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Thread: Sights and Sounds: Greek Protests

  1. #11
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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by Stopandthink View Post
    Years of government spending more than it takes in, people taking a privilege and thinking it is now a right, money runs out, people revolt. O yes, it is coming.
    25% unemployment.

    If we didn't revolt by then, then I would question the balls of every American.

    the Greeks are heroes.
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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by Peter Grimm View Post
    It's mind-blowing that something like this is occurring in the Western World.

    In other news, Greece was recently forced to amend their constitution to mandate, in other words, that the repayment of debt comes before all other responsibilities of the government.

    That's a loss of national sovereignty. I can understand the people's anger. The EU experiment hasn't worked out well at all for the Greeks.
    Actually, it has worked to their benefit. They are floundering as a result of public policy, and their other member nations are coming to their rescue.
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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by lizzie View Post
    Actually, it has worked to their benefit. They are floundering as a result of public policy, and their other member nations are coming to their rescue.
    The EU wouldn't need to rescue them if Greece was monetarily sovereign.
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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by JP Hochbaum View Post
    The EU wouldn't need to rescue them if Greece was monetarily sovereign.
    I would have no problem with that, however, they aren't, thus the EU is liable to bail them out.
    "God is the name by which I designate all things which cross my path violently and recklessly, all things which alter my plans and intentions, and change the course of my life, for better or for worse."
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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by lizzie View Post
    Actually, it has worked to their benefit. They are floundering as a result of public policy, and their other member nations are coming to their rescue.
    The reason the EU is such a burden to the Greeks is because they no longer have any control over their currency (they are on the Euro). If Greece were still using the drachma, they could devalue their currency and simultaneously ease the debt burden and promote growth.

    Being in the EU is like having an anvil shackled to their ankle, and being thrown in a river. They can't do anything. They are at the mercy of their creditors.

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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by Peter Grimm View Post
    The reason the EU is such a burden to the Greeks is because they no longer have any control over their currency (they are on the Euro). If Greece were still using the drachma, they could devalue their currency and simultaneously ease the debt burden and promote growth.

    Being in the EU is like having an anvil shackled to their ankle, and being thrown in a river. They can't do anything. They are at the mercy of their creditors.
    Well, Greece could decide to leave the eurozone unilaterally. But I assume the Greeks don't really want that, because the next step would be an inevitable bankruptcy -- even with their devaluated new drachma, they'd still have to pay back their debts in euros. And considering the dive a new drachma would experience the moment it's on the market, there is no chance on earth they could ever pay that.

    But yeah, the entire situation is a mess. Greece lied when it applied for the euro, and the other Europeans turned a blind eye. Some others, including Germany, soon violated the stability pact on their own. Anyway, we're all in this together now, and nationalistic whining on either side won't solve the problem.

    Changes must be in Greece, no doubt about it. But you're right that much of what we see now is not proportionate. Especially because of the impact it has on the Greek economy.

    One thing that bothered me when I read it the other day was that apparently, Germany insists on Greece keeping up the plans for a billions arms deal. Greek had signed to buy tanks from Germany, but somehow, this plan is not cancelled. Although every sane person would assume that buying tanks for billions is not top priority for Greece at the moment. Apparently, Merkel disagrees.

    So what are the options? Greece going bankrupt is a bad idea. It might cause a domino effect, causing more economies to tremble, like Portugal or Spain -- and many banks. We'd see a new banking crisis, probably even worse than the one in 2008. Greece would drag the eurozone into the abyss along with it.

    What about eurobonds and the ECB buying more papers? Many support it. The German opposition supports it (the Greens do, the SPD too, IIRC), so does Francois Hollande, the Socialist in France who is likely to win the election in May.

    So why not going for some more inflation? It's not that Germany can't afford moderate inflation. We'll see what happens if Hollande wins the election.

    At least debtee banks have agreed on a partial debt relief. Of the new aid package, 130 billion are coming from the EU (most of it from Germany) and another 107 billion from the banks. IIRC.

    So at least the banks are contributing *something*.

    And I wonder, how is lowering the minimum wage supposed to help the economy anyway? Do they really expect the companies will hire more employees?

    Most of all, an infrastructure for actually collecting taxes seems to be missing. Apparently, judging by what I've read, most people in Greece don't even pay the full amount of taxes they're required to, simply because there is no infrastructure for collecting it. Makes one think that should be priority, instead of badgering those who have very few already.
    "Not learning from mistakes is worse than committing mistakes. When you don't allow yourself to make mistakes, it is hard to be tolerant of others and it does not allow even God to be merciful."

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    Re: Sights and Sounds: Greek Protests

    The 1%ers in Greece, can only fool the people for so long before they revolt in the name of social justice.
    Caitlyn Strong...

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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by German guy View Post
    Well, Greece could decide to leave the eurozone unilaterally. But I assume the Greeks don't really want that, because the next step would be an inevitable bankruptcy -- even with their devaluated new drachma, they'd still have to pay back their debts in euros. And considering the dive a new drachma would experience the moment it's on the market, there is no chance on earth they could ever pay that.

    But yeah, the entire situation is a mess. Greece lied when it applied for the euro, and the other Europeans turned a blind eye. Some others, including Germany, soon violated the stability pact on their own. Anyway, we're all in this together now, and nationalistic whining on either side won't solve the problem.

    Changes must be in Greece, no doubt about it. But you're right that much of what we see now is not proportionate. Especially because of the impact it has on the Greek economy.

    One thing that bothered me when I read it the other day was that apparently, Germany insists on Greece keeping up the plans for a billions arms deal. Greek had signed to buy tanks from Germany, but somehow, this plan is not cancelled. Although every sane person would assume that buying tanks for billions is not top priority for Greece at the moment. Apparently, Merkel disagrees.

    So what are the options? Greece going bankrupt is a bad idea. It might cause a domino effect, causing more economies to tremble, like Portugal or Spain -- and many banks. We'd see a new banking crisis, probably even worse than the one in 2008. Greece would drag the eurozone into the abyss along with it.

    What about eurobonds and the ECB buying more papers? Many support it. The German opposition supports it (the Greens do, the SPD too, IIRC), so does Francois Hollande, the Socialist in France who is likely to win the election in May.

    So why not going for some more inflation? It's not that Germany can't afford moderate inflation. We'll see what happens if Hollande wins the election.

    At least debtee banks have agreed on a partial debt relief. Of the new aid package, 130 billion are coming from the EU (most of it from Germany) and another 107 billion from the banks. IIRC.

    So at least the banks are contributing *something*.

    And I wonder, how is lowering the minimum wage supposed to help the economy anyway? Do they really expect the companies will hire more employees?

    Most of all, an infrastructure for actually collecting taxes seems to be missing. Apparently, judging by what I've read, most people in Greece don't even pay the full amount of taxes they're required to, simply because there is no infrastructure for collecting it. Makes one think that should be priority, instead of badgering those who have very few already.
    For Greece to leave unilaterally, I think they would need to buy several more of those tanks before they go.

    I say that because in truth, they would need to cancel or unilaterally write down their debts, which would not make them very popular with their neighbors. They could never afford to pay the full value.

    As you say, it is almost impossible at this point for Greece to leave the Euro on their own. Nations entered in to the agreement so blindly and nonchalantly. And now they are stuck in a bad situation.

    That said, I agree with your assessment. The only option that exists is to continue to fund Greece with loans, to continue to write down loans, and to go through the painful process at the negotiating table.

    What worries me is that there is nothing to stop this from happening again. I haven't even seen proposals put forth that would make the needed reforms to the EU that would prevent this, and that is concerning.

    What happens if it is Spain? Italy? Germany is a strong economy, but you can't afford to bail out those much larger nations.

    The Euro is like taking seventeen cats and tying their tails together. You hope to create a tiger, but probably you just have seventeen angry cats.
    Last edited by Peter Grimm; 02-23-12 at 03:35 AM.

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    Re: Sights and Sounds: Greek Protests

    Quote Originally Posted by Peter Grimm View Post
    For Greece to leave unilaterally, I think they would need to buy several more of those tanks before they go.

    I say that because in truth, they would need to cancel or unilaterally write down their debts, which would not make them very popular with their neighbors. They could never afford to pay the full value.
    As I said, leaving the euro would mean an immediate bankruptcy for Greece the moment the new drachma is on the market.

    As you say, it is almost impossible at this point for Greece to leave the Euro on their own. Nations entered in to the agreement so blindly and nonchalantly. And now they are stuck in a bad situation.

    That said, I agree with your assessment. The only option that exists is to continue to fund Greece with loans, to continue to write down loans, and to go through the painful process at the negotiating table with the creditors.

    What worries me is that there is nothing to stop this from happening again. I haven't even seen proposals put forth that would make the needed reforms to the EU that would prevent this, and that is concerning.
    Well, then you haven't paid attention.

    Germany

    Germany and France got through this plan for a debt brake. Of the 27 EU countries, 25 have signed it, including those EU members which don't even have the euro currency yet -- the only two countries to stay out are the United Kingdom and the Czech Republic. It was the event shortly before Christmas when there was bruohaha about Britain being isolated in the EU.

    What happens if it is Spain? Italy? Germany is a strong economy, but you can't afford to bail out those much larger nations.

    The Euro is like taking seventeen cats and tying their tails together. You hope to create a tiger, but probably you just have seventeen angry cats.
    If Greece goes bankrupt and drags others with them, such as Spain and/or Italy and many French and German banks, that would be the worst case. Probably a new banking crisis, this time worse than 2008. And I don't think the effect would be limited to the EU. You'd probably feel the shockwaves in America too.

    Of course, another remaining option would be "eurobonds".

    Eurobonds - Wikipedia, the free encyclopedia

    You in America have the benefit that you have "dollarbonds" already: The entire USA has one single common interest rate for your government bonds. If that wasn't the case, you'd probably be in the same situation as Europe is now, because the bankruptcy of a weak state such as Mississippi or Utah could drag down stronger states such as California and Texas into the abyss, much like Greece threatens to do with the eurozone.

    Eurobonds would result in a single interest rate for government papers, the same in Greece and Germany. That would mean for Greece a much, much lower interest rate than currently without eurobonds, and a higher interest rate for Germany. Basically, it would be a financial transfer from Germany to Greece.

    Many say it was a stupid idea to introduce a common currency on one side, but avoiding to harmonize the government bonds on the other side. It's like wanting to have the cake and eat it too.

    There are not few in Europe who support eurobonds. The French and most less prosperous EU countries did, before "Madame No" Merkel pushed through her debt brake idea. The French Socialists, including their Presidential candidate Francois Hollande, who is likely to win the election and replace Sarkozy in May, still support the idea. So do the German opposition parties.

    I'd say it's not a bad idea. Merkel is playing a risky game. It'd be better if we played it safe now, instead of waiting until it's too late and even eurobonds won't help anymore.
    "Not learning from mistakes is worse than committing mistakes. When you don't allow yourself to make mistakes, it is hard to be tolerant of others and it does not allow even God to be merciful."

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    Re: Sights and Sounds: Greek Protests

    no thanks ,no need for EU

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