Financial Crisis in Greece

[George S.]

or how about the subliminimal messages when you play it all in reverse.Probably don't cry for me macedonia don't join the eu macedonia..Definitely itally is next with 1,9 trillion eu dollars.
But notice this i read that other countries are implicated with greece as they loaned other countries money i think it's either romania or hungary including bulgaria.I think they could be hefty amounts.
Also Italy how many other countries has it loaned money from their own money.???
I predict a domino roll which will take a lot of the eu countries.They did a calculation as in excess of 12 trillion eu dollars.

[George S.]

Greece should default and abandon the euro

http://www.bbc.co.uk/news/business-15452180

25 October 2011





Jeffrey Miron, senior lecturer in economics at Harvard University, believes that the consequences of a Greek default are overstated. Not only would a default be better for Athens, it would have benefits for Europe too, he argues.



The Greek parliament has adopted new austerity measures - civil service layoffs, higher taxes, and reduced bargaining rights for unions - in the hope of generating further bailouts from the European Union.



The Greek populace responded with violent protests and strikes. It remains to be seen how the European Union will respond.

The question for Greece is whether to continue its recent path - continued attempts at austerity, which do little to tame the deficit, followed by just enough bailout from the EU to avoid default - or whether to finally admit the obvious: it should default on its sovereign debt, abandon the euro, and go its own way.



If Greece defaults, the country gets immediate relief from the crushing interest payments on its debt, leaving it with a relatively modest primary deficit which excludes the big interest payments Greece is faced with now.



In such a scenario, the pressure for austerity would therefore diminish. This would allow Greece to choose policies that encourage growth, rather than ones that shrink the deficit but retard growth by imposing higher taxes.



Continue reading the main story



“Start Quote

A Greek default has one further benefit: it sends a message to creditors that lending carries real risks.”

End Quote Jeffrey Miron



By abandoning the euro and adopting a properly valued currency, Greece can restore its international competitiveness. This means greater employment demand from both domestic and foreign sources.



The potential negative of default is that Greece will likely lose access, for a while, to international credit markets (although it will be a much safer investment after default than it is now).



Byzantine tax code



But being cut off from foreign lending for a few years is not a disaster; if anything, it might encourage cuts in the wasteful components of government spending.

A bigger risk of default is that ending the crisis might reduce pressure for Greece to address the economy's fundamental problems: crony capitalism, a Byzantine tax code, excessive regulation, and a bloated government sector.



If Greece fails to reform, it will suffer slow growth and a new crisis soon, regardless of what it does now.



Thus, default is no panacea for Greece, just as declaring bankruptcy is no guarantee that an indebted individual or business will return to financial health: that depends on the actions taken once default has occurred.



But default is a necessary first step that will provide Greece the breathing room to fix its economic policies in a calm, rational manner.



Many individuals, companies, and countries have recovered from bankruptcy or default.

Overstated



For Europe's creditors, a Greek default might appear to have two negatives: the loss of future repayments, plus an increased risk of default in other countries, like Italy.

Yet those risks are easily overstated.



Substantial repayments from Greece are unlikely in the foreseeable future, or they will occur only because the rich countries give Greece the money to make the repayments.

Default risks in other countries are more readily addressed if Europe avoids throwing good money after bad, and instead retains its bailout funds for countries in difficult but salvageable shape.



And a Greek default reduces uncertainty, which is likely to facilitate rather than impede the orderly resolution of other bad debts.

For European taxpayers, a Greek default has one further benefit: it sends a message to creditors that lending carries real risks, so they should be more careful in future.

The fundamental reality is that Greece and much of Europe have borrowed and consumed too much in recent decades; someone has to pay for that.



Default accomplishes this quickly, and imposes the losses on those who made the gains when times were good. That is the right outcome.



Jeffrey Miron is senior lecturer and director of undergraduate studies at Harvard University and senior fellow at the Cato Institute. He is the author of Libertarianism, from A to Z.

[George S.]

Unraveling the Greek basket case

Unraveling the Greek basket case

Oliver Marc Hartwich

Published 6:41 AM, 20 Oct 2011 Last update 10:00 AM, 20 Oct 2011

http://www.businessspectator.com.au:80/bs.nsf/Article/Greece-default-eurozone-monetary-union-soverieng-d-pd20111017-MQ2GW?OpenDocument&src=kgb

Once again the world is impatiently awaiting a European summit at which once and for all the continent’s problems will be comprehensively solved – or not. If history is anything to go by, we should not set our hopes too high. For modern Greece there has never been a lasting solution.

You may agree or disagree with Georg Wilhelm Friedrich Hegel’s deterministic world view, but it is hard to argue with the philosopher’s grim assessment of governments’ ability to learn: “What experience and history teach is this — that nations and governments have never learned anything from history, or acted upon any lessons they might have drawn from it.”

Since these words were written 180 years ago Europe’s dealings with Greece have proved Hegel right time and again. Greece is not a country with temporary economic, fiscal and monetary problems. It is a permanent basket case. Despite this, Europe has never found a way to deal with it.



Since Greece gained independence from Turkey after its war of independence (1821-29), the country has been plagued by recurrent budget crises, frequent state defaults and long periods of being cut off from international capital markets. There was no shortage of attempts to put Greece on a more stable trajectory by integrating it into international monetary arrangements. And yet they all failed eventually.



The first attempt to give modern Greece a convertible silver currency was in 1828. It was suspended only four years later when the budget deficit was so high that the government resorted to printing paper money to pay for the ongoing conflict with Turkey. A return to the silver standard began a few years later but the Greek government continued to borrow heavily from the central bank for its expenditure – hardly a sustainable fiscal arrangement.

After more tumultuous years with yet another departure from silver to paper and back, Greece in 1867 sought refuge in the Latin Monetary Union, one of the forerunners of today’s euro currency.



Effectively, LMU was a gold and silver-backed monetary union with the French franc at the centre, and Greece hoped to benefit from the monetary stability it offered. Being part of a big monetary union with many other European nations also gave it access to deeper capital markets.

From a Greek point of view, it was perfectly understandable why they were so keen to join the club. The only question is why the other members of LMU admitted Greece despite its poor economic structures.



Not even observers closer to the historic events could see the point of Greek membership. In his ‘History of the Latin Monetary Union’ report, University of Chicago economist Henry Parker Willis summed it up nicely, and it is worth quoting at length:

“It is hard to see why the admission of Greece to the Latin Union should have been desired or allowed by that body. In no sense was she a desirable member of the league. Economically unsound, convulsed by political struggles, and financially rotten, her condition was pitiable. Struggling with a burden of debt, Greece was also endeavouring to maintain in circulation a large amount of inconvertible paper. She was not territorially a desirable adjunct to the Latin Union, and her commercial and financial importance was small. Nevertheless her nominal admission was secured, and we may credit the obscure political influences … with being able to effect what economic and financial considerations could not. Certainly it would be hard to understand on what other grounds her membership was attained.”



Replace ‘Latin Union’ with ‘European Monetary Union’ and the paragraph quoted above could have been published today. In fact, it was published in 1901. Already back then, Willis came to the conclusion that monetary union in Europe did not work, which again sounds like a prophecy of things to come:



“The Latin Union as an experiment in international monetary action has proved a failure. Its history serves merely to throw some light upon the difficulties which are likely to be encountered in any international attempt to regulate monetary systems in common. From whatever point of view the Latin Union is studied, it will be seen that it has resulted only in loss to the countries involved.”



One of LMU’s problems was Greece. The country had introduced paper money that was only valid domestically and it also reduced the gold and silver content of its coins in violation of international agreements. No wonder that other LMU members became increasingly frustrated by Greece’s refusal to play by the rules.



The Swiss ambassador to Paris allegedly once complained that monetary union with Greece was an ‘unhappy marriage’ from which there was no easy escape. Eventually, however, the other LMU countries lost patience and ordered Greek coins retired in 1908. Effectively, they kicked Greece out of the union because they were fed up with it.



Greece then had to readjust its monetary policy and managed to return to LMU in 1910 under a gold standard, but by then the LMU was already fragile. Four years later, the union was effectively abandoned at the start of World War I and formally dissolved in 1927.



After LMU, Greece’s monetary history remained a roller-coaster. The drachma devalued and became pegged to the sterling in 1928. It devalued again before being pegged to the US dollar in 1953. In 1975 it was floated and devalued immediately, followed by big devaluations in 1983 and 1985. Only in preparation for the euro did the Bank of Greece eventually announce a ‘hard drachma’ policy in 1995, but its entry into the European Exchange Rate Mechanism required yet another devaluation.



After this turbulent monetary history of Greece, it was surprising (to say the least) how easily Greece managed to become part of the eurozone. Either Greece had fundamentally changed its whole economic system as grown over two centuries overnight or Greece’s European partners had not learned their lessons from history.



This weekend, European leaders will once more decide on how to deal with Greece. It looks as if even in case of a Greek default, which now looks like a certainty, the country could remain a member of the eurozone.



Rumours have it that Hegel is laughing in his grave.

Dr Oliver Marc Hartwich is a Research Fellow at the Centre for Independent Studies.

[makedonche]

Makedonche, do you remember our discussion with Cultea in August, September???





Now where is Cultea when we need him

Papandreu resigned already. Greek default, returning to drachma and Samaras being new PM will follow soon.

Cultea, i know you are reading this cuz you came back to the forum after being banned at least 10 times b4


P.S: Anyone knows when is the next German parliamentary elections? I am asking because thats the deadline when Greece will be defaulted and return to drachma. Just roll back 6 months b4 the election date, thats the end of the Greece`s euro journey, just b4 election propaganda of Merkel`s party begins.

Ofc the Greek deadline might be the French elections in 2012, we will see.

Onur
.....aaahhhhh yes I remember this! Where has our hellass-ian friend gone? Whilst we weren't 100% correct, I think in time we will have been proven to be far more accurate! I wonder how Cultea is going in his newly created state of "Denial" (the former hellenic republic of greece)?

[makedonche]

To onur and makedonce.

That is amassing accuracy regardless if the Drachma prophecy is a little off predicted date. The main thing is it will happen.

What else does your crystal ball say?

Bill77
hahaha!!!1 I'll just go and unzip my fly and check that crystal ball again! (hope I can remember which one it is) lol

[Bill77]

Bill77
hahaha!!!1 I'll just go and unzip my fly and check that crystal ball again! (hope I can remember which one it is) lol

lol

Don't forget to give it a rub mate

That's a natural thing for us blokes to do....Well scratch them to be precise.

[makedonche]

lol

Don't forget to give it a rub mate

That's a natural thing for us blokes to do anyway.

Bill77
hahahahahah!!!!!...............I forgot about the rubbing part

[George S.]

Maybe the genie will pop out of the crystal ball & return all of macedonia fortunes.You will be real famous makedonche.

[Voltron]

I dont know guys, but it looks to me that the whole eurozone is going down. Sure, you may get kicks out of Greece being used as the scapegoat but anybody with half a brain can see this is a global and mostly a European problem. I think Italy owes more than Greece does but anyway why does it even matter. If the Euro goes bust, its not something you should be happy about. It will affect the US, and even Turkey. It will affect the whole world and the Greek people will adjust fast while others will not. Falling hurts least for those who fly low.

[George S.]

hey voltron are you talking about the eurogenous zone??THat's because that's related to the crystal ball.THat's where makedonche & his gemie comes into it.
SEriously voltron italy owes 1.9 trillion greece owes 300 billion they are all on the same sinking boat.THe total dficit for the eu is somthing like 12 trillion.Look at the way the loans were even made it was all criminal roughting never to be paid back.Its called stealing.

[makedonche]

I dont know guys, but it looks to me that the whole eurozone is going down. Sure, you may get kicks out of Greece being used as the scapegoat but anybody with half a brain can see this is a global and mostly a European problem. I think Italy owes more than Greece does but anyway why does it even matter. If the Euro goes bust, its not something you should be happy about. It will affect the US, and even Turkey. It will affect the whole world and the Greek people will adjust fast while others will not. Falling hurts least for those who fly low.

Voltron
You never cease to amaze me, even in the face of cold hard facts and financial desolation you are still in denial and still looking for blame elsewhere for the actions of your countrymen. This whole eurozone crisis began as a Greek debt crisis - don't make me post 500 pages of jurnalism to have to prove this to you! Yes it will affect US & Turkey, but also most of the financial world as well - let's see how forgiving they will be, I'm not happy about it, I'm laughing at the denial - which seems to be a well versed trait amongst hellassians.
If flying low is going to cause the least pain then Greece needs to get ready for the most serious pain because denial of flying high is not the same as actually flying low!

[Voltron]

Makedonche, the whole mess regarding Greece is when Papamalakas decided to hang out the dirty laundry for the whole world to see. In his short sighted attempt to discredit the then ruling party New Democracy he basically told the whole world how the statistics were false. He had no idea how it would of backfired in his face and subsequently start a Eurozone attack from speculators. Then, we find out that he even exageratted on how false the statistics were back then. It wasnt as bad as he said but by then the gates of hell had been unleashed. Im just saying that for some that are harping on how much pain we will feel and blah blah. Its not going to happen, most Greeks have homes in rural areas or family to stay with. They will get by, while the other people commit mass suicide as they did in America when the credit market went through the crapper a few years back. Thats just reality.

[Bill77]

Makedonche, the whole mess regarding Greece is when Papamalakas decided to hang out the dirty laundry for the whole world to see.

Its Andreas Georgiou that is a turd for speaking the truth http://www.macedoniantruth.org/forum...&postcount=805

Now its also Papandreou. I wander why its hard not being a bullshit artist in Greece, who would want to be labled a malaka or worse, get a life sentence.

I love this quote so here it is again
"The ancient Greek philosopher Diogenes used to walk the streets of Athens “looking for an honest man.” Today’s Greeks are still looking"
The problem is, you can't be honest even if you wanted to in Greece these days.

Im just saying that for some that are harping on how much pain we will feel and blah blah. Its not going to happen, most Greeks have homes in rural areas or family to stay with. They will get by

"The queue of hungry people snaked across the courtyard and into the street at the homeless shelter behind Omonoia Square in Athens last Thursday, just as it does every day at lunchtime. The retired, the unemployed, mothers with children, immigrants; they were all waiting patiently for church members to press something to eat into their hands". http://www.macedoniantruth.org/forum...0&postcount=39

Mabe the family in rural areas of these people were not home, or just plain hiding for they can't feed anymore mouths.

while the other people commit mass suicide as they did in America when the credit market went through the crapper a few years back. Thats just reality.

cough cough.....

Rate of suicides has ‘doubled’ in Greece

The past few months have seen a sharp rise in the number of people taking their own lives, according to a nongovernmental organization that runs a helpline for those considering suicide.

According to Aris Violatzis of the NGO Klimaka, the number of suicides “have doubled if not tripled” over the past year. Violatzis said the rate had increased to more than two suicides per day this year, as compared to one per day in 2009. And these are just the suicides that are recorded, Violatzis said, adding that the real number was likely to be higher as the stigma attached to suicide means they are often not reported.

http://www.macedoniantruth.org/forum/showpost.php?p=66010&postcount=1

[Voltron]

Its Andreas Georgiou that is a turd for speaking the truth http://www.macedoniantruth.org/forum...&postcount=805

Now its also Papandreou. I wander why its hard not being a bullshit artist in Greece, who would want to be labled a malaka or worse, get a life sentence.

I love this quote so here it is again
"The ancient Greek philosopher Diogenes used to walk the streets of Athens “looking for an honest man.” Today’s Greeks are still looking"
The problem is, you can't be honest even if you wanted to in Greece these days.

"The queue of hungry people snaked across the courtyard and into the street at the homeless shelter behind Omonoia Square in Athens last Thursday, just as it does every day at lunchtime. The retired, the unemployed, mothers with children, immigrants; they were all waiting patiently for church members to press something to eat into their hands". http://www.macedoniantruth.org/forum...0&postcount=39

Mabe the family in rural areas of these people were not home, or just plain hiding for they can't feed anymore mouths.

cough cough.....

Rate of suicides has ‘doubled’ in Greece

The past few months have seen a sharp rise in the number of people taking their own lives, according to a nongovernmental organization that runs a helpline for those considering suicide.

According to Aris Violatzis of the NGO Klimaka, the number of suicides “have doubled if not tripled” over the past year. Violatzis said the rate had increased to more than two suicides per day this year, as compared to one per day in 2009. And these are just the suicides that are recorded, Violatzis said, adding that the real number was likely to be higher as the stigma attached to suicide means they are often not reported.

http://www.macedoniantruth.org/forum...10&postcount=1

Strange how I dont see it that bad and I live here. I only wish the immigrants can leave. That would be a first positive out of the crisis.
We always had homeless even in the days of the Drachma and Omonia square well surprise surprise...

Most Greeks have a place to go, that is why in August Athens is empty. In the rural areas the people I know that raise their own livestock, grow their own vegetables, have their olive oil, and even ferment their own wine. Neighbors trade goods, Il give you a goose for your chicken etc. You can survive, nobody can take the land from you. We are blessed with a good climate, the IMF cant take that away either. Most of those homes are already payed off for many years so their is no title lean against them. So is the land, usually its been inheritied for a long time now. What are they going to do to these people ? They cant do anything. Do Greeks like to beat the system ? Sure, they do. Is it partly a reason why we got here ? Yes it is, but you know what. If our politicians dont set the standard neither will the people. In other countries you have stand up citizens, but their politicians are crooked yet they are not bothered by this injustice. Here it simply doesnt fly.

[Bill77]

Strange how I dont see it that bad and I live here.

But if The ancient Greek philosopher Diogenes still walked the streets of Athens today, He would have walked right past you. No......he would have bolted.

I only wish the immigrants can leave. That would be a first positive out of the crisis.

Don't let Georgios Levedogiannis, 38, who worked in security at Athens Airport for seven years hear you call him a immigrant. His ancestors might have been, but not Georgios. Or the other retired Greeks the article mentions.

http://www.macedoniantruth.org/forum/showpost.php?p=104250&postcount=39