Greece

[Yossarian]

I am intrigued by the Greek financial drama. Anyone want to make predictions?

[sweetana3]

Well, I don't trust anything their politicians say. Remember the Greek economist who told them what was going to happen and was jailed? They want others to fund their lifestyle and that is my take on it. Note: I am a pessimist.

[IshbelRobertson]

Well, I'll be returning to our favourite Greek island in May. I think it's evenly balanced whether we will be using euros or Drachma.

[gimmethesimplelife]

I agree with you that it is intriguing. I'd like to see Greece leave the EU and start printing drachmas again. This is not without consequences to the stability of the EU and the euro but I don't see any better way out for Greece. Maybe eventually Spain will have the peseta again, Portugal the escudo (I always found escudo to be a nice name for a unit of currency) and Italy the lira. I don't see things getting much better in these countries or overall debts levels trending downwards. Rob

[razz]

The big question is how badly the big guys want the European Union to survive. At present, Greece simply cannot get out of debt, Germany etc., who pay their taxes don't want to give Greece the continuance to avoid paying badly needed taxes and yet want the European Union for business benefits. They also want to support the banking system otherwise the economies will suffer severe consequences.
What are you thinking, Yossarian, are the possibilities? Similar to mine or something else?

[jp1]

Probably the biggest concern on the EU side is that if Greece leaves what's to stop Portugal, Italy, Spain from leaving. Then it all falls apart and there's much chaos. The reality, though, is that Greece has no hope of paying off their debt.

I have no idea how this will play out but frankly Greece has the stronger hand right now. As the old saying goes "If you owe the bank $100 it's your problem, if you owe the bank $100 million it's their problem."

[gimmethesimplelife]

Probably the biggest concern on the EU side is that if Greece leaves what's to stop Portugal, Italy, Spain from leaving. Then it all falls apart and there's much chaos. The reality, though, is that Greece has no hope of paying off their debt.

I have no idea how this will play out but frankly Greece has the stronger hand right now. As the old saying goes "If you owe the bank $100 it's your problem, if you owe the bank $100 million it's their problem."Not only does Greece have the stronger hand but the country has just elected a new Prime Minister that promised to end austerity and vocally seems to be willing to play the stronger hand. It will be interesting to see the showdown of Greece vs. Germany. I also agree with you - as I said above, I believe Italy will be eventually printing lira, Portugal once again printing escudos, and Spain once again printing pesetas - what's to stop any of these other indebted countries from leaving the EU? And France, too, although not quite in the league of these last countries is very top heavy on debt and unwilling to make the changes this world of turbo charged capitalism demands. I respect France for this but OTOH the price may be leaving the EU and printing Francs once again. Rob

[Blackdog Lin]

I am applauding and rooting for Greece to stay their current (new) course and tell the EU to stick it. The loans were not made in good faith, and Greece will be better off in the long term by defaulting.

[Yossarian]

The loans were not made in good faith

I don't understand what you mean. Can you explain?

[Yossarian]

And France, too, although not quite in the league of these last countries is very top heavy on debt and unwilling to make the changes this world of turbo charged capitalism demands.

I'll confess to being something of a francophile, but I can't buy into this characterization of the problem, at least not directly. I don't think it's about socialism versus capitalism. You can have whatever system you want, but at the end of the day it has to be self supporting. The problem is people want benefits without paying for them. When you spend borrowed money, your ability to consume above current income is increased, but, at least in theory, at the cost of having to spend less than your future income. Sometimes that's wise. I'd put my student loans in that category. But the challenge that is playing out is how that unwinds in a democracy when subsequent generations are stuck with the bill. People can pick as socialist system as they want as long as they can actually pay for it. So unless you are asserting that there is no way a socialist economy can pay its bills, I wouldn't phrase it the way you did. Unless of course you want to admit that you have seen the light and now recognize a capitalist system is better for everyone in the long run, then I'll agree.

[gimmethesimplelife]

I'll confess to being something of a francophile, but I can't buy into this characterization of the problem, at least not directly. I don't think it's about socialism versus capitalism. You can have whatever system you want, but at the end of the day it has to be self supporting. The problem is people want benefits without paying for them. When you spend borrowed money, your ability to consume above current income is increased, but, at least in theory, at the cost of having to spend less than your future income. Sometimes that's wise. I'd put my student loans in that category. But the challenge that is playing out is how that unwinds in a democracy when subsequent generations are stuck with the bill. People can pick as socialist system as they want as long as they can actually pay for it. So unless you are asserting that there is no way a socialist economy can pay its bills, I wouldn't phrase it the way you did. Unless of course you want to admit that you have seen the light and now recognize a capitalist system is better for everyone in the long run, then I'll agree.This is a sticky one for me. I admit I am a much bigger believer in socialism than capitalism - that should be no surprise to anyone here. HERE'S THE SURPRISE FOR YOUALL THOUGH: I do question in today's world if the countries I so respect with cradle to grave social welfare can continue indefinitely with this set up. I'm not for the American way of doing things all of a sudden - economically I'm not suddenly batting for the other team as it were (lame attempt at humour, I hope someone found it funny). What I could work with is America as it was set up in the 50's, 60's and 70's where the average person was given a much more fair economic shake and American life wasn't continual economic terror and continually comforting yourself by your ability to flee and how long you could survive elsewhere, which I'm sorry, for many I know, this is American life today. I realize that this is not everyone's America - understood. But it is far from a radical view and every year with more and more people dropping out of the middle class, this is the America more and more people face.

Point being - given all the givens, I'd be willing to take the America of say circa 1965 - at least economically. Rob

[jp1]

In hindsight one has to wonder if the Euro was doomed from the start. Trying to jam all these different cultures with vastly different economic histories together and expect it to just work somehow was probably foolish. One has to wonder if Greece "cooked the books" to meet the financial requirements to join the Euro, and further, if the rest of the Euro countries only did a weak version of due dilligence in their desire to add as many countries as possible. The people in the wealthier countries can grumble all they want but no amount of austerity is going to enable Greece to pay off their debt even if they stay the course which as Rob mentions, given the recent election and new prime minister, seems highly unlikely.

[gimmethesimplelife]

I am applauding and rooting for Greece to stay their current (new) course and tell the EU to stick it. The loans were not made in good faith, and Greece will be better off in the long term by defaulting.I agree Greece will be best served by defaulting but I worry for the consequences to the EU and the value of Euro. I have family in Austria and I so wish Austria had kept the Schilling and passed on joining the EU as Switzerland wisely did, but for better or worse, what plays out with Greece and then down the road possibly with Spain, Portugal, and Italy is going to affect my family in Austria.....along with millions of other people. And there will be impacts on the world economy too. It's as if there is no win/win here - a price is going to be paid somewhere, and it may be a high one. Rob

[Yossarian]

a price is going to be paid somewhere

Significant parts of the debt are held by other EU countries, so the default some are rooting for is just shifting the burden of Greek spending to German, French, Italian and other EU taxpayers. That of course reduces their ability to pay benefits to their own citizens.

[jp1]

Significant parts of the debt are held by other EU countries

I guess those countries will relearn a valuable lesson that seems to have been forgotten, that you shouldn't loan money to someone/something if they aren't likely to be able to repay. American bankers should have learned that lesson in 2008 when the housing bubble popped but congress and the federal reserve decided to bail them out instead. It'll be interesting to see how the ECB tries to bail out the losers when Greece defaults.

[gimmethesimplelife]

I'm of the opinion that the next few months will be interesting in Europe. I don't know how this standoff is going to end but Greece in effect giving the middle finger to Germany is not going to go over well with Ms. Merkel or most of her country people, and I wonder how the Greeks who have fled to Berlin to eke out a living since the crisis came to Greece - I wonder how welcome they will still be if Greece doesn't tone down the rhetoric and cave?

Something that Greece does bring to the table as a weapon is the fact that many urban Greeks still have families in agricultural Greece and many urban Greeks can flee Athens and survive off the land if they have to. It's a hard life to be sure but it is a weapon at the negotiating table as it means less of the citizenry hungry and homeless in urban Greece. Germany might be wise to realize that they don't hold all the power this go round but I don't believe Angela Merkel is in a charitable and conciliatory/forgiving mood. Rob

[LDAHL]

Wasn't it Margaret Thatcher who said that the trouble with socialism is that you eventually run out of other peoples' money?

[IshbelRobertson]

I just give thanks daily that the ONLY thing that Gordon Brown did as Chancellor of the Exchequer that was worth a tuppeny damn to the UK was his failure to take us into the Euro. :)

[jp1]

Socialism doesn't have to fail. It seems to be doing fine in a number of northern European countries.

[LDAHL]

Socialism doesn't have to fail. It seems to be doing fine in a number of northern European countries.

The Nordic countries, particularly Sweden and Denmark, have been reducing the scope of their welfare states since the 1990s. Southern Europe would have done well to follow their example. You can march and bluster and renege on your debts all you like, but ultimately a country can't consume more than it produces.

[jp1]

The Nordic countries, particularly Sweden and Denmark, have been reducing the scope of their welfare states since the 1990s. Southern Europe would have done well to follow their example. You can march and bluster and renege on your debts all you like, but ultimately a country can't consume more than it produces.

Those are two unrelated points. And even if the nordic countries are reducing programs they still have quite a lot left that appear to be sustainable.

[IshbelRobertson]

Whilst at present we are 'enjoying' a Conservative/Liberal Democrat coalition, we still have certain socialist-inspired benefits eg the national health service, for which I am grateful and would support to the hilt!

I love Greece and many Greek people, but actually believing the figures dreamt up as their 'income' as sufficient to allow membership to the Euro zone? Never in a million years! So few Greeks actually paid ANY tax at all for decades. The scandal of who qualified for full final salary pensions was a national joke.

[razz]

Whilst at present we are 'enjoying' a Conservative/Liberal Democrat coalition, we still have certain socialist-inspired benefits eg the national health service, for which I am grateful and would support to the hilt!

I love Greece and many Greek people, but actually believing the figures dreamt up as their 'income' as sufficient to allow membership to the Euro zone? Never in a million years! So few Greeks actually paid ANY tax at all for decades. The scandal of who qualified for full final salary pensions was a national joke.
This is the real issue, IMHO, not so much soclialist vs capitalism. Those that were able to do so, abused the sources of revenue. Much of northern Europe paid their taxes and didn't skim quite as vigorously from the cream sources of revenue and they legitimately don't see why they should fund those countries who abused the public purse. Those who abused have little intention of changing what has worked so well in the past decades despite the impact on their children and future generations.

[IshbelRobertson]

EXACTLY!

[Blackdog Lin]

I guess those countries will relearn a valuable lesson that seems to have been forgotten, that you shouldn't loan money to someone/something if they aren't likely to be able to repay. American bankers should have learned that lesson in 2008

This. is what I meant.

[Reyes]

American life wasn't continual economic terror

Rob, please tell me you don't seriously view American life as "economic terror." Please.

[Yossarian]

This. is what I meant.

I don't see how that makes it bad faith. Foolish, maybe, but what's your morality here? Don't try to help people who need it or we will root for them to "stick it" to you for trying to help?

Greece's debt is about 175% of GDP. If someone making $100k a year came here asking for advice on how to payoff their $175k of debt, what advice do you think they would get?

[Reyes]

Wasn't it Margaret Thatcher who said that the trouble with socialism is that you eventually run out of other peoples' money?

Now that is a very funny quote:).

[Yossarian]

Rob, please tell me you don't seriously view American life as "economic terror." Please.

Rob is sensitive. He probably does believe this subjectively, but that shouldn't be taken as a credible objective description.

[ApatheticNoMore]

Foolish, maybe, but what's your morality here? Don't try to help people who need it or we will root for them to "stick it" to you for trying to help?

what does helping have to do with making loans? Helping would be giving charity, loans is making a return on an investment, two things that should never be confused.

[Blackdog Lin]

I agree ANM. I am convinced that these loans were not made in any way to "help" Greece - they were made as a first step toward looting Greece.

[gimmethesimplelife]

Rob, please tell me you don't seriously view American life as "economic terror." Please.The whole of American life, no....but parts of it, definitely. How could you describe American health care, prior to the ACA as anything but economic terror? Let me refresh your memory - insurance companies used to be able to deny you for coverage based on past health issues. Translation - lose your job in a downturn, lose your insurance, can't get new insurance, what do you call such a situation if you get sick and need expensive care for a pre existing condition? I'd call it economic terrorism. True, this is now in the past - but who in what little the remains of the middle class has $6000 or so sitting around for deductibles/co-pays on ACA insurance? I still see US healthcare, to a lesser degree now, as economic terrorism or at least minimally the potential of economic terrorism. I was 15 when I first realized this about US healthcare - all I can say is, I'm very grateful I live near a border......I also see the US civil court system as being fraught with the potential for economic terrorism as truly you can be sued for having sneezed too loud on September 14th, 1975. It really is that risky and that ridiculous now - and yes, I see the irony in my having this stance given that I'm all for suing in cases of police brutality and going for the absolute maximum (this is much more about causing financial pain to usher in change than just for mere money, however, but that's off topic and is another thread).

So to answer your question fairly - not all of American life do I view this way but parts of it, yes, very much so. There really is a lot of financial risk you assume by living in the US - shop around other countries as I have for some time and compare and you'll see what I mean. This financial risk does not play well in a country with stagnating/declining wages, rising costs, and almost all gains going to the very few at the top.

Rob

[gimmethesimplelife]

Rob is sensitive. He probably does believe this subjectively, but that shouldn't be taken as a credible objective description.Sensitive or not is besides the point as I see it. I do see parts - but not all, granted - of American life as being fraught with the potential of what I consider economic terrorism, yes.

Here's something interesting I have to add to this (but I'm not sure I agree with this). I have some straight male friends from my college days that I have recently been in touch with that have really intense resentment and anger due to how family court laws in the US are set up. Apparently, a few of my friends feel they have been victims of economic terrorism (their words, not mine) due to alimony and child support, especially as the women initiated the divorces and none of my male friends wanted to divorce. Now they can't see their kids often, and if their income falls and they can't make their child support payments, they are vulnerable to jail time.

Now, out of respect to all the women here - No, I don't know all the issues that led up to these divorces and I realize that I'm getting only one side of the story. I also believe often that the best move for a woman is to run like the wind as it was in the case of my mother's divorces. So I'm not taking an anti female stance here, really, I am not.

I do however wish to state that if a man is laid off through no fault of his own, and can't make child support for children that are not his anyway but he has been legally required to pay for - with the risk of jail/prison constantly over his head if he can't make the payment - this is economic terrorism and truly a legitimate reason to flee the US never to return again. It would be hell for someone like me to run on my kids but to be this vulnerable to America - I just couldn't live that way, having learned what I have about America. I just could not do it. (Good thing I don't have kids and in my case any marriage would be male/male but then again, who knows how such divorces are going to pan out when you get right down to it?)

I guess my overall point is yes, I do see more than one area of life in America in which we all are vulnerable to economic terrorism, yes. This has nothing to do with being sensitive - it has to do with having open eyes and no loyalty to any system period. Rob

[gimmethesimplelife]

I agree ANM. I am convinced that these loans were not made in any way to "help" Greece - they were made as a first step toward looting Greece.The more I know and learn of what is going on with Greece the more I tend to agree with what you have posted here. Though I would agree that Greece was impractically reckless with it's spending.....there is a part of me that cheers Greece on in it's new refusals even though I realize this could be the first step towards a lot of instability in Europe. Rob

[Reyes]

shop around other countries as I have for some time and compare and you'll see what I mean

And yet with all your comparison shopping, you choose to stay in the US.

[gimmethesimplelife]

And yet with all your comparison shopping, you choose to stay in the US.If you would kindly think back to a few months ago, I responded directly to a post of yours as to why exactly I remained in the United States and what I was doing to change matters. I also gave a rough timeline as to leaving and even though I've been burnt out out of nowhere lately, I have kept up with school and online income so I don't fall behind in what I am trying to do. I'd think, being pro-American as you seem to be, you'd be happy that I'm making efforts to leave. Uruguay is where I'd truly like to end out, but I'm not picky. Rob

[Reyes]

Funny, I don't think I've ever been labeled "pro-American":). I'll have to try that on for size.

I'm happy for *you* that you are making plans to leave. Truly, you seem downright miserable living in the U.S. so I do hope you have the opportunity to settle down somewhere else soon. Life it too short to be so unhappy in the place you live. Remind me of your moving year?

On a side, is it really *that* difficult to relocate to another country? Maybe you could teach English someplace? I have family from Guatemala and they've made it here (undocumented) and back several times, so I'm surprised it is so difficult to get somewhere else once. Are you opposed to going undocumented to another country?

[jp1]

I agree ANM. I am convinced that these loans were not made in any way to "help" Greece - they were made as a first step toward looting Greece.

I tend to agree. They seem very much in the way of all the "deals" that are described in the book "Confessions of an Economic Hitman" by John Perkins.

[jp1]

what does helping have to do with making loans? Helping would be giving charity, loans is making a return on an investment, two things that should never be confused.

But, but, all those subprime home loans that blew up in people's faces. That was just bankers trying to "help" people buy homes. Out of the goodness of their little banker hearts. [/snark]

[Yossarian]

I agree ANM. I am convinced that these loans were not made in any way to "help" Greece - they were made as a first step toward looting Greece.



The ECB is charging Greece something like 1.5% interest. They also allowed Greek banks to borrow at 0.05% using junk government bonds as collateral. I'm curious why you consider that to be "looting" in any context, but particularly in light of Greece's market rates in 2012?







https://qzprod.files.wordpress.com/2013/05/screen-shot-2013-05-15-at-10-41-26-am.png?w=640&h=389

[LDAHL]

But, but, all those subprime home loans that blew up in people's faces. That was just bankers trying to "help" people buy homes. Out of the goodness of their little banker hearts. [/snark]

"As our economic difficulties have worsened, we voters have struggled to find the appropriate scapegoat. We blame the politicians whose hard lot it is to bring public finances under control. But we also like to blame bankers and financial markets, as if their reckless lending was to blame for our reckless borrowing. We bay for tougher regulation, though not of ourselves."
Niall Ferguson

[jp1]

I don't need a scapegoat. It seemed pretty obvious by 2006 who,was responsible for the obviously coming housing crash. (Anyone who didn't see it coming was either blind or willfully ignorant in my opinion. Only a fool would honestly expect housing prices to rise faster than wages indefinitely which was the only way that the subprime loans weren't going to burst.). Bankers who made their profits up front and offloaded risk ASAP were responsible. If the free market can solve that moral hazard then great. Otherwise some sort of regulation is in order.

[gimmethesimplelife]

I don't need a scapegoat. It seemed pretty obvious by 2006 who,was responsible for the obviously coming housing crash. (Anyone who didn't see it coming was either blind or willfully ignorant in my opinion. Only a fool would honestly expect housing prices to rise faster than wages indefinitely which was the only way that the subprime loans weren't going to burst.). Bankers who made their profits up front and offloaded risk ASAP were responsible. If the free market can solve that moral hazard then great. Otherwise some sort of regulation is in order.Agreed 100%, especially with your last comment. Rob

[ApatheticNoMore]

I don't need a scapegoat. It seemed pretty obvious by 2006 who,was responsible for the obviously coming housing crash. (Anyone who didn't see it coming was either blind or willfully ignorant in my opinion. Only a fool would honestly expect housing prices to rise faster than wages indefinitely which was the only way that the subprime loans weren't going to burst.).

I suspected it might be a bubble, I was like "I think we might be in a bubble ... housing might be in a bubble ...". But it's kind of a characteristic of bubbles that you can only call them for certain after they've popped.

But then I no longer believe housing in some places really has to have that much to do with the median wage either. Sure I imagined houses would be going for 200-300k all over the place after the crash. Wishful thinking, is all that was. Yes if housing prices were based on the median household income maybe. But they aren't. Housing is back up to above 08 levels and wages haven't gone up any (of course one probably should adjust the housing price increases for inflation). Of course I think banks are more knowledgeable at figuring out the financial consequences of the loans they make than the person on the street, but then if they get bailed, why bother?

[Blackdog Lin]

Not trying to stir up any controversy - but I remembered our discussion here and I absolutely could not resist! :)

http://www.zerohedge.com/news/2015-03-04/imf-director-admits-greek-bailout-was-save-german-french-banks

[Davidwd]

I am intrigued by the Greek financial drama. Anyone want to make predictions?

I think they will be happy to leave the Eurozone.
I hate the fact we are governed by the Eurozone, immigration is completely out of control, the schools and hospitals cannot cope with the sheer numbers. I will be voting ukip.

[ApatheticNoMore]

More bankster involvement, but mostly just partners in crime here:
http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=all&_r=0

Yea restructuring might help. Truthfully at this point they need humanitarian aid (yea conditions do seem to be bad enough to say that - no medical care etc.), but might not if not for all the debt.

[IshbelRobertson]

Greek Govt courts popularity by reigniting the demands for WWII reparation from Germany.
http://www.telegraph.co.uk/finance/economics/11463568/Greece-demands-Nazi-war-reparations-as-rhetoric-turns-nasty-in-creditor-talks.html

[LDAHL]

While they're at it, they should demand reparations from the Persians, the Macedonians, the Romans and the Ottomans.

[IshbelRobertson]

Don't put ideas in their minds :)

[LDAHL]

If you want to make it as a demagogue in this competitive market, you need a solid scapegoating strategy. Borrowed foolishly? It’s the bank’s fault for lending to you; or at least government’s fault for allowing them to do business with a deadbeat like you. Built an unaffordable welfare state in a nation of tax cheats? Blame “austerity”, or the whole dirty capitalist system malevolently tying consumption to production. And if you can add a whiff of Third Reich iniquity to the mix, you’ve got yourself a winner.

[Yossarian]

Built an unaffordable welfare state in a nation of tax cheats? Blame “austerity”, or the whole dirty capitalist system malevolently tying consumption to production.

I wonder what the final act of the Greek tragedy will be. I wonder if you eventually do run out of other people's money.

[razz]

CBC had an analysis that concluded that if anyone had the smarts and motives to overcome the 'moral hazard' of borrowing beyond ability to repay and tax cheating, the risk of loss of credibility of the European Union and the will to work through this crisis that could possibly impact other members of the EU, it was the collective wisdom of the Europeans. I pray that this is true.

[IshbelRobertson]

I'm presently on a Greek island. Many of our Greek friends say they don't expect their govt to default THIS time.

I am in the Ionian area. The islanders are incensced that their govt is proposing to impose a VAT of 23 per cent, right at the beginning of the tourist season. What truly gets their collective goat is that the Aegean islands have 6 per cent VAT and Athens doesn't intend to increase that rate. They say some Greeks are more equal than others...

[LDAHL]

CBC had an analysis that concluded that if anyone had the smarts and motives to overcome the 'moral hazard' of borrowing beyond ability to repay and tax cheating, the risk of loss of credibility of the European Union and the will to work through this crisis that could possibly impact other members of the EU, it was the collective wisdom of the Europeans. I pray that this is true.

Even if your prayers are answered, will they be able to do the same for Spain when the time comes? Especially if they need to commit more resources to defense in the face of increasing Russian aggression and receding American power?

[Tammy]

Ishbel -

I must say - it's refreshing to hear directly from Greek people via your post. I get weary of hearing opinions on world affairs from those with no first hand info.

[Xmac]

People are going to learn a lot of about the issuance of money from this.
Greek leaders will do well to watch what Iceland is doing to counterfeiting bankers.

[LDAHL]

I wonder what the final act of the Greek tragedy will be. I wonder if you eventually do run out of other people's money.

Looks like we'll see quite soon. I'd be surprised if the other people agree to continue funding their deficits at this point. That leaves the traditional route of dishonoring debt to stiff your creditors and inflating the currency, post-euro to stiff your citizens.

[Gregg]

If Greece defaults and leaves / is forced out of the Eurozone as a result it would put a lot of pressure on the other weak economies in Europe. Portugal, Spain, Italy, etc. would probably be seen as the next dominoes in the line. If so, their cost of borrowing would likely go up putting even more pressure on their already under-performing economies. Lather, rinse, repeat right down the line. Either way, I'd hate to be carrying any Euro-based debt in Greece right now.

[LDAHL]

I'd hate to be carrying any Euro-based debt in Greece right now.

I understand it's mostly held by central banks, multinational agencies and other big institutions. Eurozone taxpayers and the Greek population would therefore seem to be the most at risk right now.

[IshbelRobertson]

As members of the EU, we in the UK hold some Greek debt, but in comparison to those in the Euro zone, we have only a small liability.

[LDAHL]

Staying with sterling seems to have been the wise course thus far. Isn't Mr. Cameron committed to a referendum on EU membership in a couple of years?

[IshbelRobertson]

Yes he is, but it seems that pro-european UK MPs are already scare-mongering about the repurcussions if the vote is 'no'.

A friend from Greece emailed me this morning to say the ATMs at three Banks on his island are empty. He is going to drive into the main city and will stop at every ATM he passes on the way. He is a Greek national and can only withdraw the daily amount allowed by his Govt, currently a little over 60GBP per day. Noone is accepting credit or debit cards drawn on Greek banks.

[CathyA]

I'm a little behind on this. What did Greece spend all that money on? Why couldn't they get their tax collection system in order?
The longer I live, the more I feel that it isn't good to make every culture and every person the same.....whether it be in laws or in finances. If biodiversity is sooooo important (and necessary) in nature, why isn't it also good for human things. Isn't having every country on the same economic plan the same as having only 1 plant in the world? That plant/tree, etc., could so easily be wiped out.

[LDAHL]

There was an interesting piece in the Economist about the popular distaste in Germany for bailing out Greece in connection with pensions. Germany recently raised it's base retirement age to 67, and Greece was considering going from 61 to 63 as an "austerity" measure.

[CathyA]

Wow.....that's really a young age for retirement! Especially when they are supposedly eating the Mediterranean diet! :~)

[ApatheticNoMore]

The most popular age to sign up for U.S. social security is age 62. It could be claimed the U.S. retirement age is 62 as that's minimal eligibility, of course the average age of collecting social security is somewhat higher.

" A smaller proportion of people have been claiming Social Security at age 62 in recent years, but it continues to be the most popular age to begin receiving payments"

http://money.usnews.com/money/retirement/articles/2013/09/09/the-most-popular-ages-to-claim-social-security

Of course you get less benefits. It's often not a choice to stop working by that point (of course if you have a lot of other assets you can delay collection even if you can't work). Any type of hard physical labor and your body has probably broken down before 67. Sometimes even office workers. And even if one's health is good the companies hiring older people - not so much so.

I don't think Greece actually has a retirement age that is comparable to the U.S.. It seems it more has a minimum years you have to have worked age and this differs depending on the "hazardousness" of the profession which has some logic (your body doesn't break down being a college professor or something the way it would doing construction decade after decade). That's why you get claims that the retirement age is 58, no 61, no 63, no 65 etc.

Here's it's claimed the current age is 65 with proposals to raise it to 67 (but that might be maximum retirement age (that is assuming you don't have the years of continuous employment and your job wasn't "hazardous"))
http://www.reuters.com/article/2010/05/04/greece-idUSATH00544920100504
http://rt.com/business/greece-retirement-troika-cuts-620/

Here it's discussed what the retirement age in Greece is and how it's so hard to find out (apparently the average age is about 61-62, in the U.S. I don't have the data, I'd guess it's about 64 - again most are not waiting for full collection of social security):
http://www.aleksandreia.com/2010/03/08/greek-retirement-age-and-more-on-the-greek-debt-crisis/

Wikipedia doesn't support the contention that Greece retirement age is that much different than anywhere else:
https://en.wikipedia.org/wiki/Retirement_age

And oh yea, Greek food is great!

[CathyA]

Hmmm.....I forgot that you can start collecting it here pretty early too. But......my mother quit work at 62, and lived to be 87..........and after we paid a lot for her and we couldn't do it anymore and she ran out of money and was on Medicaid for several years.........you start to see that one maybe shouldn't start collecting it until later. But in my mother's case......she hated her job as an R.N. and was really sick of it........so it's sort of understandable. But she really hadn't prepared for retirement, other than social security. And she probably didn't think she'd live that long....
DH and I are waiting to take ours for awhile. We're both 65, but he's still working.

But about Greece's tax collection falling apart. How does that happen? Is it a matter of having a bad IRS-type department, or did masses of people just refuse?

[Lainey]

CathyA, I had heard a long time ago that it was a cultural thing, like in Italy, that people ignore paying their taxes. So it certainly looks like there was no penalty or follow-up for refusing to do so. Although remember when Sophia Loren was famously jailed briefly for tax evasion?
I can understand why other EU countries don't find it so amusing.

[gg_sl]

CathyA, I had heard a long time ago that it was a cultural thing, like in Italy, that people ignore paying their taxes.
I remember an Ethics case about Italy in a continuing education course I took (I am a CPA). It was about an American Manager leading an Italian corporation. He wanted to fill out the company's tax form correctly, and pay the amount the company owed according to Italian Tax law. He was advised that this was not how things worked in Italy. In Italy, your initial tax filing is an opening offer to the taxing authority in what will become a negotiation. And you don't start a negotiation with your best offer on the table. The Ethics question was asking how the American manager should handle the situation.

I understand it is worse in Greece.

[Tradd]

I've read multiple places that in Greece, avoiding paying your taxes is very much a cultural thing.

There is also a high number of people employed by the government - maybe something like 50% of the total population.