Greece...

padington

ChiefGrasscutter wrote: »

The problem is that Greece is not itself a functional economic unit.
.....not unlike say a village in the UK
Most of what it produces is available cheaper elsewhere - eg Turkey for holidays.
Unlike Iceland with fish and geothermal cheap power it does not have extensive natural resources to sell.

So either
It has to have a perpetually depreciating independent currency.
Or like my village under a single currency regime it has to have a continual source of external income/capital transfers in with no expectation of it ever being paid back.
The single currency for Greece has locked in permanent uncompetitiveness where others (both in and out of the euro) now have a total and absolute competitive advantage over it.

Ever considered why its cheaper to go on holiday in Turkey ?

remorseless

padington wrote: »

Ever considered why its cheaper to go on holiday in Turkey ?

Or Malaysia, Thailand and many other places offer a better value for money...Last summer I went to a Med location and it was so overpriced, poorly managed and not many services compared to a similar rated hotel in Asia...

Greeks, Italians, etc may have to learn the hard way or import hospitality workforce from abroad to compete with prices!

Koicarp

remorseless wrote: »

I still don't get the queues at the ATMs, can't they pay by card in shops if they have a card to cash out? I barely use £50 a month in cash...

Most people don't have debit or credit cards. These have been tolerated by businesses since the euro came along but not promoted. Older people don't seem to use cash cards, often standing in a queue for an hour or so to pay in a few euro. It's a different world.

Generali

wotsthat wrote: »

I bet that's why your economist colleague would vote no though - it's a step closer to default and the Drachma mechanism or not.

Oh absolutely right.

1. Default on the debt
2. Go to the Paris Club to agree a reasonable level of default (probably pay back ~50% of the debt)
3. Redenominate the debt in New Drachma at a 1:1 rate
4. Let the Drachma float freely (probably drop like a stone)

There are so many things wrong with the current deals it's hard to know where to start. Not making debt to the IMF senior was the first big error as in doing so the EU may well have weakened the institution of the IMF which does some excellent and very under appreciated work across the world.

remorseless

Koicarp wrote: »

Most people don't have debit or credit cards. These have been tolerated by businesses since the euro came along but not promoted. Older people don't seem to use cash cards, often standing in a queue for an hour or so to pay in a few euro. It's a different world.

if they're queuing at the ATM, they must have a card. Unless Greece has its own system (doubt) it must work on Cirrus/Maestro, etc - so the same system used to pay by card in stores, not using debit/credit.

Businesses may not like it cause it's harder to undeclare income for taxes, but that could be well the reason for shortage of money.

I [personally] DISLIKE when I go in places where I cannot pay electronically and usually take my business elsewhere.

Pensioners with non card, I understand, that it's a different story and they wouldn't be queuing at the ATM.

[Deleted User]

The poor folks queuing behind the ATMs wish they had invested some of their savings in gold instead. Of course most of them have no savings, hence they have nothing to lose and a default would probably be the best option in the long run.

It could happen here one day.

antrobus

Koicarp wrote: »

Most people don't have debit or credit cards. These have been tolerated by businesses since the euro came along but not promoted. Older people don't seem to use cash cards, often standing in a queue for an hour or so to pay in a few euro. It's a different world.

The ECB has statistics on that sort of thing.:)

Greece had 23.5 million debit card transactions in 2013, compared to say Ireland (less than half the size of Greece) with 341 million debit card transactions. Although since Greece has issued almost 10.9m debit cards (Ireland 4.2m), this would lead me to conclude that Greeks do have debit cards, it's just that they don't use them.

Most interestingly, ECB has worked out stats on the number of payment transactions per capita. For Greece the numbers are; credit transfers 8.08, direct debits 1.27, card payments 6.88, cheques 0.98, other stuff 0.41, which is not a lot really. Which would lead me to the conclusion that an awful lot of business in Greece is conducted in cash.

Generali

ciaccino wrote: »

The poor folks queuing behind the ATMs wish they had invested some of their savings in gold instead. Of course most of them have no savings, hence they have nothing to lose and a default would probably be the best option in the long run.

It could happen here one day.

This is the reason not to buy gold:

"Today the world's gold stock is about 170,000 metric tons. If all of this gold were melded together, it would form a cube of about 68 feet per side. (Picture it fitting comfortably within a baseball infield.) At $1,750 per ounce -- gold's price as I write this -- its value would be $9.6 trillion. Call this cube pile A.

"Let's now create a pile B costing an equal amount. For that, we could buy all U.S. cropland (400 million acres with output of about $200 billion annually), plus 16 Exxon Mobils (the world's most profitable company, one earning more than $40 billion annually). After these purchases, we would have about $1 trillion left over for walking-around money (no sense feeling strapped after this buying binge). Can you imagine an investor with $9.6 trillion selecting pile A over pile B?

"A century from now the 400 million acres of farmland will have produced staggering amounts of corn, wheat, cotton, and other crops -- and will continue to produce that valuable bounty, whatever the currency may be. Exxon Mobil will probably have delivered trillions of dollars in dividends to its owners and will also hold assets worth many more trillions (and, remember, you get 16 Exxons). The 170,000 tons of gold will be unchanged in size and still incapable of producing anything. You can fondle the cube, but it will not respond."

!!!!!! would someone with a bar of bullion do with it in Athens right now? You aren't going to be able to shave a corner off to buy a quart of ouzo and a jar of olives.

danothy

Generali wrote: »

!!!!!! would someone with a bar of bullion do with it in Athens right now?

Re-plate the connectors on their stack hi-fi system, so they can hear that authentic vinyl hiss with greater clarity.

ChiefGrasscutter

remorseless wrote: »

I [personally] DISLIKE when I go in places where I cannot pay electronically and usually take my business elsewhere.

So you won't be going skiiing in Austria then!
Even 4*hotels have notices up - no cards for purchases below 50 euros.
In restaurants in the mountains when you buy your lunch etc you pay cash.