What is wrong with Greece?

Amtmann

What combination of factors - political, social, economic, and cultural - have conspired to make Greece the economic basket case that it has been for the past few years?

marozz

I'd say the main reason is that they had widespread corruption at every level.

Predalien

marozz wrote: »

I'd say the main reason is that they had widespread corruption at every level.

It didn't help that access to credit was remarkably easy, Greece was still able to borrow freely and easily in 2004 when controversy was emerging as to whether or not they had actually met the budget deficit requirements for entry to the Eurozone, it should not be easy for a country running a deficit that high to borrow so much but unfortunately it was.

It must be remembered too that both France and Germany broke the budget rules, so it wasn't just the supposed basket case that overdosed. The entire Euro project never enforced it's rules properly, laying all the blame at Greece is unfair to say the least, their borrowing was a product of an environment developed and allowed by the entire Eurozone which was often blinded by ego-driven ambition to develop a currency able to compete on a global scale with the dollar, without enough regard to the economic consequences of trying to shove very different economies into a one-size fits all currency.

golden lane

greece made a simple, but widespread mistake........when money becomes easily available...people, spend.......government's spend...councils spend......

they have had a great time.....now it is payback time.......

very sad for some people, but great for many others...

and there are still some doing very well out of the situation.....

Ellis Dee

Don't forget the Greek billionaires who swan around the Mediterranean in luxury yachts, and wouldn't dream of paying taxes. And they are treated like royalty when they turn up in places like London and Paris.:)

What hope is there of the ordinary citizen being willing to pay taxes and contribute when they see an example like that? With only the example of rampant and limitless greed to guide them, it any wonder that corruption is rife and a sense of national solidarity is weak?:eek:

I am pie

Poor tax income due to widespread tax evasion, ludicrous military spending doesn't help either. Biggest importer of arms in Europe and also the highest military spend in relation to GDP in Europe. 9 billion euro.

Took out advantage of german / french funding and spent a sizeable chunk of the money on arms from ......french and german arms companies !

mike65

Porsche Cayenne fever! Everyone was driving Fiats then they thought they were rich. Sounds familiar.

Lantus

golden lane wrote: »

greece made a simple, but widespread mistake........when money becomes easily available...people, spend.......government's spend...councils spend......

they have had a great time.....now it is payback time.......

very sad for some people, but great for many others...

and there are still some doing very well out of the situation.....

Greece is no different to any other country in that it is entirely funded and all economic activity it produced is derived from debt. Money lent by banks over time to give the illusion of growth. After all if all debts in existence, personal, business, countries or banks were to be paid back in full there would be no money in existence! That goes for any country.

Greece mis managed its credit supplies, economy and taxation & government spending to the extent that the falsehood of monetarism in general has become apparent much faster. Every country in the world is trapped in the same vicous circle. We can never pay off out debts as all growth and economic activity is inherently dependant on the creation of debt.

The expansion curve of fractionalised banking which all our economies are based on is now flattening out. The truth of this system which it is just an elaborate pyramid scheme is now becoming more and more evident.

Greece is a catalyst for helping other people to see a greater truth.

jwilco

Lying about their finances to join the Euro and having a voluntary tax system is it's problems. No one complained when they spent money on the Athens Olympics.

golden lane

Lantus wrote: »

Greece is no different to any other country in that it is entirely funded and all economic activity it produced is derived from debt. Money lent by banks over time to give the illusion of growth. After all if all debts in existence, personal, business, countries or banks were to be paid back in full there would be no money in existence! That goes for any country.

Greece mis managed its credit supplies, economy and taxation & government spending to the extent that the falsehood of monetarism in general has become apparent much faster. Every country in the world is trapped in the same vicous circle. We can never pay off out debts as all growth and economic activity is inherently dependant on the creation of debt.

The expansion curve of fractionalised banking which all our economies are based on is now flattening out. The truth of this system which it is just an elaborate pyramid scheme is now becoming more and more evident.

Greece is a catalyst for helping other people to see a greater truth.

germany did the same between the wars.........they will never do that again.........

The Corinthian

Amtmann wrote: »

What combination of factors - political, social, economic, and cultural - have conspired to make Greece the economic basket case that it has been for the past few years?

I'd also add historical. Greece was under the Ottomans for a long time and this fostered a certain level of rebellious irreverence against authority, which was seen as imposed from without. And when you don't see your government as necessarily representing you, but as something that imposes its will over you then things like tax evasion and corruption become socially a lot more acceptable - even patriotic.

Ireland has the same thing, to a lesser extent but for the same reasons. Even after independence, we still can't shake the idea that authority is something to be circumvented, something imposed on us, too - it's why 'cute hoors' are still to a great degree idolized here, just as they are in countries like Greece.

AVN_1

I'd say the main reason is that they had joined the Euro Zone.

OS119

AVN_1 wrote: »

I'd say the main reason is that they had joined the Euro Zone.

no, the problem is that they don't pay tax, and that their citizens respond positively to politicians who 'back off' tax collection when elections are in the offing.

Shipping billionaires don't not pay tax because its a rule of physics, they pay no tax because the Greek electorate vote in, repeatedly, politicians who promise tax breaks to Shipping Billionaires, and every other special interest group.

the EZ gave them access to cheap debt, but long before the EuroZone they were up to their eyeballs in debt, long before the EuroZone they were corrupt at every level, long before the EuroZone they built houses that were never finished so they'd never have to pay tax on them, and long before the EuroZone they thought that 30 years 'work' would pay for 20 years of education and 30 years of retirement.

the problem is they are bunch of idle fcukers with an entitlement complex.

flutered

the worst idea they had was to get suds and co to guide them into the eu.

The Corinthian

AVN_1 wrote: »

I'd say the main reason is that they had joined the Euro Zone.

That's like suggesting that the main reason a drunk driver has an accident is because (s)he bought a car. It's not, it's because they drove that car drunk.

To begin with Greece should not have been able to join the Eurozone in the first place; they were only able to because they falsified their government accounts. Secondly, when they did join, they went on a massive spending spree (paid for with low interest credit that came with Eurozone membership), leaving them with a massive debt.

Neither of those things are due to their joining the Eurozone, no more than the Eurozone created Ireland's property bubble, or Italy's debt mountain (which actually pre-dates the Euro and actually decreased under the Euro, up until the crisis). Membership of the Eurozone may have facilitated this, but it's not why it happened any more than buying a car causes you to drive drunk and have an accident.

Nonetheless, I have noticed that making snappy claims about the Euro, apparently without any knowledge of economics and even less interest in accuracy, is all the rage in some quarters.