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Old May 11th, 2010, 12:04 pm
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Klio  Female.gif Klio is offline
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Join Date: 08th February 2008
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Re: Crisis in Greece, the Euro Area and the European Union

Thanks, moogirl - that was a useful economics lesson.

Reading it I realise that I have seen bits of this here and there, but never quite so nicely put together in a concise way.

I am with Mundungus - and the noises I hear privately out of Greece are that many people are very worried about the rioters - they *want* these reforms to succeed even though they know that it will hurt them personally, and they know that the riots might mean delays which Greece can't afford.

With all that stuff going on in the UK I haven't had time to read Greek newspapers (reading modern Greek takes me a lot longer than reading English or German), but from the little I have seen my impression is that a large majoity of the Greek peple are taking this with admirable calm.

I stick by my point that the radical element (though small) is worrying - but not because it might take the people with them in a revolution. IMHO the worrying factor is that they might just cause enough trouble to delay the necessary reforms. In a state on the brink that could be a problem.

Moreover, I worry whether bad TV pictures of rioting mobs burning stuff could have a bad influence, too (and note that the riot pictures in recent years almost always come from a very small part of Athens, but you wouldnt know that almost the whole country is calm from the pictures we are seeing outside Greece).

Originally Posted by moogirl
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.
The weird thing is that here in Europe we hear all this news about how our economies are in a horrible state - but it also feels a bit as if this weren't quite so true. I think you have to understand that we aren't all going down in panic or poverty just yet - not from where I am sitting anyway. Yes, unemployment has risen, and those who are hit have a very tough time. I am not belittling the plight of those who have been directly hit. But the general mood isn't (yet?) one of doom and gloom - at least not in the countries I have recently been to (apart from the UK that would be N Italy, Austria, Germany, Belgium and Slovakia). I know of nothing like the sort of stuff you see happening in the US, with mass forclosures, and former middle class families needed food aid (!!!) in large numbers. I think the fairly robust social systems of most European states have helped to make the whole problem less harsh (or have they just made it less visible? I am not sure!).

I expect it to be a lot more painful once those deficits run up for stimulus packages and for keeping that social backup going through the crisis have to be paid back. I know that our new government (whatever it will be) will have to make awful cuts, which may even cost me my job. But somehow it doesn't quite feel like it just yet. However, I am assuming that they'll try their bst to make the cuts in a way that won't throw too many people into abject poverty. If running up that debt helps you to do that, I am OK with it. After all, less money in your pocket might mean the difference between having food and housing for the people at the low end of the scale, while further up it might just mean not being able to have a second car or a new flatscreen TV. If we can somehow manage to cut back by distributing the pain to avoid abject poverty as much as we can, then I shall be content.

I'd be curious to hear from people in those countries most affected (the fabled PIIGS - Portugal, Ireland, Italy, Greece and Spain) whether it is the same there..... that you *know* it's bad rationally, but it doesn't quite feel like it yet?


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Last edited by Klio; May 11th, 2010 at 12:16 pm.
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