[civil] "Greece moves closer to eurozone exit after delaying €300m repayment to IMF "

[Bereta_Eder]

People in Estonia that I talked to seemed fairly happy with how their government handled the recession. In the meantime, shortly they will probably be richer than greece. Particularly when you consider much of Greece's wealth is based on the phantom productivity of unsustainable borrowing. Maybe try taking a leaf out of their book?

Well I don't think I want my country to have the 5th largest drug addict problem in the whole wide world.

I also have a sneaking suspicion that the estonians weren't too fond of the idea either.


But here's the thing, I can say ha **** you subhuman screw-ups you had it coming.

That would make me a nazi, or an oerdin.


Instead, I try to understand why they went down that slipery road, have compassion maybe help and try not to have that happen to me, if I can.

And that doesn't make me a nazi, or an oerdin.

[regexcellent]

Firstly, what does drug use have to do with economic policy? (spoiler: nothing)

It's entirely due to relatively easy access to fentanyl, which is a completely different regulatory problem.

Meanwhile Estonia leads Europe in economic growth.

[giblets]

That seems low. Does it include government-owned corporations?

I don't think so, but they're not relevant unless they survive on government subsidies.

[PLATO]

It seems to me, after reading everything here, that the Greeks have a primary surplus and the real discussion is on how to structure the pay down of debt using that surplus.

The Greek average retirement age does not seem out of line with the rest of Europe, but it does appear that there may be areas that they can address there.

Greek Government ownership of some corporations should probably be sold...however this is judgemental on my part as I believe private ownership is more competitive than government ownership. Clearly a case by case analysis couldn't hurt.

I don't believe that the IMF or EU has any real desire to push Greece out of the EU and I don't believe Greece has a real desire to exit the EU.

It appears that the economic contraction in Greece has put them up against a wall. To further tighten things that would further shrink their economy is not a place they are willing to go...hard to argue with that.

Can Greece do more with non-monetary policy to encourage growth? Maybe some regulation reform? I haven't seen this topic discussed much and think it would be a good scenario to explore. Maybe attract foreign corporations with long guarantees on no taxes...the employment gains from this should help. Just throwing out ideas....

I also don't believe that anyone is being racist against the Greeks. There is certainly some frustration on how both they and the IMF/EU is handling this in this thread, but I don't think that frustration is based on racism.

Both sides need to give a little more in my opinion, but perhaps not in the ways currently being discussed. I think it was a smart move on the Greek's part to delay the payment. The news tells me that they had the money so it wasn't a postponed default. I believe that in the end there will be an agreement...probably one that nobody is happy with.

[Jon Miller]

I think that the deal should be that Greece improves it's tax system and Europe gives them forbearance.

Tie forgiveness with improvements. Europe has focused on austerity and privatisation, how about instead focus on taxes? Or taxes and privatisation?

JM

[regexcellent]

If Greeks actually paid their taxes the economy would totally collapse. The government is providing more services than the country's economy can support and it has been doing this through borrowing. There is no way to avoid the end of the gravy train.

[Jon Miller]

How do you explain the primary surplus?

Do you just pretend it never existed?

JM

[Hauldren Collider]

I don't think so, but they're not relevant unless they survive on government subsidies.

That's generally the nature of public corporations. At a minimum the subsidies support a layer of unproductive cruft that wouldn't exist without them.

[Hauldren Collider]

How do you explain the primary surplus?

Do you just pretend it never existed?

JM

What are you talking about? Greece's government has been running a deficit since far before the recession.

[giblets]

That's generally the nature of public corporations. At a minimum the subsidies support a layer of unproductive cruft that wouldn't exist without them.

You can't just assume the Greeks are subsidizing publicly owned corporations even though they can't afford it.

[Jon Miller]

What are you talking about? Greece's government has been running a deficit since far before the recession.

Not a primary deficit though. They were running a primary surplus a few months ago. That means they didn't need any loans for running government/etc.

Do you know what primary surplus means?

JM

[C0ckney]

You can't just assume the Greeks are subsidizing publicly owned corporations even though they can't afford it.

i provided a graph from the OECD in post 80 that shows very clearly the percentage of workers directly employed by the government and in public corporations in 2008. considering that fewer than 8% of workers were employed directly by the government in 2008, your figure from post 124 almost certainly includes workers from public corporations.

[C0ckney]

It seems to me, after reading everything here, that the Greeks have a primary surplus and the real discussion is on how to structure the pay down of debt using that surplus.

The Greek average retirement age does not seem out of line with the rest of Europe, but it does appear that there may be areas that they can address there.

Greek Government ownership of some corporations should probably be sold...however this is judgemental on my part as I believe private ownership is more competitive than government ownership. Clearly a case by case analysis couldn't hurt.

I don't believe that the IMF or EU has any real desire to push Greece out of the EU and I don't believe Greece has a real desire to exit the EU.

It appears that the economic contraction in Greece has put them up against a wall. To further tighten things that would further shrink their economy is not a place they are willing to go...hard to argue with that.

Can Greece do more with non-monetary policy to encourage growth? Maybe some regulation reform? I haven't seen this topic discussed much and think it would be a good scenario to explore. Maybe attract foreign corporations with long guarantees on no taxes...the employment gains from this should help. Just throwing out ideas....

I also don't believe that anyone is being racist against the Greeks. There is certainly some frustration on how both they and the IMF/EU is handling this in this thread, but I don't think that frustration is based on racism.

Both sides need to give a little more in my opinion, but perhaps not in the ways currently being discussed. I think it was a smart move on the Greek's part to delay the payment. The news tells me that they had the money so it wasn't a postponed default. I believe that in the end there will be an agreement...probably one that nobody is happy with.

good post although i disagree with some parts (see below), it is at least factually based.

greece's problems stem from the fact that it had a debt it could not pay (caused by lax public finances) and the solution imposed was more debt! the measures imposed caused the economy to shrink by a quarter. greece still, despite a large haircut, has a debt it cannot pay and a far smaller economy. the first step must be to reverse the policies that caused this decline.

the same thing with taxes. it is true that tax evasion/avoidance is a problem, and some more action is certainly needed here, but one doesn't need to a phd in economics to work out what a 25% drop in GDP does to tax revenues.

as for solutions, well my ideal solution would look something like this:

if alexis wanted to be really bold, and say knock 100x the value off european equity and bonds than the vindictive treatment of the greek people ever could, he could default, print a few billion drachmas and decree the legal transfer of all immovable property in greece to the greek people: rented houses and other dwellings to their tenants; workplaces, and their stocks, to those working there etc. he should learn from the bolsheviks and their imitators, and instead of trying to take over capitalism in the name of the 'people', dismantle it entirely.

but remaining within a capitalist context, i would say that in terms of taxes the first priorities must be completing the land registry and starting to move the burden of taxation onto land (this makes tax evasion/avoidance very hard), taxing the church and cutting the military. in terms of growth, this is certainly necessary, but needs to viewed holistically. what is the point of GDP advances achieved by attacking worker's rights and wages, i.e. by making their lives worse? in a default/drachma situation the greek government should prioritise exports and tourism with appropriate investments and incentives in these areas.

finally, a brief word about privatisations it's certainly true that some things are better run privately, and there may well be a few state run enterprises in greece that fall into this category. however, the assumption that state = bad, private = good and idea that anything privately run will be better run is one of the most ridiculous and ruinous falsehoods that plagues the western world. uninformed people often list privatisations as some kind of magic bullet, but rarely do they list what exactly should be privatised, or crucially why and how this would improve things, beyond a vague yet unshakable belief in the god of the invisible hand.

[PLATO]

greece's problems stem from the fact that it had a debt it could not pay (caused by lax public finances) and the solution imposed was more debt! the measures imposed caused the economy to shrink by a quarter. greece still, despite a large haircut, has a debt it cannot pay and a far smaller economy. the first step must be to reverse the policies that caused this decline.

It does seem however, that Greece is still able to produce a primary surplus. I would imagine given the rest of your post that you are advocating this surplus be designated for economic stimulation as opposed to debt reduction. Not sure why a little of both wouldn't be a good idea??

the same thing with taxes. it is true that tax evasion/avoidance is a problem, and some more action is certainly needed here, but one doesn't need to a phd in economics to work out what a 25% drop in GDP does to tax revenues.

I would really need to see the participation rates of earners to really see if there was a correlation. One would assume, however, that as the economy shrunk/tightened that the participation rate of people actually paying their taxes would have shrunk at an even greater rate than the economy did. These uncollected taxes look like they could be a significant issue in meeting debt service or economic stimulus.

as for solutions, well my ideal solution would look something like this:

if alexis wanted to be really bold, and say knock 100x the value off european equity and bonds than the vindictive treatment of the greek people ever could, he could default, print a few billion drachmas and decree the legal transfer of all immovable property in greece to the greek people: rented houses and other dwellings to their tenants; workplaces, and their stocks, to those working there etc. he should learn from the bolsheviks and their imitators, and instead of trying to take over capitalism in the name of the 'people', dismantle it entirely.

but remaining within a capitalist context, i would say that in terms of taxes the first priorities must be completing the land registry and starting to move the burden of taxation onto land (this makes tax evasion/avoidance very hard), taxing the church and cutting the military. in terms of growth, this is certainly necessary, but needs to viewed holistically. what is the point of GDP advances achieved by attacking worker's rights and wages, i.e. by making their lives worse? in a default/drachma situation the greek government should prioritise exports and tourism with appropriate investments and incentives in these areas.

It is hard to imagine that quote in any kind of capitalistic context! I believe that you should not shift the entire burden of taxes to landowners. Two reasons...1.) It simply allows the land owner's to pass the tax on to their renters/lessors. In the case of individuals, it may make housing prohibitively expensive...particularly if they are out of work. In the case of Company's, it is a disincentive to locate new facilities in Greece. and 2.) Governments are usually more responsive when more people share the tax burden. To remove all non-land owner's from the roles would lessen their accountability for supporting various government spending.

As far as adding "The Church" to the tax roles...this would depend on the role "the church" plays in philanthropic activities. Many churches spend a large percentage of their contributions on this and usually distribute it with volunteer workers. Not sure if this is the context you are talking about and if the amount "the church" spends on these kinds of activities is out of line. Certainly some accountability for tax free status would be a minimum.

Military spending is problematic as Greece is a NATO member and is not currently spending the 2% "suggested" amount. However, I am sure there are opportunities to look at specializing in some areas and allowing the collective defense posture to pick up on some areas that could be eliminated. I would advocate efficiency over just sweeping cuts.

finally, a brief word about privatisations it's certainly true that some things are better run privately, and there may well be a few state run enterprises in greece that fall into this category. however, the assumption that state = bad, private = good and idea that anything privately run will be better run is one of the most ridiculous and ruinous falsehoods that plagues the western world. uninformed people often list privatisations as some kind of magic bullet, but rarely do they list what exactly should be privatised, or crucially why and how this would improve things, beyond a vague yet unshakable belief in the god of the invisible hand.

I don't really disagree with anything here at all. I do still believe that a case by case analysis by the Greeks on where they can increase competitiveness through sale of government owned corporations is warranted. However, I believe that this is the case everywhere...not just Greece.

[Hauldren Collider]

I think the economic proposals of anyone seriously advocating that one "learn from the bolsheviks", unless such learning is learning in what not to do, can be safely ignored.