If the government came along tomorrow, wiped out your debts and let you borrow as much as you want interest free to speculate with in the financial markets that would be unfair, right? It would be unfair to spend taxpayers’ money helping you out as opposed to other people in need, no? When it comes to bankrupcy everybody should be subject to the same rules, right?
What the devil does this have to do with the Euro-zone crisis? You are conflating two totaly seperate issues which involve often-different creditors/lenders. No matter who on the entire planet lent to Greece, or why, or what weird financial instruments anybody came up with, it doesn’t matter! It doesn’t change the fundamental facts that Greece borrowed too much money. And if you don’t like how the government bailed out banks, fine, and I’d agree, but that’s not really relevant to Greece’s situation.
It does matter to the Greeks why they got into the debt that they’re in. They’ve seen a large chunk of money borrowed to bail out bankrupt banks and they’re being asked to pay that back. That chunk of money is very relevant to Greece’s situation, they’d owe a lot less if they hadn’t had to bail their financial system out. They also feel that the wealthiest people in Greek society should bear a little bit more of the debt rather than cutting wages and pensions, increasing consumption taxes etc. while there aren’t any planned income or investment tax increases.
First off, I dispute your vague characterization of the scale you imply. I think you need to back that up with some actual numbers if you’re going to assert it.
Second, Greece’s tax regimen is so onerous that people regularly and routinely cheat just to get by, or more often simply arrange things so that they don’t have to pay tax. Frankly, I’m not sure there are really are a bunch of “Croesus-es” who are supposedly living high off the hog to tax in modern Greece. It’s not really a rich nation, at the bottom of the “wealthy”. It’s also not a hugely stratified society, with only 2.5% in the “bottom” 10% of income and 26% in the “top” 10%". (If that sounds confusing, the CIA World Factbook swaps what people usually think of as the “top and bottom” portions of the income triangle.
It isn’t just a matter of tax evasion (although that is a big problem, particularly among the wealthy). There are a whole slew of legal tax exemptions in Greek law which result in massive amounts of income being subject to no tax whatsoever. For example, the entire Greece shipping industry, which is the largest in the world, is tax exempt. Shares traded on the Athens stock exchange are tax exempt. Capital gains are tax exempt. Dividends received from Greek companies are tax exempt. If Greece were to start taxing those incomes, as well as to crack down on evasion by wealthy earners, it would wipe out most of its budget deficit.
It could also reduce its military spend, which is more than four times the EU average. Oops, except France and Germany are demandingas part of the bailout package that it buy their arms.
Addressing these issues is a more sensible way of reducing the deficit than targetting the lower-paid through public sector wage cuts - which will only reduce tax receipts further, while simultaneously increasing social welfare spend.
Every major economy in the world has had to bail their banking system out to some extent and deal with a global recession caused by the property bubbles and cheap money prevalent in America and Europe in the first seven or eight years of the decade. It’s not like every other major economy had this happen but that Greece’s financial system was so spectacularly run by its participants and regulated by its government that it alone avoided the meltdown. They had the same low Euro interest rates too, their banks made massive numbers of loans (and Greek banks and pension funds bought some of the toxic paper like everybody else) and then the banks made losses.
Anyway :
Many of Greece’s problems stem from problem banks. Greek banks poured money into the capital-starved Balkans to take advantage of the higher earnings potential. However, now that the Balkan economies have stopped growing, the potential for losses is staggering: Banks have extended loans to the region equal to 20% of Greece’s GDP. So, in 2008, Greece followed virtually every other nation as it bailed out its banks that weren’t smart enough to see a recession coming.
The Greek bank bailout cost 28 billion euros, which is equal to 10% of Greece’s GDP.
Googling Greek bank bailout doesn’t work very effectively at the minute for obvious reasons so this is the best I can do. This is from last year too so you can guarantee that there have been more government capital injections into the system since then when Greece hit their funding crisis on the bond markets and their whole financial system started looking shaky.
So they bailed their banking system out by roughly the amount they’re facing as a deficit, and analysts say that Greek bank losses are going to accelerate as the economy tips into wider recession caused by the austerity measures. Greek debt is about 100% of GDP and is predicted in a best-case scenario to hit 150% of GDP in a few years before it starts falling. A big chunk of that 50% increase will be further capital injections by the Greek government into their banking system to keep it solvent.
Greece is a poster child for tax evasion and government corruption.
No - Greece is Tax-Avoidance Central.
Professionals including (especially) doctors only take cash. Tax collectors are notoriously corrupt.
People rightly think that the cuts would be a lot less savage if the middle-classes actually paid their taxes.
Having said that - they cannot expect the EU to pick up the tab for the ridiculous early retirement ages.
Do countries have some sort of inalienable right to exist? Or, like every other economic entity, should they either evolve, or die?
This is utter tripe.
Greek borrowings (of which the massive accumulated debt pile) have Nothing to do with bank bailouts. ZERO, NADA, ZILCH.
The Greek crisis has fuck all to do with your American banking crisis, Jaysus… bloody American navel gazing, the whole world isn’t about the US eh?
The Greek debt was run up all on its own on excess spending on current consumption (the Welfare state), hasn’t a bloody thing to do with fucking banks.
You just talk to yourself because you like what you hear.
You are correct that Greece loses $30,000,000,000 a year in tax dodging.cite.
That isn’t the uber-rich, or big business, that is the ordinary Greek people, and the middle classes, who have resisted all attempts at tax reform, even when the EU kept on telling them that they needed to deal with the issue.
The problem is the Greek people: they want massive social welfare, abundant corruption (try getting planning permission in Greece without bribing a public servant:rolleyes:), and a ridiculously low retirement age, but they don’t want to pay any tax (or rather, they want it all paid by somebody else).
You have doctors who don’t pay any tax.
The problem isn’t the rich, the problem is with the Greeks as a whole being incredibly immature, and refusing to accept that cuts have to happen, corruption has to be targeted, and taxes have to be paid.
Even assuming that 28bn Euro is fully costed (a lot of those bailout estimates are forecasted costs not real outlays) Greek debt stock in 2006 was a staggering 205.7 bn euro; and 2008 it was 237.2, 2009, 273.4 bn. A measly 28bn Euro did not create the Greek problem.
Greek governments fabricating data and spending the past decade pissing away other people’s money created the problem.
Spot on.
Blaming banks, or whatnot for the Greek problem is idiocy. It’s the Greeks themselves.
(and yeah, anytime I do business in Greece I come away thinking, fuck, bloody sub Saharan African countries like Ghana are almost better run)
Well, that certainly settles that! Any more questions? No?
Wistful thinking here … the EU kicks them out and returns the funds deposited by them in their original monetary units and tells them to figure it out and try back later when they have rearranged themselves to actually follow EU rules … sigh
Germany also has a massive welfare state (at least by American standards) and lots of social spending, but Germans understand that doing so takes high taxs and mass compliance with tax law. Germany has every right to be pissed off at Greece.
Greece has always been run the same way. The thing that tipped them into the situation they’re facing now was the property-credit bubble/financial meltdown. The thirty billion is only a small fraction of the total debt but you can say that about any other country too, and you can also blame their debt on expansive welfare states, look at the growth of the government share of GDP in Britain since 1997 for instance. The fact is it’s the events of the past few years that have caused things to get to where we are now. They caused an existing problem to become much worse.
- Tax the rich dry
- _____________?
- [del]Profit[/del] misery
But it’s been that way for a generation, and the protesters can’t see that they did anything different - yet things are different. Consequently it must have been (and indeed likely was) someone else’s fault that the system - deranged though it was, it was more or less sustainable - collapsed. IOW why should they have to pay for a problem they didn’t (directly) cause?
Note I’m not saying their POV is reasonable, quite the opposite. But this thread seems to be struggling for their justification and I believe that is it. Not dissimilar in fact to the teabaggers: raw inchoate anger with no real justifiable cause or possible solution.
The Tea PARTY is peacefully asking for their representatives to spend money wisely. The protesting Greek Communist party is violently demanding more spending. I’d say they are the exact opposite of each other.