Greece could receive bailout from other European nations

myp · Feb 9, 2010

Amid a massive budget deficit and growing financial crisis, Greece recently announced spending cuts along with a state wages freeze and tax reform. After poor outlooks for Greece and the Euro, the EU seems to be ready for a bailout of sorts for Greece as well as other nations that could be in similar situations.

source: http://www.reuters.com/article/idUSTRE61819O20100209

Thoughts?

deanhills · Feb 9, 2010

myp said:
Amid a massive budget deficit and growing financial crisis, Greece recently announced spending cuts along with a state wages freeze and tax reform. After poor outlooks for Greece and the Euro, the EU seems to be ready for a bailout of sorts for Greece as well as other nations that could be in similar situations.

source: http://www.reuters.com/article/idUSTRE61819O20100209

Thoughts?

Wow! I thought the EU was having financial problems of its own? If they don't, I'm certain this could get them into financial trouble?

myp · Feb 9, 2010

deanhills said:
Wow! I thought the EU was having financial problems of its own? If they don't, I'm certain this could get them into financial trouble?

Well this is their problem as the Greece uses the Euro as well and their debt affects the value of the currency.

Dirk · Feb 9, 2010

deanhills said:
Wow! I thought the EU was having financial problems of its own? If they don't, I'm certain this could get them into financial trouble?

Greece is part of the EU. The problems with its economy affect the economy of the EU as a whole.

I better clear something up here. Bailouts do not cause economic problems in themselves - since they are allegedly the solution - but they are counterproductive. What i mean is, while the bailouts are economically damaging, they are a response to economic problems.

Revenue is taken from taxpayers. They provide artificial stimulation to the economy, so that rich people get even more money. The idea is that they use that money to kickstart the economy by using it.

It's actually based on one of the principles of what i call idiotonomics.

You know the Trotskyites love the idea of wealth redistribution? Well, it's like that... only backwards. And realistically, it ultimately has few economic benefits.

Then, when the banks lend again and the recession recedes into the past, and the economy picks up again, the Government says "look what we achieved, eh?" and claims credit for the economy recovering.

Ultimately, even if it worked, it's still the money of ordinary workers. The least we should get in a democracy is a referendum.

deanhills · Feb 10, 2010

Dirk said:
Greece is part of the EU. The problems with its economy affect the economy of the EU as a whole.

I better clear something up here. Bailouts do not cause economic problems in themselves - since they are allegedly the solution - but they are counterproductive. What i mean is, while the bailouts are economically damaging, they are a response to economic problems.

Revenue is taken from taxpayers. They provide artificial stimulation to the economy, so that rich people get even more money. The idea is that they use that money to kickstart the economy by using it.

It's actually based on one of the principles of what i call idiotonomics.

You know the Trotskyites love the idea of wealth redistribution? Well, it's like that... only backwards. And realistically, it ultimately has few economic benefits.

Then, when the banks lend again and the recession recedes into the past, and the economy picks up again, the Government says "look what we achieved, eh?" and claims credit for the economy recovering.

Ultimately, even if it worked, it's still the money of ordinary workers. The least we should get in a democracy is a referendum.

Your explanation sounds like a typical Government one, and as transparent as mud. I'm not saying you are wrong, I"m just saying that it totally does not make any sense to me. If one has X amount of money in the kitty. And times are bad, then you conserve as much as you can of that money. If you do not have money and you go into debt, then you are probably shooting yourself in the foot, while you are trying to "save" a country that you feel compelled to save.

Will the taxpayers of Europe have a say in this?

Dirk · Feb 10, 2010

deanhills said:
Your explanation sounds like a typical Government one, and as transparent as mud. I'm not saying you are wrong, I"m just saying that it totally does not make any sense to me. If one has X amount of money in the kitty. And times are bad, then you conserve as much as you can of that money. If you do not have money and you go into debt, then you are probably shooting yourself in the foot, while you are trying to "save" a country that you feel compelled to save.

Sorry, i'm bad at explaining things. Alright, let me try to explain the flow of money.

Ordinary taxpayers -> Government -> Rich people - > More rich people

Basically, it's ordinary people that fund the Government. That's why going into debt isn't a problem (for them). Say that i got all my money from you. If i go into debt, it's not me that has to pay it, it's you.

The Government giving it to rich people is the bail-outs.

Rich people giving to more rich people is buying things and investing money, which is what the bail-outs intend to do.

The economy thus recovers, since it is based on the flow of capital. Rich people own most of the capital in the world, so they're the ones that the economy revolves around.

Is that a better explanation?

Do you get it now?

Will the taxpayers of Europe have a say in this?

Er, no. No, not really. Certainly not directly.

deanhills · Feb 10, 2010

Dirk said:
Basically, it's ordinary people that fund the Government. That's why going into debt isn't a problem (for them). Say that i got all my money from you. If i go into debt, it's not me that has to pay it, it's you.

You explained this very well the first time. It's perhaps I who did not put my point across properly. Bailing out poor countries aren't "ordinary" budgetary items, they are extraordinary items. I would have imagined that if you have an extaordinary item that has not been budgetted for that you would have to vote on it first, and during the presentation indicate exactly how this "bail-out" is to occur and where the funding for it will be coming from?

deanhills · Feb 10, 2010

I wonder whether the Greek can really be helped. If they can't agree on austerity measures in their own country, and are prepared to buckle up, is it really fair to expect the rest of the world to help them? I.e. if they can't help themselves, can the world help them?

Refer article in Yahoo!News:

ATHENS, Greece ? Greek workers shut down schools, grounded flights and walked out of hospitals Wednesday to protest austerity measures brought on by the nation's staggering debt, as European leaders wrangled over whether and how to come to the country's financial rescue.
Greece's prime minister headed to a European Union summit where leaders will take up the debt crisis Thursday. Greece's fiscal problems have shaken the euro and underscored the interconnectedness of the global economy.

European stocks rose on hopes for a rescue plan that might take pressure off other struggling eurozone countries such as Portugal and Spain, but it is unclear what wealthier EU nations will do to help Greece.

The EU's largest economies, Germany and France, are ready to offer their support to Greece at the summit but will wait to see if other countries join the effort, a French diplomatic official said in a briefing ahead of the summit. The official, who spoke on condition of anonymity because of the sensitivity of the issue, did not provide specifics.

Dirk · Feb 11, 2010

Greece is a great example of the failure of representative democracy.

Basically, all the parties are to the right of the population (the communist party is communist only in name by the way) and there's a pretty big anarchist community in the cities, along with quite a few liberated areas.

When the successively unpopular Governments put a foot wrong, the entire populace goes up in arms. We've had the country on the brink of civil war on and off for half of last year. Now that the Government is making drastic spending cuts on vital services, the workers - and ordinary people, by the way - are out to protest it.

The story's quite familiar - it's their fault, why should we suffer to fix it?

DodgeFB · Feb 11, 2010

Dirk said:
Greece is a great example of the failure of representative democracy.

Basically, all the parties are to the right of the population (the communist party is communist only in name by the way) and there's a pretty big anarchist community in the cities, along with quite a few liberated areas.

When the successively unpopular Governments put a foot wrong, the entire populace goes up in arms. We've had the country on the brink of civil war on and off for half of last year. Now that the Government is making drastic spending cuts on vital services, the workers - and ordinary people, by the way - are out to protest it.

The story's quite familiar - it's their fault, why should we suffer to fix it?

I know less than nothing about this. But from what you say I would guess if it was "fixed" they would just do it again.

deanhills · Feb 11, 2010

DodgeFB said:
I know less than nothing about this. But from what you say I would guess if it was "fixed" they would just do it again.

Exactly. Greece would have to show first that it is willing to make changes to save itself, otherwise it would just be good money wasted. What would be more impressive is if the EU could set up a transitional Government in which the EU would be responsible for administrating the funds for bailing out Greece, so that the remedies would be applied in a savvy and hands-on way.

Greece could receive bailout from other European nations

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