Greece Debates Staying in the Euro Default Being Considered

[Conley]

Greece is facing an acute political and social crisis this weekend as the bankrupt state prepares to decide whether it can stay in the single currency.

As riot police clashed with protesters on the streets of Athens, and five ministers resigned in protest at the scale of the spending cuts demanded in return for a new €130bn (£108bn) bailout, Evangelos Venizelos, the Greek finance minister and socialist leader, said the country had until Sunday to choose whether to swallow the eurozone medicine of more cuts – or default on its debt next month and be forced out of the euro.

In an emotional speech he said: "The choice we face is one of sacrifice or even greater sacrifice – on a scale that cannot be compared. Our country, our homeland, our society has to think and make a definitive, strategic decision. If we see the salvation and future of the country in the euro area, in Europe, we have to do whatever we have to do to get the programme approved."

Police ringed the Greek parliament building following the failure of eurozone finance ministers to approve the new bailout for Greece. Prime minister Lucas Papademos had offered new austerity measures worth €3.3bn to secure the euro lifeline, but he was told the cash would not be forthcoming until savings of an additional €325m were identified. He was told to get the €3.3bn programme endorsed and come up with a plan for the new cuts – to plug a gap in this year's budget – by Sunday.

http://www.guardian.co.uk/world/2012/feb/10/greece-crisis-bailout-euro-default

Merkel is saying the default could have uncontrollable consequences. To me that seems like just the tip of the iceberg.

[MMC]

Well truthfully Greece could have put out more money. They have like 60 billion in Capital but they only put like 680 million in the til.

Another thing is everyone in their country recieves a pension and it is for life. Which those pensions are based on 14 months not twelve. So Greece is to blame for the spending and not paying of their debts. now they are breaking word on the Austerity measures. In that aspect I can understand how the Germans feel. As they are expected to bail everybody else out.

[Peter1469]

Greece must leave the Eurozone. It needs to go back to its currency and devalue the heck out of it. Then tourists would see Greece as the best deal on earth! This would help all businesses that carter to tourists. It would stabilize their economy and start the healing process, assuming that they can make people pay their taxes that is!

[Mister D]

I guess now is the time to buy a Greek island! :grin:

[Peter1469]

I guess now is the time to buy a Greek island! :grin:


Not until the sale price is no longer in Euros but rather in Drachmas.

[Mister D]

Not until the sale price is no longer in Euros but rather in Drachmas.

I can accept that. All forum members will have free access to my beaches. I am that kind of guy.

[Mister D]

The E.U. as currently configured is a disaster. Bury it. I do think some kind of confederation is not just the best course but also inevitable.

[RollingWave]

Good lord, just default already. or start a revolution and burn down everything.

[Conley]

Good lord, just default already. or start a revolution and burn down everything.

Haha, good to see you back around RollingWave. They might just do both the way things are going.

[Peter1469]

Good lord, just default already. or start a revolution and burn down everything.

Greece has already defaulted. Nobody admits it. Time to leave the Eurozone.

[RollingWave]

That is true, they've essentially restructured their debt like what.. 5 times already? if any common folks did that they'd be considered bankrupted.

On the other hand, the economy is actually doing quite well here in Taiwan, from both official and more down on the ground observation.

[Peter1469]

I have never been to Taiwan, what is it like? Are you a local, or an expat?

[Conley]

That is true, they've essentially restructured their debt like what.. 5 times already? if any common folks did that they'd be considered bankrupted.

On the other hand, the economy is actually doing quite well here in Taiwan, from both official and more down on the ground observation.

To what do you attribute that to?

[RollingWave]

I have never been to Taiwan, what is it like? Are you a local, or an expat?


Local, though I've lived in the US for a few years as a kid.

Taiwan is essentially started out like China did in the 60s, early on it was a cheap export driven economy, much like China, a lot of labor intensive factories etc, even politics was like that back then (authoritarian one party state) . later on it gradually got democratic and also economy began to shift as folks got wealthier, from the mid 90s onward it became gradually best known for it's high tech industry, most computer / notebooks / smart phones have some parts that were either made or assembled here. And for couse Foxconn, one of the world's largest electronics assembler (everything from Iphone to X-box) is a Taiwanese company as well . Though service sector is also a big boom in recent years.


To what do you attribute that to?

Well, mostly because Taiwan's busniess isn't as strongly tied to Europe, it's biggest trade partner is China / Japan / USA . the later two is doing ooook and China still doing well, so it hasn't been hit as hard. The bigger thing also is that tourism is being ressurected from the dead here in recent years, since nowadays Chinese tourist are FINALLY allowed to come here (yeah, they could go to North Korea but not Taiwan before 2008, imagine that.) . which caused a massive boom in tourist visit in recent years, the growth of total visits in the last 4 year already doubled the growth total of the 8 years before that. Tourism growth obviously helps domestic employement a lot as it's basically outside money pouring in for free. The growth is not restricted to just Chinese tourist either, visitors from Malaysia and the West are also growing strongly as many local attraction finally have enough money to upgrade their service .

[Conley]

Thanks for the explanation. I'd be interested to start a new thread about Foxconn, that is a whole other can of worms. Taiwan's evolution from cheap exports and inexpensive labor to what it is today is an interesting case study as well. Didn't know China wouldn't allow trips to Taiwan but it makes sense given the history, no doubt tourism is booming now that it's allowed. I'd be curious to visit North Korea only for the experience.

[RollingWave]

Thanks for the explanation. I'd be interested to start a new thread about Foxconn, that is a whole other can of worms. Taiwan's evolution from cheap exports and inexpensive labor to what it is today is an interesting case study as well. Didn't know China wouldn't allow trips to Taiwan but it makes sense given the history, no doubt tourism is booming now that it's allowed. I'd be curious to visit North Korea only for the experience.


Yeah Foxconn is obviously now notorious, though there's some story behind that as well, Taiwan's economic path is not particularly unique, South Korea's is almost identical, and to a lesser extend Japan / Hong Kong is as well. and of course China now looks like it's on the same path more or less.

Chinese not being able to visit was obviously a legacy of the cold war and Chinese civil war, during which neither side were allowed to go ... hell you'd be in serious trouble if you even try to send a letter or make any sort of contact . but the Cold war ended so long ago and it's political absurdity that has been holding things back, obviously Beijing isn't totally out of blame here either but mostly Taiwan's own politics played a bigger role, the absurdity that a huge economy right next door to you, where you are it's second largest invester (actually it might be the largest, because a lot of the Hong Kong investment are actually Taiwan's going through them.) and you have MILLIONs of expats living and working there, and you can not even take a direct flight over to Shanghai or Beijing up until very recently.

So Taiwan's kinda benifiting now from the correction of long overdue deregulation against China (like overdue for 2 freaken decades). so the simple economic effect of simply being able to actually take a plane from here directly to China, and sail a ship directly over etc... and the tourist comming over, is the real reason why Taiwan is actually doing quite well in recent years.

[Conley]

So Taiwan's economic prosperity is linked to deregulation, the government getting out of the way, and the opening up of society to trade. That's what a lot of folks in the U.S. would like to see happen in our country.

[RollingWave]

So Taiwan's economic prosperity is linked to deregulation, the government getting out of the way, and the opening up of society to trade. That's what a lot of folks in the U.S. would like to see happen in our country.


Well yes and no, it also helped that our banks were more conservative / limited by the government before the financial meltdown so exposure to the whole derivative fiasco was limited. that helped to, and we also had a bit of a bailout going at that point. so it's always a matter of finding a middle ground I guess.

And besides, Taiwan isn't a huge economy like the US (our population is roughly that of Texas, so it's not SMALL but it's also not HUGE) so different factors can effect us more obviously.

The US's regulation on tourist is actually quite high for example, getting a US visa tend to be a nightmare for many folks even for tourism purposes, but obviously the reason for not opening it more has little to do with the economy, but rather fearing some folks blow themself up on the plane , obviously we have a lot less risk of that.

Another part of course is that Taiwan does allow foreign labor to a good degree, espeically for lower skilled manuel labors like assembly lines etc. which helps make up some of the holes since most of our youth are no longer willing to take that sort of jobs, which keeps a lot of the labor intensive factories afloat, but we do give them the same minimum wage as our locals (of course, it should be noted that Taiwan's actual wage level isn't THAT high, though it's cost of living is quite low)