A spectre is haunting Europe ...

[Axulus]

And this thread is about the election they just had that repudiated the "turned the deficit around" thing. So now the petulant child's problem is how they are going to ramp up spending while pissing off sugar daddy to the point where he won't give them the money to do it.

Maybe you didn't catch that Greece is running a surplus. That means they have the money to do it. However if the "sugar daddy" insists on taking all the surplus for himself then he is being the petulant child and is working against the health of the Greek economy. Therefore I'm not surprised the Greek people elected a party to stand up to the sugar daddy.

So let me get this straight - first the sugar daddy drives a hard bargain to get repaid. You agree to the sugar daddy's terms. Then, a couple years later, you decide you don't like the terms after all and tell the sugar daddy to go fuck himself after he already gave you want you wanted? In other words, you are someone not to be trusted who pulls out of agreements whenever they become too inconvenient. Rather than doing the honorable thing and not agreeing to sugar daddy's terms and rejecting his offer from the get go if you don't like the terms, you do the dishonest thing and screw over the sugar daddy. And you support this kind of behavior?

- - - Updated - - -

Looks like Syriza is getting things rolling:

New Greek Prime Minister Alexis Tsipras said his party could not disappoint the voters which had elected them.

Greek five-year bond yields jumped to 13.5%, reflecting fears investors may not get their money back.

Share prices also fell for a third consecutive day with the Athens Stock Exchange (ASE) losing more than 9%.

The biggest losers were bank shares, which plunged 26.67%.

In the two sessions since Sunday's election, banks have seen 43% of their value wiped off, with investors fretting that the possibility of Greece leaving the euro would see bank accounts converted back into a new Greek national currency.

And bond yields are now at their highest since a 2012 restructuring which wrote off a large proportion of Greek debt held by private investors.

'Rough'
The dramatic movements came after new Greek Prime Minister Alexis Tsipras said in his first cabinet meeting that he planned to negotiate with creditors over the €240bn (£179bn; $270bn) bailout.

"We are coming in to radically change the way that policies and administration are conducted in this country," he said.

Mr Tsipras has already appointed a team of anti-austerity ministers and pledged to halt the full privatisation of Greece's biggest port, Piraeus Port Authority, a sale made as part of its international bailout.

It also said it would also stop the planned sale of its 51% stake in Public Power Corporation of Greece, its biggest utility.

Shares in the port were down nearly 8%, while shares in the utility dropped 13%.

Mr Tsipras also plans to reinstate public sector employees deemed to have been laid off without proper justification and has announced rises in pension payments for retired people on low incomes.

http://www.bbc.com/news/business-31022209

What more justification is needed other than "our bank account is empty"? It is really little different from theft to take away money you committed for creditors and giving it to public sector employees instead.

But then again, being against theft and respect for agreements and private property rights aren't very high on the leftist priority list.

 

[ZiprHead]

Yes, I'm sure it's just like that.

 

[Horatio Parker]

Maybe you didn't catch that Greece is running a surplus. That means they have the money to do it. However if the "sugar daddy" insists on taking all the surplus for himself then he is being the petulant child and is working against the health of the Greek economy. Therefore I'm not surprised the Greek people elected a party to stand up to the sugar daddy.

So let me get this straight - first the sugar daddy drives a hard bargain to get repaid. You agree to the sugar daddy's terms. Then, a couple years later, you decide you don't like the terms after all and tell the sugar daddy to go fuck himself after he already gave you want you wanted? In other words, you are someone not to be trusted who pulls out of agreements whenever they become too inconvenient. Rather than doing the honorable thing and not agreeing to sugar daddy's terms and rejecting his offer from the get go if you don't like the terms, you do the dishonest thing and screw over the sugar daddy. And you support this kind of behavior?

- - - Updated - - -

Looks like Syriza is getting things rolling:

New Greek Prime Minister Alexis Tsipras said his party could not disappoint the voters which had elected them.

Greek five-year bond yields jumped to 13.5%, reflecting fears investors may not get their money back.

Share prices also fell for a third consecutive day with the Athens Stock Exchange (ASE) losing more than 9%.

The biggest losers were bank shares, which plunged 26.67%.

In the two sessions since Sunday's election, banks have seen 43% of their value wiped off, with investors fretting that the possibility of Greece leaving the euro would see bank accounts converted back into a new Greek national currency.

And bond yields are now at their highest since a 2012 restructuring which wrote off a large proportion of Greek debt held by private investors.

'Rough'
The dramatic movements came after new Greek Prime Minister Alexis Tsipras said in his first cabinet meeting that he planned to negotiate with creditors over the €240bn (£179bn; $270bn) bailout.

"We are coming in to radically change the way that policies and administration are conducted in this country," he said.

Mr Tsipras has already appointed a team of anti-austerity ministers and pledged to halt the full privatisation of Greece's biggest port, Piraeus Port Authority, a sale made as part of its international bailout.

It also said it would also stop the planned sale of its 51% stake in Public Power Corporation of Greece, its biggest utility.

Shares in the port were down nearly 8%, while shares in the utility dropped 13%.

Mr Tsipras also plans to reinstate public sector employees deemed to have been laid off without proper justification and has announced rises in pension payments for retired people on low incomes.

http://www.bbc.com/news/business-31022209

What more justification is needed other than "our bank account is empty"? It is really little different from theft to take away money you committed for creditors and giving it to public sector employees instead.

But then again, being against theft and respect for agreements and private property rights aren't very high on the leftist priority list.

I would guess that Greece is not "too big to fail" which is the right's justification for helicopter money.

 

[Harry Bosch]

Uhhh, yes. If Greece were to "fail" the US economy would survive. And the Greek economy could not meet minimum qualifications required by TARP even if it were "too big to fail".

 

[Loren Pechtel]

An onerous debt is one there is no possibility of being repaid. I doubt the Greek people have much control of their government or its borrowing or spending. The so-called loans ended up in SOMEONE'S HANDS. It is obvious it wasn't the Greek people or there would be a residual wealth circulating in that country today. What we have in Greece is developing nicely in America as well. If the Greek people are not thriving, then the money loaned to their government was stolen in some manner by design...either by Greek oligarchs or foreign interests.

The Greek people still support the welfare state/lack of tax collections that lead to the mess in the first place. So long as this is true they are not victims of bad government, they are victims of their own stupidity.

 

[Trausti]

An onerous debt is one there is no possibility of being repaid. I doubt the Greek people have much control of their government or its borrowing or spending. The so-called loans ended up in SOMEONE'S HANDS. It is obvious it wasn't the Greek people or there would be a residual wealth circulating in that country today. What we have in Greece is developing nicely in America as well. If the Greek people are not thriving, then the money loaned to their government was stolen in some manner by design...either by Greek oligarchs or foreign interests.

The Greek people still support the welfare state/lack of tax collections that lead to the mess in the first place. So long as this is true they are not victims of bad government, they are victims of their own stupidity.

As well, in Greece success is sneered at and the government makes it incredibly difficult to start a business. With that type of culture, they're dooming themselves to remain Europe's basket case. It's part of the reason so many Greeks move their businesses to Bulgaria. Yeah. Bulgaria.

 

[Togo]

The Greek people still support the welfare state/lack of tax collections that lead to the mess in the first place. So long as this is true they are not victims of bad government, they are victims of their own stupidity.

As well, in Greece success is sneered at and the government makes it incredibly difficult to start a business. With that type of culture, they're dooming themselves to remain Europe's basket case. It's part of the reason so many Greeks move their businesses to Bulgaria. Yeah. Bulgaria.

The nearest industrialised country outside the Eurozone. Means they can export without bearing the burden of sharing a currency with Germany, and without risking the fall out from a Greek exit. What's wrong with that?

 

[Axulus]

As well, in Greece success is sneered at and the government makes it incredibly difficult to start a business. With that type of culture, they're dooming themselves to remain Europe's basket case. It's part of the reason so many Greeks move their businesses to Bulgaria. Yeah. Bulgaria.

The nearest industrialised country outside the Eurozone. Means they can export without bearing the burden of sharing a currency with Germany, and without risking the fall out from a Greek exit. What's wrong with that?

How is sharing a currency with a productive and successful country a "burden"? There have been countries that have fucked up their own currencies so badly that people start using US dollars and Euros for their stability, becoming the de facto official currency, all without any sort of agreement with the US or the EU.

In any other situation but a leftist "paradise", a stable strong currency is a good thing and a positive for the economy and the people.

 

[Togo]

The nearest industrialised country outside the Eurozone. Means they can export without bearing the burden of sharing a currency with Germany, and without risking the fall out from a Greek exit. What's wrong with that?

How is sharing a currency with a productive and successful country a "burden"?

It increases the cost of your exports, making your products less competitive. why do you think German exports are doing so well? It's in part because they are priced in a currency that is shared with Greece.

In any other situation but a leftist "paradise", a stable strong currency is a good thing and a positive for the economy and the people.

Stable sure. Strong, not so much. It makes borrowing cheaper, but you can't inflate away the payments if you get into trouble. For ordinary people it makes exports less profitable, foreign goods cheaper (and thus demand for domestic goods falls) and may lead to cost of living increases. It also makes domestic investment less attractive compared to cash instruments. That's why most Western countries don't pursue a policy of keeping their currency as expensive as possible.

 

[laughing dog]

In any other situation but a leftist "paradise", a stable strong currency is a good thing and a positive for the economy and the people.

Stable yes. A strong currency can inhibit exports and induce more imports which may or may not be a positive for the economy and the people.

 

[T.G.G. Moogly]

Imposed by the people bailing them out. If you get into financial trouble and ask your parents for a bailout, you may not like them telling you to cut your spending but they are perfectly right to tell you to trim your budget (especially if you tend to spend more than them of certain things!)

Loaning money to a person is very different that huge banks plunking down venture capital in hopes of a payoff. The money Greece owes to Europe is the latter, not the former. I don't know how people cannot understand this. It's like me demanding money back I lost in the stock market.

- - - Updated - - -

The Greek people still support the welfare state/lack of tax collections that lead to the mess in the first place. So long as this is true they are not victims of bad government, they are victims of their own stupidity.

And lets be fair by stating that so are their lenders.

 

[Trausti]

As well, in Greece success is sneered at and the government makes it incredibly difficult to start a business. With that type of culture, they're dooming themselves to remain Europe's basket case. It's part of the reason so many Greeks move their businesses to Bulgaria. Yeah. Bulgaria.

The nearest industrialised country outside the Eurozone. Means they can export without bearing the burden of sharing a currency with Germany, and without risking the fall out from a Greek exit. What's wrong with that?

The point is that Bulgaria is a former eastern block country which has developed a positive business environment. Imagine all the tax revenue the Greek State loses for its anti-business, anti-competitive, policies.

Bulgaria, along with Cyprus, boasts the lowest corporate tax rate in the EU at 10 percent and starting a new business is easy and cheap. Romania has a flat tax of 16 percent.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_01/06/2012_444995

"Like everyone, I was being really squeezed by taxes and my rent for the gym alone was €12,000 [£10,000] a month. After the first memorandum," he said, referring to Greece's initial €110bn EU-IMF sponsored bailout, "people began being so affected by cuts the first thing they dropped was their membership to the gym. It got to the point where I couldn't afford to pay the rent, or the electricity bills, or the taxes."

A former Soviet bloc state such as Bulgaria offering stability and solace to entrepreneurs such as Agorastos would have been inconceivable not that long ago when Greece, the Balkans' only EU member, was attempting to cast itself as the regional economic leader.
***
The number of Greek firms registered in Bulgaria rose 75% between 2010 and 2012, from about 2,200 to nearly 3,800, according to figures released by the national revenue agency in Sofia. Last year, Greek media estimates put the figure at 6,000 and reported that companies with Greek/Bulgarian ownership surpassed 15,000.

http://www.theguardian.com/world/2014/mar/19/bulgaria-benefits-weakness-greek-economy-aid

If you've ever wondered why so many Greeks succeed in shipping, John Coustas has a plausible theory: "Greek shipping has nothing to do with the Greek state."
***
On top of misguided government spending, "we spent a very long period during which entrepreneurial activity was victimized, during which profit was seen as wrong. It's a very populist approach, to go and tell the people that the rich will pay."
Here, Mr. Coustas is not referring primarily to his rarefied breed, but to the roughly 30% of Greeks who are self-employed—the largest percentage in the OECD. "So the 'rich' is a much more general kind of thing. Anyone who wanted to make an investment here was considered a kind of bloodsucker."

http://www.wsj.com/articles/SB10001424052702303544604576435482470666512

 

[Togo]

The nearest industrialised country outside the Eurozone. Means they can export without bearing the burden of sharing a currency with Germany, and without risking the fall out from a Greek exit. What's wrong with that?

The point is that Bulgaria is a former eastern block country which has developed a positive business environment. Imagine all the tax revenue the Greek State loses for its anti-business, anti-competitive, policies.

Ok, let's imagine it.

These companies are leaving now, not because of tax policies, which you claim have been a constant, but because of the Euro, austerity measures, and threats of a Greek exit. So in the short term, around about zero.

But let's be a bit more generous to your point. Greece has higher taxes. Not all business is leaving Greece, and the books are largely balanced, so it looks like what people are talking about is a worrying sign, rather than a vast exodus. So we have, let's be generous to you again, a small but reasonable handful of businesses who have relocated. We need to work out whether they still would have left if the taxes were lower - probably some would, since Bulgaria also has lower wages and fewer regulations and export controls (non-EU). So the question is whether the taxes that would have been paid by the few businesses that left, that would not have left if there had been a tax break, would be more than the revenue lost by lowering the taxes across the board. And the answer, clearly, is that it wouldn't.

Which makes sense if you think about it. Greece has been descended on by almost every financial expert in the world - they're not lacking for good advice. The chances are good that they know what they're doing.

 

[Trausti]

The point is that Bulgaria is a former eastern block country which has developed a positive business environment. Imagine all the tax revenue the Greek State loses for its anti-business, anti-competitive, policies.

Ok, let's imagine it.

These companies are leaving now, not because of tax policies, which you claim have been a constant, but because of the Euro, austerity measures, and threats of a Greek exit. So in the short term, around about zero.

But let's be a bit more generous to your point. Greece has higher taxes. Not all business is leaving Greece, and the books are largely balanced, so it looks like what people are talking about is a worrying sign, rather than a vast exodus. So we have, let's be generous to you again, a small but reasonable handful of businesses who have relocated. We need to work out whether they still would have left if the taxes were lower - probably some would, since Bulgaria also has lower wages and fewer regulations and export controls (non-EU). So the question is whether the taxes that would have been paid by the few businesses that left, that would not have left if there had been a tax break, would be more than the revenue lost by lowering the taxes across the board. And the answer, clearly, is that it wouldn't.

Which makes sense if you think about it. Greece has been descended on by almost every financial expert in the world - they're not lacking for good advice. The chances are good that they know what they're doing.

You really think that anti-business policies don't drive businesses away?

Greece's rankings in the World Bank's latest annual “Doing Business” survey, published in November, were strikingly poor for a rich, supposedly modern country that has been a European Union member for 30 years. As other governments around the world pushed ahead with liberalising reforms, Greece slipped 12 places in the bank's league table of 183 participating countries (see chart), ending up behind Paraguay and Bangladesh. Opening a new business in Greece is well nigh impossible; closing one is somewhat easier.

“Sometimes you feel stupid doing business here,” says Stefanos Panteliadis, the chief executive of Epirus, a maker of feta cheese in the eponymous north-western region of Epirus. Every year Mr Panteliadis is vexed by the legal requirement for companies to publish their balance-sheets in two national newspapers and a regional one. Although publishers welcome the revenues this outdated rule brings, it is a pointless expense for companies which, like Epirus, make all their figures available on the internet. The only regional paper in Epirus charges local companies even higher advertising rates than national dailies, because they have no alternative.

This is one example of many business-unfriendly laws that are obsolete or so complex that they leave plenty of scope for bureaucrats to interpret them arbitrarily. Greece's previous government, run by the conservative New Democracy party, passed a law on promotional pricing in supermarkets that required goods to be labelled with as many as nine prices, including the cost before and after the promotion, with and without tax, per kilogram, and so on. When the Socialists got in, they made this law more complicated still, sighs Mr Panteliadis.

More taxing than ever

Orsalia Partheni, who runs a fashion retailer and manufacturer in Athens, says that corporate taxes and social-security contributions are the biggest burden on her business. Last year, she was faced with “urgent” taxes, ad hoc levies to alleviate the country's financial crisis, which made a difficult year even trickier. She recently had to close a shop in Nea Erythraia, a fashionable part of Athens. One in every two shops in Kolonaki and Glyfada (two trendy Athens neighbourhoods) has closed, says Ms Partheni. They cannot pay the high rent for the location as well as the additional one-off payments of more than €100,000 that landlords are insisting on passing on to tenants.

http://www.economist.com/node/18396298

It took 10 months, a fat bundle of paperwork, countless certificates, long hours of haggling with bureaucrats and overcoming myriad other inconceivable obstacles for one group of young entrepreneurs to open an online store.

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_21/02/2012_429208

“People are constantly asking questions about where it is most beneficial to start a business,” Sotiris Vasilopoulos, a lawyer, told Kathimerini. “It is not just high taxation that is preventing them from starting up here. It is also the fact that the taxation system is so vague that it does not inspire any trust. They can’t plan how to run their businesses in such an environment.”

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_29/04/2012_439872

The debt crisis simply exposed the rot.

 

[Jarhyn]

Specter, thy name is 'austerity'.

When people do not have the power to satisfy their demand, we call that stagnation and poverty. The cause of bad economic situations is a lack of money in the hands of people who would spend it on things they like, and giving that power instead to people who are only interested in more power being in one place.

 

[T.G.G. Moogly]

Specter, thy name is 'austerity'.

When people do not have the power to satisfy their demand, we call that stagnation and poverty. The cause of bad economic situations is a lack of money in the hands of people who would spend it on things they like, and giving that power instead to people who are only interested in more power being in one place.

When money is borrowed the borrower signs his life away. The deck should not be so stacked. The lender should be made to sign a legal document acknowledging that he fully understands that his loan may never be repaid and that he accepts this risk.

 

[Derec]

Loaning money to a person is very different that huge banks plunking down venture capital in hopes of a payoff. The money Greece owes to Europe is the latter, not the former. I don't know how people cannot understand this. It's like me demanding money back I lost in the stock market.

It wasn't venture capital. If a venture capitalist invests in a country he owns a chunk of it. As an owner he is not protected nearly as well as a creditor. Are you suggesting Germany now owns a chunk of Greece?

And lets be fair by stating that so are their lenders.

At the very least they should refuse to lend any more money. Syriza wants to drastically increase spending and undo most of the reforms of the last few years and also wants Germany et al to pay for their profligacy. Germany should say "keinen Pfennig mehr!"

 

[Axulus]

Specter, thy name is 'austerity'.

When people do not have the power to satisfy their demand, we call that stagnation and poverty. The cause of bad economic situations is a lack of money in the hands of people who would spend it on things they like, and giving that power instead to people who are only interested in more power being in one place.

Sorry, but no. Greece's problems stem from their lack of competitiveness (read: lack of economic productivity compared to the rest of Europe and how slow they are to adjust to new economic situations due to their overregulated labor market) and their government spending far more money than they collected.

Giving them extra money to spend would not fix these issues. In fact, it would exasperate the problem, unless you are talking about a free handout from the rest of Europe instead of a loan at generous repayment terms. And if you are indeed talking about a free handout, then why not for Spain and Italy as well? Where does it stop, and how can the rest of Europe afford it, and why should they?

Furthermore, as has already been posted, Greece is on the path to recovery. Their unemployment went down in 2014 and they had the first bit of economic growth in several years. Their spending was finally kept in check.

 

[Harry Bosch]

When money is borrowed the borrower signs his life away. The deck should not be so stacked. The lender should be made to sign a legal document acknowledging that he fully understands that his loan may never be repaid and that he accepts this risk.

?? You mean like unsecured lending? This happens all the time, but rates are higher.

 

[dismal]

Specter, thy name is 'austerity'.

When people do not have the power to satisfy their demand, we call that stagnation and poverty. The cause of bad economic situations is a lack of money in the hands of people who would spend it on things they like, and giving that power instead to people who are only interested in more power being in one place.

When money is borrowed the borrower signs his life away. The deck should not be so stacked. The lender should be made to sign a legal document acknowledging that he fully understands that his loan may never be repaid and that he accepts this risk.

We are talking about a nation here. The borrower is a national government.

I mean, I'm as anti-government as the next guy but I think even governments are generally smart enough to get the whole "if you borrow money the lender wants it to be paid back" concept.