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Subject: »PIIGS - economics problems
btw hows ur country nowdays? you still suffer the same as in 1995?
Most european here seem tobe either too naive, or unable to put themseves in some1 elses shoes, the same thing would happen in their countries if something similar would happen there.
Hungary went through something like that 1.5 years ago. There are people who were striking many times, for irrational goals. (theoretically the railroad workers are striking right now too - they call that "rolling strike"; they can start it at any time and they can finish it at any time...)
But there are things you can't dismiss. Right now the Greek crisis is poisoning the whole economic system. Our forint has lost ~8% against euro/dollar last week. And nobody can say now who'll be the next: Spain? Portugal? Italy? USA? UK? They are all in a bad economical situation.
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Hungary went through something like that 1.5 years ago. There are people who were striking many times, for irrational goals. (theoretically the railroad workers are striking right now too - they call that "rolling strike"; they can start it at any time and they can finish it at any time...)
But there are things you can't dismiss. Right now the Greek crisis is poisoning the whole economic system. Our forint has lost ~8% against euro/dollar last week. And nobody can say now who'll be the next: Spain? Portugal? Italy? USA? UK? They are all in a bad economical situation.
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Next targets are Portugal, Spain and UK.
There are already rumours that american and asian funds are massively selling bonds in euro in order to gain from it. The portoguese spreads are already rising and the country has announced new austerity measures.
It's quite clear that we have tolerated many parasites in the global economy such as Goldman Sach and the credit rating agencies. All those agencies who on purpose thought that "toxic bonds" were good just because they had profits from it.
@Ganze
Useless strikes?? I suggest reading about the Haymarket Massacre in Chicago in 1886.
I'm against useless strikes but some times it the only way to be heard...
There are already rumours that american and asian funds are massively selling bonds in euro in order to gain from it. The portoguese spreads are already rising and the country has announced new austerity measures.
It's quite clear that we have tolerated many parasites in the global economy such as Goldman Sach and the credit rating agencies. All those agencies who on purpose thought that "toxic bonds" were good just because they had profits from it.
@Ganze
Useless strikes?? I suggest reading about the Haymarket Massacre in Chicago in 1886.
I'm against useless strikes but some times it the only way to be heard...
Next targets are Portugal, Spain and UK.
There are already rumours that american and asian funds are massively selling bonds in euro in order to gain from it. The portoguese spreads are already rising and the country has announced new austerity measures.
This disgusts me too
There are already rumours that american and asian funds are massively selling bonds in euro in order to gain from it. The portoguese spreads are already rising and the country has announced new austerity measures.
This disgusts me too
It's was clear from the begining (for those who had their eyes open and wanted to see)
Merkel's statements on this issue, about the gvt needing more control over the capital market and not the speculative investors, is something that made me happy
A bit late and a bit scandalous as one of the largest german banks made a fortune by speculating against Greece...
A bit late and a bit scandalous as one of the largest german banks made a fortune by speculating against Greece...
That is capitalism, in every crisis there is always investors speculating and making money out of it.
In the Argentinean crisis, in the recent US crisis, now here, that is no news, and it will always happen. At macro level or micro level from one way or another everyone always takes advantage of the disgrace of someone in the other side of the world. I am doing it, and probably 100% of the people that is reading this is taking advantage at a micro level of someone else. It is like that, sad but true.
That is capitalism, in every crisis there is always investors speculating and making money out of it.
In the Argentinean crisis, in the recent US crisis, now here, that is no news, and it will always happen. At macro level or micro level from one way or another everyone always takes advantage of the disgrace of someone in the other side of the world. I am doing it, and probably 100% of the people that is reading this is taking advantage at a micro level of someone else. It is like that, sad but true.
Well...but why do they expect? To get money from UE and keep on wasting the same way that made them end up in this situation? Or maybe they want the country to go bankrupt?
The problem is that it is really hard to believe that the IMF/EU demands really target the "wasting" part of expenditures. That's the point that nobody try to defend yet, but it's the crucial one to understand the anger in Greece. Something was really wrong, and governments fooled both locals and Euripeans about it. Now that it si known, "something has to be done", but IMF seems as un-creative as always: basically, cut off all the expenditures tha tthe Govenrnment is supposed to make. THere's no attempt, not the slightest, to detect waste, to detect unproductive, unnecessary, or even harmful expenditures. They just take the "right" expenditures and say "make less of everything". There also isn't a single word on the recessive effects of such a cut-off, with the negative implications it will have for government revenues, undoing part of teh debt reduction intended.
I mean, if someone taks ethe whole Greek public budget and doesn't find anything better expenditure to be reduced than pensions or health, then he really is stupid.
@BlueZero: The problem is not the amount of debt, it is never the amount of debt. Italy lived for years with debts above 100% of GDP. The relevant thing is just how fast it grows, if at all, as a percentage of GDP. So the basic ingredients for a debt crisis are maturity and credit market conditions: first, a large bunch of your debt should mature in the short-run, so you obviously need to roll-over a large fraction (even all) of it; second, you need to face such adverse conditions in the credit market so as to be charged crazy itnerest rates and short maturities, until the trend becomes explosive. It is important to understand that, as long as maturity is overwhelmingly short, default risk is self-fulfilling: any default fear (rational or not) leading to higher interest rates will actually worsen the repayment possibilities, thus confirming the expected default probabilities and even feeding back the process. That's one way of getting a "sudden stop" (a sudden reversal in the balance of payments, basically a drastic stop in capital inflows), but there are others in which fully exogenous events can leave a country "dry". The only fragility needed to be exposed to such a stop is to base your economy's balance on constant, large inflows. It can be because your debt has a very short maturity, it can be because your current account sucks (for example, vbecasue of overvalued currency), or both, like in the case of Argentina 2001 :P
So, back to Greece: it doesn't really matter if Greek debt is still at 110% if GDP or whatever after the Euro/IMF aud, the only important things are:
-If, starting from this help, Greece can change the maturity structure of its debt
-If the 5% rates charged by Euro countries can pin down the market expectations so as to stop the explosive dynamics in the market rates.
As long as this help is succesful in these 2 dimensions, and hence in moderating the debt/GDP growth, Greece will be fine, no matter if it doesn't decrease the amount of debt. Of course, if they can also lower debt that's even better, so they'll be less vulnerable in the future (other things equal), but the important goal is to stabilize it, meaning to avoid a growing trend.
The problem is that it is really hard to believe that the IMF/EU demands really target the "wasting" part of expenditures. That's the point that nobody try to defend yet, but it's the crucial one to understand the anger in Greece. Something was really wrong, and governments fooled both locals and Euripeans about it. Now that it si known, "something has to be done", but IMF seems as un-creative as always: basically, cut off all the expenditures tha tthe Govenrnment is supposed to make. THere's no attempt, not the slightest, to detect waste, to detect unproductive, unnecessary, or even harmful expenditures. They just take the "right" expenditures and say "make less of everything". There also isn't a single word on the recessive effects of such a cut-off, with the negative implications it will have for government revenues, undoing part of teh debt reduction intended.
I mean, if someone taks ethe whole Greek public budget and doesn't find anything better expenditure to be reduced than pensions or health, then he really is stupid.
@BlueZero: The problem is not the amount of debt, it is never the amount of debt. Italy lived for years with debts above 100% of GDP. The relevant thing is just how fast it grows, if at all, as a percentage of GDP. So the basic ingredients for a debt crisis are maturity and credit market conditions: first, a large bunch of your debt should mature in the short-run, so you obviously need to roll-over a large fraction (even all) of it; second, you need to face such adverse conditions in the credit market so as to be charged crazy itnerest rates and short maturities, until the trend becomes explosive. It is important to understand that, as long as maturity is overwhelmingly short, default risk is self-fulfilling: any default fear (rational or not) leading to higher interest rates will actually worsen the repayment possibilities, thus confirming the expected default probabilities and even feeding back the process. That's one way of getting a "sudden stop" (a sudden reversal in the balance of payments, basically a drastic stop in capital inflows), but there are others in which fully exogenous events can leave a country "dry". The only fragility needed to be exposed to such a stop is to base your economy's balance on constant, large inflows. It can be because your debt has a very short maturity, it can be because your current account sucks (for example, vbecasue of overvalued currency), or both, like in the case of Argentina 2001 :P
So, back to Greece: it doesn't really matter if Greek debt is still at 110% if GDP or whatever after the Euro/IMF aud, the only important things are:
-If, starting from this help, Greece can change the maturity structure of its debt
-If the 5% rates charged by Euro countries can pin down the market expectations so as to stop the explosive dynamics in the market rates.
As long as this help is succesful in these 2 dimensions, and hence in moderating the debt/GDP growth, Greece will be fine, no matter if it doesn't decrease the amount of debt. Of course, if they can also lower debt that's even better, so they'll be less vulnerable in the future (other things equal), but the important goal is to stabilize it, meaning to avoid a growing trend.
Actually i thing i wrote the same. But not in that long text and i was bit pesimistic ;-).
Would you mind applying all you know and do my tax return?
2010-05-06 12:52:54
Don Enzo to kasimsietsma
It's unbelievable how selfish Greek people are at this moment. The rest of the world is helping them out.
It's also unbelievable how naive people can be...
Whatever :) Rest of the world is 'kind of' agreeing with my point of view. They have to accept it, now or later. It's so simple, naive or not :)
Don Enzo to kasimsietsma
It's unbelievable how selfish Greek people are at this moment. The rest of the world is helping them out.
It's also unbelievable how naive people can be...
Whatever :) Rest of the world is 'kind of' agreeing with my point of view. They have to accept it, now or later. It's so simple, naive or not :)
thank you for your kindness, but stop talking like we are never going to pay you back. if you are going to pay each one of you 100 euros or whatever for greece, i am going to pay you for the rest of my life.
so cheers.
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so cheers.
(edited)
I never said such thing :) Actually I am more than happy to help you out.
Just be happy there are actually others who care about your country. Just think about what would happen if nobody did anything. Just think about it for 1 second.
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Just be happy there are actually others who care about your country. Just think about what would happen if nobody did anything. Just think about it for 1 second.
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i think anyone of us (greeks) appreciates europe's help. actually we would appreciate if europe was the only one who could help us, as IMF (=US) is not wanted for its policies on previous cases (i.e. argentina).
euro debt crisis is political test for eurozone countries not only greek problem
last few months left greece alone in the fight against Vulture Funds
at the same time, some northern countries like Germany and the Netherlands via their media are still playing “beggar thy neighbor” by their reluctance to stimulate their own domestic purchasing, which could help weaker countries to export.
cause The southerners need the others to create more domestic demand and be less export dependent.
last few months left greece alone in the fight against Vulture Funds
at the same time, some northern countries like Germany and the Netherlands via their media are still playing “beggar thy neighbor” by their reluctance to stimulate their own domestic purchasing, which could help weaker countries to export.
cause The southerners need the others to create more domestic demand and be less export dependent.