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[Greece]!: Screwed! (Maybe!)

Tiger BurningTiger Burning Dig if you will, the pictureRegistered User, SolidSaints Tube regular
edited April 2010 in Debate and/or Discourse
So Greece, a country, known for basketball and for the invention of homosexuality, has some problems. Apparently it lied on its credit card application and ran up a bunch of debt that it now may not be able to pay back. It's a really good place to be a hairdresser, however.
Vasia Veremi may be only 28, but as a hairdresser in Athens, she is keenly aware that, under a current law that treats her job as hazardous to her health, she has the right to retire with a full pension at age 50.

“I use a hundred different chemicals every day — dyes, ammonia, you name it,” she said. “You think there’s no risk in that?”

“People should be able to retire at a decent age,” Ms. Veremi added. “We are not made to live 150 years.”

Germany, which is another country, not really known for basketball or hairdressing, might help Greece out. But first it wants Greece to raise its taxes and cut its fairly generous social services to help close the gap. Germans, who just recently raised their own retirement age to 67 from 65 to alleviate similar concerns back home, are not generally happy about helping the Greeks, who get retirement at 60. Greece in turn is not happy about the cuts demanded by Germany, aka Europe's ATM, and some officials have gone so far as to bring up some kind of unpleasantness that happened 70 or so years ago, in protest.

A greek hairdresser:
12pension1-articleLarge.jpg

So, Greece: unfairly put-upon land of brave and virtuous hairdressers, or unsustainable wasteland of degenerate and dissolute hairdressers?

Ain't no particular sign I'm more compatible with
Tiger Burning on
«134

Posts

  • YogoYogo Registered User regular
    edited March 2010
    Greece has always been fiddling with the books. I recently talked to my dad about this issue and back in early 90's where he was on a business trip in Greece, he saw the same thing: massive debt, no plan to pay back, fiddling with the books.

    Essentially people have known about this for a long time, but instead of fixing it people have just hid it away in the closet and hoping the next caretakers would not be smart enough to open it (and if opening it, just hiding it further away).

    Greece will have to cut back on their generous social securities if they wish to sustain an economy that can support its population. Of course the Greek government is in a tight situation. To accept aid they have to cut their social programs at the risk of angering the public (and causing city wide riots). I cannot see an easy way out of this.

    Yogo on
  • ronyaronya Arrrrrf. the ivory tower's basementRegistered User regular
    edited March 2010
    In the absence of an easy way out, there's an inevitable way out: the Greek government goes bankrupt and simply ceases to pay pensions and everything else.

    At which point Germany might step in and impose austerity anyway, which will cause riots. Because, you know, seventy years ago.

    ronya on
    aRkpc.gif
  • tinwhiskerstinwhiskers Registered User regular
    edited March 2010
    unsustainable wasteland of degenerate and dissolute hairdressers

    Retiring at 50 with full benefits as a hair dresser...theres no way shes ever going to pay in a fraction of what she'll take out. The Germans are right, except for the taxes EVERYONE knows lower taxes increase revenue.

    pink- for pinko commie motherfuckers.

    tinwhiskers on
  • BubbaTBubbaT Registered User regular
    edited March 2010
    So a European country is demanding a buttload of cash from Germany because Germany lost the last war. That worked out so well last time.

    Where was Greece and the rest of Western Europe stepping in to bailout the USSR when it was collapsing? The USSR did more to win WWII in Europe than anyone.

    BubbaT on
  • HachfaceHachface Not the Minister Farrakhan you're thinking of Registered User regular
    edited March 2010
    The Germans are right, except for the taxes EVERYONE knows lower taxes increase revenue.

    You need to add a few "if... then" statements before this becomes uncontroversial.

    Hachface on
  • TanolenTanolen Registered User regular
    edited March 2010
    Germany was wanting greece to sell off islands to pay for the debt. But apparently nobody really wants to buy greek islands since they have been trying to sell alot of them off.

    Tanolen on
  • Anarchy Rules!Anarchy Rules! Registered User regular
    edited March 2010
    BubbaT wrote: »
    So a European country is demanding a buttload of cash from Germany because Germany lost the last war. That worked out so well last time.

    Where was Greece and the rest of Western Europe stepping in to bailout the USSR when it was collapsing? The USSR did more to win WWII in Europe than anyone.

    It's less that, and more that Germany is the most economically powerful country in the EU, or at least the euro, and therefore is largely in charge of EU finances. It's the equivalent of the US helping Haiti the most as opposed to say Turks and Caicos. If Greece becomes bankrupt then it would massively devalue the € and it would affect the other countries that use the €.

    The USSRsic isn't in the EU so doesn't have any involvement in Greek finances.

    Anarchy Rules! on
  • [Tycho?][Tycho?] Registered User regular
    edited March 2010
    There is currently massive social unrest in Greece. There are general strikes among air traffic controllers, teachers, hospital workers and more. Remember those huge riots in Greece last year? Well all that anger is still there. Police are fighting demonstrators regularly; and police pensions are being cut heavily as well. Greece needs to implement its austerity measures in order to bring its books into check after years of corruption. The Greek public says no way, people don't want their pay and pensions cut because the rich and powerful tried to cheat the system. It makes for very interesting times.

    [Tycho?] on
    mvaYcgc.jpg
  • TanolenTanolen Registered User regular
    edited March 2010
    Greece is also demanding money from germany because germany didn't pay greece what it was promised from the nazi occupation. Not sure how true this is, but greece's Prime Minister did call germany on it few weeks ago.

    Tanolen on
  • ImprovoloneImprovolone Registered User regular
    edited March 2010
    I heard on NPR that the tax collectors that visit the rich take a lot of under the table payments. The underground economy is Greece is estimated at 30% of their real economy.
    Thats fucking huge.


    Oh, and a bunch of people screwed leaving schools closed and hospitals operating on Emergency only staff. Greece is totally screwed. Whats awesome is how much Goldman Sachs plays into this.

    Improvolone on
    Voice actor for hire. My time is free if your project is!
  • tinwhiskerstinwhiskers Registered User regular
    edited March 2010
    [Tycho?] wrote: »
    There is currently massive social unrest in Greece. There are general strikes among air traffic controllers, teachers, hospital workers and more. Remember those huge riots in Greece last year? Well all that anger is still there. Police are fighting demonstrators regularly; and police pensions are being cut heavily as well. Greece needs to implement its austerity measures in order to bring its books into check after years of corruption. The Greek public says no way, people don't want their pay and pensions cut because the rich and powerful tried to cheat the system. It makes for very interesting times.

    I really don't buy this. A few really powerful assholes can steal a lot of cash, but the insane entitlement system coupled with ever extending average life expectancy seems a much more likely culprit. If you are over payed and the pension system was way under funded, you're benefits need to get cut. Sounds a lot like the US, except we can inflate our debt away if things get really bad.

    edit: heres a story about the germans owing the greeks money from WWII. http://euobserver.com/9/29551, the Greek guy seems to think countries have money because of their gold reserves.

    tinwhiskers on
  • MalaysianShrewMalaysianShrew Registered User
    edited March 2010
    [Tycho?] wrote: »
    There is currently massive social unrest in Greece. There are general strikes among air traffic controllers, teachers, hospital workers and more. Remember those huge riots in Greece last year? Well all that anger is still there. Police are fighting demonstrators regularly; and police pensions are being cut heavily as well. Greece needs to implement its austerity measures in order to bring its books into check after years of corruption. The Greek public says no way, people don't want their pay and pensions cut because the rich and powerful tried to cheat the system. It makes for very interesting times.

    I really don't buy this. A few really powerful assholes can steal a lot of cash, but the insane entitlement system coupled with ever extending average life expectancy seems a much more likely culprit. If you are over payed and the pension system was way under funded, you're benefits need to get cut. Sounds a lot like the US, except we can inflate our debt away if things get really bad.

    I wonder what their budget looks like compared to ours. Our military budget is ridiculous so you have to expect the US to get a lot less social services from the same amount of taxes than other countries.

    MalaysianShrew on
    Never trust a big butt and a smile.
  • Tiger BurningTiger Burning Dig if you will, the pictureRegistered User, SolidSaints Tube regular
    edited March 2010
    [Tycho?] wrote: »
    There is currently massive social unrest in Greece. There are general strikes among air traffic controllers, teachers, hospital workers and more. Remember those huge riots in Greece last year? Well all that anger is still there. Police are fighting demonstrators regularly; and police pensions are being cut heavily as well. Greece needs to implement its austerity measures in order to bring its books into check after years of corruption. The Greek public says no way, people don't want their pay and pensions cut because the rich and powerful tried to cheat the system. It makes for very interesting times.

    I really don't buy this. A few really powerful assholes can steal a lot of cash, but the insane entitlement system coupled with ever extending average life expectancy seems a much more likely culprit. If you are over payed and the pension system was way under funded, you're benefits need to get cut. Sounds a lot like the US, except we can inflate our debt away if things get really bad.

    I wonder what their budget looks like compared to ours. Our military budget is ridiculous so you have to expect the US to get a lot less social services from the same amount of taxes than other countries.

    Sort of. The US has a much higher per capita GDP, so the same tax levels bring in much more revenue. But yes, we in the US have both lower taxes and lower levels of social services. Which might not be entirely bad, given that our own long term retirement benefit commitments are also pretty huge. Having lower taxes means we have more room to raise them in the future if things start to get out of hand.

    Tiger Burning on
    Ain't no particular sign I'm more compatible with
  • Saint MadnessSaint Madness Registered User
    edited March 2010
    I reccomend this piece from The Economist's european blog. There are a few others pn the Greek/German situation on there as well.
    Greece: not a simple fable about ants and crickets

    * Mar 8th 2010, 17:59 by Charlemagne

    EMPATHY is always in short supply in recessions, even within the European Union where we are all supposed to understand each other instinctively. But really, the cross-border debate on Greece is depressingly simplistic. From German news magazines talking about "Swindlers in the Euro family" to senior Greek politicians talking about wartime reparations, it is easy to conclude that beneath a veneer of rationality, cartoonish stereotypes lurk just below the surface of all Euro-debates.

    I have lost count of the number of references I have seen to the fable of the ant and the cricket: with people thinking of either the Æsop version or (in French newspapers) the version by Jean de La Fontaine, I suppose.

    Well here is the thing. Real, live Germans are not heartless ants, and the Greeks are not broke because they are giddy crickets who sing their summers away. Greece is a grown-up country with grown-up problems: rough, tough politics, and a lot of recent history, not all of it very nice. And it is precisely that recent history, and rough politics, that are at the core of Greece's fiscal woes today. Take the painful question of the huge public sector, and all those civil servants with jobs for life, and unusually generous retirement packages. The existence of those jobs for life is not a cultural quirk, in which Greek officials simply like coffee and backgammon too much to do any work. It is the end result of a brutal, multi-decade power struggle between the left and the right: a struggle that got people killed within living memory.

    Talking to a Greek friend (and former senior finance official) the other day, he very precisely placed the origins of the current fiscal mess in the eminently political move by the former socialist prime minister, Andreas Papandreou (father of the current prime minister, George) to use public sector jobs to bring Greeks of the left into the mainstream of Greek life, after years of exclusion. My friend is from the centre-right, as it happens, but to him the problems of the current Papandreou could not be understood in terms of bad policies alone. They are something bigger, and darker: a tragic inheritance from his father.

    I strongly recommend the English-language edition of Kathimerini, the centre-right Greek newspaper, which has run some excellent commentaries throughout this crisis, trying to explain the context of Greece's modern day woes. Here is their summary of how the public sector ballooned under the Greek socialist party (PASOK) of the Papandreous, notable for the way it does not spare the main conservative party, New Democracy:

    The late Andreas Papandreou’s strategy in the 1980s was to give the disenfranchised, who formed the bulk of PASOK’s voters, a shot at living like the middle class. If this meant throwing European assistance and subsidies around like political favors and giving pensions to people who had never contributed to social security (such as farmers), then so be it. At last, all those who had been shut out by the right-wing establishment which triumphed in the Civil War in 1946-49 – and which was thoroughly discredited by the dictatorship of 1967-74 – would get to share in the wealth of the nation. The fact that this new middle class was founded on wealth that the country was not producing meant that the economy broke free from all logic and went into its own orbit. PASOK established the National Health System and poured money into education but it also undermined the gains by destroying any semblance of hierarchy, accountability and recognition of merit in the public sector. This meant that no one really knew how much money was being spent nor whether those who deserved it most were getting it. Costs rose while productivity plummeted. A wasteful public sector, in turn, condemned the private sector to inefficiency and lack of competitiveness. New Democracy, especially in the 2004-09 period, made the situation worse by doing almost nothing to cut costs and increase revenues, allowing the economy to career out of control.

    The Greek civil war, and the bloody score-settling that followed, is a living memory for many Greeks. Any consideration of Greek nepotism or clientelism needs to be seen in that light. So for example, it is not enough to say that Greek civil servants enjoy jobs for life, and that is a big problem. (Though it is a big problem, not least because many Greek civil servants are paid pitiful wages—partly because there are so many of them. That means they will resist austerity measures all the harder, because they feel like victims in this crisis, not fat cats.) But the bloated public sector is also a function of history. Here again, is a commentary from Kathimerini:

    The vast majority of Greek civil servants and others working in public enterprises are guaranteed lifetime employment. This practice arose from the country’s recent past, when any new government coming to power would fire the employees hired by its predecessor and replace them with its own supporters. Unfortunately, immunity from dismissal has been abused and simply offers hundreds of thousands of employees shelter from changing economic conditions. The fact that these employees cannot be fired, except for extremely serious reasons, has contributed to the decline of productivity in the public sector.

    Moreover, public servants are guaranteed promotions based on the years they are at work and can only move faster up the ladder if they have good connections with politicians and trade unionists. The latter resist any new hiring from the market, arguing that there are plenty of public servants who can do the job instead.

    Newspapers here in Belgium talk all the time about the government needing to "buy social peace" by paying off some interest group or other. In Belgium, the alternative to "paix sociale" is a strike. In Greece, plenty of grown-ups remember when the alternative to social peace was their neighbour, or their loved-one, vanishing in the night into a jail cell or worse. The current clientelist truce between right and left is the price (albeit a horrible, wasteful price) established for the current version of social peace enjoyed in Greece.

    None of this is to side with Greek public sector trade unions, or Greek Communists. I suspect regular readers of this blog would be a trifle sceptical if I started down that path. This posting was actually prompted by the recent snide little jokes in the German press about how Greece should sell Corfu in exchange for a bailout. I have been visiting Corfu for nearly 30 years, and have some very old friends there. I know it well enough to know that just off the shore in the bay of Corfu Town, for example, there is a little island covered in pine trees, that looks an idyllic spot for a picnic. That was where Communist prisoners were taken to be shot, in the hearing of their wives and children in the town. A lot needs to change in Greece, and Greece has done a lot to deserve the scepticism it endures in Brussels. Nor can everything bad be blamed on history: it is not the civil war that makes Greek lawyers or dentists declare incomes of €20,000, and keep the rest in cash, for instance.

    But Greeks are not children, or silly crickets chirping in the sun. They are adults, from a real place. If Europe is to get out of this crisis in good shape, we will need a lot more empathy.

    Saint Madness on
  • themightypuckthemightypuck MontanaRegistered User regular
    edited March 2010
    Sounds like California.

    themightypuck on
    “Reject your sense of injury and the injury itself disappears.”
    ― Marcus Aurelius

    Path of Exile: themightypuck
  • HenroidHenroid Radio Demon Internet HellRegistered User regular
    edited March 2010
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    Henroid on
    Centrism is just the cowardly way to be a bigot w/o being explicit about it.
    American politics isn't 4D chess, it's just if you give a shit about other people or not.
  • Saint MadnessSaint Madness Registered User
    edited March 2010
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Saint Madness on
  • Andrew_JayAndrew_Jay Registered User
    edited March 2010
    I heard on NPR that the tax collectors that visit the rich take a lot of under the table payments. The underground economy is Greece is estimated at 30% of their real economy.

    Thats fucking huge.
    Yep, per capita, Greeks spend about $4,000 a year on bribes, split fairly evenly between the public and private sectors. And there is a rampant culture of tax evasion and cheating.

    Andrew_Jay on
  • HenroidHenroid Radio Demon Internet HellRegistered User regular
    edited March 2010
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    Henroid on
    Centrism is just the cowardly way to be a bigot w/o being explicit about it.
    American politics isn't 4D chess, it's just if you give a shit about other people or not.
  • Tiger BurningTiger Burning Dig if you will, the pictureRegistered User, SolidSaints Tube regular
    edited March 2010
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    It becomes very cheap for Americans to visit Europe.

    Tiger Burning on
    Ain't no particular sign I'm more compatible with
  • HachfaceHachface Not the Minister Farrakhan you're thinking of Registered User regular
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    This is kind of a hard question to answer because it happens so rarely--like, maybe never.
    But basically the government wouldn't be able to pay for anything. It would essentially cease to exist.

    Hachface on
  • RentRent I'm always right Fuckin' deal with itRegistered User regular
    edited March 2010
    So basically Greece is France without the successful economy and a heavy culture of bribery?

    Yeah don't really see the problem with Germany going 'Yeah we'll bail you out but you need to do X, Y, and Z for us first'.

    Rent on
  • CorehealerCorehealer The Apothecary The softer edge of the universe.Registered User regular
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    My guess? Anarchy. Money does make even their world go round. Without the means to bribe or retire or do much of anything, people will be forced to do things much more unpleasant then trying to beg/guilt trip Germany into giving them some money. Or someone can bail them out, begrudgingly, and can try and change things.

    Corehealer on
    488W936.png
  • adytumadytum Registered User regular
    edited March 2010
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    adytum on
    etxvv5.jpg
  • QuetzatcoatlQuetzatcoatl Registered User regular
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    If the IMF bails them out they pay of part of the debt, restructure the rest, set up a payment plan and in return get a large say in the country's finances for a while.

    If there was no one to bail them out then either the lender would have to forgive the debt or repossess something from Greece which would probably require the use of force.

    Quetzatcoatl on
  • CorehealerCorehealer The Apothecary The softer edge of the universe.Registered User regular
    edited March 2010
    adytum wrote: »
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    Ireland: They still got that whole Catholic Vs Protestant Cagematch thing but at least it's a little bit more handled now.
    Greece: See thread below. D:
    Spain: Don't want to touch that with a 60 ft pole.

    Corehealer on
    488W936.png
  • Tiger BurningTiger Burning Dig if you will, the pictureRegistered User, SolidSaints Tube regular
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    Other countries would turn on the printing presses and destroy the on/off switch, hyper-inflating their way out of it, with all the joy that entails.

    Greece can't do that because it doesn't have the authority to print Euros. So they would default, their credit rating would be destroyed, and they would only be able to borrow money at very high interest rates. Since pretty much all governments borrow money to operate, they would have to enact austerity^2 measures as they went to a 'cash up front' system. In all likelihood the government would collapse until the <EU, IMF, UN, 'anyone want a country? anyone?'> stepped in to prop them back up. Which is why the EU or IMF will bail them out now.

    Tiger Burning on
    Ain't no particular sign I'm more compatible with
  • HenroidHenroid Radio Demon Internet HellRegistered User regular
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    If the IMF bails them out they pay of part of the debt, restructure the rest, set up a payment plan and in return get a large say in the country's finances for a while.

    If there was no one to bail them out then either the lender would have to forgive the debt or repossess something from Greece which would probably require the use of force.

    Would the nation itself have a land value of sorts and just out-right taken over that way?

    Henroid on
    Centrism is just the cowardly way to be a bigot w/o being explicit about it.
    American politics isn't 4D chess, it's just if you give a shit about other people or not.
  • Andrew_JayAndrew_Jay Registered User
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?
    The IMF has to bail them out, which is something the ECB really doesn't want.
    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.
    Mexico tried to default on its debts in the 1970's, but didn't really get away with it. It still freaked out a lot of people, because nobody even thought at the time a sovereign country could do that. The result was structural adjustment through the IMF and World Bank, which is pretty much what Greece is trying to do (or is being told it has to do) on its own: cut spending, raise revenues and pay off debt.

    Argentina "successfully" default on part of its debt in 2002, and this happened (from Wikipedia):
    Argentina defaulted on part of its external debt at the beginning of 2002. Foreign investment fled the country, and capital flow towards Argentina ceased almost completely. Argentina was "left out of the world." The currency exchange rate (formerly a fixed 1-to-1 parity between the Argentine peso and the U.S. dollar) was floated, and the peso devalued quickly, producing massive inflation.
    Not exactly ideal. And that was only part of its external debt, which it had later restructured.

    If Greece doesn't work this out on its own, I believe the next step is for the EU to step in and literally take over much of its financial policy until things are fixed.

    Andrew_Jay on
  • HenroidHenroid Radio Demon Internet HellRegistered User regular
    edited March 2010
    Corehealer wrote: »
    adytum wrote: »
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    Ireland: They still got that whole Catholic Vs Protestant Cagematch thing but at least it's a little bit more handled now.
    Greece: See thread below. D:
    Spain: Don't want to touch that with a 60 ft pole.

    I saw Spain briefly mentioned among a few nations that are in financial trouble in the EU (the only other one I remember is Portugal, which sucks because that's the motherland). What exactly is happening with Spain though to make you guys say that it's going to be a bigger disaster?

    Henroid on
    Centrism is just the cowardly way to be a bigot w/o being explicit about it.
    American politics isn't 4D chess, it's just if you give a shit about other people or not.
  • zeenyzeeny Registered User regular
    edited March 2010
    Greece can't default, so it's a moot point. The country is where the rest of Eastern Europe was 10 years ago.

    zeeny on
  • RMS OceanicRMS Oceanic Registered User regular
    edited March 2010
    Corehealer wrote: »
    adytum wrote: »
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    Ireland: They still got that whole Catholic Vs Protestant Cagematch thing but at least it's a little bit more handled now.
    Greece: See thread below. D:
    Spain: Don't want to touch that with a 60 ft pole.

    Point of order: That's Northern Ireland, part of the UK, which has the cagematch. It's not a major issue for the Government of the Republic of Ireland.

    RMS Oceanic on
  • Dis'Dis' Registered User regular
    edited March 2010
    Corehealer wrote: »
    adytum wrote: »
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    Ireland: They still got that whole Catholic Vs Protestant Cagematch thing but at least it's a little bit more handled now.
    Greece: See thread below. D:
    Spain: Don't want to touch that with a 60 ft pole.

    Your thinking of Northern Ireland, the Republics economic troubles are rather different from that whole mess.

    @Henroid, Spains economic growth in the last decade was based on tourism, a huge construction bubble (though one different from the US, rather than bad mortgages, Spain has a bunch of empty houses), and specialized high end products. All of which went tits up in the Recession, which coupled with long term unemployment makes things look quite bad medium term. The reason it'll be a bigger disaster is because its a rather bigger country, and thus will take a lot more to fix.

    Dis' on
  • LoklarLoklar Registered User
    edited March 2010
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    Other countries would turn on the printing presses and destroy the on/off switch, hyper-inflating their way out of it, with all the joy that entails.

    Greece can't do that because it doesn't have the authority to print Euros. So they would default, their credit rating would be destroyed, and they would only be able to borrow money at very high interest rates. Since pretty much all governments borrow money to operate, they would have enact austerity^2 measures as they go to a 'cash up front' system. In all likelihood the government would collapse until the <EU, IMF, UN, 'anyone want a country? anyone?'> stepped in to take prop them back up. Which is why the EU or IMF will bail them out now.

    What are the implications for the rest of the Euro-Zone though? Like... doesn't it create a bit of a domino effect? Even if the IMF bails them out, doesn't that affect everyone who... pays the IMF money (or borrows their money).

    I obviously don't understand how this works, but it seems to me that if the IMF/UN/Whoever bails Greece out that everyone else's interest will go up.

    ... or something (??)

    Loklar on
  • enc0reenc0re Registered User regular
    edited March 2010
    Henroid wrote: »

    Would the nation itself have a land value of sorts and just out-right taken over that way?

    It doesn't work that way. Sovereign debt is ultimately unsecured. If Greece defaults, that's it. The lenders don't get paid back. End of story. However, naturally Greece wouldn't be able to borrow any more on international capital markets (or only at %Texas). So now it would have to live balanced budget style, like most American states.

    Spill over would affect the rest of the PIGS: Portugal, Ireland, and Spain. Their interest would rise astronomically for fear of a repeat without a bailout. As four states of the eurozone go bankrupt, the Euro would fall in value as less global wealth would be held in Euro securities. How much is unclear, as noone would balk at holding (for example) German debt, no matter what currency it is denominated in.

    Which is why the civilized thing will happen here and Greece will be bailed out. Likely by Germany and a Coalation of the Shilling, if not that by the EU at large, or else by the IMF. Of course, those actors will demand austerity measures in exchange. For Greece that means: no more general retirement at 60, or 50 for some jobs. You couldn't ask Germans, who just hiked their age from 65 to 67, to pay for that.

    The stuff about selling islands and wartime reparations are only to score political points. None of that is grown-up talk.

    Of course the bailout produces moral hazard. Portugal, Ireland, and Spain will now have a diminished incentive to avoid their own budget crisis. After all, if the Greek get a handout, why not them?

    enc0re on
  • zeenyzeeny Registered User regular
    edited March 2010
    Loklar wrote: »
    Henroid wrote: »
    Henroid wrote: »
    Hey so, question.

    What happens when Greece doesn't pay money back? Who does what to them?

    The IMF has to bail them out, which is something the ECB really doesn't want.

    Hypothetically, what happens if they're not bailed out?

    I'm trying to figure out what happens to a nation that runs out of money and the means to pay back money it owes.

    Other countries would turn on the printing presses and destroy the on/off switch, hyper-inflating their way out of it, with all the joy that entails.

    Greece can't do that because it doesn't have the authority to print Euros. So they would default, their credit rating would be destroyed, and they would only be able to borrow money at very high interest rates. Since pretty much all governments borrow money to operate, they would have enact austerity^2 measures as they go to a 'cash up front' system. In all likelihood the government would collapse until the <EU, IMF, UN, 'anyone want a country? anyone?'> stepped in to take prop them back up. Which is why the EU or IMF will bail them out now.

    What are the implications for the rest of the Euro-Zone though? Like... doesn't it create a bit of a domino effect? Even if the IMF bails them out, doesn't that affect everyone who... pays the IMF money (or borrows their money).

    I obviously don't understand how this works, but it seems to me that if the IMF/UN/Whoever bails Greece out that everyone else's interest will go up.

    ... or something (??)


    IMF would be a last option and it won't get there.
    It would be handled internally by the Eurozone(read: France & Germany would be picking up bad bonds & debt) and then hopefully somebody would realize that not having a procedure to deal with shit like that like this internally when you share a common currency is beyond retarded.
    Right now, the implications are that the Euro is taking a big hit and the producers are loving it while at the same time wondering how the hell did it get so messy.

    Edit: And again, Greece would not default. They can't, unless they are ok going back to the 19th century.

    zeeny on
  • HenroidHenroid Radio Demon Internet HellRegistered User regular
    edited March 2010
    enc0re wrote: »
    Henroid wrote: »

    Would the nation itself have a land value of sorts and just out-right taken over that way?

    It doesn't work that way. Sovereign debt is ultimately unsecured. If Greece defaults, that's it. The lenders don't get paid back. End of story. However, naturally Greece wouldn't be able to borrow any more on international capital markets (or only at %Texas). So now it would have to live balanced budget style, like most American states.

    Spill over would affect the rest of the PIGS: Portugal, Ireland, and Spain. Their interest would rise astronomically for fear of a repeat without a bailout. As four states of the eurozone go bankrupt, the Euro would fall in value as less global wealth would be held in Euro securities. How much is unclear, as noone would balk at holding (for example) German debt, no matter what currency it is denominated in.

    Which is why the civilized thing will happen here and Greece will be bailed out. Likely by Germany and a Coalation of the Shilling, if not that by the EU at large, or else by the IMF. Of course, those actors will demand austerity measures in exchange. For Greece that means: no more general retirement at 60, or 50 for some jobs. You couldn't ask Germans, who just hiked their age from 65 to 67, to pay for that.

    The stuff about selling islands and wartime reparations are only to score political points. None of that is grown-up talk.

    Of course the bailout produces moral hazard. Portugal, Ireland, and Spain will now have a diminished incentive to avoid their own budget crisis. After all, if the Greek get a handout, why not them?

    But as you said, the country is only being offered bailouts if they agree to conditions.

    Thanks for answer you guys, I was confused as to why there was a lot of hubub about Greece.

    Henroid on
    Centrism is just the cowardly way to be a bigot w/o being explicit about it.
    American politics isn't 4D chess, it's just if you give a shit about other people or not.
  • CorehealerCorehealer The Apothecary The softer edge of the universe.Registered User regular
    edited March 2010
    Dis' wrote: »
    Corehealer wrote: »
    adytum wrote: »
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    Ireland: They still got that whole Catholic Vs Protestant Cagematch thing but at least it's a little bit more handled now.
    Greece: See thread below. D:
    Spain: Don't want to touch that with a 60 ft pole.

    Your thinking of Northern Ireland, the Republics economic troubles are rather different from that whole mess.

    @Henroid, Spains economic growth in the last decade was based on tourism, a huge construction bubble (though one different from the US, rather than bad mortgages, Spain has a bunch of empty houses), and specialized high end products. All of which went tits up in the Recession, which coupled with long term unemployment makes things look quite bad medium term. The reason it'll be a bigger disaster is because its a rather bigger country, and thus will take a lot more to fix.

    No, I know that's a Northern Irish thing, i'm just pointing out that it didn't really help the economic situation get any better, is all.

    As for Spain, Wikipedia sums it up in detail:
    Until 2008 the economy of Spain had been regarded as one of the most dynamic within the EU, attracting significant amounts of foreign investment.[4] During the last four decades the Spanish tourism industry has grown to become the second biggest in the world, worth approximately 40 billion Euros, about 5% of GDP, in 2006.[5][6] Spain's economy had been credited with having avoided the virtual zero growth rate of some of its largest partners in the EU.[7] In fact, the country's economy had created more than half of all the new jobs in the European Union over the five years ending 2005, a process that is rapidly being reversed.[8]
    More recently, the Spanish economy had benefited greatly from the global real estate boom, with construction representing an astonishing 16% of GDP and 12% of employment in its final year.[5] According to calculations by the German newspaper Die Welt, Spain had been on course to overtake countries like Germany in per capita income by 2011.[9]
    However, the downside of the now defunct real estate boom was a corresponding rise in the levels of personal debt; as prospective homeowners had struggled to meet asking prices, the average level of household debt tripled in less than a decade. This placed especially great pressure upon lower to middle income groups; by 2005 the median ratio of indebtedness to income had grown to 125%, due primarily to expensive boom time mortgages that now often exceed the value of the property.[10]. There is also no unemployment benefit in Spain, as the tax is particularly low
    A European Commission forecast had predicted Spain would enter a recession by the end of 2008.[11] According to Spain’s Finance Minister, “Spain faces its deepest recession in half a century”.[12] Spain's government forecast the unemployment rate would rise to 16% in 2009. The ESADE business school predicts 20%.[13]

    Corehealer on
    488W936.png
  • enc0reenc0re Registered User regular
    edited March 2010
    Henroid wrote: »

    But as you said, the country is only being offered bailouts if they agree to conditions.

    Thanks for answer you guys, I was confused as to why there was a lot of hubub about Greece.

    Which they will agree to. Taking a hostage by holding a gun to your head only gets you so far.

    enc0re on
  • RMS OceanicRMS Oceanic Registered User regular
    edited March 2010
    Corehealer wrote: »
    Dis' wrote: »
    Corehealer wrote: »
    adytum wrote: »
    (Mostly) Right way to deal with things: Ireland
    (Completely) Wrong way to deal with things: Greece
    Award for biggest catastrophe waiting to happen: Spain

    Ireland: They still got that whole Catholic Vs Protestant Cagematch thing but at least it's a little bit more handled now.
    Greece: See thread below. D:
    Spain: Don't want to touch that with a 60 ft pole.

    Your thinking of Northern Ireland, the Republics economic troubles are rather different from that whole mess.

    @Henroid, Spains economic growth in the last decade was based on tourism, a huge construction bubble (though one different from the US, rather than bad mortgages, Spain has a bunch of empty houses), and specialized high end products. All of which went tits up in the Recession, which coupled with long term unemployment makes things look quite bad medium term. The reason it'll be a bigger disaster is because its a rather bigger country, and thus will take a lot more to fix.

    No, I know that's a Northern Irish thing, i'm just pointing out that it didn't really help the economic situation get any better, is all.

    Speaking as a denizen of Norn Iron myself, I can say that our own politcal problems have little impact on whether the Republic of Ireland will default on their debts. If we sort ourselves out and become an economic powerhouse, it's the UK treasury that will benefit.

    RMS Oceanic on
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