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Should Greece receive a Bail out?

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  • Should Greece receive a Bail out?

    There seems to be support growing in Brussels for some kinda economic Greek bailout to support their scandalous deficit. The Euros tumbled against the £ recently as a result of Greeks politicians repeatedly fixing the statistics to show the deficit was lower than it actually is.

    But a bail out would be rewarding this behavior. Should the rest of the euro zone be made to suffer because of the incompetence of Greek politicians?

    After all the Other struggling economies like Ireland and Latvia received no such help and recently passed extremely auster budgets, slashing pay and benefits to pay for the recession. Meanwhile Greece passes a populist budget that INCREASES spending.

    Obviously its unthinkable that a euro-zone country should have to go to the IMF, but this sets a terrible precedent. What incentive do other countries have to be fiscally responsible?

  • #2
    Originally posted by zara View Post
    There seems to be support growing in Brussels for some kinda economic Greek bailout to support their scandalous deficit. The Euros tumbled against the £ recently as a result of Greeks politicians repeatedly fixing the statistics to show the deficit was lower than it actually is.

    But a bail out would be rewarding this behavior. Should the rest of the euro zone be made to suffer because of the incompetence of Greek politicians?

    After all the Other struggling economies like Ireland and Latvia received no such help and recently passed extremely auster budgets, slashing pay and benefits to pay for the recession. Meanwhile Greece passes a populist budget that INCREASES spending.

    Obviously its unthinkable that a euro-zone country should have to go to the IMF, but this sets a terrible precedent. What incentive do other countries have to be fiscally responsible?
    No - the reality should be Greece cutting spending, or raising taxes (realistically both) by itself unless absolute meltdown occurs, if that happens negotiate a package with the EU, a loan if you will, with interest on top.

    Remind them if they can't do that, the IMF are coming to wreck their economy with neoliberalism.

    Politics is the art of persuasion after all and I know which I'd prefer.
    Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative.
    - John Stuart Mill.

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    • #3
      Wow, you can replace "Greece" with "California" and "Brussels" with "Washington" and the story can print right here in my local newspaper without missing a beat.
      "Only Nixon can go to China." -- Old Vulcan proverb.

      Comment


      • #4
        Originally posted by gunnut View Post
        Wow, you can replace "Greece" with "California" and "Brussels" with "Washington" and the story can print right here in my local newspaper without missing a beat.
        Be careful what you wish for buddy... Greek politicians are somewhat 'special'.

        It would actually be an improvement for the commiefornia lot to come over and run Greece.
        The best part of repentance is the sin

        Comment


        • #5
          Originally posted by chakos View Post
          Be careful what you wish for buddy... Greek politicians are somewhat 'special'.

          It would actually be an improvement for the commiefornia lot to come over and run Greece.
          πρόεδρος Arnie:))

          Comment


          • #6
            Originally posted by zara View Post
            There seems to be support growing in Brussels for some kinda economic Greek bailout to support their scandalous deficit. The Euros tumbled against the £ recently as a result of Greeks politicians repeatedly fixing the statistics to show the deficit was lower than it actually is.

            But a bail out would be rewarding this behavior. Should the rest of the euro zone be made to suffer because of the incompetence of Greek politicians?

            After all the Other struggling economies like Ireland and Latvia received no such help and recently passed extremely auster budgets, slashing pay and benefits to pay for the recession. Meanwhile Greece passes a populist budget that INCREASES spending.

            Obviously its unthinkable that a euro-zone country should have to go to the IMF, but this sets a terrible precedent. What incentive do other countries have to be fiscally responsible?
            The money will come with strings attached. It'll have to, otherwise there will be no fiscal respect worldwide for the euro, which they will need if they want to become a widely-used reserve currency a la the dollar. But how will Greek citizens react to having their domestic economy and pensions and taxes and civil service curtailed by fellow Eurozone members? It was just a month ago when some militants, supposedly due to proposed budget cuts, blew up a bomb in front of the Greek Parliament building. This is one bit of sovereignty they've lost and the Greeks will be the first to experience it.

            Zara, this blogger has been covering the European economy problems really well. Here's his latest article from this past Sunday: Greek Bailout News (1) | afoe | A Fistful of Euros | European Opinion

            EU Commission “Ups the Ante”

            So now lets turn to Plan A, and to that normal analytical document Señor Almunia refers to, which is due to be discussed by the Commission on Wednesday. Fortunately, the Greek web portal Ta Enea have seen the document, and Reuters have provided us with a convenient English language version of what they saw. What the Ta Enea report makes clear, is that the reason Greek Prime Minister Papandreou has not asked the EU for a “bailout loan” is connected to the conditions which would be attached to that loan. According to the reports, the EU Commission plan to go a lot further than simply providing short term funding on the cheap:

            The European Union will tell Greece next week to take extra measures by May 15 to shore up its finances and cut a spiralling deficit, Greek newspaper Ta Nea said Saturday, citing a draft of the recommendations. The European Commission’s recommendations, due to be made public on February 3, include cutting nominal wages in the public sector and setting a ceiling for high pensions, Ta Nea said.

            Under the headline “Urgent measures to be taken by 15 May 2010,” the EU document will tell Greece to “cut average nominal wages, including in central government, local governments, state agencies and other public institutions.” The EU will also urge Greece to introduce advance tax payments for the self-employed and possibly a tax on luxury goods, according to the document, excerpts of which were printed by Ta Nea. Most other recommendations, as reported in the paper, are already part of the Greek plan.
            Reports also mention putting a complete freeze on public sector hiring, and a system of monthly reports to the Commission along the lines of the Latvian programme. What this effectively amounts to is enforcing the implementation of an internal devaluation process along the lines of the ones adopted in Ireland and Latvia, as outlined in the most recent technical report to the commission (see here), in order to restore competitiveness to the economy and make Greek debt sustainable in the long run. It also amounts to an effective surrendering of part of Greece’s national sovereignty to the EU Commission, and this is the part that virtually everyone is doubtless baulking at.
            Last edited by rj1; 03 Feb 10,, 01:10.

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            • #7
              Originally posted by dave lukins View Post
              πρόεδρος Arnie:))
              Oh god no

              How about we give them Governor Papandreou instead ;)
              The best part of repentance is the sin

              Comment


              • #8
                Originally posted by chakos View Post
                Oh god no

                How about we give them Governor Papandreou instead ;)
                Fair exchange no robbery ;) but remember this:.."I'm not into politics, I'm into survival" –in "The Running Man"

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                • #9
                  I find it hilarious that the economies of the two Hellenic countries are so vastly different.

                  Greece has a terrible economy, going down the gurgler and led by populist governments.

                  Cyprus on the other hand, even though its only half an island currently with a very large defence expenditure for its size still manages an excellent economy with one of the lowest tax regimes in all of Europe. Even though its led by a Communist (in name only) party.
                  The best part of repentance is the sin

                  Comment


                  • #10
                    Originally posted by gunnut View Post
                    Wow, you can replace "Greece" with "California" and "Brussels" with "Washington" and the story can print right here in my local newspaper without missing a beat.
                    So what happened in California? Did they get a bail-out? Where there conditions attached?

                    I suppose the USA must have encountered this sort of thing before with irresponsible states. I presume you must have mechanisms to deal with it?

                    Comment


                    • #11
                      Sounds like they got the message!

                      Greece's public debt stands at about 300bn euros

                      Greek Prime Minister George Papandreou has announced tough austerity measures aimed at cutting his country's soaring public debt.
                      Mr Papandreou said a public sector pay freeze and fuel duty increases were essential because the economic crisis was propelling Greece towards a cliff.
                      He said the EU was pressuring him to curb the budget deficit, which is four times higher than the 3% permitted.
                      The European Commission will meet later on Wednesday to consider his measures.
                      Earlier, one of the principal architects of the euro warned against any financial rescue of Greece, saying it could destabilise the currency.
                      The German economist Otmar Issing told the BBC that after years of violating rules and cheating on its statistics, Greece had to reform its own economy without a bailout from Brussels.


                      Austerity will be a hard sell - many on the left will fight cuts and wage freezes
                      Gavin Hewitt
                      BBC Europe editor

                      Read more in Gavin's blog
                      "These reforms which are needed will be blood and tears... but without that, Greece will never overcome the difficulties," he said.
                      'Unprecedented crisis'
                      In a televised address on Tuesday, Mr Papandreou urged the public and his political rivals to support his austerity programme.
                      "This is an effort to stop the country's course towards the cliff," he said.
                      "Our country is at the centre of a speculative attack. It is being treated as the weak link of the Eurozone.
                      "We must act in an imminent and efficient manner and it is for that reason that I called on the political parties to support this national effort," he added.

                      A deficit of such a magnitude must be decisively corrected
                      Jose Manuel Barroso,
                      European Commission president

                      Greece 'should not get bail-out'
                      The prime minister said tough measures were needed in the face of such an "unprecedented crisis", including a 10% cut in wages and spending in the public sector, a higher retirement age and an increase in fuel prices.
                      He also pledged to go after tax evaders and said those who could afford to pay more would be forced to do so.
                      "The time has come to take brave decisions here too in Greece as others have done in European Union countries," Mr Papandreou said.
                      Strikes
                      BBC Europe editor Gavin Hewitt, who is in Athens, says the view of the European Union is that the Greek plan is risky but achievable.
                      The bloc is likely to offer its support, but on the condition that Greece accepts outside scrutiny of its accounts, he says.

                      Farmers are already blocking major roads in a bid to get state financial aid
                      "A deficit of such a magnitude must be decisively corrected. Moreover, the government debt in Greece is excessively high," European Commission President Jose Manuel Barroso told reporters.
                      EU rules state that no nation in the euro bloc should have an annual budget deficit which is higher than 3% of its gross domestic product.
                      Greece's public debt stands at about 300bn euros ($419bn, £259bn). The government aims to shrink public debt to 9.1% of overall economic output this year, down from 12.7% last year.
                      Our correspondent says the first challenge for the austerity package may come on the streets, with public sector workers planning a strike next week.
                      "The government's policies are clearly aimed exclusively at raising money and once again lay the burden on those who have been exploited for years - workers and pensioners," Ilias Iliopoulos, general secretary of the civil servants' union, told the Associated Press news agency. "These policies will lead nowhere."
                      Farmers are already blocking major roads across the country in a bid to get financial help from the government, which has so far refused.
                      bbc

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                      • #12
                        That's what you get for hosting an Olympics!

                        But really, nowadays there's no such thing as a debt problem. Just print money like they do in the USA or Canada. Then re-jig the inflation numbers "hedonically." Economics is so easy! There's nothing that Benny Boy can't fix with his Magic Helicopter!
                        Last edited by cape_royds; 05 Feb 10,, 04:26.

                        Comment


                        • #13
                          Originally posted by zara View Post
                          There seems to be support growing in Brussels for some kinda economic Greek bailout to support their scandalous deficit. The Euros tumbled against the £ recently as a result of Greeks politicians repeatedly fixing the statistics to show the deficit was lower than it actually is.

                          But a bail out would be rewarding this behavior. Should the rest of the euro zone be made to suffer because of the incompetence of Greek politicians?

                          After all the Other struggling economies like Ireland and Latvia received no such help and recently passed extremely auster budgets, slashing pay and benefits to pay for the recession. Meanwhile Greece passes a populist budget that INCREASES spending.

                          Obviously its unthinkable that a euro-zone country should have to go to the IMF, but this sets a terrible precedent. What incentive do other countries have to be fiscally responsible?
                          Not that it has been a shooting war, or even an honest disagreement among friends; but should Turkey be allowed into the EU? Someone has to be paid off, and the Greeks have their skeletons in the closet, as do the Turks. Such is the price of peace...

                          heck, I don't really know, but don't go throwing the blame into the Grecian lap seems awfully shortsighted...

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                          • #14
                            but should Turkey be allowed into the EU? Someone has to be paid off, and the Greeks have their skeletons in the closet, as do the Turks. Such is the price of peace...
                            Sir, how the economic blunder of populist greek politicians relate with Turkey's EU bid?

                            Comment


                            • #15
                              Originally posted by TTL View Post
                              Sir, how the economic blunder of populist greek politicians relate with Turkey's EU bid?
                              I think it has to do with the economic support EU is going to provide to any country that achieves ascension in EU. Be it Turkey, Albania, Croatia or F.Y.R.O.M. Given the current situation of Greece, Portugal, Spain and Italy, some countries may seem as a gamble at this point (and I don't say that Turkey IS such a gamble, as far as I know Turkey's economy is on the rise)

                              I guess the bigger the country the larger the economic support it requires (or so people think). And you can't find a bigger candidate country than Turkey.


                              At least I think this is what Pate says...

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