Someone explain the Greek economic crisis to me

I don't quite get it. I was just watching the news and seeing all these people rioting in Athens because of the austerity measures the greek government adopted. I assume people are mad because certain programs and benefits are being cut. And while that certainly sucks, what do they expect? Greece is broke. Worse, they are in massive debt. They dont have any money to pay for any of those benefits and no one is going to loan them the money. What are they supposed to do? At some point, if you dont have the money and you cant raise it through loans, you cant pay out benefits. So are they rioting because they are pissed at losing benfits or are they rioting for some other reason?

A lot of Greece's problem is tax avoidance. It's become part of the culture, and there's a huge black/gray market. Most of the austerity measures are doing things like lowering the minimum wage, raiding pensions, and the like while not addressing the core problem.

mattbbpl

[QUOTE="mattbbpl"]A lot of Greece's problem is tax avoidance. It's become part of the culture, and there's a huge black/gray market. Most of the austerity measures are doing things like lowering the minimum wage, raiding pensions, and the like while not addressing the core problem.

lancea34

To summarize: the Greeks got themselves into a bad situation with several poor decisions that wasted tons of money. Ex. They paid their public employees for 14 months of work annually.

Now, Greece is cutting back on these types of measures and even further to actual pay cuts, benefits, etc. to try and balance their budgets.

As a result, people are rioting as the economy has gotten worse due to most of these cuts.

[QUOTE="lancea34"]

[QUOTE="mattbbpl"]A lot of Greece's problem is tax avoidance. It's become part of the culture, and there's a huge black/gray market. Most of the austerity measures are doing things like lowering the minimum wage, raiding pensions, and the like while not addressing the core problem.

mattbbpl

A lot of Greece's problem is tax avoidance. It's become part of the culture, and there's a huge black/gray market. Most of the austerity measures are doing things like lowering the minimum wage, raiding pensions, and the like while not addressing the core problem.

mattbbpl

SNL gave a pretty good explanation of the situation.

A lot of Greece's problem is tax avoidance. It's become part of the culture, and there's a huge black/gray market. Most of the austerity measures are doing things like lowering the minimum wage, raiding pensions, and the like while not addressing the core problem.mattbbpl

As I see it Greece is a country that depends primarily on tourism. The current system favors competition so weak countries like Greece have little places to compete with others in regards to production, they don't produce practically anything so other countries don't depend on them but they depend on others. The current system leaves out whole countries and so they start to collapse. The same with Italy, Portugal, Ireland and I think it will continue happening unless there's a way to make a system that includes everyone.kuraimen

It sounds like you're more interested in laying the blame on other countries as opposed to Greece itself.

No other country forced Greece to spend the amount it did.

[QUOTE="kuraimen"]As I see it Greece is a country that depends primarily on tourism. The current system favors competition so weak countries like Greece have little places to compete with others in regards to production, they don't produce practically anything so other countries don't depend on them but they depend on others. The current system leaves out whole countries and so they start to collapse. The same with Italy, Portugal, Ireland and I think it will continue happening unless there's a way to make a system that includes everyone.airshocker

It sounds like you're more interested in laying the blame on other countries as opposed to Greece itself.

No other country forced Greece to spend the amount it did.

[QUOTE="airshocker"]

[QUOTE="kuraimen"]As I see it Greece is a country that depends primarily on tourism. The current system favors competition so weak countries like Greece have little places to compete with others in regards to production, they don't produce practically anything so other countries don't depend on them but they depend on others. The current system leaves out whole countries and so they start to collapse. The same with Italy, Portugal, Ireland and I think it will continue happening unless there's a way to make a system that includes everyone.kuraimen

It sounds like you're more interested in laying the blame on other countries as opposed to Greece itself.

No other country forced Greece to spend the amount it did.

Greece has the blame too but when the same is happening to several countries then I think it suggests the system is not very well thought out. I'm not blaming one country in particular just how the system works, it will keep producing this same kind of situations. It is unsustainable IMO.kuraimen

Well yes, obviouslly the heavily socialized system is unsustainable, as the PIGS are showing us. They're already highly taxed, so I doubt raising the rate any more will do any good. Seems like they're just going to have to make some sacrifices. I feel bad for them. Hopefully that doesn't happen in the US any time soon.

[QUOTE="kuraimen"]Greece has the blame too but when the same is happening to several countries then I think it suggests the system is not very well thought out. I'm not blaming one country in particular just how the system works, it will keep producing this same kind of situations. It is unsustainable IMO.airshocker

Well yes, obviouslly the heavily socialized system is unsustainable, as the PIGS are showing us. They're already highly taxed, so I doubt raising the rate any more will do any good. Seems like they're just going to have to make some sacrifices. I feel bad for them. Hopefully that doesn't happen in the US any time soon.

[QUOTE="kuraimen"]Greece has the blame too but when the same is happening to several countries then I think it suggests the system is not very well thought out. I'm not blaming one country in particular just how the system works, it will keep producing this same kind of situations. It is unsustainable IMO.airshocker

Well yes, obviouslly the heavily socialized system is unsustainable, as the PIGS are showing us. They're already highly taxed, so I doubt raising the rate any more will do any good. Seems like they're just going to have to make some sacrifices. I feel bad for them. Hopefully that doesn't happen in the US any time soon.

[QUOTE="kuraimen"]Greece has the blame too but when the same is happening to several countries then I think it suggests the system is not very well thought out. I'm not blaming one country in particular just how the system works, it will keep producing this same kind of situations. It is unsustainable IMO.airshocker

Well yes, obviouslly the heavily socialized system is unsustainable, as the PIGS are showing us. They're already highly taxed, so I doubt raising the rate any more will do any good. Seems like they're just going to have to make some sacrifices. I feel bad for them. Hopefully that doesn't happen in the US any time soon.

So is the us system by the looks of itEmpCom

So is the US system in terms of what?

I don't think it is just the socialized part although you can't have strong social systems if you don't have a strong economy. Some countries have strong social systems with strong economies like scandinavian countries. I think it is more to do that there are no way to guarantee that a country is left out of the globalized economy or left at the margin. When that happens there's no way the country can maintain their own population, I think we need more economies that guarantee local subsistence first. We need countries that are mostly self sufficient before we start to make them dependable.kuraimen

Who is trying to make them dependent? The EU?

to explain it simply spend 300% of your taxes, give national employees 15 month salarys each year trick and cheat in every statistic you can over years so it becomes part of culture.

Sry but in my opinion only ppl living behind the moon can really think they are the only ones in the world who have the right of 15 month salarys and going to protest for that ...

Basically, they've run out of kebabs, they're fuked.

People are rioting because as always the middle class will have to pay for a problem created by a whole generation of politicians responsible for monumental blunders. I'm not sure about the specifics of Greece's case, but this is mostly the case with Portugal. After the old regime fell, in 1974, we had a host of politicians, one after the other, that pretty much spent like crazy, riding on ever increasing debt. You may say these are the politicians we voted for, but the truth is that there really wasn't much choice.

Now to the ignorants trash-talking the 14-month salary, what does that have to do with anything? What matters is total yearly salary, they can pay it in 20 salaries for all I care. Again, I'm not sure about Greece's specific case, but yearly salaries in Portugal (where we also have 14 salaries) are quite low by European standards. A fresh-grad in IT will probably make around 20K€/year. Only a fraction of people make more than 50K€/year. Minimum wage is below 500€, VAT rate is 23%, retirement age is 65 years old, so no one tell me we have been living the good life and now we must pay for it (which we actually are).

[QUOTE="kuraimen"]I don't think it is just the socialized part although you can't have strong social systems if you don't have a strong economy. Some countries have strong social systems with strong economies like scandinavian countries. I think it is more to do that there are no way to guarantee that a country is left out of the globalized economy or left at the margin. When that happens there's no way the country can maintain their own population, I think we need more economies that guarantee local subsistence first. We need countries that are mostly self sufficient before we start to make them dependable.airshocker

Who is trying to make them dependent? The EU?

tl;dr

Similar to the US's fiscal situation, but with the added benefits of no monetary policy nor financial clout.

Greece had no business being part of the eurozone in the first place.

Part of the EU? Sure.

Adopt the Euro?

Pretty sure it's because of the economy failing.BranKetra

[QUOTE="BranKetra"]Pretty sure it's because of the economy failing.cybrcatter

.

Sure.

I don't have a single Euro.

Now how do i buy videogames?

Magic!

:P

A fresh-grad in IT will probably make around 20K€/year. Only a fraction of people make more than 50K€/year.

nunovlopes

The system allows such dependency. Maybe we should come up with a system that prevents such dependency and therefore prevents these kind of situations.kuraimen

I have no idea what system you are referring to.

You may say these are the politicians we voted for, but the truth is that there really wasn't much choicenunovlopes

[QUOTE="kuraimen"]The system allows such dependency. Maybe we should come up with a system that prevents such dependency and therefore prevents these kind of situations.airshocker

I have no idea what system you are referring to.

[QUOTE="airshocker"]

[QUOTE="kuraimen"]The system allows such dependency. Maybe we should come up with a system that prevents such dependency and therefore prevents these kind of situations.kuraimen

I have no idea what system you are referring to.

The system allows such dependency. Maybe we should come up with a system that prevents such dependency and therefore prevents these kind of situations.kuraimen

I have no idea what system you are referring to.

[QUOTE="kuraimen"][QUOTE="airshocker"]

I have no idea what system you are referring to.

BranKetra

There is a globalized economic system. Why do you think entities like the IMF and the WTO exist for? They are there to manage how the global economy works.

tl;dr

Similar to the US's fiscal situation, but with the added benefits of no monetary policy nor financial clout.

Greece had no business being part of the eurozone in the first place.

Part of the EU? Sure.

Adopt the Euro?

cybrcatter

I will agree with this and add a culture of tax evasion to boot.

Holy sh*t, E2.

I haven't seen you in ages.

Holy sh*t, E2.

I haven't seen you in ages.

cybrcatter

It's the damn Greek economic crisis...

[QUOTE="BranKetra"][QUOTE="kuraimen"] The globalized economic system.kuraimen

There is a globalized economic system. Why do you think entities like the IMF and the WTO exist for? They are there to manage how the global economy works.

Basically its financial heads were idiots, there's no big thing which you can blame they were just generally terrible. [QUOTE="nunovlopes"]

A fresh-grad in IT will probably make around 20K€/year. Only a fraction of people make more than 50K€/year.

markop2003

Well, obviously I was comparing to European standards. And this is in the capital city, go out of that and it's much lower. Point is, it's not like the country is in this state *because* the people are getting huge salaries (like the people criticising the 14-month salaries were implying), they obviously aren't.

[QUOTE="kuraimen"]

[QUOTE="BranKetra"] There is no globalized economic system. There are international systems such as the Euro, but that's different.BranKetra

There is a globalized economic system. Why do you think entities like the IMF and the WTO exist for? They are there to manage how the global economy works.

[QUOTE="nunovlopes"]You may say these are the politicians we voted for, but the truth is that there really wasn't much choiceCataclism

No, it's not that simple. If you cared to pay attention to what all those parties stand for you'd realize they're even worse! You have left-wingextremists who think we should leave the EU or some other BS "measures", to monastic parties, to parties who think we should lower all taxes and hand-out raises to everyone! Furthermore, many people didn't vote in these governments but you only need 50% to win.

And to top it all, you have all those rating agencies that suddenly throw junk ratings left and right, the same rating agencies that were handing out triple A to really dodgy investments during the subprime crisis. Yeah,suddenly they're now so credible after all the colossal mistakes they made. That has huge impact because it raises the interest rates so it's even harder to get out of this situation.

Oh well, what a mess!

[QUOTE="BranKetra"][QUOTE="kuraimen"]

There is a globalized economic system. Why do you think entities like the IMF and the WTO exist for? They are there to manage how the global economy works.

kuraimen

[QUOTE="kuraimen"][QUOTE="BranKetra"] If it were global, it would all be the same currency.BranKetra

I find it interesting that Greece isn't simply allowed to default at this point. The consensus seems to be that default is inevitable, so where is the motivation to continually bail them out again and again as their economy shrinks?