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| | |-+  Greek economy implodes further (Q2) (search mode)
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Author Topic: Greek economy implodes further (Q2)  (Read 1737 times)
Gustaf
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« on: September 11, 2011, 05:17:36 am »

Actually it is Germany which is to blame for the troubles, not Greece.

True, Germany should never agreed to having Greece be in the Eurozone, but they foolishly thought they could trust Greek politicians to be at least somewhat honest.

No, Germany is a prime example - along with China and a few others - of the problem.  They pursue destructive, deflationary 'competitive' policies.  They should be increasing their wages and government spending to pull their fair share.. instead they're little more than pickpockets.

Pickpockets? Surely, you cannot seriously presume to impose such silly scout morality on the world economy?

----------------

Al, I guess the difference between your scam analogy and this (at least in theory) is that this is like the state stepping in with debt relief for someone going into personal bankruptcy. If Greece were to borrow on the market they would have to pay the kind of interest rates you pay to the scammers you're thinking of. Borrowing from EU/IMF etc they pay a lot less.
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Gustaf
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« Reply #1 on: September 12, 2011, 06:45:18 pm »

The problem is twofold.

1)The recession is much deeper than anticipated even by IMF/ECB, thus causing a collapse in revenues.

2)The government is exhausted after waging for two years a brutal war on two fronts: an external one with our debtors and an internal one against a unified and stringent opposition (where you can barely distinguish conservatives from communists, they use the same pro-bigger government rhetoric) with the help of the most reactionary and statist elements of PASOK.

There are many people in the government, fortunately Papandreou is among them, that refuse to capitulate and continue to fight for reforms, ignoring the (often violent) protestations of powerful unions. But as long as some parts of our society sabotage them (like our IRS agents who refuse to collect taxes or make audits because their wages have been cut) it will be very hard to stay afloat without external help.     

Like most things this really seems to come down to institutional strength and legitimacy. I think Papandreou pretty much has it together in terms of what has to be done, but unless Greek society comes together to get it done, it's not going to work.

The kind of reforms that need to happen in Greece cannot, imo, be done without solid support, at least in the political establishment. Sweden was, roughly speaking, about as fcked as Greece is now back in the 90s. The reforms that were made to prevent a repeat (which are helping us now) had support from both blocs (not the silly ex-Communists, but they don't matter much) as well as the trade unions and such. Without that it would never have worked.

It seems to me that the Greek state is lacking some fundamental legitimacy among the Greek people. That's very much an outsider's observation which isn't based on much though.
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This place really has become a cesspool of degenerate whores...

Economic score: +0.9
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In MN for fantasy stuff, member of the most recently dissolved centrist party.
Gustaf
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« Reply #2 on: September 13, 2011, 09:38:39 am »

The Greeks have been fraudulently living beyond their ability to tax. They also appear to be unable to stop doing it, as the Greek people keep expecting Brussels to send them more money. As bad as things are now, they will get worse when the rest of Europe stops lending them money, which could happen any day now.  If Merkel's government collapses there will be a European paralysis for a couple of months, and there is a good chance that whatever government is elected will have pledged itself to no longer prop up the PIIGS.  It's only a couple of years at most before we see the reemergence of at least one and maybe both of the drachma and the mark.  Either Greece is kicked out of the Eurozone for its inability to meet the conditions or Germany decides it's no longer go be part of the farce.

Actually it is Germany which is to blame for the troubles, not Greece.
It's the Eurozone, not the Mittelbund.  France has just as much pull as Germany.  Making Germany out as some sort of bogeyman is both trite and ignorant.

Well, it's an Opebo post so what do you expect? Tongue
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This place really has become a cesspool of degenerate whores...

Economic score: +0.9
Social score: -2.61

In MN for fantasy stuff, member of the most recently dissolved centrist party.
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