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Old 07-12-2015, 01:27 PM   #541
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I might get flamed for this, but I'd like to see this thread move to a higher plain. Let's keep our political bias in check.
That's all well and good, but isn't the Greece problem at it's essence a political one?
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Old 07-12-2015, 01:30 PM   #542
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Originally Posted by DEC-1982 View Post
... "The desire to help in such situations, whether motivated by politics or not, has already been the undoing of Greece’s attempts to reform its pension system. In 2012, under the terms of its previous bailout deal, the Greek government promised to close one of the most infamous holes in this system: the list of so-called “arduous” professions, whose workers are allowed to retire years and sometimes decades earlier than the European average. Over the years, this list had grown to include some 600 professions—among them opera singers, hairdressers and television anchors—as a succession of Greek governments tried to win their support by letting them retire early.

“This is clientelism at its finest,” said Platon Tinios, a professor at the University of Piraeus, near Athens, who studies Greek pensions. “It is a system that’s completely mad.
...
Moreover, the revised list of “arduous” professions still includes many that do not seem arduous enough to warrant early retirement: workers in food retail, for instance, or the fish, cheese and ham industries.”...
I don't know the reason about ham, but fish and even cheese can stink, so there's that.

Nice! Everybody wins. How can any Greek voter dislike that?

Instead of asking what those 600 arduous professions are, I wonder what unfortunate jobs are not included, the few that were passed over, the ones where people have to work until full retirement age of, what, 62?

Oh, I think I know one. Greek politicians! They would volunteer to work tirelessly till death, sacrificing themselves for society wellness. They will never leave their office.
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Old 07-12-2015, 01:47 PM   #543
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... Over the years, this list had grown to include some 600 professions—among them opera singers, hairdressers and television anchors—as a succession of Greek governments tried to win their support by letting them retire early"...
TV anchors. TV anchors? How many TV anchors does Greece have? If the pols tried to get those few votes, they had to be really desperate.

Oh wait! A favorable coverage from a TV commentator is worth millions of vote.
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Old 07-12-2015, 01:54 PM   #544
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The whole Euro thing to me makes no sense. Why would a country give up the printing press? That is a huge loss of sovereignty.
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Old 07-12-2015, 02:06 PM   #545
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UK suffered GDP drops the first few years after Cameron took over.
Krugman been proved wrong on UK austerity?

Refers Krugman as well incidently. Point is that the UK cut pretty deep as far as I know and is doing fine now compared to other nations. There are some recent articles in the Economist as well discussing this. You could argue that this is despite austerity or because the UK changed its mind on austerity (did it?), I wouldn't know how to control for that.

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Eu growth is much lower than the U.S. since the financial crisis. Why is that? What did they do differently?
I don't know.

One factor could be that on top of the banking crisis there were multiple sovereign debt crises as well (Greece as an example, Ireland too), and with even fewer tools and flexibility than the US to fight it.

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Oh they didn't do massive bank bailouts or a fiscal stimulus or monetary stimulus. Trichet kept rates higher than the Fed and no QE until Draghi started it within this past year.
There were massive bank & insurance bailouts, although not all of it was as visible as in the US. Abn Amro for example was (almost) the largest bank in the Netherlands, they were rescued and nationalized (probably will IPO this year). Same for three financial institutions in Belgium (Dexia, Fortis, Ethias).

An overview from 2008:
EU Nations Commit 1.3 Trillion Euros to Bank Bailouts (Update3) - Bloomberg

More recent overviews
European banks: From bail-out to bail-in | The Economist

European bank bailouts - graphic of the day | Thomson Reuters Blog

I guess most of us here know about the lack of eurobonds, ECB mandate issues and indeed the fights about getting QE going as you point out. That sure didn't help to get inflation back up. To what extent low inflation actually stifles growth is a matter of unresolved debate as far as I know.

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If the EU has growth at all, it's despite austerity, not because of it.
I wouldn't know how to filter the "austerity factor" out. Don't see a cut & dry causation either way.
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Old 07-12-2015, 02:42 PM   #546
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I wouldn't know how to filter the "austerity factor" out. Don't see a cut & dry causation either way.

Good statement. I have opinions on this that favor austerity and a more fiscally conservative slant, but it is impossible for either side to definitively say what causes what, and the truth is - as always - likely in the middle.
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Old 07-12-2015, 02:45 PM   #547
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... Eu growth is much lower than the U.S. since the financial crisis. Why is that? What did they do differently?
There are so many differences between US and Europe that direct comparison is difficult. Demographics is one. And then, the US is "too big to fail" to the whole world.

Who else can run trade deficit year in/year out, and can keep on importing more goodies? Certainly not the Greeks. They wish! Man, it's nice to have people keep sending us stuff.
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Old 07-12-2015, 03:37 PM   #548
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I can understand the issue of trust. What must be going through the mind of the Greek Prime Minister, Alexis Tsipras. Is he going to jettison all his seeming past beliefs that socialism is the answer and embrace market economics for Greece? Can he really get his country to make the tough changes needed for long term growth knowing the short term pain it will cause? Has he really changed or is he just buying time to get back to some past idealistic view how how things should be. Considering his past antics, what is going through the mind of the Prime Minister has to be the most interesting and maybe the most important question right now.
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Old 07-12-2015, 03:48 PM   #549
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Ah, the rest of EU is having the same question: can they trust Tsipras? Nope.

They just gave him a 72-hour deadline to put their requirements into law. And they want state assets as collateral.

From Bloomberg Web site:
Euro-area leaders presented Tsipras with a laundry list of unfinished business from previous bailouts he’d pilloried in opposition and during six turbulent months in office. They gave him three days to enact their main demands into Greek law in exchange for the third bailout in five years.
...
Euro-area leaders also want Tsipras to transfer as much as 50 billion euros ($56 billion) of state assets to an independent Luxembourg-based company for sale and make him fire the workers he hired in defiance of Greece’s previous bailout commitments.
...
Greece needs to pass laws by July 15 to raise sales tax, cut pensions, change the bankruptcy code, safeguard the independence of the statistics office and make spending cuts automatic if the budget misses its target, according to the text presented to leaders.
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Old 07-12-2015, 04:11 PM   #550
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And seems to me one of the biggest questions is about the future of all the unemployed youth. They are coming into a world their predecessors created for them, a word of very few opportunities and they are understandably angry, and will probably get even more so. The big question then: will they drift to the far right, or to the far left, or will there be a clash between those that choose one vs other? We have seen this happen before in Europe during times of economic crisis and the results were never pretty.
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Old 07-12-2015, 04:20 PM   #551
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And seems to me one of the biggest questions is about the future of all the unemployed youth.
And so many of them .. unemployment rates are levels not seen since .. well ever I think:
Europe's Record Youth Unemployment: The Scariest Graph in the World Just Got Scarier - The Atlantic

Many of them will drift northwest geographically (to find work). The ones that stay seem to be going left politically.
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Old 07-12-2015, 04:29 PM   #552
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Current draft also available here:

https://uk.news.yahoo.com/eurogroup-...s.html#GtmH8nx

Quote:
Given the need to rebuild trust with Greece, the Eurogroup welcomes the commitments of the Greek authorities to legislate without delay, by July 15, a first set of measures
This bit seems to indicate a positive direction,

Other items are sometimes a bit derisive and humiliating in wording, but leaves little room for doubt.

It looks like Tsipras has his moment in history right now. I wish him strength and wisdom.
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Old 07-12-2015, 04:32 PM   #553
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Looks like take it or leave it, the leave it being temporary Grexit.

I think Germany really prefers the latter so they made the former really tough for Greece to take.

Whatever the case, this may drag on.

DAX indicated to open down 174 points on Monday.
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Old 07-12-2015, 04:50 PM   #554
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I think it is likely that Greece will (and should) reject it and exit the EU.
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Old 07-12-2015, 05:24 PM   #555
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Current draft also available here:

https://uk.news.yahoo.com/eurogroup-...s.html#GtmH8nx



This bit seems to indicate a positive direction,

Other items are sometimes a bit derisive and humiliating in wording, but leaves little room for doubt.

It looks like Tsipras has his moment in history right now. I wish him strength and wisdom.


I did not read them all.... but do not think many are going to pass....


I also see that the problem is not just passing the laws... but the implementation.... kinda reminds me of a Jeff Foxworthy joke... and I will screw it up royally....

Said that someone came by to repo the car... and unless they are able to pay what they owe they are going to take the car... in the conversation the guy said he would accept a check... Jeff said something like 'a check, I thought you would want cash... I can give you a check"....
Greece will probably just write a check that has nothing behind it...
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Old 07-12-2015, 05:49 PM   #556
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I think Germany really prefers the latter so they made the former really tough for Greece to take.

It's not just the Germans, though they obviously have the most pull.

The Finns are Greece's toughest adversaries | GRReporter.info

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Furthermore, 74% of Finns say that the creditors must insist on compliance with the conditions originally agreed. Only 14% believe that the terms should be renegotiated and Greece's debt reduced.

In Denmark, this percentage is 64%, in Germany - 61%, in Sweden - 53%, in France - 41%, and in the UK - 38%.
and almost all the former communist countries that have joined the eurozone are taking a tough stand as well.
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Old 07-12-2015, 06:01 PM   #557
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It's not just the Germans, though they obviously have the most pull.

The Finns are Greece's toughest adversaries | GRReporter.info

and almost all the former communist countries that have joined the eurozone are taking a tough stand as well.
That should not be surprising. These countries know first-hand that "To each according to his needs" will inevitably lead to more and more needs. And let's not forget that 1/2 of Germany knew how well Communism worked.
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Old 07-12-2015, 07:30 PM   #558
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Ah, the rest of EU is having the same question: can they trust Tsipras? Nope.

They just gave him a 72-hour deadline to put their requirements into law. And they want state assets as collateral.
.
Tspiras has botched these negotiations from the start, but he made a very serious misjudgment at the end of June, when he abruptly left the talks and called for that Greek referendum. Then he went back home and rallied the crowds, calling the creditors "terrorists" who wanted only to "humiliate" the Greek people. That stunt clearly angered many of the European leaders, including Merkel. Well, he got his NO vote, then turned around and presented a new proposal to the EU that was essentially the same as the one the voters just rejected. Meanwhile, the banks are now closed, so the economy is near collapse. So, things are now far worse, as the EU leaders no longer trust him at all (which I can understand). So now they want state assets as collateral for any future loans, which again, is understandable, because if you can't believe the party you are negotiating with will follow through on what they agree to, then you either: 1) walk away, and let the Grexit happen; or 2) you find a way to exert more direct control, to make sure any agreement reached is adhered to. It sounds like the EU leaders have given Tspiras these two options. Neither is very palatable.

Tspiras was very close to getting a much better deal from the EU at the end of June, without all these direct controls, but he chose to abruptly walk away and start the name-calling and grandstanding. Very bad decision, as it will only lead to more pain and suffering for the Greek people now. I do feel badly (to a point) for the Greek people, but you could also argue that they elected this guy, knowing what he stood for and what he was like.
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Old 07-12-2015, 08:04 PM   #559
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Well as the Greeks like to point out, they are a democracy, but unfortunately, in a democracy you never get a government better than you deserve.
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Old 07-12-2015, 08:53 PM   #560
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Krugman is an idiot.
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