The savings rate in Greece

Discussion in 'Europe' started by cjpraharaj, Apr 23, 2012.

  1. cjpraharaj
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    cjpraharaj Rookie

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    Statistics available on the internet shows that the savings rate in Greece ( as a percentage of GDP ) has declined drastically and is far lower than most economies with comparable per capita GDPs. The investment ratio ( as a percentage of GDP or GNP ) has not declined as much, most probably due to foreign investment in Greece. Does anyone have any thoughts about whether the Greek government tried to take pro-active steps to prevent the savings ratio from declining to its present pathetic state ?

    Monetary or fiscal schemes designed to make the level of savings in the economy increase will probably have limited effect on overall savings rate since monetary and fiscal policies have to achieve other objectives too. Moreover, Greece does not have an independent central bank, and even if it did, a central bank has only a few policy instruments and other concerns like inflation and unemployment. And the ability of governments to induce people to save more, say, by offering high interest-rate schemes ( for example, some kind of infrastructure bonds or similar financial instruments ), is limited by other fiscal policy concerns. How about drastic policy options like imposing some kind of tax at the source and putting the money in an investment fund of specific duration ( not necessarily a mandatory retirement account, but something along those lines, of shorter duration ) ? Does anyone have any thought about whether the low savings ratio in Greece is a response to the economic weakness it has been experiencing and the economic problems it has been having, or whether it is due to a drastic change in consumer preferences and the spending habits of the people or whether it is due to different allocations of profits by businesses ?
     
  2. Artevelde
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    Artevelde Senior Member

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    Actually, one of Greece's many problems is that Greek capital is fleeing the country. All Greeks who can have put their savings abroad, out of reach of their government and an eventuel default.
     
  3. waltky
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    waltky Wise ol' monkey Supporting Member

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    Granny says it all gonna come tumblin' down like a house o' cards...
    :eusa_shifty:
    Greek Economy Contracting at Rapid Rate
    April 24, 2012 - Greece's central bank says the country's troubled economy is shrinking even faster than first thought.
     
  4. waltky
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    waltky Wise ol' monkey Supporting Member

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    'Mass poverty' warning for Greeks...
    :eek:
    Greek socialist leader Venizelos warns of 'mass poverty'
    4 May 2012 - Polls indicate Mr Venizelos' Pasok will be punished at the polls by voters angry at austerity measures
     
  5. waltky
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    waltky Wise ol' monkey Supporting Member

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    Greece out to scrap EU bailout...
    :mad:
    Greek election: Syriza 'to tear up EU austerity deal'
    8 May 2012 - Alexis Tsipras says his cabinet would reject "barbaric" austerity measures

     
  6. Artevelde
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    Artevelde Senior Member

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    It's over and out for Greece. Sad really, but inevitable. Bankruptcy and exit from the Euro (and possibly also from the EU) are virtually inevitable. Fortunately most European banks have been able to write off their Greek loans in the meantime so that a default will only affect the ECB (which is strong enough to cope); the Greek banks (who will all have to be nationalized anyway); and some hedge funds.
     
  7. waltky
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    waltky Wise ol' monkey Supporting Member

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    Greece still a problem...
    :eusa_shifty:
    Greek Tensions to Persist in Coming Week
    5/19/12 --- Market anxiety is expected to stay at elevated levels in the coming week as the political turmoil in Greece goes unresolved.
     
  8. Two Thumbs
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    Two Thumbs Platinum Member

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    Greeks should learn to say "danke" instead of σας ευχαριστώ

    And get used to taking it Greek from the Germans.
     
  9. editec
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    editec Mr. Forgot-it-All

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    Greece will go down that seems obvious.

    I wonder how much that will cost taxpayers in the nations (other than Greece of course) where their national banks lent Greece money?

    Because you know we cannot expect the BANSTERS to take losses on the loans they made to Greece, can we?

    I mean there's no such thing as AUSTERITY for stupid lenders, only for stupid borrowers.
     

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