The Greek crisis

The Greek retirement age was very similar to that of the UK public sector, and guess who paid for that.  

This thread has similar line as the whose to blame one. It all boils down to the greed of humans. The animal in us will always be there. If we have a 3 bedroom house for a family of 4 we must have a better one like the Joneses.  Same thing with a car and  other trappings that  make us appear we are well off. credit credit and switch cards when they get too big to pay the monthly payment. Not just the Greeks. live on credit

Isn't it also a flaw in the democratic system?  Politicians make promises "to make things better" and entice voters, but these inducements invariably have a cost which is quietly added to the countries debt.  At every election this snowballs.

But in a situation where politicians do not have to buy votes, like a dictatorship there is no need to spend money that cannot be afforded.

Is there irony in Greece being a perfect example of this and being the mother of democracy?

I realise this is very simplistic and of course there are numerous examples of less than perfect dictators, but it does seem daft to me that there are so few restrictions as to how much politicians can promise to spend to secure power for a few years.  Can we really expect voters to be capable of being more altruistic and less selfish and fickle?

For any civilised society to flourish this is exactly why there is the need for effective transparent and independent regulatory bodies to be in place to counter self centred corruption and greed on a scale that has the potential to decimate a nation.

And all the while we forget......Or maybe the media forgot to highlight it. The Greeks brought a lot of this upon themselves. When the Euro arrived in Greece, a lot of its citizens still dealt cash in hand in the old currency thus avoiding taxes. Had those taxes been paid..........?  We are talking big businesses doing this, and wealthy individuals. As has been said. You borrow money.........You pay it back or there will be consequences. I notice the Greek Prime minister who is telling "his people" to stand by him (and his cabinet) dont appear to be having difficulty getting money from an ATM. Stop trying to play "Big man" and put your people first PAY YOUR DEBT!!! No sympathy!

I wonder how many are aware of the Stability and Growth pact.

The Stability and Growth Pact (SGP) is an agreement, among the 28 Member states of the European Union, to facilitate and maintain the stability of the Economic and Monetary Union (EMU).

The purpose of the pact was to ensure that fiscal discipline would be maintained and enforced in the EMU.

"If a Member State breaches the SGP's outlined maximum limit for government deficit and debt, the surveillance and request for corrective action will intensify through the declaration of an Excessive Deficit Procedure (EDP); and if these corrective actions continue to remain absent after multiple warnings, the Member State can ultimately be issued economic sanctions."

The first regulation "on the strengthening of the surveillance of budgetary positions and the surveillance and coordination of economic policies", known as the "preventive arm", entered into force 1 July 1998.The second regulation "on speeding up and clarifying the implementation of the excessive deficit procedure", known as the "dissuasive arm", entered into force 1 January 1999.

And yet how many know that the Stability Pact was watered down at the request of Germany and France.

Some remark that it has been applied inconsistently and that the Council of Ministers failed to apply sanctions against France and Germany. The Pact has proved to be unenforceable against big countries such as France and Germany, which were its strongest promoters when it was created. These countries have run "excessive" deficits under the Pact definition for some years.

The reasons that larger countries have not been punished apparently include their influence and large number of votes on the Council of Ministers, which must approve sanctions.  In fact the pact violations by France and Germany were seen as green light for Portugal and Greece to violate the pact. This exacerbated the Eurozone crisis, the very scenario the pact and the convergence criteria were designed to prevent.

So although not making excuses for Greece's failings, the question remains, why, when an important regulatory procedure had been put in place following the devastating financial crisis in 2008, ( a procedure to ensure stability and greater accountability) did Germany and France call for a relaxation of this procedure, and why is this major failing and relaxing of essential regulation not being widely reported and taken into account when reviewing the subsequent catastrophic consequences that have now beset Greece.

Surely such facts only reinforce the need for greater regulation and strict compliance, don't they?

The word 'Regulation' is often used as a cure all treatment for financial stupidity. In my experience regulation trickles down to the little guy, some bonused up big shot decides that sub prime lending is the place to be, but when it all goes wrong he/she is nowhere to be found.

It appears to me that large internal EU loans are made in order that other large internal EU loans could be repaid, so why not let the borrower default in the first instance? The Greek people were living the EU dream, had I been offered an index linked pension whilst in my 40's I would have snatched their hands off, however they should not be punished for the actions of politicians. If commissioners can replace local UK councellors found to be unfit for purpose, why not governments that are found unfit for purpose? 

To find an effective solution and prevention to this unethical and immoral situation that either impacts those who have the "capacity" to self regulate and live within their means, or for whatever reason those who don't see the bigger picture and comprehend the consequences and downward spiral that can ensue, only goes to prove why INDEPENDENT TRUSTED TRANSPARENT Regulatory financial bodies or EFFECTIVE ENFORCEABLE and WORKABLE rules are essential to act as a buffer/ control to human nature that you rightly describe Hephaestus.  I agree that lack of accountability has been a major failing in this scenario but that too is as a consequence of ineffective enforcement from the regulators.

Its the scale of devastation that we are now witnessing that is the wake-up call, but agreed it should never be at the expense of those who placed their trust in those that thought their politicians were competent and wise enough to recognise the early signals , especially when they have been led to believe that such preventative rules were already in place to protect!

There is much hypocrisy at play here, but it's essential to understand the overall picture when making judgements and finding effective solutions, but I suspect solutions will require acknowledgement of failures ON ALL SIDES,  greater compromise and far more caring for our common man in that process in the interim, if we are ever to achieve a "civilised, fair and ethical" solution. But there lies another human failing in our politicians.... The ability and courage to admit when you got it wrong but be willing to learn from your mistakes!

To be fair the Greek crisis is only a crisis for Greece and the Greek people, had similar happened to say Italy, it would be catastrophic for the EU. Greece aren't about to pay anything back to anyone because they are terminally broke in both the short and the long term. EU membership protects them from another junta, but that is a very unlikely thing to happen anyway, the EU either swallows Greek debt or waves them goodbye as friends, that's unless there is another alternative that I'm unaware of.

Whatever the solution I hope they take into account the many failings of the EU ( their own failings) since 2008.

Reform has to come from all quarters not just Greece if this is ever to be perceived as a longer term solution.

Trust is at an all time low and it's time they reflected this in their future decision making.

The simple answer is for Greece to collect all the reparation that should have been paid to them from Germany and all the debt plus more will be wiped out.

All the Greek debts are for bailing out the banks

Greek people got none of it.....................more power to them

The following Guardian article might explain a little further the reparation debate:

http://www.theguardian.com/business/2015/jul/06/germany-1953-greece-2015-economic-marshall-plan-debt-relief

Also, with regard to Greeces' debts here's an interesting article that identifies some poignant facts: 

http://jubileedebt.org.uk/reports-briefings/briefing/six-key-points-greek-debt-weeks-election

Who knows, perhaps the fear of contagion re an impending global financial crisis (re China) might just be enough to get the EU to strike a compromise in this highly complex scenario.

Don't talk daft steone, that would mean that Germany hadn't won the peace.

The suggestion would have made sense if it had happened 70 years ago and applied to all countries who suffered losses due to Germany's aggression, not just Greece.

acer,

I'm not aware of any statute of limitations in respect of german war reparation payments, if Greece asked for payment of the balance of the original amount awarded, Germany could hardly pretend that WW11 didn't happen.

Germany says they settled this matter in 1990, the Greeks disagree.

http://www.bbc.com/news/world-europe-31849430

Poppyseed,

Call me old fashioned but I tend to lean towards the nation that was invaded, enslaved, has its citizens murdered, raped and tortured and it's banks stripped of their assets.

Hephaetus,

There is international agreement that there is no time limitation/restriction applied to war crimes, but IMHO it would be farcical if this was re-opened now - and the French would have a field day with us!  Just been studying European history in the 14th & 15th Century and I hadn't previously realised that we were not good neighbours!

acer,

They couldn't go back prior to 1215, Magna Carta and all that.