Greece

[El Presidente]

El Presidente I think you are correct about Japan. I did not bring it up for comparison purposes.

Greece is also producing. We are, for the most part, in the service industry, tourism is an example.

My friend, a true economic wheel in this world needs more than one spoke.

You have a lot of friends here in Australia. The smartest accountant i know is Greek in Arthur Kassos (one of the best in Australia) and we while away an afternoon discussing possible remedies to the current malaise. It really is in the hands of the people to support or otherwise a Govt which is prepared to change the economic landscape.

We only wish you the very best of luck .

[Chaki]

I read the article. It serves no point other than make things worst.

With all due respect, I disagree. The article helps in understanding some of the causes of the problem, which is a prerequisite in trying to solve it.

[RedRum]

@Chaki

I completely agree. Tax evasion in Greece is a travesty. the 4-4-2 is an exaggeration. As I said, for a few years there was an effort to crack down on tax evasion, but this service was dismantled... Actually, the major problem with greek economy was not growth, until a couple of years ago we had a healthy 4-5% of growth. The problem with the Greek economy as you said was excessive spending and the the complete break down of a the tax system. Income from tax really plummeted. That is why I am a bit hopeful about the economy, because it just needs hard work to make a comprehensive tax system.

As for Germany not wanting to help... a friend of mine told me this (great idea Nikos)

Think that in 1945, there was TV, internet, blogs, forums (like this one), and press as now. Germany has just lost the war, has lost half the country and it is in complete and utter ruins. These blogs, forums, press have polls (like this one) asking:

Germany just killed millions of people, tortured million others, ruined countries, erased whole cities of the map. It is a ruined country and now asks for help. What do with do with it?

A)do the same to them, leave them to their misery, they should be know better to win the war

B)lets pour millions in their economy, rebuild the whole country. Lets call this Marshall Plan...

Given Germany's history up to 1945, what do you think the consensus in blogs and forums would be? I have a hunch it would be A

my fellow EU friends, and particularly Germans. Twice during the previous century Germany got substantial aid to restructure its faulting economy. Actually, after the first aid was given to Germany in 1946, major issues of corruption, tax evasion and overspending made Germany to ask for additional funds in 1949...

PS To my fellow Greeks that have specific political affiliations and think I am blaming the previous government. Well... I voted for them the first time they run. And sorry... but they messed up really really badly...

[Chaki]

I hear you RedRum.

That's why I keep repeating that defaulting is not as bad an option as it seems. It's like Chapter 11 in the US: it allows a company to restructue while keeping creditors at bay. Greece defaulting on its debt (which by the way is what markets are pricing in) would relieve it of debt repayment, giving it breathing space to restructure its economy. In 2 or 3 years, Greece will be in a much better shape to renegotiate with its creditors.

The alternative, the bailout, benefits the creditors (mostly French and German banks), not the Greek people who will have to make all the efforts in both cases. The EU and IMF bailout money will go the Greek treasury and flow right out, back to French/German banks coffers. But the Greeks will be saddled with this EU/IMF debt for years.

If Africa is the cradle of mankind, Greece is the cradle of democracy. It deserves our support. The Greeks must keep their heads up.

[RedRum]

I hear you RedRum.

That's why I keep repeating that defaulting is not as bad an option as it seems. It's like Chapter 11 in the US: it allows a company to restructue while keeping creditors at bay. Greece defaulting on its debt (which by the way is what markets are pricing in) would relieve it of debt repayment, giving it breathing space to restructure its economy. In 2 or 3 years, Greece will be in a much better shape to renegotiate with its creditors.

The alternative, the bailout, benefits the creditors (mostly French and German banks), not the Greek people who will have to make all the efforts in both cases. The EU and IMF bailout money will go the Greek treasury and flow right out, back to French/German banks coffers. But the Greeks will be saddled with this EU/IMF debt for years.

If Africa is the cradle of mankind, Greece is the cradle of democracy. It deserves our support. The Greeks must keep their heads up.

I am past the delusion that we are important because of the achievements of our ancestors. In todays world we are as important as our achievements today. And I will have to say, that we are not a bad country at all. Someone posted a wiki of the financial position of Greece, in general we are top 30 in the world. However, it was delusions of grandiose, based on the achievements of our ancestors, that made us complacent today... like getting the 2004 Olympics... we were the country with the smallest GDP to ever host the Olympics... billions went down the drain, as everything that was purpose built for the Olympics is now rotting...

as for defaulting. This would actually be the worst solution, as it would demolish the Greek banking system. Remember, Greece is in 2% recession, a default would destroy the banks' reserve and ability to borrow and lend. The Greek economy needs to get off recession and back to growth. But this cannot happen without the banks lending.

Unfortunately, and it hurts me to say because my parents, brother, friends live in Greece, the only solution is the IMF-EU loan for 3 years, with severe cuts in order to cut the deficit below 6% as soon as possible. a year ago, other measures could be taken (I will not go in depth), but right now, in the state that the Greek economy is at the moment, that is the only solution. In the shorterm (and hopefully in the long term), we also need to cut spending on military expenses (5% of GDP...) and push tourism as much as possible. These are the only immediate ways to increase revenue and cuts, which should go straight to deficit reductions.

Really tough times ahead...but I am hopeful.

[Leonidas]

With all due respect, I disagree. The article helps in understanding some of the causes of the problem, which is a prerequisite in trying to solve it.

On the other hand, I do not disagree with you. Spot on.

Recently one of the infamous german hi-tech electronic manufacturers was proven guilty for multinational bribing. Amongst those dozen countries "subsidized" was Greece. And believe it has surfaced an ongoing turmoil in my country. Will it help in trying to solve the problem? I sincerely hope so.

I wonder whether our fellow germans share your and my views?

[Kangaroo495]

To our Greek members:

Can you please identify the other major industries of Greece other than tourism?

I'm just thinking about how Russia almost effortlessly came out of a default in 98 on the back of natural resources?

It would be useful to know what else Greece has to offer the world. It could give us some perspective on how/when Greece will be able to recover from this crisis.

[RedRum]

unfortunately... not much... Agriculture (olive oil, cotton, fruit and veg) and tourism are the greek heavy weights. The banking, energy and telecommunications sectors made some serious investments around the Balkans. But apart from that... cannot think of anything else. Our natural resources is the country's natural beauty I think... I always thought that Greece cannot handle heavy industry, and should concentrate on high technology. Huge discussion though.. and it needs at least a decade to develop

[Colt45]

Some interesting conversation - and a little sad at the same time - like the all the countries of the world are simply pawns in a giant

economic chess game.

[Leonidas]

Major industries. Mining (bauxite, coal, perlite), cement, steel, shipyards are few that I recall spontaneously. Although agriculture accounts for roughly 3% of the GNP, there are some massive industries manufacturing diary products and exporting all over Europe and the Middle East.

[Kangaroo495]

unfortunately... not much... Agriculture (olive oil, cotton, fruit and veg) and tourism are the greek heavy weights. The banking, energy and telecommunications sectors made some serious investments around the Balkans. But apart from that... cannot think of anything else. Our natural resources is the country's natural beauty I think... I always thought that Greece cannot handle heavy industry, and should concentrate on high technology. Huge discussion though.. and it needs at least a decade to develop

Isn't shipping also quite developed there?

In this case the solution would be as you said - sweeping administrative reforms and popular change, while always keeping that tourism industry at the forefront of your strategy. Investment in the Balkans is also an excellent idea IMHO.

In Russia's case, administrative reforms were not needed. Despite the fact that no-one pays taxes and bureaucracy is basically choking business to death - natural resources make up for all of that with a tidal wave of easy money. Obviously, it's going to be more complicated for Greece.

It's going to be hard, but once it's over I hope Greece learns at least one lesson - diversification.

By the sounds of things, Greece can get back on its feet with a bailout. It is capable of meaningful economic growth. If I was Germany, I would give the money, but really keep an eye on this country. Any further failures and we could definitely see a default.

[Kangaroo495]

Major industries. Mining (bauxite, coal, perlite), cement, steel, shipyards are few that I recall spontaneously. Although agriculture accounts for roughly 3% of the GNP, there are some massive industries manufacturing diary products and exporting all over Europe and the Middle East.

Well this is all great news. Perhaps in return for a bailout Germany could ask for a share in some of these enterprises.

So Greece seems to have some potential, but for their own sake, someone needs to take the bull by the balls and clean up the state apparatus. Try to weed out corruption. If I use the comparison to Russia again, I know exactly what it's like, and how hard it is to change. But surely if a country is on the brink, people will stand up to the challenge..?

[Leonidas]

Well this is all great news. Perhaps in return for a bailout Germany could ask for a share in some of these enterprises.

So Greece seems to have some potential, but for their own sake, someone needs to take the bull by the balls and clean up the state apparatus. Try to weed out corruption. If I use the comparison to Russia again, I know exactly what it's like, and how hard it is to change. But surely if a country is on the brink, people will stand up to the challenge..?

Well, isn't that what it's all about? I'm pretty sure you get the drift.

[Kangaroo495]

Well, isn't that what it's all about? I'm pretty sure you get the drift.

You mean they intend to exercise some kind of control over Greece's economy? This is definitely not something unheard of!

[Kangaroo495]

BTW, good to see some Greek members here. I didn't know we had any!

What cigars are you guys into? (No thread jack intended, we can return to the conversation now)

[Leonidas]

BTW, good to see some Greek members here. I didn't know we had any!

What cigars are you guys into? (No thread jack intended, we can return to the conversation now)

Habanos for the most part. It was RedRum who introduced me to non-cubans. I don't hate him for that

And surprisingly so, Greece is a cigar producing country as well. Which makes it a good reason for you to visit us soon

[RedRum]

Habanos for the most part. It was RedRum who introduced me to non-cubans. I don't hate him for that

And surprisingly so, Greece is a cigar producing country as well. Which makes it a good reason for you to visit us soon

Hehehe! both habanos and NCs. Though I am not sure we can make greek cigars the forefront of our economy.. that would be cool though!

I come from the north part of greece, where tobacco cultivation has been going on for more than a century. Unfortunately the varietal basma that grows is not used for cigars, but for cigarette and pipe tobacco. But it is very aromatic, very predominant in many pipe blends and found in almost all american heavy cigars.

I have actually worked on tobacco farms when I was a kid, the field right opposite to our house was used to cultivate basma, now it is a block of flats...

back on topic. Leonidas is right, there is industry in greece, as I said the GDP is one of the top 30 in the world. It is a matter of sorting out decades of pathogenic policies and perceptions. Not easy but can be done

[jquest63]

I think Aussies know a little about restructuring an economy. We spend the best part of 15 years doing so between 1984-2000. Painful but necessary.

I suppose we and the western world are trying to look into the eyes of the Greeks (living in Greece) and trying to understand if they have the stomach for what needs to be done.

So, are you now the spokesman for Australia and the western world?

[jquest63]

Two of my best mates are Arthur Kassos and Steve Vergotis. Proud and successful Greeks as there ever were.

They are dismayed. No one wants to throw stones here, however the lowest tax take in the OECD points a few fingers.

If no one wants to throw stones, then don't throw them. I suspect if the the initial post provided a more accurate and balanced assessment of Greece's economy the responses would be less polemic.

I too also have many successful Greek friends.

[anacostiakat]

at this thread.

[Colt45]

If no one wants to throw stones, then don't throw them. I suspect if the the initial post provided a more accurate and balanced assessment of Greece's economy the responses would be less polemic.

I too also have many successful Greek friends.

While some of the responses may be considered by some to be of the mob mentality, and most of us have no idea of what daily life is like for

the average Greek in Greece, I thought the initial questions measured and not out of line.

[jquest63]

While some of the responses may be considered by some to be of the mob mentality, and most of us have no idea of what daily life is like for

the average Greek in Greece, I thought the initial questions measured and not out of line.

While some of the responses may be considered by some to be of the mob mentality - not may or maybe, but definitely mob like and insulting. Calling Greeks a bunch of thieves or F**Ks are not terms of endearment.

most of us have no idea of what daily life is like for the average Greek in Greece - Agreed, based on responses

initial questions measured and not out of line - the idea of calling for dialog is not objectionable to me, but the way it was framed certainly was not accurate and balanced. "economic madness" and the implication that Greek manufacturing is strictly ouzo based is in fact not accurate, its grossly incomplete, ridiculous, definitely not balanced and certainly invited a fair amount of stone throwing.

[El Presidente]

While some of the responses may be considered by some to be of the mob mentality - not may or maybe, but definitely mob like and insulting. Calling Greeks a bunch of thieves or F**Ks are not terms of endearment.

most of us have no idea of what daily life is like for the average Greek in Greece - Agreed, based on responses

initial questions measured and not out of line - the idea of calling for dialog is not objectionable to me, but the way it was framed certainly was not accurate and balanced. "economic madness" and the implication that Greek manufacturing is strictly ouzo based is in fact not accurate, its grossly incomplete, ridiculous, definitely not balanced and certainly invited a fair amount of stone throwing.

I have to thank our Greek members for chiming in and really adding to the discussion. I have certainly learned a lot and seen a different angle which challenged some of my own viewpoints.

Isn't this what discussion is all about? In this case a Geoffrey Robertson "Hypothetical" where you roll out a main stream statement (pick up any newspaper on this subject) but the plot thickens as different factors come to light?

"Economic madness" is indeed a valid viewpoint when you look at the situation of the tax base (and lack of enforced systems) + the retirement age as a comparison to the state of the unfunded economy.

As an aside Ken is off to Melbourne I believe this weekend for a tasting of Greek Wines. I look forward to his review

[RedRum]

well... as a Greek myself I was not offended by Rob's initial post, it was obvious it was made with a touch of humor. I was a bit upset with the assessment made by some people during the thread, but I guess it is understandable. No one is obliged to know the exact financial status of a small country at the other side of the world, that just came up in the news. I was very happy by the balanced view many had.

Again, someone posted some stats from the wiki, which showed that Greece is a bigger player in the financial world than thought. The gist of the problem comes down to this:

-Greece has a serious tax evasion problem for decades.

-This problem became much more severe by complete incompetence by the previous government, that essentially dismantled any tax collecting/monitoring.

- In the meantime, for 15 years Greece was enjoying very low loan rates, which went into growth (average 5% for the decade, highest in EU), but also induced overspending,also spending 5% of GDP in military expenses (top spender worldwide last year)

-The combination of overspending and almost zero tax revenue the last 5 years blew the deficit out of proportion

- Hedge funds smelled blood and jumped on buying Greek security bonds

- That drove the spread (base rate between Germany borrowing and Greece) to the roof, being at 14% at the moment, making it impossible for Greece to get loans to repay the deficit.

-Greece needed either intervention of IMF-EU to lend "cheaply" (as I said, they still make money lending us...) or Greece to default.

-For the sake of the euro and Greece, IMF-EU loans were decided, but with very very very (very...) severe cuts, tax increases. Greek wages will drop by 20-25%, sales tax will go up from 21% to 25%, gas, tobacco, alcohol will also be highly taxed.

-Good news is that the present government tries to fight tax evasion and cut waste. IMF-EU will also oversee restructuring of services.

I think it will be a couple of really really tough years, but I am hopeful that Greece will come out stronger.

Then we can go on get the 2020 Olympics and spend any spare change from the 140bil loan

[Colt45]

initial questions measured and not out of line - the idea of calling for dialog is not objectionable to me, but the way it was framed certainly was not accurate and balanced. "economic madness" and the implication that Greek manufacturing is strictly ouzo based is in fact not accurate, its grossly incomplete, ridiculous, definitely not balanced and certainly invited a fair amount of stone throwing.

I understand how these things can become touchy, regardless of initial intent. But truth be told, there are many of us here who could be taken to task for any

number of things (I include myself on the list). But I think another truth is that many of us consider each other friends.

I won't say much more, as it might sound as if I'm trying to defend Rob, and by now it should be abundantly clear I'd take any opportunity to throw him to the lions.

That, of course, could be considered anti christian........