Greek farmers to government.. "F#^*K Adam Smith"

[Joanne98]

Farmers in Greece have sparked fuel shortages and panic buying after blockading roads and border crossings in protest over low agricultural prices.

Thousands of farmers, demanding help from the government following a harsh winter and a drop in prices, have cut the main roads from Athens to major cities and shut the three main crossings to Bulgaria.

The effects of the protest, which is in its ninth day, are starting to be felt across the country as trucks carrying produce are unable to refuel, causing tonnes of fruit and meat to rot.

A £500m aid package has been already been agreed by the government but farmers claim the real problems, such as minimum sale prices for various crops, have still not been addressed.

http://news.sky.com/skynews/Home/World-News/Farmers-Protest-In-Greece-Over-Agriculture-Prices-Causes-Fuel-Shortages-Through-Road-Blockades/Article/200901415211127

[Renew Deal]

1. Why would a harsh winter make prices drop?

Wouldn't the winter hurt supply thus raising prices?

[Joanne98]

2. This has more to do with the EU making Greece cut back on subsidies

Bulgaria has asked the European Commission to intervene because a border blockade by Greek farmers is preventing goods getting through.

In a letter to the commission, Bulgaria said its hauliers were incurring heavy losses and it demanded that Greece open a transport corridor.

The farmers want help from the Greek government as their industry has been hit by low food prices and bad weather.

They say an aid offer worth 500m euros (£468m; $650m) does not go far enough.

The farmers are now into their ninth day of protests, which have also shut border crossings to Turkey and Macedonia.

http://news.bbc.co.uk/2/hi/europe/7852861.stm

At the end of the article...

But the farmers turned the offer down, saying that low prices for produce such as corn, wheat and cotton were sending some towards ruin. They want fixed subsidies for the future.

But the European Union wants to phase out support for cotton production in central Greece, since it requires huge quantities of water and is regarded as an inefficient crop, our correspondent says.

[Jim__]

3. Deflation is a killer for farmers.

From the article:

The farmers say that high fuel and fertiliser prices last year drove up their costs but a global economic slowdown has led to rock-bottom prices, leaving many of them facing ruin.

[Joanne98]

4. Bulgaria is in deep shit too... Debt more than GDP!

The debts of Bulgarian businesses may balloon to 200 billion leva, which is more than three times the country’s gross domestic product, the Bulgarian Industrial Association said on January 26 2009.

Debts of non-financial firms were 116 billion leva at the end of 2007, but the figure is headed for a 160 billion leva increase in 2008, chairman Bozhidar Danev forecast.

Company debts surged by 43 per cent in 2007 and a projected 38 per cent and 28 per cent for 2008 and 2009, respectively.

Bank debts totalled 29.59 billion leva in 2007, the first time they outran debts to suppliers and customers, which came in at 29 billion leva.

Defaults make up about 40 per cent of the total inter-company debts, excluding bank loans.

http://www.sofiaecho.com/article/credit-crunch-bulgarian-industrial-association-says-companies-debts-could-add-up-to-triple-gdp/id_34231/catid_67

:wow:

[Joanne98]

5. All the countries in the Baltic are going under. Latvia

Latvia could go bankrupt within two years, said the Centre for Strategic Research, Russian business portal rus.db.lv writes.

Baltic States will be the first victims of the financial crisis among the countries with transitional economies. Even if the International Monetary Fund will be able to save the region, avoiding prolonged stagnation is still not possible.

Center for Strategic Research has prepared a review of «The impact of the crisis on developing countries and countries with transitional economies”, writes Infox.ru.

It includes Baltic countries among the states with negative payment balance and heavily dependent on foreign capital flows. The economy in the region grew at the expense of low level of debt accumulation by population. The authors of the report argue that the states have tied themselves to the U.S. economic cycle, allowing the rapid increase in private sector borrowing in foreign currency.

Distinct signs overheating economies of the Baltic republics emerged a year ago, according to the survey. Rating agency Fitch analyst Ed Parker explained that the agency has lowered ratings of Latvia three times, Lithuanian twice and Estonian once since August 2007.

«The outlooks for all three countries are negative», - he added.

«The negative outlook means the chance of reducing the rating over the next three to six months», - reminded the representative of the agency.

The entry to the European Union in 2004 led to a sharp increase in borrowing and as a result the companies have started to actively develop the mortgage, construction and retail spheres.

According to the survey, the loans of Latvian private sector make up 125 pct of GDP and loans of government 9 pct of GDP, amounting to USD 40 bln. The experts are waiting Latvian households to bankrupt massively in next two years.

http://balticbusinessnews.com/Default2.aspx?ArticleID=4f1eb856-1a1e-4ca9-8bcc-907b952a839d&open=sec