# Greece strikes



## CuriousReader (Apr 3, 2009)

I dont follow the details, but I am curious as to what's happening in Greece. So the country is going to bankruptcy basically, and the government is trying to cut all the perks that their public workers and unions seem to have been enjoying for quite a while. The unions/workers are not happy about losing their perks, so they go on strikes.

But what are they complaining about really? Yes, they will get cuts to their cushy perks, but then if they dont do so, the country will simply go bankrupt and it will make it worst for everybody wouldnt it? Or is there's a side that I havent heard?

What do you think?


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## the-royal-mail (Dec 11, 2009)

Nobody wants to suffer. Everyone says "cut somewhere else". It's easy for us to say they should take half a loaf, but unless you're in the situation personally, I don't think you can know what it feels like. Given how cash-strapped people are these days (due largely to their excess desires to have the best of the best NOW and not do without any device) I am not surprised that they are protesting. For them this basically means they'll be even further in personal debt.

France didn't have an easy time with austerity measures either, nor will any country that tries to impose this upon its citizens.

Why hasn't the gov't addressed the core issue that caused this problem in the first place? Why should companies be laying people off just because they make less profit? The greed these days is out of control. And the little working class people are NOT the ones who caused this - why should they suffer?


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## HaroldCrump (Jun 10, 2009)

the-royal-mail said:


> Why should companies be laying people off just because they make less profit?


In the case of Greece, it's because the majority of folks do not work for companies that make profit.
They work for the govt.
Which is funded by tax-payers.

As less and less people work for profit-making (and tax paying) private enterprises, the govt. collects less money and thus has less to pay out to the cushy public sector fat-cats.

So the govt. starts borrowing and starts running deficits (in this case, made easy by the strength of the common currency).

Eventually, the whole castle-in-the-air starts evaporating.
The house of cards collapses.
The party is over and all that's left is a ruddy hangover.

It's a variation of the Labor Theory of Value. You can't keep creating something out of nothing.
If labor is not adding real, net value to goods and services, you cannot grow the economy.


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## CuriousReader (Apr 3, 2009)

the-royal-mail said:


> Why should companies be laying people off just because they make less profit? The greed these days is out of control. And the little working class people are NOT the ones who caused this - why should they suffer?


I dont think that's applicable in Greece's case - All I've read is all the mess mainly because of government giving out really cushy pay and perks to the public sector and seems like Greece have a really big public sector.

Why take a shot at corporations when it's not applicable in the context of this discussion? Unless you thought Greece's mess is like US' ones where greedy corporations run the show. Again - unless I am totally misunderstood Greece's mess



HaroldCrump said:


> In the case of Greece, it's because the majority of folks do not work for companies that make profit.
> They work for the govt.
> Which is funded by tax-payers.
> 
> As less and less people work for profit-making (and tax paying) private enterprises, the govt. collects less money and thus has less to pay out to the cushy public sector fat-cats.


That's what I understand so far too.

But they kept protesting about any austerity measures - dont they see that keep getting what they get would mean bankruptcy and will make it even worse for all of them?


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## HaroldCrump (Jun 10, 2009)

CuriousReader said:


> But they kept protesting about any austerity measures - dont they see that keep getting what they get would mean bankruptcy and will make it even worse for all of them?


They are pissed because the party is over.
Now the EU will impose an austerity regime and that will cause high unemployment, lower wages, almost no benefits, and higher taxes.
Greece had what is known as hidden unemployment.


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## calrest (Apr 13, 2011)

I assume the problem of Greece is the same problem as in Spain, Portugal, Hungary (its a bit different situation) and maybe some other european countries. The living economical level of Greek is exceptionally high to their economical real power. I don´t know exactly if you understand me. It means high salaries in public sector, high prices in tourism, high pensions (frustrative fact - the payment of pensions after death for thousand people), high expense on military and many more unbelievable processes in Greece. Loot at the Central Europe: the same ordinary staff in telecommunication company => (salary) in CE: 1000-1500€/ in Greece: 2000-2500€ for the same responsibility. I think that people in Greece and the Western Europe have unbelievable high salaries which consecutively destroy the system in Eurozone.


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## LondonHomes (Dec 29, 2010)

I think that the general unrest in Greece is based upon the position that they want the government to default on the debt and screw the banks and foreign investors so the party can continue.

It is easy to see how they got themselves in trouble. It is easier for a government to get reelected if it puts off making tough choices until they need to. ie the US continues to put off effectively dealing with it's growing debt.

Closer to home in Ontario we have the current government addressing issues that prior governments just ignored ie HST & Power Supply and getting killed in the polls for it.


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## andrewf (Mar 1, 2010)

It seems to me that the protests in Greece are about jockeying to be the people who take the least pain out of the restructing. Either it will be old people, young people, civil servants, etc. No one wants to bear the brunt, and are willing to fight to make sure they don't.


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## CuriousReader (Apr 3, 2009)

LondonHomes said:


> I think that the general unrest in Greece is based upon the position that they want the government to default on the debt and screw the banks and foreign investors so the party can continue.


Can the party continue though if they do that? 
Wouldnt the country just go into a real big messy situation like what happened to Argentina?



LondonHomes said:


> Closer to home in Ontario we have the current government addressing issues that prior governments just ignored ie HST & Power Supply and getting killed in the polls for it.


The things against McGuinty would be his repeated pre-election promise of "no tax or tax increase" then he just shove the health premium down everyone's throat, and then HST and other stuff. Those taxes/fees may or may not be needed, but point being was that he does the exact opposite of what he said which directly pains everyone.

And another thing against McGuinty would be all the spending he does for nothing with E-Health, and his "pay freeze" which translate to secret deal/increases to OPP and other unions.

So it's not exactly that he's getting killed because he's doing the good thing or making the tough decision.


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## andrewf (Mar 1, 2010)

^ We get what we deserve when we force politicians to promise things like "no tax increases ever for any reason". They lie through their teeth. Same with Harper swearing on a stack of bibles in 2008 that we would never, ever, ever run a deficit under his watch, mere _days_ before they started musing about running a deficit, and a couple months before announcing that they would borrow $150 billion. You force people to lie to you--they will lie to you.


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## HaroldCrump (Jun 10, 2009)

We all know that money (value) cannot be created out of thin air.
Someone (a worker/producer) has to create value.

In the case of Greece, they expected value to be created indefinetely.

However, in reality, it is the workers in Germany, France, and other productive countries in the EU that are carrying the Greek (and Spanish and Portugese, etc.) workers.

Someone's gotta pay, and in the EU it's the stronger countries paying for the weaker countries.

Greece and a couple of other weaker countries in the EU had disguised unemployment.
A large % of workers were employed in the public sector, drawing unusually generous wages, benefits, leave and pensions - not commensurate with the value being created in the economy.

It was not sustainable, and now the party is over.

Those striking mobs in Greece want their country to default on their govt. debt.
If they did that, Greece will be kicked out of the EU.
The holders of the debt (European and other global banks), other governments, etc. will lose their deposits.

In the end, it will be the tax paying workers in other countries that'll lose.

Greece will have to go back to its old currency and devalue the hell out of it, until it reflects its true economic state - much like what happened to the Russian Ruble in the early 1990s.

Apparently, for those striking Greeks, that is a preferred outcome rather than give up their 10 weeks of vacation, fat pensions, 2 hr. lunches and early "retirement".

Ontario and the respected McGuinty is, fortunately, not the same case.

It's not so much as the fact that he's lied time and again (you kind of expect that from a politician).

It's the policies that he's actually implemented (HST, health tax, eco fee, auto insurance changes, etc.)
Then the sneaky deals his administration made with public sector unions to give them grossly unfair and overpaid salaries & benefits vis-a-vis the private sector.
Finally, the slew of corruption scandals (e-Health, deputy Health Minister golden handshake, etc.)

I vote for McGuinty to be the next Prime Minister of Greece.


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## LondonHomes (Dec 29, 2010)

CuriousReader said:


> Can the party continue though if they do that?
> Wouldnt the country just go into a real big messy situation like what happened to Argentina?


Of course it will get them into a bigger mess and that it why the government is resisting. 




CuriousReader said:


> The things against McGuinty would be his repeated pre-election promise of "no tax or tax increase" then he just shove the health premium down everyone's throat, and then HST and other stuff. Those taxes/fees may or may not be needed, but point being was that he does the exact opposite of what he said which directly pains everyone.
> 
> And another thing against McGuinty would be all the spending he does for nothing with E-Health, and his "pay freeze" which translate to secret deal/increases to OPP and other unions.
> 
> So it's not exactly that he's getting killed because he's doing the good thing or making the tough decision.


Context is everything.

The "no tax or tax increase" was based upon the budget assumption that all of the parties campaigned under was that Ontario had balanced books. When the truth of the situation came out that we had a 5.6 billion dollar annual deficit it needed to be addressed, amoung other issues that the health care system was falling apart and more money needed to be spent.

The HST on the other hand doesn't increase taxes, it was a change in the way taxes where collect. It was combined with a reduction in your income tax rate plus a low income rebate cheque. You will be better off because of the HST.

My company makes a new budget every month and makes plans based upon the forecast of the future. We have been getting a new computer system "this year" for the last 5 years but it has yet to happen for various legitimate reasons.

I don't expect the government or a political party to be able to forecast the future any better. It is not reasonable to hold a politicial party to statements made 8 years ago. I doubt that if another politicial party was elected 8 or 4 years ago that they would have been able to impliment their elect platform fully either.

But this of course shows the slippery slope Greece got itself into. Elections are fought based upon a certain scenerio, and nobody will vote for the doom & gloom party even if it is telling the truth.


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## Benswt2 (Jun 27, 2011)

*default*

If Greece defaulted on their debt the cost of borrowing money from investors would be even higher than the 30% now required from private investors. The one thing most everyone can agree on is government policies created the problems across this entire globe. Governments only want more and more. Until people recognize governments are only required for protection and nothing else we are going to see many countries pushing the pain off on the people. Like someone said, you cannot create money from nothing and expect it to be sustainable. The entire premise of the EU is unsustainable because of individual countries doing what Greece, Portgual, Spain, Italy and Ireland have done. Many people tried to explain this to the EU when they formed the Euro, but governments always think they know best. More often than not the largest portion of the people end up suffering. Something for nothing has never worked and will never work. The US has this problem because they have begun to except the liberal (something for nothing) spending that has destroyed many countries. Anyone that accepts their politicians lying (because they must) is contributing to the problems. When a politician lies it costs the people (money) suffering. When a company lies about finances (to keep their stock price high) they can go to jail. Why would anyone accept politicians "to lie through their teeth"?


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## greeny (Jan 31, 2011)

I don´t understand these guys in Brussel. why do they safe banks against people? Their problem will be a still bigger and bigger.


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## dogcom (May 23, 2009)

Greece is a lost cause and will need to share the pain across the board which includes bond holders taking a hit so yes a form of default as well.

In Canada we need to be more transparent when it comes to introducing taxes. I don't mind paying as much if I know where the money is going and it goes to where it was supposed to go. A good example of this is the incredible stupid carbon tax on gas in BC. The money goes to general revenue and the tax is meant to make it more expensive to drive so we drive less. What a load of crap and many idiots in BC agree with this idea. That money should go to transit or insulating your house or electric cars or whatever makes make life greener for BC. 

Same goes for the US, the president addressed it last night saying the pain should be felt across the board, meaning big spending cuts and tax increases. I don't know if he is serious in what he wants to do but the message is the right one. The Republicans say spending cuts only and nothing else will do because tax increases kill jobs. In the end run when we went through it in Canada in the 90's the pain was felt everywhere with tax increases and spending cuts. I think the US has to follow the same type of path as we did in the 90's if they are to succeed.


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## andrewf (Mar 1, 2010)

Actually, all of the revenue from the BC carbon tax was used to cut other taxes.


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## dogcom (May 23, 2009)

I know about that andrewf but it is still a stupid tax not going to where it should go. In fact down the road I am sure they will raise those other taxes they lowered and all accountability of the tax will be lost.

Target taxes should go to where they are supposed to go or should be scrapped.


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## andrewf (Mar 1, 2010)

dogcom, the price signal does the heavy lifting. We can give people transit tax credits until the cows come home, but it takes a rise in gasoline prices to change their behaviour. So, I say we don't waste money bribing people to do things they were going to do anyway (most subsidies), and just cut other taxes that are more harmful to the economy, like corporate taxes (which discourage investment) or income taxes (which discourage saving and working). I'm okay with taxing smog, even if we don't use the proceeds to plant trees.


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## dogcom (May 23, 2009)

Rising gasoline prices just make it more expensive for people to commute which they will do anyways and takes away money those people could have used in the real economy. In BC the tax has been a complete failure as far as reducing the driving that people do. I personally drive to the US once a week to avoid paying this stupid useless tax.

I also would not give out transit credits but instead look for ways to expand the sky train system with this money. Instead the mayors are now calling for more gas taxes to fund this. 

I wonder how many more people are willing to allow governments to set up conditions that allow them to use smoke and mirrors instead of being accountable.


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## dogcom (May 23, 2009)

One thing I find interesting is how many people on this forum and everywhere can only see the short term. Don't people realize that down the road your so called saving will evaporate and people or governments will have their way with you in the long term.

Look at the GST that was directed to the deficit and is now going into general revenue. At some point we may need another GST to fight down the deficit. No that tax should go to pay down our debt or deficit and should not go anywhere else or it should be abolished.


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## andrewf (Mar 1, 2010)

I know the idea of this tax is for that purpose is seductive. It just doesn't make much sense in practice. If you were to employ that reasoning for all taxes, you'd end up with one epic mishmash of economically harmful taxes.

GST was never dedicated to deficit reduction. Deficit reduction is not even a spending item, deficits are a result of spending in other areas, so reducing the deficit inherently goes into general revenues. Besides, last I checked, we were running a hearty deficit, so you should be pretty happy with the GST?


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## andrewf (Mar 1, 2010)

dogcom said:


> Rising gasoline prices just make it more expensive for people to commute which they will do anyways and takes away money those people could have used in the real economy. In BC the tax has been a complete failure as far as reducing the driving that people do. I personally drive to the US once a week to avoid paying this stupid useless tax.


So, you're saying that modern economic theory is completely wrong, and that raising the cost of goods does not reduce demand for those goods? You should tell Apple. I'm sure they would gladly raise the prices for their devices into the trillions of $ each and see no reduction in demand.

What you're saying is that gasoline demand is perfectly inelastic. It's just not the case. I don't think you'd be able to find a single economist who would agree with you.


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## HaroldCrump (Jun 10, 2009)

Nothing is perfectly inelastic, except maybe pure physical necessities like drinking water and basic food groups (some form of carbs, proteins, etc.)
In the case of gasoline, it is the easiest and the most visible target of govt. manipulation and tinkering to serve their interests (taxation) and special interest groups.

Less than 2 years ago, crude oil was nearly $150 and we were paying $1.30 per litre.
These days, crude is below $100 and we are still paying $1.30.
Going a little further back, gas prices were in the 70c. range.
Do we see any substantial difference in driving habbits?

Economic conditions, such as jobs, consumer spending, etc. impact people's driving habits more than the price of gas.
Americans will gladly pay $4 a gallon for gasoline to go on that cross-country driving trip in the SUV if their economy were to recover to the 2006 days.

All that govt. manipulation does is reduce people's disposable incomes for other things like entertainment, fashions, eating out, flight travel, etc. thereby further exacerbating the recession.
Which, in turn, may cause people to drive further and further to get to work (since they can't fnd work close to home).

The other thing is that it allows the govt. to cater to special interest groups, all in the name of social justice or whatever they are calling it these days.
So if you drive, you are an evil dolphin murderer.
If you take transit, you are the savior of the green planet.

Never mind that public transit (esp. using 40 year old buses and trains) brings a host of problems of its own.

The so-called carbon tax is an example of this...robbing Peter to pay Paul.


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## andrewf (Mar 1, 2010)

The BC carbon tax is revenue neutral. It's robbing Peter and Paul out of different pockets.


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## dogcom (May 23, 2009)

Sorry andrewf but it is hard to argue what I mean by transparency and accountability. I know what you mean and you are correct but it leads to confusion and the ability to fool the masses and screw everyone over when talking about the general revenue thing.

Haroldcrump said it best about the carbon tax and said what I wanted to say. As a nation Canada is confusing and complicated itself to death and we must simplify the tax system so we can explain very easily to the masses, so the voters can properly direct their votes.


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