The crisis thread

[Mr.Cambio]

Don't know what you guys hear on the news in your country, but here things get worse every day. The media all the time publish news like there will be a german manager here, who will sign for anything discussed in Brussles in charge of the GR PM. Some say that Greek public property is under mortgage and that private property may be under mortgage, too.

I feel this is a kind of war without weapons, but a financial war, as they want to reduce greek property, greek salaries in so low level, so that GR turns to be like Uzbekistan. New taxes and terror everyday.

What do you hear and what is your opinion? It would be very helpful if guys from Ireland or Portugal (we have one here, i think) would give a feedback.

I used to be very optimistic, but since last week i'm having thoughts of taking my things and get to another country. Not an easy decision, but i cannot take the stealing of money, real estate etc..

One thing i know for sure is that all the EU has similar problems, but they are focused to GR, cause it was the easiest target.

 

[Parisien]

Nikos...where do you start...................please correct me if all the facts below are not so factual.............

1. Greece cooked the books as regards meeting the criteria for getting into the euro in the first instance....ie deficit/meeting max 3% limit
2. Greece borrowed the same amount of money from EU banks as its GDP per annum for a full 8 years.....and never really had any hope of paying it back especially now as economy is shrinking
3. When lastest PM got to power he assured the country deficit was 6%...but actually when he looked at books it was 15%
4. Greece has no real option but to default like it did in 1931 or so and leave the Euro
5 All very sad for any proud nation to end up like this.....I can only wish you well as these events play out.


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[hodroyd]

Hi Nikos,

We get updates here on the news cconcerning the Euro Zone and of course Greece. You are correct the majority of the Euro Zone are in trouble and I think the general opinion here, is that it was an accident waiting to happen. Numerous countries with different currencies and financial standards, suddenly all coming together and wanting to be the same, it had to run in to trouble. I remember visiting Athens on business many years ago, before the euro and most things were reasonably priced. People seemed happy and had reasonable spending ability. Bring in the Euro and suddenly you were expected to be the same as such as Germany, wages, prices for things, everything suddenly had to go up to bring GR up to the same level. Now Greece do not have the same manufacturing, wages, or infrastructure as such as Germany, so how on earth could you ever be the same, but everybody wanted to be and so prices for everything increased. A country can only have a GDP matching it's true worth, as soon as spending goes over that level to try and keep up with others, you start heading for eventual disaster.
Greece are not alone in this within the Euro Zone and am I glad the UK did not join. We have our own problems created by past governments and made worse by the global financial collapse, so we too have substantial debt, but are working towards getting out of it, hopefully.

Cheers
Robert

 

[Mr.Cambio]

Frank, well, i do not agree with everything you say, cause i do not have the evidence to prove it and personally i don't really care about what happened then(regarding number cooking etc), but i do care about what happens now: With that saying,my question is, do we have a war here, with the purpose beeing the finacial crisis, OR is GR taking the responsibilities of taking part in the EU?
Do you think that Ireland went to IMF for the same reasons, OR did someone lead them to do so?

 

[Mr.Cambio]

Robert, believe me the wages did not get up, back in 2002, when the Euro came, but the prices for goods were not reasonable anymore. Besides, banks offered loans and Greeks lived on lended money. I agree with UK, you did the right thing to be outside euro.

 

[Parisien]

Not going to argue at all Nikos.....remember who lent the Greeks, Irish, Portuguese, Italians the money to then relend to their populations?

The Germans, UK, French banks.....surprise...surprise....I know about a year before the Irish economy blew up the Germans "warned" them of what was happening......but who likes a party pooper?!

Basically....a poorly thought our system, poorly regulated...then being poorly dealt with.

Remember all previous monetary unions in the last 200 yrs in Europe have also ended in failure.....surprised?

Whole states and countries lived beyond their means...................governments, banks, lenders and the ordinary person have been swallowed up in this debacle......pity!


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[conaero]

Greece is a lovely place and possible my routes stem there too. I am doing my bit by having the family holiday in Rhodes (Roda) this year. Its not much but ever bit helps.

I would like to see Greece leave the Euro...and fair better.

 

[Parisien]

Yes Matt......been to Greece a number of times...but not since 1986 or so.......done lots of the islands.....Aegina.....Athens.......all wonderful.


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[BennyD]

The problem lies with politicians who wanted to create a cozy little club but got it horrifically wrong. They took from the rich and gave to the poor which led to too much debt and no way to pay it back. Italy, Spain, Portugal are all in the same boat and the sh1t is airborne and en-route to the fan. It's not war Nikos, it's political stupidity. Enjoy.

 

[conaero]

...according to Dem, its because nobody pays tax and everything changes hands with cash. Personally, I don't know if there is any truth to it?

 

[Parisien]

Yeah...heard that too......Matt....all cash, all evasion.....no-one ever wanted to pay their share in...money now all gone offshore, no confidence at all in their government to get things right


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[hodroyd]

Nikos,
One thing that Greece always had was it's tourism. The wonderful history, ancient buildings, countryside and people. Since the Euro came in and visitors have been faced with paying massive increases in prices for things, tourism has started to find other places more competitive. Other countries in the Euro Zone are having the same issues with tourism, which can be a massive money spinner for any country, when you cut that off you leave a big hole in your finances. I was in Cyprus last year, I have friends there, they were saying life is hard due to prices constantly going up and tourism is going down all the time.

Cheers
Robert

 

[safrane]

Portugal's bond rate was 15% last night...their next to go.

 

[bigbob]

Agree - Greece and Portugal will leave the euro. Italy is too big too. Spain - not sure but that would be it IMHO.

As for the OP, I would get all liquid assets (deposits, shares etc) out of Greece and into more stable currencies - US dollar, sterling, swiss franc. You can then bring them back in at more advantageous rates once Greece is out of the Euro. Once Greece is out, it will have depreciating currency and high inflation. The latter will erode the real value of all the debt along with the default percentage. My view is that Greece is going to have five years of pain but if it stays in the Euro, it will be ten years.

 

[hodroyd]

15%??? Looks like Portugal is down the pan then, they can't sustain that.
Good advice BigBob, you have a chance Nikos to salvage something before the boat sinks.

 

[Parisien]

The Greeks moved their money.....early last year apparently ...hardly a brass farthing in Greek accounts now......

Yup if they default.....in the banking wilderness for quite a few years....more pain than they imagined...real poverty again....


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[bigbob]

The point is not to hold the money in Euros, even if it is abroad, if you are Greek. Needs to be outside the Eurozone in another currency IMHO.

 

[bigbob]

The Greeks moved their money.....early last year apaprently ...hardly a brass farthing in Greek accounts now......

Yup if they default.....in the banking wilderness for quite a few years....more pain than they imagined...real poverty again....


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Defaulting is better than austerity.

 

[Paco]

I do not see how Greece's financial position can be recovered without a 50 year+ repayment plan. Nikos is right to be concerned about what happens now, but you can't fix that without accepting that a country needs revenue, and there is now a generation or two of Greeks who have never paid tax and object to starting to pay tax.

There was clearly a spectacular incompetence to the government have you seen the example of the train system? They raised enough ticket revenue to pay the 250m euro wages and then lost 950m euro on top!!! But the travel was cheap!!!!

I don't doubt that there are millions of Greeks wanting to work and pay taxes but one Doctor I heard on the radio said his tax was refused because his job was valuable to society so he didn't need to trouble himself with taxes!!! You can't help that sort of political set up, it is only interested in itself and will inevitably fail.

This can't be fixed over night, if Greece is to stay in the euro (unlikely imho) they need a 50 year plan with a new tax regime that is reasonable in what it charges (20% for eg) but policed ferociously and corruption made a criminal offence that is actually prosecuted. Oh and State retirement age aligned with the econoic peers.

This way people can afford to live and the country can earn some revenue, but it won't make a difference to the bottom line for a long time.

Trouble is this will be too long for the Germans so more than likely they will let Greece exit the euro quietly along with Portugal, Spain and Italy over time, and we'll go back to having cheap holidays.

I'm sad for Greece, the population has been totally fooled by the state and left to carry the can, and "we" sat by and let it happen.

I am not a fan of Brussels!!! Trade agreements? YES!! What we ended up with??? Ridiculous and doomed to failure from the minut it went beyond a free trade agreement.

 

[bigbob]

Monetary unification only works if you have fiscal unification too. Tick sheets for the latter do not work. Northern and Southern Europe have very different approaches to so many things that they could never have worked together with partial unity.

Greece will be fine in a few years time. It will default, the drachma will come back, it will depreciate to high heaven and all their hotels will be full for years. Greece over lived for years as did Ireland, Portugal and Spain - an inappropriate (strong) exchange rate with high inflation and/or high government borrowing.