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Greece is in the process of defaulting, and the Euro members are aiding and abetting it. Why? Because it cannot be avoided. Economic types call this an orderly restructuring of Greece's debt. There is lot's of precedence for this in sovereign bankruptcy; Argentina around 2000, Denmark all the way back in 1813.
Sort of like letting a derelict house fall in on itself. Just be sure it doesn't do too much damage to nearby houses.
Greece should do the above and then get off the Euro.
As long as Greece is on the Euro it's economy will be depressed. With their own currency, that can be devalued, they can become competitive in Europe and their unemployment situation will improve.
Greece needs a different prime interest rate than Germany does. But they are stuck with Germanies prime rate. So tax the principle on debt. You pay the government part of the interest on your debt. This will let each member-state in the EU set its own interest rate where it needs to be.
Greece needs a different prime interest rate than Germany does. But they are stuck with Germanies prime rate. So tax the principle on debt. You pay the government part of the interest on your debt. This will let each member-state in the EU set its own interest rate where it needs to be.
I'm not seeing how having a different rate than Germany is an advantage. Greece is benefiting from Germany's low rates. Having Greece with its own would mean Greece's rate would be much higher -- but they can't pay the low rate now. How is that better?
Also, my understanding is that the debt is public debt, not private debt. So, what exactly are you going to tax?
Rubbish. Greece has benefited enormously from the EU and they know it. The EU is a success. The problems today are around the Euro. The Euro and the EU are two different things.
How is Greece going to operate without borrowed money? They can't do it.
It would be tough but if they left the euro and reinstated the new drachma their exports would regain some measure of competitiveness in the world markets. Also tourism should see a bump as a Greek vacation would be considerably cheaper than it is now. Tourists bring in hard currency, certainly not enough to fund the government at its current level but better than most.
Their needs to be fundamental changes in Greek society and its not apparent that such a change is possible euro or not.
Greece is done unless they cut everything and be a hurting economic nation for ther next 10-15 years...
As we look on the EU's problems from North America... The Fact is the same things (high unemployment levels, Corruption, Too loose banking Regulations, all levels of Govronemnt unwilling to act to save their own countries butt, A High debt and a falling GDP ratio) is what got them in trouble and same problems that are happening over there are going to hit us hard sooner or later esp if the EU falls.
This is like a vicious cycle for the Greeks. Think about it. The metric is deficit as a percentage of GDP. So when you cut government spending, you're cutting the denominator. You cut more spending, you cut the denominator further which causes the shrinking of that % to be much more mathematically difficult. It's like going in circles.
I posited years ago that the whole EU thing would eventually fall apart since the countries are all bloated governments and the weakest links would drag at the currency\economies of the others.
So no personal accountability what so ever, eh? Should people who max out their credit cards and can't make the payments tell the credit card companies to " go to hell?" I honestly do not understand how your brain works.
The same way as the mindset of those who support the Obama/Reid/Pelosi spending plans up to November of last year.
This is our future unless we dramatically cut the size/scope of our federal government and dramatically cut the spending and our ever growing debt.
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