Greece - A New Hope

No. That was Spain.

The question is, what the fuck do Greeks produce that the world actually wants? The Italians at least have expensive furniture and cars, but what the fuck do the Greeks do well besides cooking insanely yummy souvlaki, tzatziki sauce, and grilled octopus? If it wasn't for the historical significance of slum-hole Athens or their beautiful islands, they wouldn't even have tourism.

Tourism and shipping. Something like 85% of their economy is services with 15% manufacturing. Thing is if the referendum leads to more civil unrest like when the socialists rioted for five days and burned chunks of Athens, then their tourism industry will go to shit like it did last year.

That's actually something that came up before the January elections: many of the Syria candidates were exactly the people that supported the socialist rioting that drove their tourism industry down just as it had started picking up again.

And that was before Greece actually had to rob it's municipal treasuries and shut down banks, imagine the civil unrest after the referendum.

Frenzied Wombat_sl said:

The question is, what the fuck do Greeks produce that the world actually wants? The Italians at least have expensive furniture and cars, but what the fuck do the Greeks do well besides cooking insanely yummy souvlaki, tzatziki sauce, and grilled octopus? If it wasn't for the historical significance of slum-hole Athens or their beautiful islands, they wouldn't even have tourism.

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"Let's see - Spain for ?300 for a week, or Greece for ?200 for a fortnight?"

Of course, that's only until The Almighty Free Market decides to kill the rest of the PIIGS and then it's cheap holidays all over the Med anyway!

Itzena_sl said:

"Let's see - Spain for ?300 for a week, or Greece for ?200 for a fortnight?"

Of course, that's only until The Almighty Free Market decides to kill the rest of the PIIGS and then it's cheap holidays all over the Med anyway!

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Is the disparity actually that huge? I don't remember Greece being that much cheaper than Spain, but it was like 20 years ago for me. Greece has far nicer beaches but Spanish women are waayy hotter than Greek women. If money was the deciding factor though and I lived in Europe, I'd say fuck off to both of them and just do Thailand instead.

No, it's not.


Yet. Ask again in a few weeks.

Well if they go back to the drachma it'll be like Tijuana but with fat chicks

Khorum, what is Greece's fatal miscalculation, in your estimation? Why are they on the chopping block right now?

They're trying to model the US economy without superpower status or innovation. Service economies only work when you can exportsomethingfrom those services. The Greeks are basically using a modernized bartering system with taxes at this point.

On the near-term it's because the January elections spooked the Troika with Syriza reflecting a sort of bad faith from the Greek electorate. Note that Greece's creditors have shown plenty of flexibility. The last round of haircuts was around 54% and they've even restructured the debt so Greece has until 2054 to pay it all off. But Syriza's landslide victory was a slap in the face to those creditors and much of the market that hadjust started reinvesting in Greece just last year. Folks like WL Ross who invested a couple billion into one of the Greek banks that are now closing their doors:

CNBC_sl said:

"Once there's social unrest, which there will be before too long if this thing continues, no tourist is going to want to go to [Greece]," Ross told CNBC's "Squawk Box" on Monday. "If the Greek people understand how limited those concessions that are requested are, and contemplate going into the abyss on other side, they're never going to pick the abyss."

Last year, the chairman and CEO of WL Ross & Co. and other international financiers invested $1.8 billion in Eurobank-becoming the biggest shareholder of Greece's third-largest bank. He said Monday he made the bet thinking the current government would not be in power.

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But this will keep happening because at the long-term it's a structural problem with the EU itself. It's basically an imperfect trade pact pretending to be a nation-state. Like Palum says the EU is trying to be a federal monetary union but without the hard-fought federal unity. So they have the so-called "Swabian Housewives" and their Scandinavian counterparts turning up their noses on their national siblings. But in real federal unions we have states and provinces like Greece all the time. Mississippi and Alabama in the US and Guizhou and Xinjiang in China. We laugh at them because they're permanently broke, but they get fiscal transfers and other federal subsidies because it's in the national interest that they stay prosperous or the whole union would look like shit.

One of the intresting points in the case of Greece is its glorious display of how the "free market" does not exist.

1) Greece gets help from Goldman&co to cook its books to sneak into the euro group (most of who knows that the books are about as honest as Fox News).

2) Things move along as long as noone cares that much because they are too busy making money on US housing debts and such. Economy is booming across the globe. Anyone who can do the maths without using their fingers and toes knows the economy in Greece is a joke.

3) Crash 2007/2008; Holy fuck, what do you mean Greece cheated? *gasp* We are horrified!

4) Quickly switch out all debt held by banks and financial institutions for taxpayer money! (This is where it stops even pretending to be a free market, in a free market you would have to own up to making out loans to bums you know will never be able to repay them, also that fucking intrest you get for loaning money to someone is because there is supposed to be a RISK involved amongst other things, i.e. you can LOSE YOUR MONEY).

5) Where we are now. Either the EU grows a pair, confiscates all assets held by the institutions who helped Greece cheat and then take a long, hard and realistic look at the situation and cut the debt to a level where there is a chance it might actually be repaid sometime before the year 3000, or it just lets the country fail and then blame Greece for "stealing" the taxpayers money (which the EU happily gave away KNOWING it would not be repaid) and hope the idiots, read; taxpayers, buy it.

It will never be a free market as long as our corrupted leaders gets away with this kind of shit and follows the time-honored tradition of letting the peasants pay.

This is the referendum question the Greek government has come up with:

Should the plan of agreement be accepted, which was submitted by the European Commission, the European Central Bank, and the International Monetary Fund in the Eurogroup of 25.06.2015 and comprises of two parts, which constitute their unified proposal? The first document is entitled 'Reforms for the completion of the current program and beyond' and the second 'Preliminary debt sustainability analysis'."

Not accepted / No
Accepted / Yes

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To confuse things further, the Greek government is campaigning for a No vote to reject austerity but stay in the Euro, whereas the EU is saying a Yes vote is required to stay in the Euro.

LOL I don't know why people need to oversimplify Greece's dysfunctions when they're so well-known and the Greeks don't bother denying them anyway.

The Greeks are notoriously leftist. Syriza is a legit stalinist party that's way left of their usual socialist party (PASOK). That said, that same leftist Greek state apparatus, you know, the same government that's gotten Greece into so much debt by borrowing money to pay its lavish pensions and fighting so long to keep its retirement age at 57, THAT government can't even do the one thing it needs to do to keep running: collecting taxes.

Remember how Greece is about to default this Tuesday if it can't pay the IMF $1.87 billion? Most people would think that's not a lot of money for a western country so Greece might just be really poor. Nope it's not really a lot of money. Not even for Greece.If only Greece would get its shit together and collect the $86 billion in uncollected taxes as of 2014. Yeah:

Wall Street Journal_sl said:

ATHENS-Of all the challenges Greece has faced in recent years, prodding its citizens to pay their taxes has been one of the most difficult.

At the end of 2014, Greeks owed their government about ?76 billion ($86 billion) in unpaid taxes accrued over decades, though mostly since 2009.The government says most of that has been lost to insolvency and only ?9 billion can be recovered.

"Greeks consider taxes as theft," said Aristides Hatzis, an associate professor of law and economics at the University of Athens. "Normally taxes are considered the price you have to pay for a just state, but this is not accepted by the Greek mentality."

Though Greece's rich have often been singled out for not paying their due, the vast majority of tax evasion occurs at the lower end of the income scale, among small and medium-size enterprises, government officials say.

Greeks' innate resistance to taxation is one reason Syriza, the leftist party now in power, campaigned against the tax increases championed by the previous government in the run-up to elections. The party went so far as to embrace a grass-roots antitax movement called "I won't pay."

Syriza would risk a popular uprising by the very people who put it into power if it were to back away from those policies and get tough on taxes, political analysts warn. Even within the government's own ranks, officials say Syriza can't risk tougher enforcement.

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So if Syriza would actually just collect the $9 billion IT KNOWS IT'S OWED for 2014, it would cover over four times the IMF dues and even pay off some of the treasuries that are gonna come calling in July. But since they campaigned AGAINST collecting taxes from the proletariat that hoisted them into power, they'd rather default.

And oh about that "entrenched bourgeois" that socialists usually lump all the cosmic unfairness on? Well remember how 85% of the Greek economy is services? A huge chunk of those services is in shipping. In fact Greece has the largest merchant marine fleet in the world, controlling 16% of the world's merchant fleet. It's so large that shipping is a big part of the Greek mercantile identity. Such a big part that since 1967, THE SHIPPING INDUSTRY IS IMMUNE FROM TAXES, a protection afforded in no less than the Greek constitution. Guess what industry the Greek's wealthiest people are involved in?

"I'm not paying taxes. Germany and France have to pave my roads and mow my lawn. Why is everybody looking at me like that?"

Big Phoenix_sl said:

Kinda hard to have a monetary union when not everyone is on the same page fiscally.

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And worse when you don't have one overriding government. What they are going through is somewhat similar to the US articles of the confederacy and for the same reasons can last when economic times are good but cannot survive downturns the member economies are in simply much to different places for it to work long term.

Unfortunately for the euro's, back in 1787 there were only about a hundred or two men that had to deliberate a new form of government, and maybe a few thousand that had to be convinced. And most everyone seemed to realize that the only thing interstate tariffs were going to accomplish was undoing everything that Washington did in the first place. So they don't get the chance to take that "America isn't a confederacy anymore? Oh. Still don't care" painless route to federalism.

I dunno how you guys are gonna get out of it. Maybe keep kicking greece hard enough until they finally openly revolt and then you can send in the U.N. or something.

I still chuckle that after 2 world wars, Germany finally found a way to control all of Europe and they didn't have to fire a shot ;P