Greece, a basket case economy ,and a corrupt country.

[52ndStreet]

I think the European union is making a big mistake in bailing out Greece. I hear the country is corrupt, and that they have no kind of economic discipline.

They should be allowed to fail.

 

[Polk]

A collapse of the Greek economy would bring the whole Eurozone to it's knees. They aren't saving Greece. They're saving themselves.

 

[uscitizen]

I never did like musicals.

 

[52ndStreet]

A collapse of the Greek economy would bring the whole Eurozone to it's knees. They aren't saving Greece. They're saving themselves.

How so, is the Greek economy really that integrated with the rest of Europe?, if thats the case the Euro isn't worth the paper its printed on .

 

[Polk]

A collapse of the Greek economy would bring the whole Eurozone to it's knees. They aren't saving Greece. They're saving themselves.

How so, is the Greek economy really that integrated with the rest of Europe?, if thats the case the Euro isn't worth the paper its printed on .

It's reasonable well integrated, but it's small, so that's not really the issue. The problem is that if Greece were to default on it's debt, that would increase pressure on countries (such as Spain and Portugal) in similar financial situations. The increased pressure over fear of default would result in higher interest rates, making default more likely.

 

[52ndStreet]

A collapse of the Greek economy would bring the whole Eurozone to it's knees. They aren't saving Greece. They're saving themselves.

How so, is the Greek economy really that integrated with the rest of Europe?, if thats the case the Euro isn't worth the paper its printed on .

It's reasonable well integrated, but it's small, so that's not really the issue. The problem is that if Greece were to default on it's debt, that would increase pressure on countries (such as Spain and Portugal) in similar financial situations. The increased pressure over fear of default would result in higher interest rates, making default more likely.

I see, some kind of Machiavalian, Robert Freedman ,school of economics, we are all kind linked socio economic principle huh.?

 

[Polk]

Just to give you the alternative case: If Greece still used the drachma, they could simply devalue it. The result would be a sharper downturn, but they'd hit the floor quicker and bounce back.

 

[52ndStreet]

Just to give you the alternative case: If Greece still used the drachma, they could simply devalue it. The result would be a sharper downturn, but they'd hit the floor quicker and bounce back.

What about this "moral hazard" theory, what if another of the "PIGS" countries needs to be bailed out?What then for the Eurozone??

 

[Toro]

Greece will get bailed out eventually. Much of its debt is held by German and French banks.

 

[Modbert]

Gee, I wonder if someone had made a thread about this situation about two months ago.

OWAI-

http://www.usmessageboard.com/current-events/98310-wave-of-strikes-sweeps-greece.html

 

[52ndStreet]

Gee, I wonder if someone had made a thread about this situation about two months ago.

OWAI-

http://www.usmessageboard.com/current-events/98310-wave-of-strikes-sweeps-greece.html

Have you had your Human Liver, and fava beans yet?.Hannibal Lecter??

 

[blu]

A collapse of the Greek economy would bring the whole Eurozone to it's knees. They aren't saving Greece. They're saving themselves.

How so, is the Greek economy really that integrated with the rest of Europe?, if thats the case the Euro isn't worth the paper its printed on .

all of club med goes if greece goes. germany also wants to bail them out to show their economic dominance over the rest of the eurozone

 

[germanguy]

Yeah, the german taxpayer will be delighted to pay for a bunch of people, who simply thought that money comes from the ATM. I would like to see how Mrs Merkel tries to sell this to the public.

But anyway:

Think of California, which is close to be bankrupt as well. How does this affect the Dollar ?


Regards
ze germanguy

 

[Toro]

Yeah, the german taxpayer will be delighted to pay for a bunch of people, who simply thought that money comes from the ATM. I would like to see how Mrs Merkel tries to sell this to the public.

But anyway:

Think of California, which is close to be bankrupt as well. How does this affect the Dollar ?


Regards
ze germanguy

Yes, California is our very own Greece! But the two aren't really comparable.

California's deficit is about 2% of GDP compared to 13% for Greece. Debt is 7% of California's economy while Greece's is 100%.

http://www.fxstreet.com/fundamental/analysis-reports/market-sense/2010-02-03.html

Both of those are minor compared to Greece.

However, debt in the states can weigh on the dollar. In the 1990s, debt at the provincial level hurt the Canadian dollar (Canadian provinces can borrow all they want), and the 2001 Argentina default was caused in part by too much debt of the provinces.

 

[Polk]

A collapse of the Greek economy would bring the whole Eurozone to it's knees. They aren't saving Greece. They're saving themselves.

How so, is the Greek economy really that integrated with the rest of Europe?, if thats the case the Euro isn't worth the paper its printed on .

all of club med goes if greece goes. germany also wants to bail them out to show their economic dominance over the rest of the eurozone

The first part is correct. The second is not. Germany doesn't want to show their dominance over the Eurozone. If anything, they want less control (or at the very least the appearance of less control). The most powerful EU institution is the ECB. It's functionally speaking an enlarged version of the Bundesbank, down to even being based out of the same city (Frankfurt). And yet, how many Germans have headed the ECB? The answer is none. The first president of the ECB was Dutch, the second (and current) is French.

 

[RedChalk]

I posted this elsewhere in the forum, but I can see it was in the wrong spot. This blog has an interesting (and funny, if you're from Greece) take on the German bailout of Greece that's being discussed, essentially saying that Greece is going to take the new loans from Germany and laugh all the way to the bank...
Another Financial Charade Mastersen's Musings

 

[ekrem]

The EU will put pressure for a lasting reduction of public debt in Greece. Greece will have to bake smaller breads in terms of government spending.
Anyway, the strategic outlook for Greece looks good, despite its debt.
Romania and Bulgaria joined the EU just in 2004. Since then Greece did not even play its full potential over these direct neighbours.
In the mid-term Greece's own lacking industrial capacity will be compensated by Greek capital buying assets in those countries. Off course Greece will not run Bulgaria or Romania, but an economic expansion is inevitable.

Stratfor puts it this way:

It is not exactly a leadership position, but it is certainly a strategic position far more central and important than anything Athens has known in centuries.

Also Greece has after USA 2nd highest defence spending relative to GDP (%) within NATO. They are armed up to their teeths and plan purchasing new weapons.
This off course wont be allowed in this scale anymore by the other EU actors having the motivation to force Greece into debt reduction.
The defence spending of Greece may be not the main problem of Greece's debt, but it is one of the problems, and clearly overkill.

From the same Stratfor Article:

In 1999 Greece and Turkey were the first to offer each other humanitarian assistance in the aftermath of two massive earthquakes. This warming of relations allowed the two to set aside their differences (not to be confused with burying them) and dial their hot peace back to a cold one, setting the stage for Turkey’s path toward EU membership. That path has now disappeared, and Turkey is moving on. Yet Turkey’s first step in preparing to go expeditionary is to ensure that this cold peace remains that way. Ankara has to ensure that its traditional foe does not sabotage its efforts. Luckily for the Turks, this is a topic on which the two rivals can largely agree — after all, the last thing Athens wants is Turkey clucking around in the Balkans in a way that interferes with Greek plans.

Their future — for the next few years anyway — will be to agree to disagree and to stay out of each other’s way. Which is great news for Athens and Ankara, but not so great news for anyone that shares a border with Turkey.

 

[Dionysis.73]

I'm Greek and I want to explain the truth about my country,
for almost 50 years since Konstantinos Karamanlis -senior- ruled the country people have worked hard and prospered for themselves and for Greece. Everyone was paying the state social services for his medical care and pencion. Not only these money were stolen from us by "wrong invesment moves" or high paid sharks, now and since the country is in total chaos today, we're asked to pay again for this outragious situation. We, -the people- never showered in german gold or in eu diamonds, everything was carefully gathered by 7 dominant families that still govern my country. I never voted for either of the two political parties that govern my homeland, but I still have to pay for the mistake of not burning the parliament along with the 300 fat smiling thieves sitting inside. I never saw one, just one politician taken to court or being punished for anything, and there's been A LOT of exposures during my lifetime (I'm 37yo). We Greeks are proud people but this attack from the eu media is not unjustified.

 

[Dionysis.73]

it's true, corruption has affected all fields in Greece. We cant get medical treatment without giving "something" to the doctors and nurses, we cant build something without paying off the public intitution man that checks paperwork, we cant get a job if we dont vote for the useless pig as a senator. Life is difficult here and its gonna be even harder with these new tax laws. The ugliest thing of all is we're trying to save money to pay the interest of previous loans and not to come out of this crisis. People here are poor and angry so if this continues strikes is the least that's going to happen

 

[antagon]

the eu incorporates 'diverse' economies to facilitate quantitative easing in the first place. greece plays the role how i see it.