WHY GREECE IS COLLAPSING

Greeks can see a bloated and corrupt public sector thats sucked the economy dry

This is a question I must have heard a number of times within the last couple of weeks but basically the government lied about what the situation was like. Typical when you do business in Greece you need to grease many hands then wait ages to get anywhere. On the other end of the line I would be talking to travel agents or travel professionals trying to decipher news reports and stunning images from Syntagma Square.

How is it possible for a country that only 6 years back showed the world it was able to not only organize the finest Olympic Games but to also support a growth rate of over 3%, to now seem unable to get off a recession spiral? Not only that but to feed cameras all over the world with protesters clashing with the police only a year after similar shots went around the world in December of 2008?

So, what is going on with Greece?

This is a question easier to pose than to address. There is a number of factors that led Greece to the financial issues that need to be addressed today.

• Greece hardly ever invested European Union Funds (EUF), such as Delors’ Community Support Funds (CSF) packages for example, to creating the appropriate infrastructures to support economic growth in the country. Deplorably, such funds were mostly consumed to supporting PR for political parties. Even worse, lack of transparency in handling such funds renders most of such PR activities questionable. One of the outcomes of European Funds handling by the Greek State was that Greece remained a country with no heavy industry and no industrial infrastructure. Worse than that years of abuse of EUFs led to weakening or even lack of any moral code in the Greek political system. This situation in turn, led to devaluation of the political system in Greece.
  
  
• In the years of global growth and up to 2007, Greek economy followed the global trend. However, once trends changed, Greece entered recession, worse than the rest of EU economies.
  
  
• Successfully organizing the 2004 Olympic Games is one way to view how Greece handled the Olympic Games story. What is not usually mentioned is that Greece actually overburdened its economy by billions of Euro that were funneled to infrastructures some of which even today remain undeveloped. No long terms plan were in place for such infrastructures to be productively used after the end of the Olympic Games.
• It has been too corrupt for years

What above is a non-exhaustive list of causes that contributed to a degree in forming the financial and social state of things in Greece today.

Greece, as every other state in the world, borrows money to cover its national debt. Markets seem to estimate that the way Greece currently operates its economy does not guarantee that it will be in a position to pay off interests on its debt accrued over time by May 19, 2010. In market-lingo this translates to higher interest rates when a state asks for a loan. With Greece the situation got so bad that the interest rates requested by the markets to approve loans for Greece got to all-time highs. Moreover, Greece’s economy devaluation by organizations such as Moody’s et al. only led to a vicious circle leading the country to higher and higher loan interest rates but its inflated Public sector doesn't help --the people, unions etc lead to their own demise as they do not want to work?

GREECE & WHY THEY ARE A BLOATED LAZY PEOPLE:

In Greece unions have it all there way---do little get more money, If you get sick during your vacations, you get another one.  1 in 3 Greeks work for the government many do nothing. They get high wages, benefits, and earlier retirements than private-sector employees. Many of the private sector employees also receive perks and benefits mandated by law. Greeks are lazy and they cheat. With free public transport they avoid paying anything. The government also is corrupt.

Civil servants can retire after 35 years of service at 80 percent of their highest salary and enjoy lavish health plans, vacations, and other perks. Because theres many of them, Greece being highly centralized, public-sector unions hardly have to negotiate. They simply vote in their preferred bosses. T he average salary on Greece’s railways is $95,716.00, which includes cleaners and track workers. This is around 3 times the average salary in the country & a joke for doing nothing.

Perks for government workers. All civil servants receive 14 yearly checks for twelve months work. Government unions have over the years built this into their contracts. It is mandatory each worker receive 25 paid vacation days each year. On top of this they also have 12 paid national holidays.

In addition to the holiday and vacation pay, employees who have completed 10 years of service with the same employer, or 12 years with two or more employers, are entitled to 25 working days of paid leave per year. This paid leave can be for anything the employee says it’s for. Its a joke.

Greek pastry chefs, radio announcers, hairdressers and masseurs in steam baths are among more than 600 professions allowed to retire at 50 (with a state pension of 95 per cent of their last working year’s earnings) — on account of the “arduous and perilous” occupation.

Productivity for workers in Greece is zero. Most studies put Greece at or near the bottom of the list for worker productivity. Greece is in much worse shape financially than anyone has been lead to believe. Greece’s population has a generation and a half of corrupting socialism that will be hard to fix as the battlkes continue by the lazy lot. Would you lend them money or help as they are basically the cause of their own demise?

Don’t feel sorry for them. They did it to themselves. All one has to do is look around at most of the countries in Europe. Italy carries more debt as a percent of GDP than Greece. Italy’s debt will be next. Then we have the United States heading the same way as they print more money & have a bloated public government sector as well.

Even though it is one of the smaller countries in the Euro-Zone, a default by Greece may lead France and Germany (two of the larger countries in the bloc) to enter a new recession as their banks have the largest exposure to the indebted nation. But for a weak euro means this would make exports more competitive against China -- which keeps the yuan undervalued and tips favoring Chinese exporters. It may be exactly what Europes ailing economy needs. But of course China has no intentions of appreciating the yuan and the USA is suffering as more companies close succumbed by China's intense competition and its piggy bank money box gets added to each day.

George Soros, our great stock market legend and 29th richest man in the world, expects the global economic “recovery” to “run out of steam.” In fact, he thinks it’s likely that another recession will happen again in 2011 and we think so as well!

Soros warned that growing political resistance to fresh state borrowing risks pushing the global economy into a double-dip recession next year. He also said the recovery from the worst recession since the second world war was incomplete, but that fears about a sovereign country debt was a barrier to spending designed to boost growth.

There is a general concern with sovereign debt, Soros said. “It is coming under suspicion and it has a political momentum because there is increasing political resistance to allowing national debt to rise. Some countries such as Greece do have deficits of 12.5% of GDP, which is intolerable and has to be reduced. Other countries such as the US and the main European nations have plenty of room to increase their deficits.”

Governments around the world have allowed their budget deficits to balloon since the financial crisis broke in 2007, but Soros said more spending was needed. “I think that since the adjustment process to the recession is incomplete, there is a need for additional stimulus. The political resistance to it increases the chances of a double dip in the economy in 2011 and after that.”

GREECE: ($413.6 billion DEBT ), is bigger than the country's economy, with some estimates predicting it will reach 120 % of GDP in 2010. The country's deficit was caused by cheap loans & no financial restraints plus indiscriminate spending -- how much more it spends than it takes in -- is 12.7% & its in the pits looking for bailout funds to reduce the deficit by more than €10 billion ($13.7 billion). It has hiked taxes on fuel, tobacco and alcohol, raised the retirement age by two years, imposed public sector pay cuts and applied tough new tax evasion regulations. Drastic cost cutting include taxes on fuel, tobacco and alcohol, retirement age up by two years, imposed public sector pay cuts and applied tough new tax evasion regulations but bailout by other EU country is not an option due to they having problems of their own. Oil prices rose above US$86 a barrel on Monday 3rd May 2010 as a record bailout for debt-stricken Greece of €110 billion ( NZ$201 billion ) was made

PENSIONS OUT OF HAND:

Tens of thousands of unmarried or divorced daughters of civil servants collect their dead parents’ pensions, weighing on a social security system that experts say will collapse in 15 years unless it is overhauled.About 40,000 women benefit from the allowance at an annual cost of around 550 million euros ($731.5 million Cdn.), according to economic website capital.gr. While the law protects civil servants from dismissal, it allows them to retire with a pension in their 40s.

BONUSES

Civil servants get bonuses from 5 to 1,300 euros to their monthly paycheck, some civil servants are paid extra for using a computer. Some get a bonus for speaking a foreign language and others for arriving at work on time, while many in the forestry industry get a bonus for working outdoors & if they do wrong you cannot fire them. All Greek public and private sector workers get 14 monthly salary payments a year. Half a month’s extra salary is paid at Easter and another half during the summer. The 14th salary is paid to civil servants at Christmas when the whole economy is geared to consuming it. Taxis, restaurants and hairdressers are legally allowed to charge extra as a “Christmas present.” The government has trimmed most bonuses by 12 per cent and Christmas and Easter salary bonuses by 30 per cent as part of its austerity plan, saving 1.7 billion euros ($2.26 billion).

NON EXISTENT COMMITTEES

Hundreds of state-appointed committees employ staff BUT THEY DO NOTHING. Greece has a committee to manage Lake Kopais, which dried out in the 1930s. One Greek newspaper estimated that committees employ more than 10,000 people and cost over 220 million euros ($292.6 million) a year for doing nothing

FREE TRAVEL

Olympic Airways for decades, costing Greek taxpayers millions while employees enjoyed generous benefits—their family members could fly around the world for free.

MILITARY SPENDING A JOKE

2010 defence budget now stands at 6.7 billion euros ($8.91 billion). But nearly 80% of Defence Ministry spending goes on administrative costs and payments of army staff.

June 2015: Greece, which may default on an International Monetary Fund debt repayment due on Tuesday 30th June after talks with creditors broke down, owes its official lenders 242.8 billion euros ($271 billion), with Germany by far the largest creditor.

COUNTRIES WHO CRASHED In the last 20 odd years:

• 1989 ARGENTINIAN

• 1997 THAILAND

• 1998 RUSSIA

• 1999 ECUADOR

• 2001 ARGENTINIAN

• 2008 Iceland whose next!!!!!!!!!!!!!!!!!!!!!!!!! &

• 2009 North Korea & Greece??

• 2011 Spain & Portugal, Greece & Ireland

• 2011 Poland coming

CHINA SITUATION:

China in 2011 have revalued their yuan which is good but the country is slowing down. As at 2019 China is starting to spread inflation to other Western countries. China has borrowed $8 for every dollar of GDP growth so have a credit problem. We loved the cheap goods but now China is flooding the markets via exports to the rest of the world. NZs Reserve Bank cannot stop this. Remember the US was borrowing $6 for every dollar before the subprime crash & Kiwis are borrowing still well beyond there means. Kiwi Banks keep pampering depositors with small loans and credit and debit cards to try to indebt you.

Some of the world's largest hedge funds are even saying that the Euro currency will sink to trade at an even level with the U.S. dollar.

The most terrifying prediction for 2019 involves Nostradamus "Satan's arch of fury". Although the precise nature of this prediction is left open to interpretation -could it be a comet, a war but definitely a disaster???

Are we heading back to recession with $$$ dropping & foreign currencies starting to fall [ More on Greece ] [ Poland situation ] [ World Population exploding ] [ World Currency ] [ China Vs USA finance situation 2010 ]

WHY ARE MANUFACTURERS & BUSINESSES LEAVING NZ: [ Read the story ] [ Compare to Thailand ] [ Check WHY THAILAND ] is better for Manufacturers & any Kiwi Company. Why NZ is lost [ NZ Deficit increases ] Yes we owe money????? [ Government $250m a week borrowing ] [ NZders lose out ]

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