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Or it could have been that there are no real industries outside of tourism in these places, they didn't tax anyone, and have retirement at 55, then when the bill comes due people throw a hissy fit
Cyprus's economy is made up of something like seventy percent service sector. It's a house of cards, frail and unstable.
LOL, because Krugman says he was? Krugman predicted bankruptcy for Latvia. They are doing far better than their EU counterparts that were in the same mess.
Produce the quote. What he said was that if the Baltic countries stuck with the Euro, they face years of suffering, which they are.
The fact is that all the countries that embraced austerity are worse off while those who didn't are better off.
Playing devil's advocate here, why shouldn't the people of Cyprus have to put up some collateral for the loans they are seeking?
I don't think you are wrong for suggesting this, however, a great chunk of that money that they plan to take belongs to foreign investors and individuals. Is it fair that they pay for the down payment?
Or it could have been that there are no real industries outside of tourism in these places, they didn't tax anyone, and have retirement at 55, then when the bill comes due people throw a hissy fit
No, it's not the welfare state, as Dean Baker points out:
,
Quote:
if the problem is an excessive welfare state, the countries with the most generous welfare states appear to be doing just fine. If we just take the measure of spending relative to GDP, the leaders would be countries like Sweden, France and Denmark, all of which are surviving the crisis reasonably well. None of the crisis countries rate near the top of the list and Spain is an outlier in Europe for having a much lower than average share of government spending in GDP.
Playing devil's advocate here, why shouldn't the people of Cyprus have to put up some collateral for the loans they are seeking?
I don't think people are saying they shouldn't. I think what people are saying is that, when government says, "we are going to tax the money in your bank account at 3% tomorrow" it creates a bank run like you saw on its a wonderful life. Those aren't good things.
There were other options, that wouldn't have created a bank run
I don't think so. Putin has expressed his outrage about that step and the British government has said it will pay British customers of those Cypriot banks what is taken away from them. Since the Brits are not doing so well, I suppose politicians are not happy about it either, as they have more important things to spend their money on.
Foreigners have deposited 16 billion Euros on Cypriot banks, which is way more than this rescue mission is all about. So why is it fair to steal from small Cypriots?
Foreigners are not responsible for this mess at all. They shouldn't even be mentioned.
For Russia & GB, what happened is actually very good as their 'tax-hiders' will simply stop using this off-shore. BTW, to whom is Cameron going to reimburse the money? That people broke the law, who will tell him about that deposits?
What does it mean to be the new Argentina? It means they would have to devalue their currency and default like Argentina did, neither has happened. In fact unlike their counterparts that didn't make the tough decisions, they are now growing.
Quite a contrast to the stories coming out of Cypress. Actually Estonia, Latvia, and Lithuania are all doing very well after not following the spend, spend, spend model.
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