Subject: »PIIGS - economics problems

By the way, can I ask you ( this is not an attempt to insult you in any way ) what studies you've done? And even more interesting, what your political direction is?

I can say mine: you know I've been studying economics for two years at Leuven University now, and my political opinion ( besides Flemish nationalism, but that doesn't matter in this context ) is conservative liberalism.
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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...

AFIAK, this is the only thing some of the biggest economies ever do. The trick isn't to get out of depts, the trick is to make more money than you get endebted in, so you can keep up (the appearance of) the promise to pay it back.

Second, this is much cheaper too. Digging an economy out of a hole is far more difficult than lend it money when it is still functional. It's like having a relationship with a bipolar gun owner. With great sex.
It's cynical, I know, but on this level of finances, it's the solution that makes most money that is the right one. Not the one that makes people pay financially for their own mistakes (you know, like in the real world). And the solution that is chosen is not always the one that is most sane from a pure economical point of view (although this happens to be the same thing, atm.
Absolute free market thinking used to be the shizzle in the academics on economy (and please correct me if I'm wrong, I only got this from a few econmy PhD students who did their internship in the WTO and EU, but I'm no expert..), but relative recently one of the guru's wrote a few papers that changed the academics opionion towards a free market with government checks, and the world of business leaders has yet to apapt. Which they really don't want to, since a totaly free market gives more profit. Esp. in the banking business.

Anyway, what I wanted to ask... how much is the stuff happening in greece the result of mass influence of the stock market. Short selling greece's state obligations last month (and again, to some extent, right now?) In Belgium we've seen it happening to at least one major bank: a rumor starts, share prices drop, money well dries up and soon the bank gets real problems, affirming the previous ungrounded rumor.
I think it's shame we live in a system where these things can happen. A few coked up stock-jockeys destroying what hundres of thousand of people have worked for. Real work, with their hands, not with gambling. Awful.

I've got a lot of dollars online, so imo, let Greece sufferrrrrr..

and please Spain and Portugal too :) Onwards to €1 = $0.25 please :)

What should do EU and Greece with their economic problem?

I hope the UK does nothing as we areself are in enough problems at the minuite!

Well, '56 was at least the third Hungarian Revolution in the history (1703 and 1848 was the first two - if we don't count some civil wars in 1437 and 1514) :D
But we had serious things here in 2008 september and october. Some people had burned the headquarters of the state television and there were some riots too...

Every country is in problems, but indeed, the UK are know not to be very helpfully ;-)

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? :)

AFAIK, again:p, Greece has a strong left support. To the point that they'll strike for the stupidest reasons. On some holidays, violent riots by anarchists are a tradition. Whatever happens, they'll strike.

What the ... Here in Belgium, the worse that ever happens is a ... demonstration, and most ( almost every single time ) of the time, it's very peacefully. And I'm sorry, but I searched for 'Hongaarse Opstand' like it is called in the Dutch language, and I clicked on the English Wikipedia page, and I saw Hungarian Revolution, so ... Thanks for the small lesson in Hungarian history ;-)

There are always innocent people who suffer, but to me it also looks inevitable that the unemployment rate will increase and that it'll have some negative effects on most - if not all - Greeks.

And it's always the poor who are going to take the first blow in times of economic turmoil and they will always be the last to profit from an economic boom. That's how it is. You should install checks inside the system to make this a bit less likely. But not during a time of economic crisis.

1. here is the problem mate. these measures targer only public servants and ordinary people. there is not even one measure concerning wealthy greek companies, there is no measure for church taxes, there is no measures for specific professions, such as engineers, doctors, lawyers and etc (because they currently enjoy a different tax system than the others). that is my and most greeks main concern. these measures target mainly ordinary greeks who every month count their money in order to pay basic goods which now will become much more overpriced. is that fair?

2. yeah belgium is an ideal country. (comparing to greece always). i would love to come and work in belgium. what is the annual income of an engineer in belgium? or in uk?
so in terms of economy, yeah, you are much much better that greece. the main problem in greece, is that greeks pay for everyday goods as much as an average european (or sometimes even more) and greeks' wages are among the lowest in europe.

3. ok that was an over-statement :P
we pay billions in army expenses, and billions in immigrant expenses. does belgium have such expenses every single year?

4. the thing is that in my point of view, not a single european or american or whover citizen should pay a single euro for that banks-made crisis. recently most of the european governments paid some billions of euros to banks. among them was greece. why so? why now greeks have to pay for the crisis, but banks dont? is that fair?
and anyway, as i told yoy this is a political and economical game of US, major global banks and golden boys to make money and target euro. why should all citizens of the world pay money for such games??

5. i dont study economics, i have no idea about macro or micro- economy, but IMHO ordinary people in every single country should never pay for corrupt politicians' and banks' and golden boys' games. i dont care where they will find the money. maybe they should change the stupid way banks work from they day they started.

i reverse the question. in your opinion, what will be the situation in greece in 3 years and what sould we do by then? should we increase the taxes and reduce wages and unemploy people??

you are comparing an ideal country such as belgium, or the other guy from switzerland, with greece, who pays every year trillions of euros for army expenses because of its neighbours

Greece has the biggest army expences for its GNP (or however this is called)

But you're right in that belgium has a totally different situation. We have a 50% tax weight on average, but the tax collection and tax control is terrible. Some good citizens pay "everything" and some creative minds don't pay a cent. Rumors go that if Belgium would collect ALL its due taxes, it would be out of national dept:p

Anyway, what I wanted to ask... how much is the stuff happening in greece the result of mass influence of the stock market. Short selling greece's state obligations last month (and again, to some extent, right now?)

I think this influence is not that high. Of course, when a country is in trouble, normally, the financial markets 'will make' that country's currency drop in value. Now that is not really possible ( due to the fact that Greece is in the Euro-zone ), so the financial markets 'go' to the state obligations. People sell those under the market price, so the market price drops. So when Greece wants to make new state obligations, they have to raise the % of profit for the buyer ( because they can buy an obligation worth for instance 100 EUR, with a benefit of 4 EUR for ( just an example ) 98 EUR; because of this, the Greek new obligations will have to have a margin of 6 or 7 %, which is negative for Greece of course ). But this is quite technical ;-)

That's exaggerated, but we would 'win' every year 10 billion euro.

4. Indeed, the crisis is not caused by the Greek, but due to a bad Greek government and the financial crisis, the situation in Greece is worse than in the rest of Europe. Of course you can't blame the Greek citizens, but you can even less blame the European citizens, can you? Someone has to pay for the debt, and it won't be Belgians, Spaniards or Estonians, it will be ( logically ) the Greek.

Well, that's not completely true. Belgium, Germany, ... pays as well.

F. ex: If Germany wants to lend money to give/lend to Greece, their interest % will rise
=>> not lending any money: interest %: 0,5%
=>> after lending money to give to Greece: interest %: 1,5% (just an example).

That's why Germans don't want to lend money to Greece. Their own interest % will rise after giving the loan to Greece.

But you're right in that belgium has a totally different situation. We have a 50% tax weight on average, but the tax collection and tax control is terrible. Some good citizens pay "everything" and some creative minds don't pay a cent. Rumors go that if Belgium would collect ALL its due taxes, it would be out of national dept:p


Sorry mate ;-)

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.

Exactly :)