Greek Financial Crisis

[Librarian]

http://www.rte.ie/news/2015/0628/711122-greece-economy/

 

[dholliday]

The ECB cannot continue to provide funds to the Greek banks to meet their deposit withdrawals if the Greeks default on Tuesday.

There's almost no chance of the Greeks not defaulting.

So the Greek banks will go bust, the Greeks will default and frankly there will be chaos as there is no mechanism to remove the Greeks from the Euro.

Next week could be incredibly messy for everyone within the Euro. The intransigence of the Germans in particular could cost Europe dear.

"intransigence" is harsh. There's enough there to tell us compromises, redrafts and extensions have been made (to death).

A controlled sovereign default may be a tidy solution for Greece, but there needs to be clear policies in place so that people are protected. It may not come to that as after the referendum-as-chess-move by Tsipras the latest polls indicate 47% of Greeks would support the austerity plan. On the day the unknown factor of sovereign default may push the vote the creditor's way. Such a default is of course not in itself unusual, and often healthy in the long run, but it's the Euro so all bets are off...and the people I think sense this.

 

[bizzaro]

Basically Saritza have sabotaged this.

This was their agenda all along. But they wanted their hands 'clean'.

So they offered a referendum they know will never pass. (of course it won't because Joe Public thinks they don't have to pay their debts!).



Greece will be kicked out of the Euro now. Can't see it any other way.

 

[Bruce Wayne]

I wonder why, if the Greeks thought the terms of their loan were so bad, they accepted them in the first place. You shouldn't Welsh on your word, especially as the interest rates are at crazy low levels, so the actual repayments as a % of GDP are not that steep at all.

 

[bizzaro]

I wonder why, if the Greeks thought the terms of their loan were so bad, they accepted them in the first place. You shouldn't Welsh on your word, especially as the interest rates are at crazy low levels, so the actual repayments as a % of GDP are not that steep at all.

This is the point.

Fact is Greece has been crazily badly governed for 40 years.

These clowns think they can just give - public money away.

Whilst they have amongst the highest tax evasion rates in the world.

Crazy.

 

[bizzaro]

The ECB cannot continue to provide funds to the Greek banks to meet their deposit withdrawals if the Greeks default on Tuesday.

There's almost no chance of the Greeks not defaulting.

So the Greek banks will go bust, the Greeks will default and frankly there will be chaos as there is no mechanism to remove the Greeks from the Euro.

Next week could be incredibly messy for everyone within the Euro. The intransigence of the Germans in particular could cost Europe dear.

I think that the supporting statement footnote from the communique from the EU was important.

It said that it was supported by all EU member states - except Greece.

I think we can quickly see Greece be kicked out the EU for treaty violations to be honest.

The other members can without a mechanism quickly act to preserve themselves.

Greece's behaviour has been outrageous to be fair.

 

[thirdmantackle]

It still goes back to the fact that the Germans want their money back from Greece
What short memories they have

Germany had the biggest national debt write off in history in 1953 which allowed them to recover, yet they won't allow Greece negotiate something towards that

Germany also owed a huge amount of money from war reparations to Greece which the Nazis effectively stole in 1942, and Germany effectively only repaid one quarter of that money in 1960 have ignored Greek efforts to the get the rest repaid.

 

[bizzaro]

It still goes back to the fact that the Germans want their money back from Greece
What short memories they have

Germany had the biggest national debt write off in history in 1953 which allowed them to recover, yet they won't allow Greece negotiate something towards that

Germany also owed a huge amount of money from war reparations to Greece which the Nazis effectively stole in 1942, and Germany effectively only repaid one quarter of that money in 1960 have ignored Greek efforts to the get the rest repaid.

Its a bit rich to start quoting WWII to everyone here

What next? Are we going to start demanding money back for the Napoleonic era wars from France???

 

[thirdmantackle]

Its a bit rich to start quoting WWII to everyone here

What next? Are we going to start demanding money back for the Napoleonic era wars from France???

Those who fail to learn from history are destined to repeat the same mistakes.
That was my point.

Germany was given a poor deal after WW1 and it cam back to bit everyone.
What will happen to Greece? What problems will it create in the Mediterranean?
You do realise they are the only reason so few Turks get into Europe?

 

[bizzaro]

It still goes back to the fact that the Germans want their money back from Greece
What short memories they have

Germany had the biggest national debt write off in history in 1953 which allowed them to recover, yet they won't allow Greece negotiate something towards that

Germany also owed a huge amount of money from war reparations to Greece which the Nazis effectively stole in 1942, and Germany effectively only repaid one quarter of that money in 1960 have ignored Greek efforts to the get the rest repaid.

This is just a cover for the likes of Saritza to blame everyone else but themselves.

Kopite behaviour. Not their fault.

 

[bizzaro]

Those who fail to learn from history are destined to repeat the same mistakes.
That was my point.

Germany was given a poor deal after WW1 and it cam back to bit everyone.
What will happen to Greece? What problems will it create in the Mediterranean?
You do realise they are the only reason so few Turks get into Europe?

I doubt we need a lecture about history.

Greece's problem is of their own making. Ireland made massive decisions and action in 2008/2009 and has reaped the early rewards for hard decision making


France is the reason Turkey is not in the EU. Not Greece.

Even so. The fact is Greece thinks it can give money away and not take in tax.

Unless the Greek people get it in their heads that in the real world everyone is competing with Asia now and that they just can't do this. This was always bound to happen.


Their current political masters Saritza have used every trick in the book.

 

[Toffeelover]

It still goes back to the fact that the Germans want their money back from Greece
What short memories they have

Germany had the biggest national debt write off in history in 1953 which allowed them to recover, yet they won't allow Greece negotiate something towards that

Germany also owed a huge amount of money from war reparations to Greece which the Nazis effectively stole in 1942, and Germany effectively only repaid one quarter of that money in 1960 have ignored Greek efforts to the get the rest repaid.

Back then the circumstances were substantially different, the war had only just ended 8 years before and we were now in a cold war.

However back to now, even if the Germans had refunded more than they did in 1960, I think the situation Greece is in would largely be the same. There would still be the governmental incompetence, corruption from the bottom to the top where all sought to enrich themselves at the expense of the country. There would still have been massive tax evasion. I holidayed in Lesvos a couple of years before the financial crisis broke. Wherever we went for a drink, restaurant even petrol, the demand was to pay in cash for which very often no receipt was given, There can really be only one reason for this! as Bizarro commented.

 

[bizzaro]

Greece has lots of money.

The fact is its all in Switzerland!


https://en.wikipedia.org/wiki/Greek_government-debt_crisis

Another persistent problem Greece has suffered in recent decades is the government's tax income. Each year it is below the expected level. In 2010, the estimated tax evasion costs for the Greek government amounted to well over $20 billion per year.[141]The latest figures from 2013, also show that the State only collected less than half of the revenues due 2012, with the remaining tax owings being accepted to be paid by a delayed payment schedule.[142] As of 2012, tax evasion was widespread, and according to Transparency International's Corruption perception index, Greece, with a score of 36/100, ranked as the most corrupt country in the EU.[143][144] One of the conditions of the bailout was implementation of an anti-corruption strategy;[81] Greek government agreed to combat corruption, and the corruption perception level improved to a score of 43/100 in 2014, which was still the lowest in the EU, but now up at the same score as Italy, Bulgaria and Romania.[143][145]

As per news quoted in Swissquote Bank (Switzerland) on 2015-03-25 it is estimated that the amount of "black money" undeclared by Greeks in Swiss banks is around 80 billion EUR or CHF and therefore after the negotiation of a tax treaty by the Greek government which seems to be imminent the Greek government could expect according to experts 10 - 15 billion EUR per year being paid by Swiss banks under the agreement.[146]

 

[bizzaro]

Corruption is the enemy.

Of all states and peoples. Corruption leads to things like this happening.

Greece is full of corrupt people hiding money away and thinking they don't have to pay any taxes whatsoever. Rich or relatively poor people.


There wouldn't be all that money sitting in foreign banks like that otherwise.


Their whole society is in for a 'correction' here. Where this behaviour will have to be properly challenged. If not they will always be a failed state.

 

[thirdmantackle]

Ireland and Greece are two completely different cases though.

Ireland people were screwed over by the government guaranteeing bank losses (idiots!)
Which landed us with one of the largest soveirgn debts in the world, whereas before the guarantee we had one of the lowest!
Ireland's taxation system is one of the most efficient in the world and it was quite easy for the replacement government to slap taxes on stuff and hike charges across the board to get the deficit down.
Ever hear of a USC? THE most hated charge.

Though, I would say Irish people do like avoiding taxes and there is still quite a large cash economy in Ireland.

Whereas Greece...