Global Economics

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Global Economics

Postby Kimiko » 03 Jun 2010, 01:07

Well, isn't the official reason assorted UN forces are there to protect/liberate the people from an oppressive regime? Protecting one's economic interests is rather different/less lofty than keeping the peace and protecting innocents. I think (though our German forumites are more qualified to comment on that aspect) that with Germany's anti-military stance, it was difficult enough to get them to participate at all in this mission. If it turns out that the government lied about the mission's true purpose then that would be enough to sack them, popular though they may otherwise be.
(All this is just my speculation though. I haven't kept up with news about this lately.)
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Re: STUPID MEN

Postby wildlx » 03 Jun 2010, 07:36

Athena wrote:Let's leave his remarks aside for a while and look at the last few month of his presidency. With the bankruptcy of Greece and the decline of the Euro, Germany could also drift into a financial crisis. Since Germany is one of the heeled countries in Europe our share in saving Greece is the biggest with 123 Billion (!!!) Euro. This was actually what people were concerned with.

How aware are people in Germany that if the money was not spend in saving Greece your banks would probably have a very big problem? A problem that could be higher than 500 Billion Euro? That is assuming that Greece's default would be followed by other countries with debts as all econ analysts say it would. Check this:

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Re: STUPID MEN

Postby Athena » 03 Jun 2010, 10:19

The question is rather how come that nobody noticed that Greek has such a financial problem? How could they year after year spend more money than they have and why do German taxpayers have to suffer for this?

After all it is Germany who already pays most of Europe's founding

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Let's have a look at Greece. Per year they got 40 Billion Euro from the EU. They pay back 15 Billion, that means every Greek profits with 2'284 Euro.

Besides, the figures in your article are incorrect. Here is an overview of outstanding debits of German banks

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Re: STUPID MEN

Postby wildlx » 03 Jun 2010, 12:52

Athena wrote:The question is rather how come that nobody noticed that Greek has such a financial problem? How could they year after year spend more money than they have and why do German taxpayers have to suffer for this?

Faking the accounts seems to have been done with the help of the same banks that caused the financial crisis (e.g Goldman Sachs) and also due to lack of regulation by politicians worldwide. German taxpayers would eventually suffer also if the intervention had not be done. Regarding spending money that they don't have. Isn't that what most countries do? Germany also has a public deficit. And has even exceeded several times the 3% of GDP established in the EU stability and growth pact in previous years.

Athena wrote:After all it is Germany who already pays most of Europe's founding

You are one of the countries with a bigger population. Actually, per capita, The Netherlands pays more.

Athena wrote:Let's have a look at Greece. Per year they got 40 Billion Euro from the EU. They pay back 15 Billion, that means every Greek profits with 2'284 Euro.

There is a policy in the EU that tries to correct asymmetries and so the poorer regions get money from the EU for projects that involve development in several areas - the so called regional development funds. The way you put it seems as if every Greek gets 2284 Euros in their bank account and spends it in shopping ... So, in your opinion the policy of correcting asymmetries is wrong?
Athena wrote:Besides, the figures in your article are incorrect. Here is an overview of outstanding debits of German banks

Why are they wrong? The data are from two different dates (September vs December 2009) and the difference in the value is approx. 10 (238 +184+ 45 + 47= 514) which is a perfectible acceptable difference.
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Re: STUPID MEN

Postby Athena » 04 Jun 2010, 02:53

wildlx wrote:Regarding spending money that they don't have. Isn't that what most countries do? Germany also has a public deficit. And has even exceeded several times the 3% of GDP established in the EU stability and growth pact in previous years.


Exactly, we do have a public deficit and it will rise now because we have to save Greece and our currency. What if this is now happening to two or three more countries? We are not in the position to handle much more.

wildlx wrote:You are one of the countries with a bigger population. Actually, per capita, The Netherlands pays more.

lol hooray, I guess all our problems are over then. It's nice that The Netherlands pay more per person but that doesn't lessen my worries even a little bit.

wildlx wrote:There is a policy in the EU that tries to correct asymmetries and so the poorer regions get money from the EU for projects that involve development in several areas - the so called regional development funds. So, in your opinion the policy of correcting asymmetries is wrong?


As you may have noticed it didn't help. I actually have the fear that the standard of living will not rise in the poorer countries but rather ours will decrease. We are the ones who have to suffer due to Greek's mismanagemant. Our pensions will not rise, we have to face severe cuttings in the social area, we might have to pay more taxes.

Every German now is in debt 45,000 Euro from the Greek experience. And what example do we set for every other country with monetary problems? Keep going like that, even if you will bankrupt the rest of Europe has to pay. I doubt it would have gotten that far hadn't the Greeks been in the EU.
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Re: STUPID MEN

Postby wildlx » 04 Jun 2010, 06:16

I'm finding interesting Germans sudden lack of interest in "Europe". So, do you plan on leaving the EU?

Athena wrote:Every German now is in debt 45,000 Euro from the Greek experience. And what example do we set for every other country with monetary problems? Keep going like that, even if you will bankrupt the rest of Europe has to pay. I doubt it would have gotten that far hadn't the Greeks been in the EU.

That is a simplistic view of the problem. If the Greeks hadn't been in the EURO, which is the main problem, they would have devaluated their coin and a lot of their financial problems would be solved. The EURO was created in such manner as to suit Germany and no mechanisms were created for situations like this (actually a lot of economists say that eventually Greece and other countries like Portugal will leave the Euro, if no real reform of the Euro is made). Also, I don't know if you read economy articles - but a lot of economists think that the current crisis in Greece and also Portugal/Spain/Ireland/Italy has to do with Germany and its surplus and exports policy within a common coin, the Euro (see here, here, here and here, for example). Plus, Merkel's indecision led to a lot of speculation on the markets, including the downgrading of the Greek debt to junk ( see here for Galbraith's comments).
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Re: STUPID MEN

Postby Lt Sue » 04 Jun 2010, 23:07

My view is that eventually Greece will default on its debt, leave the Euro and devalue their Currency. Germany's intervention has merely postponed the inevitable. As for the PIGS (Portugal, Ireland, Greece and Spain) they have benefited from low interest rates in the past which prompted cheap lending and high personal debt without the safety net of being able to devalue their currency when it all goes wrong leaving France and Germany to pick up the tabs. So glad the UK is not in the Euro - although it is handy when we go on holiday!
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Re: STUPID MEN

Postby Athena » 05 Jun 2010, 06:25

wildlx wrote:I'm finding interesting Germans sudden lack of interest in "Europe". So, do you plan on leaving the EU?


No, we don't plan to leave the EU. Also, I'm not representing my whole country. I'm sure you will find enough other opinions

wildlx wrote: Also, I don't know of you read economy articles - but a lot of economists think that the current crisis in Greece and also Portugal/Spain/Ireland/Italy has to do with Germany and its surplus and exports policy within a common coin, the Euro Plus, Merkel's indecision led to a lot of speculation on the markets, including the downgrading of the Greek debt to junk .


So, let's have a look at this scenario: I see the EU as a coalition of business partners wanting to form a union. There are some strong ones and there are some which are not so strong. So in order to make them alle equal, the strong business partner is willing to give the weaker ones a lot of money for them to improve their products and their standards of living. It's not easy for the strong ones, they have to make several cuts of the social system in their own country. They also rose taxes but people don't complain because they think it will be for the good of all when every partner has equal standards. The weaker ones however haven't done anything. After paying for several years there are no results. The quality of the products of some business partners haven't really improved. So instead of making an efford to do so they just say to the stronger ones: "Hey, it's too arduous to improve our products. How about you just make your products crappier so fewer people will buy from you and choose ours instead!" You don't see anything wrong with that?
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Re: STUPID MEN

Postby Nurse Jo » 05 Jun 2010, 08:18

lol Reading this thread is like reading a pro- european paper one moment and a eurosceptic paper the next. An interesting debate to follow, even for someone (like me) who has no particular interest or understanding of economies. Of course, I can't make up which side of the fence to leap so I'll continue to sit on it and listen. Thank you.
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Re: STUPID MEN

Postby Baker » 05 Jun 2010, 08:56

Yes, it is a fascinating discussion to 'listen' to.

I found these two interesting charts.

The first one shows the size of the EU members' debts, and breaks them down into public, company, and household fractions. The place where I found this, headed the chart: German households woe more than Greece's do. So, clearly, in discussions of the size of a country's debt, there is a lot of nuance to it that might be missed with just using totals. (I notice the UK has an even higher chunk of household debt than Germany!)
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This next one, too, was clearly sparked in relation to the Greek debt crisis and the German response.
According to many accounts of the financial crisis in Europe, one reason intervention has been slow is that it is hard to convince Germans, widely seen by themselves and others as hard-working, thrifty and virtuous, to "bail out" those lazy, spendthrift Greeks.

This bit of OECD data on hours worked per worker (via Economix) runs contrary to the stereotypes:


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I notice NZ is right next to the median bar.
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