Greece Financial Crisis Thread (1 Viewer)

[Rohn Jambo]

Hhmmm.... China wants Greece to stay in EU

I wonder if China buying up some debt could could help avert a crisis...

China wants Greece to stay in EU

By Asia Unhedged on

July 1, 2015

in Asia Unhedged, China

Already some observers are suggesting a Greek exit from the euro could provide China with the opportunity to move its strategic agenda several paces up the board by buying more Greek assets at rock bottom prices, suggested the BBC. Its a tricky equation: on one side the soft power benefits abroad for Beijing of riding to the rescue where Brussels wont, and on the other side, the bottom line cost of being saddled with a lot of unrecoverable Greek debt.

Sounds to me like they are better off taking the loss on Greek debt and gobbling up Greek property cheap in the aftermath of them leaving the Euro.

They already own so much real estate in the US and Europe. Is there such a thing as too much land?

 

[Chadstroma]

I had an American- Greek customer in yesterday. We talked about what was going on there and she has immediate family still there and still watches Greek TV. She said that basically the entire populace is confused and are constantly told contradictions and being fed lies.

She was not optimistic.

 

[njherdfan]

Can someone smarter than me explain why this is such a huge economic deal?

From the news I read it seems like people are worried that this will cause the end of the Euro, but the EU has like 500 million people in 28 countries. Are people worried that this will lead to other countries leaving the EU? I get why a lot of Greeks would want to stay in the EU, because presumably otherwise they'd be forced to start using a currency worth a lot less, but is this really a huge deal to the EU as a whole in the grand scheme of things?

 

[Slapdash]

Can someone smarter than me explain why this is such a huge economic deal?

From the news I read it seems like people are worried that this will cause the end of the Euro, but the EU has like 500 million people in 28 countries. Are people worried that this will lead to other countries leaving the EU? I get why a lot of Greeks would want to stay in the EU, because presumably otherwise they'd be forced to start using a currency worth a lot less, but is this really a huge deal to the EU as a whole in the grand scheme of things?

The fear is that, if the Euro becomes reversible, pressure to leave it could spread to other countries like Italy, Spain, and Portgual. Some of these countries have debt burdens pretty similar to Greece.

Financial contagion can be unpredictable and irrational, but damaging nonetheless. Some good graphics here: http://www.economist.com/blogs/graphicdetail/2015/05/european-economy-guide

 

[Politician Spock]

Not sure about your thoughts but I think Greece should get the next Olympics and the World Cup that is scheduled for Qatar. Those two events should be economic boosters for the country. All Greece has to do is build a couple new stadiums and they'll be good.

Sorry about the late response. Was your post directed at me?Greece has recently hosted the Summer Olympics. How did that work out for them economically?

Let them do it again. Everyone knows the Olympics and World Cup bring economic booms to the countries that host. Give Greece the Olympics all the time if that helps.

Got it. Recalibrating my sarcasm app as I "type" this.

Perhaps some pictures explain it better than sarcasm.

http://www.theguardian.com/sport/gallery/2014/aug/13/abandoned-athens-olympic-2004-venues-10-years-on-in-pictures

 

[SaintsInDome2006]

News is dripping in now that the Greeks are apparently voting No to the EU proposal.

I don't know what that means but I take it Grexit ie the exit from the EU is on the table. If so Russia will be very happy to sweep in and lend support.

 

[-jb-]

http://www.nytimes.com/interactive/2015/business/international/greece-debt-crisis-euro.html?_r=1

 

[cstu]

I used to have hope that Greece would stay in the Euro but it's not going to happen now. Rampant tax evasion (no one has suggested Fair Tax to them?) and higher unemployment leaves them with no way out.

 

[-jb-]

I used to have hope that Greece would stay in the Euro but it's not going to happen now. Rampant tax evasion (no one has suggested Fair Tax to them?) and higher unemployment leaves them with no way out.

Pretty much. At some point, as painful as it may be as a parent, you're gonna need to kick out your dead beat kid from the attic above the garage. Get a job hippy.

 

[Rohn Jambo]

I used to have hope that Greece would stay in the Euro but it's not going to happen now. Rampant tax evasion (no one has suggested Fair Tax to them?) and higher unemployment leaves them with no way out.

Pretty much. At some point, as painful as it may be as a parent, you're gonna need to kick out your dead beat kid from the attic above the garage. Get a job hippy.

OXI

 

[Slapdash]

I used to have hope that Greece would stay in the Euro but it's not going to happen now. Rampant tax evasion (no one has suggested Fair Tax to them?) and higher unemployment leaves them with no way out.

Those problems wouldn't be nearly as troublesome if they had their own currency. Going to be an interesting few months if this happens.

 

[cstu]

One thing it means is it'll be cheaper to travel to Europe.

 

[SaintsInDome2006]

One thing it means is it'll be cheaper to travel to Europe.

Actually it's relatively cheaper than it has been for some time already.

 

[Rohn Jambo]

Greece says no to the Euro and yes to Dogecoin.

http://www.coinbuzz.com/wp-content/uploads/2014/08/dogecoin.jpg

 

[Dinsy Ejotuz]

Greece has made a ton of cuts in the last five years and balanced their budget.

Of course all that austerity did was throw the country into a deep depression and increase their debt burden despite the balanced budget.

Austerity forever, 25% unemployment forever and an ever-growing debt burden despite the sacrifices. Yeah -- hard to imagine why the said no.

 

[cstu]

One thing it means is it'll be cheaper to travel to Europe.

Actually it's relatively cheaper than it has been for some time already.

Very true, but I'm spoiled by having my first trip there in 2001 when the Euro was 78 cents. I'll be very happy if it hits 1:1 though and can plan a longer trip.

 

[cstu]

Greece has made a ton of cuts in the last five years and balanced their budget.

Of course all that austerity did was throw the country into a deep depression and increase their debt burden despite the balanced budget.

Austerity forever, 25% unemployment forever and an ever-growing debt burden despite the sacrifices. Yeah -- hard to imagine why the said no.

Also known as the 2008 Tea Party Plan.

 

[timschochet]

Greece has made a ton of cuts in the last five years and balanced their budget.

Of course all that austerity did was throw the country into a deep depression and increase their debt burden despite the balanced budget.

Austerity forever, 25% unemployment forever and an ever-growing debt burden despite the sacrifices. Yeah -- hard to imagine why the said no.

Also known as the 2008 Tea Party Plan.

To be accurate there was no Tea Party in 2008.

 

[timschochet]

Greece has made a ton of cuts in the last five years and balanced their budget.

Of course all that austerity did was throw the country into a deep depression and increase their debt burden despite the balanced budget.

Austerity forever, 25% unemployment forever and an ever-growing debt burden despite the sacrifices. Yeah -- hard to imagine why the said no.

I'm honestly confused here- not trying to be snarky or make an argument but if they truly were able to balance their budget then why did their debt burden increase? That seems counterintuitive.

 

[Dinsy Ejotuz]

I'm honestly confused here- not trying to be snarky or make an argument but if they truly were able to balance their budget then why did their debt burden increase? That seems counterintuitive.

Because balancing the budget and raising taxes resulted in their economy being 25% smaller than it was prior to the austerity.

1. Back in the black: In the last five years, Greece has swung from a hefty deficit to a small surplus. The country's primary deficit was a whopping 10.7% of GDP back in 2009. Last year it ran a primary surplus of 2.7% of GDP. That means when you strip out interest payments, the government collected more money that it paid out. And it hit that target earlier than promised to lenders.

2. Healthier banks: Greece's banking sector is much more resilient. Banks have been recapitalized and the industry has downsized from 18 commercial banks to just 4. Recent stress tests have underscored their stronger capital position and confidence in the financial sector.

3. Unemployment soars: But the biggest trouble spot is jobs. Five years ago the unemployment rate was about 12%. Last year it was more than double that level, at 26%. The job shortage is even worse for young Greeks: half of all young people are out of work. And that's a problem both in the short and long term.

"It's a ticking time bomb for national health care and public sector pension bills," said G+ Economics managing director Lena Komileva, "The taxpayer will need to pay the future public sector bills."

4. Economy is shrinking: Many of the job losses are tied to a sharp contraction in the size of the Greek economy, which is roughly 25% smaller than it was before the crisis. Last year, the country returned to modest growth after five years of recession -- but output remains far below levels seen in 2007.

5. Wages tumble: Those who have a job are getting paid less. Wage inflation peaked at an unsustainable 12.5% year-on-year growth in 2010. Then wages began falling sharply. In 2013 they were falling nearly 12% year-on-year -- and they're still falling.

6. Working longer: The retirement age averaged 61 in 2010. It has been pushed out to 65, and expectations are that it will be hiked again to 67 in the coming years.

7. Debt deluge: Greece's debt was very high then, and it's very high now. Net debt was around 130% of GDP in 2010 according to the IMF -- now it's close to 170%. The economy has shrunk so the debt ratio has increased and it's put the country in what G+ Economics Komileva describes as the "debt trap".

"Greece cannot possibly generate the level of income to pay back its debtors, ever," she said.

 

[Rohn Jambo]

Greece has made a ton of cuts in the last five years and balanced their budget.

Of course all that austerity did was throw the country into a deep depression and increase their debt burden despite the balanced budget.

Austerity forever, 25% unemployment forever and an ever-growing debt burden despite the sacrifices. Yeah -- hard to imagine why the said no.

I'm honestly confused here- not trying to be snarky or make an argument but if they truly were able to balance their budget then why did their debt burden increase? That seems counterintuitive.

Yep, they started owning much less debt than they do today (about a 30% increase). All the extra money they borrowed went straight to the banks.

 

[PatsWillWin]

I've never really understood how people didn't think a Grexit was inevitable. You can't cut/tax your way out of massive debt.

 

[Dinsy Ejotuz]

I've never really understood how people didn't think a Grexit was inevitable. You can't cut/tax your way out of massive debt.

The only thing I've seen that makes any sense at all is that Germany, France, etc were happy to take payments as long as they could get them, but mostly wanted to establish the precedent that Euro-denominated debts would never be forgiven and the only way out of them was to leave/get kicked out of the Euro -- something the other debtor nations would be less willing to do than Greece.

 

[timschochet]

OK I can see that austerity made things worse. But what should the Greeks do then? Is there any way out of this? And if there isn't, what is the least painful alternative?

 

[SaintsInDome2006]

Russia's gonna step in, Putin has already met with Tsipras.

 

[Mark Davis]

Perfect example of lots of government spending and taking on massive debt. At some point it becomes unsustainable and there is no good solution.

 

[Rohn Jambo]

Russia's gonna step in, Putin has already met with Tsipras.

Putin just wanna know if he was serious about the F. EU.

 

[Evilgrin 72]

One thing it means is it'll be cheaper to travel to Europe.

Actually it's relatively cheaper than it has been for some time already.

Very true, but I'm spoiled by having my first trip there in 2001 when the Euro was 78 cents. I'll be very happy if it hits 1:1 though and can plan a longer trip.

I'm going in 10 weeks and watching this solely to see if my beers at Oktoberfest will cost less.

 

[Mark Davis]

I have a buddy that is in our poker game who is originally from Greece. He's over there right now. His wife was going over to join him and is considering not going with all the things going on.

 

[Fennis]

Russia's gonna step in, Putin has already met with Tsipras.

Russia's not going to bail out Greece. They have their own very serious economic problems to deal with.

 

[Fennis]

I have a buddy that is in our poker game who is originally from Greece. He's over there right now. His wife was going over to join him and is considering not going with all the things going on.

I hope you don't spot him any cash.

 

[Rohn Jambo]

There will be much finger pointing and the Greeks will take the blame for #### hitting the fan.

http://www.youtube.com/watch?v=E1d_dmKBiiI

 

[MaxThreshold]

I have a buddy that is in our poker game who is originally from Greece. He's over there right now. His wife was going over to join him and is considering not going with all the things going on.

I hope you don't spot him any cash.

 

[MaxThreshold]

There will be much finger pointing and the Greeks will take the blame for #### hitting the fan.

http://www.youtube.com/watch?v=E1d_dmKBiiI

As they should.

 

[Mark Davis]

I have a buddy that is in our poker game who is originally from Greece. He's over there right now. His wife was going over to join him and is considering not going with all the things going on.

I hope you don't spot him any cash.

Trust me, that's a valid concern. Guy owns a local restaurant though with awesome food so he gets enough of my money. Generally it's what I took off him in poker though.

 

[timschochet]

There will be much finger pointing and the Greeks will take the blame for #### hitting the fan.

http://www.youtube.com/watch?v=E1d_dmKBiiI

As they should.

I don't think it's ever a good idea to assign collective guilt, especially in economic crisis. That's how ugliness, ignorance and war develop. I strongly doubt that the average Greek family was ever given any real chance to avoid the misery they are going to endure.

 

[NutterButter]

I hope that country implodes. Bunch of freeloaders.

 

[cstu]

Perfect example of lots of government spending and taking on massive debt. At some point it becomes unsustainable and there is no good solution.

We can all agree less debt is better, but if the U.S. can balance the budget the debt is not a huge issue. To get there the first step will be to raise the Social Security age - no way around that. Next we need to reduce military spending, especially not getting into unnecessary and costly wars. Then we will eventually go to single payer health insurance.

 

[cstu]

I have a buddy that is in our poker game who is originally from Greece. He's over there right now. His wife was going over to join him and is considering not going with all the things going on.

I hope you don't spot him any cash.

 

[cstu]

I hope that country implodes. Bunch of freeloaders.

The EU deserves the blame as well since they:

- made it cheap for them to borrow money without any controls

- didn't require them to adjust their entitlement programs before joining

- didn't require to solve their tax evasion problem before joining

Bottom line - Greece should never have been allowed into the Euro.

 

[Zigg]

I have a buddy that is in our poker game who is originally from Greece. He's over there right now. His wife was going over to join him and is considering not going with all the things going on.

I hope you don't spot him any cash.

Trust me, that's a valid concern. Guy owns a local restaurant though with awesome food so he gets enough of my money. Generally it's what I took off him in poker though.

Truest stereotype/generalization out there.

 

[TripItUp]

I feel bad for the hardworking/honest taxpaying Greeks.

I don't feel bad for those that aren't...which appears to be a large percentage.

 

[Andrew74]

There will be much finger pointing and the Greeks will take the blame for #### hitting the fan.

http://www.youtube.com/watch?v=E1d_dmKBiiI

As they should.

I don't think it's ever a good idea to assign collective guilt, especially in economic crisis. That's how ugliness, ignorance and war develop. I strongly doubt that the average Greek family was ever given any real chance to avoid the misery they are going to endure.

They had a chance to not vote for policies to enact pensions to bankrupt the country

And pay their taxes.

 

[squidrope]

:in:

 

[NutterButter]

I hope that country implodes. Bunch of freeloaders.

The EU deserves the blame as well since they:

- made it cheap for them to borrow money without any controls

- didn't require them to adjust their entitlement programs before joining

- didn't require to solve their tax evasion problem before joining

Bottom line - Greece should never have been allowed into the Euro.

This may be true and I'm sure I don't have an adequate understanding of the complexities of what's going on. I just have no tolerance for people/countries that put themselves in a financial mess and are unwilling to make the necessary sacrifices to get out of that mess.

 

[Fennis]

I hope that country implodes. Bunch of freeloaders.

The EU deserves the blame as well since they:

- made it cheap for them to borrow money without any controls

- didn't require them to adjust their entitlement programs before joining

- didn't require to solve their tax evasion problem before joining

Bottom line - Greece should never have been allowed into the Euro.

This may be true and I'm sure I don't have an adequate understanding of the complexities of what's going on. I just have no tolerance for people/countries that put themselves in a financial mess and are unwilling to make the necessary sacrifices to get out of that mess.

Lots of US companies file bankruptcy do you avoid them?

 

[NutterButter]

I hope that country implodes. Bunch of freeloaders.

The EU deserves the blame as well since they:

- made it cheap for them to borrow money without any controls

- didn't require them to adjust their entitlement programs before joining

- didn't require to solve their tax evasion problem before joining

Bottom line - Greece should never have been allowed into the Euro.

This may be true and I'm sure I don't have an adequate understanding of the complexities of what's going on. I just have no tolerance for people/countries that put themselves in a financial mess and are unwilling to make the necessary sacrifices to get out of that mess.

Lots of US companies file bankruptcy do you avoid them?

This doesn't have to do with avoiding them. Heck, bail them out, but just like a company, Greece should have to go through a lot of pain and sacrifice if its going to be bailed out. They created this mess.

 

[Todd Andrews]

OK I can see that austerity made things worse. But what should the Greeks do then? Is there any way out of this? And if there isn't, what is the least painful alternative?

Maybe Greece should imitate the biggest debt welching terds of all: the Germans.

 

[Leeroy Jenkins]

So what do we need to learn from this crisis?

 

[Todd Andrews]

I hope that country implodes. Bunch of freeloaders.

The EU deserves the blame as well since they:

- made it cheap for them to borrow money without any controls

- didn't require them to adjust their entitlement programs before joining

- didn't require to solve their tax evasion problem before joining

Bottom line - Greece should never have been allowed into the Euro.

And the massive debt welching Germans gave them all those loans and then demanded strict repayment terms that crushed their national economy.