Greece's inability to own up to their mistakes.

[notorious bum]

The amount of useful information that you can take-away from the average Time mag article is about the equivalent of watching CNN HN for an hour.

I've been hearing these same stories as the OP article for the past year now, it's borderline fluff at this point because for every article that tries to address the EU or the rare article mentioning the activists/protestors, there's 100 of these going in-depth on the anti-immigrant movement.

Time magazine and censorship/misinformation go together like FoD and Japanese porn.

[Mazmaz]

I've been hearing these same stories as the OP article for the past year now, it's borderline fluff at this point because for every article that tries to address the EU or the rare article mentioning the activists/protestors, there's 100 of these going in-depth on the anti-immigrant movement.

I've read this 3 times and maybe I'm still misunderstanding, but are you saying it's fluff because there are more articles going in depth into the anti-immigration movement than there are going in depth about the other problems going on in Greece?

Cause if so, I'm gonna guess there's more articles about it because, hmmm, I don't know, it's a bigger, more shocking problem?

[mightyg]

Obviously Greece's problems are a little more complicated than them simply spending too much and not paying up. Yes they made mistakes (just like we did in the US), but now they're paying hard because letting them off the hook would be devastating to Europe's banking system. It's half the banks that made the loans in the first place's fault mind you. But as is the usual course with loans, the bank takes a smaller loss and the debtor gets F'd in the A. Now 25% unemployment from heavy taxes and cut services/benefits makes for a pissed off population who generally sees themselves as victims of rich people's exploitation (mostly accurate). Think occupy wall street. Then imagine if instead of the last 4 years of slow recovery here in the US, you have a country that has been continually getting worse and worse with no end in sight. Imagine how scary the Tea Party would be under Obama if the US were in Greece's situation.

[Cantih]

Hijacking this for a moment.

http://www.loweringthebar.net/2012/1...-identity.html

Potential math-test question for Greek children: If someone steals nine million computer files containing the personal data of Greek citizens, and the population of Greece is 11 million, what percentage of Greek citizens have had their personal data stolen?

The answer would be 82%, but it turns out to be a trick question.

...

Third, according to some reports, the files "appeared to include duplicate entries," so the actual number of affected Greeks may be lower than 9 million, but we don't know how much lower yet. For now we have to assume the number is 9 million, so your answer should have been that there is approximately a 91% chance that any particular Greek citizen's identity has been stolen. That number is high enough that it seems reasonable to say that somebody just stole an entire country's identity, and to use italics to do it.

(I used bold because our quotes eat italics)

[BaneTheBrawler]

Now the criminal can just get one of those pre-approved credit cards in Greece's name and save them from themselves.

[Salodin]

I was about to say, the criminal is going to be mighty upset when he realized he can't get a credit card cause he took the identity of a Greek citizen XD.

[Pirian]

[Guitarman]

lol ya. You just stole about 20 bucks. GG.

[Cadsuane]

The fact of the matter is, this entire situation can easily be solved by giving European members (Greece, Spain, Portugal, Italy, etc.) funds so they can stimulate their economies and get out of a deflation that is only increasing the size of their debt. After the debt inflation issue is solved, then Europe can reform its monetary system.

It's an easy economic solution, but a politically difficult one, because States like Germany don't want to look like they're giving away hard earned nothern money to irresponsible southern europeans or else risk losing elections, which drags this whole problem on for much longer than it has to. In the mean time, crime and suicide go through the roof in places like Greece, because some people get a sexual thrill from watching the "bad guys" suffer.

From a fiscal standpoint, yes it's usually the case that you're right and some fiscal floodgates should open to stabilize demand and stave off a recession. However, consider that the 15 or so years before the recession were good years economically for the west but not that great in most of Europe given the depth to which government fiscal gas pedals had been pressed, which was of course exacerbated by the peculiar monetary mechanics that comprise the euro as a currency as you've mentioned. So you have a problem as a state when you play a close game fiscally but then your economists are scratching their heads looking for fiscal multiplier effects that no longer exist and wondering where the fuck the aggregate growth is this year. It's a stack of cards which stood more or less teetering until the fateful and mysterious events of 2008 and forced one of two cards to played; austerity or more fiscal expansion.

One problem with fiscal expansion is that even in the short to medium term, you can affect demand with Keynesian voodoo, keeping capital and labour employed, but you can't change the fundamental fact about economics (that some would do well to remember) that all wealth is real; for anyone anywhere to have stuff (derive utility from goods) someone else had to sacrifice scarce time and energy and other stuff to give it them in exchange for some other stuff or time or energy that they had to give up. The problems with Greece and the rest of the underperforming euro zone problems don't cease to exist with political solutions, but rather when they begin to produce more wealth. Basically the idea is that it's largely accepted that Europe's problems are not so much due to bad policy but rather from more deep seated structural defficiencies, now matter how shrill you scream neo-liberalism.

Which is why the prevalent opinion on situations like these is that the fiscal rope has run out for countries like Greece. I mean, technically it ran out 4 or 5 years ago really but the euro's sluggish interest rate fooled everyone. There are about a million reasons not to believe that fiscal expansion will result in boom time in Greece; I'll enumerate two:

1.) It hasn't in the past, and in fact directly contributed to the current mess. National debt in Greece as in Portugal Spain etc. is in part a function of how dismally uncompetitive those economies are, which is in turn caused by the high prices fomented by fiscally undisciplined governments. There is much to be said for the structural spring cleaning that devaluation should cause (liberalization of labour being a big example).

2.) Even granting that it was the right call during the beginning of the debt crisis (dubious), now that the Greeks have finished dismantling the rule of law and the legitimacy of their government, it's just about the stupidest idea in the world. You loan money to governments who you can reasonably expect to turn around and enact a working program, and the Greek program has utterly failed.

I'd just like to add one last thing to point number 2.), before someone says that it wasn't the Greeks who did the dismantling. Quick reality check: yes it was, and the Greeks do have a cultural problem of kleptocracy, corruption, cronyism, an addiction to bad ideology and a frightful lack of respect for law and order. Compare, for instance, the popular disgust heaped upon a protest turned violent in front of Portuguese parliament in Lisbon this week, and how the same topic is treated in the Greek sphere as a national pass time. The unrest in Greece reflects the petulance of a weak culture addicted to unionist fantasies at least as much as it does an inept state addicted to corruption.

Oh and a last last point. It's easy to say that austerity is a matter of political convenience for northern European politicians but it takes either a lot of browbeating a lot of forward thinking for the leadership of an embattled country like Ireland or Spain to enact grueling austerity cuts, which is the opposite of political expediency.

[Milkster]

Closest related thread without making a new one.

LISBON (Reuters) - Portuguese consumer confidence is at record lows, unemployment at all-time highs and the country has launched the largest tax rises in living memory. Yet investors are snapping up its bonds and its international lenders are full of praise.
In perhaps the starkest example of the gap between renewed investor appetite and languishing economies, Portugal has started 2013 on its strongest footing since it was bailed out in mid-2011, with confidence boosted by hopes it will relinquish its lifeline from the European Union and IMF as scheduled.

Investors bought 2.5 billion euros of Portuguese 5-year bonds last week in the country's first issue since its bailout, returning it to the market many months earlier than planned. Struggling Spain and Italy have benefited from similar bond market largesse.
Yet on the streets people are braced for severe hardship in 2013 as they lose up to two months' wages to the tax man after years of grinding austerity.
With almost a sixth of the workforce unemployed and shops and restaurants shut down in record numbers, selling bonds or improving the current account deficit is meaningless to ordinary people.

"The government bangs on about a lot of stuff but down on the ground things are different. The return to the (bond) markets was a farce, it means nothing to me," said Adelino Santos, 54, who works for Portugal Telecom in Lisbon.
"I am bracing myself for the hammering of the tax hikes when they kick in. Unfortunately, I think 2013 is going to be even worse than 2012."
LA VIDA LOW-COST
Fast food chain McDonald's may have best summed up the mood with a new campaign titled "Living La Vida Low Cost" that offers cheap burger meals.

The centre-right government argues that tough austerity, including massive tax hikes this year, is the only way the country can ride out its debt crisis.
It says the medicine has begun to pay off, pointing to sharply improving trade and fiscal accounts, despite the deepest recession since the 1970s promising to drag the country through its third year of contraction in 2013.
Bond investors, responding to the European Central Bank's pledge to backstop the euro zone, are on board, buying Portuguese 10-year debt which a year ago yielded around 18 percent compared with 6.2 percent now. That culminated with last week's 5-year bond issue at a yield of 4.891 percent.

Finance Minister Vitor Gaspar said the bond was issued to show "we have the financial ability to exit the (aid) program successfully. Our view is that at rates of about 5 percent we are comfortably sustainable."
The government hopes the improving financing conditions will gradually trickle down to companies, allowing 2013 to be a turning point and for growth to return next year.


But there are large risks on the horizon, perhaps the most obvious being the yawning gap between the government's and most economists' forecasts for economic output, which could have a big impact on fiscal performance.
"Our baseline scenario is that things will get worse economically for Portugal and market sentiment across the euro zone will get worse, and then Portugal will need a new rescue program when it runs out of money by mid-2014," said Giada Giani, an economist at Citi.
Giani sees a 2013 contraction of 3.7 percent of GDP, far deeper than the government's forecast of a 1 percent fall. The Bank of Portugal expects a downturn this year of 1.9 percent, after contraction of 3 percent in 2012.
If GDP falls short, it could compromise the goal of cutting the budget deficit to 4.5 percent of GDP this year from 5 percent in 2012, which could lead to the EU and IMF demanding more spending reductions as a result.


The government hopes tax revenues will rise more than 10 percent this year thanks to income tax hikes on virtually all workers and on pension income. But last year tax revenues slumped 6.8 percent as the economy contracted more than expected.
"The key worries are the budget execution, the extent to which revenue targets may be missed this time, the extent to which the 'troika' will demand compensation in spending cuts and the political implications of that," said Lefteris Farmakis, an economist at Nomura.
Still, Farmakis thinks Lisbon will not need a new bailout as it is in Europe's interest to push it back to the market, possibly with support from the ECB.


COURT CHALLENGE
Further threatening fiscal performance is a looming decision by the Constitutional Court on tax rises in this year's budget. Several challenges have been lodged with the court by opposition parties and by the country's president.
Antonio Barroso, an analyst at Eurasia Group, said a negative decision by the court was one of the biggest risks going forward. Last year, it ordered the government to reverse planned cuts in civil servants' twice-yearly holiday payments, blowing a hole in the government's accounts and forcing it to hunt for alternative austerity measures.
If the court rules against the government, "what can they do?" asked Barroso. "They have tried everything. On the other hand, if the court delivers a good judgment, it will be a big boost."
It is not clear when the court will rule, dragging out uncertainty.
The government faces another big challenge with a plan to carry out 4 billion euros of spending cuts in the public sector in 2013-14 in order to put state finances on a stable footing for the long-term after the country exits its bailout.


Opposition parties have refused to join a parliamentary committee to discuss the cuts, which many Portuguese see as a further threat to an already diminished welfare state.
"They just asked where to cut. This is not a debate, it is simply imposition," said Armenio Carlos, head of the country's largest union, the CGTP.
But investors have so far shrugged off such concerns, emboldened by the view that Lisbon will not veer off its bailout austerity course. Internal fractures in the main opposition party, the centre-left Socialists, have also dimmed political opposition to the government.
Equally important, a sharp rise in strikes and marches against austerity in the second half of last year appears to have tapered off with no indication of social protests turning into something more serious or becoming violent like in Greece.


"I think they have reached the tipping point, if it hasn't happened now, it won't happen," Barroso said, referring to protest intensifying.

http://news.yahoo.com/analysis-inves...-business.html

[archibaldcrane]

lol austerity