Lets talk about Greece

[ramza]

Wooops, I reread my post and it seems I forgot to finish one of my sentences:

 

-The media show Greeks as being rich and lazy. Wrong, there is indeed a "rich" social class (famous doctors, lawyers, businessmen, etc) but they do not represent what happens in the middle and lower classes. These people live luxuriously and in a very provocative manner. These are mainly the ones that do not pay their taxes. They keep living as they used to as the crisis hasn't affected them that much and the new measures obviously don't aim them directly. Nothing is done to control them and punish them. I do believe the riots will turn against them soon enough if this keeps up (they all live in the rich districts so they are easy targets).

 

I would also like to clarify a thing about the 13th and 14th month of salary. Salaries haven't increased for 20 years now. The 13th and 14th month of salary are given in the form of bonuses at Christmas and Easter mainly. These were a great help for people with low wages and even boosted the general consumption of goods and services during these holidays.

 

Ramza, I thank you for taking the trouble to list counters to the public misconceptions. I'm quite prepared to take you at your word on all points, if you can confirm you stand by them. I did after all say I wasn't sure I understood the story.

 

I am myself Greek, so you can trust me on what I have written. I have also had much experience abroad as I have lived in other European countries as well (mainly France, Belgium and Switzerland), so I can clearly see what's being done wrong in Greece compared to those other countries.

 

 

Oh, and another question: Why is 70% of the greek population against the ECB/IMF-loans?

 

Well, simply because getting the loan from the ECB/IMF means that the Government has to adopt a number of austerity measures (lay offs, more taxes, reduced salaries, reduced retirement pensions, etc). It was already hard enough living decently before. Imagine what it will be in the coming years. Since 2008, I can't count the number of shops that have closed. Some commercial streets have become deserted, it's really depressing. The Government has already made cuts to the salaries of civil servants (between 20 to 40%, which is a lot considering the average salary here). Many people have stopped buying things and go much less out. Many of them can't pay their rents anymore. The only good thing is that family bonds are strong and people will always be willing to help a cousin, niece or uncle in need, no matter how much money they have.

 

Overall, these are really unpopular measures, so it's understandable that people aren't happy about them. Try implementing them in France and I believe we will witness a new revolution. However, those measures are needed in order to straighten up the State's finances. We can't indefinitely live on credit (actually, the previous Greek Governments did a good job at hiding the state of national finances even to its own people - everyone was shocked when the real deficit rate was announced). I guess we may live some historic changes in our economic systems in the years to come. Socialist parties everywhere in Europe kept promising social grants and salary raises in order to get elected. They also gave many privileges to specific groups of professionals (farmers, train drivers, miners, etc). It's ok to help the underprivileged but you have to do if you can afford it. European countries have kept increasing their public debt to support these policies for more than 30 years and the situation is going to be explosive once they won't be able to pay off these debts. They take new credits in order to pay their old debts. Here we come with another vicious circle.

 

Anyway, the Greeks are not that much against the ECB/IMF loans. If it helps them solve things, they are all for it. The average Greeks, in their majority, do agree in making small sacrifices for the benefit of the country and future generations. The thing is that they don't agree in being the only ones making the sacrifices. The rich, the Church and the politicians do not contribute in any manner in order to help the country. For example, members of parliament refuse to lose their 15th and 16th months of salaries while other people lost their 13 and 14th months of salaries and even their 12th month if you count the tax increases). If there are any riots, they will be directed towards those people who keep their privileges to themselves and refuse to contribute like everyone else.

 

And here's a final: why do States have to borrow money? It comes to my understanding that the creation of money should be under the responsibility of States as part of their sovereignty. However, since 1976 and the end of the Bretton Woods system, the power to create money has been progressively transferred to private banks. This resulted in the States having to borrow money from private institutions in order to fund their policies. This is an aberration in my opinion and should be remedied asap.

[Enoch]

It's not looking good. The core problem isn't in Greece-- it's in the fiscal and monetary struction of the Eurozone. Under ECB rules, countries can issue debt to commercial banks, and the banks, in turn, can use those government bonds as collateral for borrowing from the ECB at below-market rates via "repo" transactions. In essence, this makes government borrowing cheaper than it would be, based on a sober analysis of risk and return, throughout the Eurozone. Nations with profligate governments (and, by definition, half of the governments out there are below-average) had one of the major checks against their overspending greatly weakened. The powers-that-be in the core of the Eurozone set up this whole system and didn't have the foresight to realize that it might be a problem down the road-- really, during the boom years, they were pretty happy that this overspending in Greece and elsewhere was helping boost their exports.

[Enoch]

And here's a final: why do States have to borrow money? It comes to my understanding that the creation of money should be under the responsibility of States as part of their sovereignty. However, since 1976 and the end of the Bretton Woods system, the power to create money has been progressively transferred to private banks. This resulted in the States having to borrow money from private institutions in order to fund their policies. This is an aberration in my opinion and should be remedied asap.

History has shown repeatedly that when governments have direct control over the currency, they print like there's no tomorrow. There are basically two structures that have proven to be somewhat stable: Specie-based currency (which has the weakness that money supply can swing unpredictibly based on the relative growth rates of specie supply and overall economic activity), and independent central banks (which are not really "private" in that they are established by governmental action and can be disestablished by the same) composed of technocrats to manage the money supply and who are insulated from the pressures of politicians forever yearning for short-term gains at the cost of long-term stability.

[Wrath of Dagon]

It's not looking good. The core problem isn't in Greece-- it's in the fiscal and monetary struction of the Eurozone. Under ECB rules, countries can issue debt to commercial banks, and the banks, in turn, can use those government bonds as collateral for borrowing from the ECB at below-market rates via "repo" transactions. In essence, this makes government borrowing cheaper than it would be, based on a sober analysis of risk and return, throughout the Eurozone. Nations with profligate governments (and, by definition, half of the governments out there are below-average) had one of the major checks against their overspending greatly weakened.

Isn't all that true of the US also?

[Enoch]

It's not looking good. The core problem isn't in Greece-- it's in the fiscal and monetary struction of the Eurozone. Under ECB rules, countries can issue debt to commercial banks, and the banks, in turn, can use those government bonds as collateral for borrowing from the ECB at below-market rates via "repo" transactions. In essence, this makes government borrowing cheaper than it would be, based on a sober analysis of risk and return, throughout the Eurozone. Nations with profligate governments (and, by definition, half of the governments out there are below-average) had one of the major checks against their overspending greatly weakened.

Isn't all that true of the US also?

Not really. There's only one government issuing bonds in the U.S.-- the problem in the Eurozone is that the banks can access the ECB lending window with government bonds issued from any member government. So it benefits the riskiest (i.e., most indebted) most.

 

Also, during the boom years, the private commercial banks who were in the middle of these transactions weren't paying much attention to the indebtedness and risk being piled up by these governments. The market for pricing U.S. Treasury issues, on the other hand, is scrutinized more than any other, and by the most sophisticated financial players around.

[Magister Lajciak]

I find it extremely funny that it was Greece that objected about Finland's EU membership and now off we are to safe those corrupt ****ers. I hope they use at least part of that 80 billion euros to build few prisons for all those tax evaders. I don't think they will learn otherwise...

 

Stop making stuff up. I am specialized in EU matters and never heard or read anything of the sort. Why would Greece even do that in the first place? Those two countries do not even have any litigation between them...

 

Yeah, I haven't heard of any Greek objections to Finland's membership (or Slovakia's membership for that matter) of the EU either.

 

In any case, what is it that you do regarding your EU specialization?

[Magister Lajciak]

And here's a final: why do States have to borrow money? It comes to my understanding that the creation of money should be under the responsibility of States as part of their sovereignty. However, since 1976 and the end of the Bretton Woods system, the power to create money has been progressively transferred to private banks.

 

This is incorrect. States can and do create money through their central banks (& mints for the physical representation of money). Central banks are parts of the state and aren't private (the U.S. is a bit of an exception in this regard, where the Federal Reserve is semi-private). Greek case is different, though, see below.

 

This resulted in the States having to borrow money from private institutions in order to fund their policies. This is an aberration in my opinion and should be remedied asap.

 

Well, the issue here is that Greece is part of the Eurozone. By joining the Euro, states agree to give up control over their monetary policy, including their right to create money and transfer this part of their sovereignty to the European Central Bank. As a result, individual states can no longer rely on creating money to finance their deficits/debts. If Greece had its own currency its debt problems would not be so severe, as it could create money to finance them and to inflate them away. As it stands, however, Greek membership in the Eurozone means that Greece does not have that option and has to borrow and cut spending instead.

[Monte Carlo]

The Latin members of the Euro have a different way of doing things from the Northern, predominantly protestant Euro-member states. As Rod Liddle said in the UK press this weekend, the Siesta zone versus the non-Siesta zone.

 

I'm not going to be crudely stereotypical, not least because I love Italy and Spain... but. The Siesta Zone does seem to have higher incidences of public-sector waste and corruption, joke governments (q.v. Berlusconi), late 30-somethings still at university and not even remotely economically active and a lax attitude to tax compliance. and let us be honest - Greece wasn't ready for the Euro zone. Not by a country mile. The EU wanted it in for political reasons and is reaping the results. Ha ha ha.

 

Happily, my own country, which has gotten far more 'European' than I would have liked in the past 13 years and has a wrecked economy, isn't in the Euro. As I said above, ha ha ha.

 

I hope Greece pulls through, I harbour no animus towards them or any other European country (unlike the EU as a political entity) but they need to batten down the hatches because its gonna be tough.

[Walsingham]

I think this is a golden opportunity for Britain which will certainly be missed by anyone as unimaginative as Brown. We should make a deliberate and unilateral move to assist, even if it isn't a huge amount, in direct small scale loans to small businesses. Call it a 'Byron' initiative.

 

Greece's political and upper classes may be feckless, but I'm prepared to bet that ordinary Greeks would remember the kindness.

 

But of course that would only raise questions as to why British businesses are still failing to get loans from British banks.

[Monte Carlo]

^ A Byron loan is awesome, in my mind's eye I see us sending a horde of fey, Opium and Absinthe-addled public-schoolboys to write obtuse poetry and shag their way across the Med in the name of Anglo-Greek harmony.

[Walsingham]

^ A Byron loan is awesome, in my mind's eye I see us sending a horde of fey, Opium and Absinthe-addled public-schoolboys to write obtuse poetry and shag their way across the Med in the name of Anglo-Greek harmony.

 

Great, so I can help Greece, and offload my spongeing school chums at the same time. I _am_ a genius.

[Enoch]

By the way, the cover of the current issue of The Economist is hilarious:

 

[ramza]

And here's a final: why do States have to borrow money? It comes to my understanding that the creation of money should be under the responsibility of States as part of their sovereignty. However, since 1976 and the end of the Bretton Woods system, the power to create money has been progressively transferred to private banks.

 

This is incorrect. States can and do create money through their central banks (& mints for the physical representation of money). Central banks are parts of the state and aren't private (the U.S. is a bit of an exception in this regard, where the Federal Reserve is semi-private). Greek case is different, though, see below.

 

This resulted in the States having to borrow money from private institutions in order to fund their policies. This is an aberration in my opinion and should be remedied asap.

 

Well, the issue here is that Greece is part of the Eurozone. By joining the Euro, states agree to give up control over their monetary policy, including their right to create money and transfer this part of their sovereignty to the European Central Bank. As a result, individual states can no longer rely on creating money to finance their deficits/debts. If Greece had its own currency its debt problems would not be so severe, as it could create money to finance them and to inflate them away. As it stands, however, Greek membership in the Eurozone means that Greece does not have that option and has to borrow and cut spending instead.

 

Thanks for clarifying some of my statements. I have no in-depth knowledge about economics so I had a hard time explaining these things. The main thing is that euro-zone countries have no control on the currency and cannot make any devaluation in order to get rid of excessive debts.

As it concerns my specialty in EU matters, I have a law degree with a focus on EU and international law and two Masters that deal with EU matters and policies, and I am writing a Phd on a subject that concerns the EU internal market. I have also worked at the European Commission for a time and have studied a lot about EU history and policies in order to enter the European civil service.

[Monte Carlo]

I have also worked at the European Commission for a time and have studied a lot about EU history and policies in order to enter the European civil service.

 

Quick! My crucifix! My holy water!

[Walsingham]

I have also worked at the European Commission for a time and have studied a lot about EU history and policies in order to enter the European civil service.

 

Quick! My crucifix! My holy water!

 

Back off, Brussels!

 

[ramza]

No worries, I don't work there anymore.

[Zoraptor]

Yeah, I haven't heard of any Greek objections to Finland's membership (or Slovakia's membership for that matter) of the EU either.

Maybe he meant "Macedonia"/ FYROM, Turkey, ?Kosovo and Bulgaria? rather than Finland since the Greeks have, iirc, had objections to all of those doing various Europe-y things at various times.

 

(caveat: not 100% sure on the last two)

[Humodour]

Greece's objections to Macedonia are absolutely ****ing ridiculous. It makes them look like idiots, IMHO.

[ramza]

Greece's objections to Macedonia are absolutely ****ing ridiculous. It makes them look like idiots, IMHO.

 

Once again, let me enlighten you on this matter. I will explain the problem by using a hypothetical situation. It may not be realistic but it's just an example to show the problem. Let's suppose Belgium decided to split up in two separate countries: Flanders and Wallonia. Now, that wouldn't pose any problem to its neighbours, right? However, what would happen if Flanders decided to name itself Holland? Holland is already a region of the Netherlands. Don't you think the Netherlands would object? The same would happen if Wales decided to become independent and name itself Britain. Greece has 3 regions bearing the name Macedonia: western Macedonia, central Macedonia and eastern Macedonia. It is obvious that having a neighboring country naming itself Macedonia poses a problem. We have proposed many alternatives such as Slavomacedonia (as there is a majority of slavs) or North Macedonia but FYROM keeps rejecting these alternatives and would only accept the name "Macedonia". It's not our fault a compromise can't be reached.

 

What makes these examples less realistic is that western Europe has been peaceful for more than half a century. However, the Balkans have endured wars even in the 90s. There are tensions that still persist nowadays.

 

The situation with Greece is even more complex. We are unfortunate enough to have relatively aggressive neighbors. Between Albania, FYROM and Turkey, it is difficult to compare Greece's situation with any other country. Turkey keeps sending F16s over our territory daily and have even sent on occasion warships in the proximity of the capital. Turkey keeps pressuring us so that we give up control over part of our maritime territory. Moreover, FYROM has adopted a very provocative stance in regards the name of Macedonia. They have demands regarding everything related to Macedonian legacy: the symbols and history, namely Alexander the Great. Alexander is a Greek name, he was speaking Greek and he promoted Greek culture with his conquests. It is without doubt that ancient Macedonians were Greeks and have nothing to do with the current "Macedonians". Yet, FYROM names its national airport "Alexander the Great", adopted at some point Alexander's flag as its national flag and so on. What we are afraid is that they keep increasing their demands (restitution of relics to name an example) which would result in stealing our own legacy (claiming they are the descendants of Alexander is provocative enough by itself). The Balkans are not like western Europe and you have to prepared to expect everything. They could practically demand anything as there are already pre-existing tensions. How would Britain or Holland feel if Wales and Wallonia did respectively steal parts of their history and presented it as their own?

Edited May 4, 2010 by ramza

[Walsingham]

Greece has 3 regions bearing the name Macedonia: western Macedonia, central Macedonia and eastern Macedonia. It is obvious that having a neighboring country naming itself Macedonia poses a problem. We have proposed many alternatives such as Slavomacedonia (as there is a majority of slavs) or North Macedonia but FYROM keeps rejecting these alternatives and would only accept the name "Macedonia". It's not our fault a compromise can't be reached.

 

I don't know anything about the geography, but clearly you have the logical option of letting them have the sodding name. So yes, it is always both party's fault that a compromise can't be reached.

[ramza]

Greece has 3 regions bearing the name Macedonia: western Macedonia, central Macedonia and eastern Macedonia. It is obvious that having a neighboring country naming itself Macedonia poses a problem. We have proposed many alternatives such as Slavomacedonia (as there is a majority of slavs) or North Macedonia but FYROM keeps rejecting these alternatives and would only accept the name "Macedonia". It's not our fault a compromise can't be reached.

 

I don't know anything about the geography, but clearly you have the logical option of letting them have the sodding name. So yes, it is always both party's fault that a compromise can't be reached.

 

Not really, because allowing them to be called just plain "Macedonia" would practically mean we give up on our history, identity and culture. The Greek Macedonians regions are not well known and that works at our disadvantage. If FYROM uses the name Macedonia as it pleases, there will be a risk of confusion with the ancient Greek Macedonia on an international level and in the public opinions. If we give in the pressure, then in the decades to come, everyone will identify the new Macedonia with the ancient Macedonia of Alexander the Great, while in truth they have nothing in common. Macedonia and Alexander are an integral part of our civilization and we cannot give it up just like that. No country would. The thing is that the problem we are facing does not have any precedent in recent history and it is hard for foreigners to understand what the real issue is about. This again works at our disadvantage as we are being depicted as the mean ones. We have no quarrels with FYROM but it is them that are being provocative and that try to steal our heritage by using our own symbols.

[Humodour]

Greece has 3 regions bearing the name Macedonia: western Macedonia, central Macedonia and eastern Macedonia. It is obvious that having a neighboring country naming itself Macedonia poses a problem. We have proposed many alternatives such as Slavomacedonia (as there is a majority of slavs) or North Macedonia but FYROM keeps rejecting these alternatives and would only accept the name "Macedonia". It's not our fault a compromise can't be reached.

 

I don't know anything about the geography, but clearly you have the logical option of letting them have the sodding name. So yes, it is always both party's fault that a compromise can't be reached.

 

Not really, because allowing them to be called just plain "Macedonia" would practically mean we give up on our history, identity and culture.

 

Wow, you're the master of embarrassingly tenuous justifications.

[ramza]

Why tenuous? Since when is the protection of a country's cultural heritage tenuous? As I have already said, I don't expect foreigners to sympathize with our cause as they cannot understand the issues at stake and do not feel concerned by these issues. No offense meant, but what can an Australian understand to Balkan politics and intricacies? In any case, I just wanted to clarify yet another stereotype about the mean Greeks that won't allow the "macedonians" to name their country as they will.

[Humodour]

Why tenuous? Since when is the protection of a country's cultural heritage tenuous? As I have already said, I don't expect foreigners to sympathize with our cause as they cannot understand the issues at stake and do not feel concerned by these issues. No offense meant, but what can an Australian understand to Balkan politics and intricacies? In any case, I just wanted to clarify yet another stereotype about the mean Greeks that won't allow the "macedonians" to name their country as they will.

 

Look, you're polite, and informative, but one can tell by the tone of your posts that you're also incredibly biased.

 

Maybe I am a foreigner, but maybe that's what it takes to look at the situation objectively.

[Meshugger]

To Krezack's defense, Australia has little to no cultural heritage that is considered as important to them.

 

As for the Balkans, most Europeans should be lucky by having little to do with them.

Edited May 4, 2010 by Meshugger