Phasmid: Based on the growth rate of the Greek economy, what else? Negative growth rate in this case, of course, and it's not an exact number.
If you want a specific illustration, 354 billion GDP in 2008 to 238 billion (est) 2014. That's actually about a third rather than a quarter, but I like to be conservative about such things.
Then you are making odd assumptions in your calculations, like that Greece would have been able to keep up its economy in the pre-crisis spending levels, had they just chosen another path, whatever that would have been. Apparently you believe the private banks would have kept pumping money to Greece forever, and Greece's loan servicing expenses wouldn't have increased in the process.
Phasmid: Partly fear of the unknown, partly a belief that the IMF etc had their interests if not at heart then at least not as completely irrelevant for the first. For the second, it's questionable whether they genuinely want to stay now, only thing certain is that they want it to look like it's the EU kicking them out because Euro membership is generally popular and they can also blame them for any economic problems too.
LOL yeah right, it is all just show, while they are secretly preparing to leave the eurozone. Like the arguments about sueing ECB if they'd try to oust Greece.
Seriously though, Greece wants to stay in the eurozone as it has been financially a heaven to them. They've received oodles of money from other euro countries over the decades, and no I am not talking about the loan money here from euro banks, but on top of it.
Greece's living standards will be far lower outside of eurozone, but at least then they would be in realistic levels. And who knows, maybe Putin would fund Greece too, but I presume he'd rather do it while Greece is still part of EU, as in having an ally inside, rather than outside, of EU.
Phasmid: Well, it hasn't, whatever they may believe. The way the Euro is built is a loaded deck slanted playing field. The figures I've quoted show it pretty comprehensively.
The numbers above comparing 2008 and 2014? Maybe this comes as a shock to you, but Greece joined EU long before 2008. You cherry picked numbers when Greece was at the top of its spending, and long after it had fallen down from there.
Compare Greece's economy to the time before they were part of EU (how much pensions, wages etc. have increased after that; albeit that was partly funded with cheap loans), and how much Greece has paid towards EU and received money from it during that time.
Don't forget that this pension money is currently for the most part taxpayer's money from other EU countries. Shouldn't I demand that my tax money is spent of Finnish pensions, not Greek pensions? Will Greeks at some point pay our pensions? I doubt it, why would they want to do that, even if they could afford? The sick thing is that we are also living on debt currently, so basically we are increasing our debt in order to pay Greek pensions and public sector wages.
Phasmid: Shrug. That's how the Euro works,
No it isn't how it is supposed to work. See Maastricht Treaty, the part about bailing out other countries in the eurozone.
The main problem with euro is that it had the beautiful idea of everyone trying to keep up and keep their economy in order. Apparently that isn't possible, at least with so wide assortment of countries.
Phasmid: It won't be fun for Finland when you're the weakest economy left and find yourself with exactly the problems Greece has, because they are inherent problems that have not been fixed and give all appearances of not ever being fixed because it's politically inconvenient to do so.
You speak as if euro countries can't affect at all with their own politics, how they run their economy. Finland is not in IMF's leash, yet we are already curbing our spending, while we still can do it on our own terms.
It is true Finland can't print more money on its own anymore, that possibility is gone. If we wanted to keep that, we should have stayed outside of eurozone.
Phasmid: Really though, you have the choice of subsidising a country that has 400 billion euro in debt- at 5% bond rate that's 20 billion euro, near 10% of GDP let alone taxes, in interest alone- or letting them go. They're never going to repay that,
especially when IMF EU policies cripple growth and lead not to 5% growth but 5% recession.
Ah, again the assumption that bigger pensions and more jobs to public sector with debt money are the keys for sustainable economic growth.
Yeah, I guess Greece would have much better chances to pay its debts (at least partly) in the future as long as it was allowed to increase debt for pensions and government jobs. Perpetual motion machine has been invented.
Phasmid: I rather suspect you couldn't find any rebuttal and that is why you cut it and put in a childish paraphrasing instead.
Your main premise was and still is overly stupid: that unrealistically high pensions and big amount of government jobs is somehow the key to ignite sustainable economic growth. That works only as long as you keep pumping money to keep those government jobs and pensions.
Phasmid: Because there is no rebuttal- the whole current dispute is that Syriza wanted to raise money by taxing the more well off while the IMF in particular demanded pensions be cut instead; that is what precipitated the current events.
IMF complained that Syriza was not willing to cut expenses
that will not create sustainable growth (but in the end just increase Greece's debts), and then suggesting to take more tax money from "rich" industries and companies, which will limit the growth of the economy.
If you want industries and corporations to invest more in your country (more jobs etc.), you don't generally try to tax them more. E.g. China and India have examples of that, they have specific industrial zones where international corporations have tax alleviations, and not surprisingly, lots of corporations have invested there.
One thing that Greece should keep is those lower taxes to tourism industry, considering how important tourism is to Greece.
Overall the whole "we will increase taxes" seems quite problematic in Greece, as they are either unable or unwilling to collect taxes. That's also probably why IMF would generally rather see cutting expenses than raising taxes, as the latter either will be collected, or not. No way to know yet. That's the report from the tourists too, quite often you get a receipt which has only part of the bill, or the cash register is in a training mode that will give you a fake receipt that is not registered (the tourist doesn't know that as they can't read Greek). Evading taxes is the order of the day.
Phasmid: Yes, I'm sure that this is all some sort of scam to milk cash off the EU. 35% poverty rate, loss of a quarter of their economy, it's all a way to weasel out of something something. Greeks are actually and already the hardest working in Europe, per the OECD.
Many Cambodians work much harder their whole life in the rice fields than anyone on this forum will ever work. Yet, they don't have Norwegian oil living standards either. Should they? Will you personally subsidize them so that they can reach it?
Also, you keep comparing the pre-2009 living standards to later times when they didn't have cheap loan money all over them anymore. Oh no, the economy collapsed from the times when it was based largely on taking debt over debt.
Phasmid: You aren't going to get the money back, I know it and you know it. So, why not recoup off the banks you bailed out?
So there is no grey area in between? Either all the money is recouped for the last cent, or none of it? You seem to look at it very black and white.
Phasmid: The purpose of the bail out was to help those banks, not Greece
That's your opinion. Another one is that the purpose was to try to calm the eurozone, and in the long run try to help Greece on its own legs again, by other means than just forgiving them all of their debts.
The funny thing is, Greece was already heading to the right direction, before Syriza. No, comparing the economy pre-2009 and 2014 doesn't prove otherwise, as I've explained before.
Phasmid: Want it not to happen again? You need to fix the eurozone. You can't have monetary union without fiscal union, you can't have it without rules everyone follows. If you can't do it, disband it no matter what ideological attachment the Euro has for the pan European movement. Otherwise this will happen again.
I wonder if Greece wants to be in a eurozone where others tell it how to run its economy (ie. your fixed version)? After all, isn't that what they are complaining about now as well?
I personally would rather see the eurozone divide into sub-areas where the countries by default have similar ideas of how to run the economy. After all, if different countries already now have wildly different ideas of running their economies, what hope they would have to agree on strict rules that everyone has to follow? I don't believe in the ideological reasons to keep EU and eurozone intact, no matter the cost. Again, there are alternatives to the two extremes, ie. either a true federation (a bit like US), or all European countries on their own.
