Well, from what it sound like, everybody was dodging every cent of taxes they could while enjoying generous public benefits and retiring at 52 years of age. Surely anybody who thought about it could put two and two together?
But I suppose that, much like the mortgage sector in the US (and there I go now!), you had to figure that no, this can’t last but you kind of hand wave it away with “oh well, something will happen to make it all good in the end” and for good or ill by that time you’ll be cashed out / retired / whatever and can let someone else deal with it.
The ECB better get busy buying eurodebt or things are going to get tricky. I’m guessing the top politicians in France, Germany and other top eurozone nations are going to be shitting themselves this weekend.
This is a problem with central planners everywhere. They work in broad strokes, and have no conception of the real complexity of the system they’re mucking about with. As a result, they soon become acquainted with the Law of Unintended Consequences.
In the sense of “not in agreement at all”, yes. The OTS screwed up something within its jurisdiction. The FSA didn’t have jurisdiction at all in this case. Those are different issues. Might as well complain that the Federal Reserve isn’t dealing with the Greek banks effectively.
Any Greek banks operating in America will be regulated by the Fed and/or the SEC depending on what they’re doing. The Brits are entitled to regulate anybody operating in Britain but the OTS told then don’t worry, we’ve got this covered so they didn’t bother.
So they had some ability to regulate them? And if so they just let them get on with things, which is the point I was originally making. When AIG blew up all the regulators pointed fingers at each other and said they weren’t to blame, somebody else was. But British pols blamed the FSA to a large extent :
On Friday, the Conservative Party Treasury spokesman Philip Hammond called for a public inquiry into the FSA’s oversight of AIG Financial Products in Mayfair. “We must not allow London to become a bolthole for companies looking for a place to conduct questionable activities,” he said.
“This sounds like a monumental cock-up by the FSA,” said Lib Dem shadow chancellor Vince Cable. “It is deeply ironic,” he added, that Brown was in Brussels last week calling for tougher global financial regulation just as the scandal over the FSA’s role in one of the key regulatory failures at the root of the global panic emerged as an international issue.
“We need an inquiry to establish what happened with the FSA’s regulation of AIG’s London operation,” Cable said.
Since AIG’s collapse in September, insurance regulators in various jurisdictions have played pass the parcel, each regulator seeking to distance itself from the CDS firm’s London business, according to politicians in Washington, such as the US Congress’s Waxman, as well as here.
The spectacle is reminiscent of the regulatory response to the collapse in the early 1990s of BCCI, a bank with operations in London, Luxembourg and the Middle East. BCCI regulators in its multiple jurisdictions, including London, dodged responsibility for not spotting BCCI’s $10bn fraud by blaming each other.
On Friday, Adair Turner, the FSA’s chairman, declined to answer questions about AIG’s London operation.
Erdogan of Turkey is in Athens today.
Be interesting to see how Washington and the Eurozone reacts to this.
**Talks on Friday covered the possibility of reducing strategic tensions and cutting defence spending.
Greece, which is in economic turmoil and struggling to reduce its ballooning national debt, spends more on defence as a proportion of gross domestic product than any other EU country.
“I honestly feel national shame each time I am forced to buy weapons we do not need,” said Greek Deputy Prime Minister Theodore Pangalos.
“I know that on the other side of the border too the Turks are also buying weapons they do not need… due to an imaginary threat that arises from a political confrontation, which can be solved and must be solved.” **
Why? Brussels and the US have been trying to get the two to stop behaving like 12 year old children for decades.
Rather more interesting, the Greeks publishing a list of tax dodgers.
Greece names doctors accused of tax evasion
By Kerin Hope in Athens
Published: May 14 2010 22:28 | Last updated: May 14 2010 22:28
Greece’s finance ministry has raised the stakes in its crackdown on tax evasion by releasing the names of more than 60 doctors and dentists facing legal action for underreporting their incomes.
Newspapers published details on Friday of tax filings by more than 60 “Kolonaki doctors” – named after the Athens neighbourhood where many practices are based.
This is disgusting. Greece knows who these people are, but has refused to prosecute them for years. Then the crunch comes and people start rioting, and they just… release their names to the public? Are they looking for scapegoats? Trying to deflect blame by throwing these people to the wolves?
Don’t get me wrong - people should pay their taxes. But the government could have chosen to prosecute them at any time, and indeed could just haul them in now and force them to pay back taxes. Instead, they seem to be using them as ‘the enemy’. That’s typical class warfare crap you expect from places like Venezuela.
I think this may be a harbinger of things to come in several other countries in Europe. I don’t think this is exactly the death-knell of Euro-socialism, but it’s a pretty big wake-up call.
Oh, they’re headed for austerity, all right. The question is whether it’s going to be a controlled austerity that slowly puts their fiscal houses back in order, or whether the political classes will continue fiddling until the system crashes down around them.
The jury is still out on that, but the actions of the Spanish government are a hopeful sign. But they never should have let it get this far in the first place. It’s always much harder to cut entitlements than to avoid giving them out in the first place.
This is not a genuinely Developed Europe political system. Greece is a 3rd World country that the EU let in from some misplaced classical nostalgia. Turkey is more Euopean in political culture than Greece nowadays. (well not really, actually they’re perhaps more or less the same, but the Greeks have less excuses)
Both the Iberians have tried to get ahead of the curve, and the Spanish at least spent their money on real things with long term value - infrastructure, housing etc. that can rebound.
The Greeks pissed it all away on inflated salaries and age 50 retirement. but you see people on this board claiming it was “The Banks” and “The IMF” that are at fault.
I think it was rather amusing that Obama allegedly called Zapatero to have him reign in the debt spending. Obama deficit: $1.5 trillion. Zap deficit: $150 billion. That’s like having Keith Richard tell you to go easy on the drugs after you took a vitamin pill. Still the advice was good.
Mate, the figures that count are Per Capita Debt / GDP and Debt / GDP ratio. Just citing big numbers there isn’t meaningful. The US is not seeing the spreads on its debt that Spain is. Nothing amusing or ironic really.
Class warfare would be confiscating their properties, putting them on trial, taking their assets and putting them in prison. The kind of things that happen to tax dodgers in countries like America or Canada. These guys are being given a nudge to start paying taxes.
All you have in Europe is a variety of countries that are in trouble for various reasons. Spain actually had a budget surplus before the meltdown but their property bubble/foreign capital inflows and the money needed to bail out their banks/revenue crash caused the budget deficit problem they’re facing today. Countries like Germany, with powerful unions and a cradle to grave welfare system aren’t going to change their system at all, it was working just fine before the meltdown. The Germans’ biggest problem is their totally unregulated banking system which has massive debts that they’re currently pretending don’t exist, so Germany really needs more regulation. Despite you wanting to see the end of euro-style social democracies what you’re going to see over the next couple of decades is countries like America become much more like European social democracies, not the other way round. Europe does have a massive problem to deal with with its effed-up single currency though.
