View Full Version : What would happen if Greece averted the default?
dannylee_dl
Jul 2, 2015, 01:01 PM
I want to know what the situation would have been like for the greek people and other international communities if the default had been averted.
Curlyben
Jul 2, 2015, 01:12 PM
Realistically, very little will actually happen or change, just lurching from one crises to another..
paraclete
Jul 2, 2015, 02:59 PM
That depends on whether they accept the demands of their creditors, or are able to modify them.
http://www.bbc.com/news/world-europe-33373390
As it stands there would be a higher VAT imposed on most commodities
There would be later retirement raising the age to 67
The pension subsidy would be abolished, this would affect poorer pensioners most
The VAT would be imposed on the Greek Islands
The banks would be provided with liquidity and could continue to operate
Greece would stay in the eurozone
Greece would need more bailouts in the future
The basic problem is the level of tax evasion and avoidence as a result the government is not self funding and has not been for many years. As a result it has amassed massive debt.
They have already faced reduction of public service salaries, reduction of public service positions, cuts in pensions, sell off of state assets, changes in VAT and various other conditions some of which they have failed to implement
tomder55
Jul 3, 2015, 01:27 PM
Danny ,Robert Kaplan argues that it was a terrible mistake to admit Greece into the EU . But since they did ,there is much more at stake than monetary concerns at play .Greece was critical to the Cold War policy of Soviet containment. It is no less so in the age of Putin.
Russia may be helping to inflame Syriza’s internal divisions in the hope that Greece’s ruling party cannot make the difficult concessions necessary to stay in the eurozone. If Greece does leave the eurozone, the economic aftershocks to the domestic economy could reduce it to a semi-failed state that, along with the dismemberment and weakening of Ukraine, will seriously weaken Europe’s geopolitical position vis-à-vis Russia.
If this happens not only will the Iberian states of Spain and Portugal be more susceptible to euro-debt contagion, but Balkan states with weak institutions and fragile economies like Albania, Bulgaria and Romania will be in a more exposed position. While those states were never part of the eurozone, the spectacle of a major Balkan country pivotally loosening its ties with the West, even as Russia appears momentarily ascendant in the region, will be sobering in the extreme.
The Greek Crisis Is About More Than Money - WSJ (http://www.wsj.com/articles/SB11486026120286184909004581077960515036484)
47570
That being said ; I think it would be a mistake to prop up Greece . I don't think that would stop the inevitable collapse because the Greek model is fundamentally flawed ;and propping it up would not fix it . The fact is that no one knows how to keep Greece solvent .
paraclete
Jul 3, 2015, 03:01 PM
I think we know how to keep Greece solvent however the Greek people don't have the will to do what is needed, as to paying off the amassed debt that needs a very long term solution. Greek assets need to be sold off and the money used to pay down debt. Greece needs to leave the EU because it cannot abide by the rules and play a meaninful economic part and I think Europe will be strengthened by their exit, it won't be going through this farse every few months. The fact is the greek lifestyle of la dolce vita has to change. The EU model of accepting eastern european countries is nonsense.
smoothy
Jul 3, 2015, 03:44 PM
I know a lot of Europeans are disgusted they are bailing them out yet again... ( I just got back from a Month in Italy) EVERY Italian I met was absolutely disgusted after the first bailout... and completely indignant about the next several.
Particularly since Greece should not have even been allowed into the EU in the first place because they made wholesale fraud about their National financial statistics and when they applied for the EU which has come out and has been getting a lot of press coverage in Europe (in Italy anyway).
paraclete
Jul 3, 2015, 04:43 PM
And they still think they can cheat the system. There should be consequences for not living up to the agreements but with a common currency they cannot devalue and make things more expensive in Greece so additional taxation is the only way, but you can't tax your way out of recession. The lesson that no one owes you a living comes hard. There are too many creditors in the mix and eventually they will be played off against each other but who would want to take over the entire debt. a one time levy on the population should do it, Say E20,000 would even things out a lot. Greeks seem to have lot of money in banks so freeze their funds until they pay up
tomder55
Jul 4, 2015, 02:24 AM
"Socialism works until you run out of other peoples money". (Thatcher)
No matter what the deal is ,why would you trust the Marxist Syriza government to execute it ? However ; do you want Russian naval bases on both ends of the Black Sea ? If you haven't noticed yet ;Czar Vlad the conqueror sees himself as the self appointed defender of the Orthodox faith ,and Greece is an Orthodox nation. See the map I provided . The nations along the Black Sea are being absorbed slowly into a greater Novorossiya . That would be great revenge for NATO's peeling off Kosovo .
The US should be taking a lesson from this . 25 years ago Greek debt was 75% of the Greek economy ......about what the US debt is now (I say about because we don't really know . Emperor Zero's Treasury dept has been reporting the same exact number for weeks now ).In 25 years, U.S. debt levels are projected to reach 156 percent of the economy, which Greece had in 2012. The debt clock is ticking .
paraclete
Jul 4, 2015, 06:51 AM
You still have time and the ability to save yourselves Tom but it means a change in direction. A pull back in your military and you have to deal with poverty. I wouldn't worry about Putin as much as you need to worry about the weight of your own processes. Capitalism doesn't lead to utopia any more than socialism does
tomder55
Jul 4, 2015, 11:39 AM
not looking for utopia . That's a Marxist dream. I'll settle for liberty . Happy Independence Day America !!
paraclete
Jul 4, 2015, 03:51 PM
Have fun Tom
tomder55
Jul 5, 2015, 01:24 AM
People who found this post inaccurate:
How do I rate comments on a discussion board ? I often find comments inaccurate . Then again I wouldn't rate an opinion. I'd engage the poster in debate.
paraclete
Jul 5, 2015, 03:17 PM
This is a place for opinions, hopefully based on facts, but if we didn't have differing opinions we wouldn't need political parties
Here are some facts
World - BBC News (http://www.bbc.com/news/world)
The greeks have voted OXI! And now they enter a new phase
tomder55
Jul 6, 2015, 11:48 AM
and which stock market is tanking ? ..... The Chinese market ...
Nearly quarter of Chinese investors ‘suffer over 50 per cent losses’ as stock market slumps, survey suggests | South China Morning Post (http://www.scmp.com/news/china/economy/article/1832022/nearly-quarter-chinese-investors-suffer-over-50-cent-losses-stock)
paraclete
Jul 6, 2015, 02:19 PM
Yes Tom that's what overheated markets do, the price of capitalism, but it really doesn't have anything to do with Greece
tickle
Jul 6, 2015, 03:33 PM
This is a place for opinions, hopefully based on facts, but if we didn't have differing opinions we wouldn't need political parties
Here are some facts
World - BBC News (http://www.bbc.com/news/world)
The greeks have voted OXI! And now they enter a new phase
Their banks open and they get their benefits now. Now we see how the NO vote plays out.
I think we know how to keep Greece solvent however the Greek people don't have the will to do what is needed, as to paying off the amassed debt that needs a very long term solution. Greek assets need to be sold off and the money used to pay down debt. Greece needs to leave the EU because it cannot abide by the rules and play a meaninful economic part and I think Europe will be strengthened by their exit, it won't be going through this farse every few months. The fact is the greek lifestyle of la dolce vita has to change. The EU model of accepting eastern european countries is nonsense.
Yes, well stated para !
cdad
Jul 6, 2015, 07:16 PM
How do I rate comments on a discussion board ? I often find comments inaccurate . Then again I wouldn't rate an opinion. I'd engage the poster in debate.
Tom, one of the older skins seems to allow rating all posts. The newer skin does not and can not rate posts in this section. It can only do so on the Q&A side.
talaniman
Jul 7, 2015, 03:36 AM
This is where the Greeks can turn a corner, by solving a very old problem,
Primary Greek tax evaders are the professional classes | Business | The Guardian (http://www.theguardian.com/world/2012/sep/09/greece-tax-evasion-professional-classes?CMP=twt_gu)
paraclete
Jul 7, 2015, 06:13 AM
The guys running the place are tax evaders go
Figure
tomder55
Jul 7, 2015, 09:28 AM
nahhh .the answer is to privatize all government owned businesses ....,then institute a national flat tax . Then sell all those Greek islands to Trump to build resort hotels ,casinos ,and golf courses . That should keep him busy and out of the race for President .... Kills 2 birds with 1 stone.
NeedKarma
Jul 7, 2015, 10:35 AM
Yes, Trump is immune to bankruptcies. Hehe.
tomder55
Jul 7, 2015, 11:10 AM
Yes he's had some failures and lost $billions . However ,he was put in the Guinness Book of World Records as having the biggest financial turnaround in history. So give him his due for what he does well. I'd rather he build than run for President .
paraclete
Jul 7, 2015, 04:21 PM
He has good training for the job, he knows what it is to fail, a important attribute and better still he has learned how to fire
tomder55
Jul 8, 2015, 05:58 AM
Maybe he can go to Beijing and fix their looming collapse .
The really worrying financial crisis is happening in China, not Greece - Telegraph (http://www.telegraph.co.uk/finance/china-business/11725236/The-really-worrying-financial-crisis-is-happening-in-China-not-Greece.html)
paraclete
Jul 8, 2015, 06:25 AM
You seem obsessed with china you should be more concerned about things at home
tomder55
Jul 8, 2015, 07:35 AM
The Greek collape is not affecting anything where I live . The China collapse will reverberate around the world .
paraclete
Jul 8, 2015, 03:49 PM
Maybe, maybe not, how do we know this is not retaliation for cyber attacks, someone over there would be stupid enough to do it
tomder55
Jul 8, 2015, 05:54 PM
Because you know that conditions there are ripe for a crash . The government has already taken it's best short at averting it by artificial intervention . It has not worked. ChiNext Index has lost 42% of its value in less than a month ,and that's just the beginning of the fall.
paraclete
Jul 8, 2015, 11:45 PM
Markets come and go, Mr Chicken Little, China's market is some 3 trillion or so so it lost a tillion, nothing in comparison to US debt. It had been primed and a correction was necessary some of us saw the same sort of corrections in 2008 the world didn't end. There is a lot of money in china in savings that has to go somewhere, they don't have the same outlets for spending we do and this was a cowboy market where short selling was rife and opportunists abound
tomder55
Jul 9, 2015, 10:29 AM
they don't have the same outlets for spending and why is that ? Oh never mind .The answer is obvious . There is no personal liberty there .
this was a cowboy market where short selling was rife and opportunists abound
it was exactly what the cadres wanted . They needed something other than real estate to invest in so they encourged people to get in . I have no doubt that part of the decline is the cadres 'wetting their beaks" .
paraclete
Jul 9, 2015, 11:25 AM
and why is that ? Oh never mind .The answer is obvious . There is no personal liberty there .
No Tom certain things are more expensive and like the US wages poor
it was exactly what the cadres wanted . They needed something other than real estate to invest in so they encourged people to get in . I have no doubt that part of the decline is the cadres 'wetting their beaks" .
What they really needed was for people to invest in and take up the slack in the real estate market but for the same reasons, see above, that wasn't happening, also the chinese are gamblers and you an I both know stocks are a gamble
tomder55
Jul 9, 2015, 07:03 PM
No Tom certain things are more expensive and like the US wages poor
if wages in the US are poor than yours are about the same There is a $5,000 difference in our country's median incomes. If things are more expensive there it's because their government restricts consumer choices.
paraclete
Jul 9, 2015, 10:02 PM
Again Tom statistics don't tell you reality, just averages. The minimum wage in US is $7.25 in Australia $17.60. That is the wage factory worker might earn. That $17.60 buys $US14. Now I know that in some US states the minimum wage is much higher and comparisons on this base are useless because of exchange rates, entitlements and general costs of living. So you have to compare the numbers of unemployed, welfare, growth rates in the economy and so on. I found a site which says that the minimum needed per person per day for food is $US9.93 so I don't see how that computes with those minimums but that same site suggests that $A11.93 is needed for the same basket, adjusting for exchange rates that would be $US10.00 suggesting that food costs in both places are the same, which I really doubt. Just on market size alone there have got to be big differentials.
tomder55
Jul 10, 2015, 07:47 AM
The minimum wage is bogus !Few work for minimum wage unless they are working for tips or commission in addition to wage. I am in a state with a higher min wage than the national average .If I advertised a job opening for that amt there would be no one applying .
Now if you are looking for a reason why some US wages lag ,all you have to do is look at the open borders that the liberals love so much . The libs cry about wages at the same time they celebrate an influx of hundreds of thousand illegals into the country .
The minimum wage has done enormous damage to the country . Where teens and college students looking for some pocket change used to work starter jobs to gain experience ,now those same jobs are careers for people who are family providers .
Starter jobs are not intended to be lifetime careers . So when those teens now enter the work force they have zero experience . Then the libs cry about the lack of opportunities for teens to work summer jobs and the mischief those idle youth get into.
I stand by what I said . IF the Chinese who have disposable income do not have consumer choices ,or choices that are too expensive ,it is the fault of the central planners who restrict imports .
talaniman
Jul 10, 2015, 09:08 AM
Seems to be a conflict with your logic Tom since you don't even acknowledge the decades of job losses overseas that use to be a good middle income base for many adults. Those jobs haven't been replaced, but the service industry that use to be considered entry level has certainly grown because there are few other unskilled choices.
Nor the 10's of thousands of skilled immigrants that business bring in every year to take American jobs.
The economic climate of the 70's/80's is long gone so stop blaming the liberals for what the FREE market has wrought. Looks like we all have to wait until the free market job creators of your fantasies run out of cheap labor to exploit and extract profit.
paraclete
Jul 10, 2015, 04:31 PM
Tom the lack of opportunities are because those job creators of yours chose to create jobs in China while being able to exploit the minimum wage at home. You have a different concept of the minimum, I have family members who work in jobs that are only offerring the minimum because there isn't anythingelse available, this is not a youth entry level wage at Mcdonalds, that is something quite different, but an adult minimum imposed by arbitration. Does its existence mean that an employer would opt to export the job, yes but there is no reason to allow that employer to exploit labour on that threat
tomder55
Jul 10, 2015, 08:01 PM
manufacturing is making things that are taken from the earth . Everything is made from something .That means mining and doing things that has an impact on the environment . That of course is something that liberal goverments hate . They destroy one market after another with their regulations and other laws.
At every level it is the government that discourages manufacturing at home ,not employers. So you should direct your scorn where it belongs. If employers create jobs elsewhere it's because of an unfriendly environment for job creation at home. Get rid of this administration, the Democrats, , the socialism, unnecessary regulations and unleash the entrepreneurship of the US and no one will be able to keep up.
paraclete
Jul 10, 2015, 09:48 PM
More dogma, my scorn is for those who put the profit motive ahead of the country, was it my government or yours that destroyed the auto industry here? No it was the avariscous corporate environment that decided that manufacturing in asia was more profitable. Entrepreneurs are motivated by profit and regulation is just a cost like any other cost. It is an excuse to say regulation prevents them unless it is that industry has undesirable impacts such as CSG. Mining can be carried out without destroying the environment through remediation, just another cost of doing business, but of course you would prefer passing that remediation cost to future generations. You want to see the result of unregulated mining go to Bouganville and who benefited in the end no one, in fact in the end it caused a civil war
http://www.pngmininglegacies.org/mining-projects/panguna/
talaniman
Jul 11, 2015, 05:35 AM
There you go again with those UNNAMED regulations AGAIN. Of course you believe taxpayers should clean up the mess of big business, and subsides wages for the workers, so the job creators can make mo'money, pay NO taxes, and reduce the workforce to minimum wages and NO benefits.
Wait until they cut YOUR pension, poison YOUR water. We will see how you support unfettered capitalism then.
tomder55
Jul 11, 2015, 06:51 AM
Can't recall a time when capitalism was "unfettered " . Maybe we should try it some time .
paraclete
Jul 11, 2015, 07:02 AM
Well Tom think back to when it was unfettered and the result was a slave labour system it took a civil war to unseat and still the capitalists long for the days when labour could be bought and sold and right now they let the chinese do it for them. You just have a short memory or a convenient one
paraclete
Jul 13, 2015, 03:18 PM
Greece bailout: Alexis Tsipras accepts 86-billion-euro bailout from eurozone leaders after 17 hours of talks - ABC News (Australian Broadcasting Corporation) (http://www.abc.net.au/news/2015-07-13/eurozone-leaders-say-agreement-reached-at-greece-talks/6616448)
The EU said OXI to Grexit and the result, The greek government stripped of assets, increased taxes and more austerity, that is how the exit was avoided. Democracy is dead in Greece as Europe effectively takes over government. A heavy price to pay but an effective lesson? we will see. The greek government sought a haircut and the greek people will be given a haircut, I would say a number 2 with a pair of electric clippers..
This is another case of something being too big to fail, Greece should have been allowed to fail. This is about european governements not needing to book the losses of loaning money to failed nations. They have an immediate opportunity for growth and they don't see it. Greece is a destination for refugees, so establish the resettlement camps in Greece. This would give immediate employment to unemployed greeks and with all those islands they have the opportunity to isolate the refugees from further travel and disruption of the european economy
tomder55
Jul 14, 2015, 03:48 AM
All they really need to do is create an environment favorable for all the John Galt types ,that they drove out of their country with their socialist policies, to return .
paraclete
Jul 14, 2015, 07:53 AM
So you think they should invite the capitalist entrepreneurs in to rape and pillage or perhaps you prefer a more ordered economy
”Of all tyrannies a tyranny exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies…” – C.S. Lewis
I expect the Greeks have experienced both outcomes and they voted OXI to the busibodies
tomder55
Jul 14, 2015, 08:32 AM
They drove the investor class out of their country and then wondered why their economy tanked .
paraclete
Jul 14, 2015, 03:34 PM
I doubt you have any real evidence of that, the existence of state owned enterprises doesn't mean absence of investors, merely that they don't have the capital or the inclination for risk, a problem for small nations with unstable political systems. My own nation is an example of how state owned enterprises can be used as a nation building tool which will give way to private enterprise when a sufficient mass of capital is achieved. There is no doubt Greece must achieve labour market reform and a lessening of reactionary politics