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European Austerity

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KaRzY6
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#31

Posted 19 June 2012 - 10:26 AM

I know the new Greek government has keep them in the Euro, for now. But do you really think their economic problems are over? Will they stay in the Euro if they still can't recover from the problems in say 3-4 years time?

Chorup
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#32

Posted 19 June 2012 - 03:30 PM

QUOTE (gtaivpc @ Wednesday, May 16 2012, 18:44)
Lazy greeks has become a slogan but that is totally untrue, for many reasons I am willing to go through if someone really wants me to.

I have both been to Greece and have family living in present day Greece, and let me tell you it is true. Perhaps not for some, but for a vast proportion of the population sheer laziness and an inept work attitude has led to their demise. When they are finally forced to tighten the belt, the people resist because they want to keep living the way they were, albeit in an economic crisis. This is one of the reasons they are extremely anti-austerity, choosing to vote for commies and fascist nazis in order to restore their 'easy' lifestyle.

They may be doing it tough now, but let me tell you, as corrupt and irresponsible as current and previous governments may have been, the people are also to blame. This is why I have little sympathy for Greece. They have essentially been living the good life until now, yet don't want to alter their lifestyle in times of economic downturn...it's absurd. The government would previously borrow and borrow, throwing money at people...yet spending little on infrastructure and future projects/initiatives. Now the the tap has run dry, we see the dire consequences.

If I mentioned my ethnicity here, people would probably say my opinion is biased. If I were to consider that particular factor, then I assure you I would be saying something different right now. This is how it is, and if you don't look out for your own future then you only have yourself to blame.

They should also be kicked out of the eurozone. It is absolutely ridiculous that candidate countries are given hurdle after hurdle to join, yet Greece almost brings down all of Europe and the union is fine with it. Time to set some standards and discipline. The EU is rubbish anyways, so I perceive them as somewhat insignificant.

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#33

Posted 19 June 2012 - 07:53 PM

Just to mention, this has come out today. Sorry Angela.

G-20 draft urges spending over austerity to create jobs

KaRzY6
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#34

Posted 19 June 2012 - 11:37 PM

QUOTE (Chorup @ Wednesday, Jun 20 2012, 02:30)
QUOTE (gtaivpc @ Wednesday, May 16 2012, 18:44)
Lazy greeks has become a slogan but that is totally untrue, for many reasons I am willing to go through if someone really wants me to.

I have both been to Greece and have family living in present day Greece, and let me tell you it is true. Perhaps not for some, but for a vast proportion of the population sheer laziness and an inept work attitude has led to their demise. When they are finally forced to tighten the belt, the people resist because they want to keep living the way they were, albeit in an economic crisis. This is one of the reasons they are extremely anti-austerity, choosing to vote for commies and fascist nazis in order to restore their 'easy' lifestyle.

They may be doing it tough now, but let me tell you, as corrupt and irresponsible as current and previous governments may have been, the people are also to blame. This is why I have little sympathy for Greece. They have essentially been living the good life until now, yet don't want to alter their lifestyle in times of economic downturn...it's absurd. The government would previously borrow and borrow, throwing money at people...yet spending little on infrastructure and future projects/initiatives. Now the the tap has run dry, we see the dire consequences.

If I mentioned my ethnicity here, people would probably say my opinion is biased. If I were to consider that particular factor, then I assure you I would be saying something different right now. This is how it is, and if you don't look out for your own future then you only have yourself to blame.

They should also be kicked out of the eurozone. It is absolutely ridiculous that candidate countries are given hurdle after hurdle to join, yet Greece almost brings down all of Europe and the union is fine with it. Time to set some standards and discipline. The EU is rubbish anyways, so I perceive them as somewhat insignificant.

I also believe this. My father told me that the majority of Greeks are lazy. They only want to work very short days, and retire at about 50.

sivispacem
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#35

Posted 20 June 2012 - 08:17 AM

Most of the Mediterranean countries have comparatively low retirement ages, which I've always found quite odd as they tend to have very long life-spans thanks to their diet. But I'm not entirely sold on the productivity issue- my partner's father spent a number of years working in Greece and in his industry (petrochemicals) the staff worked 8 til 6, albeit with a two hour lunch. I can't speak for all employment sectors, but averaged over a week that means more working hours than in the UK, for instance. I think the economic issues for the Greek government are more a product of tax evasion than they are poor working practices- Greece has (or at the very least had) about the lowest return per capita in terms of taxation in the Euro zone despite having actual taxes on par with most other countries.

gtaivpc
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#36

Posted 20 June 2012 - 12:33 PM Edited by gtaivpc, 20 June 2012 - 12:39 PM.

OMG. It is unbelievable how misinformed you are. It is unbelievable how the media has brainwashed you SO MUCH. LIVING OVER OUR MEANS? Jesus christ, kids are fainting in schools because they have nothing to eat, people are being evicted all the time and more and more are becoming homeless, youth unemployment is over 50% while in general it is 22%, THE MAJORITY of workers are doing part time jobs, and even those who have full time jobs work from 10 up to 14 hours a day for as low as 500 euros a month (we are talking about people with postgraduate diplomas!!), and of course NO THEY DO NOT f*ckING RETIRE AT 50 YEARS OLD WHO THE f*ck IS TELLING YOU THAT, for example any of my teachers are 60-70 years old, and to be exact I can't think of a person I know under 65 who has retired. the only solution for young students is to move abroad, jobs are now impossible to find. robberies and thefts are more common than ever especially in the big cities. state-insured patients with cancer didn't get their meds for two weeks because the government couldn't pay the bills to the pharmacies. and of course the neonazis that got into the parliament with 7% of the vote are taking advantage of this HUMILIATING situation. yet you are calling us lazy? get a clue goddamnit. get a clue.

I am so outraged by your bullsh*t. this is un-be-lievable. it is pathetic that the Greeks have voted for this corrupt party at the elections. young people of course didn't vote for it, it was the elderly, the uneducated, and the rural population that did. they were really terrorized by the media. the f*cking media... so much propaganda. if this austerity continues, I am pretty sure we'll end up in a civil war. the greek people are more divided than ever.

I only hope germany goes into recession, NOT because I hate the germans or anything, just because Merkel has to realise this is NOT the way to go. if they really wanted us to repay the debt, they would try to spark growth. the debt is now HUGE and definitely not manageable. my opinion is, give it 3 months. if the policy changes then good. if it doesn't then I say get out of the euro and eventually the growth will start. the first years or so will be difficult, but at least we'll be on the right path! now we are both humiliated and poor, and there is no light at the end of the tunnel either!

the greek problem was both due to tax evasion (which was admittedly high in the past, but not anymore because people don't have money to pay any taxes), a dysfunctional structure of the public sector and bureaucracy that STILL is there because of the corrupted governments. oh plus, tax evasion is still high in the higher classes. but the IMF, the ECB and the EU don't care about that! they only want to f*cking starve us.

if you think though, that today all we are doing is leeching of the german taxpayers' money then you are greatly delusional. I suggest you watch this

I will not say sorry for me being uncivilised in this post because of the sheer ignorance that has been spouted.

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#37

Posted 20 June 2012 - 01:56 PM

The thing is buddy, whose gonna lend you that money if you leave the Euro in the first place?

I agree with you with regards to austerity measures not working to an extent. First of all, you need to consider the Greek situation. From what I can gather, your current debt measures at 170% of your GDP. It can't be denied that reckless spending got you into this problem in the first place.
On one hand, you have most of Europe advocating austerity measures and why shouldn't they, the Greeks overspent and now need to cut back. It seems to be a fair punishment. However, in terms of escaping economic collapse, I think it's the wrong way too go. It's here that I sway towards Keynesian ideas in which one must spend to boost AD and in turn, spark economic growth. It's a pretty sound macroeconmic theory and whilst it may give you stable econmic growth, how it affects the ither macroecomic objectives is still significant.
There are four macroeconomic objectives: Sustainable growth, stable prices (low inflation), low unemployment and a low budget deficit. Let's say Greece leave the Euro and begin a policy of government expenditure. In the short term, this will give you a grand amount of economic growth and may encourage some foreign investment into the country as well as increasing consumer confidence. From this, AD will rise and cause a multiplier effect etc. To add to this, an increase in government expenditure is likely to decrease unemployment as the multiplier effect will allow firms too expand and hire more workers so on so forth. However, by spending you invoke two big problems into the Greek econmy. First of all, you will have the issue of rapidly rising inflation. An increase in AD always leads to an increase in the price level and I can see this getting very out of hand if the Greeks return to the levels of spending that we have seen previously. Secondly, this does nothing to help your budget deficit. Whilst you may argue that an increase in economic growth will allow you to repay these debts but I wholeheartedly disagree. The loans your government would need to start any spending policy would come with astronomical interest rates and would very likely be short-term. Further more, whose to say the EU would supprot the Greek government after they had left the Euro anyway. I can't see it being on the same level as the inner circle would likely turn to those a part of the Euro who need help a la Spain and Italy.

Quite frankly, to accuse us of being judgemental as to the causes of the Greek economic crisis is farcical. No-one can deny that the Greeks have an extremely "relaxed" lifestyle in comparison to other European nations and what's more, is that your government got you into this mess by recklessly overspending and putting the Euro at risk of collapsing. Granted not all of the latter is your fault but to be irresponsible enough to manipulate data so you could join such an important economic intergration is worthy of criminal liabilty in my eyes.

To conclude, I believe that we need to find a balance between austerity and spending to aid the Eurozone's recovery. In the long-term, the austerity measures will pay off significantly but in the short-term, I think that Merkel (since she is the figure head of all this) should advocate some public spending to try and boost consumer confidence/spending. Looking at this on a wider scale, there can be no doubt that we need the help of both the Chinese and American markets to buy our exports. Now would be the perfect time since the Euro has depreciated significantly meaning countries like China, if they stopped manipulating their exchange rate, would be able to sort out the balance of payments on current account deficit. But, that's a whole different argument.


gtaivpc
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#38

Posted 20 June 2012 - 03:22 PM

The post wasn't directed to you, but to those who think laziness is a DNA trait of the Greeks.
I am not denying the causes, but calling a nation lazy is simply offending! I wrote in the above post that there indeed was much tax evasion and there still is in the upper classes of society. There still is terrible bureaucracy and a largely dysfunctional public sector. However calling us lazy is only provocating, when the situation is as bad as I described. Are the Spanish lazy too? Are the Irish lazy too? The Portuguese?

I do not know economics. What I do know for sure is that we are on the wrong path and calling us lazy may be easy, but it's not going to solve the problem.
Of course I do not advocate reckless spending. But right now there is no spending at all and the economy is stagnant. The thing with pro-austerity parties is that they are also corrupted. They are the ones that got us into this mess (yes, the people allowed them to and they are responsible for that). So it's foolish to think they will solve the problem, even if the policy was right (which is not!).

I do not in any way think leaving the Euro is a good idea, but if we are in this situation IN the euro, and it's getting worse day by day, we'll all end up starving! This has to end someday.

Right now we need a government that acts fast and effectively, a government without corruption that also makes the people hope for something better. No one, especially an underpaid 12h/day worker, can be productive in this depressed society.

What they have achieved so far is making people hostile towards ANY reform, and that is because those that have been made have made things worse...
All I can say is that if Europe's approach doesn't change, this isn't going to end well. Maybe only for us, maybe for the countries that have been bailed out, maybe for the whole EZ.

Irviding
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#39

Posted 20 June 2012 - 08:45 PM

QUOTE (sivispacem @ Wednesday, Jun 20 2012, 03:17)
Most of the Mediterranean countries have comparatively low retirement ages, which I've always found quite odd as they tend to have very long life-spans thanks to their diet. But I'm not entirely sold on the productivity issue- my partner's father spent a number of years working in Greece and in his industry (petrochemicals) the staff worked 8 til 6, albeit with a two hour lunch. I can't speak for all employment sectors, but averaged over a week that means more working hours than in the UK, for instance. I think the economic issues for the Greek government are more a product of tax evasion than they are poor working practices- Greece has (or at the very least had) about the lowest return per capita in terms of taxation in the Euro zone despite having actual taxes on par with most other countries.

I think it's fair to carp with some of the Greek practices. Though from a purely economics standpoint, most will not sit here and objectively say that the reason for all of these probems is that Greek people are lazy. If you refer to the following chart -

user posted image

You'll see that Greece actually was running relatively small deficits before it joined the Euro. It was not until it joined the Euro and all that capital poured in that things got out of hand.

QUOTE

I do not in any way think leaving the Euro is a good idea, but if we are in this situation IN the euro, and it's getting worse day by day, we'll all end up starving! This has to end someday.

It is, though. If you left the Euro and then your government flooded the markets with drachmas, you'd be in a much better place. Prices would go down from their ridiculous levels now, for one thing.

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#40

Posted 20 June 2012 - 09:39 PM

QUOTE (sivispacem @ Wednesday, Jun 20 2012, 08:17)
Most of the Mediterranean countries have comparatively low retirement ages, which I've always found quite odd as they tend to have very long life-spans thanks to their diet. But I'm not entirely sold on the productivity issue- my partner's father spent a number of years working in Greece and in his industry (petrochemicals) the staff worked 8 til 6, albeit with a two hour lunch. I can't speak for all employment sectors, but averaged over a week that means more working hours than in the UK, for instance. I think the economic issues for the Greek government are more a product of tax evasion than they are poor working practices- Greece has (or at the very least had) about the lowest return per capita in terms of taxation in the Euro zone despite having actual taxes on par with most other countries.

Just because they might be working many hours doesn't mean they're productive, especially when Spain and Greece have 20%+ unemployment. You're probably right about it being a revenue/collection problem, but Greece does have fairly low labor productivity.

As seen in this handy chart. I had more difficulty finding good productivity numbers than I thought I would.

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#41

Posted 21 June 2012 - 02:03 AM

I think this chart is relevant too -

user posted image

If you correlate productivity with foreign investment, you'll see an indirect relationship.




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