Greece voted against the bailout. F*** Them.

The BBQ Pit
21

In 2012, people were saying if Greece defaulted, some other countries (like dominoes) would fail.
In a slight hijack, I’ve noticed that this isn’t mentioned anymore. Is that still a possibility? Could this cripple the lending chances of other countries that may still be struggling or even cripple the whole EU?

Also, as the markets tumble tomorrow, will anyone here be drinking heavily?

22

China is up right now. Greece has been a problem since 2011, and they are a tiny economy. I don’t think this a surprise orchanges anything. The s&p typically has a 10% correction every 18 months or so. It’s been about 3 1/2 years since our last. This may very well be the catalyst that causes it, but if we do correct, I think Greece is more the excuse than the reason.

23

Thomas Piketty on national debt and a way forward may be interesting to posters. He notes that Germany had much of its debt wiped out and has some other provocative ideas here:

24

Since we have so many economists in this thread, can I ask a tangential question?

In the US, Mississippi and similar states have a GDP per capita of about $30k. Delaware and Alaska are twice as wealthy - they have GDPs per capita of about $60k. These “strong” and “weak” state economies co-exist in a union in which they both use the same currency, which neither of them have any control over. Apparently, this does not cause problems.

Meanwhile, in Europe, the strong Germany economy has a GDP of about US$46k, and the weak Greek economy is on $US26k. Apparently, the fact that Greece can’t devalue its currency is a huge problem for it, in a way that it’s not for Mississippi.

Why is this?

Obviously I know that the Greek government has a problem right now that they’re deep in debt. But - could this same thing not happen to a State government in the US or Australia or some other federated country? Is there a mechanism to deal with it if it does?

25

Because EU is not a “federated country”. Compare how easy it is to move from Illinois to Indiana in the US vs. from Greece to Turkey (or Germany, for that matter) in Europe. Labor mobility is an important steam-blowing-off mechanism.

There is also no equivalent to US federal taxes and no federal distribution mechanism in Europe. Thus, every money transfer is exposed like a nerve under an aching tooth. If, in the United States, every citizen in Delaware knew that he is paying 50% taxes while those in Alabama are paying 20% (and most are not paying and Alabama is not doing anything about it, really), and Delaware is sending money out to support Alabama, regularly, you definitely would have the same problem you’re seeing in Europe now.

26

All Spaniards are thieves ?

27

So that implies that an alternative to the “split off and separate again” model of fixing the crisis, is for the countries in Europe to grow closer still - that some sort of wealth transfer from more wealthy to less wealthy parts should maybe be built into the model.

I understand that a lot of young Greeks are leaving the country already. They’re part of the Schengen zone after all - it ought to be relatively straightforward. Not sure that this actually helps the situation. I know in a lot of poorer countries, exporting workers who send remittances home is an important aspect of propping up the local economy, but I don’t know if expat Greeks are actually doing this

28

It is quite a bit easier when such a wealth transfer, if it is needed, slowly emerges. It is well nigh impossible to create it from scratch.

Note that “labor mobility” does not just mean young people. It means a 40-year-old can pick up and reasonably easily move a thousand miles to a different state for a job. There is no comparison between the ease of moving from Texas to Florida (same language, same, basically, culture, same stores, same products, same cuisine, same school curricula, etc. etc. etc) vs. moving from Greece to Germany or France. Huge difference.

29

Well, the Greek people were promised a higher standard of life, and equal footing with Germans, French and Scandinavians and other European well-to-dos if they signed up with the EU. Now they are having a gun held to their head and being told to accept a lower standard of living and less jobs if they want to still be part of the country club. I suggest Germans and Norwegians and citizens of other wealthy European countries dig into THEIR pockets and help Greece if they want them to stay in the EZ so bad.

30

No, but not all Spanish politicians are either, and the kind of schemes both politicians and men-on-the-street get involved in are the same. They’re gaming the same rules, after all.

31

What’s the huge difference? Eta: oh, language mostly? Surely mentioning food differences is a joke.

32

Norway is neither a member of EU nor a user of the euro.

33

I think it’s hypocritical for the Germans to be such hard asses when Greece was among the nations that helped West Germany when it was deeply in debt. Let’s not lose the fact that those who will be hurt most in the current crisis didn’t have much to do with creating it. I think the international community should team up and forgive some of the debts and restructure the others.

34

In retrospect, Germany and the IMF made a mistake by bailing out the banks who made the loans in the first place. They should have been forced to either absorb the losses by the default of Greece, or agree to restructuring that Greece could keep up with. It is the whole moral hazard issue; privatize the profit an socialize the losses is bad for everybody but the stockholders of the banks. Let the banks fail, and new banks will take their place.

35

My POV was they were bound to go broke no matter what they did. Might as well just do it and get it over with. Going through 5 more years of austerity and then having the vote, bankruptcy, and grexit doesn’t really make sense.

36

Have you ever moved between countries?

I did, twice. I also moved within the same country at least a couple dozen times. It was a LOT harder to move between countries.

37

You mean like Delaware getting $0.32 of federal money on the dollar contributed and North Dakota getting $7.51 per dollar contributed.
South Carolina $3.29, Alabama $2.60…You mean like that?

38

Language, medical systems, school systems… there is a system in place, usually called “Bologna” after the city where its treaty was signed, intended to “converge” our educational systems so that degrees are comparable between countries, but the curricula still differ widely; more so at lower levels.

There are lots of processes that people take for granted until we move. I’ve been in Sweden for a year and I still don’t know where to buy fresh fish :stuck_out_tongue: (attempts to ask my coworkers have received “uh, the supermarket” “it’s frozen” “well, yes!”).

Things that were different the first time I moved to the US, and note that I spoke the language and had a job (grad student and TA at a university) and no dependents:

  • I needed to get a new tax ID,
  • my medical coverage was deemed unacceptable because the policy didn’t list every medical condition known to man and whether it was covered or not (it referenced the Spanish law defining medical healthcare),
  • the coverage my employer required me to get would have been considered insulting back home (female care was limited to abortions - oooook…),
  • banks looked at me like I hadn’t showered when they saw me in person, while showering me with ads for student loans at a distance,
  • the way classes were organized was extremely different from what I was used to. More options, but less compact and with a lot more walking around.
  • My students wouldn’t have recognized self-directed teamwork if it had bit their asses off (the second-generations understood the idea faster but had never encountered in class, only at home; the two exceptions were one of the second-generation students and a half-American half-Spaniard raised in Spain)
  • and viewed the best students as “a danger to the collective GPAs” rather than as “someone to ask for help”
  • the cars were different: automatic barges, mostly in unfamiliar brands. It took me several months to figure out that bigüi meant Buick. By the way, how come almost every car described in a movie is either “a sedan” (no make or model mentioned) or “a '77 Ford” (ok, sometimes it’s a different number)? Speaking of which, even the way car models work was different.
  • a lot of home appliances were different, from washing machines to fridges. I still don’t understand the fixation with dryers in climates where the Fusion Dryer works just fine.
  • the radio stations were much more rigid in their selection of music. Genres weren’t so much separated as kept apart by electrified fences.
    And that’s off the top of my head and more than 20 years later…
39

Great post. Very interesting. Thanks.

40

There’s fresh fish in just about every food store in Sweden. If you tell me were you’re at, I point out the closest ICA or Coop or whatever store on Google maps for you. :slight_smile: