Heh, this forum is a bitch for multiquoting, apologies if I've stuffed it up anywhere.
Phasmid: 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.
timppu: 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.
Nerp. You disputed the figure I gave when you asked me why Greece would be better off if they defaulted in 2009, and that is why they'd be better off. Having a recession from 354 billion gdp due to leaving the euro is demonstrably better than having a recession at 240 billion gdp when leaving the euro- even if you lost 25% of your economy you'd still be ahead of their current position, without exit pending.
As for the pumping money into Greece via borrowing, nerp again. Their debt to GDP ratio barely increased over their time in the Euro, up until the financial crisis. From roughly 1990 to 2007 it stayed around 100%, so both when in and when not in the eurozone it stayed at a similar rate. Unsurprisingly, given that their economy has tanked the ratio is now at roughly 180% of GDP. Top work, Troika! You're as good at economics as your gaming namesake.
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.
Again, no. They had faster growth prior to joining the eurozone, eg 70s and 80s and they've managed total GDP growth of around 10% over their eurozone time, to be generous an overall increase of 1% per year. And they cannot manage their debt effectively because they cannot print currency, only Frankfurt can do that.
For comparison, Denmark (EU, non Euro) has nearly doubled GDP, New Zealand (western, non EU/euro) has near tripled and even Iceland, which defaulted/ repudiated their banks' debt, has grown by 2/3 over that time. 10% unemployment in 2002, 25%+ now, that 35% poverty rate and they're the hardest working in Europe, those that have jobs. That's not financial heaven, not even close. The EU itself might be seen as such, but certainly not the eurozone.
You cherry picked numbers when Greece was at the top of its spending, and long after it had fallen down from there.
Shrug. As above, 1% per annum GDP growth compares extremely disfavourably to others. Feel free to pick counter examples if you want. I wouldn't advise spending too much time, it will be a fruitless search.
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.
Yeah, it isn't how it's
supposed to work, theoretically- but it is not how it
practically works. Theoretically, if I pray at a church I go to heaven, practically though...
Take the Stability and Growth Pact as an example. Germany,
Germany,
Germany has been in breach of it for eight years, France for 12, Italy for every year except 2007, Spain for 7 years; and for the eurozone as an overall economy it has been followed in 2006-7, only,. The rules aren't followed, and they aren't followed by just about everyone. Kudos to Luxembourg and (revised as complying) Finland though, shame they represent the only 2% of the initial eurozone population that has followed the rules.
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.
Well yeah, that's exactly what I said and you disagreed with a couple of lines ago. It doesn't matter if you have rules if they're ignored, that simply means they aren't actually rules.
But in any case, far and away the biggest problem is that the rules cannot really work when the field is slanted. Germany has the biggest economy, euro policy will always be run primarily on how it is performing rather than on how the Greek or Finnish or Austrian economy performs. If you're in a slump while Germany is still growing you're outright fucked, because you cannot take the needed corrective action yourself. Thus you need either full fiscal union, essentially a genuine United States of Europe with aggregated debt and the like, or you need to dissolve the Euro. Because otherwise it will keep happening. But there's no political will for that, of course.
Ah, again the assumption that bigger pensions and more jobs to public sector with debt money are the keys for sustainable economic growth.
45% of Greek pensioners are
already below the poverty line, and you think that taking 200E off them will help things? It'll suck the money out of the hands of the people they buy things off- suck it out like a milkshake, slurp slurp! If you want Greece to be capable of repaying debt stabbing their economy through the eye for narrow economic fundamentalism won't help.
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.
Ah, here's the 'rebuttal'/ answer to my question. Again, 45% poverty rate on pensioners,
already; but they're just creaming it with those "unrealistically high pensions" that the EU- the EU- says are below poverty line, eh?
Honestly, it's burble burble gold plated pensions burble burble unemployed people rorting burble burble but don't touch the rich! from the IMF, and people don't check the facts. Fortunately, I'm willing to help out with the actual facts, and I don't charge either; illuminating the gloom of ignorance is reward enough. I don't particularly blame you for that though, it is widely repeated as 'fact', just by an interested, ideological party that basically nobody bother to fact check.
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.
Are you going to invest in a country which has had 30% GDP decline, really? I mean,
you're complaining about Finnish taxpayers effectively investing in Greek debt, would you do it if you had an option? And the Chinese have heaps of options beyond an unstable country in an unwieldy currency union. In any case, rich greeks have barely been touched by austerity, comparatively, yet the supposed blossoming of free enterprise doesn't happen, so they suck more money out and wonder why nobody wants to invest.
Overall the whole "we will increase taxes" seems quite problematic in Greece, as they are either unable or unwilling to collect taxes.
From the rich though, primarily, and that was due to political nepotism amongst ND and Pasok, something that at least theoretically Syriza doesn't suffer from. In any case, in 2009 their black economy was only 5% larger proportionately than... Germany, so it's hardly the vast beast it's made out to be. Rich greeks have not been taxed much/ had tax burden increased under the ND/ Pasok regimes even theoretically, and that hasn't helped one iota.
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?
Spurious example, as Cambodia isn't european let alone eurozone.
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.
Already rebutted, GDP ratio debt was near constant 1990-2007. Irresponsible borrowing from 2002-8 is a myth, propagated to paper over the eurozone's fundamental problems by shifting all the blame onto Greece. Greece certainly bears much of the blame, but the eurozone inherently disadvantages the poorest members.
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 bail out was for the banks and the financial markets and is what "calming the eurozone" means to all practical considerations, you've just rephrased it. After all, you already accept that you took on the banks' debts because they didn't think they'd get paid back otherwise, that's already admitting it was a bail out.
Even the IMF has admitted that some of their measures were counterproductive and didn't work. Much like the eurozone rules, while there may theoretically have some idea of a Randian Neo Liberal Utopia being established in Greece to boundless economic growth and zero debt in 2025 that's pure theory, it is not practice. I just wish they'd be a bit more practical rather than ideological, it would benefit everyone.
