Greece economic woes worsen as IMF says greece should have left Eurozone

[Slant]

Which is exactly why austerity fails and exactly why Greece keeps struggling to repay. We get loans to repay loans and the people giving us the loans give them with precondition that more austerity measures are needed.

The best part is that people are flaming Greece and Greeks for trying to repay all that shit even with austerity. We never said "screw this we go bankrupt and you can kiss your money goodbye". We pay back no matter what but obviously it's a no brainier that the more companies shutdown the more people get unemployed the less we can do to repay. If I don't make money you don't get money. And even if I die you still don't get your money. Very simple.

That is exactly what Varoufakis has proposed.

[Pua]

One of the weirdest parts of the financial crisis and ensuing fallout for me was seeing this prevailing trend of people and countries that took loans that they couldn't pay back became the victims in the eyes of many. This, to me, runs almost exactly counter to reality - people and countries that take loans that they can't pay back aren't the victims, they're the villains.

I find it's less convenient to consider why those loans were issued to a country that had no hope of paying them back; something that your comment doesn't consider.

[Deleted]

hey, I remember when a lot of politicians promised they wouldnt help greece a second time.. and then they all did.

[Flarelaine]

What game do you refer to? What is it worth when a winner also requires a loser? What larger pie? Nothing got better all got worse - do you know the current unequal statistics? You think that is fair or justified in any means? What you write makes no sense it's contradicting itself with your very last sentence. Read some social science literature, you will quickly see what this is about. You can even read Adam's neo-liberalism vision and see why this failed. I am speechless how ignorant people are who live on cost on so many other people and yet think they are the good people... Terrible.

For German speakers I recommend reading P.M. - Subcoma - a fantastic read and you will get a very clear picture of what is wrong and how we can deal with it.

I fear you failed to take your time to comprehend what I wrote. Admittedly, I did not approach the problem from a social science viewpoint. I did not even comment on fairness. I was proposing some basic math instead.

If country A had an economy of 1000 wealth units last year and it has 1001 this year, someone became 1 unit wealthier. Or maybe 3 people gained 1 unit while 2 lost 1 each, but the total wealth possessed actually grew. This is called growth.

If there is no growth, people can only gain wealth units at someone else's detriment.

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"Economic completion" must be a new term in Germany for the companies that habitually violate articles 81 and 83 of the Treaty of the EU. But I guess it's a step forward from the term "Final Solution" right?

The funny thing is that you quote those articles while proposing that Germany should limit or control production, markets, technical development, or investment - exactly what is forbidden by Article 81, 1 (b).

At any rate, if you feel those companies violate the articles, go ahead and report them. Or sue them. Whichever floats your boat.

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I find it's less convenient to consider why those loans were issued to a country that had no hope of paying them back; something that your comment doesn't consider.

Greece had been cooking the books for years before the scandal broke. Someone giving them loans could have been doing that in good faith if they relied on official data.

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Which is exactly why austerity fails and exactly why Greece keeps struggling to repay. We get loans to repay loans and the people giving us the loans give them with precondition that more austerity measures are needed.

Oh, I'm not saying austerity is the way out. In fact it probably isn't. But flaming Germany for sound economic policies is laughable. Their politicians have a mandate from the Germans to guarantee their welfare, not the Greeks'.

[Slant]

I find it's less convenient to consider why those loans were issued to a country that had no hope of paying them back; something that your comment doesn't consider.

Obviously, because they lied to the lender? That's usually how they get the money. Hence the villain part of the equation. Do you think banks make a habit of lending to people that have no chance at repaying? That only happens in the US with corrupt reinsurance companies trying to make a quick buck on the back of the people. 2008 would like to say hello at this point.

[Pua]

Greece had been cooking the books for years before the scandal broke. Someone giving them loans could have been doing that in good faith if they relied on official data.

How many lenders don't do proper due diligence before actually lending?

[Slant]

How many lenders don't do proper due diligence before actually lending?

Due diligence is a) a good title to sell books and b) harshly limited by the available data. So unless you're suggesting that anyone lending to a country should get access to non-public, nay quite probably classified information about the country's budget, due diligence is just as good as the data you have at hand.

[Deleted]

I love how mad you are over that avatar thing. I'm starting to think I have really hit a sweet spot there. Its funny though I had never seen a dog behave like a rat. You must have really weird parents.

mad? you're the one obsessed with my avatar. its now the FOURTH time you mention the dog. you just made that shit up. and keep hitting the sweet spot ROFL!
YOU GOT ME! you got my sweet spot. i got more than one ^_^

you're a big sack of shit and thank you for proving my point.

[Ettan]

The Eu has to die.

[d00mGuArD]

That's just a ridiculously stupid thing to say, the EU has no control of what the individual countries vote about - that referendums aren't followed has nothing to do with the EU but the country that had the referendum.

In 2005 French and Dutch voted in referendum against the creation of a EU constitution. EU worked around that and made all the things that were voted against anyway, but called it the Lisbon Treaty instead of the EU constitution. I call that "disregard or work around" yes.

[alexw]

You blame Germany for a trade surplus. If you ran a business, would you strive to make a profit? If you ran a government, would you accept a deficit to help other countries?

Germany can run a trade surplus because people actually buy their stuff despite the fact that they are more expensive than competing products. Deal with it.

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So what do you expect Germany to do? Should the government regulate German companies to make them artificially unsuccessful?

Err lol, a household or business is not the same thing as a nation. You are treating them as economically equivalent. They are NOT, not in any shape, form, or fashion. This is an extremely common misconception among average people who don't understand macro-economics, and its exactly the sort of thinking that created and is prolonging European economic dysfunction.

There is no such thing as a nation making a profit. All a country does when it exports more than it imports is reduce the current living standards of its own people in order to make claims against another nations economic output in the future that likely won't ever be paid back.

And no Germany is not running a trade surplus because Germany makes stuff people want to buy. That's economic illiteracy as I've already said, and it is. If you sell lots of things to other nations that merely gives you the opportunity to buy lots of things from other nations to raise the living standards of your own people. So Germans can buy more French wines, they can take more holidays in Greece, they can buy more German cars who's parts are made all across Europe. However if you manipulate your economy to hold down German wages (which is what Germany has done, German real wages are roughly at mid-1990's levels), you end up running a trade surplus with all the negative ill effects I've previously mentioned.

[Glorious Leader]

How many lenders don't do proper due diligence before actually lending?

Goldman sachs was paid a healthy sum to help them

[Deleted]

However if you manipulate your economy to hold down German wages (which is what Germany has done, German real wages are roughly at mid-1990's levels), you end up running a trade surplus with all the negative ill effects I've previously mentioned.

So what are you saying, that Greece shall lower there real wages like the Germans?

[alexw]

So what are you saying, that Greece shall lower there real wages like the Germans?

That's what Germany is currently forcing Greece to do, yes. In essence to do what Germany did to Greece, to someone else. Now you should be able to see the lunacy of that, we already have a basket case economy in Greece, and yet Germany is trying to force Greece to turn someone else into a basket case economy in turn (though in reality Germany is trying to force every other deficit nation in Europe to also run trade surpluses, which is impossible, hence the end result is system wide stagnation across all of Europe with respect to its potential. Germany really is a menace to the rest of Europe but very few understand that, and those that do are hesitant to speak out because of the political implications).

The other point to mention is that what Germany did to itself was during a period of significant world growth and expansion. It was easy for it to hold back internal growth when it had all its growing neighbors to leech from in terms of economic demand. Its a whole other story trying to do it now in a demand deficit world.

[Flarelaine]

There is no such thing as a nation making a profit. All a country does when it exports more than it imports is reduce the current living standards of its own people in order to make claims against another nations economic output in the future that likely won't ever be paid back.

And no Germany is not running a trade surplus because Germany makes stuff people want to buy. That's economic illiteracy as I've already said, and it is. If you sell lots of things to other nations that merely gives you the opportunity to buy lots of things from other nations to raise the living standards of your own people. So Germans can buy more French wines, they can take more holidays in Greece, they can buy more German cars who's parts are made all across Europe. However if you manipulate your economy to hold down German wages (which is what Germany has done, German real wages are roughly at mid-1990's levels), you end up running a trade surplus with all the negative ill effects I've previously mentioned.

Lol! Hey @Slant, you hear that? You're being ripped off!

Seriously though... all right, I got that far without laughing. Selling more stuff than you buy gives you more money. How is that reducing living standards?

[Slant]

Lol! Hey @Slant, you hear that? You're being ripped off!

Seriously though... all right, I got that far without laughing. Selling more stuff than you buy gives you more money. How is that reducing living standards?

We know we're being ripped off. We still prefer stable, average salary to a high salary economy and being unemployed. Funny how life goes.

However, I'm not sure if he understands economics. If we had high salaries all around with our current level of unemployment, we'd have even more surplus and our money cycle would run even faster. Not sure what he's trying to accomplish with more salary. Companies would compensate by selling even more shit, since people got more money. You can't just go and manipulate numbers until you happen to come across a solution. There's a bit more to it than calling anything "illiterate economic arguments" that isn't shat out of some theoretical economics professor's arse.

[alexw]

Lol! Hey @Slant, you hear that? You're being ripped off!

Seriously though... all right, I got that far without laughing. Selling more stuff than you buy gives you more money. How is that reducing living standards?

A nation is only able to sell more than it buys by holding down the incomes of its citizenry. That is how trade surpluses work. You hold down the incomes of your citizenry in one way or another, which both increases the price competitiveness of what you are selling (via holding down wages), as well depriving those workers of the means to buy more things themselves, something which would automatically rectify the trade imbalance.

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We know we're being ripped off. We still prefer stable, average salary to a high salary economy and being unemployed. Funny how life goes.

However, I'm not sure if he understands economics. If we had high salaries all around with our current level of unemployment, we'd have even more surplus and our money cycle would run even faster. Not sure what he's trying to accomplish with more salary. Companies would compensate by selling even more shit, since people got more money. You can't just go and manipulate numbers until you happen to come across a solution. There's a bit more to it than calling anything "illiterate economic arguments" that isn't shat out of some theoretical economics professor's arse.

This doesn't make sense.

Higher salaries would lower the price competitiveness of German made goods so while you would see a rise in wages and consumption, it would be met by an increase in imports to meet that increase in demand for "stuff". Moreover, when you run a trade surplus you typically "export" unemployment (as seen in Spain, Greece, etc) while lowering your own rates of unemployment. However its still a bad trade off for the average worker, as 2-3% higher average unemployment is better than everyone have wages suppressed by 10-20%.

[Slant]

This doesn't make sense.

Higher salaries would lower the price competitiveness of German made goods so while you would see a rise in wages and consumption, it would be met by an increase in imports to meet that increase in demand for "stuff". Moreover, when you run a trade surplus you typically "export" unemployment (as seen in Spain, Greece, etc) while lowering your own rates of unemployment. However its still a bad trade off for the average worker, as 2-3% higher average unemployment is better than everyone have wages suppressed by 10-20%.

You still don't get it. German products are already in the top tier price segment. People don't buy them, because they want good deals or because they look fancy. They buy them, because they work. And in some areas, because there just isn't an alternative. I have brought up the example of the tunneller. We're one of maybe 3 nations producing a tunneler that can tunnel through basically anything and have a tube big enough for a two lane road or railway to go through. The market isn't big enough and we got the top products. Connected to that, you have an industry of one or two companies building parts for the tunneller's head, a rather complicated piece of machinery.

Your economic theory doesn't apply to those. I could go on with environmental tech, in which we're one of the leading nations in R&D, again, not many alternatives in those rather specialised fields. Then you have a shitton of chemical patents that Germany still profits from. A car industry that, even with all its problems, still belongs firmly to the top three car producing nations. I could go on and on... Germany has long ago decided that natural resources won't last forever, and we have specialised into high tech industry and services as the future of Germany. So far we're doing good, while other nations still largely depend on tourism, which is a flimsy business as any economic can tell you, or agriculture.. which really is a shite pillar to build your economy on if that's all you have.

So no, lowering the price won't happen. Higher salaries would lead to higher prices straight up. And we'd still sell our shit. Because Germany doesn't believe in just lowering the price for competetiveness. Germany is a strong believer in simply selling the better product. And the result pays off. I have tried this little game with someone from the UK on this forum, and thankfully he was an honest dude. I asked him which German made products he had in his household and he immediately came back with a couple, mostly kitchen appliances. And I looked around my household and found one thing from the UK. A simple leather wallet that I think cost me 10 quid in London.

That's it. And that's what all your economic theory doesn't solve. You can shift the blame to Germany all you like, but we won't start manipulating our own, rather delicate and intricate and above all, functioning economy with wild theories that may or may not fuck up the entire German economy just because some academic tells us we should spend more or somehow fuck our own trade surplus up. Even if we could do it. And the things we buy from abroad, I'm thinking of computer hardware and other electronics here, we buy from either the US or SEA.

Tell me, which Greek technological gadget do you think I should buy? Or Italian? Or Spanish? Go ahead, impress me and see if you can motivate me to buy something from those countries.

Also, lol for telling me we should suffer more unemployment by artificially raising wages just so Greeks can have a better life. Are you for real? You'd want to put millions of jobs on the line in Germany only to trust the Greek Government not to steal from their own people? Yeah, fat chance that's going to happen. Any politician doing anything remotely along that line will be finished for good in politics.

[Deleted]

This doesn't make sense.

Higher salaries would lower the price competitiveness of German made goods so while you would see a rise in wages and consumption, it would be met by an increase in imports to meet that increase in demand for "stuff". Moreover, when you run a trade surplus you typically "export" unemployment (as seen in Spain, Greece, etc) while lowering your own rates of unemployment. However its still a bad trade off for the average worker, as 2-3% higher average unemployment is better than everyone have wages suppressed by 10-20%.

That's one of the basic tenets of economy, but the poster you quoted doesn't exactly has a history of making sense.

[alexw]

You still don't get it. German products are already in the top tier price segment. People don't buy them, because they want good deals or because they look fancy. They buy them, because they work. And in some areas, because there just isn't an alternative. I have brought up the example of the tunneller. We're one of maybe 3 nations producing a tunneler that can tunnel through basically anything and have a tube big enough for a two lane road or railway to go through. The market isn't big enough and we got the top products. Connected to that, you have an industry of one or two companies building parts for the tunneller's head, a rather complicated piece of machinery.

Your economic theory doesn't apply to those. I could go on with environmental tech, in which we're one of the leading nations in R&D, again, not many alternatives in those rather specialised fields. Then you have a shitton of chemical patents that Germany still profits from. A car industry that, even with all its problems, still belongs firmly to the top three car producing nations. I could go on and on... Germany has long ago decided that natural resources won't last forever, and we have specialised into high tech industry and services as the future of Germany. So far we're doing good, while other nations still largely depend on tourism, which is a flimsy business as any economic can tell you, or agriculture.. which really is a shite pillar to build your economy on if that's all you have.

So no, lowering the price won't happen. Higher salaries would lead to higher prices straight up. And we'd still sell our shit. Because Germany doesn't believe in just lowering the price for competetiveness. Germany is a strong believer in simply selling the better product. And the result pays off. I have tried this little game with someone from the UK on this forum, and thankfully he was an honest dude. I asked him which German made products he had in his household and he immediately came back with a couple, mostly kitchen appliances. And I looked around my household and found one thing from the UK. A simple leather wallet that I think cost me 10 quid in London.

That's it. And that's what all your economic theory doesn't solve. You can shift the blame to Germany all you like, but we won't start manipulating our own, rather delicate and intricate and above all, functioning economy with wild theories that may or may not fuck up the entire German economy just because some academic tells us we should spend more or somehow fuck our own trade surplus up. Even if we could do it. And the things we buy from abroad, I'm thinking of computer hardware and other electronics here, we buy from either the US or SEA.

Tell me, which Greek technological gadget do you think I should buy? Or Italian? Or Spanish? Go ahead, impress me and see if you can motivate me to buy something from those countries.

Also, lol for telling me we should suffer more unemployment by artificially raising wages just so Greeks can have a better life. Are you for real? You'd want to put millions of jobs on the line in Germany only to trust the Greek Government not to steal from their own people? Yeah, fat chance that's going to happen. Any politician doing anything remotely along that line will be finished for good in politics.

Oh Joy..... another case of "its different this time". I'm afraid it isn't. Germany isn't special. It isn't unique. Its followed the same mercantalist patterns many other nations have trod before, and undoing those polices will undo its trade advantage just as has happened in other nations in the past.