Greece...

vivatifosi

Sorry mwpt, I know you asked the question of CLAPTON, but I think that what the EU needs to do with regards to Greece - and they are as reticent to suggest it as Greece is to accept it - it to leave the Euro and introduce the Neo Drachma.

We've talked for years about Greek can kicking, but this can be the only answer, surely?

CLAPTON

mwpt wrote: »

We feel quite similarly about the opposite sides posts. I feel that there are those here who will find the EU at fault in every case and look to fit the facts to this view.

My opinion is that Greece is mostly to blame for Greece's problems but the EU should take some blame too. I also don't think it is up to the EU, nor is it even possible, to solve every constituent countries economic problems. The stability mechanism is there for emergencies, so by definition it's going to be a rough ride when it is used.

I keep asking what the EU should be doing differently for Greece _right now_? Should they ask the tax payers of every other country to give the Greeks a free lunch, write off the debts and let the Greeks continue to do what they previously did?

the EU should engineer either Germany's departure from the euro or Greece and some of the other southern eu states.
secondly a proportion of the greek debts should be written off and of course greece needs to reform its tax system so people actually pay taxes and it benefits system need reform too

Germany's 'currency' is massively undervalued and Greece's massively overvalued.
Whether it is Germany's or Greece's fault doesn't come into it : it is the system that is wrong.
Fixed exchange rates within a fiscal union can work because London subsidises Hull: but if London didn't subsidise Hull then Hull would virtually be wiped from the map.

Basically yes : the fault is the EU/euro system and it needs dismantling.

mwpt

CLAPTON wrote: »

the EU should engineer either Germany's departure from the euro or Greece and some of the other southern eu states.
secondly a proportion of the greek debts should be written off and of course greece needs to reform its tax system so people actually pay taxes and it benefits system need reform too

Germany's 'currency' is massively undervalued and Greece's massively overvalued.
Whether it is Germany's or Greece's fault doesn't come into it : it is the system that is wrong.
Fixed exchange rates within a fiscal union can work because London subsidises Hull: but if London didn't subsidise Hull then Hull would virtually be wiped from the map.

Basically yes : the fault is the EU/euro system and it needs dismantling.

Thank you.

I am inclined to agree that the Euro without fiscal union isn't a good idea.

I wonder if antrobus could explain how the US system works. From my understanding, states have devolved powers of taxation, but I guess other things such as pension age are fixed?

antrobus

mwpt wrote: »

...I wonder if antrobus could explain how the US system works. From my understanding, states have devolved powers of taxation, ...

The Federal government gets its money from income/corporation tax and social securty contributions.

Most state governments have their own income tax and corporation tax which raise about 20% of revenues, but most of it comes from sales taxes and federal grants.

http://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-state-governments
http://www.taxpolicycenter.org/briefing-book/what-are-sources-revenue-federal-government-0

mwpt wrote: »

...but I guess other things such as pension age are fixed?

There is a federal state pension. Not aware of any states that do the same.

worldtraveller

German Finance Minister Wolfgang Schaeuble is preparing for a continuation of aid for Greece without the involvement of the International Monetary Fund (IMF), Germany's Bild newspaper reported on Wednesday.

Talks between Athens and foreign lenders on its bailout progress have dragged on for months due to differences on labor and energy reforms as well as on fiscal targets and debt relief measures. The IMF has said it will only be involved if it is the last bailout for Athens and includes debt relief for Greece.

The German government would like the IMF to participate in the bailout program to boost its credibility but Berlin is against granting Athens significant debt relief.

The Finance Ministry is preparing for a vote in the Bundestag lower house of parliament in case the IMF refuses to take part, after Schaeuble previously promised the Bundestag the rescue package would only be approved if the IMF was involved and keeping tabs on Greek reforms, Bild said.

The newspaper, which did not name its sources, said Schaeuble thinks the hole left by the IMF should be filled by the European Stability Mechanism (ESM) - the euro zone's bailout fund, Bild said.

Reuters

As usual, I'm sure it'll be whatever it takes! :rotfl:

ANDR£W

"Socialism only works untill you run out of other people's money"

A_Medium_Size_Jock

worldtraveller wrote: »

As usual, I'm sure it'll be whatever it takes! :rotfl:

Quite so.
[STRIKE]Germany[/STRIKE] the EU cannot afford another country leaving the club (for ANY reason) - well not just yet with Britain wanting to leave.

worldtraveller

With the IMF meeting in Washington this week, with further discussions on Greece, there is the new factor in, you guessed it, President Trump.

The US being the biggest shareholder in the IMF, it'll be interesting to see if he gets more than a little involved, especially with his views on the EU, and Germany in particular, all of which are, of course, instrumental in Greece's current & future aid.

worldtraveller

The EU faces a looming crisis which could threaten the sustainability of the eurozone as the International Monetary Fund has warned Greece’s debts are on an “explosive” path despite years of attempted austerity and economic reforms.

Global financiers at the IMF are increasingly unwilling to fund endless bailouts for the eurozone's most troubled country, passing more of the burden onto the EU - at a time when Germany does not want to keep sending cash to Athens.

telegraph.co.uk

westernpromise

This is why all previous European currency unions have failed.