Subject: »PIIGS - economics problems

The economic crisis has resulted from the financial crisis. And I had a class ( macro-economics ) that, dealt with that problem. You see, in the years before autumn 2007, the Fed ( American Central Bank ) let the intrest rates to low, because they didn't want deflation ( negative inflation, like Japan had for many years, which is worse than high inflation, as long as it isn't hyperinflation ). This made a lot of Americans buy houses they couldn't afford. The house prices went up, in fact like a bubble. In autumn 2007, that bubble exploded, and the American Banks had loans that would never be paid back. I'm talking about Lehman Brothers, Freddie Mac and Fannie Mae. This caused crises in the European banks too, which you can't blame, so to that Greek guy ( I'm sorry, I've forgotten your nickname ): you can't let the banks pay for the Greek debt either. Btw, for Belgians ( and Dutchies will know this too ): the Fortis-case has nothing to do with this.
So that is ( shortly ) what has happened. Of course the monetary system should change. Like Gordon Brown and Nicolas Sarkozy have suggested, their should become a kind of Bretton Woods II, but without fixing the US Dollar to the gold. But this is becoming quite technical, and I don't know if you guys can still follow, as I don't know what you know about (macro-)economics ;-)
About Spain and Portugal: in fact, I don't really know what their biggest problem is ( I do know they didn't lie like Greece did ), but I suppose their economic system isn't healthy neither, for instance too many employees working for the government, too high pensions in comparison to taxes, inefficient government, ...
Yes, we should be more active in politics, but not like the Greek left side is doing. They strike every minute. But the problem is that many people who vote don't know a lot of economics, so parties can say what they want, most people don't understand a s*** of economics ;-)

I'm not saying I'm an expert here, but I do know something about it I think :-)

Greece is technically bankrupted. There are state bonds worth 8.5 billion euro, which will be due on 19th May. Without the EU/IMF help Greece can't pay that. Euro is already declining against US dollar, and Greece's problems caused today the Hungarian forint and the Polish zloty to decline 6-7% against euro, dollar and Swiss franc.
Germany didn't want to help Greece at all. If there would be any other solution, they won't help now - but there isn't. The rate percents are worse for Greece, but since its risky to give money to Greece, it isn't surprising...
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at least more than the average guy in the pub

Me, I just watched too much to the economic channel, and the programs after the news. And I had to write a paper on the standpoint of the Costa Rican Economical and Fiscal policy. As an introduction to a diplomacy exercise. It got rejected, but before that, I never heard about fiscal policy, so at least I learned something :p

Anyway, managing the wealth of a country is something that is best not left in the power of private banks.

if all the currencies are devaluating against the other, which one is making profit?

Of course not, but big private banks will always have a big influence.

i have academic skill, but not in economics :-PP. And i dont go to pubs, pretty boring habbit in my point of view :-D.

But:
1. I am sure you have heard about Ron Paul, didnt you? :-)
2 .And here is also an interresting view of our monetary system or how can it be changed. But you need some time to read it and process it :-).
3. Naomi Klein
4. Some insights, maybe bit demagogic, but actually a lot of this is true. Both Zeitgeist movies.
5. Our monetary system
I came across a lot of such teories.

First two would be the academic points of view. Thats what you wanted.

It's depreciation, devaluation is something completely different ;-)

If your currency depreciates, your import products will cost you more, and the export products will cost less. That is the biggest disadvantage of a depreciating currency.
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1) Kick a country out fo Euro-Zone could be devastating for the zone. However it could be beneficiary for the Greek economy as we could devaluate our money, improve exports, decrease imports, increase the number of tourist and improve our economy on the whole. I'm of course against such a scenario though.

2) Don't believe the numbers on the news. We indeed have a wide public sector. It's almost 900.00 people while the private sector has 5.000.000. That means that public sector is about 18% and not 40%. Moreover the average salary in Greece is 800 euro and the pensions 600 or less (net). However the current VAT is 21% (23% from the 1st of June), gas costs 1,5 euros per litre and the prices went up high after the entry of euro in Greece.

3) Private sector and all pensioners lost a large part of their 13 and 14 wage. However all those years those pensioners (while they were working) paid their contribution in order to receive the 13 and 14th pension later.

4) Something you may not know is that some large german multinational companies bribed our politicians in order to sell equipment to Greece (Siemens, Man, german submarines)

Do you think all the money that is spent will help?
The labor unions tell Greek people to strike, how stupid is that?

The country has no money and people are still striking and not even trying to improve their economical situation!
The retirement age is much lower as in most other European countries (especially those in the EU), the hours people have to work much lower and they're striking because they'd have to abandon that if they wanna have even more help.

I just can't understand that.

100% my thoughts!

Your country being in a crisis is never nice, we can all understand that. But striking for your own personal benefit (ignoring all problems that you are causing to others if Greece won't recover) is beyond my believe.

The 14th month even doesn't exist in Belgium ;-) That is one of the disadvantages of EU, prices aren't the same in different countries, but they move to each other ( in cheap countries, the prices rise, in expensive countries, the prices drop ).

if you lived with a 700euro wage and paying all these taxes and overpriced goods, then you would change your mind.

I work 5 days a week, 8 hours a day and I don't get paid for any overtime which I oftenly must do.
I'll retire on the age of 67 and I'm UNPAID for 3 MONTHS!!!

Should I be on strike or not??
What are your statistics about working hours etc.

Of course I'm against striking this very moments but my point is to warn you, STOP BELIEVING THE NEWS

everybody should get a basic book on economy for his/hers 18th birthday:)

"It's like it is possible that there are no elections in Belgium because the constitution says the election law has to change first. It's a doom scenario that is there to give some limits to the system (and as such, give it its credibility), but it'll never come so far.

Iceland, Estonia? Probably some other countries who were unofficially bankrupt, but we bailed them out.

Only when no other country has interests to protect in that country, it can go bankrupt. Other than that, no chance... "

Estonia was not bankrupt and will not be under this government lead by Reform party. Will will soon join the Euro Zone. Are we boarding a sinking ship :D? Latvia was bankrupt.

You know, you get chemistry, biology, maths, languages, etc. at school. So why doesn't everyone gets classes in economics?