Greek Debt Poses a Danger to Common Currency - Page 3 - Politics Forum.org | PoFo

Wandering the information superhighway, he came upon the last refuge of civilization, PoFo, the only forum on the internet ...

Everything from personal credit card debt to government borrowing debt.

Moderator: PoFo Economics & Capitalism Mods

User avatar
By Nandi
#13267757
It's the deficits that matter, a country needs to find a ways to short-term finance them in structurally sound way. A country as Italy has a way higher debt/gdp ratio but that was reached over decades and is partly being paid off in the long-term and thus not in dire need of a scramble for short-term refinancing, contrary to countries recently running up huge deficits.
User avatar
By JohnRawls
#13267898
Our deficit is not large also . If i am not mistaken it is about 1.7% or 2.7% of gdp .

In the last 5 years my country turned into Ron Paul Heaven by the way , which is the only problem in economy which bothers me . We are doing farely well on the most fronts , the crysis is just a minor set off .
User avatar
By killim
#13268443
Ehm... as i talked about the debt i supposed that it would be clear that i didn't differentiate between public and private debt...... and in case of Estonia the private debt (especially financed in foreign currency) was the problem, which skyrocketed in end of 2008 and 2009 due to the devaluation, flexible interest rates etc.
User avatar
By Miecznik
#13268928
If Greece does not take all nessecary steps to avoid recession they should bear full consequences. I would't like to be in Monetary union that cannot afford consequence
User avatar
By JohnRawls
#13268954
Ehm... as i talked about the debt i supposed that it would be clear that i didn't differentiate between public and private debt...... and in case of Estonia the private debt (especially financed in foreign currency) was the problem, which skyrocketed in end of 2008 and 2009 due to the devaluation, flexible interest rates etc.


There is no devalvation and there wasn't any. If you consider all that debt in america its like 800% of gdp ........ But i am not sure about public debt it is probably not that large .
User avatar
By cp8993
#13271297
Greece wants to inflate its way out of debt, which would be disastrous. A better course of action would be to default, eliminate spending on everything except the bare essentials (police, courts, military, roads), deregulate, and cut taxes. All funding would be provided on a pay-as-you-go basis. This would give the Greek economy a huge boost, as the government would no longer be regulating, taxing, and otherwise distorting the market as much. After the economy recovers, the Greek government could begin to pay back the debt. In order to do so, it would have to freeze spending and probably increase taxes. After the debt is paid back in a few years, the Greek government could return to normal Keynesian budget surpluses during good economic times and budget deficits during depressed economic times.
User avatar
By killim
#13273143
:lol:

Greece can not create inflation/devaluation to get out of the debt, because they don't control the EURO and their debt is in EURO :eek:

Additionally they can not pay back in a "few years", they can not deregulate or cut taxes, because the biggest part of the economy is already in the black market and the trust into the administration is one of the lowest in the EU (and corruption one of the highest), which means they will not generate positive impact.
User avatar
By NYYS
#13276741
This specific situation isn't a big deal, Greece will just get bailed out by Germany or someone if it's really serious, but it does raise questions about the Euro's ability to survive crises. Can it handle Spain going down as well? Is some country going to require a bailout in every crisis or pose a serious risk to the Euro? Do you really want multiple countries with wildly different economic, social, and cultural situations tied to the same currency? I also wouldn't be shocked to see the Euro become a thing of the past, or at least lose some of its luster on the international stage.
User avatar
By killim
#13277844
No one will bail out Greece. Italy or Spain is another story but so far there is not greater thread that one of the greater countries goes onto default and even then this situation shows a lot of opportunities :D

People tend to forget that the French now have a s[…]

Neither is an option too. Neither have your inte[…]

Israel-Palestinian War 2023

@JohnRawls There is no ethnic cleansing going o[…]

They are building a Russian Type nuclear reactor..[…]