Have the Greeks Actually DONE Anything to Address Their Deficit?

hallmark

vax2002 wrote: »

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:

Taxes raised in the South subsidise the North. It's a fact. Just because you don't like it doesn't make it untrue.

pqrdef

tomterm8 wrote: »

It is not possible, under any realistic circumstances, for Greece not to default. The only option other than default is for non-greek taxpayers to bail them out. That means you and I.

Is this so terrible? The cost is pretty much the same either way. But the bailout option is much less disruptive and dangerous.

As already mentioned, the European project was always "socialist" in that it implied a degree of redistribution. The same is true of the United States of America - the Federal taxes collected in the richer States subsidise the poorer States, but even the Tea Party seems able to cope with that.

Europe (with or without the euro or even the EU) can't work on the basis of the rich countries aiming to get richer at the expense of the poor countries. The article of faith has to be that a prosperous Europe is good for everybody in the long run.

A rationally-run Europe, far from imposing austerity on the states with the most shattered economies, would be treating them as economic development zones, with subsidies and concessions to encourage growth.

heathcote123

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:

Are you Ed Balls?

Whats the alterantive - more of the same 'deficit investment' which didn't produce returns & led to the problem in the first place?

heathcote123

pqrdef wrote: »

Keeping people on instead of retiring them isn't going to save any money.

Yes it will, they won't have to hire replacements.

FTBFun

vax2002 wrote: »

We supply around 70% of the Army and 70% of the airforce just in one county of North Yorkshire.

I would be surprised if that's even remotely correct, given that about 10% of the Army comes from outside the UK anyway.

tomterm8

pqrdef wrote: »

Is this so terrible? .

Yes, it is.

There is a presumption that other European states can afford to bail out Greece. But, to be blunt, although they can bail out Greece, the markets would then focus on the other peripheral nations, then Italy, Spain, and the UK.

It's what happened to the ERM.

Sooner or later, you get to an economy that is too large to be bailed out. And, at the rate it is going it will be sooner rather than later. (There is a bank run going on in France and the USA as we speak... )

kabayiri

hallmark wrote: »

Taxes raised in the South subsidise the North. It's a fact. Just because you don't like it doesn't make it untrue.

A moot point anyway.

A bloke called Dave C told me we are 'all in this together'.

kabayiri

tomterm8 wrote: »

...
Sooner or later, you get to an economy that is too large to be bailed out. And, at the rate it is going it will be sooner rather than later. (There is a bank run going on in France and the USA as we speak... )

I admit, although I don't get the technical detail, I feel like this issue of our large banks being exposed to sovereign debt to be the biggest issue we face.

Banking share price falls seem to be driven by fear recently. Did the recent stress tests achieve nothing, or do the markets not believe the results?

tomterm8

kabayiri wrote: »

I admit, although I don't get the technical detail, I feel like this issue of our large banks being exposed to sovereign debt to be the biggest issue we face.

Banking share price falls seem to be driven by fear recently. Did the recent stress tests achieve nothing, or do the markets not believe the results?

The bottom line is that most banks are functionally bankrupt. They have been since 2008. A raft of government subsidy, and regulatory forbearance, and throwing money at the deposit window, has allowed them to continue to operate.

The whole thing works because people believe governments will step in and make sure that, even though they are insolvent, they continue to have cash flow and will continue operating.

If governments are no longer able to do that, the banks are insolvent and will close down.

No, people don't trust the stress tests, because at a fundamental level, with the leverage banks are operating at now (over 33 times), a simple loss of 3% of equity makes the entire bank insolvent.

michaels

The banks could have got out of Greek, Italian and Spanish debt but probably chose not to because the returns were better than for other debt and they assumed that the countries would be bailed out - back to banks taking risks with the profits being private but the losses if it goes catastrophically wrong being public.

I believe the European stress test did not include write down on sovereign EUR bonds so not surprisingly people do not trust them.