Greece

[Totoro]

Very good writeup, thank you!

Concerning the trade balance: I wonder how does the US fix this (or any other large country like China)? There are also large differences in economic situation between states, and they share the same currency too.

Is there a quasi-permanent transfer from positive states to negative states? As in, federal taxes are redistributed unevenly?

In Germany I think for example it's done through the tax system. Basically some parts (e.g. Bavaria) pay more taxes than they get in return. Since it's consolidated at federal level "fiscal union" indeed there is no debt accounting.

Note: Not trying to trigger opinions here or what's fair/not fair, just curious about how its done elsewhere currently.

[Meadbh]

Excellent post by MichaelB.

Totoro, here is a link to the transfer system in Canada. Basically, provinces and territories have jurisdiction over certain functions such as healthcare, education and social welfare, which needs are more or less proportional to the population. Federal income taxes, which come disproportionately from more productive areas, are partly redistributed according to those needs.

Federal Transfers to Provinces and Territories

Current national debt to GDP ratio is ~85%. We were doing great until 2008.

Canada Government Debt to GDP | 1988-2015 | Data | Chart | Calendar

All the provinces and territories also service debt. Alberta had actually paid off its provincial debt in 2004, but is now back in the red.

Canadian Taxpayers Federation | The Canadian Taxpayers Federation is a citizen's advocacy group dedicated to lower taxes, less waste & accountable government.

[explanade]

Definitely some US states pay more in taxes than it gets back in benefits from the federal govt.

Some states are net payers and other states are net receivers of federal money.

[ERD50]

Quote:

Originally Posted by explanade Definitely some US states pay more in taxes than it gets back in benefits from the federal govt. Some states are net payers and other states are net receivers of federal money.

True, but all those states are part of the same country and share the same Federal laws and taxes. Social Security retirement benefits are consistent, as one example.

Very different from what is going on in Europe.

-ERD50

[robnplunder]

Quote:

Originally Posted by MichaelB The balance of trade issue is much more difficult to deal with. Perhaps impossible, actually. No member country has a currency that truly reflects the value of their economic production,. Some are wildly overvalued (Greece) while others seriously undervalued (Germany). This creates an imbalance which has no way of being resolved economically and is the critical challenge the EU faces today. It has nothing to do with living within one’s means, it’s a trade flow that is always out of balance. EU leaders don’t know how to talk about it because there is no easy way to deal with it, but it is always present. Treating it as debt between countries that must be repaid is not viable, the inability to reconcile this leads to greater economic imbalance. This is without doubt the EU's greatest challenge.

There are plenty of other countries with similar or worse trade deficit, and learned to deal with it. Some even reversed their trade deficit over short period of time. For some, it took decades. I would not say it is impossible for Greeks to make a dent in their trade deficit.

[NW-Bound]

I saw on BBC Web site a video portraying a single woman with a child who was unemployed and tried to live on 10 euros/week. Some part-time cleaning jobs were all she could find, and the reason she was not homeless was because her landlord let her stay for now. She has no welfare support from the state, who cannot even pay retirees the pension that was promised.

Another BBC article mentioned that in the last 5 years, Greece population has dropped 400,000 by emigration, of which 120,000 are professionals such as doctors, engineers, and scientists. This is for a country of 11 million total. Of the people leaving Greece, nine in 10 hold a university degree and more than 60% of those have a master's degree, while 11% hold a PhD.

It's hard to believe how a bad government can doom a nation to such destitution in such a short time. But it's not the first time, and will not be the last.

For more, see: How bad are things for the people of Greece? - BBC News.

[Meadbh]

Quote:

Originally Posted by NW-Bound Another BBC article mentioned that in the last 5 years, Greece population has dropped 400,000 by emigration, of which 120,000 are professionals such as doctors, engineers, and scientists. This is for a country of 11 million total. Of the people leaving Greece, nine in 10 hold a university degree and more than 60% of those have a master's degree, while 11% hold a PhD.[/url].

Ireland had the highest net emigration per capita in Europe in 2012, despite having had the highest net immigration per capita just six years earlier.
Ireland has highest net emigration level in Europe

47% of emigrants from Ireland in 2013-14 had third level education.
Population and Migration Estimates April 2014 - CSO - Central Statistics Office

We've always been a pretty mobile bunch.
https://en.m.wikipedia.org/wiki/Irish_emigration

[AnIntentionalRoad]

I think the crux of the issue is lack of entrepreneurial spirit and inability for the state to increase the supply of money in the economy, IE they have no control over the Euro, whereas a country like the US or UK can print money to lubricate the economy.

Sent from my SM-T237P using Early Retirement Forum mobile app

[explanade]

But Europe overall isn't that great for entrepreneurship, at least in high tech.

Many of the Europeans who are educated in CS or other engineering disciplines come to the US, either to work for a tech company or start up their own companies.

[aja8888]

Quote:

Originally Posted by explanade But Europe overall isn't that great for entrepreneurship, at least in high tech. Many of the Europeans who are educated in CS or other engineering disciplines come to the US, either to work for a tech company or start up their own companies.

Have a look at this:

https://en.wikipedia.org/wiki/List_o...ies_by_revenue

[explanade]

I'm not denying there aren't big businesses there.

I was responding to the above post about lack of entrepreneurship in Greece.

I think that's generally true of Europe, not because the labor market isn't talented but because it's harder for start up companies to succeed. There isn't the same kind of investment infrastructure for new businesses, like the venture capital available to high tech.

A lot of the companies on that list are former state enterprises which were privatized only in the last 20-30 years.

[aja8888]

Quote:

Originally Posted by explanade I'm not denying there aren't big businesses there. I was responding to the above post about lack of entrepreneurship in Greece. I think that's generally true of Europe, not because the labor market isn't talented but because it's harder for start up companies to succeed. There isn't the same kind of investment infrastructure for new businesses, like the venture capital available to high tech. A lot of the companies on that list are former state enterprises which were privatized only in the last 20-30 years.

Here's only the top 25 hot startups in Europe:

Top 25 Hottest European Early-Stage Companies - Informilo

[explanade]

Interesting, most of those are in the UK (including Ireland).

[Nemo2]

Quote:

Originally Posted by Meadbh We've always been a pretty mobile bunch.

"Meanwhile the wild geese, high in the clean blue air,
are heading home again."

Mary Oliver.

[Meadbh]

Quote:

Originally Posted by explanade Interesting, most of those are in the UK (including Ireland).

Ahem. The UK does not include the Republic of Ireland. Only Northern Ireland is part of the UK.

Republics and monarchies are not compatible.

[explanade]

Ah yes.

Of course Ireland has catered to the tech industry so it's no surprise they have tech startups.

[Fermion]

Quote:

Originally Posted by explanade Ah yes. Of course Ireland has catered to the tech industry so it's no surprise they have tech startups.

Microsoft has a pretty big division there.

[Meadbh]

Quote:

Originally Posted by explanade Ah yes. Of course Ireland has catered to the tech industry so it's no surprise they have tech startups.

True. That has been generations in the making.

Information & Communications Technology (ICT) sector profile - Enterprise Ireland

http://www.independent.ie/business/i...-26714000.html

https://www.siliconrepublic.com/care...-105000-people

I don't think Greece has been working on anything equivalent.

[Totoro]

Quote:

Originally Posted by explanade I was responding to the above post about lack of entrepreneurship in Greece. I think that's generally true of Europe, not because the labor market isn't talented but because it's harder for start up companies to succeed. There isn't the same kind of investment infrastructure for new businesses, like the venture capital available to high tech.

Tis different. Europe sucks for big dotcom style stuff because of the fragmented market and indeed lack of big bucks VC. There were a lot of facebook competitors for example that all got clobbered because they didn't expand quickly enough (netlog, hyves to name just a few).

It's great though for B2B and industrial innovation, also healthcare. Alot less visible and less mega-corps come out of it.

Sometimes invisible successes (Swift for example). Or Angry Birds

And there are huge differences across Europe.

[yakers]

So where is Greece now? Can just kicked down the road or possible improvements on the horizon? What next event will tell whether the bailout has worked or failed?