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

[Slant]

I've read a few articles suggesting that this could have been avoided if Greeks simply paid their taxes.

I'm pretty certain that it's a bit more complex than that. We've discussed this topic at length on this forum, probably getting 1k posts and more all in all. Whatever people's opinions are, I can tell you this much, it's way more complicated and nobody, nobody has found a simple solution like "just pay your taxes!"

It's also a bit unfair to the Greek people, considering that the taxes that they did pay, vanished in the pockets of quite a substantial number of politicians.

[NED funded]

You keep on attacking Germany and... I'm the one derailing the thread? Your posts are a joke is what they are. Cheap insults, half assed knowledge and some unjustified ranting. That seems to be the extent of your posting here. Good job!

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You're not factually wrong, except.. it's not Germany's currency. It's the European currency. Germany doesn't get to dictate how it's run. The ECB, and by extension the Eurozone member states, gets to implement monetary policy. Germany has about as much say in it as Spain or Italy, relatively speaking.

Yeah, but germany gets an enourmous advantage in exports through it. Two years ago switzerland unpegged its currency from the euro and it immediatly saw a decrease in its exports.

[Slant]

Yeah, but germany gets an enourmous advantage in exports through it. Two years ago switzerland unpegged its currency from the euro and it immediatly saw a decrease in its exports.

Germany's not setting the currency. That Germany has an advantage through it is quite possibly true. But it's not Germany setting the rules. It's the Eurozone. Everyone has their input at the Eurozone. Perhaps the member states should change the rules instead of putting them in place like this and then bitching that Germany profits from it.

On the other hand, it doesn't matter what rules they change it to. Germany will always "profit" from it. I've realised a while ago that much of this bitching is just greed and resentment at Germany's perceived wealth. Pick whatever ruleset you want, people will still blame Germany. Kill everyone last German in Europe and Germans will still be nazis. *shrug* This forum is quite good at teaching people like me just to not give a fuck about peasants anymore. Solidarity? One of the supposed pillars of the EU? Fuck that, if we lend a helping hand, we get bitched at. Next time I sincerely hope we don't help and let whoever needs help rot. And perhaps make an actual profit from the situation as we could. After all, if we're going to get bitched at, why not give them an actual reason to bitch at us.

[Deleted]

Greece took a communistic turn voting in favor of Tsipras so my country will remain in deep shit for the foreseeable future no matter if we are under the supervision of troika or not.

[Kuntantee]

They would have been successful if Hitler didnt lose the war. They are still mad from then that Greece resisted and want to destroy the country on every attempt they get.

Why would they destroy an overwhelmingly consumer market? They (not just Germany, any industrial country) want you rich enough to buy their shit, and certainly not destroyed. The problem with Greece seems to be deeply rooted corruption and lack of idealism on bureaucratic/political ranks. I am afraid this implies a dumb public.

[Pua]

Lots to go through here, @Slant. I'll try to be brief without skipping too much.

I'm pretty certain the Troika at this stage knows just about as much about Greek finances as Greece does.

I think they knew much more about it, prior to lending, than you're giving them credit for ("credit"? Get it? Haha...). GDP figures are generally a matter of public record, as are general tax and spend plans and how they pertain to debt and a national deficit. We weren't part of the negotiations, so can only speculate, but I'd be absolutely amazed if the state of the Greek economy was somehow alien to any member of the Troika.

Yes, I'm ignoring the known problems in Ireland, Portugal et all, but everyone knew about them, that's the difference. Greece was a boiling problem that we didn't find out until the pot boiled over.

Ireland was a somewhat unique case, but Portugal and the southern Eurozone is economically quite different to the northern. The reason for these countries to be in the European Union is obvious, but the single-currency? It's harder to convince me. Portugal, Spain, Greece and Italy are more economically alike when compared to France, Germany or the United Kingdom. Balkan states, such as Hungary, Croatia or the Czech Republic, haven't adopted the Euro for largely this reason; it doesn't necessarily make sense for them to do so.

As a result, the lending from the Troika that was accompanied by the demand for a southern economy to behave as if it were northern was, in some respects, an act of national vandalism. The fact that we know austerity is a disastrous economic policy under any circumstances makes inflicting it on Greece even worse.

Note: I'm not saying that money should have been handed to the Greek government and no more said about it. That's deeply irresponsible. I'm simply saying that there should have been a far more holistic approach to the problem than what actually happened.

I know we would survive it with barely a scratch. But what about the rest of the EU? When they suddenly realise that the guy they're leeching from has left and taken all the money with them?

I'm sorry, but this is Brexit-style talk and it's just not true. Germany benefits hugely from its part in the Eurozone, which is why it's so heavily invested in making sure it keeps working. I'm not one of the people who thinks Germany is a free-rider, far from it, but ignoring just what the EU does for the German economy is doing everyone a horrid disservice.

German exports get through the EU quickly and easily thanks to the freedom of goods, people and services; this export boom would have seen a rise in the Mark, something that obviously didn't happen with the common currency. Imagine what'd happen to the cost of German exports were there 15 currencies to trade in, rather than just one. It's funny that the nations who've struggled (Ireland, Portugal, Greece, Spain) were the nations that opened their borders to a competitive environment that their economies weren't built for, and didn't have their own currency with which to combat this problem.

You might argue that's why they were given cash to cushion the blow, but this didn't see the reforms that one might have hoped for. The nations we're talking about invested the cash wastefully (typically via cheap credit) and didn't have independent regulatory bodies to stop this corruption from happening, particularly in their banks that unsurprisingly went on to fail. It's perhaps no coincidence that more prudent nations, like the Balkan states I mentioned earlier, have maintained their own currencies and seem to be generally disinterested in signing up to the ERM-2.

They're acutely aware of what happens when divergent economies of vastly differing size try to compete.

It's a poker game where Germany has 1,000 chips, and their competitors have 10. It's, in essence, neoliberalism in its most basic form - those at the top can make error after error and recover, while those at the bottom are one bad hand away from disaster.

I've read a few articles suggesting that this could have been avoided if Greeks simply paid their taxes.

Those articles are horribly wrong, and are trying to disguise reality.

Look at it like this; most every country in the world runs a deficit, developed or not. The whole world is in debt. If it were a question of simply "paying taxes", that wouldn't be the case and the tax take would exceed public spending. In the UK, for example, the deficit is still around double what it was prior to the recession in 2008 (£20b to £40b) despite the better part of a decade under austerity.

[Deleted]

I knew mmoc doesn't harbor much quality but this is starting to be really sad. Btw please explain me how to "run away with the tail between my legs" unlike you the dogfaced racist I don't have a tail. You on the other hand...

Anyway at least you show your true colors here. As for the **** you abundantly use its very funny you re such a coward that you can't even use profanity in case you get slapped in the wrist.

Since your first post all you do is post racist hatred and insults. Not sure where it comes from either but I guess shit life makes you behave like that Get a girlfriend mate you ll feel much better.

i have been insulting you quite a while now, i havent seen any infractions ^_^
pathetic is your constant derailing and deflections. and if mmoc doesnt harbor much quality (whateverthefckthatmeans) why dont you just fck off MATE?

[Slant]

You come in here call my countrymen lazy, thieves, etc

I have said no such thing. Quote me a single post in this thread where I've said anything remote to what you said here.

[pitakos]

Why would they destroy an overwhelmingly consumer market? They (not just Germany, any industrial country) want you rich enough to buy their shit, and certainly not destroyed. The problem with Greece seems to be deeply rooted corruption and lack of idealism on bureaucratic/political ranks. I am afraid this implies a dumb public.

A combination of a dumb public with corrupted goverment for sure. A goverment that is 100% controlled by other countries nontheless, for example germany

[Cyanu]

Why would they destroy an overwhelmingly consumer market? They (not just Germany, any industrial country) want you rich enough to buy their shit, and certainly not destroyed. The problem with Greece seems to be deeply rooted corruption and lack of idealism on bureaucratic/political ranks. I am afraid this implies a dumb public.

the 'dumbness' or intelligence of the public is mostly irrelevant when it comes to government efficiency, give a nation well structured institutions and infrastructure and it runs on auto-pilot but without them it's always subject to the whims and incompetence of the current governement, you know this from your own country too, under Kemalists Turkey was progressing, now it's more like in a 'progress reversal' situation, powerful institutions and more efficient check and balances could have leashed Islamists and minimized the damage they can do, much like they do with Trump in USA a state that does have the said institutions and checks

generally the state of politics in Greece is one in which the majority of people do not feel represented by any party and unable to do much about it, rebelling and protesting are acts of deconstruction, without having replacements at the ready destroying things, even corrupt things can do more harm than good, getting into politics is an impossible task too, as without the media you have no voice, so it's a stale situation, marked by generic discontent and inability to do something with immediate impact, small actions civilians can take can only make small impact in he longterm

[Morgarw]

Lots to go through here, @Slant. I'll try to be brief without skipping too much.


I think they knew much more about it, prior to lending, than you're giving them credit for ("credit"? Get it? Haha...). GDP figures are generally a matter of public record, as are general tax and spend plans and how they pertain to debt and a national deficit. We weren't part of the negotiations, so can only speculate, but I'd be absolutely amazed if the state of the Greek economy was somehow alien to any member of the Troika.



Ireland was a somewhat unique case, but Portugal and the southern Eurozone is economically quite different to the northern. The reason for these countries to be in the European Union is obvious, but the single-currency? It's harder to convince me. Portugal, Spain, Greece and Italy are more economically alike when compared to France, Germany or the United Kingdom. Balkan states, such as Hungary, Croatia or the Czech Republic, haven't adopted the Euro for largely this reason; it doesn't necessarily make sense for them to do so.

As a result, the lending from the Troika that was accompanied by the demand for a southern economy to behave as if it were northern was, in some respects, an act of national vandalism. The fact that we know austerity is a disastrous economic policy under any circumstances makes inflicting it on Greece even worse.

Note: I'm not saying that money should have been handed to the Greek government and no more said about it. That's deeply irresponsible. I'm simply saying that there should have been a far more holistic approach to the problem than what actually happened.



I'm sorry, but this is Brexit-style talk and it's just not true. Germany benefits hugely from its part in the Eurozone, which is why it's so heavily invested in making sure it keeps working. I'm not one of the people who thinks Germany is a free-rider, far from it, but ignoring just what the EU does for the German economy is doing everyone a horrid disservice.

German exports get through the EU quickly and easily thanks to the freedom of goods, people and services; this export boom would have seen a rise in the Mark, something that obviously didn't happen with the common currency. Imagine what'd happen to the cost of German exports were there 15 currencies to trade in, rather than just one. It's funny that the nations who've struggled (Ireland, Portugal, Greece, Spain) were the nations that opened their borders to a competitive environment that their economies weren't built for, and didn't have their own currency with which to combat this problem.

You might argue that's why they were given cash to cushion the blow, but this didn't see the reforms that one might have hoped for. The nations we're talking about invested the cash wastefully (typically via cheap credit) and didn't have independent regulatory bodies to stop this corruption from happening, particularly in their banks that unsurprisingly went on to fail. It's perhaps no coincidence that more prudent nations, like the Balkan states I mentioned earlier, have maintained their own currencies and seem to be generally disinterested in signing up to the ERM-2.

They're acutely aware of what happens when divergent economies of vastly differing size try to compete.

It's a poker game where Germany has 1,000 chips, and their competitors have 10. It's, in essence, neoliberalism in its most basic form - those at the top can make error after error and recover, while those at the bottom are one bad hand away from disaster.



Those articles are horribly wrong, and are trying to disguise reality.

Look at it like this; most every country in the world runs a deficit, developed or not. The whole world is in debt. If it were a question of simply "paying taxes", that wouldn't be the case and the tax take would exceed public spending. In the UK, for example, the deficit is still around double what it was prior to the recession in 2008 (£20b to £40b) despite the better part of a decade under austerity.

Tumbs up! Agree 100%

[Kuntantee]

the 'dumbness' or intelligence of the public is mostly irrelevant when it comes to government efficiency, give a nation well structured institutions and infrastructure and it runs on auto-pilot but without them it's always subject to the whims and incompetence of the current governement, you know this from your own country too, under Kemalists Turkey was progressing, now it's more like in a 'progress reversal' situation, powerful institutions and more efficient check and balances could have leashed Islamists and minimized the damage they can do, much like they do with Trump in USA a state that does have the said institutions and checks

generally the state of politics in Greece is one in which the majority of people do not feel represented by any party and unable to do much about it, rebelling and protesting are acts of deconstruction, without having replacements at the ready destroying things, even corrupt things can do more harm than good, getting into politics is an impossible task too, as without the media you have no voice, so it's a stale situation, marked by generic discontent and inability to do something with immediate impact, small actions civilians can take can only make small impact in he longterm

Turkey has never fully implemented Kemalism, nor it was ruled by Kemalists at any point other than the formation period (till Ataturk's death). Additionally, it is a well educated public that creates those well-structured, fully-functioning institutions. That's the challenging task and the absence of such institutions (political institution being one of them) implies dumb and uneducated public.

[Deleted]

Ah yes greece.. the country that owes my country 10 billion €.

[Cyanu]

Turkey has never fully implemented Kemalism, nor it was ruled by Kemalists at any point other than the formation period (till Ataturk's death). Additionally, it is a well educated public that creates those well-structured, fully-functioning institutions. That's the challenging task and the absence of such institutions (political institution being one of them) implies dumb and uneducated public.

well there are a number of ways to find yourself in a well structured state, some of the modern state had those solid foundation from day 1, it often traces back to the creation of the state

(when state precedes the nation): for instance France (or most of central and western Europe) was a functional state from medieval times, it had infrastructure, a taxation system, a judicial system etc, so when the French Republic was founded there were already some basics to work with and above all the knowledge of how to run a state

(when nation precedes the state): like Greece (or most of the Balkans), how did the founding of the Hellenic Republic start really? we gathered everyone who identified himself as Greek, started a revolution, declared independence and then what? oh great we're a bunch of guys with no idea on how to run a state, not to mention there's not much to work with, there was no Greek taxation system, no Greek government records, no Greek public services etc

or simply the world of high quality administration, changes are easier to implement when you're already in power, often all it takes is a good plan and the will to see it through, Kemal was personally responsible for many goof things that happened in Turkey for instance

and educated public does not automatically mean highly effective government, especially if their education is focused on technical departments, not to mention that to have a good educational system you must already be in a well governed country

[Kuntantee]

well there are a number of ways to find yourself in a well structured state, some of the modern state had those solid foundation from day 1, it often traces back to the creation of the state

(when state precedes the nation): for instance France (or most of central and western Europe) was a functional state from medieval times, it had infrastructure, a taxation system, a judicial system etc, so when the French Republic was founded there were already some basics to work with and above all the knowledge of how to run a state

(when nation precedes the state): like Greece (or most of the Balkans), how did the founding of the Hellenic Republic start really? we gathered everyone who identified himself as Greek, started a revolution, declared independence and then what? oh great we're a bunch of guys with no idea on how to run a state, not to mention there's not much to work with, there was no Greek taxation system, no Greek government records, no Greek public services etc

or simply the world of high quality administration, changes are easier to implement when you're already in power, often all it takes is a good plan and the will to see it through, Kemal was personally responsible for many goof things that happened in Turkey for instance

and educated public does not automatically mean highly effective government, especially if their education is focused on technical departments, not to mention that to have a good educational system you must already be in a well governed country

I doubt your problem is lacking "experience" when it comes to "statecraft". It's been more than 100 years, and you can simply check working examples around the world and modify according to your needs. We are not in medieval or earlier times where groups with experience on how to run states (Turks, for example) regularly emerged as powers because only they had the experience and not others. Information age has many advantages; one of them is ability to learn what seems to working and what is not. This applies to any field really, be it engineering or governmental administration.

Besides, that institutional background you are talking about is meaningless if they aren't up to date. Ottoman Empire had to restructure their institutions (often military) based on Europe because they were not capable to do it themselves or innovate over what was the state-of-the-art.

Yes it often helps and yes institutional heritage from Ottoman Empire helped us a lot, but it's not the ultimate solution. We have systematic corruption just like you.

[SidFwuff]

I'm a Canadian, so feel free to correct me but:

Pre-Euro:

1) For most of the 20th century at least, Greece spent more than it earned. Just like now.
2) Instead of taking loans to pay off their bills, the Greek government simply had the banks print off more drachma.
3) More drachmas on the market devalued the currency. The drachma became weaker- the economy sort of "self correcting". Basically the Greek people got bigger cheques from the government, but the local supermarket prices all went up too. Actual purchasing power didn't change.
4) A weak drachma meant cheap holidays in Greece! People from all over Europe and the world would visit Greece on vacation because of the great exchange rates. This pumped money into Greece which in turn helped strengthen the drachma back out.

Then the Euro came along, with a goal to be a) stable and b) strong. To accomplish this, printing of the Euro would have to be strictly controlled: Only nations that could balance their budgets could join the Eurozone and adopt the Euro. The Greek government at the time "fudged" the numbers a bit to show that their budget was balanced and applied for Eurozone membership. Greece got in!

Immediately Greeks got richer: They were on the strong Euro- importing and going to visit other places in Europe was much cheaper. Life was good... except Greece wasn't on the same page as rest of the Eurozone.

Post-Euro:

1) Greece continued to spend more than it generated. When the government tried to balance the budget, they found that cutting social programs, raising taxes etc. to be unpopular and were replaced.
2) The Eurozone quickly became aware that Greece fudged its numbers to get in, as Greece started running a deficit.
3) Without being able to simply print more drachmas like it used to, Greece took loans to buy time to balance the budget.
4) Interest and debt payments meant additional cuts were needed. New governments were voted in regularly because they promised to balance the books without making any cuts or raising any taxes
5) More loans, more taxes, more elections.
6) When it became clear Greece was having trouble, the rest of the Eurozone wanted commitments to balancing the books and be able to pay back debts- taxes alone weren't going to work, so the Eurozone started pressuring Greece for cuts, or "austerity"
7) Bailouts with conditionally austerity
8) Whenever the Greek government tried to implement austerity measures, they'd only get so far before an election and would be replaced by a new party that promised to get the Eurozone to let Greece handle the budget on their own, and to drop the austerity measures.
9) Go back to 7

Which is why Greece has so much anger towards Germany. Germany is seen as being unreasonable because as they're currently the leader, along with France, when it comes to control of the Euro... Germany could print more Euros.

They could wipe out Greece's entire debt by a snap of its fingers! Germany just has to say "Ok" and Greece can print off whatever amount of Euros Greece needs. It's just money- Greece can print more of it if Germany would just say ok!

That's what Tsipras and Varoufakis were threatening to do the last time "Grexit" was a threat. If they didn't get the money they needed, they'd just start printing it.

What the Greek people don't seem to understand though is that the whole reason the Euro is stronger than the old drachma is because every member of the Eurozone doesn't simply print off more Euros when they want to spent beyond the means of their budget.

Germany isn't intentionally forcing Greece over a barrel- Merkel isn't cackling with evil when she hears Greeks plead for money, and holding the Euro printing presses hostage: If Greece prints off Euros to wipe out their debts just once (let alone every year to balance its budget) it'll weaken the Euro horribly.

Which affects every country that relies on the Euro.

And...Greece joined the Eurozone. Not the other way around- it didn't have to join. Greece can leave.

Instead though, Greece sits like a petulant child throwing a temper tantrum, crying about taxes, stomping its feet and screaming every slur and insult imaginable at Germany. It has even threatened to give ISIL Europassports so it can go blow up Berlin for fuck's sake.

Why? Because it joined a club, knowing full well the rules and yet not wanting to follow said rules.

Greece expects every member of the Eurozone to take a hit because Greece is...Greece. They invented democracy or something.

It's a child at a table full of grownups. It wants its cake and to eat it too.

It's not Germany's job to give Greece a spanking. It's not the Eurozone's job to spank Greece either.

Instead... Greece is going to fall down and hurt itself badly eventually.

And Greece will probably blame Germany for not being there to catch it and prevent the fall in the first place.

It's unbelievably selfish.

[Kuntantee]

I am having hard times to believe that Europeans didn't know Greece fudged their numbers.

[Morgarw]

I am having hard times to believe that Europeans didn't know Greece fudged their numbers.

more exactly: everyone did know that, specially the germans.

[Glorious Leader]

more exactly: everyone did know that, specially the germans.

To be fair the former greek government under papendreou did pay goldman sachs 300 million to help cook the books. The complicity of finance capital is always obscured.

[Ulmita]

To be fair the former greek government under papendreou did pay goldman sachs 300 million to help cook the books. The complicity of finance capital is always obscured.

The problem is the following:

It's not a question of Greeks are in fault. Off course they are. They voted for retards.

However, there are a couple of things:

a)The debt as it is, can never be payed back. Each passing year it grows. IMF said it will be well over 300% in 2030 or so
b)There is a HUGE ethical issue with the new generations that are called to pay something they had nothing to do with.