What are the Greek Austerity measures?

Thrugelmir

Really2 wrote: »

I would say that is best done in general election though, it is pointless having a pro europe government in power if the people want out.

So I really see general elections are the way forward for greece, not a referendum. But in the mean time they may have to take what is on offer, it has been left so late.

Seems as if the referendum has been abandoned. Vote of confidence in PM will be after US and European markets have closed. So after 10 o'clock tonight.

Interesting to see if a coalition Government is formed and what their approach will be.

Really2

Kennyboy66 wrote: »

Yep - absolutley sure.

Those announcements were all superceded by recievership on or around 9th October.

Ask yourself this - if the Govt. took over the banks, why did Germany, Isle of Man and UK have to bail out savers and use ant-terrorist legislation!

see Generali's thread about Iceland and the IMF

They nationalised them then wound them up, they still took on debt by nationalising. How do you think the country went belly up?
29/09/08

The government has bought a 75% stake in the bank for 600m euros ($860m; £478m) to ensure stability of the bank during the current financial turmoil.

Sorry that in itself is a instant loss.

Ask yourself if they had gone bust and had not been nationalised would the UK and IOM be chaseing payment?

The Authority has taken note of the outcome of the Icelandic referendum concerning the Icesave issue. We now expect a swift answer from the Icelandic government to our Letter of Formal Notice of May last year. We will assess the government's reply before we take further steps in the case.
Unless the letter from the government contains arguments that alters our preliminary conclusions in the case, the next formal step would be to send Iceland a final warning, a Reasoned Opinion. This final warning will give Iceland two months to rectify their breach of the EEA Agreement. If Iceland continues to be in breach of the agreement, the case will be sent to the EFTA Court.

You cant say they were not nationalised, they were. They may have been wound up later, but they were all nationalised at cost to iceland.

ChiefGrasscutter

Regarding the Icelandic banks.............

As I recall they are nationalised first.
The foreign savers were then told to sod off - you get nothing
The locals were guaranteed their local currency deposits probably up to some limit
Then the rump of the bank (ie "badbank plc") was then put into receivership:

Really2

ChiefGrasscutter wrote: »

Regarding the Icelandic banks.............

As I recall they are nationalised first.
The foreign savers were then told to sod off - you get nothing
The locals were guaranteed their local currency deposits probably up to some limit
Then the rump of the bank (ie "badbank plc") was then put into receivership:

So would it be fair to say icelands problems were caused by nationalising the banks? (well that and the over dependance of the banks income streams)

By that I mean they were fine in terms of government debt etc up to that point.
EG, not like greece

ChiefGrasscutter

I 'think ' you are right - but I'll defer to someone on these boards who has access to the appropiate financial data.
I also 'think' Ireland's problems likewise arose from the banks and in particular Ireland's Government's much critized decision sometime in ?late 2008? that they would guarantee 100% of everything in the banks - which was fine until one went bust and they had to pony up.............

Really2

The only way iceland have avoided crushing debt on their public sector is by basically sticking two fingers up to everyone. (bond holders mainly)

It still seems their are valid claims to chase the debt (deposits) though.

http://www.google.com/hostednews/afp/article/ALeqM5isByKn15vsm5yODH9jfqJ2-DMA-Q?docId=CNG.107773495a0160387697a1de4e76c059.191

The emergency laws now make it possible to refund the 3.9 billion euros ($5.5 billion) Britain and The Netherlands spent compensating 340,000 of their citizens who lost money when online Icesave bank failed, using the assets of its failed parent company Landsbanki.

Kennyboy66

Really2 wrote: »

They nationalised them then wound them up, they still took on debt by nationalising. How do you think the country went belly up?
29/09/08

Sorry that in itself is a instant loss.

Ask yourself if they had gone bust and had not been nationalised would the UK and IOM be chaseing payment?


You cant say they were not nationalised, they were. They may have been wound up later, but they were all nationalised at cost to iceland.

Sometime you need to slow your rate of posting and engage in a bit of thinking (you are quick enough to critisise Graham of Devon in similar circumstances).

The proposed 75% stake in Glitnir never went through. The bank was put in recievership before the purchase could be approved by shareholders. You have it the wrong way round.
The process was something like this.

Plan to nationalise
Abandon that plan
Recievership of banks
Re-capitalisation by their central bank


Quoting from Generali's thread from a few days ago (from an IMF website).

So how did Iceland put its economy back together? The program we ended up agreeing in record-time with the Icelandic authorities had four important elements.

• First, a team of lawyers was put to work to ensure that losses in the banks were not absorbed by the public sector. In the end, the public sector did of course have to step in and ensure the new banks had adequate capital, but it was insulated from vast private sector losses. This was a major achievement.

This is not remotely like Nationalising the banks and taking on full liabilities (as the UK and Ireland did).

Icelands debt to GDP ratio is approx 90%.

Only roughly 30% of this debt relates to direct fiscal support for the banks - the rest is a combination of fall in taxes, economy in freefall, devaluation of the Krona (increasing the burden of foreign denominated debt).

The UK's problem was that over reliance on financial services taxation (and property boom), meant that once the party stopped there was suddenly a huge structural deficit.

Ireland had this problem x 3

Iceland had this problem x 10.

Ilya_Ilyich

The fun thing about Greece is that it's not Greece's fault the rest of the world is going to suffer, but blame has successfully been deflected to the Greek people anyway. The economic difficulties have arisen (primarily) because private banks chose to lend to Greece. They received a premium for lending to a higher-risk country due to increased risk of default; it was absolutely Greece's right to default and this was a likely occurrence due to their poor economic situation. Banks chose to lend to them anyway due to higher yields and belief that they'd be bailed out in the event of default. Then when Greece predictably folded, it turned out the banks hadn't covered their high-risk bonds sufficiently (instead transferring the capital -- that could have been used as a buffer -- to shareholders) and instead would be massively bailed out at the nations' expense. However thanks to some masterful propaganda, the media narrative is that our economic problems are entirely due to lazy foreigner Greeks exercising their perfectly valid right to default and not the banks who bought their debt. It's impressive.

ILW

They were never forced to take the loans.

Ilya_Ilyich

...what's your point?