Greece Watch...

[kenneal - lagger]

The situation that Greece finds itself in at the moment is, to a great extent, their own fault. The Greek people have been allowing themselves to be bribed at elections, giving their votes to the party which offered them the most. Any thoughts of fiscal proberty were nowhere to be seen. And a very early retirement age was just one of the perks that they bought. No country can afford to support the level of funded, let alone unfunded,pension provision that has been common over the last twenty or more years so Greece must change their extremely generous system.

Also most Greeks do not pay any significant amount of tax. Fiddling is a way of life and the more money people have the more they fiddle. The government is still having problems collecting taxation from those who owe it. The rate of boat ownership, for instance, in Greece is probably one of the highest in Europe as they are bought, ostensibly, for tourist purposes at a huge tax discount but rarely, if ever, used by anyone other than the owner.

The Greek government of the time fiddled their entry into the Euro and at far to high a rate so that the Greeks profited from the change over. That has haunted then ever since.

Having said all that, the Greek people can be wonderful and no one deserves what they are being asked to suffer, especially when the situation is not all their own fault. The Germans have been happy to have the Greeks buying their consumer products over the years and have made loans available for them to keep up the purchasing. The continued trade has contributed to the success of the German economy. it's about time the Germans admitted their culpability in this situation.

The ECB didn't conduct any due diligence into the Greek entry proposals so they are also culpable in the present situation and should admit this and make reparation. Not going to happen though.

I haven't got a lot of sympathy for either side really when you see what Ireland and Spain have been through as well. It just goes to show how right we were to avoid getting sucked into the euro and what a cock up they're making of things.

[3rdRock]

http://www.theguardian.com/world/2015/j ... shook-euro

Share prices slumped in Asia and heavy losses are expected in London and across Europe when markets open on Monday morning as Greece shuttered its banks for a week following a fateful weekend that has shaken Europe’s single currency.

The Greek government decided on Sunday night it had no option but to close the nation’s banks the following day after the European Central Bank (ECB) raised the stakes by freezing the liquidity lifeline that has kept them afloat during a six-month run on deposits.

In Tokyo the Nikkei index tumbled almost 3% overnight but even steeper falls are predicted in Europe, with Germany’s DAX being called 5% lower. The FTSE 100 could fall by 200 points, or 3%, when trading begins in less than an hour (8am BST).

[3rdRock]

Let's all spare a thought for some of the real victims in this crisis.

http://www.theguardian.com/world/2015/j ... ve-nothing

[biffvernon]

Let's all spare a thought for some of the real victims in this crisis.

http://www.theguardian.com/world/2015/j ... ve-nothing

From that piece:

He is not sure how much he will get even then. Pensions have been a major stumbling block in Greece’s aid-for-reforms talks with its creditors, who want further savings from a system whose benefits have already been cut by 45%, leaving nearly half of Greece’s pensioners below the monthly poverty threshold of €665.

So why, John H, the obsession with pensions? (And anyway, as has been pointed out, raising pension age doesn't change much unless there is near full employment.)

Whose fault is it that has led to the Karvouniaris family's predicament? Who will stand up and say, "I got it wrong."?

[biffvernon]

Here's Franny Armstrong's response to that article a few moments ago:

Franny Armstrong
Just now · iOS ·
Does anyone know of a peer-to-peer scheme where people in eg the UK can help individuals in Greece? I would definitely set up a monthly payment if I could find an individual or family like these in the story, who've lost their home and jobs and are trying to survive on zero income.
Or if there's not a scheme out there, would anyone be up for helping me set something up, like we did with the Iraqi refugee kids in 2004? (Will post link on next message)
The Greeks for whom all the talk means nothing – because they have nothing

Like to help, John?

Or what will we say to Magda?
https://www.byline.com/column/11/article/126

[peaceful_life]

Let's all spare a thought for some of the real victims in this crisis.

http://www.theguardian.com/world/2015/j ... ve-nothing

From that piece:

He is not sure how much he will get even then. Pensions have been a major stumbling block in Greece’s aid-for-reforms talks with its creditors, who want further savings from a system whose benefits have already been cut by 45%, leaving nearly half of Greece’s pensioners below the monthly poverty threshold of €665.

So why, John H, the obsession with pensions? (And anyway, as has been pointed out, raising pension age doesn't change much unless there is near full employment.)

Whose fault is it that has led to the Karvouniaris family's predicament? Who will stand up and say, "I got it wrong."?

'As I already said: It is truly pointless to play the blame game. Whose fault was the crisis? We are all at fault. We created a Eurozone with a surplus recycling mechanism which with mathematical precision led to a crisis with victims everywhere. The longer we take to realise this the greater our collective fault'

Yanis Varoufakis~

[johnhemming]

What I said previously is that it is not unreasonable to have some form of means tested support scheme and I would support humanitatrian aid I do not think having blanket payments is a good mechanism.

As it stands is the probability is that the Greeks will vote for austerity, the banks will re-open once the government has changed the greek laws appropriately and gradually things will get better.

[PS_RalphW]

Here we are in uncharted territory. The history of the EU is one of compromise and muddling through, but there are times where that just does not work.

The bean counters really do not like not knowing what is happening to money, and I think this is what is adding to the sense of panic. I suspect that there will be no sudden collapse of markets or Euro exchange rates, but it cannot help but be a significant milestone along to the next financial crisis.

Markets and oil are down a few percent, but the physical economy has not shut up shop, even if billions have been wiped off nominal values.

All this talk of responsibility and moral high ground is redundant. The numbers don't add up and are not going to add up. Everything else is fighting over the crumbs.

Some accountants and economists are going to have to accept that their wonderful models and bank accounts do not reflect physical reality and reality is going to win.

[Blue Peter]

As it stands is the probability is that the Greeks will vote for austerity, the banks will re-open once the government has changed the greek laws appropriately and gradually things will get better.

The Greeks have opted for austerity for the last 5 years and things have (not so gradually) got worse. Why should more austerity make things better?


Peter.

P.S. Greeks not especially bad at paying tax.

[johnhemming]

You may have noted that the banks have closed.

[PS_RalphW]

on a more general note, a bank tells it as it is.

http://www.theguardian.com/business/201 ... ettlements

The Western world's financial system is locked into low interest rates, triggering high asset prices and low growth, leading to insupportable debt levels and price bubbles.

Is anyone listening?

[biffvernon]

What would happen if the Usury Fairy came along, waved her magic wand, and declared all debts/loans wiped away? Would anybody actually die?
There would certainly be a redistribution of wealth so rich folk would not like such a fairy.

[3rdRock]

The Guardian @ 10.11 am

Reports of panic outside banks, in supermarkets and at petrol stations are now coming through thick and fast. Pensioners, waiting outside closed banks in Salonika, collapsed when it became apparent that the lenders weren’t going to open and they would not be getting their monthly allowance.

[PS_RalphW]

A global debt holiday would be total chaos.

The financial system is now so convoluted that it would be a mathematically hard problem to unwind it. Unwinding layers of debt relies on sequences of default, and a simultaneous cancellation would be impossible to resolve. So many different claims would be made against remaining assets that it would be impossible to decide who had legal precedence. Fiat money would cease to exist and would need to be replaced with a new set of fiat money distributed to individuals and organisations using arbitrary criteria.

No-one would know who would own physical assets with any debt secured against them.

The result would be a collapse of world trade, and global depression rapidly followed by economic and food distribution collapse, followed by the four horsemen.

Probably better to allow the system to decay one piece, or one country at a time.

[3rdRock]

http://en.europeonline-magazine.eu/1st- ... 99671.html

German Chancellor Angela Merkel suggested Monday that compromise still needed to be found on Greece, as the growing prospect of the country‘s exit from the eurozone sent panic through global markets.

"If the ability to find compromises is lost, then Europe is lost, and that‘s the sense in which a sentence I have often said should be understood - ‘if the euro fails, Europe fails,‘" Merkel said at a party conference in Berlin.