Financial Crisis in Greece

[George S.]

The Greek Government has passed the harsh austerity package on which its continued international funding depends, offering the nation and the euro zone a brief respite from crisis.
It faces a second, more complex vote tomorrow on laws to enforce the measures.
Observers warned that implementing the austerity program would be difficult, meaning the vote has bought breathing space but an eventual Greek default remains likely.
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The measures garnered 155 votes to 138 despite a second consecutive day of violent public protests in the square outside, where tens of thousands gathered. Crowds repeatedly rushed police with missiles and were forced back with tear gas and stun grenades.
In the debate, the government said there was no alternative to austerity but the opposition said there was too much pain for too little gain.
Professor Kevin Featherstone, of the Hellenic Observatory at the London School of Economics, said the vote had bought time for Greece but the crucial test would be the delivery of immediate reform measures.
''I think the Greek government needs to have a quick win on things like privatisation in order to convince international markets that it is serious and can see through its schedule.''
Before the vote, an independent European economist, Megan Green, warned that while a positive vote would avert immediate crisis, it would not change the fundamentals.
Implementing it would be so hard that a default and snap election would still be probable, she told the BBC.
The €25 billion ($34 billion) austerity program of tax rises, spending cuts and privatisations is fiercely resisted by the Greek opposition, most of the public and several members of the ruling party, who believe existing austerity measures have triggered the worst recession in modern Greek history.
The program is demanded by the European Union and the International Monetary Fund, who say Greece will not otherwise receive the next tranche of its €110 bailout loan.
Without the money Greece, which owes €350 billion, will go bankrupt and trigger the euro zone's first sovereign default. This could set off a chain reaction of financial collapses across Europe and perhaps the world.
Government MP and economic adviser, Elena Panaritis, said: ''There's an American expression - 'No pain, no gain' … Unfortunately we have to revise our economic way of doing business.''
The former Greek finance minister, Stefanos Manos, said of the vote: ''It keeps Greece afloat and gives it a little more time to put its house in order … In my opinion, the high debt we have now is not the problem. The problem is the propensity of Greek governments to spend much more than they earn and that is a problem that has not been resolved.''
with Guardian News & Media


Read more: http://www.smh.com.au/world/breathin...#ixzz1QhcPvKy1

[Onur]

Absolute facts about how and why Greece has gone bankrupt. An honest article from Daily Mail;

The Big Fat Greek Gravy Train: A special investigation into the EU-funded culture of greed, tax evasion and scandalous waste

Even on a stiflingly hot summer's day, the Athens underground is a pleasure. It is air-conditioned, with plasma screens to entertain passengers relaxing in cool, cavernous departure halls - and the trains even run on time.

There is another bonus for users of this state-of-the-art rapid transport system: it is, in effect, free for the five million people of the Greek capital.

With no barriers to prevent free entry or exit to this impressive tube network, the good citizens of Athens are instead asked to 'validate' their tickets at honesty machines before boarding. Few bother.

This is not surprising: fiddling on a Herculean scale — from the owner of the smallest shop to the most powerful figures in business and politics — has become as much a part of Greek life as ouzo and olives.

Indeed, as well as not paying for their metro tickets, the people of Greece barely paid a penny of the underground’s £1.5 billion cost — a ‘sweetener’ from Brussels (and, therefore, the UK taxpayer) to help the country put on an impressive 2004 Olympics free of the city’s notorious traffic jams.

The transport perks are not confined to the customers. Incredibly, the average salary on Greece’s railways is £60,000, which includes cleaners and track workers - treble the earnings of the average private sector employee here.

The overground rail network is as big a racket as the EU-funded underground. While its annual income is only £80 million from ticket sales, the wage bill is more than £500m a year — prompting one Greek politician to famously remark that it would be cheaper to put all the commuters into private taxis.

‘We have a railroad company which is bankrupt beyond comprehension,’ says Stefans Manos, a former Greek finance minister. ‘And yet, there isn’t a single private company in Greece with that kind of average pay.’

Significantly, since entering Europe as part of an ill-fated dream by politicians of creating a European super-state, the wage bill of the Greek public sector has doubled in a decade. At the same time, perks and fiddles reminiscent of Britain in the union-controlled 1970s have flourished.


Greek farce: Living it up in swanky harbour-side restaurants

Ridiculously, Greek pastry chefs, radio announcers, hairdressers and masseurs in steam baths are among more than 600 professions allowed to retire at 50 (with a state pension of 95 per cent of their last working year’s earnings) — on account of the ‘arduous and perilous’ nature of their work.

This week, it was reported that every family in Britain could face a £14,000 bill to pay for Greece’s self-inflicted financial crisis. Such fears were denied yesterday after Brussels voted a massive new £100bn rescue package which, it insisted, would not need a contribution from Britain.

Even if this is true — and many British MPs have their doubts — we will still have to stump up £1billion to the bailout through the International Monetary Fund.

In return for this loan, European leaders want the Greeks’ free-spending ways to end immediately if the country is to be prevented from ‘infecting’ the world’s financial system. Naturally, the Greek people are not happy about this.

In Constitution Square this week, opposite the parliament, I witnessed thousands gathering to campaign against government cuts designed to save the country from bankruptcy.

After running battles with riot police, who used tear gas to disperse protesters, thousands are still camped out in the square ahead of a vote by Greek politicians next week on whether to accept Europe-imposed austerity measures.

Yet these protesters should direct their anger closer to home — to those Greeks who have for many years done their damndest to deny their country the dues they owe it.

Take a short trip on the metro to the city’s cooler northern suburbs, and you will find an enclave of staggering opulence.

Here, in the suburb of Kifissia, amid clean, tree-lined streets full of designer boutiques and car showrooms selling luxury marques such as Porsche and Ferrari, live some of the richest men and women in the world.

With its streets paved with marble, and dotted with charming parks and cafes, this suburb is home to shipping tycoons such as Spiros Latsis, a billionaire and friend of Prince Charles, as well as countless other wealthy industrialists and politicians.

One of the reasons they are so rich is that rather than paying millions in tax to the Greek state, as they rightfully should, many of these residents are living entirely tax-free.

Along street after street of opulent mansions and villas, surrounded by high walls and with their own pools, most of the millionaires living here are, officially, virtually paupers.

How so? Simple: they are allowed to state their own earnings for tax purposes, figures which are rarely challenged. And rich Greeks take full advantage.

Astonishingly, only 5,000 people in a country of 12 million admit to earning more than £90,000 a year — a salary that would not be enough to buy a garden shed in Kifissia.

Yet studies have shown that more than 60,000 Greek homes each have investments worth more than £1m, let alone unknown quantities in overseas banks, prompting one economist to describe Greece as a ‘poor country full of rich people’.

Manipulating a corrupt tax system, many of the residents simply say that they earn below the basic tax threshold of around £10,000 a year, even though they own boats, second homes on Greek islands and properties overseas.

And, should the taxman rumble this common ruse, it can be dealt with using a ‘fakelaki’ — an envelope stuffed with cash. There is even a semi-official rate for bribes: passing a false tax return requires a payment of up to 10,000 euros (the average Greek family is reckoned to pay out £2,000 a year in fakelaki.)

Even more incredibly, Greek shipping magnates — the king of kings among the wealthy of Kifissia — are automatically exempt from tax, supposedly on account of the great benefits they bring the country.

Yet the shipyards are empty; once employing 15,000, they now have less than 500 to service the once-mighty Greek shipping lines which, like the rest of the country, are in terminal decline.

With Greek President George Papandreou calling for a crackdown on these tax dodgers — who are believed to cost the economy as much as £40bn a year — he is now resorting to bizarre means to identify the cheats. After issuing warnings last year, government officials say he is set to deploy helicopter snoopers, along with scrutiny of Google Earth satellite pictures, to show who has a swimming pool in the northern suburbs — an indicator, officials say, of the owner’s wealth.

Officially, just over 300 Kifissia residents admitted to having a pool. The true figure is believed to be 20,000. There is even a boom in sales of tarpaulins to cover pools and make them invisible to the aerial tax inspectors.

‘The most popular and effective measure used by owners is to camouflage their pool with a khaki military mesh to make it look like natural undergrowth,’ says Vasilis Logothetis, director of a major swimming pool construction company. ‘That way, neither helicopters nor Google Earth can spot them.’

But faced with the threat of a crackdown, money is now pouring out of the country into overseas tax havens such as Liechtenstein, the Bahamas and Cyprus.

‘Other popular alternatives include setting up offshore companies in Cyprus or the British Virgin Islands, or the purchase of real estate abroad,’ says one doctor, who declares an income of less than £90,000 yet earns five times that amount.

There has also been a boom in London property purchases by Athens-based Greeks in an attempt to hide their true worth from their domestic tax authorities.

‘These anti-tax evasion measures by the government force us to resort to even more detailed tax evasion ploys,’ admits Petros Iliopoulos, a civil engineer.

Hotlines have been set up offering rewards for people who inform on tax dodgers. Last month, to show the government is serious, it named and shamed 68 high-earning doctors found guilty of tax evasion.

‘We will spare no effort to collect what is due to the state,’ said Evangelos Venizelos, the new Greek finance minister of the socialist ruling party. ‘We promise to draft and apply a new and honest tax system, one that has been needed for decades, so that taxes are duly paid by those who should pay.’

Yet, already, it is too late. Greece is effectively bust — relying on EU cash from richer northern European countries, but this has been the case ever since the country finally joined the euro in 2001.

Two years earlier, the country was barred from entering because it did not meet the financial criteria.

No matter: the Greeks simply cooked the books. Two years later, having falsely claimed to have met standards relating to manufacturing and industrial production and low inflation, the Greeks were allowed in.

Funds poured into the country from across Europe and the Greeks started spending like there was no tomorrow.

Money flowed into all areas of public life. As a result, for example, the Greek school system is now an over-staffed shambles, employing four times more teachers per pupil than Finland, the country with the highest-rated education system in Europe. ‘But we still have to pay for tutors for our two children,’ says Helena, an Athens mother. ‘The teachers are hopeless — they seem to spend their time off sick.’

Although Brussels has now agreed to provide the next stage of its debt payment programme to safeguard the country’s immediate economic future, the Greek media still carries ominous warnings that the military may be forced to step in should the country’s foray into Europe end in ignominy, bankruptcy and rising violence.

For now, the crisis has simply been delayed. With European taxpayers facing the prospect of saving Greece from bankruptcy for the second year in a row, some say even the £100bn on offer will pay off only the interest on the country’s debts — meaning it will be broke again within two years.

Meanwhile, there are doom-laden warnings that the collapse of the Greek economy could be the catalyst for another global recession.

Perhaps if the Greeks themselves had shown more willingness to tighten their belts and pay taxes due to the state, voters across Europe might not now be feeling such anger towards them.

But having strolled the streets of Kifissia, and watched the Greek hordes stream past the honesty boxes on the underground, it does not take a degree in European economics to know when somebody is taking advantage — at our expense.

25th June 2011

http://www.dailymail.co.uk/news/arti...ous-waste.html

Living in a dream world with someone else`s money but ofc every dream has to end, and i would say that the Greek dream took sooo long, from 1980s till recent year, so it became a nightmare in the end.

I`ve read that Greece took about 220 billion euro free money from EU funds since they became a member of it. And we know that they took 110 billion loan last year and now they will probably get 100 billion more. That`s fcking huge for a country with 10 million population. So, that means Greeks wasted about half a trillion dollars in ~25 years. Man, with this amount of money, you could end the hunger in whole Africa or could do something useful to the whole world.


I have no idea what was the intention of the eurocrats in Brussels while they were giving half a trillion dollars to the Greeks. Maybe they wanted to create some kind of heaven for their European dream to lure other european states, show it as an example of what can be achieved in their federal EU super-state project. Some kind of laboratory for the PR business of the clowns in Brussels;
"Welcome to the Greece, with it`s 35.000!!! year old white European history. It`s full with richness, where the descendants of Homer lives in a dream world, enjoying the Aegean sun by their swimming pools, breaking dishes in night clubs, dancing till dawn".

[SirGeorge8600]

Why are you burdening an entire population with what the corrupt higher class/politicians do? You realize Greece has one of the longest work-hour labor forces in Europe?

[julie]

So they can retire on almost full pay 20 years younger than the west ,?

[makedonche]

[QUOTE=SirGeorge8600;103665]Why are you burdening an entire population with what the corrupt higher class/politicians do? You realize Greece has one of the longest work-hour labor forces in Europe?[/QUOT

SirGeorge8600
Good point you raise, my view is that the population weren't keeping a vigilant eye on them or asking the tough questions that needed to be asked, that being the case the population itself needs to accept some of the responsibility, no?

[Risto the Great]

Why are you burdening an entire population with what the corrupt higher class/politicians do? You realize Greece has one of the longest work-hour labor forces in Europe?

How long do they actually work for in that "work-hour"?

[julie]

Why is the world continually bailing Greece out. Any other country in such a corrupt financial mess would have had American troops barging in ! And are the peole protesting because they might have to start paying taxes , or heaven forbid actually retire at ages the rest of us low lifes have to . How much longer are they going to allow Greece to go on ? At the same time endorsing their claims on MAcedonian history . The I m f and eu should create new economic and financial reforms for this corrupt society , stealing other peoples money enforcing poverty on people doing the right thing to support their extravagant lifestyles whilst the plebs elsewherebudget for a loaf of bread . I was a guest at a large conference my husband was at a speaker for . Was interesting how many aussies at the dinner that evening had so much contempt and scorn for Greece . And I did not have to say a word .

[Stojacanec]

How long do they actually work for in that "work-hour"?

Would you call protesting "work"?

[George S.]

Stojanec i think they did a good job on the police & scaring the politicians firing molotov cocktails & firing rocks & slingshots i think looks like hard work in a day.

[George S.]

oh on the aspect of the money i know quite a number of greeks that i have met & they say don't assume that the 200 billion of euros has dissappeard they said it's hidden away & probably in swiss bank acoounts.

[Risto the Great]

Why is the world continually bailing Greece out.

Greece used to be a tiny little laughing stock of a European continental country. It still is. However, this is in fact a test of the EU and the world is very nervous about this as a consequence. Rightly so.

It is like having a drug addict for a child and having to continually throw money at the problem. You will do this for someone you love. But EVERYONE is getting tired of the Greeks in relation to this matter. Notwithstanding this, it is a test of the EU's strength and we shall soon see how strong it is.

I simply cannot see how Macedonia would be any different to Greece upon entry into the EU. The one major difference would be that less money would flow into Macedonia. Aside from that, I think the work ethic is probably about the same.

[Voltron]

Greece used to be a tiny little laughing stock of a European continental country. It still is. However, this is in fact a test of the EU and the world is very nervous about this as a consequence. Rightly so.

It is like having a drug addict for a child and having to continually throw money at the problem. You will do this for someone you love. But EVERYONE is getting tired of the Greeks in relation to this matter. Notwithstanding this, it is a test of the EU's strength and we shall soon see how strong it is.

I simply cannot see how Macedonia would be any different to Greece upon entry into the EU. The one major difference would be that less money would flow into Macedonia. Aside from that, I think the work ethic is probably about the same.

There is no doubt that the money "thrown" at us has been squandered by traitor politicians and that there is responsibility on our govt.

That said, that doesnt mean the people have to pay for it. The people that are responsible for this mess should pay for it. We can start with the incompetence and greed of US Banking Corporations. We can start with malicious tactics by Credit Agencies that try to manipulate soverign countries for a profit. We can start with dubious inside trading on Wall Street and Forex. The list goes on and on. Again, this is "normal" to ppl in America and probably to you guys as well. This mess started not with us, but with the mortgage crisis in the US. Most of you have selective memory and its easy to make Greece the scapegoat today.

Again, I have no idea why we dont blackmail these bastards. Throw in the towel and take half of Europe with us. Cause chaos in the world markets and lets see then how willing they are to negotiate on how to repay our debt. Someone in our current govt. has a pair missing.

[Voltron]

Voltron, it’s high time you get a reality check. The collection of taxes in Greece (and in the Balkans) is poor. Corruption is high. Everything is highly politicized. Very difficult to run a business in neighbouring countries because of politics and red tape.

America at least has industry, sports and movie elite that most of the world focuses on. They don't do themselves any favours by waging wars all over the world, that can't be a cheap exercise.

A Greek friend of mine has her feet firmly on the ground when she says, "the only thing stopping Greece from being a third world country is their tourism"

We in Aust can't retire at 50 or 55 where the govt gives us a full pension. As a nation you have to start to balance the budget and stop cooking the books.

Newsflash Stojanec, you dont have to work like a 3rd world slave to be a productive member of society. This is something that I always try to tell my cousins in the US when I go back home. This perception that you have to bust your ass 60 hours a week, retire at 67, no compensation, termination of you job at any given notice, 2 week vacation without the option to take it all at once, so on and so on.

Its this complacency in countries in America where they think this is perfectly normal. And any other country that does not follow those guidelines are lazy. I have lived both worlds, and I can assure you that it is possible to have a balance in your life regarding work and personal time.

In Belgium they have 42 paid vacation days a year, 42 !!
That is without public holidays and other perks they receive.
The Germans and French have also better working rights than Greece. In fact we work more hours than any other country in Europe. Yet we are the lazy ones ? Why because we have a beautiful country with the sun and sea ? Of course we will use our spare time to kick back on the beachside with our frappedes. This is a case of pure jealousy on the part of outsiders that see us. Now they want to sell our country off to these outsiders so they can come in here and enjoy themselves. Well, that aint going to happen. Regardless what "laws" will be passed, it will never be implemented. Just like so many other laws we have here that are not implemented. Wake up for the love of God. There is a life outside of work, it is just complacency on your part to even see it.

[Voltron]

Lol, you're kidding, right? Let me know when your prime minister gives the order to his security forces to mow protesters down with machine guns in the streets..........I thought the Greek government ceased their gestapo tactics after suppressing all of the minorities in the country.

It was an expression SOM. I dont plan on seeing ppl mowed down either. My point is that we are very vocal in what we believe and in Europe you will not find any other country that reacts the way we do when we are pissed off. Thats all im trying to say.

@ Lavce, you found a band of commies that cut through the chains at the Acropolis with a diskcutter and placed the commie insignia on a flag on the Parthenon. That is old news buddy.

You see, we are so free over here that any retard can voice their opinion. Even outdated commies that live in the past. They are hardly a force to reckon with here.

[Risto the Great]

There is no doubt that the money "thrown" at us has been squandered by traitor politicians and that there is responsibility on our govt.

That said, that doesnt mean the people have to pay for it. The people that are responsible for this mess should pay for it. We can start with the incompetence and greed of US Banking Corporations. We can start with malicious tactics by Credit Agencies that try to manipulate soverign countries for a profit. We can start with dubious inside trading on Wall Street and Forex. The list goes on and on. Again, this is "normal" to ppl in America and probably to you guys as well. This mess started not with us, but with the mortgage crisis in the US. Most of you have selective memory and its easy to make Greece the scapegoat today.

Again, I have no idea why we dont blackmail these bastards. Throw in the towel and take half of Europe with us. Cause chaos in the world markets and lets see then how willing they are to negotiate on how to repay our debt. Someone in our current govt. has a pair missing.

Voltron,
You might have me confused with someone else. I have been to Greece 4 times in the last 7 years. The people are lazy and expect to be rewarded for it. This is the problem. Please do not blame some American (or whatever) because they want to work harder. I am positive the Greek government is part of the problem. They spent hundreds of millions in cash for support/bribes for the "quest for Macedonia" in recent times. Imagine what they have spent on themselves!

All in all, it is an inefficient economy that has no urgency and no inclination to improve. It will improve because it now has no choice. Not many Greeks in the Diaspora have much pity for their relatives "back home". They know what they had to do to create a life for themselves in their new countries.