Home Forums Hunting & Shooting Hunter's Campfire The problem with Greece, nobody is working:

Plus all the Greeks that feel they, and not the troika, should pick their next PM.

I don't want to say that none of this is Greece's fault or that there couldn't be less corruption and tax cheating there, but Greece is a victim in a rigged game.

The big creditor nation of the Eurozone is Germany. Why? because they have an export based economy. Something like 50% of their GDP is exports. That is an inequity that has two sides to the equation.

To support Germany's export-based economy there have to be other countries that are net importers, and that can not work in the long run. Traditionally, if a country got in a balance of payments bind by consistently importing more than they export, they undermine their currency either on purpose or, more realistically, inevitably as a reflection of their balance of payments problem.

By tying all it's neighbor states into a single currency, Germany eliminated that safety valve, that equalizing mechanism.

Also, the Eurozone demands elimination of all import restrictions. This, too, just gives Germany arte blanche to rape it's neighboring economies.

In years gone by, Greece was very frugal in terms of imports and balance of trade. They had huge import tariffs and lifelong restrictions on importing big ticket items like cars. Now they are stuck in this deal where they have no defense against Germany trucking in endless consumer goods and extending consumer credit. Greece is like a canoe being towed behind a motorboat, no control and swamping fast.

The problem is there is no equalizing mechanism. They only went half-way into making Europe into one country. They have the common currency and the common market, but no common taxes or budget.

Think of the decades when our South was ransacked by the carpetbaggers. Raw materials like cotton and timber and minerals were used by the Northern industries and the South was left impoverished. But, there was a national tax system and a national budget within which both North and South were a part, and things have evened out.

If Greek social expenditures were being paid by taxes on Germany's piggish, export-based economy, there would be a leveling there too. Of course there would also be an immediate demand that social spending was leveled off, no differences in retirement age, etc. But there would be a balancing.

Instead there has been half of a nation formed, just the half that benefits Germany. Is Germany building a Volkswagen or Blaupunkt factory in Greece to absorb some of the unemployment and let some of the profits benefit Greece? No!

The Eurozone has been very inequitable to the less industrialized nations of Europe and the strain is finally reaching a breaking point.

Reader,

The Greeks could also get off their collectivist azzes and actually produce something with their labor force that won't now work a day for a day's pay. Greece asked in to Europe and the Euro, then they asked for credit with no income to pay the debts.

Granted they shouldn't have been extended the credit, but it wasn't forced upon them.

Fact is Greece hates Germany and won't dance with them.

They have never been an industrialized country. What is there to do, clean each others' houses? That doesn't create income from outside of Greece which is what is necessary to balance their trade deficit.

I wish I could properly ascribe the quote but: "Greece's only hope is for Earth to be discovered by an extraterrestrial culture with a vast demand for olive oil and cheese"

You know, we are so used to the fact that currencies rise and fall against each other that it has become invisible to us. The ramifications of being tied to a single currency were more than most Europeans were able to think through.

Without that mechanism, the dynamics create unreleived forces which have to lead to some other sort of schism. Currency variations are the gentlemanly way to balance this, default is the ungentlemanly way. Default is also the only way that has been left for Greece.

And, while we are at it, these same dynamics are stifling Spain, Italy, Belgium and even France. The Euro has hit the wall.

Maybe they just want the same debt relief Germany received.

I find it hilarious that anybody with a brain would look to Europe as a barometer of anything.

That collective group of [bleep] lost their balls a long time ago.

Their ancestors are easy to spot.



Travis

Britease is in, mister. Get over it or GFY.

PS,. Good to see you back. Was afraid you had suffered a stampede of mountaian maggots.

And...why should they get the same?

Greeks are lazy socialists who shun paying taxes and their debt. They produce not much of anything and have no desire to be productive.

The Germans are the polar-opposite and are credit worthy.

English translation, anyone?

Much of what's already been said here is true. Antelope's CIA research is great. However, there's a big chunk of fact missing from any data based analysis.

Many more Greeks work than what is shown on any statistical dashboard. The big truth is they absolutely hate the Athens government and the graft and freebees their officials enjoy.

Which brings us to the narrower truth. A large percentage of Greeks work under the table or make money by exchanging "favors", or make their living by working the land or sea. Many Cretans, for example, seek an agrarian society. That will never fully materialize. Capitalism and profit motive still rule. But, It's their way of pizzing in Athens' pot, so to speak.

I have met Greeks that would much prefer to work like dogs (and many do, including foreigners from neighboring countries) under the table, trading favors, or living off the land and sea than paying taxes. THAT'S how much they hate the central Athens govt.

Something's gonna give there some time, sooner or later.

Sam's post about socialism's ugly head in the background is spot on. But, I believe it to be in response to the affluence afforded the few in Athens.

Paupers and peasants just struggling to feed themselves will mostly choose socialism over capitalism hands down, if it means they get a meal at the captain's table. The part they don't understand is, that meal is once only and the vengeance is short lived.

This is why our Republic is unique. Our forefathers chose not to sit at the Captain's table.

Everything that's wrong with Greece is the fault of the Greek people.

Including the spoiled brats who are just old enough to vote.

The Krauts got a 50% writedown of their debt (that's creditworthy?) less than a decade after the war they started killed tens of millions of people. In your eyes, they get a pass for that, and the Greeks have to starve because the troika stuffed some unsustainable debt down their throat. I think we have a double standard here.

He didn't?

Oh, sure, blame the drug pusher. The junkie is never at fault for putting the smack in his veins.

Change Germany to China & that's where the U.S. is at with our huge trade imbalance with them today..........if it doesn't change soon, we'll be face with similar problems.



Yes, & several other nations are carrying some big debt; not clear yet how that is going to settle out.

MM

I'm not saying they should have taken it. They've got a hell of a mess to clean up. Getting out of the Euro could be the first step to cure them of socialism.

Rufus:

I think the opposite will happen. The socialists will win big time and stay in power for decades. Any Greek who doesn't like the depression coming their way is going to move to the rest of Europe.

The rest of Europe will be less than thrilled.

GR,

You failed to ask the real question. Instead of blaming the Germans for a more prosperous economy, how about asking the simple question WHY??

So to begin the comparison, here's the number for Germany that I earlier ran for Greece:



The first thing you will notice is that on a percentage basis nearly three times as many Germans have a Job

But Greece has other problems leading to this. Greece scores very poorly in the area of Property Rights, with taxes on not only real estate, but also Bank Deposits, luxury goods, and fine art. Keep in mind this is an ownership tax, in addition to the consumption tax.

Yes, the Greeks actually tax people for saving. This in turn decimates their capital markets. As a result, Germany has 3 times the per capita stock market cap of Greece. In addition they limit foreign investment in their industrial development, further inhibiting their economic growth.

Buy a house? There's an 11% tax, plus an additional 18% VAT if it's a new construction. New homes are a major economic driver, and Greece has decided to tax all incentives out of this industry.

In addition, serious rule of law issues exist in Greece. 90% of Greeks consider the political parties to be either corrupt or extremely corrupt. On the Transparency International Corruption perception index, Germany is near the top ranked number 12, Greece is ranked 69th with Senegal and Tunisia.

Greece also presents a difficult labor enviroment for employers, with a "rigid and stagnate" labor market. In addition to a young retirement age, with the most educated retiring the earliest (resulting in a significant drain of human capital, business are not allowed to replace these early retiree with educated foreign workers. In additions workers get a minimum of 20 paid vacation day, and cannot work more the 120 hours of overtime in a year.

When taken it total, German investors would be fools to open a car plant in Greece. If the Greeks wants to land lucrative heavy industries, they need to take a page from Huntsville Alabama playbook and COMPETE for it. Why is the new Remington plant in Huntsville? Because Huntsville offered Remington a deal they couldn't refuse.

You are omitting the first part of the story. After WWI, the Germans were laidened with with a level of war reparations that pushed them down the road to WWII. Repeating that mistake a second time could have been just as bad if not worse the second time around.

I think many of the Greeks with skills have already bailed. At least that's what my college roommate, who is Greek-American and visits Greece frequently, tells me.

I was suggesting if the gov no longer has free Euros to spend, or the ability to obtain much credit, their ability to fund a free shtuff army will be greatly diminished. Or maybe they just print drachmas until they're worthless. I don't pretend to be able to guess what will really happen though.