George Papandreou - a good move?

1. 90

   Paragliderposted 13 years ago

   Greek Prime Minister George Papandreou has decided that the Greek people should be asked whether or not to accept the rescue package negotiated by the Eurozone leaders.
   The 'rescue' package, of course, came with strings attached: further austerity measures for a people already suffering. And however you dress it up, it's just another loan to a heavily indebted economy.
   Was he right to offer the referendum or should he have played the party line and accepted the bail out on the people's behalf?
   He certainly rocked the financial world!

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      Petra Vlahposted 13 years agoin reply to this

      AT LEAST A REFERENDUM GIVES PEOPLE A VOICE; when was the last time America had a referendum? It will ever have one?

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         Paragliderposted 13 years agoin reply to this

         It does, and it potentially defuses the motivation to riot since that is based on frustration at being disempowered and having 'solutions' imposed from on high and abroad. Interesting times...

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      Xenonlitposted 13 years agoin reply to this

      It was a terrible thing to do at this time, given the anger that it caused. The people will not be able to fund 11 billion euros in bailout money or get the debt reduced by half without this deal that has been in the works for so long.
      
      The people need to vote on the next round of bailout money, though.

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2. 67

   2uesdayposted 13 years ago

   I do not know what they can do, but I do feel sorry for the Greek people. I am not sure what will happen as the problems they face either way are huge. The uncertainty is certainly affecting the rest of the EU. Italy is certainly under more financial pressure through this.
   
   If I ran my kitchen the way politicians have been running their countries; I would have empty cupboards and no money to restock them.
   
   You will probably get more responses to this at a more constructive level, soon.

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      EmpressFelicityposted 13 years agoin reply to this

      I've often thought about it in terms of an imaginary interview with the manager of my local Lloyds TSB:
      
      Mr Banky: So Ms Empress, I understand you'd like to take out a loan? I would say it's inadvisable under your circumstances.
      
      EF: Why?
      
      Mr B: Because you already have an unplanned overdraft of over £5,000, and it's going up every month.
      
      EF: Ah, but it's not going up as fast as it was a year ago.
      
      Mr B: But you still owe us more money than a year ago.
      
      EF: But that's not fair. You're talking about my debt. My debt is going up, but my deficit is going down. So my finances are healthy.
      
      Mr B: I'm afraid it doesn't work like that.
      
      EF: What do you mean, it doesn't work like that? It's what the government does.
      
      Mr B: With respect, you're not the government. What's that old saying, how does it go? If you owe £5,000, then it's your problem. If you owe £5 trillion pounds, then it's the bank's problem!

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         CASE1WORKERposted 13 years agoin reply to this

         I have just looked at the austerity measures- they make your eyes water- but what is the alternative?
         I reckon the greeks will vote no in the referendum, greece will default and what then?

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            EmpressFelicityposted 13 years agoin reply to this

            I wonder what's the worst thing that could happen if they do default and even come out of the Euro?
            
            Is there any point in actually having a Euro? I've never been convinced.

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               CASE1WORKERposted 13 years agoin reply to this

               I think that they were too quick to let people into the Euro.
               it is probably a good thing we are out of it
               I think the EEC will crumble and it will be one of those turning points in history.

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   Joe Badtoeposted 13 years ago

   Greece the first of several countries in EU to fall I fear - Italy, Portugal, Spain all struggling and all in debt to imaginary money that lenders wish to make real. Incompetent governments and banks have contributed to this financial disaster and as usual its workers/poor who bear the brunt of such greed from above. France and Germany stand to lose everything if Euro collapses and there appears to be people out there who'd like this to happen. Will US benefit from the collapse? The whole affair stinks of malpractice and political scheming -Banks are terrified of losing trillions in investment yet the idea of lending money at high interest to countries already in debt and therefore risky borrowers seems logical? The alternative is to plunge nations into relative poverty until debts are paid. Still capitalism works I guess.
   
   Never mind the people its the power of the few that counts...for the moment.

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4. 67

   2uesdayposted 13 years ago

   I am concerned that all of this chaos may begin to affect the Greek tourist industry and the islands really need that income.
   
   Businesses such as restaurants, bars and holiday accommodation are often run by very hardworking families as a family business. If they have to close then the whole family is affected from grandma down to the youngest. They work so hard in the holiday season to cover their costs and to build a future for their family. It will be a tragedy if the younger Greeks have to leave and find employment elsewhere. There are islands where this has happened in the past. I hope the future is brighter for them than it looks at this time. The Greek people deserve a happy future their past is full of upheavals.
   
   The general feeling I got when visiting the islands was that they disliked the Euro and were reluctant to relinquish their own currency. Often they blamed the Euro for increased prices.

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   2uesdayposted 13 years ago

   As an after thought, China is 'holding' the debt with some of the loans/debts of other countries maybe that will happen again in this situation.

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   Paragliderposted 13 years ago

   Sorry for disappearing after starting this thread. Work called
   
   For the Greek people, it seems to be lose-lose. If they vote yes, they're in for years of hardship and saddled with a huge debt to the Eurozone bailout fund. And if they vote no and default completely, they're starting again outside the Eurozone with a drachma currency that nobody would want to invest in. Apart from becoming a very cheap tourism destination, it's hard to see how they are going to move forward.
   But by forcing them to choose between dreadful options, the PM has shifted responsibility to the people. I think it's a pretty cynical move on his part, but I bet the French and German people aren't half as angry with him as the financial elite are!

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      Hollie Thomasposted 13 years agoin reply to this

      I thought that it would be inevitable that Greece would eventually default on their debts. Perhaps I'm being over optimistic, but I do think that Greece could use the referendum for greater bargaining powers when dealing with their creditors.

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      EmpressFelicityposted 13 years agoin reply to this

      I think the drachma option is probably the better one. They'll be in a bigger hole to start with, but at least they won't be beholden to the EU and {{{{{{{shudder}}}}}} the IMF for eternity.
      
      I don't envy them though. That could be the UK or any country in Europe in a few years' time.

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   Greek Oneposted 13 years ago

   I was never one to support him or his party, and I think the manner and timing by which he informed the other leaders is shameful...(as is the evident delay in the vote itself) but it was a genius move..
   
   The riots in the streets grow each day, and so does the anger.  By holding a referendum, he puts the onus on the people and opens up a valve for release of their frustration...
   
   If the vote passes, he can tell the demonstrations to go to hell, the country has spoken and decided the matter.  If the vote doesn't pass, then better that they default now before the other countries give (and lose) more of their money.
   
   Also, by holding the vote, he can structure the issue in stark terms.. do you want the bailout and a 50% reduction in the debt, or do you want to default, get out of Europe and the Euro, and the chaos that will entail.
   
   If 40& of the populous already supports the deal despite the hardships, then the vote should pass when framed as a "Europe or bankruptcy" choice

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   Paragliderposted 13 years ago

   Yes, except that the real choice might be bankruptcy now or bigger bankruptcy later. The bail out gives no guarantee of recovery in the foreseeable future.

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      Greek Oneposted 13 years agoin reply to this

      but he won't phrase the question that way

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         Paragliderposted 13 years agoin reply to this

         Of course not, but the 'vote no' campaign will

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            Greek Oneposted 13 years agoin reply to this

            I think that the government would want to have that debate...
            
            The No side would point unsustainable economic conditions, the Yes side would point to the danger / fear of the unknown and even worse conditions, removal from the EU (if not in reality, then in all but name), and the abandoning of Euro.
            
            At least think that is what Papandreou is betting on.  It's one thing to protest against the bad times, its another to have to physically act to reject money and plunge yourself into the unknown.
            
            At any rate, that is the debate that the government wants to frame.

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               Paragliderposted 13 years agoin reply to this

               Agreed, but the bail out isn't really an offer of money. It's an offer of debt, a commodity Greece is already wallowing in. Why would they want more?

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                  logic,commonsenseposted 13 years agoin reply to this

                  Maybe because they owe it?
                  Should take a page out of Irelands handling of their debt crisis.  Could learn a thing or two.
                  Greece is just another symptom of what happens when people demand more benefits and handouts from the government.

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                     Paragliderposted 13 years agoin reply to this

                     They owe what they have borrowed, not what they haven't yet borrowed. My question was, why would they want to borrow more?
                     And you are over simplifying things. One of Greece's biggest problems is non-payment of taxes.

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                        Greek Oneposted 13 years agoin reply to this

                        well, that wasn't the question i was answering... I was talking more about the strategy Papandreou was taking and the reasons why, not whether or not the deal should be approved or not.

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                           Paragliderposted 13 years agoin reply to this

                           You're responding to my comment to logic-commonsense. I wasn't accusing you of oversimplifying, especially about Greece

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                              Greek Oneposted 13 years agoin reply to this

                              I am to distraught at the money my people owe to be able to read correctly...
                              
                              perhaps if people send me bailout money through Paypal, it will easy my mind

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9. 67

   2uesdayposted 13 years ago

   Here is the latest news we have on the Greek crisis.
   
   http://www.telegraph.co.uk/finance/fina … -live.html
   
   I think the referendum will be using up precious time and possibly their neighbor's patience.

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10. 83

    Taliskerposted 13 years ago

    The proposed referendum effectively rids George Papandreou of any responsibility. There's also no real 'choice' for the Greek people. Its black hole A or black hole B.
    The last time there was a referendum in Greece was when they overthrew the monarchy. It's quite a convenient way of leaders stepping out of the firing line!

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    Taliskerposted 13 years ago

    Sorry paraglider, I've just parroted what you've said already . I need to read the comments more thoroughly next time!

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       Paragliderposted 13 years agoin reply to this

       No worries - you said it differently

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12. 83

    CMHypnoposted 13 years ago

    Papandreou is off to Cannes tonight for a showdown with Merkel and Sarkozy - would be a good meeting to be a fly on the wall in.
    
    There have also been rumblings about a possible military coup, as some of the top military guys have just been fired
    
    http://www.dailymail.co.uk/news/article … rkozy.html
    
    (and yes I already know that the Daily Mail is generally hated and reviled, but the article just rounds up the day's happenings vis a vis Greece)

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       Paragliderposted 13 years agoin reply to this

       Wouldn't it just? But what possible argument can there be against holding a referendum? Merkel and Sarkozy, if they oppose this sudden outbreak of democracy, show themselves up as proponents of the self serving financial oligarchy that is methodically strangling ordinary people everywhere.

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          Hollie Thomasposted 13 years agoin reply to this

          Well, most Governments only allow a referendum if they believe it will deliver  the outcome they want.  So it follows that Merkel and Sarkozy will oppose a referendum, because they fear the outcome.

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13. 68

    Ralph Deedsposted 13 years ago

    It will be interesting to see what happens. Perhaps the holders of Greek debt will take an even bigger bath than the 50% in the deal worked out by Sarkozy and Merkel.
    
    Here's an idea for the pension cut back issue:
    
    In the great sweep of history, "retirement" is a recent concept and is still being worked out. Peoples' needs and desires differ. Many employees are living longer in good health, and there is no one magic retirement age that works for everyone. Why not offer a phased retirement option in which, after a certain age, employees who wish to continue working on a reduced schedule could opt for a shorter work week or work year. This could be accomplished by adjusting the individual employee's weekly or annual hours or by a job sharing arrangement with another employee who also preferred to continue working but with a reduced schedule.
    Year ago Walter Reuther, legendary president of the United Automobile workers proposed a "phased retirement" scheme which would give workers whose health permitted and whose financial situation was such that they needed the money for children in college or to pay off a mortgage to continue to work as long as they wished. The auto companies didn't go for the idea and nothing came of it. However, a flexible retirement policy was adopted which allowed auto workers to retire early with a reduced pension.
    
    Seems to me that more than one of the European countries have adopted unduly liberal and costly retirement programs. Incentives for employees to work longer are badly needed in recognition of the need to reduce costs and the increasing average lifespans. Moreover, many psychologists believe that early retirement can lead to depression and premature decline in physical health. Tapering off in one's job or pursuing a second career is more healthful than suddenly stopping working even if finances permit.

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14. 68

    Ralph Deedsposted 13 years ago

    Here's a view from the left:
    
    Greece’s Brilliant Bailout Decision
    
    Greek Prime Minister George Papandreou spooked world markets with his announcement that he would put his country’s euro-zone bailout up to a vote. And that’s exactly what he wanted, writes Robert Kuttner of The American Prospect. Germany is standing firm on the conditions already set on the bailout—including a 50 percent reduction in Greek debt held by banks—but Kuttner says the banks are playing with the fine print in ways that could put Greece right back in the austerity trap. Papandreou’s proposed referendum is a message to Europe’s financial and political leaders that they can’t alter the terms of the deal by stealth, because if it’s altered much more, default might start to look like a better option. “Papandreou’s is a brave, nervy, high-stakes move,” writes Kuttner, “and one that deserves our respect.”
    Read it at The American Prospect
    
    
    
    http://www.thedailybeast.com/cheats/201 … at%20Sheet

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    Joe Badtoeposted 13 years ago

    Looks like no referendum and I'm hearing Papandrou has resigned (ie told to go for daring to challenge Germany/France over debt). So the country that founded democracy has now watched it being eaten alive by the IMF. If no uprising stems from this extraordinary democratic abuse of a country we may as well switch off the lights hand over the keys and put on a slave outfit. Who's next on the list?

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       Paragliderposted 13 years agoin reply to this

       Exactly. The IMF is a predator posing as a beneficiary. Who's next? Italy has got to be worried

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          Joe Badtoeposted 13 years agoin reply to this

          Hey Para how are you? I'm hearing Italy's economy is sliding down faster than Berlusconi's tan in a sauna :-0

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             Paragliderposted 13 years agoin reply to this

             Hi Joe - watching all this happening from the relative isolation of Qatar is interesting. The many British ex-pats here paint a pretty grim picture of life back home. Oh well, I'll see for myself at Christmas.
             Italy, yes, watch this space...

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    maven101posted 13 years ago

    If the Drachma comes back they will hurt more, they will be punished by the EU, their debts will be bigger than if they stay......but with the Drachma, the tourists will flock back in...Once again cheap holidays, once again cheap stable real estate for foreigners, and once again no tax controls.....just the way the Greeks like it...
    
    George Papandreou has just shown us that democracy is alive and well. Those who think he should be listening to Merkel and Zarkozy instead of his people might be a little too obsessed with their portfolios.

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       uncorrectedvisionposted 13 years agoin reply to this

       The risk of returning to the Drachma is the social upheaval that has, heretofore, only hinted at by the violence in the streets.  Greeks have come to expect a standard of living and retiring that was unheard of just twenty years ago.  The Greek people are used to the comfort of the state preserve.  That preserve has been maintained by a bogus economy built on corruption, money laundering for the Germans and massive deficits.  It can no longer be maintained despite the violent resistance to its reform.  The subsequent upheaval and the hardship through out Europe from the collapse of the ill conceived Euro will not make Greece an attractive or practical destination for a generation.
       
       The bill, world wide, for the profligacy of the welfare state is coming due.  We are facing a generation of global economic hardship - as long as that old way is not totally, thoroughly and completely repudiated and abandoned.

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          EmpressFelicityposted 13 years agoin reply to this

          Money laundering for the Germans? How do you mean?

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             uncorrectedvisionposted 13 years agoin reply to this

             Multiple deals to "buy" but not really "buy" German manufactured equipment.
             
             http://www.defensenews.com/story.php?c= … ;i=6098571
             
             One of my favorite historians' take on Greek tragedy.
             
             https://www.facebook.com/topic.php?uid= … ost=603751

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                EmpressFelicityposted 13 years agoin reply to this

                Bribery and corruption in arms dealing. My word, you do surprise me - not!
                
                It strikes me that the only difference between the Greek economy and - say - mine (the UK's) is that our public sector and welfare state is perhaps a bit less bloated and maybe our civil servants do a bit more work. Maybe. There's probably not a lot in it.
                
                
                

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                   uncorrectedvisionposted 13 years agoin reply to this

                   Britain is in trouble.  The character of the people is perhaps the only, albeit thin, insulation against the brand of disaster Spain faces.  The Spanish economy, on paper, looks stronger than Britain's.  But I suppose that is Margaret Thatcher's fault just as the current trouble in the American economy is Ronald Reagan's.  It cannot possibly be the fault of economic theories rooted in a deeply flawed understanding of human nature or natural law.

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                      EmpressFelicityposted 13 years agoin reply to this

                      If you're hoping for an argument from me on that score, you won't get one.
                      
                      I've long suspected that our economic performance (or lack of it) has relatively little to do with whatever bunch of politicians are in office right now (or were in office twenty years ago).
                      
                      It's got a lot more to do with things that transcend party politics - like fractional reserve banking, international trade, stocks & shares trading, and (regrettably) people's tendency to act like lemmings and buy into whatever "bubble" is being peddled at the moment.

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                         uncorrectedvisionposted 13 years agoin reply to this

                         I was not looking for an argument - I wish to commiserate with you about Britain's bleak prospects.  It is a genuine tragedy.  It is the inevitable decline brought on by government growing ever larger and distant from its people. It has more to do with a basic human failing - we would rather be cared for than care for ourselves.  When healthy people are coddled like the infirm it cripples them.  We have become invalids, infants in a government nursery.  Pets on a government preserve. It is not just Britain, it is every country that supposes that a vast governmental agency should manage our lives and insulate us from the consequences of bad decisions and the hazards of living a free life.
                         
                         It is fear of our mortality that breeds a willingness to let others take care of us.  It is the child's desire to be mothered.  As we strip people of their gumption we strip them of their adult attitudes and sink them into an ever deeper and more crippling infancy.  The government is the most dangerous human institution.

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                            EmpressFelicityposted 13 years agoin reply to this

                            Take away the government and you remove the problem, whatever the 'problem' is?
                            
                            I don't think it's that simple. I think there's a sizeable percentage of people who do indeed have that authoritarian 'take care of me, pleeeeease' attitude that you describe. So therefore if you didn't have governments, something else would rush in to fill the vacuum. Fundamentalist religion. Mafia-style protectionism. Whatever.

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                               uncorrectedvisionposted 13 years agoin reply to this

                               I do not suggest the elimination of government but rather the acknowledgement that it is dangerous, especially when large and uncontrolled.  Containing the powerful and avaricious state is vital.  The goals of government are simple - stability, control and predictability.  To accomplish these it must be all powerful.  That power is at the expense of liberty.  So one may either have severely limited government and liberty or vast and powerful government and servitude.
                               
                               Fundamentalism or Mafia-ism are just other forms of government ultimately seeking the same thing only by different means and with different uniforms.  How was Stalin's Russia so different than Mussolini's Italy, Hitler's Germany, Hussein's Iraq or the Mullah's Iran?  I would dare say none of us would want to live in any of them and for the same reasons.
                               
                               The tyrant is the tyrant.  His cupidity varies in its degree not in its presence.

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                               Hollie Thomasposted 13 years agoin reply to this

                               And how would that "something else" be propelled to power. By election or through oppression? I believe that is something even more sinister then the model of 'fake democracy' that we have now.

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                         Paragliderposted 13 years agoin reply to this

                         Privately owned fractional reserve banking, coupled with debt interest and deregulation inevitably produce the conditions that allow all the wealth to be sucked up to the top of the heap. That is a far bigger problem than the welfare state. (I'm agreeing with you here and disagreeing with Uncorrected Vision's old fashioned notion that it's all about left-right politics).
                         You know, in the late 60s, the 7/84 theatre company was established because people were outraged that 7% of the population (of Britain) owned 84% of the wealth. Where are we now? 1/99, or maybe 2/98? Serfs and masters all over again.

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          maven101posted 13 years agoin reply to this

          I agree Socialism and all its various incarnations eat themselves eventually...But I think you underestimate the adaptability of people in times of stress and loss of state-bred benefits...The Greeks will welcome a burgeoning tourist trade, the control of their own currency, and a revitalization in taking personal control of their lives...
          
          Rather than doom and gloom, I foresee a renewal of the human spirit, the rejection of socialism, and a form of Plato's Republic coalescing within, a Republic that seeks justice equally for all citizens...

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             uncorrectedvisionposted 13 years agoin reply to this

             The Greeks abandoned their democratic history.  Before the Euro they were a poor country built on tourism were the Drachma, like the Ruble, was an internal currency that was worthless outside of Greece.  The social order in Greece is dependent on the corruption the welfare state engenders in the populous. 
             
             As for it becoming a vacation destination, this supposes that there will be sufficient disposable income available to the rest of Europe as the remaining Euro-zone rips itself apart creating a new financial crisis in Europe.  French banks have sunk substantial resources into the Greek bailout.  Germany's economy, the most powerful and stable in the Euro-zone, is limping along while bearing the brunt of European laziness on its back. 
             
             Great Britain, though still using its own currency, is inextricably linked to the rest of the EU and therefore the Euro.  Great Britain has its own internal economic problems with a balance sheet that looks more lopsided than Spain's.  Britain is not strong enough to make up for a shaky France or over burdened Germany.
             
             That leaves Italy, the fourth largest economy in the EU. Italy is one of the originally identified countries in deep and genuine trouble.  Italy is too large for any bailout.  How comfortable have the Italians grown over the last twenty years?   The sacrifice necessary to set the economy on the right path will strip Italians of their expected retirement hammocks.  Can that happen without upheaval?
             
             Europe is historically dynamic.  That dynamism is about to return, as it does about once very 30-70 years.

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             Paragliderposted 13 years agoin reply to this

             Hi Larry - I think you could be right about a Greek revival under the drachma. With no political union, the financial union was always going to have winners and losers and Greece was never going to rise to the top in that club. Relegated from the first division, they can do very nicely at the top of the second, alongside their old sparring partner, Turkey.

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          Joe Badtoeposted 13 years agoin reply to this

          Uncorrected Vision - Blaming the 'welfare' state for a global problem caused by greedy corrupt incompetent banks and govts is laughably naive. You seem to want to blame the desires of ordinary people for having a basic level of 'comfort' yet the luxurious lifestyles of billionaire tax evaders and Corporates escapes criticism. No Greek shopworker, labourer, postal worker etc is to blame for the ruination of their country but they are the ones you seem to target for a nations failings. How you can blame such huge financial losses on a Welfare State is plainly ridiculous - A Welfare State should be an intrinsic part of any responsible government. Right wing knee jerk reactionary stuff might fool those that chase the money but I think you'll find far more people can see through the excuses of the IMF/Eurozone who look after interests of bankers and corporates first and continue its corrupt practices. Capitalism has failed millions and benefited a tiny elite who wish to punish those who don't buy into it. Take away the tax owed by billionaire evaders and a Welfare State could be funded without burdening low earners.

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    Ralph Deedsposted 13 years ago

    Goldman Sachs should be made to contribute to the situation. They helped Greece hide the extent of its debt problem as I recall reading.

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    uncorrectedvisionposted 13 years ago

    It is the end of the Euro.  Once the picture becomes clear Greece will collapse as a society, return to the Drachma and trigger an exit from the Euro by Italy, Spain and Portugal.  The Federal Reserve and Obama administration will seek to re-inflate yet another bubble but the House of Representatives will block the Obama Admin's efforts.  The Fed will further wreck the dollar and attempt to pump value into the Euro(this has already been done once.)
    
    The collapse of the Euro is inevitable.  Italy, the eighth largest economy in the world, will sink any hopes of rescuing the Euro when it fails.  These failures are all a consequence of a flawed and fundamental concept of how economies work.  If there isn't a total abandonment of Obamanomics the Untied States will follow within ten years.

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    Ralph Deedsposted 13 years ago

    Floyd Norris, NYT chief financial writer says: "Why not give Greeks their say?"
    
    "This week, it appeared that the prospect that scared European leaders the most was the specter of democracy. When the Greek prime minister, George A. Papandreou, proposed a referendum on whether Greece would go along with the agreement reached at the European summit meeting last week — one that calls for more austerity and that polls say is unpopular with most Greeks — much of Europe reacted with shock and alarm. How dare he do that?
    
    "In the end, he could not persuade his own government, and there will be no vote. That should be a cause for sorrow in the rest of Europe, not joy. There is little reason to think that Greek citizens will be more cooperative now that it has been made clear their opinions are irrelevant to the people who run Europe.
    
    "It is not only the Greek people who should be consulted about the major changes now under way in how they are governed. So should the people of other countries."
    
    "Heretofore, the countries that joined the euro zone did so with the understanding that they could have the best of all worlds — the convenience of a common currency without the economic and political integration that would inevitably be needed if the countries did not pursue similar economic policies. That understanding was wrong...."
    
    More here: [Norris's entire piece is worth reading.]
    
    http://www.nytimes.com/2011/11/04/busin … ay.html?hp

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    Amanda Severnposted 13 years ago

    My gut instinct is that Greece should abandon the Euro, and get out now, while they still can. They should declare themselves bankrupt, and start again with the drachma. It might be absolutely disasterous in the first instance, but further down the line they'll be regarded as trendsetters, when Italy, Spain, Portugal etc, start considering their options.

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       Paragliderposted 13 years agoin reply to this

       I think that is probably best for Greece, though the playground bullies won't like it. They haven't finished squeezing the pips dry yet.

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