What's your thoughts about the current situation of Greece?

Discussion in 'Off-Topic' started by BurnPyro, Jul 12, 2015.

  1. Morfeas

    Morfeas I need me some PIE!

  2. DarkJello

    DarkJello I need me some PIE!

    Please explain.
  3. StormChasee

    StormChasee The King of Potatoes

    The problem is if the government debt did not lead to sustainable and real economic growth without continuing to be artificially pumped by debt spending, all you're doing is trading future economic growth for a false near-term benefit (as Greece is finding out now).

    If business investments don't pan out with real growth the business will face serious ramifications. Nations are no different.
    IMAGIRL, DarkJello and Ohmin like this.
  4. StormChasee

    StormChasee The King of Potatoes

    Continual and excessive debt is bad regardless of who gets into it. As I said before governments have more tools to deal with it than individuals or businesses, but the key principles remain. Excessive debt leads to problems period.
    IMAGIRL, DarkJello and Ohmin like this.
  5. DarkJello

    DarkJello I need me some PIE!

    The major tool used is legal counterfeiting. The only surprise is that people keep falling for it generation after generation and century after century.
    Ohmin likes this.
  6. DarkJello

    DarkJello I need me some PIE!

    Making the case.

  7. Bellagion

    Bellagion I need me some PIE!

    Yeah. I don't think anyone is disputing that.
  8. DarkJello

    DarkJello I need me some PIE!

    If that was true, why are so many "genius" governments printing money like it was water??
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  9. Bellagion

    Bellagion I need me some PIE!

    Anyone in this thread. :p
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  10. DarkJello

    DarkJello I need me some PIE!

    Well played.

    Democracy practically guarantees continued economic dipshizzery for 100s or 1000s of years. Many other tyrannical forms of gooberment are even worse than socialism. Sadly, Murica is moving one tiny step after another towards tyranny, and thus away from liberty and freedom. I wonder how much longer the host can survive all the vampirism. Also, how uncomfortable will the next collapse be compared to prior meltdowns?

    Good luck to one and all.
  11. badgerale

    badgerale Warchief of Wrath

    The greek situation isn't really about capitalism or socialism, just bad governance.
  12. Ohmin

    Ohmin Forum Royalty

    Well (crony) capitalism and socialism are often tied to governance.

    Anyway... Incomplete write-up of time-line starts with this:


    From 1980, where Greece had a reported Debt to GDP ratio of 22.6%, it rose steadily throughout the 80's and into the early 90's to about 100% Debt to GDP. There, throughout the remainder of the 90's it seemed to hold pretty steady until 2008-ish. From there it rose to a high-point of 177.1% as reported in 2014, with only a (relatively) minor dip in 2012. I'm still looking up unfunded liabilities for Greece, to see what, if anything, that adds to it to the picture.

    The causes for this increase in debt are:.... things I need to research. (TBD)

    Of significance to me, I compared it to US Debt to GDP over the same time period, and the US followed mostly the same pattern, massive raising of debt through the 80's (a bit worse than Greece actually) followed by a relatively level period (much better than Greece's) through the 90's, especially Clinton's second presidency. Come 2008 the Sub-Prime Mortage fiasco hits and debt starts rising again, also going over 160% Debt to GDP.

    So what's the main differences here?

    1. Greece is part of the EU. As a member of the EU, the Maastricht Treaty applies, which states that no member shall go above 3% of GDP to paying Interest on their debts (at least not without penalties). This was a pressure enough to have Greece secretly loan 2.8 Billion from Goldman Sachs (0.6B of which was paid back directly to Goldman Sachs) in 2002 with a variable interest rate. By 2005 that loan's debt had ballooned to 5.1 Billion. While that undoubtedly seems like a small amount, compared to the 150-ish Billion GDP of Greece in 2002, or the 250-ish Billion GDP of Greece in 2005, it still says a lot about the international pressures exerted on Greece to maintain specific numbers at specific times.

    2. To the best of my knowledge, Greece hasn't implemented 0% interest loans or Quantitative Easing. Please do correct me if I'm wrong. The US is currently paying 4% of it's GDP towards paying down Interest, but this does not take into account the effect of 0% interest loans from the FED, or of it's Quantitative Easing program, wherein it buys bonds and whatnot (as I understand it, the specifics may be different).

    3. Greece is a relative small nation who's currency does not act as the world's trade currency outside of Europe (and the nation itself doesn't even control it's own currency in the same way the US does).

    EDIT: I'm a *******. Though the US followed the same pattern, the magnitude is also less. Learning to properly read charts is important folks.

    Now, someone get me a frying pan to make use of this egg that's all over my face...

    Anyway, this is still only a VERY PARTIAL (as in just fledgling) timeline on one aspect of the situation. There's a lot of research to do and I'm not willing to copy-paste Wikipedia's timeline (I like to confirm my sources and stuff, especially with an open-source 'pedia). I'll update this post more with more specific data overall, as time permits.

    Like I said, this will take a while. Thanks for patience.
    Last edited: Jul 21, 2015
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  13. Dagda

    Dagda Forum Royalty

    after you're through i'd be interested to see where your line and the wiki-line differ
  14. Ohmin

    Ohmin Forum Royalty

    Well, the wiki entry with the timeline starts at 2009. I don't know if it even will differ past that point, but I'm taking a longer approach if nothing else. I'm trying to see cause of the events of that year and what lead up to it, rather than just how it was handled after the announcement.

    For those that want the wikipedia entry mentioned: https://en.wikipedia.org/wiki/Greek_government-debt_crisis_timeline
  15. DarkJello

    DarkJello I need me some PIE!

    Last edited: Jul 20, 2015
  16. rodar

    rodar Well-Known Member

    The deeper cause of the current Greece situation is that Greece failed to successfully change their spending patterns to accomodate the Euro. Pre-Euro Greece government spent more then it received, then debt was kept a constantly high but sustainable by inflating some of it away. A fairly common tactic. post-Euro the inflation handle is not in control of greece anymore. Spending patterns were not adjusted enough and debt stuck around.

    There also was some uh... let's call it inventive bookkeeping done by Greece to meet the requirements of joining the coin-union in the first place as you noted in another post. The 3% rule is there exactly to prevent ballooning debt because it can't be magicked away anymore like in the pre-Euro days.
  17. Ohmin

    Ohmin Forum Royalty

    Found an interesting article on the subject from 2012:

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  18. Ohmin

    Ohmin Forum Royalty

    Clean Slate Protocal Initiated. Commence overly long Timeline (still Incomplete):

    1940-1944: Greece is invaded by the Axis, this effectively destroyed the nation's economy, as well as resulted in the deaths of many. A resistance movement had been formed during the occupation: Εθνική Αντίσταση ("National Resistance" called the "Greek Resistance" internationally) though it was of course formed of numerous different groups, several with British support. King George the II, the previous ruler, was run out and hid in Egypt.

    Many production areas were destroyed, and starvation had become a huge problem by the end of the occupation.

    News reel produced by Universal Studios: https://upload.wikimedia.org/wikipe...12-14_Strife_Torn_Greece_Gets_Food_Relief.ogv

    1946: Greek Civil War starts, primarily between US and UK backed monarchal government, and communist backed Democratic Army of Greece (DSE) backed by Albania, Yugoslovia, and even Bulgaria (one of the Axis powers that had occupied Greece during WW2, though it had the best public relations of the three that participated).

    1947: Greece (along with Turkey) is one of the first major recipients of aid from the Truman Doctrine, and later the Marshall Plan.

    1949: Greek Civil War ends. Support from Yugoslavia and other nations slowly withdrew from the DSE, it's members eventually retreating to Albania or Uzbekistan.

    1951-1955: Greece joins NATO, or "North Atlantic Treaty Organization." Field Marshall Papagos resigns from the military and founds the Greek Rally Party, gaining a seat but unable to create a government until 1952, wherein his party acquires 239 seats out of 300. In 1955 Papagos dies and King Paul appoints Karamanlis as his replacement.

    1962-1964: Karamanlis gets Greece to join the "European Community", however, dissent over the validity of his election in 1961 prompts Papandreou, leader of the Center Union party to call for a reversal of the election, citing authoritarianism. In 1963 a Pacificist rally attempted to march from Marathon to Athens, but police cracked down on it calling it illegal and arresting participants. Lambrakis protected by being a member of parlaimant, marched alone, but was later run down and ultimately killed. In the wake of this Karamanlis resigned and went into exile. Papandreou won the election that year.

    Papandreou would later attempt to take control over the Ministry of Defense. The King declined to sanction the move, leaving Papandeou to resign and members of the left-leaning Aspida (shield) movement to be arrested and tried.

    1967-1974: The Rolling Stones held a concert. The Prime Minister dissolved Parliament, and a military coup was carried out (in roughly that order). Colonel Papadopoulos named himself Prime Minister and Regent. Speculation that Papadopoulos had CIA backing spread (well founded, he had received training and became an Agent after WW2, he was also a German collaborator working in the Security Battallion during the occupation, though he initially fought against Italian occupation).

    In 1969 and onward, the miltary rule in Greece received open support from the US Government, including official recognition in 1970. It also remained in NATO.

    In 1973, another coup, this time by royalist military (primarily the navy), was attempted but failed, in which the Prime Minister declared the nation a Republic. However, Papadopoulos lost more and more support, a large protest was held at the National Technical University, involving thousands of protestors which the army sent in to get rid of.

    In 1974 Turkey invaded Cyprus (then under Greek control), claiming a very small portion of the island.

    In the face of these internal and external issues, Papadopoulos had lost the support of the military, and another coup involving several branches (navy, army, etc.) was successful. Greece was once again called a Democracy.

    However, the result of this is in essence yet another entirely new government (and not just in the parliamentary meaning). A cease-fire between Turkey and Greece was obtained.

    This new government would carry on to today, and effectively serves as a sort of "starting point" in terms of economy. However, the history is still important. Greece remains part of NATO, and part of the European Community (a political precursor of sorts to the EU as it is now).

    After the initial invasion and cease fire, Turkey invaded Cyprus again, this time taking a much larger portion of the Island, prompting UN intervention. Other stuff happened as a result but we're focusing on Greece here.

    It is also noteworthy that between 1967-1972 economic growth under the regime was doing quite well, including large-scale public works such as hydroelectric dams, large invemestments from companies such as Coca-Cola, etc. But this didn't stick obviously. There were also severals scandals and accusations of crony capatilism, as well as disputed policies such as multiple questionable loans for hotels (many of which are still abandoned projects once the load was secured), as well as writing off agricultural loans.

    1975-1980: More stuff happened. Will get to it soon-ish, as well as the 1980-1992-ish bracket, the 1993-2001 bracket, and the 2002-2009 bracket, and then, finally, modern times. Hurray!

    If I went a little overboard it's because it's interesting to me, to see the modern history of the place (something I'd never researched or been taught prior), and how various actions have helped shape the current political and economic climate is I think important, as I mentioned before. I spoke in the "On Politics" thread about how, in my view (though others are free to disagree) the actions of specific individuals can help shape the climate, which makes future actions more or less difficult. This is especially true when it comes to treaties, and it is very obvious that treaties and foreign policies have had a profound influence on the current Greek Debt Crisis... which again I'll get into more detail later.
  19. DarkJello

    DarkJello I need me some PIE!

    Anyone that has bothered to dig deep into the Greece/Euro crisis, should find the following hypothesis fascinating:

    Share your thoughts and such on this information.

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