What are the Greek Austerity measures?

tomterm8

HAMISH_MCTAVISH wrote: »

With austerity measures that severe, it's no wonder the Greeks are rioting.
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Maybe Thrugelmir can comment, but IIRC, this is on top of two other sets of austerity measures that were almost as severe, and in an environment where unemployment is so high there is almost no chance that kids will be employed when they leave school.

2sides2everystory

You may be all missing the point to an extent.

I know one retired couple in Athens who (like many Mediterraneans) rely on modest accumulated property interests to live on - a couple of rented flats. Both renters are very long term and of course known to them, have families and have been unemployed for two years now after being employed constantly for all the time they have been living there. They have paid no rent for the last 18 months in one case and 12 in the other. They can only help the old couple in other ways - helping with cleaning for example, a bit of maintenance, sometimes their extended families provide extra vegetables for the old couple and that sort of thing. Basic neighbourly kindnesses.

The new property tax mentioned in half a line means this:

The total living space for the old couple and the two rented flats is about 250 square metres. The new property tax for them in Athens is 4 Euros per square metre every six months I think. That's a new €1,000 bill every six months to the old couple. And if they can't pay it? The electricity is cut off. What? I hear you say They can't do that!

Oh yes they can - the Greek government in its wisdom has deputed the electricity company to collect the tax via the electricity bills for each property so that the consequences of non-payment are deliberately and immediately dire.

How far and how long do you informed commentators expect basic neighbourly kindnesses to stretch ? Should they sell up to a property speculator, watch their neighbours get hurt, and live off their Euros in the bank until they wake up one morning and they have become drachmas, for example? I think they would rather die than throw their dear neighbours to the wolves.

Really2

Graham_Devon wrote: »

Then why says it's hard to gauge?

And yes, there is no way out. But the sooner they default, the sooner they can start dusting down. That's been my point for quite some time. Just applying ever more taxation and ever lower wages isn't going to fix the problem. The austerity is severe. They cannot cope with this level of austerity.

Because I have no idea what Greek cost of living is compared to the UK and wages.
So I have no idea if they have had it "too good" before all this kicked off and that caused part of the problem.
Are greek public sector wages better than average? I have no idea? So I do not know if this brings it in line with others?
It will be painful but without any context it is hard to know if this is just over compensating for what should have been addressed years ago?

What do you think will happen if they default? Where will they borrow from to keep the public sector employed or wages the same?

The truth is default will be even deeper, it may be better in the long run as they could devalue.
But the majority will lose everything. no 20% cut in wages more like nearly 100% cut to most public sector workers.

I really don't think people understand how bad default would be for them now.

They need an orderly default and to get out of the euro, only way that can happen is if they can borrow in the short to medium term, otherwise they are screwed.

ILW

HAMISH_MCTAVISH wrote: »

So basically ILW's OP was about as wrong as you can get.

With austerity measures that severe, it's no wonder the Greeks are rioting.

Nor any wonder the economy is in a death spiral.

Looking back it appears my post was just about spot on. Which example I gave was wromg?

How does this leave the average Greek compared to say the European average?

Really2

ILW wrote: »

How does this leave the average Greek compared to say the European average?

TBF this is what I am trying to understand.

The question is not anti greek and is not ignoring how far they have cut.
But It is really hard to gauge how this is compared to what we know.

Did they under tax in the past, over spend? was the public sector over generous etc.

It is hard to know what has to be addressed and how far things would have to go after a default if we have no idea what factors caused the problems in the first place.

They can't just dust off and do the same again, so we really need context, is this austerity over the top or is it in fact only what Greece could afford on current tax incomes etc if they started again.

It is all very well saying the austerity unsustainable, but no one seems to indicate to greece or the outside world what a sustainable greece (balanced incomes and outflows) would be like.

tomterm8

Really2 wrote: »

I really don't think people understand how bad default would be for them now.
.

Not sure exactly what you are talking about; on a purchasing power basis, our wages are on average 50% higher than the greeks, and our benefits (other than pensions) were on average more generous before their austerity measures. Even before the recessions, more greeks were below the poverty line than the UK. Greece was worse at collecting taxation than us, though.

As for default, that boat has already sailed. Greece has already defaulted, what is being debated now is the scale of the default.

ILW

Just as a comparison, do the vast majority of Greek workers get taxed at least 40% of their wages?

Really2

tomterm8 wrote: »

As for default, that boat has already sailed. Greece has already defaulted, what is being debated now is the scale of the default.

They have not defaulted as in, "we are bust, see you later, no more money to go out, sorry guys" though have they?
The hair cut in reality is the defalut at the moment.

But the question no one seems to be able to answer. If Greece were to start again. What could they afford?

Does the austerity give them a budget surplus? or would greece still have to expect a massive change to how they are run? I suspect the latter.

But the more people go on about austerity being unsustainable but not indicating what is sustainable to greece it is hard to gauge the context of the austerity.
Basically is the austerity worse, better than what they can expect in the future should they be allowed to orderly default and go it alone?
What can they support with their current tax incomes etc. these are the questions no one seems to be answering? So yes the austerity is bad, but how bad is it compared to the points above?

Old_Slaphead

Thrugelmir wrote: »

Next tax year 2012/13 the personal allowance rises to £7,475.

£7475 is for current (ie 2011/12) tax year

Kennyboy66

ILW wrote: »

Looking back it appears my post was just about spot on. Which example I gave was wromg?

How does this leave the average Greek compared to say the European average?

Why bother asking ?

You have been given a comprehensive reply but you have made you mind up already.

Youth unemployment is 44%
25-34 unemplyment is 23%

Both increasing at a rate of knots and about to get a whole lot worse.

There are a whole host of structural problems with the Greek economy that only the IMF will sort out, but fatous posts like yours don't really add to the sum of the debate.