Greek spending has actually been rising

[Beet]

I just read the astonishing fact that Greek primary spending -- excluding interest payments -- has been rising this year. We have been told that Greece has been undergoing austerity. But it turns out that "subsidies to pensions" and unemployment insurance payments have caused a 4.5 increase in primary spending.

This obviously raises a question of how the IMF expects Greece to get out of its deficit, but it also raises a question of why the Greek economy is even shrinking. We are told Greece is in recession because austerity has cut government money out of the economy-- but the government is actually injecting more money into the economy. So why is Greece even in recession at all?

So not only is primary spending rising, but the inflation rate has been higher than Germany's, meaning Greek costs are not falling relative to Germany. I thought this entire bailout was supposed to be a gambit on internal devaluation?

Regardless of whether Greece restructures its debt, it should go into primary budget surplus immediately, operating as if it were on a balanced budget amendment. This means cutting whatever is needed to be cut.

Failing that, the other two options are for Greece's lenders to stop lending to it altogether, and force Greece to go int primary surplus immediately, or for them to lend to Greece like there is no tomorrow using printed money, in a bid to get Greek growth going again. Either option would work, but the present situation is untenable. Internal devaluation might have worked, but apparently that is not what is happening.

What is going on at the IMF? They have a legion of PhD economists there.

[Beet]

The European community would be better off to isolate Greece and instead concentrate on helping the other countries in financial straights that are at least making some real efforts to deal with their problems.

I agree with this.

[Beet]

Everyone practicising wage restraint and having a high savings ratio has never actually been tried, except perhaps during the Great Depression. All the major countries that do that in capitalism have a big trade surplus. It is a very supply side view to say that the slack of aggregate demand in such an economy would not be a problem.

The effect of Germany practicing wage restraint has not been good for the euro, because it is undercutting its neighbors. Without Germany, the euro would massively devalue, and this would help the PIGS, obviously. Some have even proposed that one solution to the problem is to have Germany leave the euro by itself.

[Beet]

Everyone practicising wage restraint and having a high savings ratio has never actually been tried, except perhaps during the Great Depression. All the major countries that do that in capitalism have a big trade surplus. It is a very supply side view to say that the slack of aggregate demand in such an economy would not be a problem.

The effect of Germany practicing wage restraint has not been good for the euro, because it is undercutting its neighbors. Without Germany, the euro would massively devalue, and this would help the PIGS, obviously. Some have even proposed that one solution to the problem is to have Germany leave the euro by itself.

I still disagree that the main problem for mismanaged euro countries is that other countries have been doing well. Of course, if everyone else also sucked they'd be doing relatively better but it remains a weird approach, imo.

Again, though, the fact that Germany and Southern Europe are not in step economically is of course the reason why the euro was a poor idea to begin with. So I agree with that part.

The demand point is relevant, but I still think that productivity increases is what drives demand in the long run. Wages will eventually have to follow productivity which is why the German way beats the Greek in this case.

I agree that productivity drives increased demand (in the long run), but I think that the sole driver of productivity in the long run is technology, not wages. Increasing productivity by reducing or suppressing wages is a political question of distribution, not an economic question.

[Beet]

In other words, I think the root of the problem is not that Germany cut back on wage growth relative to Greece but that they increased productivity relative to Greece (and especially relative to the countries' wage growth).

And why not? If Germany had had high wage growth to match its productivity growth, it would be contributing much less to the imbalances in the region. Not only that but most German workers would be better off.

[Beet]

In other words, I think the root of the problem is not that Germany cut back on wage growth relative to Greece but that they increased productivity relative to Greece (and especially relative to the countries' wage growth).

And why not? If Germany had had high wage growth to match its productivity growth, it would be contributing much less to the imbalances in the region. Not only that but most German workers would be better off.

Right, but isn't that a bit marginal? What I mean is that German workers were overpaid about a decade ago. They rectified that. You're claiming that they went too far, if I read you correctly.

However, that seems to imply that the Germans should have anticipated the weaker Euro economies letting their competitiveness go to hell and slowed down to match them.

Germany might be worried about competing with China and the US as well, for example. While I get the argument in technical terms, I'm not convinced of its merits in the long-term. Shouldn't the goal be for the other countries to catch up in productivity growth terms rather than Germany letting inflation run amok?

The eurozone economy is $11 trillion. If the entire eurozone had a trade surplus the same percentage of GDP as Germany, it would be a roughly $550 billion surplus. Who would absorb that?

[Beet]

In other words, I think the root of the problem is not that Germany cut back on wage growth relative to Greece but that they increased productivity relative to Greece (and especially relative to the countries' wage growth).

And why not? If Germany had had high wage growth to match its productivity growth, it would be contributing much less to the imbalances in the region. Not only that but most German workers would be better off.

Right, but isn't that a bit marginal? What I mean is that German workers were overpaid about a decade ago. They rectified that. You're claiming that they went too far, if I read you correctly.

However, that seems to imply that the Germans should have anticipated the weaker Euro economies letting their competitiveness go to hell and slowed down to match them.

Germany might be worried about competing with China and the US as well, for example. While I get the argument in technical terms, I'm not convinced of its merits in the long-term. Shouldn't the goal be for the other countries to catch up in productivity growth terms rather than Germany letting inflation run amok?

The eurozone economy is $11 trillion. If the entire eurozone had a trade surplus the same percentage of GDP as Germany, it would be a roughly $550 billion surplus. Who would absorb that?

Well, if no one wants to absorb it, there won't be a surplus that big, right?

Well then the economy would depressed, because everyone is very productive, but there is not enough aggregate demand.

[Beet]

In other words, I think the root of the problem is not that Germany cut back on wage growth relative to Greece but that they increased productivity relative to Greece (and especially relative to the countries' wage growth).

And why not? If Germany had had high wage growth to match its productivity growth, it would be contributing much less to the imbalances in the region. Not only that but most German workers would be better off.

Right, but isn't that a bit marginal? What I mean is that German workers were overpaid about a decade ago. They rectified that. You're claiming that they went too far, if I read you correctly.

However, that seems to imply that the Germans should have anticipated the weaker Euro economies letting their competitiveness go to hell and slowed down to match them.

Germany might be worried about competing with China and the US as well, for example. While I get the argument in technical terms, I'm not convinced of its merits in the long-term. Shouldn't the goal be for the other countries to catch up in productivity growth terms rather than Germany letting inflation run amok?

The eurozone economy is $11 trillion. If the entire eurozone had a trade surplus the same percentage of GDP as Germany, it would be a roughly $550 billion surplus. Who would absorb that?

Well, if no one wants to absorb it, there won't be a surplus that big, right?

Well then the economy would depressed, because everyone is very productive, but there is not enough aggregate demand.

But this again boils down to the same point. If you think supply is exceeding demand, isn't it more reasonable to increase demand than to decrease supply? Wouldn't the latter just shrink the economy? If you forced 10% of the German workforce to lose their jobs and sit at home, Germany would export a lot less and produce a lot less. But it wouldn't help the world economy much, would it?

Who said anything about forcing 10% of the German workforce to lose their jobs and sit at home? I think the goal is to increase demand, not decrease supply. However, if you cut wages in every European country with the goal of increasing competitiveness, so that every European country was like Germany, and there was no external demand to soak up the trade surplus that others now soak up for Germany, the result would be that, even at those reduced level of wages, there is not enough demand to support those jobs (assuming that the workers are not extended credit irresponsibly beyond their ability to repay). So a lot of those workers would be laid off again. I think your proposal is the one that results in unemployment, not mine.

[Beet]

In other words, I think the root of the problem is not that Germany cut back on wage growth relative to Greece but that they increased productivity relative to Greece (and especially relative to the countries' wage growth).

And why not? If Germany had had high wage growth to match its productivity growth, it would be contributing much less to the imbalances in the region. Not only that but most German workers would be better off.

Right, but isn't that a bit marginal? What I mean is that German workers were overpaid about a decade ago. They rectified that. You're claiming that they went too far, if I read you correctly.

However, that seems to imply that the Germans should have anticipated the weaker Euro economies letting their competitiveness go to hell and slowed down to match them.

Germany might be worried about competing with China and the US as well, for example. While I get the argument in technical terms, I'm not convinced of its merits in the long-term. Shouldn't the goal be for the other countries to catch up in productivity growth terms rather than Germany letting inflation run amok?

The eurozone economy is $11 trillion. If the entire eurozone had a trade surplus the same percentage of GDP as Germany, it would be a roughly $550 billion surplus. Who would absorb that?

Well, if no one wants to absorb it, there won't be a surplus that big, right?

Well then the economy would depressed, because everyone is very productive, but there is not enough aggregate demand.

But this again boils down to the same point. If you think supply is exceeding demand, isn't it more reasonable to increase demand than to decrease supply? Wouldn't the latter just shrink the economy? If you forced 10% of the German workforce to lose their jobs and sit at home, Germany would export a lot less and produce a lot less. But it wouldn't help the world economy much, would it?

Who said anything about forcing 10% of the German workforce to lose their jobs and sit at home? I think the goal is to increase demand, not decrease supply. However, if you cut wages in every European country with the goal of increasing competitiveness, so that every European country was like Germany, and there was no external demand to soak up the trade surplus that others now soak up for Germany, the result would be that, even at those reduced level of wages, there is not enough demand to support those jobs (assuming that the workers are not extended credit irresponsibly beyond their ability to repay). So a lot of those workers would be laid off again. I think your proposal is the one that results in unemployment, not mine.

Essentially, we seem to agree that there is a problem in that German workers are more productive than Greek ones. You seem to be arguing that this should be solved by German workers lowering their productivity (one way of doing this, on average, would be to just fire a lot of German workers). I think Greek productivity should be stimulated as a first solution.

My main point is that the problem is not that German workers are too productive but rather that Greek ones are not productive enough.

I think that if productivity was increased demand would go up (or be sustained at higher levels than would otherwise be possible). We will have to accept lower demand than was the case under the unsustainable regime of overspending.

I think the problem is not just productivity, it is also one of distribution. First of all you have to ask yourself what you mean by productivity. There are two ways to be productive. The first way, is to produce more goods for a certain amount of time spent. That is one definition of productivity. The other way, is to produce more goods for a less amount of money paid in wages. We cannot confuse these two things. The latter, is a great deal of what Germany has done.

I do not think this would be helpful because it creates an imbalance in supply and demand. It is not that workers are producing more, rather they are producing the same amount but they are getting paid less for it. Or they are producing more but they are not getting paid any more. In either case, the benefits of production are not realized. The company cannot sell the goods being produced, because the workers cannot afford it. So he must sell it abroad. But if he does not sell it abroad, then he must lay off workers.

The problem with the German model is that its apparent success has come at the cost of others. And even if all the other countries in Europe became like Germany, they would be no different. Were they to replicate German success, then it would have to come at the cost of others, as well. The reason, is that in this economic model there is not enough aggregate demand. Only when there is enough demand, meaning higher wages, to match productive capability, will the capitalistic system of exchange be balanced.

[Beet]

Ok, I never heard anyone use productivity in the second sense, so that's not what I've been saying here. I've been meaning productivity as in producing things in a certain time. Reputable sources like Wikipedia agree with me on this: http://en.wikipedia.org/wiki/Productivity

Now, German economy was stagnant a decade ago. Most people, I think, agreed that this was largely because they had an over-paid workforce. That is, wages were too high relative to productivity. This was also true of other countries in Europe. Germany got its act together, they didn't.

For me this reasoning is something like there being a bunch of alcoholics not doing their job properly. One of them finally goes through rehab and can now do the job that everyone did on his own. So the other alcoholics are fired. Then they complain. "If you were still an alcoholic, we would all still have jobs. Your success is built on us not being sober."

Firstly, that just seems plain wrong, morally if nothing else. It's hardly fair to claim that someone shouldn't have the right to go through rehab for solidarity reasons. Secondly, it seems dubious. If everyone sobered up they would be able to do more productive work, demand would thus be higher, etc. And thirdly, someone else who's sober might come along and kick them all out on the pavement at any time.

You write: "It's hardly fair to claim that someone shouldn't have the right to go through rehab for solidarity reasons." Of course, and I'm not claiming that. Germany has every right to do what it did, and I have sympathy for its current position. However, the effects should not be denied, when you are talking about other countries following in its path.

You write: "If everyone sobered up they would be able to do more productive work, demand would thus be higher." Here's my question to you in this story. One person has sobered up here, so why is demand not already higher? You say that he has improved his work so much that he can now do the same job as all the other alcoholics. So shouldn't it be reasonable, if demand follows supply in this manner, that he has also increased his demand so much that it is equal to all the others' demand combined? And if so, why should the other alcoholics get punished? Since the factory now has that much more demand, it should continue to keep on both the newly sobered worker and the alcoholics.

And if that were the case, there would be no complaint by me. Not only would the newly sobered worker be many times more productive, but he would also be handsomely rewarded by many times as much consumption. The problem is that this newly productive worker has increased his productive capacity many times more than he has increased his demand. So your reply of "demand follows supply" did not apply.

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Most certainly. I agree that Greece let its own wages run away from productivity, and this must be cut. I am not saying the Greeks have no blame here.

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I do not know what Germany should have done (I think this is a political question as well as economic with some inherently subjective factors and can only be decided by the voters).

My only point is that Germany chose this path, but this path cannot be evaluated only on its effect on Germany. As I am sure you know Germany's current account surplus surged and the growth has come largely from international trade. Due to this, your suggestion that every country become like Germany is impracticable, because under a perfect model they would all have to run a huge trade surplus.

" The restraint of the German Joe the Plummer, here called “Otto Normalverbraucher” (Otto Average-User) is not a new phenomena. He sits on his cash for years, already. That is no mystery; from the economic growth, he sees hardly anything back on his pay slip. An investigation executed by the economic institute DIW from Berlin, of which the results were published last week, showed that Germany employees LOST 2.5% in real income over the last ten years. The hardest hits were suffered at the bottom of the salary scales: some employees lost over 22% of real income."

http://blogs.minyanville.com/ernst-labruyere/2011/07/25/germany-an-economic-miracle-or-the-result-of-growing-imbalances-in-europe/

This shows that Germany is just like a worker that is much more productive (you can call him a former alcoholic if you like), and is kicking his co-workers out of work, because he has not increased his consumption to match his production. The reason is that his pay his not increased commiserate to what he deserves. This is causing social instability currently in the euro zone and contributing to what could be a worldwide financial crisis.

[Beet]

I realize that it sucks for Southern Europe that they suck. I still think it's wrong to frame this problem as "Germany is too efficient. If they only produced less the world would be better off"

I'm sorry, but I just don't think economics works or should work that way.

I never said that Germany should produce less. Instead German workers should get more, so they are rewarded by their productivity. With regard to things like Hartz IV, if they can't bring down unemployment without relying on external demand, then they haven't really solved the problem with unemployment, just pushed it onto someone else.

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And I don't think it's so simple that Europe only has one problem. Europe has multiple problems. To say that everyone should be like Germany does not acknowledge that. The idea that German wages currently reflect its productivity is incorrect. German wages are below German productivity.

[Beet]

Doesn't that amount to the same thing though? If you decrease marginal profit you would presumably push back production.

Once again, you only see the supply side. Marginal profit depends on the demand curve as well as the cost of labor.

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My judgement is based on Germany's significant trade surplus. That means that Germany is making more than it is consuming, literally. In Greece, the reverse is true. China's wages are also too low, but the aggregate imbalance is actually less than Germany.

[Beet]

Right, but I still think a sudden jump in wages would not compensate itself entirely.

I realize that Germany is making more than it is consuming. My point is this: if we simplify the world a bit, we have Germany exporting and the troubled economies importing. You seem to be assuming the problem is that German wages are too low. Couldn't it be that Greek wages are too high?

As I've said, I think both are true. Remember, the question we are asking is whether every country should strive to be like Germany. It is physically impossible for every country to be like Germany, unless you think that countries should manufacture a great deal of products only to dump them into the ocean! On that point I would hope my position is indisputable.

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But why must you start at one end or the other? You accuse me of being ardently on the demand-side, but I actually treat both sides as equally bad. You're the one who insists on starting at one end.

What evidence do you have that Greek productivity growth has been running below its wage growth? It's not a question to challenge your premise but I am curious to see what metric you use.

Finally I do not follow that just because Germany had it bad in the early 00s, that it is doing things right today. If you pardon the expression, I think that to some extent they went out of frying pan and into the fire. They traded one problematic situation for another problematic situation, that seemed to solve some problems but has created new problems. Your link seemed to discuss Germany as having high wage growth from reunification until 1994, and the process of adjustment began in the late 1990s. That narrative is not contradictory to my preferred metric of trade balance, because in the 1990s Germany consistently ran a small trade deficit.

[Beet]

The crux of the difference at this point I think is that I believe that when there is an imbalance of trade between two countries, whether driven by a differential in relative competitiveness or not, both the creditor and the debtor share responsibility for resolving the situation. It is not the case that only the debtor is at fault.

The reason, rooted in simple identities, is that not everyone can be a creditor. The creditor's performance is dependent on someone else being a debtor. Now what would happen if there were a world of economies in which everyone behaved like a creditor (low wages, high productivity) but not everyone could actually be one? In my opinion this would lead to an economy with a chronic shortage of aggregate demand, needless unemployment, and wages below what could be achieved at a sustainable steady-state.

That is the theory. In practice, large, persistent imbalances between countries can lead to many real world problems. The current problems which Germany is not primarily responsible for, but which it has contributed to inadvertently, is not only Greece's problem, it is also Germany's problem as we now see. Germany is being called to spend lots of money to bail out Greece. Even if Germany refused, it would have to spend lots of money to recapitalize its banks, and in the event of a breakup of the euro, its currency would rapidly appreciate and Germany would again lose competitiveness. Either way it is a headache for everyone. It is even a headache for the United States!

[Beet]

PS, If anyone is interested, this paper will provide many answers about Greece, although admittedly it is a bit technocratic and does not take into account market chaos and street chaos"

http://www.imf.org/external/pubs/ft/scr/2011/cr11175.pdf

The paper, unfortunately, does not as far as I can tell address the reported rise in Greek primary spending, except to note that the definition excludes money spent by Greece to bail out its own banks on top of interest payments, and that projected spending for the year as of July was expected to be down to 50.4 billion euros from 51.7 billion euros. Total spending is still expected to rise.

The paper is slightly more satisfactory on the question of Greek inflation, noting that tax-adjusted inflation is well below the euro zone average. Productivity has fallen because output has fallen faster than employment, but labor costs have been adjusting downward and Greece has improved its competitive position in the euro zone.

[Beet]

I don't disagree. The debtor would re-adjust through inflation/demand destruction, permanently raising the cost of living, while the creditor could adjust through Keynesian stimulus without as much dislocation in the price level.

But keep in mind, that depends on the creditor choosing to adopt enough Keynesian stimulus to bring its demand in balance with supply. If it did not choose this policy course, it would not necessarily be better off than the debtor, no. In any case, Germany has not chosen Keynesianism since the Chancellorship of Willy Brandt, so it is not likely to choose so today without a significant push, which is rather unfortunate for the future of Europe.

[Beet]

Here are some additional facts regarding the Greek situation.

What I gathered from this is the following. The State Budget is composed of Ordinary expenditures and Public Spending.
(1) The deficit is up to 15.571 billion euros vs 12.449 billion euros from the first 7 months of 2011 vs 2010, or by 3.1 billion euros.
(2) Net revenues were 26.846 billion euros in the first 7 months of the year, down 6.4% from last year. (By my naive calculation this implies net revenues of 28.682 billion euros for the first 7 months of last year). The total loss of revenue is 1.8 billion euros.
(3) Expenditures in the ordinary budget increased 7.1%, excluding interest payments they increased by 4.8%, or 1.39 billion euros, due in part to
(a) "increased grants to Social Security Funds as a result of the reduced receipts from social security contributions" by 1.69 billion euros. This item alone is responsible for more than the entire increase in primary spending, but I don't see how it is strictly a spending item. It seems to be saying they are forced to make up for a shortfall in revenues from loss of social security contributions. Can someone explain how this works?
(b) "increased grant to Employment Agency (OAED) for the payment of unemployment benefits by 301 million Euros." This makes sense.
(c) increased grants to "hospitals by 779 million euros (535 million euros for the year’s 2011 procurements expenditure and 244 million euros for the settlement of past years obligations from procurement)." Don't they use accrual basis of accounting? Jeez, with their credibility problems you would think so.
(4) Additionally we get this gem. "Public Investment Budget (P.I.B.) expenditures declined by 37.6% or 1.581 billion Euros." If you subtract the fall in public investment from the rise in ordinary primary spending, I get a total fall in spending of 191 million euros, excluding interest payments. So perhaps things are not as bad as the thread title would suggest. Still, a fall in spending by only 191 million euros is clearly not sufficient.

Further, one sees from the IMF's own study that cutting public investment is the most damaging way to attempt austerity.

So basically, the technocrats at the IMF already know this is the worst way to cut spending, yet Greece under their tutelage has primarily cut spending in this area. It appears that the difficulty arises from the relative ease of having the theoretical idea of what is the best way to do things versus the actual real world implementation of ideas into reality. In the real world, cutting public investment is probably the least controversial, while cutting transfer payments is the most politically difficult. Unfortunately the economists' models do not appear to control for this.

[Beet]

Ouch.

At risk of this becoming a slightly more informative version of the JJ thread, I am double posting a journalist's twitterstream of the PM's address yesterday:

Papandreou finishes his speech saying: "We will succeed together". #Greece #gfc2
12 hours ago

MatinaStevis Matina Stevis
2 major announcements by Papandreou: plan to distribute state land to young aspiring farmers/search for oil&gas in Ionian & S. Crete #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou concludes address
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I 've said it before, I'm not here for my position or to get re-elected, I'm here so that we can succeed together #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: to those hoping that if Greece leaves the euro, they can buy up the country cheaply, every Greek will stand opposed #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I ask that all political parties act responsibly.... It's not me pleading. It's the motherland #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou:Any bank that needs recapitalisation, this will be done through common stock so the ppl can benefit from future profits #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I ask the banks to respect the support they've received from the state & the ppl. The state supports them.
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I know our youth want to leave the country... I understand them... but I ask you to not give up... the country needs you #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I look around me and see ppl of my generation... we have given huge burdens to the youth. We owe the youth a lot #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: We can make it and we can prove those seeing Greece as a failure wrong #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I am determined to fight to the end against everything and everything holding Greece back (ref to trade unionists, closed shops)
12 hours ago

MatinaStevis Matina Stevis
Papandreou implicitly lashes out against highly remunerated public-sector workers, mega-haves & newspaper/TV owners #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we hope that those who have made money here will participate in our efforts, like rich ppl abroad asking to be taxed more #deth
12 hours ago

MatinaStevis Matina Stevis
Many of you asking about the "land redistribution to youth who want to go into agriculture" thing. I have no details but it's public lands
12 hours ago

MatinaStevis Matina Stevis
@
@Old_Holborn Don't get excited. It sounded like minor policy to redistribute state agri land to unemployed youth
12 hours ago

MatinaStevis Matina Stevis
Papandreou outlines expenditure programmes of 3.5b euro to combat youth & women's unemployment #deth
12 hours ago

MatinaStevis Matina Stevis
I stand corrected: search for oil & gas will be south of Crete, not "around" Crete as previously tweeted. Apologies #deth
12 hours ago

MatinaStevis Matina Stevis
Correction: Papandreou says Greece to look for natural gas AND oil in Ionian and Crete #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: I announce that Greece is to begin searching for natural gas in the Ionian sea and around Crete #deth
12 hours ago

MatinaStevis Matina Stevis
Ha, just got the little theme the speech-writer got into the Papandreou address. He outline policy, follows w "can we do it? of course!"
12 hours ago

MatinaStevis Matina Stevis
Papandreou: tomorrow we start distribution of land to young people who want to go into agriculture #deth
12 hours ago

MatinaStevis Matina Stevis
After tourism bit, Papandreou turns to agriculture #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we are aiming at China and India, as well as the US, for tourism #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we are fighting against entrenched interests... we need every single citizen's help (weak applause) #deth
12 hours ago

dexpatia Philomila Tsoukala
 by MatinaStevis@
@MatinaStevis he also said "how will growth return if deposits don't return, deposits that today...are returning"!!!!!
12 hours ago

MatinaStevis Matina Stevis
Papandreou outlines improvement in exports, tourism figures in H1 2011 #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou now outlines expenditure cuts & revenue performance in 2010 #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: Who will fund our growth if our banks can't reach the market to borrow? #deth
12 hours ago

MatinaStevis Matina Stevis
First break for ovation for Papandreou at "Yes, we can make it" line. #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we will not allow Greece to become the scapegoat for problems in Europe #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: at the point where Eurozone stands right now, every time we delay, any hesitation we show, puts the country in peril #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: despite the deeper-than-expected recession this year, we will stay the course... to achieve a primary surplus #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we are prepared to make more decisions, do whatever it takes to ensure the country stands tall #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we are fully determined determined to stick to our end of the deal. Starting w sticking to the July 21st decisions #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: the decisions we made are unique in the history of Europe, we cannot abandon it and waste our sacrifices #deth
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we made decisions that have guaranteed our financing needs until 2020 & improvement of debt profile through extension to 30 yrs
12 hours ago

MatinaStevis Matina Stevis
Papandreou: we are giving a huge fight, seriously negotiating for our collective and national interest #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou: We decided to fight to avoid a disaster, to avoid default and to make sure we stay in the euro #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou: ...the banking sector that did not always manage the national wealth in a transparent and correct manner #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou recounts run-up to 2010 deficit revelation, cites bad statistics and chronic overspending & weak revenues #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou: reforms... are an upward struggle among a international thunderstorm. Our priority is to save the country from default #deth
13 hours ago

MatinaStevis Matina Stevis
I refuse to translate rhetorical crap. Will only be live-tweeting policy-related stuff & significant statements from Papandreou #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou takes to the stage to give keynote economic policy address amid rumours of default. #deth
13 hours ago

MatinaStevis Matina Stevis
A few moments before Papandreou sets out his economic policy in keynote Thessaloniki address, police violently clash w protesters #deth
13 hours ago

MatinaStevis Matina Stevis
I believe it's the president of the Thessaloniki expo speaking now, ahead of PM Papandreou. You can watch it here government.gov.gr #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou makes his way through the hall to the stage, lots of handshaking, address commences #deth
13 hours ago

MatinaStevis Matina Stevis
Reminder: live-tweeting Papandreou address on the Greek economy, which is starting now in Thessaloniki #deth
13 hours ago

MatinaStevis Matina Stevis
Papandreou arrives at hall accompanied by his wife, welcomed by standing ovation by most party chieftains #deth
13 hours ago

[1] A lot of impressive chest thumping from a guy who only managed to cut ex-interest spending by 191 mln.

[2] And yes, Matina Stevis is hot, I would totally do her.

[Beet]

There is evidence of growing civil disobedience against tax payments in Greece.

The only way the government can save itself now is by making its deficit targets statutory - a step it should have taken long ago. In other words, if the country is missing its deficit targets, then automatic spending cuts are immediately implemented without another vote by Parliament.

[Beet]

Greek finance ministry reports that the primary surplus is projected to be 3.2% next year. It only turns into a 6.8% deficit once interest payments are factored in. But seeing as Greece is not borrowing from the market, it is borrowing from the Troika, I do not understand this. The whole point of the bailout is to save Greece, so why not charge a low interest rate, such as 0.5%? If that were the case, wouldn't Greece run a primary surplus? Just another thing that makes no sense when it comes to Greece.

[Beet]

I would support a bailout if it would work, but this isn't working. I mean it's not really a bailout if you don't succeed in bailing them out. Where is the road map forward?

[Beet]

Another option is that instead of giving money to Greece, the EFSF will purchase Greek debt directly at a discount and then let Greece out to dry. The country will go bust and be forced into adjustment, but at the same time avoid crippling interest payments.

There are just so many possible solutions-- I just can't understand why none of them are being implemented. What the Europeans are doing now is making a plan for disaster, all the while living in an obvious fantasy world. It's surreal.