Greece's debt rating now at junk levels

Discussion in 'Politics, Religion, Social Issues' started by Shivetya, Apr 27, 2010.

  1. Shivetya macrumors 65816

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    #1
    http://www.bloomberg.com/apps/news?pid=20601087&sid=a3myVNxY7eto&pos=1


    WOW. They are in some serious hurt. It is dragging the markets down because this is the first "Western" sovereign state with the very possibility of defaulting some of their debt.

    The question I put forward is, what should Greece do, what should the rest of the EU do? That many of the bond holders will lose quite a bit is a given. I don't blame the bondholders for lending money but I don't think the other governments should give money which essentially guarantees the bondholders position.

    I blame years of catering to a "I want" populace by politicians bent on staying in power, passing the buck from one term to the next hoping it never is called.

    Now we watch daily reports of those on the dole offended their free ride is over. The reaction is amazing, it is like watching a bunch of children denied their cookies. Offended they will have to do with less. Their 14 month pay schedule amazes me, yet we see similar extravagance among government employees across many countries.

    Time to pay the piper. The question becomes, how does Greece get out
     
  2. chrmjenkins macrumors 603

    chrmjenkins

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    #2
    I am taking donations of delicious Gyros. That is a start.
     
  3. Eraserhead macrumors G4

    Eraserhead

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    #3
    Start enforcing their tax rules, and cut spending.

    Make sure the above happens.
     
  4. Queso macrumors G4

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    #4
    It's a little disingenuous to blame this on "those on the dole". Greece's problems essentially come from decades of tax evasion not being chased up. From the super-rich all the way down to part-time kitchen hands there has been a culture of cash in hand deals and declaring nothing on your tax returns. Nobody in politics was ever brave enough to tackle the problem, probably because they were also hiding away as much income as they could. As a result the government borrowed and borrowed again to meet the cost of supplying services. Without the credit crunch they'd still be doing it, making the eventual crash even worse.
     
  5. Peterkro macrumors 68020

    Peterkro

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    #5
    Maybe this a case of Greek exceptionalism,but I very much doubt it.The situation in Greece is not much different from many other countries including the U.K. and the U.S. Take note of what happens in Greece it's probably a good indication of your country in the very near future.
     
  6. Queso macrumors G4

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    #6
    Portugal is already looking very shaky, and its only the size of the Italian economy that is currently shielding it from a similar fate. The immediate problem for the UK is that if the markets decide to head for safe havens again the Pound is going to tank, which will most likely throw us sharply back into recession.
     
  7. Ugg macrumors 68000

    Ugg

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    #7
    Exactly.

    I remember thinking that there was no way in Hades that Greece was ever going to be able to afford all the facilities that were built for the Olympics. After the games were over, it seemed as though they might just pull it off but it was all a smokescreen of corruption.
     
  8. fivepoint macrumors 65816

    fivepoint

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    #8
    Oh no, it can't be OVERSPENDING! It couldn't possibly be that! There's no way they should have been more frugal and SAVED more. That's ridiculous! :D
     
  9. takao macrumors 68040

    takao

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    #9
    and the institutes which gave greece new loans over and over again sure didn't help.. that now other EU countries have to jump in is ridiculous

    even more ridiculous is how according to polls 70% of the greece are against accepting help from other countries and they have people i nthe streets protesting the budget cuts... i somehow suspect that politicians in Greece aren't really telling them how grave their position is already


    about other countries being downgraded: most other countries start out quite a bit higehr than greece in the euro zone
     
  10. zap2 macrumors 604

    zap2

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    #10
    One could just as easily claim its the under collecting of taxes.(as it seems tax evasion is a big problem in Greece)

    The truth is likely somewhere in between, as either one could have been the solution(and going forward, it will likely be a cut in spending with increased tax collecting revenue which will be the long term solution)
     
  11. fivepoint macrumors 65816

    fivepoint

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    #11
    Really? So, really the solution to their problem could have been as easy as increasing taxes a bit. Wow, I wonder why they didn't do that! It probably would have been a pretty popular idea if they could have completely eliminated the problem with a simple tax increase. Dang should have thought of that sooner! ;)

    Hilarious to see how people try to skirt around the real problem. The real problem is big government, big spending, big deficits, entitlement programs, and anti-business regulations which push industry and job providing businesses elsewhere.
     
  12. ucfgrad93 macrumors P6

    ucfgrad93

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    #12
    While most of that is true, you can't ignore the ongoing tax evasion in Greece. It seems to be the national past-time.
     
  13. barkomatic macrumors 68040

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    #13
    From what I've read, it doesn't sound like Greece's labor unions and general population are in a place where they will agree to the austerity measures required to get aid.
     
  14. ucfgrad93 macrumors P6

    ucfgrad93

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    #14
    I have read that as well. It is going to take a lot of sacrifices on everyone's part in Greece if they are to get out of their current mess.
     
  15. Applejuiced macrumors Westmere

    Applejuiced

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    #15
    Nobody pays taxes in Greece, thats the problem.
    People own a house, a beach house and drive a brand new Benz and claim they make under 10,000 a year:eek:
    Doctors, actors, politicians you name it.
    Most want to milk the government for money and healthcare and collect a big pension when in reality they never worked on the books or paid into it to begin with.
    And request a 14th and sometimes 15th months pay in a year.
    And everyone wants to be government employee. They are the most overpaid and underworked lazy people you will ever meet. They drink cofee and hang out in their offices all day and try to do as less as possible. Productivity zero and when you need something done they act like you're bothering them. And when you need some paperwork done they either put your thru hell to get it done and make you wait forever or ask you to hand them money on the side to get your job done ASAP and without any problems.
     
  16. Ugg macrumors 68000

    Ugg

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    #16
    You've proved your ignorance of foreign affairs in past threads, but this time your single minded rant is really over the top. As Applejuiced points out below, it's really about corruption, and, believe it or not, it stretches back to the Ottoman Empire and predates any of your preconceived notions about government. Rant and rave all you want, Greece will only be able to solve their problem if they can deal with corruption. Avoiding the taxman is a national sport there.

    It's really sad that it's gone so far. I hope the country is able to find a way out of this mess.
     
  17. Applejuiced macrumors Westmere

    Applejuiced

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    #17
    Exactly.
    Im born and raised in Greece so I have lived and experienced these things first hand. I love my country and heritage but they really have alot of hard work ahead of them and I hope they do improve.
    It should first start from the top and then trickle down.
    You cant expect regural citizens to change while in the meantime Politicians receive money from Siemens for example and many other corruption and bribery scandals.
    Its not going to happen overnight but small steps that have been happening look promising.
    Hope it works out cause it really is a beautifull country.
     
  18. RawBert macrumors 68000

    RawBert

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    #18
    The Greeks should pray to Zeus and Ploutos for wealth and prosperity.
     
  19. rhsgolfer33 macrumors 6502a

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    #19
    No one said anything about a tax increase, they said Greece should properly enforce the tax laws they already have.

    Hilarious how people are so blinded by their own ideology that they can't see the truth is much more moderate than outlandish statements leaning one way or the other. The real problem is lots of spending combined with lack of revenue; notice, that means their are two ways to fix the problem, not just one "cut it all, deregulate it all" approach. Preferably, IMO, enforcing current tax laws and possibly creating new ones, combined with reduced spending would be the way the government should fix the problem; not just extreme cuts and deregulation (mind you, this is coming from someone who leans much towards libertarianism and favors capitalism quite a lot).

    Greece is quite a beautiful country with a lot of nice people, I hope they are able to overcome this mess as quickly as possible.
     
  20. Peterkro macrumors 68020

    Peterkro

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    #20
    Although your post is largely correct I think it is worth pointing out that ordinary workers pay tax directly from their wages,not much chance for tax avoidance there.It is the business people and those in the professions who avoid tax on a huge scale,plus those in the black economy of course. It's interesting to compare Greece with the U.K. for instance the accepted figure for the black economy in the U.K. is around 20% of economic activity,quite high,tax avoidance by those in business and the professions is also rampant,not so different to Greece.
     
  21. Queso macrumors G4

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    No. The solution to the problem is to enforce the current tax rates. However, in a system where tax officials can be easily "persuaded" to look the other way there needs to be a massive shakedown of the civil service before the true cause of the government's financial problems can be dealt with.
     
  22. iGav macrumors G3

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    #22
    It's part of the solution, but alone it isn't even going to scratch the surface of the astonishingly deep, deep sh*t that Greece find themselves in.

    It does make you wonder though quite how anyone could ever think a single currency could work across countries as different as Greece and Germany.
     
  23. barkomatic macrumors 68040

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    #23
    Let's say the worst case scenario occurs and Greece simply defaults and receives no aid. What happens to Greece, the EU and the global economy?

    By the way, I'm beginning to think that Greece wont be allowed to default--even if they don't enforce austerity measures. It seems the EU is sufficiently terrified of the prospect.
     
  24. flopticalcube macrumors G4

    flopticalcube

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    #24
    All this fuss over such a tiny economy. California has problems 10X the size of Greece.
     
  25. Zombie Acorn macrumors 65816

    Zombie Acorn

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    #25
    The euro takes a dive and our exports follow along with it.
     

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