


Greece and the euro

Flaming February

The game of brinkmanship continues to the very end

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Readers' comments



Its the Euro that is the problem. Yes Greece is in a crisis of its own making because it turns out it is not after all a functioning modern state, but much better states like Portugal are also in deep trouble and the blame for that is the construction of the Euro as a single currency in a superstate that it turns out is not after all a functioning state. The fastest route to recovery is to break the Eurozone up into 2 or 3 currency unions so as to allow widely different macroeconomic policies to be pursued in different parts of Europe.

mashed potatoes in reply to eroteme

It's not the Euro which is the problem but failed states (Greece) and dysfunctional economic policies, resulting in debts and competitiveness problems which make it impossible to have one single currency for every country. If you add the different cultures of how to handle such problems, I absolutely agree with you that 2 or 3 currency unions would be much better than this mess!

A9LmYLFR5j in reply to eroteme

You are absolutely correct in noting that the Euro is the problem, but that is not the only problem. Just as important is the lack of leadership in the EU. You have a the anomaly of a "European Germany" that wants to abandon its post-War principles and live in a "German Europe!" God help us all!

The problems in Greece and the PIGS are small change compared to the ones above and in some ways caused by them.

mashed potatoes in reply to A9LmYLFR5j

What a nonsense. Europe's problem is a parasite in the south-east which is begging for more money and "leadership" ... with "leadership" meaning "open your purse and don't ask questions." But don't worry: You will learn now to live within your means, inside or outside the Euro.

eroteme in reply to mashed potatoes

As far as the specific problem of Greek debts is concerned in my opinion the right way forward is to offer the Greeks total debt forgiveness as long as they either leave the EU it self (not just the Euro) or they accept a period of being a ward of an externally imposed administration whose mandate is to break up the entire old political order and set up a new one. Call it neocolonialism if you like but Greek society cannot reform itself due to its structure based on extended family networks bound by a series of mutual favors and services.

mashed potatoes in reply to eroteme

Well, I don't know. On the one hand, full debt forgiveness and leaving the EU costs us less than leaving the EZ but not the EU, only partial debt forgiveness and feeding the Greeks continuously with EU fonds. But even a black sheep deserves some solidarity, and outside the EU they would be totally lost and helpless. Your second alternative makes sense. But since I do not want my country to participate in trying to run this failed state I don't like your second alternative. I prefer an EZ exit.

eroteme in reply to mashed potatoes

If all debt is forgiven and they leave the EU they would not be totally lost and helpless as they would be debt free and can effectively start again without burden. The amount of money is significant but it will be much less than it is going to cost with endless loans to pay for past loans and a shrinking economy that cannot ever grow due to zero investment and huge debts.
Making them leave the EU is necessary to ensure that the upper echelons of Greek society have to engage in rebuilding and cannot simply relocate to other parts of the EU. As it is, wealthy Greeks have already voted with their feet by moving billions of ill gotten monies out of Greece impoverishing the country. The Greek govt should have imposed capital controls a long time ago.

chernyshevsky in reply to eroteme

Wait, but then heavily indebted countries like Portugal and Ireland will want to leave the EU too if it's such a good deal. At the same time, you're asking Spain and Italy, which are not EFSF stepping out guarantors, to take on Greece's debt. Debt free vs. more debt--what would they choose?

If Greece crashes out of the euro zone, then its EU membership will likely be suspended. The country would have broken too many EU laws (e.g. free movement of capital). Other member states also won't want to see a flood of Greek migrants in search of job or fatter welfare checks. Germany especially has legitimate worries about angry Greek youths popping up in her cities and firebombing businesses.

Liet Kynes in reply to mashed potatoes

I think that the Euro is the problem. Of course failed states like Greece make things worse but the systemic problem of the euro area is the common coin and the different fiscal policies without strong central government.
No matter how good Greece, Ireland, Portugal, Italy and Spain could have performed I think sooner or later they will all face the same problem. Greece that was the worst from them will be the first one to go down. Even if Greece was better in its economics the only thing it could have achieved is to buy time and die later. The reason is very simple and undisputed. As long as the Germans and the Dutch dominate the exports of the EU this will mathematically happen. The Germans export cars, electronics and pretty much everything and the Dutch are the biggest food exports in EU and 4rth in the world. The point is where will this go? Theoretically after the PIIGS go down the next country could be Belgium, then Austria and so on. All these with the Germans and the Dutch exporting endlessly with no restrain. Since the beginning of the EU experiment this was certain that will happen. Anglo Saxon media were mentioning this 10 years ago. All the smaller countries were there to be sacrificed.
The point here is if Germany and Holland were together on this and they have planned from the beginning or they really believed that this would work? But how could they have honestly believed that when the numbers were showing the opposite?
I don't think two or three currencies will be the solution, I think a federal state with a strong central government like the US example could be a solution. Only then no one will have any argument for failure, the Greeks would have no argument that they were tricked, no argument about rotten politicians and so on. The German, the Dutch and so on would have central watchdogs ensuring everyone is doing the right thing so no arguments for bad behaving peripheral countries.

Liet Kynes in reply to eroteme

''...or they accept a period of being a ward of an externally imposed administration whose mandate is to break up the entire old political order and set up a new one...''

This a very radical opinion but sometimes I am thinking that it could be a solution. I am Greek and I know the situation from the inside and indeed only with a regime of that kind the established political system could collapse. But then there are other greater issues that will need to be addressed. Who will be the new politicians? Maybe those who are favored by the new colonial power that ensures piece in Greece? Historically this is how it happens. So we will substitute the old corruption with new one? Also how could we ensure that this colonial power will not take advantage of the power that it has and start gaining more and more resources from Greece just because it can? It happened historically in the past every time in similar cases.

As you can see the psychological depression for the Greeks is that they cannot see an end in the tunnel. Even the most radical solutions do not ensure success.

mashed potatoes in reply to Liet Kynes

Look, Liet, first of all: The Germans never wanted the Euro and if there had been a referendum in Germany the Euro wouldn't exist today. Germany had a strong currency before and is exporting successfully since the 60s without a weak Euro similarly to the Dutch many other countries. Of course, a devalued Euro supports exports, but only to a certain extent. But this weak currency makes imports artificially expensive and destroys our living standars. We pay a heavy price for that little export advantage: We were the first who had a sincere economic crisis some years ago due to the misconstruction of the Euro, and Germany is suffering from a decline in living standards since the Euro's introduction. Nevertheless, we never asked for printing like others do now.

So second of all, of course the construction of the Euro system is a disaster. But it's a disaster for Europe, not particularly for Greece. Greece problems have different roots, you know which ones I mean and this mess in Greece would have happened with or without the Euro. And if there had been a different mechanism to shift a lot of money to Greek politicians or something like Eurobonds at the beginning of the crisis, Greek wouldn't have changed anything, the big bank would just have been postponed and have become even bigger for everyone.

Regarding German and Dutch exports: You have a wrong perception. You look at these two countries which have success and see their success as the problem. I see it as a problem that other countries do not export enough and import too much. They do so because they are not competitive enough. I prefer the weaker to become stronger. So they have to catch up, get more competitive and close the gap. You are arguing the other way around: make the stronger weak instead by letting the stronger pay (reward) the weaker with transfer payments for their lack of competitiveness so that they have no incentive to improve. What I prefer makes Europe as a whole stronger and more competitive, what you prefer makes it weaker. But there are other countries outside Europe, such as China, India etc. Think about it. We have transfer systems in Germany like they exist in the USA, and both don't work. The USA are overindebted, some states are even bust. In Germany, there's a huge fight between richer and poorer states about who is exploiting who, who is paying too much and who is not putting enough efforts in fighting debts.

And regarding a "federal state": I am sure you have other preferences than me when it comes to central banking and fiscal policies. And who is guaranteeing you that such a central "watch dog" is really doing the right things? And if he doesn't, wouldn't we have the "wrong things" all over Europe, not only in single countries? So, no thank you. I am against centralization, against full standardization, I don't want to be ruled by a Bruessels bureaucrat and I want to have an absolutely stable, hard currency. Since many don't want that, I prefer 2 or 3 currency unions instead, that would avoid a lot of bad emotions and trouble.

mashed potatoes in reply to Liet Kynes

Oh, and regarding your comment to eroteme about an "externally imposed administration" to change Greece: I don't think it works. It never has in any country. Changes must come from within a society, otherwise they are not sustainable and just cause resistance.

And I apoligize for some rude comments about Greece: They are directed at nerds, in fact I have absolutely nothing against Greece, I have only problems with Greek trolls ;).

eroteme in reply to chernyshevsky

I think Greece is a special case due to the fact that it is 1) totally bankrupt (needing loans to pay off loans and with such a small economy that it has no chance of ever paying it off totally) and 2), Greek debt has resulted out of a huge fraud perpetrated by its political elite on the rest of the EU.
Greece must either be reformed root and branch within the EU (and Greeks must accept total tutelage) or they should leave the EU completely. Forgiving 100% of the debt maybe too much but it will have to be at least 90% if Greece is to ever be viable.
As to Portugal and Ireland - there problems are more to do with the dismal structure of the Euro itself. The rich nations of Europe like Germany did well partly due to them having a huge internal market and should help fellow EU members of good standing like Ireland and Portugal by giving loans at reduced rates.

Liet Kynes in reply to mashed potatoes

I am just stating this fact for this systemic disadvantage of the EU zone system. I never said that I propose that the rich countries should become poor, this wouldn't improve the poor countries situation anyway. I am just stating that for the Greek issue, with all the blame for the Greeks, the EU system was pushing the dead corpse deeper in the mud.
I agree that the Greek problems would have revealed the debt crisis sooner or later but still this happened only with the worst crisis after WW2. But the head start of the big exporters of Europe is a fact and the smaller countries would have no chance to reach the levels of these countries. It is like the economic science, when a company has a head start in a new technology for example, then the companies that will follow will find it exponentially hard to catch up.
I agree that another mechanism for shifting money to corrupt politicians is one and the same, but good centralized control could have the proper checks so that these money will not be lost in the bank accounts of corrupt politicians and plutocrats in Cayman islands banks. This could become by setting targets for example for productivity, economic liberalization, flexibility, ease of making business and so on..You don't reach the targets (which will be every quarterly made public so people can see what the politicians are doing) you get no money...I could even agree you step down and another one gets your place but I don't know how ''democratic'' this can be.
Also I would like to say that maybe now during crisis times the wealth of the German and the Dutch is growing less, but still your consumer power and your social benefits dwarf by far those in the South so still you could be considered the winners of this whole situation.
Also you mention competitiveness, why is Germany competitive? Is it because of the salaries that are in the same level of Pakistan? No, then why is the German block backing up so strongly measures that are trying to make a nation competitive from working costs point of view? There is no country in Europe that is competitive in that way, why are the Europeans trying to make Greece competitive in that way? Why are the Germans don't copy the competitive policies that they have and make a framework for implementing such a system in Greece (adapted to the special ''needs'' of the Greeks)
For the Federal state, no one guarantees anything, that's for sure, but supposedly we have to have faith in a system that we create and that is supposed to work for the better. And I think Europeans are experienced enough in these matters to find a mechanism that could ensure high performance for all. I don't think it is about the Brussels bureaucrats, beside now you are governed by a bureaucrat in Berlin, the French from one in Paris and so is about concentrating these bureaucratic forces to one more efficient body. And of course as a German you can ask that one of the targets has to be the hard currency, I don't see why such a demand could have no place in a more centralized government.

mashed potatoes in reply to Liet Kynes

"the EU system was pushing the dead corpse deeper in the mud."
No, not really. Greece is the biggest net receiver of EU funds since it's a member of the EU. The system is very beneficial for Greece. But the money which should have invested dissappeared in black channels which is Greece's fault. This should have been monitored better by the European Commission though, this institution did entirely fail in the past ...

Actually the Germans do: They have DECLINING real wages since the introduction of the Euro whereas Greece increased average wages at record speed and the most(!) in the EU since the introduction of the Euro... but it's productivity fell at the same time. That's the biggest problem, that's why Greece needs both wage cuts and productivity gains!

You claim a lot of wrong things in your comment. Why don't you read this interview with the Harvard economist Kenneth Rogoff, it will answer a lot of your questions:,1518,816071,00.html

And I fully agree with Kenneth Rogoff, both about the Euro Zone and past mistakes. And a "close federation of states" makes sense, not a "federal super state".

Liet Kynes in reply to mashed potatoes

the Germans may have declining real wages but this doesn't mean that their wages are low...and this is definitively not the reason for the German competitiveness.
Also when I say that the EU system was pushing the dead corpse to the mud I don't mean the investments system only towards Greece. I mean the systemic problem that the Germany lends money to Greece so that Greece can buy Germany's cars and electronics. But you choose to isolate only the investment part in Greece. And what I am saying is that even if Greece was investing those money better sooner or later it would face the same problem, repaying the creditor who has already double profit, from lending and selling its exports.
As about the guy from Harvard, he is one voice that says his opinion. Academics are numerous with different views, I have read a lot of academics in America that have been advocating towards a federal system closer to the way the american system works. I guess there will a lot of pros and cons for both opinions, in the end it is about personal choice and where the interests of the different member states lie.

mashed potatoes in reply to Liet Kynes

Not only wages, the entire labour costs are important. They include for example labour related social insurance contributions as well. Labour costs influence competitiveness among many other factors such as technology, the amount of red tape etc., but they are quite important.

German wages are not especially low, they are rather average in comparison to comparable countries. And they are decreasing in real terms since we have the Euro. Nevertheless, excessive increases would be dangerous since we don't want our industry and jobs to move offshore (e.g. to China). If people want Germany to increase its demand, tax decreases would the better alternative. And if the government put more efforts in that, there would be possibilities for that, but that's another story. Germany is not efficient, it's wasting a lot of money like every country, and I hope that will change with the "debt brake".

But it is not really important if wages are high or low on average, it is important that they are in a healthy relation to productivity/economic capabilities to be competitive. And since some companies and branches are successfull and others not in every country and since success changes over time, wage flexibility is of major importance, too. The latter depends for example on the form of collective bargaining. That's another "structural" issue in Greece due to the extremely strong and partly militant left unions.

chernyshevsky in reply to eroteme

Greece committed fraud so Greece gets 100% debt forgiveness? Talk about rewarding irresponsibility!

The notion that the country's debt is a unbearable burden is a myth anyhow. Say the EU is willing to lend to it at a reasonable rate of 3% a year. Interest payment equal 165% GDP x 3% = 5% GDP or roughly 13% of government revenue. That's still far lower than what Greece has paid in the past.

The problem with Greece is that it has an economic system that is fundamentally unviable.

A J Maher

So the Greeks are compelled to further humiliating servitude under what AEP in the Telegraph describes as a Carthaginian peace:




The moral hazard posed by a nation with a demonstrated proclivity for democidal war mongering was certainly generously overlooked in '53 but, however grateful they might have been then, the modern German leadership are made of much sterner stuff than those namby pamby allied statesmen. Now they shamelessly insist that Greek pensioners must be reduced to lining up at soup kitchens because of the awful challenge their pensions would otherwise pose to the risk free returns of German rentiers.

Of course there is also a very high level of moral hazard in deliberately beating a defenseless victim senseless - sadly this never seems to occur to Germans until its far too late...

egslim in reply to A J Maher

The difference is that given oxygen, the Germans did actually rebuild their economy.

Whereas in Greece corruption, tax evasion and bureaucratic incapability are so widespread, economic growth would be stiffled regardless of foreign financial aid.

In addition, unlike Germans in 1953 Greeks in 2012 aren't expected to serve as cannon fodder against a Soviet invasion.

Greeks should stop blaming others, and focus on fixing their own internal problems.

A J Maher in reply to egslim

Well you may think that Greeks are unworthy - but that isn't what all the grasping German mercantalists were saying when they were extracting a trade surplus of $13 billion a year from the Greeks between 2002 and 2008.

You may think it is good policy for a country totally dependent on it's export markets to bluster and bully their customers but believe me when they all shut their markets it will be your factories that close.

In the meantime if they do default it will be your chronically uncompetitive banking sector that has to be bailed out......

egslim in reply to A J Maher

There's a very simply rule: Don't spend more than you can afford.

If I walk into a store and spend myself into bankrupcy, that's my fault, not the store's.
If I do so by taking advantage of the store's "generous" credit facilities, it's still my fault.

The only scenario in which I could not be held responsible is if I was mentally incapable of responsible behaviour. Are you claiming Greeks are somehow mentally incapable of responsible financial behaviour? Because if you are, then the only rational course of action is to place their finances under close supervision.

Oh, and Germany can afford to bail out its banking sector.

la.výritý in reply to A J Maher

As usual, Maher, when posting about your most hated ethnicity, you distort facts and 'thimblerig' data!

1. In the period between 2002 and 2008 (used exemplarily by you) Greece received net transfers from the EU in the amount of $22.35 billion, of this $1.45 billion "net" paid by German taxpayers.

2. In the same period (2002 to 2008) Greece accumulated a trade deficit of $78.48 billion with other countries as well, among them such non-EU countries as Russia, Iran, Saudi Arabia and China. They didn’t contribute anything to Greece’s budget (or to the EU budget respectively). Why single out 'the Germans' who aggregated only 16% of Greece's total trade deficit as trade surplus . . . and which wasn’t even ‘profit’??

3. The Greeks imported goods from Germany which their own economy doesn’t produce. If they wouldn’t have bought these goods from Germany, they, most likely, would have bought most of it from Asian suppliers, e.g. cars and machinery, as is so in similar cases in the EU. This would have damaged the overall trade balance of the Eurozone even more.

4. Only 6 to 7 percent (as is common in manufacturing) of Germany’s trade surplus with Greece was actually company profits and of this, again, only approx 15 percent was taxation, since the corporation tax charged at corporate level is 15% flat rate tax. Thus, the German taxpayer's benefited only in the amount of $0.12 billion during the period between 2002 and 2008 from trade with Greece, while German taxpayers contributed over the same period net $1.45 billion to Greece’s government budget - 12 times (!!!) as much as 'taken'.

5. The German government negotiated with German banks and institutions already a haircut on all German held debt worth 70 percent (!!!), as similarly did the French. So, what's your fuss about "the US, Canada, Britain, France, Greece, and other signatories at the London Debt Agreement of 1953 granted Chancellor Konrad Adenauer a 50pc haircut on all German debt". (BTW, they were mainly war reparations from the, anyway, unjust Versailles Treaty - not debt from over-borrowing).

6. The banks and institutions which currently don’t agree to ANY haircut of their Greek debt holdings, are mainly British and US institutions and investors, who control in various forms about $62.3 billion of Greece’s total public debt (not counting the CDSs held by London’s and Wall Street’s hedge fund tycoons).


The Eurogroup, escorted by Mercosy and lead by the Governments (not the people) of Germany, Netherlands, Finland and a reluctant France, does not see itselve as part of the cause of Greece’s current plight, and does not acknowledge any complicity in it by refusing to help Greece get back on its feet. Their leaders, most brought up in the Protestant ethic, view the Greek people’s joy for life as sinful and parasitic – a way of life that must be punished and certainly not helped. Thus, they have manufactured a bogus story of how Greeks conduct themselves. Thus, all the so called bailout money from the troika is targeted directly for the benefit of the creditors, and all of the austerity measures and high interest rates that accompany the loans are at the expense of the Greek people.

For all the talk about how much it is costing the German taxpayer to bail-out the lazy Greeks, to date no German or EU taxpayer has paid a euro cent towards this, and won’t unless Greece defaults. The Greek taxpayer, however, is paying its EuroGroup partners heavy interest simply for guaranteeing that Greece will not default! But it is in their own interest to prevent a default!

So much for the EU’s and EuroGroup’s solidarity and support for its member states. Few doubt that they would have thrown Greece out of their club, months ago, if they did not risk their own demise in so doing. The Euro Group is merely buying time with its bailouts in order to get its own house in order so that it can get rid of its “Greece problem” with minimum risk to its club – and Greece and the Greeks be damned! This is short-sightedness par excellence, and the Eurogroup is merely cutting its nose to spite its face. It should take a page from America's book that showed its magnanimity, not its pettiness, by forgiving German debts and shoring up Europe with the Marshall Plan, after WWII. Stop destroying democracy in Europe and vilifying my country, Mr.Schauble!

egslim in reply to A9LmYLFR5j

The difference is that before there was even talk of the Marshall Plan, Europeans were already hard at work rebuilding their countries. For the Netherlands the Marshall Plan covered less than 10% of the reconstruction costs, the remaining 90% were covered by extremely progressive taxation. I expect the same was true for other countries.

On the other hand, Greece has been very slack reforming its economy: Lack of political will, bureaucratical incapability, widespread corruption and legal complexities have prevented the country from taking steps to improve its economy.

There's no moral equivalence between the two.

Pooring money for growth into a cesspit of corruption, tax avoidance and bureacratic incapability is a waste. Clean out the corruption, end the tax avoidance and streamline the bureaucracy, then I will support growth investment in Greece.

A9LmYLFR5j in reply to egslim

Unless the Eurozone comes up with some other form of honest EU assistance, both the people of Greece and the people of the European Union are in for the wildest joy-ride of their lives. (That includes you and "the Ed"). Telling the Greek people that their only choice is to accept the troika’s conditions, now, followed by more austerity in the future, or face a chaotic default is not only fraudulent, but tantamount to blackmail of the highest order.
Greece has never succumbed to blackmail on this scale, no matter the cost. It didn’t do so in 480 B.C., against the Persians, and it didn’t do so in 1940 A.D., when most of the north Europeans put up scant resistance against Hitler’s armies. Have you any idea how much you owe to Greece for your freedom, or if that is too hard for you to understand, how much Germany owes Greece in war reparations, outright theft and loans to Hitler’s armies that the Greek people were forced to pay off? It’s more than enough to pay off all of its current sovereign debt. So who's kidding who, here?

egslim in reply to A9LmYLFR5j

Greece can either get its affairs in order to meet Eurozone requirements, or the country will eventually be forced to leave.

That's not blackmail, it's reality. The rest of the Eurozone won't continue paying Greece's debt forever.

And your "past glories" don't matter a bit. Even if they weren't so exaggerated.

A9LmYLFR5j in reply to egslim

Throughout dozens of European cities, today, people are demonstrating against your view and declaring their solidarity to the Greek people by shouting "We are all Greek, now!" It's only a question of time before Shaeuble et al, also get the message.

I don't think that this solidarity comes from the recognition of Greece's past glory. More likely it comes from viewing the great injustice being perpetrated on a follow European people and being unable to sit back and quietly accept it, as you do. Anyone who is a believer of democracy would find this treatment hard to digest. Get used to it, Slim, you'll see more and more of this kind of "people to people" support until Europe comes to its senses.

mashed potatoes in reply to A9LmYLFR5j

"We are all Greek, now"? Pah! Ridiculous! I feel so lucky that I don't have to call myself "Greek" because I don't have to feel ashamed. You don't get it, do you? You talk about "solidarity" when this is about a self-made mess for which Greece is not even willing to take responsibility and to put an effort to clean the mess up properly. The innocent victims of an earthquake, terror attack or a tsunami deserve "solidarity" but not your scapegoating society which has lived a decadent lifestyle with other people's money which it doesn't want to pay back and which has sucked the EU's nipples for too long. You complain like a spoiled child even though you still create new debts by the day, still have less unemployment than for example Spain, have higher wages than a lot of other Eastern and Southern European countries you ask for help. At the same time Greek politicians don't stick to their promises, fool their partners and insult them! Do you know what you are good in: Crying, rioting, scapegoating and being impertinent! You live in a country which has invented the word "Europe" but which doesn't deserve to be called "European" if you look at its failed state and this scapegoating culture, in your head you still live in ancient times and keep on telling people what a great country this place was 2500 years ago. Congratulations! Today it's a miserable mess! Every innocent poor child in Africa or South America deserves the bailout money more than you!

"Who is this Mr. Schauble, who are the Finns and the Dutch"? Well, Mr. President, they are the ones whose hard earnt money you would like to have to throw it into your bottomless pit. You feel insulted because your politicians aren't trusted? Well, grow up, stop taking drugs and get real, nobody trusts you. And if I were Schaeuble I would show you the middlefinger and tell you to go to hell.

A9LmYLFR5j in reply to mashed potatoes

I live where I live and proud of it. I, and I am certain another 300-million Europeans (Germans included) would never want to live in a German Europe. Stop raving and wake up and smell the coffee; the days of the "master race" are long gone - never to return, thank God!

egslim in reply to A9LmYLFR5j

What solidarity, and what demonstrations?

I found a few isolated calls for support against the austerity measures, but the vast majority of public opinion is infinitely more pissed about having to spend taxmoney to bail-out Greece, than they are concerned with the effect of austerity measures on the Greek people.

Popular opposition in Europe against the bail-out is strong, but it's not out of compassion for the Greek people...

Liet Kynes in reply to egslim

Dude STOP writing comments , you are a LIER! 10% of reconstruction costs from the Marshal plan? hahahahahaha what a joke!! 90% progressive taxation??? hahahahahhahaha taxation on what, there was no economy the whole world was destroyed, progressive taxation...what a JOKE, what a Joke...I will not bother anymore cause you ruin my chill out evening.

Liet Kynes in reply to mashed potatoes

First of all a comment for the ''we are all Greek'' event. It is voluntary, you don't have to do anything, no one forced you to be Geek for a day so don't worry you don't have to be ashamed.
Solidarity means exactly that, one asks for solidarity when he screws it up personally or a natural catastrophe hit him. If someone screws up together with someone else then he asks for sharing the blame and not for solidarity.
I would agree with you on the European issue. Yes, Greece is not a European country with the strict sense of the word which nowadays includes the Germans, the Dutch, the Austrians, the Scandinavians and so on. Greece is balancing for millennia between Europe and the East, but this is a historical fact that no one denies in Greece. Our food, drinks, lifestyle is 50% European and 50% Eastern, and by that I mean arabic, ottoman influenced.
For Scauble and Papoulias...I agree with you.

p.s Could I ask where are you from?

23KCPqoqHt in reply to mashed potatoes

I am glad that you (obviously) are not Greek. I would be ashamed to be of the same nationality as you, Ill tell you that much. As for the Finns and the Dutch...If you think that they have lost money from all of this, then you must surely be completely ignorant as to whats going on.
Try the potatoes boiled for a change.

Midhirst in reply to A9LmYLFR5j


What kind of mythical world do you live in. War reparations - your coffers were full of useless drachma. You were a failed state before the German invasion - similar to what you are like now. Long live the Greek economic resistance.

A9LmYLFR5j in reply to Midhirst

I can't resist, and must reply to your comment.

Germany was responsible for emptying our coffers during its occupation of our country in the Forties, and it is responsible for our planned destruction, today.

During their occupation in WWII, the Germans literally plundered everything the Greek people had: from the county's gold reserves to its animals and food stock causing the death by starvation of half a million people. They forced the Greek banks to loan the German Army millions, wiped out entire villages (men, women and children) that were "resisting" the occupation, and forced tens of thousands of Greeks into slave labor. All this was forgiven, thanks to the US, and never paid back as reparations. The Greeks have never claimed it, but there is more and more talk, here, that it is about time that they do -- since the gold Hitler’s Germany stole and the loan alone is worth more than twice the current Greek sovereign debt, today.

See also 'Germany Was Biggest Debt Transgressor of 20th Century',1518,769703,00.html

I am also sending you some info on OXI Day (28 Oct 1940), as proof that the spirit of ancient Greece lives on to this day, and why Greece will always overcome any and all adversity that is externally imposed -- as this crisis obviously is. Those who have visited Greece can appreciate the beauty of this land and its people. It is unfortunate that they are suffering now, but they shall persevere and eventually overcome, as they have for thousands of years.

See,, excerpts follow, but the site is worth a visit.

“More of Hitler’s Troops Died in One Day on Crete, Greece than in Any Single Day in the 15 Months Prior in 11 Other Countries.
Hitler’s troops lost more lives in one day in Crete, Greece than died in any single day in the 15 months prior of conquering 11 other countries. Overall, one out of ten Greeks gave their lives during WWII. Adolf Hitler said, “The Greek soldier, above all, fought with the most courage,” and Winston Churchill said, “Hence, we will not say that Greeks fight like heroes, but that heroes fight like Greeks.”

Greece’s disruption of Hitler’s war timetable forced him into the debilitating Russian winter where he met defeat. Leaders like Winston Churchill, Joseph Stalin, America’s Sumner Welles and even Adolph Hitler’s Chief of Staff, Field Marshall Wilhelm Keitel, credit Greece with bringing about Hitler’s defeat. Keitel said, “The Greeks delayed by two or more vital months the German attack against Russia; if we did not have this long delay, the outcome of the war would have been different.”

This is the kind of mythical world every patriotic Greek lives in!

Midhirst in reply to A9LmYLFR5j

Thank you for the update: I now get where you source your patriotism (and rightly so). But where did it all go wrong?
Jobs for life, retiring at 50, public sector workers doing two jobs, and the most heinous crime of all; borrowing to maintain your baby-boomer's standard of living.


The worst part is that the average, middle class Greek citizen will have to pay for the greed of the country's rich. The wealthy keep their money in off shore accounts and use every trick in the accountant's book to pay as little tax as humanly possible, and then they have the audacity to complain that schools, roads and hospitals aren't good enough. Where do they think the money for these services comes from? This just makes me sick to my stomach. Tax evaders are are criminals in every sense of the word and should be put in prison with the amount they owe confiscated by force.

Of course the worst part is that the minority few that engage in tax evasion are giving the rest of the country a bad name. This, coupled with the government's lies about its debt has seen Greece go from the envy of Europe to the laughing stock of the world almost over night. My relatives and friends now holiday in Croatia and Portugal instead because they simply fear for their safety and also don't particularly want to support the corruption of the government and resort owners. And I know, the chance of anything happening to them on the islands is unlikely, but it's still frightening to see the riots on the streets of Athens.

So now what? We have a country with a deeply engrained culture of tax evasion and mistrust of the government, perhaps rightly so due to the enormous corruption that goes on there. The worst part is even if they somehow overcome this crisis, the most educated and hardworking people have already left to work abroad, many with little intention of returning home. All it takes is two or three years of living and working abroad and the willingness to return home disappears quickly. I know this from personal experience dealing with friends and relatives who have left to work in Western Europe from my country Poland. Every year that passes the likelihood of them returning decreases sharply--many have, but many have remained. Luckily, Poles love their country to the point that it seems most are now returning home.

Perhaps the people of Greece need to find their patriotic side too--and I stress patriotic, not nationalistic. I myself have lived in Australia almost my entire life after leaving my home town of Warsaw at the age of 6. Now, at age 24 I am returning to Warsaw to be with my countrymen and to help Poland develop into a prosperous nation using the skills that I've learned here in Australia. And I'm not the only one--I know dozens of Polish Australians and Polish Americans doing the same thing during Poland's boom period.

Yet of the dozens of Greeks I know here in Australia (and there are many: Melbourne has the second largest Greek population in the world after Athens), none plan to return, which brings me back to my original point that once the educated leave Greece, it's unlikely that they will return. And if they don't return, who will help rebuild Greece after this devastating crisis, which mind you is not even close to being over. The GDP of Greece in 2012 is going to contract by as much as 8%.

I'm also genuinely disappointed by Greek rioters burning the flags of their norther neighbors on the street. This is truly disgusting behavior. There is no good reason to do it, and it does nothing but incite hatred and make the northern countries less likely to help them in the future. As a Pole, I'm already upset that we, as a relatively poor nation, have to give a substantial amount of money to Greece to help pay for their past indulgence, yet our retirement age is 10 years more than theirs and we also work the longest hours in Europe, not to mention most of us live in cramped communist blocks. But the truth is, life isn't fair, and if it'll help our Greek brothers and sisters get through this crisis, then let's just get it over and done with and move on. At the end of the day, we're all Europeans and we should be proud of that. Let's stop hating on each other so much and try to build a prosperous and happy continent together and ensure that this kind of thing never happens again.

guest-iisioen in reply to Slavic

I think that there are very few who hate the Greeks - we know they are charming people - but if they have a system so rotten - and they continue to excuse this - where very few mention it - (maybe because it is so much a way of life that they cannot see the corruption) who can help them - when they are unwilling to change their ways - and to do this first they must take responsibly - which they continue to shirk off and say it is everyone else’s fault but theirs... so how can you help them knowing full well that they have a deceitful system...
How ?- they only thing that will happen will be good money once again going bad... they are unwilling to do anything to change... sorry and it truly brakes my heart knowing the condition they are in - it must be extremely frightening ...
Thankfully Europe is pushing and pushing them – setting continuous conditions because there is a European recession things are difficult all round but from grassroots upwards their system is totally corrupt and so leaks out all the money that is provided to them. So hard measures and monies have to be implemented by over viewers – the Greek politicians are up in arms – stating that they feel insulted that out siders are called in to regulate their financies!!!
I feel that they really need to straighten their house – they are getting support – if you want to call it blackmail – in order to get their house and finances straight with the next bail out then do so – (but we all know that they will not keep their word - the politicians are already starting to change the letter) so there is no other way – they will keep repeating the same mistakes because they do not want to change anything – and it is never their fault – how can you help this - when it is plain that they are fighting hard to keep a corrupt system because they have benifited most of the population so well - in one way or another.

Disillusioned in reply to Slavic

Here's what I'm wondering: Why is it that the EU troika have been so insistent on AUSTERITY? While it is true that Greece's budgets are very unhealthy, why not instead crack down on CORRUPTION and TAX EVASION and pressure politicians to pursue those instead?

I am also sickened that austerity is the word of the day rather than structural reforms. In the long term, economic growth, combined with a greater ability to collect taxes, is the necessary component to get tax receipts back into place. Austerity only breeds unrest, which, judging by these riots, do more damage to the economy and the budget than austerity can fix. The troika should harp on planned privatizations that fail to go through; the public sector is evidently decrepit.


According to the media here 55 is the age at which most Greeks retire. The media also advances the point that only some of the population pays income tax.

No doubt the two sides will keep on playing brinkmanship. The problem will dragon with no end in sight. Greece doesn't not want to repay and cannot repay. The North is now busy building firewall around to minimise damage by lending to Europeans banks again on 29 Feb.

egslim in reply to

Ultimately the problem is not an issue of repayment. The Eurozone is more than wealthy enough to forgive Greece its debts, if that would solve the crisis.

Unfortunately, it wouldn't. The real problem is Greece's faillure to function as a first world nation. Corruption, tax avoidance and other issues are too widespread. Debt forgiveness would only allow Greece to accumulate more debt, causing a new crisis ten years from now.


exactly REALISTIC is what is needed here - nothing more nothing less from the EU to what is achievable for the Greeks otherwise it will not work and everyone will be pissed off with each other...


The problem for me is that it is not that Greece does not want to pay - it is that the measures are too hard - that is obvious – all these insults between each other are useless – we should be trying to find a way to sort out the problem rather then going on about blame – it is done – we are all to blame in a way – very easy to point the finger at hard working Greeks – who are the ones suffering at the end of the day. This has gone to far – Greeks burning German flags – why is it Germans fault – everyone is paying to help Greece out of this mess.. stop it and get on with sorting cht out bankruptcy or no bankruptcy Greece will still have to sort itself out...
It is pointless to blame each other ( i am Italian ) this is a waste of time – more or less we know the problems that have taken place – playing ping pong does not help anyone... politicians in Greece over spent – no control over spending – bankers taking advantage .. we know the story – but do not go too far where you make it so impossible that the Greeks can not catch up on their debt. We understand every day you look at Greek accounts and there is a new surprise debt – fine but killing the Greeks will not help anyone – I am sure like all – they want to debt payed but it has to be realistic achievable goals – otherwise it will be understandable that the Greeks will become resentful – clear head is needed – not hate

egslim in reply to guest-iisioen

When push comes to shove, only the Greeks can sort out the mess. THEY have to reduce corruption. THEY have to reduce tax avoidance. THEY have to streamline their bureaucracy.

The rest of Europe can pressure Greece to take those actions, it can provide money to tide them over while they do so, and it can give advice, but it cannot solve Greece's problems.

In a way I agree - taking action is much better than assigning blame. But the responsibility for said action lies solely with the Greeks. And unfortunately, Greece has made very little progress to solve its fundamental problems since the first bail-out was announced.

Cristian Nedea

There is a clear fact that the mismanagement of the Greek state is the root of the cause. It takes a lot of courage that after you are broken to ask for trust. Your credentials are gone as soon as you have proved not being able to run your own courtyard. So, Mr. President, is good for local PR but is better to look upon what has to be done NOT TO BE HERE AGAIN. With or without EURO, Greece will survive but at least one generation is destroyed. Better think wise for the next. As it looks today, seems poor chances.
It is sad the fact that an entire nation is suffering and paying for people without any responsibility called usually politicians. But they have elected them repeatedly.


Mistrusting Greek politicians has nothing to do with reviling, but a lot with common sense.

If they can't stand outside interference, they shouldn't have gotten themselves in a situation where they require outside help.


I am inclined to agree that it is difficult to trust the Greek Government on recent past performance. After all if the rest of the world works well past 60 (in Australia pension age has risen to 65 for women and 67 for men at present) how can the Greeks justify pensions at age 55 or even less?!

Kalamaria in reply to dendrobium

The average retirement age in Greece is 61.5 years, 0.2 higher than EU average, with a statutory retirement age of 65 in line with the majority of EU countries. Enough with these stereotypes!

Kalamaria in reply to dendrobium


my.opinion in reply to Kalamaria

With perks including early retirement for hundreds of supposedly 'arduous' professions such as hairdressers, butchers and cheese factory workers, the Greek pension system has cost the debt-choked nation about 12% of gross domestic product.


By what authority or policy can Greece be made to leave the Euro currency? Simply refuse to pay and take the default. The Troika cannot over throw the Greek government. The Troika can refuse more credit to Greece, but honestly Greece isn't going to get much credit in the near future regardless of the currency it uses.

I'm not saying that defaulting is an ethical action, but Greece is really only looking at bad options at this point.. take the least worse.

Ed the Ed in reply to hellokeith

but Greece ain't paying nothing, you know and we know it !
It doesn't have the finances and even if it had, it doesn't have the resolve.
Corruption, as well as socialist-led lazyness are part of the general culture over there.
Now, you mention ethics, where do you find that notion in politics?

Ed the Ed in reply to Kalamaria

if we only look at the figures (not my book but my calculator) then 15bn is a lot of payback - but the fact of the matter is, Greece had to borrow to pay it back so it comes to creditors supporting other creditors ( or themselves as it may be)
Now you see the same tricks pulled to avoid the belly up, or the default, coming in March. Private creditors were squeezed under an official blackmail cutting nearly 70% of their claims ( serves them well, why did they invest in anything Greek ? )
So it doesn't matter if the interest is 7.5% or 15,5% since Greece is paying back with someone else's money and will never repay that unless it is with more borrowing - the farcical situation goes spiralling until the bubble bursts !
Hai capito ?

egslim in reply to hellokeith

If Greece defaults, the ECB can no longer accept Greek treasuries as collateral. That would kill the Greek banks, grinding the entire payment system down to a halt. At this point the Greek government will be forced to leave the Euro, or be reduced to bartering.

Alternatively, if Greece cooperates it could leave the EU by use of article 50, or just the Eurozone if the treaty is revised. That would be much less painful.

mashed potatoes

"Revenue-raising plans were dashed by the depth of the recession, and by the finance ministry’s failure to crack down on corrupt tax officials."
... and by the unfullfilled privatization promises which turned out to be made of thin air, and by the political charades which create uncertainty and stop investors from investing in Greece, and ...

What exactly does the mighty Greek president feel insulted for? For Greek politicians being mistrusted? For Schaeble asking for guarantees before throwing good money after bad? LOL!!

Kalamaria in reply to mashed potatoes

You know very well that these were not promises, there were no discussions or negotiations in the first bailout. The troika came up with the figure of 50bn euros in privatizations and forced the greek government to accept this. Noone in their right mind can believe that Greece in the middle of recession and uncertainty can attract any foreign investment, let alone 50bn. Few even believe that the troika measures were ever meant to stabilize greek debt, but rather delay default till other countries are ringfenced and banks recapitalized. The primary deficit has been reduced by more than 8%, the largest fiscal consolidation in the history of any developed nation in peace times - compare this to the 1% reduction the UK is doing with a higher deficit for 2011.

Btw i agree with Schauble asking for guarantees, as long as there is a credible plan, which the second bailout is not. The best solution for greek and german taxpayers is not to give any more loans, if these cannot be repaid. Or else make a realistic plan to make Greek debt sustainable - which means more time to implement austerity so that recession does not kill the patient.

mashed potatoes in reply to Kalamaria

My dear friend, not the troika came up with the figure, your mighty politicians publicly admitted (!) that they had made up the number of 50 bn to please the creditors just to get the loan ... they fooled us once again. The troika had been too naive, but that won't happen again as we can read everywhere. Private investors won't come to Greece due to the uncertainty about the future, not the recession. And the most important reforms are not about reducing the deficit but to change things fundamentally, which your politicians don't really seem to be willing to do since they would loose privileges/influence.

Rudy Haugeneder

Euroland to Greece is quickly becoming what the United States has been to independent Cuba for the past half century.
Yet Cuba survives. Short of a Euroland military invasion, Greece will also survive as an independent nation if it retakes control of its finances and snubs the demands of Berlin, Paris and London.
Greece will survive well after the European Union, even the United States, disappear into history's trash bin.


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