Greece...

antrobus

Generali wrote: »

They 'hid' about EUR8bn of debt with the infamous Goldman Swap. Beggur all in the grand scheme of things.

That was just the tip of a very big iceberg.:)

Edit

See: http://forums.moneysavingexpert.com/showpost.php?p=67779038&postcount=594

michaels

antrobus wrote: »

Greece spent 17.5 % of GDP on pensions in 2012, more than any other country in the EU.

See also;

Greece's generous pensions - What makes Germans so very cross about Greece?
http://www.economist.com/blogs/charlemagne/2010/02/greeces_generous_pensions

Couldn't the percentage be as a result of two factors:
Unfavourable demographics (ie longevity and low birth rate)
A denometer (GDP) which has shrunk by 25% over the last 5 years

Generali

antrobus wrote: »

The Icelandic economy might be small, but I wouldn't describe it as "closed" - it's in the EEA. (In fact, one could say, that being in the EEA was the reason that they got into difficulties in the first place.:))

And the difference with Iceland is that it was not a sovereign default. The IMF was willing and able to help bail them out, whilst Iceland had friends who were also willing to help. And of course, it helped that Iceland was so small; $2.1 bn dollars goes a long way, if you're only talking about 300,000 people.

When I say that it's relatively closed I mean it doesn't do a huge amount of trade with other countries. I was incorrect in that assertion. Exports are ~20% of GDP. 40% fish apparently.

The British and Dutch Governments were pretty clear at the time that they considered this to be a default.

http://www.bbc.co.uk/news/business-13029210

antrobus wrote: »

Greece spent 17.5 % of GDP on pensions in 2012, more than any other country in the EU.

See also;

Greece's generous pensions - What makes Germans so very cross about Greece?
http://www.economist.com/blogs/charlemagne/2010/02/greeces_generous_pensions

I think it's come down since:

http://www.bbc.co.uk/news/business-33132595

mystic_trev

Greek prime minister Alexis Tsipras said the International Monetary Fund had “criminal responsibility” for Greece’s debt crisis on Tuesday, and called on the country’s European creditors to assess the IMF’s policies.

“The time has come for the IMF’s proposals to be judged not just by us but especially by Europe,” Tsipras told his parliamentary group, two days after the failure of debt talks with the IMF and the European Union brought Greece closer to a possible default.

http://www.theguardian.com/business/live/2015/jun/16/greek-crisis-negotiations-deadlocked-as-time-runs-short-live-updates

Blimey, the blokes 'lost it'!

antrobus

michaels wrote: »

Couldn't the percentage be as a result of two factors:
Unfavourable demographics (ie longevity and low birth rate)
A denometer (GDP) which has shrunk by 25% over the last 5 years

Does it matter?

If Greece’s pension system is not sustainable, then it is not sustainable.

antrobus

Generali wrote: »

When I say that it's relatively closed I mean it doesn't do a huge amount of trade with other countries. I was incorrect in that assertion. Exports are ~20% of GDP. 40% fish apparently......

Yes, there's a lot of fish involved. And aluminium. (Cheap geo-thermal power apparently.)

Generali wrote: »

...The British and Dutch Governments were pretty clear at the time that they considered this to be a default.....

They were wrong weren't they? They lost the court case.:)

Generali wrote: »

..I think it's come down since...

That's the most recent number I could find from Eurostat.

michaels

antrobus wrote: »

Does it matter?

If Greece’s pension system is not sustainable, then it is not sustainable.

It is only unsustainable if you are also trying to service a debt of 200% of GDP.

If the UK had seen a fall of 25% in GDP I suspect persuading pensioners to accept a 25% cut in their state pension, including defined benefit public sector pensions, would be a tricky political sell.

ChiefGrasscutter

antrobus wrote: »

Yes, there's a lot of fish involved. And aluminium. (Cheap geo-thermal power apparently.)

Aluminium smelting from the raw ore is done by huge electrodes in a form of electrolysis.
So it is very power intensive which as you say Iceland has cheaply available in abundance.

princeofpounds

It is only unsustainable if you are also trying to service a debt of 200% of GDP.

Since the previous bailouts, the debt that Greece has been given by the EU has been so cheap they are not actually servicing a debt of 180% of GDP.


They are effectively servicing about 80% of GDP, which is why their debt service burden is as low an Ireland or Portugal.


It's pretty disgusting that there is little thankfulness for this generosity. Yes, reforms have been required as the quid pro quo. But without this debt being lent even more reforms would have been forced by reality because the country would have gone bust.

michaels

princeofpounds wrote: »

Since the previous bailouts, the debt that Greece has been given by the EU has been so cheap they are not actually servicing a debt of 180% of GDP.


They are effectively servicing about 80% of GDP, which is why their debt service burden is as low an Ireland or Portugal.


It's pretty disgusting that there is little thankfulness for this generosity. Yes, reforms have been required as the quid pro quo. But without this debt being lent even more reforms would have been forced by reality because the country would have gone bust.

Really? How much is it costing the countries that are providing the money - doesn't Germany have negative yields on most of its shorter bonds? So even if Greece is only being charged a couple of percent someone is still making a nice profit bearing in mind the capital is effectively lost already...

Effectively Greece are paying say 8bn Euros a year so both parties can pretend that eventually the 200bn EUR will be repaid. The creditors get 8bn a year out of the deal, what does Greece get out of it?