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Thread: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

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    Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    This morning, Bloomberg.com reported:

    Greece accepted an unprecedented bailout from the European Union and International Monetary Fund valued at more than 100 billion euros ($133 billion) to prevent default, agreeing to budget cuts that unions called “savage.”

    The measures are worth 30 billion euros, or 13 percent of gross domestic product, and include wage cuts and a freeze on pensions for three years, Finance Minister George Papaconstantinou said in Athens today. The Sales tax will rise 10 percent. The exact bailout amount will be announced later, he said. Euro-region finance ministers meet at 4 p.m. in Brussels to ratify the pact.
    Greece Accepts Terms of EU-Led Bailout, ?Savage? Budget Cuts - Bloomberg.com

    To put things into perspective, the final amount of deficit reduction measures are the equivalent of almost $1 trillion as a share of the U.S. budget. Now that the EU and IMF have addressed Greece's liquidity crisis, it remains to be seen whether Greece will follow through on its agreed provisions to tackle its solvency issue.

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by donsutherland1 View Post
    This morning, Bloomberg.com reported:

    Greece Accepts Terms of EU-Led Bailout, ?Savage? Budget Cuts - Bloomberg.com

    To put things into perspective, the final amount of deficit reduction measures are the equivalent of almost $1 trillion as a share of the U.S. budget. Now that the EU and IMF have addressed Greece's liquidity crisis, it remains to be seen whether Greece will follow through on its agreed provisions to tackle its solvency issue.
    That's why they demanded a role for the IMF. I think it depends on Papandreou's ability to convince Greeks of the budget cuts.

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    ye goode olde times of london, sunday edition:

    Greece erupts as men from IMF prepare to wield axe - Times Online

    MAY DAY protests in Greece turned violent yesterday as youths in gas masks and hoods set fire to vehicles, smashed shop fronts and threw molotov cocktails and rocks at police in an explosion of fury over austerity measures they claim will hurt only the poor.

    Tourists were cut off from their hotels as thousands of communists, civil servants and private-sector workers converged on a main square in Athens to vent their rage at the European Union and the International Monetary Fund (IMF).

    Some young Greeks prefer to blame their elders for the mountain of debt that has resulted in Greece, like a wayward child, being placed under the tutelage of the men from the IMF.

    “I cannot help but blame my parents a little for what’s happened,” said Achilles Zacharoulis, a 36-year-old cardiologist. “They were here all that time,” he added, referring to the past three decades of mismanagement and fiscal insanity. “But what did they do to stop it?”

    Vaggelis Gettos, 24, is just as alarmed at the burden being heaped on the young by austerity measures expected to be announced today, and has pledged to resist them in more protests this week against what he sees as a plot to impoverish Greece.

    “We will live much worse than our parents,” he said. “Why should we be made to pay for their mistakes?”

    The question of who was to blame and who should pay for the greatest crisis to afflict the single currency was a subject of heated debate, particularly after a leading credit rating agency put the cradle of civilisation in the same category as Azerbaijan by reducing its government bonds to “junk” status.

    Economists regard the bloated civil service with its jobs for life and generous pensions as a cancer consuming the country’s resources. The older generation, the experts grimly concur, turned the state into a giant cash machine to be plundered at will.

    Even greater social unrest is expected as resentment simmers among poorer families at being told to tighten their belts when wealthy Greeks can protect their fortunes by moving their money abroad, some of it into property bargains in London.

    Some are already referring to a “lost generation” who will never find jobs or security, but the students, proud of their university’s reputation for being at the forefront of the uprising against the military dictatorship in 1973, are not the only ones planning resistance.

    Mikis Theodorakis, the 84-year-old musician who composed the score for the film Zorba the Greek, calls for revolt against what he sees as an American plot to turn Greece into a “protectorate”. Bureaucrats will raise their fists at the barricades in a general strike and protests on Wednesday to protect their considerable perks from the IMF.

    They and other public sector workers are virtually unsackable, can retire as early as 45 and get bonuses for using a computer, speaking a foreign language and arriving at work on time.

    Some of them get as many as four extra months’ salary a year, compared with the 14 months that are paid to other Greek workers. One of the most generous bonuses is paid to unmarried daughters of dead employees in state-controlled banks: they can inherit their parents’ pensions.

    Today the country’s budget deficit is 13.6% of GDP and the overall debt stands at €300 billion (£260 billion). Unemployment among 16- to 24-year-olds has risen to 30%, according to government figures. Crime, too, is increasing in Athens.

    “I feel like a prisoner here,” says Ilias Iliopoulos, head of the powerful civil servants’ union, gesturing to new bars on his windows after two recent burglaries of his office.

    People are stealing so they can live, so they can eat,” he said. “And it will only get worse. These [IMF] measures will drag hundreds of thousands of Greek citizens into a life of poverty.”

    As if in the path of an advancing army, Greeks are hiding their money. In the end, Stefanos, the retired captain, opted like his friends for a safety deposit box. The super rich, for their part, have shifted an estimated €11 billion to Cyprus and other havens since the start of the year, according to Konstantinos Michalos, president of the Athens chamber of commerce.

    There was hope, he believed, if the government lifted numerous restrictions on business. It costs more to transport a sack of potatoes from northern Greece to Athens than from Athens to Dusseldorf, because haulage, like many other sectors of the Greek economy, is an impenetrable cartel.

    When Michalos started a commodities trading business in London in the 1980s, the paperwork took him 48 hours, he said. In Greece’s “Soviet-style” economy he had to go through 117 bureaucratic procedures to get the right government permits. A wealthy friend of his had taken 10 years to win permission to put up a hotel.

    It would have taken him another 10 years or a large payment under the table if he wasn’t a friend of very important politicians,” said Michalos. Stournaras, an Oxford-educated economist, who believes that lifting these restrictions and trimming fat from the public sector will have an extraordinary effect on the Greek economy.
    worry

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    I feel sorry for the Greek people, but the Greek government should be ashamed of their spending patterns. Hopefully the Greek people will vote out the Panhellenic Socialist Movement and replace them with some real conservatives. Much of Europe is in a spending crisis due to the leadership of hard-left socialist parties. It seems America may be following in their footsteps with Obama's massive spending. My sympathies to the Greek people, hopefully they will make wise voting decisions in their next election.

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by digsbe View Post
    I feel sorry for the Greek people, but the Greek government should be ashamed of their spending patterns. Hopefully the Greek people will vote out the Panhellenic Socialist Movement and replace them with some real conservatives.
    It was the conservatives that got them into the problem in the first place.

    Much of Europe is in a spending crisis due to the leadership of hard-left socialist parties.
    Shows how much you know about Europe.

    It seems America may be following in their footsteps with Obama's massive spending.
    The US has been massively overspending since Reagan. Blaming Obama for something that started by the Conservatives favorite son is just pathetic.

    My sympathies to the Greek people, hopefully they will make wise voting decisions in their next election.
    Like voting in the very people who got them into trouble in the first place?
    PeteEU

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by PeteEU View Post
    It was the conservatives that got them into the problem in the first place.
    Really? How can you spin the facts to say that? The socialists have been in power in Greece sense the 80's.

    Shows how much you know about Europe.
    [/quote]
    Well, as I'm seeing all these bail outs and national debts the facts would show that Europe is in a spending nightmare. Facts play no partisanship, the liberals in Europe have trashed the place.

    The US has been massively overspending since Reagan. Blaming Obama for something that started by the Conservatives favorite son is just pathetic.
    Obama has spent far more massively in just his first year than any president in history. America's presidents have spent too much, but what Obama is spending is insane and more than we've ever seen.

    Like voting in the very people who got them into trouble in the first place?
    They would be voting in the conservatives to clean up the mess that the liberals/socialists have created. You can't blame the conservatives for this sense they haven't been the ones in power. In some countries it has been decades sense they have been in power.

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by digsbe View Post
    Really? How can you spin the facts to say that? The socialists have been in power in Greece sense the 80's.

    Shows how much you know about Europe.
    No you are wrong. The Prime Minister and hence the government from March 2004 to October 2009 was Kostas Karamanlis of the New Democracy party, which is a right wing conservative party.

    Well, as I'm seeing all these bail outs and national debts the facts would show that Europe is in a spending nightmare. Facts play no partisanship, the liberals in Europe have trashed the place.
    "Liberals" in European and world terms are right wingers. If you meant "socialists", then beware that much of the so called naughties and the 1990s, most major governments in Europe were right wing. And it was those governments that often can be directly blamed for things like Greece.

    As for "bail-outs" as in plural. What bail-outs as in plural? National debt levels in Europe have like in the US shot up because of the economic meltdown in the US causing a world wide crisis. National debt is nothing new and has been around since centuries.

    Obama has spent far more massively in just his first year than any president in history. America's presidents have spent too much, but what Obama is spending is insane and more than we've ever seen.
    Obama was not president in 2008. Fail again. And screw spending. Spending is not the problem, it is not having enough income and hence geting a deficit. And the US has been in deficit since forever with a few exceptions under Clinton. The biggest deficit spender was Reagan who almost tripled the national debt during his and Bush Sr 12 years in office. The along came Bush Jr and doubled that.

    They would be voting in the conservatives to clean up the mess that the liberals/socialists have created. You can't blame the conservatives for this sense they haven't been the ones in power. In some countries it has been decades sense they have been in power
    Again it was a conservative party that was in power from 2004 to 2009 and heavily involved in the problem. The Greek socialists are not innocent either since they were in power when Greece qualified and entered the Eurozone, but the conservative government that followed them did nothing but make the problem far far far worse than it was.
    PeteEU

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by PeteEU View Post
    No you are wrong. The Prime Minister and hence the government from March 2004 to October 2009 was Kostas Karamanlis of the New Democracy party, which is a right wing conservative party.
    Before then it was the socialists, and after them it was the socialists. Seeing how they have handled things it hasn't been very good. Although if the conservative party spent like socialist then they deserve to be voted out. Conservatives in name only are just as bad.

    "Liberals" in European and world terms are right wingers. If you meant "socialists", then beware that much of the so called naughties and the 1990s, most major governments in Europe were right wing. And it was those governments that often can be directly blamed for things like Greece.
    When I mean socialists I mean countries run by a socialist political party. By liberal I mean liberals by American terms (people on the left of the spectrum). I'm sorry if there was confusion. You can't really blame the right for this, so this problem arose in the 90's? In Greece's case the socialists were in power, the conservatives only had it between 2004-2009. Germany is run by a right-wing party and from what I understand the EU is looking to them to bail out the socialist led countries because Germany has the money to do it.
    As for "bail-outs" as in plural. What bail-outs as in plural? National debt levels in Europe have like in the US shot up because of the economic meltdown in the US causing a world wide crisis. National debt is nothing new and has been around since centuries.
    National debs have existed for decades. The problem is when the debts become unmanageable and spending goes out of control. Obama has spent almost and ran up a deficit that is almost as much as Bush did during his term. National debt levels shot up because countries decided to spend massively during the meltdown. The thing is keeping the national debts at manageable levels and trying to reduce it, not running it up and spending far more of what nations don't have. Countries should be run like a household, they need to live within their means and establish an "emergency" fund for times of crisis.


    Obama was not president in 2008. Fail again. And screw spending. Spending is not the problem, it is not having enough income and hence geting a deficit. And the US has been in deficit since forever with a few exceptions under Clinton. The biggest deficit spender was Reagan who almost tripled the national debt during his and Bush Sr 12 years in office. The along came Bush Jr and doubled that.
    How did I fail? My point was to look at Obama's spending and compare it to the presidents prior to him. Look at the debt and damage he has caused in just one year compared to other presidents before him. Spending is the problem, Obama has spent almost a trillion dollars on a failed stimulus bill and just keeps spending like a teenage girl with daddy's credit card. The problem is spending, not taxation. The US government (and others) seriously need to be held accountable like individuals and live within their means. It should be illegal to spend beyond what we have unless it is a state of national emergency and approved by the people. It's our money that's being thrown away. The biggest deficit spender is Obama, what he has done in 1 year outdoes any US president in history.

    Again it was a conservative party that was in power from 2004 to 2009 and heavily involved in the problem. The Greek socialists are not innocent either since they were in power when Greece qualified and entered the Eurozone, but the conservative government that followed them did nothing but make the problem far far far worse than it was.
    So the problem arose in Europe during the 90's when some countries had conservatives? Or the problem occurred in 2004-2009 when conservatives had power over Greece? I agree with you that the conservative government must have acted shamefully and not along conservative principals. The problem is that European countries have set up all these expensive state programs, and both the socialists and conservatives have spent like madmen.

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by PeteEU View Post
    It was the conservatives that got them into the problem in the first place
    LOL!

    from The Times:

    Economists regard the bloated civil service with its jobs for life and generous pensions as a cancer consuming the country’s resources. The older generation, the experts grimly concur, turned the state into a giant cash machine to be plundered at will.

    Bureaucrats will raise their fists at the barricades in a general strike and protests on Wednesday to protect their considerable perks from the IMF.

    They and other public sector workers are virtually unsackable, can retire as early as 45 and get bonuses for using a computer, speaking a foreign language and arriving at work on time.

    Some of them get as many as four extra months’ salary a year, compared with the 14 months that are paid to other Greek workers. One of the most generous bonuses is paid to unmarried daughters of dead employees in state-controlled banks: they can inherit their parents’ pensions.

    It costs more to transport a sack of potatoes from northern Greece to Athens than from Athens to Dusseldorf, because haulage, like many other sectors of the Greek economy, is an impenetrable cartel.

    When Michalos started a commodities trading business in London in the 1980s, the paperwork took him 48 hours, he said. In Greece’s “Soviet-style” economy he had to go through 117 bureaucratic procedures to get the right government permits. A wealthy friend of his had taken 10 years to win permission to put up a hotel.

    “It would have taken him another 10 years or a large payment under the table if he wasn’t a friend of very important politicians,” said Michalos. Stournaras, an Oxford-educated economist.

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    Re: Greece Accepts Terms of EU-Led Bailout, ‘Savage’ Budget Cuts

    Quote Originally Posted by digsbe View Post
    Before then it was the socialists, and after them it was the socialists. Seeing how they have handled things it hasn't been very good. Although if the conservative party spent like socialist then they deserve to be voted out. Conservatives in name only are just as bad.
    You said it was the socialists fault and it clearly was not. The Conservatives were the ones who lied about the depth of the problem and it was the socialists who won an election because of this and exposed them. What is being investigated now is if the previous socialist government lied about their economy when Greece entered the Eurozone. There is no doubt what so ever that the previous conservative Greek government lied to the EU and its international partners over its economy for the 5 years the Conservative right wing government was in power.

    When I mean socialists I mean countries run by a socialist political party. By liberal I mean liberals by American terms (people on the left of the spectrum). I'm sorry if there was confusion. You can't really blame the right for this, so this problem arose in the 90's?
    No, again you are wrong. What problem are we talking about first off? That countries in Europe have debt? Every country on the planet has debt. The US has debt. Japan has 200%+ debt.

    In Greece's case the socialists were in power, the conservatives only had it between 2004-2009.
    When the false reporting to the EU and the world was happening.. that was from 2004 to 2009 when the right wing government was in power.

    Germany is run by a right-wing party and from what I understand the EU is looking to them to bail out the socialist led countries because Germany has the money to do it.
    Again you are ill informed. The EU is not looking to anyone to loan Greece money. The Eurozone, not the EU, is working with the IMF to help Greece out. All Eurozone members will be contributing to the funding with Germany being the largest contributor since it is the largest single economy in the Eurozone. Yes Germany is a center right government, but so are many of the Eurozone members governments, now and during the 1990s and 2000s.

    National debs have existed for decades. The problem is when the debts become unmanageable and spending goes out of control.
    And what is "out of control" exactly? That there is deficit spending during a massive recession.. no **** sherlock that happens in most countries and is the only way. We know this from experience.. the great depression.

    Obama has spent almost and ran up a deficit that is almost as much as Bush did during his term.
    Again more false information. Look at your debt levels, and your deficit composition. Not all, far from all, but quite a bit, comes from Bush and before.

    National debt levels shot up because countries decided to spend massively during the meltdown.
    Which is exactly the way to go.

    The thing is keeping the national debts at manageable levels and trying to reduce it, not running it up and spending far more of what nations don't have.
    You have been spending like drunken sailors for 30+ years..

    Countries should be run like a household, they need to live within their means and establish an "emergency" fund for times of crisis.
    And that is a load of bs. Countries are not households. Households dont have a guaranteed income, countries do. Already your theory goes out the window.

    Now saying that, countries should not spend like drunken sailors in the good times.. something the US has done for the last 30+ years. European countries have for the most part not. In fact places like Spain and Denmark paid down their debt levels considerably during the good years... in Denmarks case to no external state debt at all.

    How did I fail? My point was to look at Obama's spending and compare it to the presidents prior to him. Look at the debt and damage he has caused in just one year compared to other presidents before him. Spending is the problem, Obama has spent almost a trillion dollars on a failed stimulus bill and just keeps spending like a teenage girl with daddy's credit card.
    I dont want to get into Obama and the US too much, but safe to say you are wrong. The 3% growth rate last quarter shows that.

    The problem is spending, not taxation.
    Its both. You spend too much and you dont collect enough taxes. It is pretty simple.

    The US government (and others) seriously need to be held accountable like individuals and live within their means. It should be illegal to spend beyond what we have unless it is a state of national emergency and approved by the people. It's our money that's being thrown away. The biggest deficit spender is Obama, what he has done in 1 year outdoes any US president in history.
    And this child like economics does not work in the real world.

    So the problem arose in Europe during the 90's when some countries had conservatives? Or the problem occurred in 2004-2009 when conservatives had power over Greece? I agree with you that the conservative government must have acted shamefully and not along conservative principals. The problem is that European countries have set up all these expensive state programs, and both the socialists and conservatives have spent like madmen.
    LOL I see, just because you dont agree with your conservative cohorts then they are not conservative enough? And what are conservative principals? Your principles? What American conservatives say are principals?

    You do know that no one right wing US government since forever has ever gotten even close to a balanced budget? Most of the time they have expanded the deficit to new heights.. Reagan did it, Bush did it. Is that the conservative principles we are talking about?
    PeteEU

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