General Discussion
Related: Editorials & Other Articles, Issue Forums, Alliance Forums, Region Forumsrogerashton
(3,920 posts)to roll out Drachmas by next Monday, then Varoufakis isn't the game theorist he has seemed to be.
Warpy
(111,437 posts)because it was so great it was going to be permanent.
They're probably getting pretty panicky right now, but the easiest thing to do is make it all electronic money in the beginning.
brooklynite
(94,950 posts)Add to which, a large portion of the Greek economy's problem is the large proportion of (under the counter) cash transactions.
Warpy
(111,437 posts)You need a piece of plastic with a magnetic strip. Hookers and drug dealers will have to rely on there being a few Euros still in circulation.
brooklynite
(94,950 posts)2. What if the businesses don't trust them, because they don't trust the banks they're linked to?
Warpy
(111,437 posts)and printing drachmas with them. If businesses want to sell anything to anyone, they'll trust the cards. They won't make enough to survive on Euros, alone.
Now let's hear your proposals, if you have any.
brooklynite
(94,950 posts)..add to which, the "drachmas" they're electronically linked to will inflate horribly once Greece formally defaults on it's debts and nobody want drachmas (electronic or otherwise) for the food and medicine Greece has to import.
Warpy
(111,437 posts)Good luck with that one. And everything needs to be easy, and perfect.
There is no free, easy or perfect way out of this one, that's rather the point.
Now let's hear your proposals, if you have any.
brooklynite
(94,950 posts)...but if they're not, the Greek Govt won't be able to pay for them. The banks barely have enough cash to get through the week, and Greece has a notoriously bad record at collecting taxes owed.
My solution is far simpler. Stop posturing and come back to the table for some serious negotiating about Greece's debt obligations.
Warpy
(111,437 posts)Bye.
KamaAina
(78,249 posts)they should have stashed them in a museum somewhere on the Acropolis.
KamaAina
(78,249 posts)They were just as broken -- but not structurally. Things up there just got out of control. As for Greece, I'd reform the tax system so that taxes actually get paid, so the government doesn't have to keep borrowing money.
Betty Karlson
(7,231 posts)The two situations are not comparable.
Another difference is that years of austerity have now crippled the Greek economy: Iceland never was that far gone.
brooklynite
(94,950 posts)redwitch
(14,954 posts)I feel terrible for the people there.
Warpy
(111,437 posts)An audit to see where the money went and determine from banking records and spending whether bribes were responsible for incurring a lot of it, especially on military hardware the Greeks did not need. The doctrine of "odious debt" might be applied to get rid of a lot of it.
Tighten the tax laws and put some teeth into them. It's estimated that they've been collecting only about 40% of what they're owed since the system has largely been an honor system and we all know how much honor a lot of people, especially the rich, have when it comes to supporting their countries with money.
Of course, I'd also nationalize the banks and jail bankers and politicians according to what the audit showed.
Another idea is to put some of that military hardware on the auction block. I'm sure the west would cough up to keep it out of the hands of ISIS.
Betty Karlson
(7,231 posts)See also his TED-talk. It's on youtube.
(Decentralised Europeanisation.)
Warpy
(111,437 posts)unless they are forced at the point of a gun to do so. That applies on an international as well as local basis. That time might be on the way but it's not here yet.
Gregorian
(23,867 posts)He's very clear that the only humane way forward is through what most resembles profit sharing. Getting rid of the big, greedy guys, and keep the surplus work we do for ourselves rather than giving to the boss. It can be done. That's why I'm watching this video again. Came from this thread:
http://www.democraticunderground.com/1017276914
MoonRiver
(36,926 posts)redwitch
(14,954 posts)Motown_Johnny
(22,308 posts)Or this could just be an intellectual exercise.
redwitch
(14,954 posts)I hope that we can pull back from the brink.
Yo_Mama
(8,303 posts)It can in no way cause global economic collapse.
Motown_Johnny
(22,308 posts)then it could cause major problems.
Yes, I overstated the danger. Even so, this is a useful thought experiment.
Yo_Mama
(8,303 posts)it's about Italy, Spain, and then France. Spain's probably going to be okay - they are out of the worst of it.
This will be a couple of interesting weeks, to be sure. But the end game is going to come 5-7 years down the line.
bhikkhu
(10,726 posts)as they are a real country, made up of real people, with many of the same kinds of problems we have here. Think of it as a mental exercise in understanding other people's problems.
yurbud
(39,405 posts)find all their assets and use them to pay toward Greece's debt.
Enshrine this action in law.
Then figure out what to do next.
NobodyHere
(2,810 posts)yurbud
(39,405 posts)underahedgerow
(1,232 posts)fraudulent claims, including thousands of pensioners over the age of 100 (they're dead, but the families continue to take the money) and the one island with more than 600 'blind' people (thanks to ONE eye doctor and his phony papers) including a blind taxi driver.
Thank greedy, lazy people who like to suck their own government dry. Look where it got them!
This article is from 2012, they all saw this coming. http://www.telegraph.co.uk/news/worldnews/europe/greece/9233670/Greece-tries-to-crack-down-on-fraud-as-mayor-of-Zakynthos-faces-revolt.html
I wish I had more pity. They need to get off their butts and start cashing in on tourism & export and stop relying on fraud and social services.
EL34x4
(2,003 posts)Leading high-earners to report annual incomes under 12k Euros a year and thus pay no income tax. They live in opulent, gated mansions but on paper, these doctors, lawyers and business leaders are paupers. And they buy camouflaged tarps to cover the swimming pools that they never paid a luxury tax for.
Public transportation that relies on the "honor system" for payment. The subway in Athens has no barriers. Millions ride for free.
The rampant disability and pension scams you mentioned above.
There's a damning new book out that paints a picture of fraud and abuse perpetrated at all levels of Greek society:
http://www.dailymail.co.uk/news/article-3148451/A-island-pretending-blind-benefits-8-500-pensioners-faked-aged-100-lawyers-claim-earn-just-12-000-New-book-reveals-Greeks-cheated-ruin.html
If these allegations are true, half the country belongs in prison alongside the bankers and politicians many are blaming.
brentspeak
(18,290 posts)Probably also believes that it was "greedy, undeserving homeowners" which made Wall Street rip off and destroy the US' economy in 2008.
B2G
(9,766 posts)Both articles are aimed at people gaming the system, particularly the wealthy.
Try reading the links before you react.
LittleBlue
(10,362 posts)Unless they are willing to tax their wealthy citizens, the underlying problem will continue to create deficits that Greece will require debt to fix. That debt is currently well past the amount that they are able to repay.
1) dump the euro for a drachma. Short-term pain, long-term stability and monetary sovereignty regained
2) crack down on tax evasion schemes
That won't solve the problem, but it will begin the process of healing a broken country
PoliticAverse
(26,366 posts)money instead?
LittleBlue
(10,362 posts)We can't have the great business magnates paying their taxes, ohh no
derby378
(30,252 posts)Just wait for it...
neverforget
(9,437 posts)people paying taxes. The Greeks are in a difficult spot, but paying back the loans without a growing economy is a recipe for disaster.
Nye Bevan
(25,406 posts)including things like making the income tax system compulsory instead of voluntary.
jeff47
(26,549 posts)2) If 1 fails, point out to Russia and China that a Greek default to the EU/IMF would be a big fuck you to Europe. And some new loans would be helpful.
Couple this with GrExit, and printing Drachmas again. Use devaluation to make Greek goods and vacations competitive.
And no matter which of 1 or 2 occurs, fix their corrupt tax system.
WDIM
(1,662 posts)With a net worth of more than one million dollars.
The wealthy have taken enough they dont need more money.
Nationalize the banks and the currency with a publically held central bank.
Put the people back to work building community and a country that will make democracy proud.
Nye Bevan
(25,406 posts)Certainly a possibility, but not what the people of Greece want.
WDIM
(1,662 posts)Nationalizing cental banks for the benefit of the people and not the super wealthy will create prosperity for all people.
Yo_Mama
(8,303 posts)You don't seem to be engaging with how bad the Greek economy really is.
The private debtholders were already forced to take a huge write-down - this is now basically about foreign debt. And sure, you can repudiate it. But don't then expect other countries to pay for your food, fuel and medicine.
WDIM
(1,662 posts)They can continue to survive with local food fuel and medicine.
Having a public central bank instead of a private multi national central bank will create prosperity the country has never seen. No longer will you have the succubus elitist at the top skiming off the nation's wealth.
Yo_Mama
(8,303 posts)Don't get me wrong, they are not going to pay a lot of that debt because they can't. They need a write-down to about 80-85% of GDP to be able to dig out, plus austerity.
I think they are right to reject this pointless austerity. But the country is in desperate straits.
brooklynite
(94,950 posts)Won't be buying any imports with the money you don't have?
WDIM
(1,662 posts)Canceling debts and telling the millionaires to stick it would be the best thing people could do.
The wealthy have exploited and extorted the people long enough. They dont deserve any more money.
Romulox
(25,960 posts)B2G
(9,766 posts)They need ponies.
WDIM
(1,662 posts)And redistributing that wealth to the people.
MFrohike
(1,980 posts)I'm assuming they'd rather stay in the Eurozone than not.
1. Germany has to see reason on its trade surplus. It either has to give up the surplus or, like America did to rebuild Europe after the war, it has to recycle euros into its trading partners for the purpose of productive investment. No more lending for speculation. It means that Germany will see its trade surplus decline as its trading partners in the Eurozone become more able to compete, but that's fine. The measure of a healthy economy is not how much it exports. It's internal demand.
2. The Greek tax system needs to work. It's broken as hell. Tax evasion is notorious and, from what I understand, is kind of a national sport. Since they don't issue the currency, they have to fix their tax system in order to fund their government (currency issuers don't have this problem).
3. Building on point one, the Eurozone needs a central fiscal authority. In the US, the states have spending constraints while the federal government has none. That's a key element of fiscal and political union. Money has to be redirected from more prosperous areas to less prosperous areas or you get disorder. The current system the EZ uses would be like if the federal government had to balance its budget every year. There would be no ability to smooth out problems among the states, like the automatic stabilizers, and the states would be stuck in their balanced budget constraints. It's a quick path to a right-wing regime that doesn't mind spending hand over fist for war-minded purposes and to tell with any kind of good governance.
MrMickeysMom
(20,453 posts)She is one of the world's foremost experts in credit derivatives, complex derivatives, interest rate swaps, collateralized debt obligations, and securitizations. She is the president of Tavakoli Structured Finance, Inc., a Chicago based consulting firm founded in 2003.
By Janet Tavakoli
Home » The Financial Report » Greece and the Troika: Next Moves
Greece and the Troika: Next Moves
Posted July 6, 2015By Janet Tavakoli
Europe is snared in its own web of false narratives. The first being that Greece can and will repay its debts. Those holding PIIGS debt are squealing today.
All the roads ahead will be hard for Greece. Some Greek corporations have already issued scrip, due to the shortage of Euros. Handelsblatt reported that Greek banks will be tapped out by the end of the day today. Greece could go back to its own currency, but what will back it? Or as others suggest, Greece can nationalize its Central Bank and print Euros at will, but the Troikas next move will probably be to label that a criminal act, because it desperately needs to keep other fringe debtors in line. Demonizing Greece may be the temporary fallback position.
The Eurozone may try to cut off currency compliant paper and ink to Greeceif Greece didnt have the foresight to secure supplies.
Greece prints Euros that start with Y in the serial number. If Greece does nationalize its Central Bank and starts a massive Euro printing program, Draghi may suggest that Euros with serial numbers starting with Y are counterfeit currency. He probably wouldnt dare say that explicitly, but there will have to be a mechanism to warn other countries it wont be tolerated.
Heres a bonus question: How many unauthorized Euros have already been printed, not just by Greece, but by other European countries?
Blue_Tires
(55,445 posts)1. Start collecting taxes, since 80-90% of them go uncollected
2. Cut military spending (Greece imports more weapons and armaments than all but 4 nations)
3. Try (as best as they can) to root out the inherent graft and corruption in their economic system
4. Try (as best as they can) to prevent the one-percenters from taking their billions out of their country and storing them in foreign banks...
DFW
(54,502 posts)I'm reading a long article about the history of Greece since before their independence from the Turks in 1830. There was a system in place to make every fourth person some kind of civil servant. Every FOURTH person. No wonder the government allowed retirement with full pay at age 55. They were giving themselves a massive handout at everyone else's expense. No wonder tax evasion became the national pastime for a population unwilling to subsidize it. Today, the Germans have every twelfth person working for the government, and they gag at how many unnecessary government employees THEY have.
The Greeks also have basically NO registry of ownership of real estate property. If you own a hovel, you declare it. If you own a mansion with vineyards and olive orchards, you declare a hovel anyway. Who is going to check? No one. Remember all those forceful steps Tsipiras and Varoufakis were going to take to reform this immediately? Don't worry, neither does anyone else.
If I get time, I'll post the most important passages later (11PM here, and I have to get up for work tomorrow at 4:20). I'll have to translate into English, so it'll take longer than just looking it up and pasting.
So, like any broken country, there is a huge difference between recognizing what needs to be done, and telling/forcing them to do it. National Pride (hubris is a Greek word, after all), local political considerations, and the fact that this system is the end product of centuries of developments that are (mostly) the fault of no one alive today.
Tsipiras wins over the population because he is one of them. He knows what they want to hear, and how to say it. Who cares if it's true or not? He's not the first charismatic guy to come to power in economic hard times and convince people he's a great patriot who is going to make things better when, in fact, he has no clue how to do it. Remember a guy named Ronald Reagan?
CajunBlazer
(5,648 posts)The are huge advantages for the countries of Europe when they formed the Common Market. One of advantages comes from the fact that "they are all in it together", but that is also one of the downsides. Before they joined together, each country was responsible for its own economy. Government tried not to make stupid economic decisions (like those of Greece outlined in this tread), because other countries were not likely to bail them out if their mistakes lead to serious financial problems.
Also, since each country had its own currency, when one country had financial problems the situation was to some extent self regulating. The financial problems would cause the problem country's currency to drop against the currencies of other countries with whom it traded. Thus the problem country's imports would become very expensive causing consumers to prefer home grown products, and the country's exports would become less expense increasing exports. Both of these developments would help the problem country's economy. In addition tourists would find visiting the problem country less expensive resulting in more tourism, again boosting the economy.
The problem is that Greece uses the Euro as its currency, just like every other country in ECU. The EURO which is not going to float up and down solely of the health of the Greek economy.
In the nutshell, the ECU went to a common currency without enforcing common economy policies among the member nations. Greece is what happens when one country plays fast and loose with its economic policies while the other, like Germany, does all the hard stuff necessary to remain financially stable and prosperous. What happens in the Greek situation will set a precedent as to what will happen to Euro-zone countries which do not follow sound economic principles in the future.
hunter
(38,349 posts)When the scum at the top gets too thick it blocks oxygen and light from the lower levels and everything gets stinky and anaerobic.
To fix it you have to pump fresh "oxygenated" money into the lowest levels, and skim the scum off the top.
That's the exact opposite of what the scum at the top of the European Union are doing.
They need to keep the money flowing to the ordinary people at the lower levels of the economy and besiege the very wealthy of the economy with forensic accountants, even turning the glass upon their own leadership.
The trouble with banks is their propensity to launder money for the other scum at the top.
None of the uber-wealthy morons who ignited this catastrophe are going to suffer for it, except maybe a little on paper. They won't starve, they won't have their home foreclosed upon, they won't go to prison. In fact quite a few will profit from it. What do they care if the peasants get hurt?
Hell, the uber-wealthy, their lackeys, their whores, and their squeaky unknown money worshiping sycophants, are all to happy to blame the peasants for their own troubles, just as the English lords treated the Scots and the Irish in the Clearances, telling them that if they had simply worked harder, put the land to "better" use, then none of the cruelties would have happened!
That's bullshit, that's blaming the victim.
bigwillq
(72,790 posts)moondust
(20,025 posts)Decentralization *can* offer smaller players more flexibility to act and react to changing conditions.