Have the Greeks Actually DONE Anything to Address Their Deficit?

hallmark

Economic union without political union does not, can not & will not ever work.

The south of England pays the bills of the north because it doesn't have a choice, we have the same Govt. Look at a simple coloured (red/blue) map of Britain over past elections & you'll quickly see that under Blair-Broon the south had a Labour govt imposed on it by Wales, Scotland & the North. That's not a political point, just a simple fact as anyone not colourblind will see.

At the moment Germany are in the unenviable position of economic union with the basket case that is Greece with no political power over them. Which is basically the problem.

A Greek default, whilst being unpleasant medicine, would be best all round & asap.

Wookster

Lol at Hamish

Greece's problems aren't down to cuts but bone idle laziness.

Time for them to work hard or the bunny gets it!

vax2002

hallmark wrote: »

The south of England pays the bills of the north because it doesn't have a choice,.

Hmm let me see, we have 570 oil rigs and gas platforms in the sea up north, we have the bank of England National reserve, we have 97% of the countrys coal and generate 84% of the countries power.
We forged the steal that fought two world wars and built our ships in Sheffield, we had the textile revolution in our mills that made the countries wealth.
We supply around 70% of the Army and 70% of the airforce just in one county of North Yorkshire.
Leeds is the banking capital of England with most banking headquaters in Leeds or Yorkshire.
call centres were invented by ventura, again in leeds
I could go on and on, but do tell us what do the South do to subsidise us again other than hot air and trade paper stocks on the value of the things we make up north....
:rotfl:

tomterm8

Loughton_Monkey wrote: »

Full marks to anyone who can work out how you 'divorce' from the Euro in a practical way. It could only be done with the most meticulous border/exchange controls. But even then, any Greek with money would simply slip legally into Italy, with all Euro's intact, and slide back into Greece long in the future if ever appropriate to do so - and be even more wealthy.

States have established new currencies in the past, often after various currency crises...

It's really not as complex to do as some would say. But it is a mess.

Greece would convert all its bonds to the new currency, and introduce enforced conversion. Greek contracts could only be enforced in the new currency in Greek courts, and Greek taxes (especially on land) could only be paid in the new currency. All mess, but hardly impossible to sort out.

That assumes that default requires leaving the euro. I am not sure it does...

neverdespairgirl

HAMISH_MCTAVISH wrote: »

Yes.

But the austerity destroyed the economy, so the deficit as a % of GDP remains pretty bad. Just like Ireland.

You can't cut your way out of a recession.:cool:

What else could the Greeks do? Carry on spending as if there was no tomorrow? Who would have lent it?

ILW

Apparently the Greek unions have walked away from talks with their government and refuse to discuss any cuts. The country is a complete basket case but they refuse to accept it.

Loughton_Monkey

neverdespairgirl wrote: »

What else could the Greeks do? Carry on spending as if there was no tomorrow? Who would have lent it?

But there's the rub!

By the simple device of stopping repayments immediately, they can carry on spending. OK, not 'as if there were no tomorrow' but they can certainly keep the country ticking over nicely.

The key result, however, would be that every other Eurobond would become worthless overnight and so the problem becomes much larger for every other European country.

I do not see Greece doing anything significant, and with their extremely loose fiscal policies doubt very much whether they can do it.

So in a sense, I see it as a case of a 'Prodigal Son'. Imagine him to be a member of a family in which reputation and paying one's debts were to be of paramount importance. In this case, I see the family as having no way out. It's like having a mouthful of hot food. Whatever you do next is wrong. Keep bailing him out and he carries on spending. Stop bailing him out and he defaults - bringing the whole family down with him.

Isn't the song "Roll out the barrel" a German one? If so, then the Greeks are writing the song "Got you over the barrel".

sabretoothtigger

If Greeks stop paying then they leave the Euro ? Or can a government default and keep the Euro anyway

I dont think it makes other government debt worthless because if we take Germany, they are a massive exporter and people have to deal with them anyway. Their debt is secondary to their normal business but Greece its the tail wagging the dog

The problem with Greece is lack of trade, people have no need to go near them without subsidies to encourage them

with its own currency would simply default

They would not have to, their own currency would be worth less then Euros
Its likely that in the first place they would never have been given enough rope to hang themselves with. Their problems lie with false circumstances, they borrowed more then was feasible.
In a way its not all their fault, bond holders misjudged risk and to ignore that factor is not capitalism. The rioters have some fair cause to protest at it all but people will pay one way or another

Degenerate

tomterm8 wrote: »

That assumes that default requires leaving the euro. I am not sure it does...

Default doesn't require them to leave the Euro, but economic recovery does. Defaulting whilst remaining within the Euro will just leave them with the worst of both worlds. When they're going to suffer a massive economic shock from defaulting anyway, they have much less to lose from dropping out of the Euro.

bendix

I think i read somewhere this week - was it in the Economist? - that around 100,000 superfluous Greek Civil Servants are being redirected into what they call strategic reserve at 60% pay, and told that if they haven't found alternative employment in 18 months, they're out.

Come on David C . . you know it makes sense for the UK too