There is no dire situation in Greece. Some Germans freak as usual. I was in Japan when the earthquake and tsunami struck. It was incredibly embarrassing to see my countrymen run away from their jobs and responsibilities in Tokyo because they thought the world had come to an end due to the Nuclear meltdown in Tohoku. They of course conveniently forgot that all the people who worked for them have also families in Tokyo and do not have the choice to run away. Just an example to show some Germans overreact when it comes to ecological and humanitarian issues. Why do you think the Romanian mafia sends so many Roma kids to Germany to beg on the streets... Ditch, you are mixing everything in one pot, I am afraid: You need to differentiate between the general issue of austerity and the need to for reforms. Without reforms NOTHING will change in Greece. On the other hand you need to acknowledge that the implementation of austerity and reforms is fully in the hands of Greek authorities and the government. They can freely decide whom to tax and whom to fire. All Troika did was to postulate that a certain budget has to be reached by a certain date. That the Greek government decided to hurt and harm its poorest and neediest was a unilateral decision by Greece. You won't find any reference by European creditors that states that Europe asked for xxx% tax increases for those living under the poverty line. This shows how ridiculous the Greek government acts and what lies are spread in public media.
volpunter, you won't agree with my reply, nor will you like it very much. The bottom line is austerity only works well in certain situations, in other situations it doesn't work at all, in fact it makes things much worse. Greece must put reforms in place, you'll like that part, but they have already done that. They must be required to show how they can right their economy going forward thirty years. In other words they need a long range plan, and that's what the Euro powers and the Greeks have been working on. The other thing that is needed is the Euro bond. It is simply ridiculous that Germany should lend to Greece at extortionist rates. The rate that Germany can borrow at needs to be available to all EU members! Soros has said, In fact he told the Germans this directly, Germany must agree to the Eurobond or leave the EU. And Soros is right! The other thing required, besides lowering the interest rate on Greek debt to near zero, is a complete restructuring of their debt along with a major injection of euros into the Greek economy. This could very easily be accommodated by the ECB through quantitative easing were there a Euro bond. As it is the ECB is limited to buying Greek Bonds. If that is their only choice then those bonds must be issued at near zero interest rate. Greece needs massive stimulus, not austerity. Germany should learn from the example of the U.S. on how to get out of a deep, deep recession, and it isn't through austerity! If the Germans can not agree to the Eurobond, then they, not the Greeks, must exit from the EU and go back to the Deutschmark. The other countries of the EU will do far better with an integrated fiscal system which requires that there be a Eurobond.
I think the reforms that Greece needs most are the ones that would make it more friendly to business. In that direction, they have a long way to go and really haven't started very far. And of course electing a left/wing socialist government to solve a problem that is largely caused by an unfriendly business environment is like electing the pacifists to fight a war. I agree with this completely. In fact, the 2014 Greek budget worked out to be in surplus other than the interest payments. And there's a morality issue to all this that Germany does not seem to understand. Germany's presence in the EU means that the Euro is a weaker currency than the DM would have been. That makes it easier for Germany to export. (And for the same reasons, it makes it more difficult for the weaker currency countries, like Greece, to export). So Germany owes some of its export strength to Greece's weakness. In addition, those Greek workers that are now working Germany are contributing to Germany's export strength. And it's not just unskilled labor. Young people in Greece (and Italy especially) are taking jobs in stronger parts of the EU after they graduate from college. In other words, Greece and Italy are paying for their education but Germany is then reaping the rewards of their productivity while using that productivity to economically destroy their homeland. No matter what happens with the present problem, it looks like Greece is not improving its ability to attract foreign business and (more importantly) grow its native businesses. All this becomes more and more difficult as the more productive workers become more and more accustomed to working outside the country. Looking 20 years down the road, you can imagine Greece as a country of retired people with the economy of Albania. It will be totally useless to the EU and will probably get kicked out one way or another. But the same thing is happening in other European states. Yes! Austerity only can work for budget deficits if the country is capable of growing through private business. And Greece is in, or close to, "primary budget surplus" which in the case of a modern democracy is the best you can hope for when you're in a deep business recession.
We are completely on the same wavelength! If we can see it, why can't others? There is one business that the Greeks are friendly towards, and that's the Greek shipping fleet business, but in other respects they could certainly improve the business climate, which they need to do if they want to attract capital and create jobs for young Greeks..
Was, and then came Tsipras. I am sure there is no surplus anymore,not even close. "primary budget surplus" is the first step to take for the simple reason that "primary budget deficit" is digging the hole deeper.
Of course you're right, indications are that the primary budget surplus went away these past few months (and it certainly will due to the events of the last two weeks). But even when they had a primary budget surplus, they were still digging the hole deeper (due to interest payments). If they work out a deal on Sunday I think it will simply postpone the bankruptcy and the exit from the euro. But it is normal behavior for politicians to delay unpleasant events.
Yes, I also believe that the Greeks have not seen the worst yet. The shipowners should be tackled. They never ever paid any taxes. Let KPMG, Deloitte or PWC check their books and calculate how much taxes were evaded. Give the auditors a commission for the money they can tax and cease ships if necessary to force immediate payment. And put the politicians who were part of this fraude in prison. I also don't understand why EU, IMF and ECB are not asking Greece to give their harbours as collateral for loans? Especially if they threaten not to pay anything. If you go to a bank you never receive money without a collateral.
i am nobody, the other thing that's not being discussed much is Greece's excessive military expenditures. Of the European members of NATO, they're #1 in per capita military budget. That's ridiculous.