Showing posts with label greece. Show all posts
Showing posts with label greece. Show all posts

Friday, December 16, 2011

Greek auto destruction

The info coming out of Greece concerning cheating with public funds are hilarious in a morbid way.  Greece will soon default.  Here I present some of the tragic-comic examples:

An ex police officer has invented 19 children with pictures and everything.  He has as a minimum managed to get 150,000 euros from the state in child subsidies.  But probably more.  He was arrested when waiting to pick up another 8,000 euros.  The man is 54 and has being working his scheme since 1996.  He quit as a police officer in 2001.

The case is extreme but not unique.  A farmer on a small island, claiming a lot of children and extreme poverty, had a Ferrari and a Porsche in his garage.

Los cuatro arbustos plantados a la entrada del hospital Evagelismos, en Atenas. | I.H.V

Hat tip: El Mundo:

This "garden" in front of a public hospital in Athens consists of 4 small "trees".  No less than 45 gardeners are hired to take care of them.  I wonder if they polish all the leaves every day?

Unmarried daughters of passed away public servants receive a lifelong pension.  There are 40,000 such daughters.  I believe they probably will not marry any time soon...

One public department has 50 drivers for one car.  That must be a sight to behold.

The Greek hospitals give their patients pacemakers 400 times more expensive than in the U.K.  I bet the pacemaker supplier is laughing all the way to the bank.

There is a public institute to take care of a lake: The "Institute for the protection of lake Kopais".  A small detail.  The lake has been dried out since 1930.

One out of 4 Greeks never have paid any tax.

Six hundred professions in Greece can retire early because of strenuous jobs.  Men at 55 and women at 50.   Hairdressers, musicians and television presenters are all included.


From other sources:


There is the example of an island of 35,000 people with 750 people receiving their pension for being blind.  We see this year that suddenly an additional 32000 more people have died than usually when the Greek state for the first time asked them to prove they were alive.  Thirty something thousand dead/alive people are still missing.  In fact Greece is the country in Europe, according to statistics, with most people alive above 100 years old.  

Tax evasion is everywhere - "Only the stupid pay tax,” one eye surgeon told a Greek state radio.  Eye surgeons are members of a profession earning up to 900,000 euros a year.


There’s now a burgeoning market in camouflage swimming-pool covers, as the tax man is flying in helicopters above Greek villas trying to determine who lives above their declared income.





And some people in Portugal question the legitimacy of countries such as Germany and international organisations such as IMF that demand more control of Southern Europe?  Conditions in Portugal, Spain and Italy are not quite Greek but they are not far off either...

Thursday, October 27, 2011

Greek debt cut to half


An agreement has been reached at the EU.  Hat Tip: BBC

At this moment I do not entirely understand it.  But it seems:
  • European banks holding Greek debt have agreed to take a loss of 50% on the debt
    • The stockholders take the loss...
    • It is not a Greek default
    • It will permit Greece a still huge debt load of 120% of its GDP in 2020. Under current conditions, it would have grown to an astonishing 180%.
  • IMF and the Euro zone will give (I think they mean loan) Greece an additional 100 billion euros
  • The EU bailout fond is boosted from 440 billion euros to a cool 1,000,000,000,000 euros (one trillion)
  • The banks will be obliged to accept new recapitalization demands of 106 billion euros
    • This will require more bank packages, I believe.  Guess who is paying...
The financial markets are reacting positively.  I consider they think it makes little difference for the spendthrift Greeks, but are just happy to see the EU agree on something.  Greece will continue to spend and will continue to need more aid.   Not the least reasons being the world wide crisis and the partial destruction of the Greek economy.

The one trillion is a big number.  But not that big a number if say Portugal, Spain and Italy start asking for (additional) help.

What would happen if we private citizens started to complain about our debt?  Would we also get a 50% discount?

Nevertheless, it is an attempt to save the Euro zone.   I wonder what the government in Portugal will now say.  They have used the "it would be terrible for Portugal to default" - does that mean hell fire on Earth?, as one argument for the austerity measures.  However, a 50% cut in debt looks rather enticing - does it not?

Update:
It seems the banks do not agree and are not part of the agreement.  The EU would like it to be a voluntary agreement as to not make Greece seem to default.
The EU banks can be forced, but what about banks outside the EU?  Or is all the debt inside the EU?  I doubt it.

Update 2:
The 50% loss is equivalent to 20 billion euros.  The banks are needing to find 126 all in all...

Update 3:
Academics do not understand much of the above either.  Quite frankly because it is unclear and not negotiated yet.  Another question:  How is the 440 billion euros bail out fond to become 1 trillion euros?  By magic?

Update 4:
The rating agencies are now jumping into the fray.  Fitch now states that the bond haircut is a default.  Of course it is, what else would you call it?  The emperor IS naked.  But sometimes it does take a child to see the obvious.

Tuesday, October 25, 2011

The future of Greece might be decided tomorrow

The situation of Greece is indeed precarious.  But so is the entire situation of Europe.  Have a look at this diagram.  It oversimplifies and perhaps exaggerates.  Yet...

Supposedly the final decision on Greece is tomorrow including the yet another "final relief package".  We will see.