[The Greek Economy Thread]

The road from Athens to Kalamata cut the commute significantly, it pretty much goes directly to Kalamata where in the past in would go to Tripoli.  I did notice a lot of Dutch/Scandinavian types more in Kalamata then I can ever remember seeing there.  For the most part though, Kalamata was mostly filled with Greek speaking people (tourists/locals).  On the Islands, I noticed so many Italians, way more than in years past but the Germans were definitely missing....

[The Greek Economy Thread]

Came back from Greece this weekend (was there for a month) and made a few observations:

 

1. Went to three islands and they were all packed! We tried to rent a car and they were telling us that they were all sold out. The only difference between this year and years past was that majority of the tourists were foreign, predominantly Italian. There were very few Greek tourists.

 

2. Went to Kalamata were my family is from, and it was packed as well. Though for the first time being there, I actually heard foreign tourists. In the past, it was 100% Greek and Greek-Americans/Australians.

 

3.  In speaking to everyone there, from family members to cab drivers, for the most part, they blamed the govn't for the mess Greece is in and for the handling of the negotiations.  Most of the hotel owners were upset that the negotiations started as the beginning of the season hurting their early bookings but for the most part, they were able to recover.

 

4. The locals still went out and tried to enjoy themselves. They did mention that they did cut down on some of their spending but this did not prevent them from going out though their vacations were cut from years past and if they did go away, usually it was in close proximity to where they lived.

 

These are just my observations and I did go at the peak of tourist season so it can be just my experience.

[The Greek Economy Thread]

The thing is that privatization will help the country.  Take the Helliniko project, even if the govnt gets nothing for the property and signs a 100 year lease, they come out ahead.  How?

 

1. This is an asset they no longer have to put tax payer money in to maintain (I know, they probably havnt but lets assume its nominal).

2. Jobs will be created in the development of the property.  This will lead to people being able to spend money, the government will get taxes on the income generated by the employees plus the VAT on the increased spending.

3. Taxes on the income generated by the Hotels.

4. At the very least, it will increase the value of the property and all of the surrounding areas.

 

So you take a non-performing asset (which in essence is what that piece of land is) and turn into a revenue generating asset even if the government doesn't directly get a cut of the profits.

[The Greek Economy Thread]

If you do not vote for the deal, than what do you do? They will be even greater unemployment, pensions will be reduced further all the while prices will go up (remember we are an import the majority of our goods).  Also remember that Greece needs to print new currency which would take quite a while.  There is no good answer. 

 

Regarding privatization, if done correctly, it does benefit a society.  Private companies are more likely to run projects more efficiently, create jobs and add to the overall GDP of a country. Greece benefits from the increase of tax revenue on both the development of the project and the people employed. If the Elleniko airport ever gets developed, it is projected that the project alone will add millions annually in tax revenue.  There will be jobs in construction, restaurants, hotels, etc...Some of these jobs will be permanent which only helps the economy.  The value of the entire land goes up including its surroundings.The other side to that, the airport sits idle, no jobs, no tax revenue.....

[Next Day for Greece]

It's crazy, 2 weeks ago, he held a referendum bc the terms were too cruel.  After his referendum, destroyed the economy further, he accepted a much harsher proposal.  If there is any saving grace, Greece will finally put in reforms necessary to attract outside investment and make the private sector that much more competitive. 

[The Greek Economy Thread]

Sometimes you need to hit rock bottom (hopefully we have) to fully understand the implications of what needs to happen and why.  Some how, he has galvanized all of his opposition (at the expense of his own party) in giving him 100% support on getting a deal, unfathomable even a few weeks ago.....Because of what has happened, I see the reforms being implemented this time.

[The Greek Economy Thread]

Apparently because there was such an outflow of cash, mostly due to the referendum and the inability to get a deal, Greek banks will need about 10 to 14 billion euros. The entire financial sector will probably need to be restructured with some of the major banks needing to be completely recapitalized!

[U-19 NT (Neon)]

Is the Ukrainian team supposed to be really good? I saw a twitter posting by some Ukrainian football site that this was an embarrassing result for them....

[The Greek Economy Thread]

Apparently the new finance minister is doing well....Minister Tsakalotos is a breath of fresh air,? Malta Finance Minister Edward Scicluna said in an interview. ?The language has definitely changed, and from what we heard from him and shown through his presentation, he strongly agrees with the Eurogroup that Greece needs a major overhaul.?

 

Finland?s Finance Minister Alexander Stubb, one of the most trenchant critics of the Greek government, said the Oxford-educated economist Tsakalotos ?made a good presentation? even as he was pressed for more concrete proposals. Analysts say Varoufakis?s removal may raise the chances of a new deal for Greece, averting broad default and keeping the nation in the euro region, at least for now

[The Greek Economy Thread]

The only way I see Greece getting a haircut on the debt is if it agrees to some sort of milestone agreement.  Basically, in three months, if Greece has implemented X, Greece gets to keep the interest payments from an escrow account.  In 6 months, if Greece's reforms are still being met, maturities get pushed back....

[The Greek Economy Thread]

It's not about being for sale, it's about being serious in these negotiations.  If it is true that Greece is unprepared, what better way to anger your peers by not being ready.  Remember, Tsipras said that the banks would originally be open on Tuesday.

[The Greek Economy Thread]

Kathimerini's Brussels correspondent @Elbarbie: Acc to info:Greeks came without proposals.Tomorrow will submit new request and proposals.

[The Greek Economy Thread]

I think the referendum answered one question, that the people are angry at austerity.  They want the euro however they cannot handle the bad policies that have been stuffed down their throat.  It showed the EU that if this is issue is not addressed, it can have a social revolution across Europe.  The Portuguese socialist party, who is similar to SYRIZA and running for elections in three months, echoed Tsipras call for end of the austerity and ironically is looking at Greece.  Many of these southern European countries are looking at Greece as a test case.  Spain just said that we will look at debt reduction for Greece, France said the same thing.  Italy stated that they want growth options in any package.  Not sure what any of this will mean if the banks cannot open in a few days but everyone is aware that something has to be done.  Hopefully, Tsipras can present to the EU a comprehensive, robust, detailed package that includes everything he wants along with some cuts.  Something the economists can agree makes sense and works.

[The Greek Economy Thread]

I did not want SYRIZA, still do not care for Tsipras but the people have spoken.  There is anger and rightfully so.  The majority of the no came from out of work youth you have not been able to find a job for a long time.  I met some young kid the other day who came here from Greece, he must have been 27.  He told me that he and his friends had just obtained their masters degrees and not one of them could find jobs.  They were just sitting there and after 6 months, he came to the US to get a job as a waiter.  How can that be acceptable? Our best and brightest leaving because of lack of job prospects.  To say that he was lazy would be unfounded. 

 

And then you have the EU who is just being punitive.  My son, who is 5 asked me why are people waiting on lines at the banks in Greece.  I told him in simple terms that the ECB cut off funding (the other EU countries).  His response, that is messed up, why would they do that to Greece. That is not a nice thing to do.  A 5 year old realizing what many of us adults do not.  I know we live in a world were economics and finance are king, but we also have a social responsibility to our fellow man.  Last week, I would have voted Yes.  Today, I am not sure but I do not blame the Greek people for voting No.

[The Greek Economy Thread]

The biggest issue that most of Europe has with Tsipras is that they cannot get a straight answer.  He flip flops all the time.  He is telling the public to vote NO on the agreement while having told the EU he accepts it (of course it was a few days to late). I have always been taught that your word is similar to currency.  If you want it to be worth anything, you have to stand by it.  He has lost all credibility with the EU. We want a leader that can walk into a room and be able to articulate our arguments with sound, insightful solutions.  Someone that is respected and considered an equal, not an outcast.

[The Greek Economy Thread]

I was watching a debate last night between a SYRIZA MP who wants a NO vote and several others (ND, business men, etc...) The lies coming out of this guys mouth were incredible.  He was saying that if everyone voted NO, banks would open the next day.  If they voted yes, banks wouldn't open for two weeks.

[The Greek Economy Thread]

Greece makes last-minute proposal to lenders to avert default

 

So Tsipras who was against the bailout decides to accept it 5 hours before the deadline expires....This is why I don't trust him, he told everyone that this is a bad deal and then does an about face 2 days later!!!!

[The Greek Economy Thread]

HellasHab - Sorry for the misunderstanding, just read it that way.  At the end of the day while everyone agrees that the austerity imposed measures by the EU is not helping Greece, the alternatives are far worse.  If Greece would leave the EU, what would happen to the quality of life of the Greek people? How would they pay for the basic necessities that they need? Its a hard choice either way.  Would I rather Greece be in Europe or out of it? I would pick in Europe.

[The Greek Economy Thread]

JVC - I am not so much upset at the point that he could not reach a deal, I am upset at his negotiating tactics.  I have said many times that I do believe he has valid points however you lose all credibility when you fail to participate in constructive negotiations.  In our day to day lives, we all have deadlines that we must adhere to.  For example, if my company has a reporting requirement with the SEC on the 30th and two days before I say that I will not meet it because I need to schedule a board meeting a week later, what would happen? Would investors want to invest capital in my company? What would happen to my credibility? How would the general public react? Would you invest in me?

 

I do not like Europe's proposals as they would restrict growth but Greece has failed to produce a proposal that would both cut spending or reform the public sector and improve growth.  The Samaras administration did not do this either but I trust them more.  They are the best choice of all of the current options. 

[The Greek Economy Thread]

Quote

If they were doing such a great job then why didn't he win the elections?!  I like how this moron is coming out now criticizing every single thing the current administration has done and pouring on the fear mongering real thck- it is clear he is a shill for the EU and the bankers who run the whole show.  He was IN POWER just a few months ago, why the hell didn't he negotiate a good deal for the country when he was PM?!  The whole political system in Greece is one big gong show IMO, is there not one competent politician in that country or are they all bought and paid for?!

 

I am new to these forums, express my opinion and get called a moron over what is sound reasoning. Instead of having an honest debate, I get critized for posting.  Way to encourage new people to express their opinions.  I am in these forums as I believe many of us are, because we genuinely love Greece and its people and are upset on all that has transpired over the last few years.  There have been many mistakes made by all parties.  The reason I blame Tsipras is for his unprofessionalism in handling negotiations.  You do not set up a referendum after a deadline has passed.  That's amateurism at its finest.  To go over your logic, Syriza has been in power for a few months as well, why haven't they closed a good deal.  If you remember their campaign promises, they would have ripped the deal and Europe would have forgiven our debt.  All these things take time, you can't reverse something in a few months that took years to make.

[The Greek Economy Thread]

The other point is that the drachma will fluctuate to the Euro.  For example, we owe 300 billion euro which today is the equivalent to 600 billion drachma (example).  In a month, the 300 billion euro will equal 1 trillion drachma as the drachma will devalue to the euro making our debts more not less...

[The Greek Economy Thread]

So they leave, Greece has no money. Remember, we are an import economy and no one will want our drachma.  How will Greece pay its pensioners? How will Greece pay for law enforcement? Basic needs such as medicine, food?  We are the ones needing funds.  We default, we still owe that money!!!! We may negotiate some sort of write off but even Argentina paid some % of its debt to its creditors.  I do not think the average Greek understands what is at stake.  The deal we are getting stinks (the Samaras administration was getting to the point of building credibility with the Troika and would have gotten way better terms) but the alternatives are far far worse!!!! 

[The Greek Economy Thread]

I have lost all respect for Tsipras and his government (not that I had that much before hand). If you wanted the people to decide, you should have let them decide BEFORE the June 30th deadline. You know, right before the tourist season (Greece's #1 revenue producer!!!!) This shows his inexperience of negotiating at the international level.  All he did was antagonize the EU and everyone else who was working on the negotiations.  I do not think he is wrong on some of his points however the harsh reality is that if Greece votes NO, Greece is out of the Euro.  People will suffer a lot worse than they will under the current program.  Greece receives/received a lot of EU subsidies which will now come to an end.  He went all in holding a pair of deuces.

[The Greek Economy Thread]

The biggest issue in Greece is the lack of jobs and the hurdles that are in place for job creation. Greece is its own worst enemy.  The laws in place do not lend to entrepreneurs which is ironic, due to the fact that every Greek I know in the states has some sort of business.  Most have done relatively well for themselves. Greece has a highly educated population who is pretty internet savvy (I remember reading a survey that stated that Greece had one of the highest internet usage in Europe per person). Why not give them the tools to move forward?

[The Greek Economy Thread]

The thing is Syriza is not totally wrong on some of their action points.  The way they went about negotiations with no real, substantive reforms is what has led us to today.  The way they lied to the public on promising them no austerity, no debt, etc...was wrong. Anybody can see that in order for Greece to be a sustainable country, reform is necessary.  We can no longer fight it however they need to be implemented in a manner that would hurt those in need the least.  I am afraid that Syriza's approach has alienated even our closest friends and now we are left on an island by ourselves.