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Greece WILL default. If the EU bails them out it is STILL a default. It makes them a poor credit risk for the next couple of centuries or so. Might as well hand them over to ISIS.
Yep. You sure nailed that. Because Greece has ALWAYS been a hotbed of fundamental Islamic extremism. Even before Mohammed, believe it or not. All the way back to the days of Socrates.
Yep. You sure nailed that. Because Greece has ALWAYS been a hotbed of fundamental Islamic extremism. Even before Mohammed, believe it or not. All the way back to the days of Socrates.
Wait a minute. Mohammed wasn't even around until centuries after Jesus lived. Around 600AD. There was no Islam in the days of Socrates.
Pretty much. No large capital is going to be invested where it can be stolen. Countries that have a fair legal system create opportunities for investors and their citizens.
Poor countries can't even get moving without a strong and stable government dedicated to development. The typical story is a corporation will cut a deal with the rulers to set up mineral or resource extraction, but the wealth never trickles down to the masses. The rulers get rich, but they spend most of it outside the country, and the corporation gets what they came for and leaves.
Greece has been suffering from corruption for a long time. If they don't get that fixed any recovery will be weak.
Pretty much. No large capital is going to be invested where it can be stolen. Countries that have a fair legal system create opportunities for investors and their citizens.
So true. Only when a country has a well-developed set of laws to protect property rights and a legal system to enforce them do we see acceleration of development.
China, for example, doesn't currently respect western intellectual property rights very much - hence the piracy of everything from hollywood movies to software to advanced defense technologies, and the result is obvious.
China will one day move to protect intellectual property rights -- about the time they have a significant amount of intellectual property that needs protection.
Many, many greeks stopped paying for utilities and taxes.
Greece doesn't have a plan B and leaves that for after their coming civil war. Which will ensue once they are kicked out of the EU.
They sure have a bloated military budget they don't want to cut. And their military will therefore win/prevent the civil war while Turkey laughs at the whole situation because the Greeks will be back to where they were in the seventies.
I imagine those pom-poms on their soldiers' shoes constitutes the bulk of their military budget.
I doubt seriously there will be civil war. The Greeks are a tight, cohesive people. Besides, they're used to fighting Germans. Much experience in that regard.
There's a lot of resentment in Germany for keep having to bail out these other countries. There growing talk of Germany dropping out of the union. Take it from an American point of view, if say Mexico was part of the Dollar and we had to keep bailing them out becuase there economy was so screwed up, how would you feel? The Euro hasn't lived up to it's promises, at least for the Germans.
That last part isn't necessarily true. The Germans have GREATLY benefitted from being in the euro, largely at the expense of other Eurozone members too. If the Germans were still on the Deutsche Mark, it would be valued significantly higher than the euro is. Thus, it would be placing a big drag on heavily export dependent Germany. The Euro makes their exports far more competitive due to its relatively lower value. I remember seeing a statistic somewhere (can't remember where) recently stating that before the adoption of the Euro Germany had a very slight trade surplus, and sometimes even a deficit. However, since the adoption of the euro, Germany now has the largest or second largest trade surplus in the entire world. This is largely at the expense of other, weaker EZ members, in terms of both within the EZ and outside of it. If Germany and Greece are using the same currency worth the same value, thus causing their exports to be more or less the same price (obviously there are still some differences, but it completely cuts out all the exchange rate fluctuations), why would most people, either in or out of the EZ, buy a product from Greece when you could from Germany? Obviously, this isn't true in all cases, but very many. Hence, as I said, Germany's ballooning trade surplus.
This situation that has been created over the past decade and a half or so is especially harmful to the weaker EZ member states like Greece, Italy, Portugal, etc. Believe it or not, when Italy still had the lira it actually had a trade surplus. Now, its deficits are horrendous. And to add insult to injury, these weaker countries can't do the traditional and obvious fix of devaluing their currencies to increase the competitiveness of their exports because none of them have their own currencies anymore. Everything's controlled by the ECB and the big cheese, Germany.
So, while the above is a very quick and easy summation, the Germans and their economy have HUGELY benefitted from being in the euro- largely at the expense of the other poorer EZ countries. The euro has allowed their exports to become far more competitive than they otherwise would be, at the expense of making the weaker EZ countries' exports far less competitive. Although, to give credit where credit is due, the Germans also make highly effective and valuable exports.
I'm not trying to make this a bash Germany post because I agree with other people's premises too that this crisis sitting on Greece's lap is also mainly their own doing. They have to reap the consequences of what they've created. Greece never should have been allowed in the euro in the first place. Their economy is too unproductive and there is far too much corruption in comparison to other EZ members.
It should be interesting to see how this all turns out the next couple weeks. I know I'll be watching!
That last part isn't necessarily true. The Germans have GREATLY benefitted from being in the euro, largely at the expense of other Eurozone members too. If the Germans were still on the Deutsche Mark, it would be valued significantly higher than the euro is. Thus, it would be placing a big drag on heavily export dependent Germany. The Euro makes their exports far more competitive due to its relatively lower value. I remember seeing a statistic somewhere (can't remember where) recently stating that before the adoption of the Euro Germany had a very slight trade surplus, and sometimes even a deficit. However, since the adoption of the euro, Germany now has the largest or second largest trade surplus in the entire world. This is largely at the expense of other, weaker EZ members, in terms of both within the EZ and outside of it. If Germany and Greece are using the same currency worth the same value, thus causing their exports to be more or less the same price (obviously there are still some differences, but it completely cuts out all the exchange rate fluctuations), why would most people, either in or out of the EZ, buy a product from Greece when you could from Germany? Obviously, this isn't true in all cases, but very many. Hence, as I said, Germany's ballooning trade surplus.
This situation that has been created over the past decade and a half or so is especially harmful to the weaker EZ member states like Greece, Italy, Portugal, etc. Believe it or not, when Italy still had the lira it actually had a trade surplus. Now, its deficits are horrendous. And to add insult to injury, these weaker countries can't do the traditional and obvious fix of devaluing their currencies to increase the competitiveness of their exports because none of them have their own currencies anymore. Everything's controlled by the ECB and the big cheese, Germany.
So, while the above is a very quick and easy summation, the Germans and their economy have HUGELY benefitted from being in the euro- largely at the expense of the other poorer EZ countries. The euro has allowed their exports to become far more competitive than they otherwise would be, at the expense of making the weaker EZ countries' exports far less competitive. Although, to give credit where credit is due, the Germans also make highly effective and valuable exports.
I'm not trying to make this a bash Germany post because I agree with other people's premises too that this crisis sitting on Greece's lap is also mainly their own doing. They have to reap the consequences of what they've created. Greece never should have been allowed in the euro in the first place. Their economy is too unproductive and there is far too much corruption in comparison to other EZ members.
It should be interesting to see how this all turns out the next couple weeks. I know I'll be watching!
I agree with most you say here.
But it took fools to set up and agree to the Euro in the first place.
It took fools to give up their monetary sovereignty.
It took more fools to allow Greece to join.
And it took fools to lend Greece money.
I don't want to bash all of Germany either. But they provided their share of fools here.
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