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Greece downgraded to CCC by S&P, Greek MPs plan their getaway!

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  • vivatifosi
    vivatifosi Posts: 18,746 Forumite
    Part of the Furniture 10,000 Posts Mortgage-free Glee! PPI Party Pooper
    Ximian wrote: »
    I'm not that convinced that the issue is mainly caused by the locals refusing to pay tax, that would assume that a large portion are self employed and have the option to not declare/pay tax.

    Whenever I've visited Greece and from the people I've known there, it has been clear to me that many people do several jobs and may not pay tax on all of them.

    A couple of years back, the Greek government included the size of the black market in its statistics and its GDP correspondingly "grew" by 25% overnight, enabling Greece to say that its budget deficit was still within acceptable limits. It is very hard to tax black market activities. The original article re the change is here if anyone is interested:

    http://www.guardian.co.uk/world/2006/sep/30/nicholaswatt.mainsection
    Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
  • Kennyboy66
    Kennyboy66 Posts: 939 Forumite
    I just can't see how Greece can recover while shackled to the Euro.
    US housing: it's not a bubble - Moneyweek Dec 12, 2005
  • Ximian
    Ximian Posts: 711 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    vivatifosi wrote: »
    Whenever I've visited Greece and from the people I've known there, it has been clear to me that many people do several jobs and may not pay tax on all of them.

    A couple of years back, the Greek government included the size of the black market in its statistics and its GDP correspondingly "grew" by 25% overnight, enabling Greece to say that its budget deficit was still within acceptable limits. It is very hard to tax black market activities. The original article re the change is here if anyone is interested:

    http://www.guardian.co.uk/world/2006/sep/30/nicholaswatt.mainsection

    Interesting article.
    "The move raised eyebrows in Brussels because Athens famously used false statistics to meet the Maastricht criteria, thereby allowing it to join the euro. Charles Grant, the director of the Centre for European Reform, said: "It is on the public record that the statistics used which allowed Greece to join the euro were exposed as false. I remember Jacques Delors [the former European commission president] saying in the early 1990s that Greece was not ready to join the EU in 1981."

    With the help of Goldman Sacs and JP Morgan ......
  • MikeR71
    MikeR71 Posts: 3,852 Forumite
    This current economic crisis is Greece has a long history. This is not something that happened in the last few years.
    As someone who is very close to Greece and knows it well, let me tell you that the whole system is corrupt. Greeks in general don't pay their taxes and there are many ways of dodging it. If any of you has ever been to Greece you will notice a few things that raises an eyebrow, the most noticable of which is the fact that most Greek families have two cars and almost every family has a villa in some remote village. Another thing you will notice is that bars, cafes and restaurants are full and they are not cheap. There was a statistic in an Athens paper recently that showed the average Greek spends more money in a month on a night out at a bouzouki than his disposable income allows.

    Watching the demosntrations in central Athens last night and the people who were asking for politicians' head, I wondered how many of them have actually contributed to the economic mess. It's not all the politicians' fault. Yes there are many corrupt politicians, but then again they are from the same culture as the rest of them.
  • Ximian
    Ximian Posts: 711 Forumite
    Part of the Furniture 500 Posts Combo Breaker
    MikeR71 wrote: »
    This current economic crisis is Greece has a long history. This is not something that happened in the last few years.
    As someone who is very close to Greece and knows it well, let me tell you that the whole system is corrupt. Greeks in general don't pay their taxes and there are many ways of dodging it. If any of you has ever been to Greece you will notice a few things that raises an eyebrow, the most noticable of which is the fact that most Greek families have two cars and almost every family has a villa in some remote village. Another thing you will notice is that bars, cafes and restaurants are full and they are not cheap. There was a statistic in an Athens paper recently that showed the average Greek spends more money in a month on a night out at a bouzouki than his disposable income allows.

    Watching the demosntrations in central Athens last night and the people who were asking for politicians' head, I wondered how many of them have actually contributed to the economic mess. It's not all the politicians' fault. Yes there are many corrupt politicians, but then again they are from the same culture as the rest of them.

    I'm pretty sure that what you have written above is mostly true, except the part about the bouzouki (taverna?) ;) but ... the fact is Greece should never have joined the EU, it was under false pretences that it joined and now there's a huge financial mess and people are asked to work longer hours, retire at an older age and pay higher taxes (at least the one's that do pay taxes). I can see how some of the innocent taxpayers are upset about the whole mess, having to suffer due to some bad decisions and corruption. Another interesting article: http://www.nytimes.com/2010/05/02/world/europe/02evasion.html
    Seems like everyone is on the take, surely you can see that low tax returns for a family living in a rich neighbourhood doesn't add up. The question is why were people getting away with it for so long? Why is it only now that tax evaders are being hunted/noticed.
    Most people that can evade taxes will evade taxes, it's human nature.
  • vivatifosi
    vivatifosi Posts: 18,746 Forumite
    Part of the Furniture 10,000 Posts Mortgage-free Glee! PPI Party Pooper
    Generali wrote: »
    There are lots of good reasons to want to own Euros: to buy German machine tools, French wine or shares in one of the many successful European companies.

    Apologies for shortening your excellent post Gen, I just wanted to highlight it in summary as 'the rational view'.
    MikeR71 wrote: »
    As someone who is very close to Greece and knows it well, let me tell you that the whole system is corrupt. Greeks in general don't pay their taxes and there are many ways of dodging it. If any of you has ever been to Greece you will notice a few things that raises an eyebrow, the most noticable of which is the fact that most Greek families have two cars and almost every family has a villa in some remote village. Another thing you will notice is that bars, cafes and restaurants are full and they are not cheap.

    And MikeR's is a view of how people in Greece live.

    I'm just wondering if Germany has a press like ours and how it affects the views of people there. You can already imagine some of the bylines if their press is similar:

    "We Germans don't own our own homes, we rent, yet we are expected to bail out the Greeks with their two houses"; and

    "We've spent 20 years paying for our own reunification through taxes, why should hard-pressed Germans continue to pay for European unification when the Greeks aren't trying hard enough?"

    I don't know what will happen, but it will be interesting to see if the rational view and the emotive view come head to head at some point.
    Please stay safe in the sun and learn the A-E of melanoma: A = asymmetry, B = irregular borders, C= different colours, D= diameter, larger than 6mm, E = evolving, is your mole changing? Most moles are not cancerous, any doubts, please check next time you visit your GP.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    vivatifosi wrote: »
    I'm just wondering if Germany has a press like ours and how it affects the views of people there. You can already imagine some of the bylines if their press is similar:

    "We Germans don't own our own homes, we rent, yet we are expected to bail out the Greeks with their two houses"; and

    "We've spent 20 years paying for our own reunification through taxes, why should hard-pressed Germans continue to pay for European unification when the Greeks aren't trying hard enough?"

    I don't know what will happen, but it will be interesting to see if the rational view and the emotive view come head to head at some point.

    Apparently the German popular argument goes along the lines of:

    We work hard and retire at 67, the Greeks do bgger all apart from riot and strike and retire at 55 and they want us to bail them out. If they can afford all that they should bail us out!

    Here is Angela Merkel articulating that argument in the English language Der Spigel:

    http://www.spiegel.de/international/europe/0,1518,763294,00.html
  • Wookster
    Wookster Posts: 3,795 Forumite
    ILW wrote: »
    Why is the Greek government incapable of collecting taxes due?

    Because it is a cultural thing - to avoid as much tax as possible. A friend of mine's partner is Greek and her sister, who works for a school is paid 75% of her salary as cash in hand.

    The size of Greece is small compared to the Eurozone as a whole, but the impact on banks are huge, particularly French & German banks.

    Given the situation, either the banks will need bailing out or the Greek's will need bailing out. If I was Ms Merkel (thank full I am not) I would rather bailout German banks than lazy Greek who retire at 55 and can't be bothered to change their ways.
  • Generali
    Generali Posts: 36,411 Forumite
    10,000 Posts Combo Breaker
    The dumbest thing about this situation is that if the Greek Government had no debt it would have hardly any deficit. Interest on the existing debt is huge.

    If the Greeks vote in a hardline Government (or the army step in 'to restore order' again) and simply repudiate the debt a lot of Greece's problems disappear. The Greeks are traditionally good with numbers so I suspect they'll work this out before too long.
  • worldtraveller
    worldtraveller Posts: 14,012 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    edited 17 June 2011 am30 10:02AM
    The International Monetary Fund is preparing to pump more money into Greece’s stricken economy in an attempt to calm turmoil on the financial markets.

    A new bail-out package, the second in 13 months, is expected to be agreed over the next few weeks.

    Telegraph

    2025_picture_of_a_businessman_shoveling_money_into_a_black_hole.jpg

    Herman Van Rompuy, the president of the EU, said last night that the euro would emerge stronger from the crisis. crazy.gif
    There is a pleasure in the pathless woods, There is a rapture on the lonely shore, There is society, where none intrudes, By the deep sea, and music in its roar: I love not man the less, but Nature more...
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