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Thread: Portugal Suffering Greek Contagion Pressures EU Bonds

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Perfect examples of what happens when politicians create a pervasive entitlement mentality with lame Marxist-leftist rhetoric - this is the welfare state run amok; Obama and company are of the same stripe.

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Greece, like the U.S., has an assortment of mandatory spending programs (health and pension) with huge long-term imbalances. In a separate IMF report, the IMF projected that Greece's gross public debt could soar to 800% of GDP on the current policy path. Unlike the U.S., at least so far, it had a bad information reporting system and that might have further undermined fiscal decisionmaking.

    For a quick summary, here's what the IMF wrote during its 2009 Chapter IV consultation.

    Greece is entering the downturn with an already weak fiscal position. Failures to stick to budget plans, deficit-increasing one-off measures, expenditure slippages, and ad-hoc revenue efforts have coincided with persistent deficits above 3 percent since 2000... Indeed, as monetary conditions had been accommodative, fiscal policy had not been nearly tight enough during the boom years. Social transfers have increased by over 3 percentage points of GDP, outpacing social contributions. The wage bill has also been rising. In this context, the European Commission has reinvoked the EDP for Greece, asking to reduce the deficit below 3 percent by 2010. Staff is concerned that large and growing data discrepancies (including “stock-flow adjustments”) between cash accounts and those of the consistently rises faster than indicated by the SGP deficits reported to Eurostat. Restoring confidence requires durable consolidation and improved accounting systems that allow the authorities to respond in a timely way to slippages and the publication of more stable fiscal indicators...

    Staff projects the headline deficit to widen and public debt to increase sharply in 2009 and 2010. With staff’s projection of economic contraction and if no further measures are taken, the general government deficit is expected to reach 6.2 percent of GDP in 2009 and 7.5 percent in 2010... Including the banking assistance package, public debt could rise to 109 percent of GDP in 2009 and 115 percent of GDP by 2010.


    FWIW, Greece did worse than the IMF projections in the above paragraph.

    If Greece is to achieve lasting fiscal stabilization, it will need to make significant and lasting cuts in its pension and health benefits system (something the U.S. will also need to do to address its long-term benefits) and implement a robust mechanism that contains the future growth of those programs despite a rapidly growing aged population. For Greece, the time for such action is now, not at some unknown point in the future.
    Last edited by donsutherland1; 04-28-10 at 08:23 AM.

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by donsutherland1 View Post
    If Greece is to achieve lasting fiscal stabilization, it will need to make significant and lasting cuts in its pension and health benefits system
    no kidding

    but it's too late

    and the commies on the streets won't let em

    Violent protests hit Greece as German backing sought

    hello

    My Way News - World markets tumble as euro debt crisis escalates

    ouch

    such serious syntax: "CONTAGION is the buzz word," "the euro area is now facing a real EXISTENTIAL THREAT..."

    spain is next, as you know

    my, my

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by 1984 View Post
    Perfect examples of what happens when politicians create a pervasive entitlement mentality with lame Marxist-leftist rhetoric - this is the welfare state run amok; Obama and company are of the same stripe.
    Considering most US debt came under Reagan, Bush Sr. and Bush Jr. then well this comment is a load of horse manure.
    PeteEU

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by The Prof View Post
    no kidding

    but it's too late

    and the commies on the streets won't let em

    Violent protests hit Greece as German backing sought

    hello

    My Way News - World markets tumble as euro debt crisis escalates

    ouch

    such serious syntax: "CONTAGION is the buzz word," "the euro area is now facing a real EXISTENTIAL THREAT..."

    spain is next, as you know

    my, my
    First off, the Greeks have ALWAYS protested violently, since the dawn of time.

    As for Spain, explain that. Spain's debt is lower than the US and UK, and their budget deficit is also lower.
    PeteEU

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by donsutherland1 View Post
    Greece, like the U.S., has an assortment of mandatory spending programs (health and pension) with huge long-term imbalances. In a separate IMF report, the IMF projected that Greece's gross public debt could soar to 800% of GDP on the current policy path. Unlike the U.S., at least so far, it had a bad information reporting system and that might have further undermined fiscal decisionmaking.

    For a quick summary, here's what the IMF wrote during its 2009 Chapter IV consultation.

    Greece is entering the downturn with an already weak fiscal position. Failures to stick to budget plans, deficit-increasing one-off measures, expenditure slippages, and ad-hoc revenue efforts have coincided with persistent deficits above 3 percent since 2000... Indeed, as monetary conditions had been accommodative, fiscal policy had not been nearly tight enough during the boom years. Social transfers have increased by over 3 percentage points of GDP, outpacing social contributions. The wage bill has also been rising. In this context, the European Commission has reinvoked the EDP for Greece, asking to reduce the deficit below 3 percent by 2010. Staff is concerned that large and growing data discrepancies (including “stock-flow adjustments”) between cash accounts and those of the consistently rises faster than indicated by the SGP deficits reported to Eurostat. Restoring confidence requires durable consolidation and improved accounting systems that allow the authorities to respond in a timely way to slippages and the publication of more stable fiscal indicators...

    Staff projects the headline deficit to widen and public debt to increase sharply in 2009 and 2010. With staff’s projection of economic contraction and if no further measures are taken, the general government deficit is expected to reach 6.2 percent of GDP in 2009 and 7.5 percent in 2010... Including the banking assistance package, public debt could rise to 109 percent of GDP in 2009 and 115 percent of GDP by 2010.


    FWIW, Greece did worse than the IMF projections in the above paragraph.

    If Greece is to achieve lasting fiscal stabilization, it will need to make significant and lasting cuts in its pension and health benefits system (something the U.S. will also need to do to address its long-term benefits) and implement a robust mechanism that contains the future growth of those programs despite a rapidly growing aged population. For Greece, the time for such action is now, not at some unknown point in the future.
    Actually Greece need to implement a tax system that actually takes in taxes to pay for stuff. Cutting and cutting wont do jack**** because the real problem lies in a very weak taxation system that makes it very easy to not pay taxes at all, especially for the rich and business owners. That is what much of the protests are about. Tax evasion is a national sport in Greek.

    That does not mean that they dont have to get their house in order, but seriously think about it. Cut their pension system? You want retired people to be living on the streets? As for the health system, it is so corrupt. In Greece you can pay your way ahead of others in the public system because the doctors take bribes. I suspect there is a lot of waste in the system due to this corruption.

    But the biggest thing that Greece has to do, is to regain the trust of the world markets and nothing will change as long as there is no trust and that again comes back to corruption in government that resulted in false information about debt ratios and budget deficits to be fed to the world markets and the EU.

    As for Portugal, they are sadly being caught up in this along with other nations who are no where near the problematic economic situation of Greece. But as long as you can hedge against countries then speculation will hurt small countries that cant fight off the big speculators, which is what we are seeing yet again here.

    It is also ironic, that we never hear anything about Ireland.. their economic situation is far far worse than Portugal's, but never a peep about that.. odd no?
    PeteEU

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by PeteEU View Post
    As for Spain, explain that.
    get your polysyllabic buddy to break it down

    in the meantime, buy a tv

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by The Prof View Post
    get your polysyllabic buddy to break it down

    in the meantime, buy a tv
    Oh I know what the TV is saying and if you bothered to listen you would see that many question why Spain is being put in the same category as Greece.

    So explain why Spain is next? Why not Ireland, or the UK?
    PeteEU

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds

    Quote Originally Posted by PeteEU View Post
    Considering most US debt came under Reagan, Bush Sr. and Bush Jr. then well this comment is a load of horse manure.
    The Democrats controlled the Congress for the majority of Reagan and Bush Sr.'s terms.

    Bush Jr. was not a conservative and neither were the Republicans.

    Leftist-Marxist rhetoric and populist posturing is to blame for the unsustainable path Greece and the US finds itself on. Your lame apologia will not change that.

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    Re: Portugal Suffering Greek Contagion Pressures EU Bonds


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