Is Greece finally fixed?

Wascurito

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There is growing chatter in lending markets that Greece is planning to start borrowing again, having been long absent due to sky-high borrowing costs. The country's medium to long term borrowing rates are still high but are tantalisingly close to the 5% threshold at which Reuter's sources say Athens would re-enter the market. The improvement in sentiment is driven in no small way by the huge improvement in Athens's fiscal position. It reported a surplus last year.

If and when it does happen, it would likely be a new bond maturing in 2022 which could be used at least partially for debt maturing in 2019. The current bailout program ends in a year's time and the Greeks will want to have dipped their fingers in the debt markets a few times in order to have built up a steady profile for lenders.

It's been a long and painful seven years for the Greek people, seeing their fiscal independence being taken away and having to repeatedly go cap-in-hand to their EU partners to keep the economy ticking over. In that time, Greek GDP per capita plummeted by 20% and has seen itself being passed out by 14 other countries in terms of income, namely Malaysia, Seychelles, Trinidad and Tobago, South Korea, Israel, Slovenia, Malta, Czech Republic, Portugal, Slovakia, Hungary, Estonia, Poland and Lithuania.

Of course, with high unemployment and growth at an anaemic 0.4%, there's still a long way to go, especially with debt now amounting to an eye-watering 175% of GDP. But things are clearly moving in the right direction and as the fiscal situation improves, consumer and investor confidence will hopefully kick in and launch the country on a virtuous circle of improving sentiment driving real economic improvements which in turn improves sentiment further.
 


dizillusioned

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There is growing chatter in lending markets that Greece is planning to start borrowing again, having been long absent due to sky-high borrowing costs. The country's medium to long term borrowing rates are still high but are tantalisingly close to the 5% threshold at which Reuter's sources say Athens would re-enter the market. The improvement in sentiment is driven in no small way by the huge improvement in Athens's fiscal position. It reported a surplus last year.

If and when it does happen, it would likely be a new bond maturing in 2022 which could be used at least partially for debt maturing in 2019. The current bailout program ends in a year's time and the Greeks will want to have dipped their fingers in the debt markets a few times in order to have built up a steady profile for lenders.

It's been a long and painful seven years for the Greek people, seeing their fiscal independence being taken away and having to repeatedly go cap-in-hand to their EU partners to keep the economy ticking over. In that time, Greek GDP per capita plummeted by 20% and has seen itself being passed out by 14 other countries in terms of income, namely Malaysia, Seychelles, Trinidad and Tobago, South Korea, Israel, Slovenia, Malta, Czech Republic, Portugal, Slovakia, Hungary, Estonia, Poland and Lithuania.

Of course, with high unemployment and growth at an anaemic 0.4%, there's still a long way to go, especially with debt now amounting to an eye-watering 175% of GDP. But things are clearly moving in the right direction and as the fiscal situation improves, consumer and investor confidence will hopefully kick in and launch the country on a virtuous circle of improving sentiment driving real economic improvements which in turn improves sentiment further.
They can show whatever percentages they want. Greece is not improving. Just visit the place. Consumer confidence? You have to be kidding... most Greeks can't even afford the heat in winter. Greece has little manufacturing and despite good efforts to have earned income declared, it still isn't for a lot of people, cash is still king.

Youth unemployment is shocking.

The problem with investing in Greece (which may be fine in the capital markets) is that protectionism (and local protectionism) is rife. You may well be able to buy that lovely neo-classical building in Athens, but if you are a foreigner BEWARE.. officials will stop you at every hands turn.
 

NMunsterman

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There is growing chatter in lending markets that Greece is planning to start borrowing again, having been long absent due to sky-high borrowing costs. The country's medium to long term borrowing rates are still high but are tantalisingly close to the 5% threshold at which Reuter's sources say Athens would re-enter the market. The improvement in sentiment is driven in no small way by the huge improvement in Athens's fiscal position. It reported a surplus last year.

If and when it does happen, it would likely be a new bond maturing in 2022 which could be used at least partially for debt maturing in 2019. The current bailout program ends in a year's time and the Greeks will want to have dipped their fingers in the debt markets a few times in order to have built up a steady profile for lenders.

It's been a long and painful seven years for the Greek people, seeing their fiscal independence being taken away and having to repeatedly go cap-in-hand to their EU partners to keep the economy ticking over. In that time, Greek GDP per capita plummeted by 20% and has seen itself being passed out by 14 other countries in terms of income, namely Malaysia, Seychelles, Trinidad and Tobago, South Korea, Israel, Slovenia, Malta, Czech Republic, Portugal, Slovakia, Hungary, Estonia, Poland and Lithuania.

Of course, with high unemployment and growth at an anaemic 0.4%, there's still a long way to go, especially with debt now amounting to an eye-watering 175% of GDP. But things are clearly moving in the right direction and as the fiscal situation improves, consumer and investor confidence will hopefully kick in and launch the country on a virtuous circle of improving sentiment driving real economic improvements which in turn improves sentiment further.
Not to mention how they have stepped up to the plate in trying to deal with the huge influx of refugees during this period.
Truly remarkable and huge credit is due to the Greeks.
 

Wascurito

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They can show whatever percentages they want. Greece is not improving. Just visit the place. Consumer confidence? You have to be kidding... most Greeks can't even afford the heat in winter. Greece has little manufacturing and despite good efforts to have earned income declared, it still isn't for a lot of people, cash is still king.

Youth unemployment is shocking.

The problem with investing in Greece (which may be fine in the capital markets) is that protectionism (and local protectionism) is rife. You may well be able to buy that lovely neo-classical building in Athens, but if you are a foreigner BEWARE.. officials will stop you at every hands turn.
One of the many bones of contention was that the austerity was being imposed by foreigners which was an unbearable humiliation for Greeks. No matter who they voted for, there were still more and more cuts. If they can borrow on their own bat, that changes the situation.

They can't go back to the old Greece of tax avoidance and fiddling the national accounts. We can only hope they've learned that lesson.
 

Wascurito

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And better still when the UK is gone.
I'm not sure about that. The UK has a standard of living above the EU average and is a net contributor. There'll be less moolah around for poorer countries like Greece when the Brits leave.
 

Erudite Caveman

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Not to mention how they have stepped up to the plate in trying to deal with the huge influx of refugees during this period.
Truly remarkable and huge credit is due to the Greeks.
Eh,... it think that was how they got themselves in to this situation in the first place.
 

dizillusioned

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One of the many bones of contention was that the austerity was being imposed by foreigners which was an unbearable humiliation for Greeks. No matter who they voted for, there were still more and more cuts. If they can borrow on their own bat, that changes the situation.

They can't go back to the old Greece of tax avoidance and fiddling the national accounts. We can only hope they've learned that lesson.
I agree completely Wascurito, however, it is ingrained in many of the older generation of Greeks that tax evasion is the way of life. This is not (thankfully) the way with many of the younger generation. There are so many anomalies in Greece that have to be tackled before it will become a functioning international economy, I personally doubt that this will ever happen.

Like Ireland in Celtic Tiger (and I hate that term) days, many (not all) Greeks lost the run of themselves and thought the money was never coming to an end. Mercedes, Porsches, huge apartments, new clothing.... were everywhere. Shops/Retail were charging crazy prices for items and the city was heaving with people carrying bags.... nowadays most of Athens is closed.

One thing I DO NOT miss in Athens is the constant Strikes of Government workers for more pay. The work "ethic" amongst young people is back. That lazy "Pay Me but I am not working for it" attitude is gone, for the most part.

The shoots are definitely there with young people. I just hope that the old guard do not go back to the old habits of money disappearing for every single project.
 

NMunsterman

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Eh,... it think that (huge credit) was how they got themselves in to this situation in the first place.
HeHe.....good one.
Mind you, they were not alone in that Dept.......as we all know.
 

FunkyBoogaloo

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One of the many bones of contention was that the austerity was being imposed by foreigners which was an unbearable humiliation for Greeks. No matter who they voted for, there were still more and more cuts. If they can borrow on their own bat, that changes the situation.

They can't go back to the old Greece of tax avoidance and fiddling the national accounts. We can only hope they've learned that lesson.
Why would Greece learn a lesson no-one else in the EU has?

It is estimated €1 Trillion is lost to tax avoidance and evasion across the entire bloc.

Fiddling the national accounts is an Irish sport.
 

Wascurito

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I agree completely Wascurito, however, it is ingrained in many of the older generation of Greeks that tax evasion is the way of life. This is not (thankfully) the way with many of the younger generation. There are so many anomalies in Greece that have to be tackled before it will become a functioning international economy, I personally doubt that this will ever happen.

Like Ireland in Celtic Tiger (and I hate that term) days, many (not all) Greeks lost the run of themselves and thought the money was never coming to an end. Mercedes, Porsches, huge apartments, new clothing.... were everywhere. Shops/Retail were charging crazy prices for items and the city was heaving with people carrying bags.... nowadays most of Athens is closed.

One thing I DO NOT miss in Athens is the constant Strikes of Government workers for more pay. The work "ethic" amongst young people is back. That lazy "Pay Me but I am not working for it" attitude is gone, for the most part.

The shoots are definitely there with young people. I just hope that the old guard do not go back to the old habits of money disappearing for every single project.
It takes a long time to change the culture. There was one very interesting guy who used to post here. He was a teacher of English in Greece during the 1980s and 1990s - the era before the euro.

Tax avoidance was a badge of honour, he said, and the way the government paid bills was by printing mountains of drachmas. The currency kept on sliding but bills were paid, Greece maintained its competitiveness and the whole thing just about held together.

Joining the euro blew all of that out of the water and bizarrely, no-one seems to have seen it coming.
 

Wascurito

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Why would Greece learn a lesson no-one else in the EU has?

It is estimated €1 Trillion is lost to tax avoidance and evasion across the entire bloc.

Fiddling the national accounts is an Irish sport.
Please explain the bit in bold - with authoritative links.
 

FunkyBoogaloo

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Please explain the bit in bold - with authoritative links.
Have you ever heard of NAMA and its SPV? A sleight of hand used by the state to fiddle the national accounts.

Does "leprechaun economics" - a more recent example - ring any bells with you?


As for authoritative links... you can do your own research. I've highlighted just two examples of fiddling. There are multitudes of them. Off you go now, and happy reading.
 

Wascurito

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Have you ever heard of NAMA and its SPV? A sleight of hand used by the state to fiddle the national accounts.

Does "leprechaun economics" - a more recent example - ring any bells with you?


As for authoritative links... you can do your own research. I've highlighted just two examples of fiddling. There are multitudes of them. Off you go now, and happy reading.

I saw the bit in bold first and didn't bother with the rest.
 

Orbit v2

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Have you ever heard of NAMA and its SPV? A sleight of hand used by the state to fiddle the national accounts.

Does "leprechaun economics" - a more recent example - ring any bells with you?


As for authoritative links... you can do your own research. I've highlighted just two examples of fiddling. There are multitudes of them. Off you go now, and happy reading.
Neither of those are examples of fiddling the national accounts.

The NAMA SPV may have been a short term attempt to pull the wool over the ECB's eyes, but it was never more than a short term ruse and couldn't really be considered fiddling the books - not in the "Greek" sense of keeping defence spending off the books, and that scam they pulled off with Goldman Sachs.

Got any better examples?
 

Watcher2

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Extortionate rate at 5%. We all know it would be backstoped by the ECB. Essentially, Europe won't let any countries default. How has Greece improved its lot exactly?
 


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