EU 'big boys' Bail Out Greece

swannee7


Joined: 21/08/2009
Posts: 394

Message Posted:
11/02/2010 14:50

The 'informal' summit on the financial crisis in Greece and the effects that has on the entire Euro system saw Germany and France agree in principle to 'bail out' Greece's huge debt. BUT there will inevitably be strings and other conditions (heavy ones apparently) attached to this proposed rescue. All this raises loads of questions about the viability of the Euro processes in its current state, what happens to the other debtor states (referred to as PIGS), and could lead to complete re-structuring of the system.

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
11/02/2010 15:00

Figures have showed that Greece's budget shortfall may be even worse than first thought. It may have been 16% of GDP last year rather than the 12% according ro research from Goldman Sachs.



That amounts to a £33billion shortfall between tax receipts and spending up from £26billion previously.

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
11/02/2010 16:00

Greece's deficit is, at 12.7%, more than four times higher than eurozone rules allow. For years Greek spending has ballooned while tax revenue has diminished.

Its debt is about 300bn euros ($419bn; £259bn), and the government estimates it will need to borrow about 53bn euros this year to cover budget shortfalls.

Debt servicing is now costing Greece 11.6% of its gross domestic product and it has to pay more interest on loans now because its credit rating has been downgraded.

Any EU budget support for Greece is likely to come with stringent conditions, to ensure that Athens fulfils its austerity plans and to reassure European voters that their taxes will not be diverted to propping up Greece.

jimmy


Joined: 15/09/2008
Posts: 251

Message Posted:
11/02/2010 17:00

I suspect Spain & Portugal will carry on regardless then. Get it wrong & along comes a bailout just like the banks get.





Makes you wonder why they will go to any lengths to keep the status quo....................................





I thinks it's just storing up more trouble down the line.

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
11/02/2010 17:02

I agree Jimmy. Big trouble ahead for the Eurozone I fear.

jimmy


Joined: 15/09/2008
Posts: 251

Message Posted:
11/02/2010 17:02

A bit like the reckless in the UK............... Borrow too much, decide you cant be arsed to pay it back & go into voluntary bankruptcy.



Another reward for failure.

jimmy


Joined: 15/09/2008
Posts: 251

Message Posted:
11/02/2010 17:08

here's an example





http://www.housepricecrash.co.uk/forum/index.php?showtopic=136545

No1Doyen


Joined: 04/07/2008
Posts: 16617

Message Posted:
11/02/2010 17:11

No one wants to take on responsibility any more. It's a 'who cares wins' attitude.

swannee7


Joined: 21/08/2009
Posts: 394

Message Posted:
11/02/2010 18:51

No.1 D. Absolutely. Problem in Greece not only lies in corrupt practices going back over many years (e.g. tax evasion, non payment of debts across the board etc ) but in the mental attitude and approach to the current problems by all public sector workers and possibly, also the majority of ordinary Greek citizens. They just don't care that their country is in the worst crisis of its modern history - its someone else's fault and problem. They want everything to stay just as it was and don't even know what 'Austerity Measures' mean. I actually feel sorry for Papandreou as he inherited this mess. ( If Labour lose the Election in May, then pity the next Government who will also have to inherit the financial gaping hole left by ex-Chancellor/PM Brown and introduce austerity measures of their own..... ).