Subject: »PIIGS - economics problems

Well to be honest I'm not an economist, not even well economically oriented. But if they have such problems now with 'floating alive' then they will probably still have them after they get the money from other EU countries, IF they keep current approach to living and working. And the workers attitude shows, that it rather won't change.

In my opinion they should be given the loan, but on many conditions, for example changing the retirement age. If they won't agree to fulfill the conditions then there should be no such help...because the situation will only aggravate - the bankruptcy will be just postponed by some years...

I'm studying economics in university ;-) This is the list of measures taken by Greek government to get those huge loans. Btw, they have big problems now, but if they can improve their economic system, after the crisis, they will be able to pay those loans back, of course, the Greek population will feel these severe measures for a very long time ( even when economic recession is finished ).

* Limit of 1000 Euros to 13th and 14th salary in the public sector and abolishing it completely for those earning over 3,000 Euros gross a month.
* Further cuts of 8% on public sector allowances and 3% pay cut for DEKO (public sector utilities) pay cheques.
* Freeze on increases in public sector wages for three (3) years.
* Limit of 800 Euros to 13th and 14th pension installment and abolishing it completely for those pensioners receiving over 2,500 Euros gross a month.
* Return of special tax (LAFKA) on high pensions.
* No changes to the 13th and 14th wage in the private sector.
* Changes planned to the laws governing lay-offs and overtime pay.
* Further extraordinary taxes on profitable enterprises.
* Increases in VAT to 23%, 11% and 5.5%.
* Further 10% rise in taxes on alcohol, cigarettes, and fuels.
* Further 10% increase in luxury taxes.
* Equalisation of men's and women's pension age limits.
* General pension age does not change but a mechanism is introduced to scale them to life expectations changes.
* Limiting the number of insurance funds to three (3).
* Opening up of certain closed professions.
* Increase in the objective prices of real-estate.
* Tax on illegal residences.
* Cancellation of the second installment in the cohesion allowance.
* Creation of a financial stability fund.

I don't understand some of this points, but I think that many of those are good ideas. Did they already enforce these changes, or just plan to do it? Is it the reason for riots on the streets? :)

Yes, Greek government is now dealing with the laws in which these measures will be taken. And they will, because if they don't, EU and IMF will stop those loans. And yes, the protests in the streets are because of these measures.

Then it's a sensible move. And I feel a bit sorry for the citizens of Greece...but well, that's what you get for living for more than you can afford.

Yet is not trivial to link public debt to citizens' living standards. I'm not sure the ones affected by the cuts and going to strikes are the same as the ones living above their means at public debt's expense.

Kick them out of the Euro currency, save the other countries at the same time.

Not really: if I owe you a dollar, I have a problem. If I owe you ten million dollars, you have a problem :P
If Greece is causing so much disturbance in Europe is not precisely because Greeks themselves are holding Greek public bonds. Most of it is either in European hands or in the hands of those who also lend to the rest of Europe. On top of that, letting a EU country hit the bottom can only increase the expectations of additional EU countries hitting bottom and foster speculative attacks.

some of you have no idea what is going on in greece so i would suggest not to write anything about tomorrow strike.

it's a pitty i don't know economical terms in english so i could explain you the situation behind all these stupid measures taken from the greek government (?).

Again, Greece was lying about their financial situation. But this is no reason to exclude them from Euro-zone, and btw, if you'd do that, you'd have to exclude Greece from EU too ( you cannot step out of the Euro-zone, without leaving the EU ).

They are not stupid, and I do know the Greek situation ... They are necessary. If you don't take those measures, you won't get money, and Greece will be bankrupt ...

low wage greek people will pay the price for politicians' mistakes and corruption? does that make sense to you?

greek church with the highest fortune in greece and doesn't pay even a 1% tax, do you know that?

money do exist. but not in average people pockets. and these these measures are the most stupid ever. only with the increase of tax to 23%, the increase in price of oil has as a consequence an increase in all everyday goods, thus greek markets will die in next few months and many people will get unemployed. is that making sense to you?

Yes, the plan does make sense to me. Yes, your politicians made mistakes, and someone has to pay that. And most logically, it is you, the Greek people, you've elected them. And the Church doesn't pay taxes in Belgium neither. Of course it will make people unemployed, but their is no other way. What would be your solution?

dude, do you have a job that you earn 10 thousands euros a month or smth?

Nope, I'm studying economics. You?

Well, but there's a difference between what you are asked to do and what you need to do. I mean, there can be a difference :P Many countries in the past "needed" to take some measures in order to receive IMF help, yet what IMF asked them sometimes had little to do with what was best for those countries, as IMF itself recognized over the last decade.

Too many people here discuss whether this or that is good to solve debt sustainability problems without the slightest information/analysis on where the problem is really coming from.
Is Greece in problems because it spends too much? Because it collects too little taxes? Because of a sudden stop in capital flows, driving interest rates to the skies? And if so, why? Because of a dangerous maturity structure, because of large negative trade balance, or because of pure speculative flows? Was it seen as Euro's "Achilles' heel" by Soros and company?

It's hard to discuss how good a measure is to solve a problem without understanding the source of the problem.

Let's look at it from this point:
Who voted the government which let all this misery happen to Greece until they noticed they had to do something?
Greece is a democratic country. That means the population can influence its development by voting. If they feel no party is able to do what they want, they should create a new one.