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Old May 11th, 2010, 8:41 am
moogirl  Female.gif moogirl is offline
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Join Date: 22nd November 2008
Location: Australia
Age: 24
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Re: Crisis in Greece, the Euro Area and the European Union

Quote:
Originally Posted by Klio View Post
IMHO you are blowing this WAY out of proportion. I wonder who you ahve been talking to, but expats don't always have a very clear view of present circumstances, and may be even more influenced by memories of the Civil War and the Junta - their own memories or those of their parents and grandparents. Greece has changed hugely in the last 20 years. I remember it having an really Levantine rather than western European air about it even back in 1990. I am sad to see that gone, but in many ways it really does feel like an organised EU country most of the time, and people have come to take that for granted, too. ANd since small-town corruption in the countryside is a very intimate measure of a country, I can tell you from experience with working with local officials in rural areas in Greece, Italy and Austria that Greece isn't perfect, but didn't seem outrageously corrupt or badly organised to this Austrian, while Italy did.

As far as I can tell, there has been a fairly reasonable succession of governments of the two sides (Nea Dhimokratia - moderately right and PASOK - moderately left), with slowly decreasing (but still relevant) corruption since I have been watching the situation (that would be c. 1992 or so). Now, I haven't been there for a year now, but I don't recognise your image of widespread radicalism *AT ALL*. Yes, there is scepticism about governments (which in Greece goes with a rather unfortunate and almost glorified tradition of tax evasion), but I haven't found it much worse than in other 'standard western' countries - such as Austria, for example.


What you need to understand is that while Greeks are grumbling about their government and might sometimes be passionate about some cause (occasionally extreme causes, too), they are hard-working people used to be on their own when it comes to fend for their prosperity, but even services such as education (I don't know any country where so many people pay for so much private tuition, particularly in foreign languages). They are, as far as one can generalise, above average enterprising and resourceful in my experience (perhaps because they have had to be for so long, I am not sure). Moreover, they are very patriotic, and mostly in a constructive way. Which means (I think at least) that a large majority is likely to be moved to action or at least a willingness to agree to whatever is necessary to save Greece before it comes to serious chaos. These are factors that can't be underestimated.
Of course, I may be exaggerating as I said earlier, but I think you seem to be overlooking the cause of the riots themselves - the Greek people want to keep all their government benefits and their high public servant wages. Which, to me, implies that they aren't willing to give up their personal cash for the good of the country as a whole - contradicting what you're saying here about them being willing to do whatever it takes to get Greece back on track. Of course, some people (most probably in the private sector) want the rioters to get out of the way and let the government cut their wages and benefits, but they continue to riot, and these are the people who seem to represent the mass feeling in Greece. They feel they are being hard done by, despite the fact that all the measures that have been taken are fairly minor and lots more will need to be taken to get the country back on track. The government has essentially been backed into a corner.

Quote:
Originally Posted by Klio View Post
BTW - you also get Communists in Italy - and they are now pretty cuddly cultured lefties - at least the ones I have met, and to judge by their TV channel and newspapers. It wasn't always thus, of course (back in the 1950s things were pretty radical - the Don Camillo stories are a brilliant entertaining introduction to that period).
There are actually active communist parties in a lot of European countries, with France and Ireland having them as well as Greece and Italy.

Quote:
Originally Posted by MmeBergerac View Post
Maybe we're politically more stable than Greece, but that doesn't mean that our government can handle the crisis. I wish it would! But the only measures they've taken in the last two years have tended to increase expenses even more and they've not created employment.
I can only imagine what it would be like living in a place with 20% unemployment. We can only hope Portugal pays you back - they have a few hundred million US dollars borrowed from Spain.

--

I feel so sheltered reading all your horror stories about the GFC in Europe! It's really hard to comprehend from where I'm standing, because it didn't really have very much impact here thanks to our government's quick and effective stimulus package and China's stable economy. I guess I should just tell you all to move out here - we didn't even go into an official recession and have unemployment at around 5%, which is essentially as low as it goes. It was at around 4% pre-GFC, but we'd had a 15 year long boom to get it to there.

Quote:
Originally Posted by Klio
If the markets worked as they should, being an almost natural reflection of the real value of things (including whole economies), then I'd understand it. But the commentary often makes it sound as if in these matters the market mechanism becomes counter-productive and overreacts, bringing down companies and whole countries which might have survived otherwise. So why does it go wrong?

Can anybody with some economic expertise comment on this? This is, frankly, something I just don't understand! It seemed OK when only companies were involved. But if that market mechanism can bring down whole countries now, it would be good to understand how it actually works (or didn't).
If you want it the simple way, things are only worth what someone is willing to pay for it. So, "real value" does not actually exist in economics. Confusing, I know. As a result of this, we have speculation and the buying and selling of shares, which is (supposed to be) guesswork. Economics is a strange yet fascinating field.

By the "market overreacting", it probably is referring to a large withdrawal of investment funds, either by banks being unwilling to lend money to businesses to invest in capital, or stockholders selling their shares back to the company. When people/stockholders aren't willing to invest money in companies any more due to the economy being perceived to be fragile, which in turn makes it fragile because there in no longer any money for capital and businesses contract - it's a big circle. This big circle is what made the Great Depression in the 30's so bad, because the governments did not take ANY action, believing the market would right itself eventually. However, governments control quite a bit in an economy, mainly in the form of TAXATION and INVESTMENT/EXPENDITURE. They can withdraw money from the market in the form of tax (which controls inflation) or they can injection money into the economy in the form of government expenditure (which creates employment). Governments and businesses aren't as separate as you might think. Businesses receive benefits or subsidies if they do certain things as well as investment if they're in certain industries, and the government receives income in the form of tax. The two are interlinked. If business starts failing, then the government loses their income, and if the government has blown it's budget and cuts investment, businesses lose money needed for capital. Trying to separate the two when discussing the economy is not really doable.

Not sure if I answered your question, but I tried. If you want to ask something more specific I could discuss it with my Economics teacher if I don't already vaguely know.


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