Greece: Will this nightmare ever end?

[Robert]

YES.

Well done to Greece. Have a vote and DEFAULT dammit. Get out of the Euro, it's poison for your country.

You are RIGHT to have a referendum. I hope you have the courage to do what is right now. You can't and shouldn't live on debt forever. Bring back the Drachma!

[alkis21]

This is not monopoly, people. This is not a computer game. There are real people involved here, us, your friends, and their families. I started this thread to make you think about that for a moment but obviously I failed because it quickly became another political discussion where people chant their beliefs. I've been living in this shithole all my life, with a crappy health system, a crappy education system, everything basically sucks here compared to the civilized world but I endured, I made the best I could of it, worked hard, paid my taxes and suddenly one day they came knocking on me door and said to me "right, you've had enough of a good time, now things will get hard because you owe the world 200 billions". How the fuck did I manage that? I've never even maxed out my credit card. And the rest of Europe is saying "Ha! Serves you right for being the slacker you are, Greek scum". In the meantime, Greek KOAers who wanted to go to Birmingham could not afford it, Nikos already explained his problems, my parents are moving to a cheaper neighborhood, drug stores refuse to give me prescribed drugs unless I pay cash because my public health insurance -which I continue to promptly pay- owe the pharmacists millions so their credit is no longer good, my wife and I walk around in our apartment in sweaters and wrapped in blankets because the other tenants of the apartment building cannot afford to pay for petrol so the radiators are not working, need I go on? Can you imagine living in this world?

Again, we're not discussing a remote country in the middle of Africa. This is us we're talking about. Some of you visited Greece not three years ago. You want us to default, you think that will solve our problems? Euro did not do this to us, our own politicians did, they just hid it as well as they could so we could cheat our way into the EU. We are incapable of surviving on our own. Without the EU money we will starve. Default = payment stoppage. Who will feed my parents if my father loses his pension? Who will pay for my mother's expensive med care? I repeat, without Europe's money we are doomed. Without Europe telling us what to do we are doomed.

And now the prime minister wants a referendum? What a joke. Yeah let the Greeks vote, they've done a wonderful job doing exactly that all these years. Most Greek people are uneducated, low IQ peasants with wet dreams of communism. I'm supposed to base my hopes on them making the right decision? I don't know about the rest of the Greeks but if Papandreou gets the confidence vote I'm taking my savings to a bank abroad. And if the referendum result dooms us to bankruptcy I'll try to leave too. I will go wherever they'll take me, away from the armpit of the planet, apply for citizenship there the moment I can, and hopefully a few generations from today nobody will remember that my family came from this cesspool joke of a country.

[manicx]

YES.

Well done to Greece. Have a vote and DEFAULT dammit. Get out of the Euro, it's poison for your country.

You are RIGHT to have a referendum. I hope you have the courage to do what is right now. You can't and shouldn't live on debt forever. Bring back the Drachma!

Robert, the problem is not the Euro. The problem is how the Eurozone is organized and operating. Or to say it in other words, it's like blaming a good car and not the bad driver who drives it. For the Euro to be effective, there should be a strong central bank. At the moment, France and Germany do not want a strong central bank, they want their own banks being strong because they are their best weapon to financial markets including other countries in the Eurozone. Who opposed to the Eurobond and why? Europe is organized as a single market but not as a single economy. This is why you hear 'attack in Greece' today and 'attack in Italy' tomorrow.

As for Greece, it is like adopting a child. 10 years later, you say "hmm, this child costs me money, so ssssuuuu, go away". Is this such an easy decision really? Some said that Greece presented false financial figures to enter the Eurozone. Correct but so did (does?) every single European country including the big ones. European leaders wanted a big Europe but size does not matter in such cases. It is the quality. I wouldn't mind if someone was coming and say "forget the Olympics, invest this money in infrastructure and organizing the public sector and in 2005, you will enter the Eurozone". You needed politicians with @@ and not @@ politicians to do that and I am not speaking only about Greek politicians but mainly for the European ones.

As for what I want, I want the Euro. I prefer to be poor with Euro than being 'normal' with GrD. I don't want my money in the bank to be halved, I don't want 15% inflation and 10% interest rate on my mortgage, I don't want to see Fiesta as a luxury car etc

What Papandreou did with announcing a referendum was

a) To expose the political opposition in Greece that last week they were saying that new loan is bad and this week it is good
b) To make people realize that there's no life without Euro
c) To show complete luck of responsibility towards Greece and towards all markets
d) To prove that he and all political leaders in Greece are piece of shit who go by the wind
e) To have Greek communists put his photo beside the ones with Che, Marx and Lenin

And to answer to Haydn, YES, we still pay for the Olympics. Why? Because the original budget was half from what was spent at the end. But even if we were spending the planned budget, who give a shit about having super stadiums when they are never used these days and when we do not have the sports culture as humans? The only good thing with Olympics is that there were a few things that stayed like the new Airport, the Athens metro, the Attika highway that crosses all Attika, the suburban railway, the Rio-Antirio bridge and a few others. At the same time, there could have been more like 2 new highways that started and now stopped because there is no money to finish the construction making traveling to the semi-completed worksites a Russian Roulette, better health system, better education etc etc. The Olympics could have been a minor mistake, they are huge mistake with the way they were 'organized'.

[Robert]

I am really surprised how downtrodden you guys are. You lost all your self-respect. The problem of your country is runaway debt. The cause is because you joined a currency that your economy couldn't keep up with. This was for political reasons. It is not economically in your interest to be in the Euro. You need to devalue your currency. This would give your economy an immediate boost. Other countries would buy your exports. Holidays in your country would be cheap. Workers in Greek factories would suddenly be paid 50% of Germans and not the same European minimum wage. Greece would suddenly become a GREAT place to put a factory. Why make i-phones in China when you can make them in Greece.

Greece needs to get back to work. It needs to get out of trade deficit. The trade deficit is sustained by the handouts from Germany.

Germany is the cause of this problem. I do not like the way that the Germans accept the moral high ground and expect the Greeks to assume the role of serfs.

Germany is the only surplus economy in Europe. It NEEDS the other countries around it to have a deficit in order to maintain this prosperity. Look...
- Germans produce more than they consume (just like CHINA and JAPAN)
- Due to this, they can sell the excess to other countries
- and thus they have a lot of cash

Greece, Portugal, Spain, UK, Ireland (everyone else in fact, just like USA) have a balance of trade deficit
- They consume more than they produce
- Due to this, they have to borrow to maintain their standard of living
- and thus, they have debts

What is never acknoweldged is that Germany needs Greece just as much as Greece needs Germany. Greece has as much power over Germany as Germany does over Greece. Because...
- The German economy and prosperity is based on other countries buying their excess production
- If the deficit countries did not do this, the German economy would collapse, there would be massive unemployment
- Therefore it makes HUGE SENSE for Germany to keep paying out cash to other countries so they can continue affording to pay for the german exports.

The EURO is a construct to preserve Germany's position. The single currency requires everyone to link their currency to the German mark, thereby preventing them from devaluing and making their exports more competitive than Germany.
The European Social Chapter and minimum wage is there to protect the competitiveness of the German economy. Greeks can't work in factories for half the price of Germans... they have to be paid the same.

The poorer countries were seduced into the Euro and the European Union because it was a rich man's club. They thought that they could peg themselves to Germany's standard of living by pegging to their currency and wages. But it didn't work out like that. Actually they accumulated massive debts because this system kept their balance of trade perpetually in deficit and Germany's in surplus. Germany had a guaranteed market of 250 million people all using their currency paid minimum wages and therefore able to afford their expensive products made by their highly paid workers.

But it was never going to last. Eventually you get to a spiral of compound debt. Now Greece faces massive unemployment (due to being in the Euro and being uncompetitive) and a huge recession caused by excessive tax burdens required to service the debt.

The answer? Leave the Euro and get rid of the debt. Who says you live to make Germany happy? Stop treating YOURSELVES like you are scum. You are human beings. It's in Germany's INTERESTS to give you money to service the debt you built up buying German goods. Soon, if everyone's economies collapse, Germany won't have anyone to sell its excess production to any more and suddenly there will be a recession in GERMANY. Then what happens? People move their factories to GREECE where there is low tax and cheap, well-educated labour.

Greece could come out of this like a tiger economy! You need to devalue your currency to 50% of the Euro and use it to supercharge your recovery. You need to get rid of these stupid taxes. YOU WILL NOT BE POORER. If you earn 1000 Euros a month and pay 500 in tax to service the debts, then next month you earn 500 Euros and pay 0 in tax, IT'S the SAME.

There is a real risk for Greece that it's going to sell its whole country to the Germans and the Chinese. Don't do it people. and don't attack your leaders. They are RIGHT to give you the chance to VOTE on this. If you vote for more austerity, there is a mandate to continue with this unsustainable shit. But I hope you vote the other way.

One last thing.

I am getting fed up with people saying 'LOOK AT THIS! CAPITALISM ISNT WORKING!'

This is NOT Capitalism. These huge government interventions and taxes, these VAST IMF payments are NOT the Free Market. This is the exact OPPOSITE of the free market. It is the intervention that is making things worse. Nowhere in Capitalism does it say that you have a single currency across a load of very different economies that it propped up by the rich one paying the poor to stay poor. Anti-capitalists can close the hell above.

Go Greece!

[manicx]

Robert, we agree in several things but we disagree on some others.

I am sorry, I don't want Greece to be China aka working 20 hours per day, sleep in factory and then jump from the second floor and all these for a loaf of bread. Would you like to be living like that? I am sure not. Please, see this:

http://www.bbc.co.uk/news/business-15367545

If Greece says "goodbye Eurozone, here we have GrD, 100000 (293 euros) wages come and invest", EU can say 'hello Turkey, thanks for your cheaper tourism and 100 euros wages'. Greece can end up being isolated while being unable to have raw materials to cover it's basic needs which in turn will lead to importing them at much higher prices.

The first thing that Greece has to do is to sort out the tax system. Do you know that shipowners do not pay taxes but a pensioner does? Do you know that most companies do not pay the VAT to government? The problem with Greece is that we must sort out the public sector. And no, it's not only the tax system. Why the heck do we have to buy shitload F16s and tanks and submarines when we are in NATO and EU? Should we be afraid that Persians will return for their revenge? In our NHS, 3/4 of the money spent ended up in the pockets of people NOT involved with health supplies or services. I can make a huge list but it is pointless.

Also, keep in mind that Greek debt was increasing with GrD too regardless the devaluations. I suffered one of the worst devaluations when I was studying in the UK and when I had to pay 7100£ for my MBA, I ended up paying a fortune due to a devaluation that lead 1£=500GrD. As a result, I worked double 4 hour shifts in shitty jobs in a Stakis hotel EVERY single day and went to the uni between my shifts and all this for 3£ per hour (so as you see, I know how it is to be Chinese)...

Also, Germany is no 2 exporter in the world. So, what makes you think that it is only a European problem? If other countries outside EU wanted to beat them, they would devalue their national currency and ... (ok, I will have a coffee because I am dreaming).

And please don't forget that when you speak about tiger economy, there is the household debt. If I was getting 1000 euros and paid 500 in tax, now I will get 500 and still pay a tax (not for the loans we got as a country but for making roads, schools, hospitals etc) and the household debt from mortgage or loans that household have from the past. And this time, the household debt will not be based on 1.25% interest rate but probably +10% from that. Most households will not be able to repay their debt leading to garnishments of your belongings.

BTW, I am not anti-capitalist. And I don't want to sell anything to foreigners. I just want someone to sort out the public sector FIRST because this is the biggest problem Greece faces in the last 30 years. And then try for the best in a country that has finally some justice.

[alkis21]

I don't know, Robert. Perhaps what you are saying is true. But I think it is more relevant to Italy or Portugal than to Greece. Because we learned that our governments have been lying to us for years and we were heading for bankruptcy long before the Euro. I've been hearing that my generation wasn't going to get a pension since I was a teenager and we didn't even know half of it. Maybe the Euro got us there faster, although I doubt it considering all the bounty we've been getting from the EU. When the IMF checked the country's finances, they were surprised to find out that not only we were lying about the money we were spending, nobody even kept count of what was actually spent. Can you picture the magnitude of corruption we are talking about? We did follow the policy you mention of devaluing our currency in the 80s, almost on a monthly basis but it did shit for us because at the same time we hired people to the public sector by the tens of thousands every year.

It is now clear to the Greek people that our politicians have neither the will nor the knowledge to run a country properly, first of all by collecting taxes from where they're due as Nikos said. And even they are knowledgeable and willing enough to do it nobody believes them any more. So yes, shameful as it may sound we need Europe to tell us what to do and how to do it. Hell, I'd welcome a German occupation at this point, anything but more years with either the Socialist or the Conservative party (what a joke by the way... they are neither).

[Bounty Bob]

I know fuck all about politics and economics, so won't be offering any opinions on the state of the country. I'm just sorry that my friends have to live under such shitty circumstances that aren't their fault

[Rodolfo]

It seems that there will be no referendum in the end. Good?

One last thing.

I am getting fed up with people saying 'LOOK AT THIS! CAPITALISM ISNT WORKING!'

This is NOT Capitalism. These huge government interventions and taxes, these VAST IMF payments are NOT the Free Market. This is the exact OPPOSITE of the free market. It is the intervention that is making things worse. Nowhere in Capitalism does it say that you have a single currency across a load of very different economies that it propped up by the rich one paying the poor to stay poor. Anti-capitalists can close the hell above.

Applause for that paragraph! Not very sure about the rest. No one (among those I read) regards as something good leaving the Euro. Perhaps necessary, but never the best possible outcome as exposed here.

[Semtex]

Really good post from Robert, explaining in a nice jargon-free way what has happened and why. What I now need is the same explaination of the free market. Because, as I see it, the free market is a place that exists next to the communist utopia. Robert says this isn't capitalism but it is the perfect expression of it, as I see it. A government-corporation seeks to exploit all markets in its own interests. The Germans keeping Greece poor is another facet of capitalism.

and this free market, if truly free... So Greece becomes competitive, the toddlers stitching footballs in sweatshops make the country rich again, and they have a surplus - does that mean that some country elsewhere has a deficit? is it possible for all countries to have a surplus? Or does it go in cycles around all the countries involved?

Look forward to your post, doesn't have to be brief but jargon-free again please.

[manicx]

Today the GM in the company I work for announced reduction in (the already reduced from taxes) wages of 8%. This is basically the gravestone in doing anything regarding leisure. Life will vary from going from home to work, work to home and just shopping the basics in the super market.

[Bounty Bob]

[Binary]

I came to this topic after a chat with one of our Greek friends. In fact, I've had a few chats with the lads to try and understand exactly what is going on.

Following the portuguese media, much time was spent stating that we didn't want to "end up like Ireland". Now that perhaps people have realized that Ireland is a totally different league, the mantra is we don't want to "end up like Greece".

But don't we?

I'll explain: as I said, I've been talking to a few Greeks and tried to understand exactly how this crysis is affecting their lives. And it is of course affecting a lot, and I wish this wouldn't happen to them. However, I've shared with them a few stories about what's happening in Portugal:

- Some schools are now open during the weekend. Why? Children are starving. They come to school and faint. If the school canteen opens on weekends it ensures they get one proper meal during the weekend.

- Portugal is the only EU country where someone with a job is considered poor. The minimum wage (485 eur/month, that's about 400 quid/month) is not enough for rent+food+electricity+water, so many move back with their parents.

- I was told some people in Greece cannot afford heating anymore. That's horrible. There's however no heating in houses in Portugal and yes, you get temperatures in the negatives during the winter there. Splash some money on a few expensive electricity portable radiators or get a few extra sweaters.

- Families are starving. Full families. Horror story I know from my relationship circle: family with 2 kids, father unemployed, mother works at a cake factory. Their dinner: cakes past the expiry date, that she brings from the factory. Every day.

My conclusion is: Portugal isn't like Greece. It's worse. I just hope Greece doesn't fall to our level.


PS: Rodolfo is correct of course. High taxation and a big government leads to corruption - as Hayek said, there's no way you can prevent the corrupt to get to the top of a system that gives them what they want.

[TheFoxSoft]

I heard greek minimum salary will be decreased by 22%! that's awful!
Do you greek friends already got your salary reduced?