-the-latest-orwelli...

Greece is bust. The Greek banking sector is a corrupt black hole. I am not buying the narrative that things were 'beginning to turn around prior to the rise of Syriza'. It is an anemic analysis devoid of substance. Structurally the economic problems befalling Greece are still in place.

In reply to Mike Stretford:

re 'German fiscal prudence'; interesting interview with 'celebrity economist' Thomas Piketty in Zeit Online, where he slates German hypocrisy re debt repayment; http://www.zerohedge.com/news/2015-07-06/piketty-germany-has-never-repaid-i...

In reply to Trangia:

There was an argument on the radio in Ireland that the greeks dont pay taxes because to not pay taxes was the patriotic thing to do when they were part of the Ottoman empire..

And now they dont pay taxes because everyones corrupt.. all seems very convenient.

It needs tidying up but bankrupting them is not the way to go about it.

You'd think security wise the EU wants Greece in the EU and secure.

In reply to elsewhere:

Yes they were, they were told about it at the time.The old saying " turkeys do not vote for Christmas" springs to mind.

In reply to Shani:

Can you not quote somebody else other than Varoukis?

In reply to neilh:


Why? Perhaps they couldnt seen the tide turning but instead just them having to pay for the incompetence of previous governments, EU officials and EU banks.

In reply to Roadrunner5:


Thanks for that. That is one of the feeblest excuses I've ever heard in my life. Wonder if it's true. Ottoman Empire?! Almost 100 years ago?! If anyone really uses that, how much longer will they do so, another 100 years?!

In reply to abseil:

Seems like it's routes are true... but it is rather convenient.. I'm not sure tax dodgers today are really doing it for such historical reasons.

https://en.wikipedia.org/wiki/Tax_evasion_and_corruption_in_Greece

Alleged origin of Greek corruption

Commentators both within and outside Greece have attributed this flaw in Greek culture to a mismanagement of Ottoman Greece by the Ottoman Empire. In Ottoman-occupied Greece tax resistance became a form of patriotism,[8][9] and property and commercial tax systems were left in shambles.[10]

In reply to Roadrunner5:


Thanks very much for posting that.

In reply to neilh:


Yes I can. Here you go, Oxford University's Simon Wren-Lewis. Another Macro-Economist here (http://bit.ly/1eCsn2F) and here (http://bit.ly/1UwkPzt).

In reply to neilh:




How about Richard Murphy from the Tax Justice Network?

http://www.taxresearch.org.uk/Blog/2015/07/06/crisis-what-crisis-4/

In reply to Shani:

Well it looks like it's going to be a Grexit anyway.something nobody really wants.

In reply to Shani:

In ten years time , if he is remembered at all, he will be remembered as a figure of ridicule.

In reply to dissonance:

The lending conditions were clear enough to everyone. The Greeks agreed. If , as you say, the conditions were highly unlikely to work then the conclusion must be that the Greeks took the deal expecting to renege on the deal!

That being the case they have only themselves to blame.

If , again as you say, they do not have the means to repay the loan then again they have taken the Loans expecting to renege on the deal.

What other conclusions are you proposing here?

In reply to neilh:

I think their current government does, but won't say it. It's a week since talks ended, they wasted time waiting for a meaningless election, then return to talks after another 2 days with no fresh proposal... Taking the pi..

Time to give them the heave ho on principle.

In reply to jkarran:

I look forward to hearing your solution then!

In reply to RomTheBear:

The now departed Greek Finance minister Varoufakis admitted that Greece was rife with tax avoidance( as well as the rest of Europe) He was quite happy to bluster and bluff at the EU table but when it came to confronting Greek business on this issue , nothing.

In 2012 the Economist estimated that up to €30 billion per year of Taxes going uncollected in Greece alone.

I reiterate , they had the means to repay their debts.

In reply to mgco3:

I don't have one. I wish I did.

That said what is clear to me is that more of the same: uncertainty, ideologically imposed austerity and asset stripping isn't a viable option. A nation stripped of its jobs, services, assets, poor and subservient to foreign treasuries and corporations before its people in perpetuity isn't a stable proposition.

jk

In reply to summo:

They are really odd.. They basically said vote no and we'll get the banks going and get a deal.. The people vote no..

So no what? Ermm well we sort of have no idea..

I do have a lot of pity with them, Germany is being a tw*t right now and as has been pointed out they are only a heavy weight nation because people gave them a chance to rebuild..

In reply to cb294:

I don't disagree with you views on European finance as a whole. I also think that the sooner we are out of the EU the better. We will never fix it and the corruption probably makes FIFA look like a bunch of amateur shoplifters.

That said, the Greeks accepted the deal and new the size and timescales of the repayments.

Not only have they reneged on the original deal they want to borrow more and don't want to accept the conditions.

Whilst I have no love for Merkel et al I would not expect them to hand over more cash to Greece without a repayment plan.

In reply to jkarran:

>A nation stripped of its jobs, services, assets, poor and subservient to foreign treasuries and corporations before its people in perpetuity isn't a stable proposition

Welcome to the UK!

In reply to mgco3:


That all sides are to blame and that all sides deserve a smack. They shouldnt have been allowed in to begin with. The fault lies with the Greek government at the time, their advisors who cooked the books and the EU leaders who happily ignored the fact the books were still hot from the oven.
Oh and then the bankers who happily handed money over without a care in the world (admittedly in their case this seems reasonable since the taxpayer ended up taking the bill from them).

The problem is only one side is being held to account for the incompetence and since most of that side arent responsible they are rightly saying bugger this for a game of soldiers.

As for tax avoidance. Perhaps thats where Greece went wrong. They should propose that they will start undercutting Luxemburg as the tax parasite of Europe. Might not go down to well with the EU chiefs though.

In reply to mgco3:

I don't pretend to understand the intricacies of international economics and am bored by conspiracy theories but I do know a bit about politics and politicians. The behaviour of the Greeks in this have been somewhere between a truculent teenager and and a fanatsist and seems tailored to scupper any deal. I get the impression they actually want to leave the Euro but they know their electorate does not, therefore they have to engineer events so they are thrown out, apparently against their will, and can play the innocent victims of the nasty Germans.

Even given their inexpereince in international negotiations, I can't see any other credible explanation for their tactics. Saying an extension of ELA must do ahead because it is the democratic will of the Greek people and ignoring the views of the voters of other Eurozone countries, who seem heartily fed up of Greece's antics, is disingenuous beyond belief. They cannot honestly believe that even while they are saying it.

Varufakis may be a good professor but he's a lousy diplomat (and this is diplomacy). He never missed an opportunity to alienate the creditors even as he was calling them 'our partners' and his description of Greece's creditors as 'terrorists' was his resignation speech. Either he is stupid (which I don't think he is) or he wanted out. Short of punching Merkel he could not have made it much more clear. It was his grand gesture before flouncing off .

That said, the new guy seems as bad. Turning up at a crisis meeting today with no formal plan but instead producing a few notes scrawled on a pad nicked from the hotel is just taking the Mickey. No one is going to take that seriously. The ministers and their teams who flew in from all over Europe are going to feel their time has been wasted by the Greeks and they are going to be pretty hacked off about it. What have Greece's civil servants been doing in the last few days? Any serious govt would have had two teams working on this, one on a formal plan for the Yes outcome, one for No. Instead it looks like everyone went to the beach.

I can't help feeling the Greeks are pretty close to being shown the door. More and more the briefings and even the on-the-record quotes seem to be saying that ministers and bankers feel they just can't do business with people who behave like this.

In reply to Wiley Coyote:

I'm not sure how I could do business with creditors who keep coming back with a plan that arithmetically cannot work, but would cause immense suffering anyway.

In reply to Wiley Coyote:

I think you assessment of the Greek "attitude" is spot on..

If they are trying to come across as a bunch of amateurs they are doing a damn good job!

If not then perhaps they are trying to pull off some sort of "Oceans Eleven" sting and the rest of the world is being conned big time!!

In reply to mgco3:

Finns are saying 10 % of their budget is being spent on Greece. That is astonishing .

In reply to neilh:


Ashoka Mody from Open Democracy offers a revealing insight in to the politics of what is going on from an IMF perspective.

https://opendemocracy.net/can-europe-make-it/ashoka-mody/in-bad-faith

In reply to Rob Exile Ward:

I think you are right in so far as this is a 5 star cock up created by Eurocrats and politicians who knew Greece did not meet the criteria for joining the Euro but allowed it to happen anyway for political purposes. As a result Greece suddenly found itself in a position to borrow easy money and went on a bit of a bender. When the Pixie-money bubble burst taxpayers in the rest of Europe found themselves left to pick up the pieces and now they are fed up of doing so. Greece is now so deep in the mire and Eurozone taxpayers so exposed to Greek debt there probably is no right answer only somew answers that are worse than others. Both sides want to extricate themselves with the minimum of pain (even though that will still be pretty painful).
If you take the view that we start from where we are which is with Greece virtually, or even actually, bankrupt and the taxpayers of the rest of the Eurozone and the wider world via the IMF being left with the bill, Greece is going to have to go an awful long way - and probably more than it wants or possibly even can after Sunday's referendum - towards meeting the cost before the citizens of those other countries will be persuaded to hand over more cash. Listening to the vox pops from Berlin the general view seems to be that Greece borrowed the money and Greece should pay it back. German voters seem very unwilling to keep propping up a country which they see as having been very profligate in its borrowing, living beyond its means and seemingly wanting to carry on doing so at their expense. Some may argue that politicians need to lead, not follow public opinion but even Merkel, despite often being described as the most powerful politician in Europe, is not a free agent. She leads a coalition and her partners have been talking very tough. At the same time her voters are exasperated with the Greeks and she can't ignore that, even if it means the reputation of the euro taking a knock.
The cynic in me says the Spanish govt, facing a threat from Podemos - their own version of Syriza - would probably be quietly pleased to see Greece suffer so they can warn their voters that they will be in for a dose of the same if they back Podemos. Other govts with Syriza-style parties growing may well feel the same. Politics is a dirty trade.
But I go back to my earlier point, I feel Syriza itself may be trying to engineer its own expulsion from the Euro. Even the referendum seems to have been aimed at that. They may say it gave them a mandate to resist but it also shackled them in how far they can compromise before they would have to resign. The only other explanation for their behaviour is that they are idiots, and that I doubt.

In reply to mgco3:



This is the first thing you've said on here that I agree with. And it was humorous too!

In reply to neilh:
Greece's lenders: who has most to lose?

http://gu.com/p/4ae82?

In reply to mgco3:

I'm not very surprised by some of the economic illiteracy on display here. It is hard to resolve our Newtonian understanding of the world with the quantum level. So it is that it is hard to resolve our view of personal debt with macroeconomics.

Austerity has hit demand. Low productivity, low inflation and low interest rates show that our current economic woes are demand side. Still, some seem side tracked by Greece and particular individuals, rather than the quality of the argument.

Ho hum. Maybe this will reach home.

http://www.thenation.com/article/austerity-has-failed-an-open-letter-from-t...

In reply to mgco3:



You obviously have no idea!

In reply to Shani:

Perhaps I should have entitled the Post "Greek Comedy".

In reply to Roadrunner5:


Eheu! That's the best you have? I could eat a bowl of alphabet soup and shit a better reply than that!

Come back when your IQ gets into double figures

In reply to Shani:


I think it stopped being a purely economic argument - if it ever was one - a long time ago. It is much more of a political argument and even more of one since Syriza's 'Let the people decide' referendum because now 200m (or whatever the exact number is) voters in the rest of the Eurozone feel entitled to their say too. I get the impression that if asked you would find them as 'economically illiterate' as you find UKC to be with a strong preference for not throwing good money after bad and for ditching Greece.

In reply to Shani:






What s/he said!

In reply to mgco3:

There is some good economic comedy on this thread, well it would be funny if the outcome wasn't going to be so dire over the next 18 months. The pain that has been seen in Greece is nothing compared to the disaster and social unrest that will follow.

FWIW my thoughts are that Greece has been on it's way out of the Euro since the election. It is in the interest of the European project for this to happen in a controlled manner, recent grandstanding/ego has not helped the process.

I'd also add that what is happening in China is likely to overshadow the Greek situation in the coming months. In which case a speedy exit, establishing a humanitarian fund and letting devaluation happen quickly is in the interests of the Greek people. If China plays out badly then the IMF, ECB and solvent nations will be focused on keeping their banks above water, Greece would be left to fend for itself, that would be very ugly.

Cheers
LD

In reply to Lurking Dave:

Would agree Chinese markets are currently diving and there is no one else around to bail them out. Global economic collapse, on a massive scale compared to the blip a few years ago. At least Greece has spent lots on defence as it may be needed.

In reply to Shani:

I suspect there are equally as many economists who argue the other way.

The letter openly talks about Greece.It fails to talk about other countrys in the Eurozone which have had to apply the same measures and take the same hits. It fails to talk about other poorer countrys in the Eurozone which will have to subsidise Greece. I heard that yesterday the Finns ( a wealthy country) said 10% of its budget was going to Greece

Therein lies the political quandry.

In reply to neilh:




Finland's exposure is about 2% of Nominal GDP (around Eu.5bn).

http://www.theguardian.com/business/2015/jul/07/greeces-lenders-who-has-the...

So let's get this straight. You are concerned about poorer COUNTRIES in the Eurozone having to subsidise Greece, more so than you are concerned about poorer PEOPLE in Greece who are having to subsidise WEALTHY creditors?

Think about that for a minute.

In reply to Shani:
I am well aware of that. Unfortunately that is an issue with the Eurozone. It is political , not economic.

Its a mess.

In reply to neilh:


Well that is something we CAN agree on. I think the mess was baked-in from the outset.

Thank god we didn't join the Euro - although I fear that Osborne's austerity plan has done real damage to the UK economy

As Chinese money flows back eastwards to plug their own losses from the Chinese stock market crash, we will see a consequent correction in property values over here - particularly high-end investments - as the Chinese sell up in London.

In reply to Shani:

I suspect you well see more Chinese money flowing into London along with Russian money.Its safe here.

Farage gets his say, not sure Tsipras was too impressed.

https://www.youtube.com/watch?v=ai43B588_co&feature=youtu.be

In reply to neilh:

More analysis in why the banking sector is responsible for the Greek situation. As with most economic crime - libor, pensions and insurance miss-selling etc... follow the money.

https://www.foreignaffairs.com/articles/greece/2015-07-07/pain-athens

In reply to Shani:

Osborne's " austerity" plan is not even worth branding as austerity when compared with Greece and others. Mere tinkering at the edges in comparison.

It is an economic, political and social crime, to blame it purely on the " money" via banks is just part of the picture.

In reply to neilh:

It is part of the picture - a massive part (from the article linked above):

"So European banks’ asset footprints (loans and other assets) expanded massively throughout the first decade of the euro, especially into the European periphery. Indeed, according the Bank of International Settlements, by 2010 when the crisis hit, French banks held the equivalent of nearly 465 billion euros in so-called impaired periphery assets, while German banks had 493 billion on their books. Only a small part of those impaired assets were Greek, and here’s the rub: Greece made up two percent of the eurozone in 2010, and Greece’s revised budget deficit that year was 15 percent of the country’s GDP—that’s 0.3 percent of the eurozone’s economy. In other words, the Greek deficit was a rounding error, not a reason to panic. Unless, of course, the folks holding Greek debts, those big banks in the eurozone core, had, over the prior decade, grown to twice the size (in terms of assets) of—and with operational leverage ratios (assets divided by liabilities) twice as high as—their “too big to fail” American counterparts, which they had done. In such an over-levered world, if Greece defaulted, those banks would need to sell other similar sovereign assets to cover the losses.

But all those sell contracts hitting the market at once would trigger a bank run throughout the bond markets of the eurozone that could wipe out core European banks."


One further nugget from the article:

"Of the roughly 230 billion euro disbursed to Greece, it is estimated that only 27 billion went toward keeping the Greek state running. Indeed, by 2013 Greece was running a surplus and did not need such financing. Accordingly, 65 percent of the loans to Greece went straight through Greece to core banks for interest payments, maturing debt, and for domestic bank recapitalization demanded by the lenders. By another accounting, 90 percent of the “loans to Greece” bypassed Greece entirely."

In reply to Shani:
The biggest problem is how the Greeks chose to run their economy. The average Greek was enjoying his cake for the past 20 years, now the bill has arrived.

In reply to summo:

No it is not. Please read the various links to the works of various macro-economists above. You are looking at this through the lens of personal/household debt.

Think of it this way. When the UK opted to recapitalise its banks to the tune of several hundred billion pounds (thus mutualising a debt run up by private financial entities), would you concede that YOU were in some way responsible for the resulting debt and deficit in the UK? As an average UK citizen, would you phrase this as you having enjoyed your cake for the past 20 years?

Are you prepared to say to front-line emergency staff and teachers in the UK that they cannot have a pay rise because they have had their cake for the past 20 years and now the bill has arrived - even though our current problems stem from a BANKING crisis?

In reply to Shani:
The greek public sector has enjoyed disproportionately high salaries, holidays, early retirement, high pensions compared to the rest of Europe. Are you saying that a 61/62 yr olds in the rest of Europe must keep working to bail out their younger now retired Greek counterparts?
And, yes. The UK has also had its cake and over spent massively. The same with other nations and it must also feel some pain to clear the trillion plus it owes.
If a country choses to not balance its budget and borrow, it should plan to repay that money.

In reply to summo:


I will skip to the irony here that your approval of the austerity measures imposed upon Greece has led to 25% unemployment. Youth unemployment hit 56.4 percent last year.

There are barely any jobs available. That is the WHOLE point of my reaction to austerity and this is why Varoufakis is fighting against austerity; our economic problems are demand side, and austerity is killing economic activity - the very thing that will stimulate recovery, fuel employment growth and allow debts to be paid.

You are not reading the links I have provided, that much is obvious.

In reply to mgco3:

You've got a point but to me it seems a bit more complicated..surely there's a difference between the average Greek and Greek banker..

In reply to summo:

Realistically, I doubt that one of the 50% unemployed young Greek voters gives a .... about that.


True, but do you actually think it will happen?

The creditors might not like it, but a sovereign nation can say "screw that" and default. That seems to have been the right thing to do for Argentina.

In reply to mgco3:



I am not sure how austerity imposed by the troika was ever going to fix tax avoidance in Greece. If anything it makes the problem worse as the states becomes unable to function properly.

In reply to Shani:


so are you suggesting it is acceptable for an entire nation to over spend for decades, then have neighbour nations which have been more or less balancing their budgets, bail out the nation that deliberately over spent.

The greek population over spent, early retired, paid less tax than was required. Now their children and grand children must pick up the tab, not the neighbours. If the banner waving greeks on the street want to blame anyone, it's their own parents, business leaders and politicians in their country which THEY voted for.

I think the EU should let them sink, then give aid direct to the people. The worst thing they can do is keep giving money to the government until they agree to change.

In reply to elsewhere:



they can say that, but not if they wish to remain in the EU and the Euro. The choice is theirs.

In reply to summo:
Then what?

We need that area stable.

Bale them out again, get the reforms in, set a manageable repayment plan that allows Greece to grow.

It's quite clearly the only sustainable option.

It's the Greeks fault, the people, the government but the EU is also to blame. We need to get a grip on pensions though. And that means all of us. We have to accept the pensions we all signed up to won't be there.. We can't be in university til 21-23 or so work for 40-45 years and expect another 25 years of good pension money.. It's just unsustainable. With south Europes greying this will happen over and over again unless we change our views on working age and pensions.

In reply to Roadrunner5:
I agree, it's a potential hotbed, or Russia might swoop in.

but they won't accept reforms and won't repay unless some of it is written off, 30%. What about Ireland, Spain, Italy, Portugal..? same for them, that would be quiet substantial?

What if the PII_S want the same though? Either way it will cost, in or out of the Euro. In the Euro is probably open ended and will cost the ECB etc.. forever.


I agree the EU/ECB is to blame, Greece should never have been in the Euro to start with and they won't admit it.

Pensions again I agree. But people just think it's their right to have one, despite paying so little in tax. People need to be taught (or forced) to save for old age, some of that holiday, car, mobile, laptop, booze, cigs... money needs to be banked and not just a few tenners a month.

In reply to summo:

That's the issue in Ireland.. I'm away in Connemara..Those countries who made reforms and paid into Greece are understandably pissed off..

Pensions. You are right people were promised a lot and think they have a right to retire at a relatively early age and live well.. but the money just is not there, we can strike, moan, but we can't just generate the billions needed. At least my generation have time but we also know we'll probably keep working to song extent well into our 70s.

I sub taught last year in the U.S. and it's full of teachers who have retired and work a few days a week to supplement their pension. One guy is in his 80s now, he loves it too..

In reply to summo:

People need to be taught (or forced) to save for old age, some of that holiday, car, mobile, laptop, booze, cigs... money needs to be banked and not just a few tenners a month.


Here we go again..... sigh.

Do yourself a favour, read what Shani posts and hopefully you will realize what a pathetic [non]explanation this is.

In reply to Roadrunner5:

so they should be, Greece is hardly making an effort, it's a week since their last proposal, 3 / 4 days since the mock vote and they've got nothing new on paper, what have they done for the past 9 or 10 days, hit the beach or ouzo? It couldn't be more amateurish if they tried. The only thing they've not produced is a note from mum excusing them from negotiations because of an upset tummy.


it's probably quite good for their health to stay a little active too, not to mention rewarding. Bet you won't catch many teens or 20-somethings with the same outlook though. A little part time job, cut down that student debt, meaning they can start on a pension much younger. I have a relative who just qualified as a pharmacist in the US, cost him over $150k, people moan in the UK, but they don't know how lucky they are.

In reply to mac fae stirling:

do one yourself and read up what the average Greek worker has enjoyed over the past 10, 20,30 years and tell me why the rest of Europe should keep working to pay for their debt? or the Greek politicians, or the greek business folk.

If your neighbour started working part time and climbing every day, would you work a few hours extra to pay for his or her mortgage? After all it would be such a shame if they had to move to sell up, what's a few hours extra to you, just to help your neighbour out? It won't be for long, just a decade or two, until their mortgage is cleared. Unless of course they want to re-mortgage along the way.

In reply to Shani:

It is reckoned that the U.S. Economy lost over a trillion dollars in the sub prime crises. Far more than in Europe.Most of that has been recovered.they took huge hits early on and also recovered.

In reply to neilh:

Guy Verhofstadt speech on YouTube to the EU parliament is quite something. First viral EU speech??

In reply to summo:



http://www.forbes.com/sites/niallmccarthy/2015/03/13/contrary-to-what-most-...

P.s. Since we know you don't read links in case the content does not agree with your own "facts", it is an article with actual numbers that puts the Greeks as the European workers who work the longest hours, and points that the average retirement age is a massive 7 months earlier than their UK counterparts.

The lazy cnuts...

In reply to summo:


Ohh I know why. Its because France and Germany wanted the rest of the EU to bail out their banks for making incompetent decisions.

In reply to dissonance:


I'm no fan of the eu, France or Germany... This is all a disaster of their making and the eu should have gone no further than a straightforward trade agreement.

Links... Anyone can post a link that matches their argument... So generally I allow them limited weight.

In reply to Mr Lopez:


http://www.economist.com/blogs/charlemagne/2010/02/greeces_generous_pension...

this link says the opposite to yours, who is right? truth probably lies in the middle, as it often does. A healthly pinch of salt is required with most stuff, as every writer has their pitch, slant or opinion, which will twist the facts in their direction.

The reality is; if Greece was well run in all respects in the past 5,10,20 years... this thread would not exist, but it does.

In reply to summo:


Maybe. I would say its more the halfway house which was the problem. Either do the job properly in terms of union or not at all. Trying to creep up on it slowly like the Euro is worse of both worlds.

In reply to dissonance:


to have a union you need something, or ideally everything in common, which for many EU or Euro nations doesn't exist.

In reply to RomTheBear:

Austerity alone wasn't going to fix tax avoidance. The Greek government should have tackled tax avoidance. They refused to do this.

If they had done so they would have recouped billions of Euros and , at least, shown the rest of the EU that they were making real attempts to fix their finances.

In reply to mgco3:


Except you can't fix tax avoidance overnight, especially in the case of Greece, this is mostly due to the fact that they have a larger part of the population in self employment and there is no easy fix.
Plus this has been inflated by the international media, yes they have more tax avoidance than average but it still in the same order of magnitude as other EU countries.

In reply to mgco3:


How do you tackle a long standing culture of tax avoidance without serious money to invest in a revenue collection service and what's a reasonable turnaround time from starting to invest to seeing the benefit? Is suddenly removing a big chunk of money from the strained and barely functioning domestic economy to pay foreign creditors actually the right thing to do even if you can? How do you go after the big tax avoiders without the cooperation and assistance of neighboring nations where their money is squirreled away?

jk

In reply to RomTheBear:

Overnight?? They have had 14 years since they joined the EU. They were aware of the problems then as they cooked the books to proved financial figure to the EU!!

Hardly overnight. In 14 years they have made no attempt to fix this hole in their finances and STILL refuse to even try!!!

In reply to summo:


I don't get the relevance of this little homily. I suspect it is part of the fatuous, but endlessly repeated, comparison of households with economies.

In reply to jkarran:

You tackle the problem by introducing competition. For example the very lucrative mobile phone networks have to be licenced to operate within a country. (Other businesses are similarly licenced or given permission to operate within a country's borders)

As a condition of this licence/permission a clear clause is made that governs tax levied on ALL earnings gained within the country. Any deviation or attempt to avoid these payments results in withdrawal of the licence/permission.

Competition for business in any and every field of business is fierce. There will always be a competitor waiting in the wings to take over. Avoid your taxes and you are out!

In reply to mgco3:


?? No attempt ? what a joke, in the five years of austerity they reduced their deficit at a faster rate than any other EU country. It obviously didn't help fixing their economy and made the situation worse.
Time to realise that they need either debt forgiveness or a default, either way it's ridiculous to ask them to pay these unsustainable debts given that France, Germany or the UK have never repaid their debts in the past when they were in the same situation.

In reply to mac fae stirling:


no I didn't think you would, if you won't pay your neighbours mortgage where you live, why should a country pay off another's debt ,despite that country having decades to make the changes it needed to it's economic and tax collection systems.

There is little difference, people in the UK and pretty much all of Europe are working up to age 65,66,67... and beyond etc.. they pay tax... should a proportion of their tax that goes to the EU be used to assist a country that refuses to even move it's retirement age up to 65?

Even after 10 days since the last proposal, refused or unable to pay the IMF last week, it's probably the most important period in Greece's recent history, life changing for the people there and future generations.... yet their current politicians, which the people voted for, haven't come forward with any new or meaningful offerings. It's just staggering, I can only presume they wish to exit, but don't want to actually say it. The effort they are making is minimal, no wonder many European leaders have given up and simply wish them to go, their patience is has worn out.

In reply to RomTheBear:


same for Ireland, do they get some cash back in lieu? Spain, Italy, Portugal, Cyprus.. all those savers in Cyprus who had money taken direct from their banks, they must be due some refunds too?

In reply to summo:



This really is a fake argument this pension age, they do indeed retire earlier but overall the Greeks work a lot more over their lives than the average German, simply because they work longer hours, the average Greek still works over 15% longer than the average German over his/her life despite retiring earlier.

In reply to RomTheBear:

I reiterate , the "no attempt to fix this hole in their finances" expressly referred to TAX AVOIDANCE!! Not to other measures that they have implemented.

In reply to summo:

if you won't pay your neighbours mortgage where you live, why should a country pay off another's debt

I just don't think there is any meaningful comparison to be made between these 2 things.

In reply to summo:


The problem is that you are comparing apple and oranges, the Portuguese, Cypriot, and Irish situation are all very different from each other and from the Greek situation.
They could take all the deposits in Greek banks and it still wouldn't fix very much of the problem.

In reply to mgco3:


This is a lie or ignorance.

If you had read my links above you would be aware that Varoufakis made proposals to the EU around tax and financial transparency that were rejected. Varoufakis questioned how he was to find and tax illicit offshore GREEK money if the countries hiding it wouldn't give him appropriate access to their financial records.

In reply to RomTheBear:


trying telling that to the residents of each country who have suffered whilst their respective governments have got a grip of things, or at least try.

In reply to RomTheBear:


so given the UK obsession with UK workers on salaries putting in 50,60,70 hrs weeks when in their 20s and 30s, to simply 'get on' within the a company, because it's the culture, perhaps the UK should lower it's age to 63 too? Maybe the French with their shorter working week will pay for it?

In reply to summo:

With 50% youth unemployment and an economic contraction of 25% because of austerity, retirement isn't really that pressing issue of the moment.

In reply to summo:

No because this seems to be largely a myth, or limited to certain sectors. On the aggregate we work less hours, about 36.3 hours a week in the UK on average compared to 42.2 per week in Greece.

In reply to summo:
>yet their current politicians, which the people voted for, haven't come forward with any new or meaningful offerings. It's just staggering, I can only presume they wish to exit, but don't want to actually say it. The effort they are making is minimal, no wonder many European leaders have given up and simply wish them to go, their patience is has worn out.

This read like some kind facile analysis you would get from reading The Mail or The Express.

Which of Syriza's policies/propositions did you find lacked meaning?

In reply to summo:

It doesn't really change the hard fact that the Greek situation is totally different and harsh austerity is clearly not working in Greece, they've have tried for 5 years and failed spectacularly.
If we want Greece to repay their debt they need to have a realistic recovery plan based on an extension of the loan repayment, and reasonable primary surplus. I am not sure how crashing their economy and forcing them to default is helping the Portuguese or Cypriots. I am not sure how losing everything in a Greek default, and end up having to supply humanitarian aid, is better for anybody than allowing them more time and margin to repay.

In reply to RomTheBear:



Exactly... we can punish them all we want but we won't get any money back without helping them to get back on their feet. The Germans should know this more than anyone.

In reply to Shani:



anything they've produced in the past 10 days since they announced a vote on an EU proposal, that didn't exist by the time of the vote anyway. Oh, hang on, since defaulting on the payment to the IMF last Tuesday, they have not produced anything new!?

Is that really the way to get your country out of the mess it's in. Or the rather comical notes written the free hotel paper, you couldn't make this stuff up if you tried.

In reply to RomTheBear:


so, if we believe you and shani;

Greeks work more hours that anyone else,
They pay their taxes,
they don't retire early..

Why are they up $hit creek without a paddle?

Don't tell me, it's all the bankers fault?

In reply to RomTheBear:


To me, the only deal left on the table, is Greece agrees to pay the full amount over longer terms and they get to reduce the austerity a little, but they have to agree to get a grip of their failings as well, otherwise the problem will repeat in a few years. The UK paid back it's WW2 loans over half a century, there is no excuse for not clearing the money THEY chose to borrow.

In reply to summo:

Ok, so let's take the policies that Syriza formulated in the months and years in opposition, and which they were only able to present to the EU once they gained power back in January (and on which they were able to negotiate about in the following six months).

So which of the policies Syriza have formulated over the past year and presented over the past six months do you think 'lacked meaning'?

I would just like to add that Syriza's analysis on the need for debt relief was spot-on in as much as the IMF (belatedly) agreed with it.

In reply to summo:

Bloomberg on Grexit: "A meaningful debt-reduction agreement and the assurance of European Central Bank support for the banking system could still avoid that result."

Sobering read. http://www.bloombergview.com/articles/2015-07-09/what-greece-can-expect

"Despite everything, avoiding a break from the euro would serve Europe's interests, too. The direct cost to the creditors of outright default would be upward of 200 billion euros; the cost of further debt restructuring would be far less. What's more, a dismantling of the euro system would set a bad, destabilizing precedent for the next crisis. And geopolitics point the same way: The last thing Europe needs in its southeastern corner is a new zone of instability and disorder."

And here: http://www.bloombergview.com/articles/2015-07-06/can-greece-rescue-itself-

In reply to summo:


The problem is that you seem to make it a moral point that Greeks should suffer more than it is necessary for the bad decisions their government and the French/German banks have made, this whole issue has been managed by politicians trying to please the German and French voters instead of pragmatic economic thinking, now we are in a situation where the potential losses have been increased for everybody because of this.

Personally I don't really care much about the mistake the Greek or their government have made in the past, if debt forgiveness or restructuring will provide a better outcome for everybody than harsh austerity that can only lead to further depression and total default, then it's what we should do.

In reply to RomTheBear:



I agree, it would be infinitely better for the Greek people to continue throwing more money at them, but nothing will change in Greece, it will simply be ground hog year, next time the big payments are due.

Whilst the Euro will destabilise a little with grexit, it would nothing compared to if the nations want debt reduction, Spain has it's big elections next, what would have if an anti austerity party won there, or even got a fair percentage.

Or, if Spain, Ireland, Prtugal, Italy presented a united from towards the EU on debt reduction?

In reply to summo:






Well it kind of is, they definitely made very bad decisions investing for such low rates in a country that already had too much debt for a long time and so many structural problems with its huge public sector.

In reply to Shani:

there are plenty of quotes that say it will cost the same either way in or out, but at least with out the costs are limited by the debts value.

Even if you waved a magic wand and cleared all their debt. Leave Greece alone and still in the euro for a decade and it will have mountains of debt again.

In reply to RomTheBear:


So if a person defaults on a loan it's the lenders fault, not the borrowers?

In reply to summo:



Really? Then the lenders involved would be grossly incompetent and guilty of negligence.

In reply to Shani:

Ok, what do you think should happen?

How do you prevent the fall out to other PI_GS nations?

How do you force Greece to make the changes it needs to, it won't do it now when it's people could starve in a matter weeks, so if you write off the debt it's not going to change either.

In reply to summo:


That depends why they have to default and what the lender knew when making the loan.

jk

In reply to summo:

It all depends why the default happen, but frankly who cares at this point whose fault it is ? What matters is that we minimise the damage for both parties.
Surely forcing the Greeks to default and the creditors losing everything is a much worse option than forgiving and restructuring some of their debt. It would be really stupid to shoot ourself in the foot just for the sake of punishing the Greek people for mistakes politicians in their previous governments have done.

In reply to RomTheBear:

It does matter why it has happened, because it will be used as the basis of an argument for other Euro nations have their debts written off too.

It also matters because they need to change things to prevent it happening in the future, regardless of if they are in Euro or New Drachmas... they've tried head in the sand, calling bluffs... it doesn't pay the bills.

Or as the saying goes, you can only help those who are willing to help themselves.