CAN THE GREEK ECONOMY BE SAVED?

The global financial crisis left the Greek government, which had spent and borrowed heavily but had not collected enough tax, without sufficient funds to pay its bills.

Bail-out plans came with unpopular reforms;  some had feared a “No” vote on a proposed referendum would have forced Greece from the euro leading to another financial crisis.

Fortunately plans for the referendum have been abandoned.  But does it really matter one way or the other?  In either case the Greeks are facing a stark  choice.  They can say yes to the terms of the European bailout — in which case they face a life sentence of harsh austerity under the watchful eyes of European technocrats who will basically be telling the Greek government what to do.  Or they can say no – in which case they face a life sentence of harsh austerity but at least they’ll be in charge.

Today Greek Prime Minister George Papandreou will face a vote of confidence in parliament.  If he wins, he says he will voluntarily step down and let a new government be formed.

Will it make any difference whether the Greek prime minister bows out?

Will failure in Greece affect our financial recovery in Canada?

Can the Greek economy be saved?

What do you think?

9 Comments »

  1. 1

    I wrote this:
    Nov 2- Update:
    Greece is hell-bent on ruining the economy. Papandraous is typical of that elite Greek mentality. He thinks he’ll outsmart Germany and France.
    Greece has been offered 50% off on their debt, but they must impose austerity measures on the population who have been demonstrating, so we already know that outcome.The Greeks don’t realize (or don’t care) that they have been riding on this wave of other peoples money for years, and now, they’ll have to go to work.
    I think Greece should be allowed to default, in fairness to Italy, Spain & Portugal & France who haven’t been offered the big bail out.
    Get Greece out of the EU and let them fend for themselves.
    It’ll be like a cold shower.
    Today:
    *It won’t make any difference if Greece changes PM. Same old.
    *It will make some difference to world recovery but Greece is 1% or less of the economy. Everyone can live without them.
    *The economy of Greece can not be saved. It’s the mentality that defeats them. They’ve been in a financial crisis and all they can do is demonstrate against cut backs.

    PS: They need to come up with some cash by mid-November to just survive-
    They won’t get it.

  2. 2
    Neil McKenty Says:

    It seems to me that if Greece wre forced out of the euro, the financial repercussions for the rest of the world (including Canada) would be horrendous.

  3. 3

    Neil: I spoke to a financier yesterday. Greece is a “speck” on the landscape. We’ve actually been more impacted when Venezuela, & Russia had problems and none of us remember that now. The only problem this time, is it is on the heels of a recovery.
    There are so many opinions out there, it remains to be seen…

  4. 4
    jim Says:

    Littlepatti – An excellent staccato report on the Greek fiasco.
    As I see it as well, the nuts and bolts are in the offer to Greece.
    If they agree to the austerity measures plus everyone paying more taxes, they will get out of the maelstrom over the years
    The nuts and bolts are also in the austerity measures including paying more taxes, if they take the course of finding someone to lend them money at 20%. Here again they will get out of the maelstrom over the years. Or get the Aris’ to sell their football length yachts and make the supreme sacrifice and donate the proceeds to the money lenders.in order to reduce the debt. As far as the average Joe goes, tell him to go into his back garden and dig up his hoard of gold and donate. Why donate a share of his ripoff? Well it’s because he wasn’t listening to Shakespeare when he said “All that glisters is not gold….”

  5. 5

    Neil you answered your own question,in a way. Given a choice would most people prefer misery while under somebody`s thumb,or misery with their freedom intact ?

    The Greeks are a very independant-minded people,and probably don`t really care what Merkel or Sarkozy threaten. Will they wake up to the error of their ways ? maybe. or maybe they`ll adjust to poverty and be happy with that. Their economy will grind to a halt,but it will eventually recover.

    Say, littlepatti,this financier of yours ,he didn`t try to sell you some Eurobonds,did he ?

  6. 6

    Good points!
    I don’t have much invested in Europe, or the USA, it’s mostly in Canada, but we’ve taken a beating up & down since 2008 and could be in for another beating over the next few months, but as you say “it will eventually recover”. Here too….I hope.
    If not, I’ll have to get back to work, pay more taxes and tighten my belt. That’s Canadian!

    Jim:” If they agree to the austerity measures plus everyone paying more taxes, they will get out of the maelstrom over the years”.
    That’s the problem-they don’t want to work and pay more taxes.
    and
    I think that they should take their “misery with freedom intact.”

    and yes, I am crabby about the Greeks occupying so much time on the world stage. Take a bow & get the hell off.

  7. Littlepatti, I’m torn between sympathy for your point of view and my Greek ancestry. When you wrote, in a previous comment that you despise Greeks I had to remind myself that I was Canadian and, even more, half French-Canadian, so I was not concerned wioh your despise. Still it did hurt a little.

  8. 8

    Hi Paul, Without going through all the blogs, I know very well that I would not have said that I despise Greeks. I may have used (misused) the word disdain, to scorn.
    However, if I have used any hurtful language, I apologize.
    I am of Czech & French Canadian extraction.(Imagine how pissed-off I can get at my own ancestry!) Born here & therefore Canadian, we have a totally different mentality. Not always right either.
    and I admit that I am pretty annoyed with your “fellows” right now.
    At one time all I dreamed of was going to Santorini.
    Once again, I apologize.
    Pat


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