Greece currently has big problems. But I think their new government is doing a great job to improve their situation. As you can see in the video Varoufakis is a brilliant guy.
Other EU countries have taken on huge debts to support Greece only to be berated by Syriza; Spain for example has given Greece 27 billion euro (equal to an entire year of government social spending) while Spain itself suffers 25% unemployment and a collapsed economy. Syriza has/is rolling back many reforms (like paying civil servants 13 months pay every year) while other EU country are continuing to cut back (e.g. on retirement ages). Many EU countries (e.g. the Baltic states) have lower average salaries and work longer before retiring than the Greeks and yet have paid into the rescue fund for Greece. After all this Syriza still blames the EU for their troubles? Or threatens to unleash Jihadists on Berlin?
The trouble with Greece is that the government hasn't balanced its books in 35 years and the economy produces little of value (olive growing and cheap tourist sector jobs) while expecting to live a live-style like the average German, British or even French or Italian who produce high value-add goods which are exported to the world. They continue to demand that the government spend more while avoiding taxes.
Syriza feeds this national self-pity by looking for outsiders (particularly the Germans) to blame for this. At some stage reality has to be faced.
I learned of this via something almost out of a ancient Greek comedy, the lines of the Goddess of irony:
A Greek manager sent to manage an branch created here in Bulgaria to take advantage our cheaper labor was outraged when she found out we only get 12 salaries a year. How is she expected to live on only 12 salaries, she asked incredulously, what about the extra spending around vacations??
[1] It's an important part of Danish culture that everyone, of all social classes, should take a contiguous 3-week vacation in the summertime.
What matters is the annual salary (or total cost of employment). This can then be split into e.g. 12, 13 or 14 - I don't care - payment lots. But if the total salary package of civil servants is something that the government cannot afford, then that is the problem.
Is that anecdote about a Greek manager in Bulgaria real? If there indeed are such managers, they are definitely very silly not to understand how different the terms of employment may be in different countries. The practices in your home country may be not at all relevant somewhere else, and this is not just the pay packages, but also days off, terms of laying off people, what things like health care is included, and so on and so on.
We have a stereotype that Americans are particularly ignorant of the rest of the world in this respect, but I don't know if that stereotype is really justified.
(FWIW, our annual gross pay in Finland is typically 12.5 monthly salaries; the .5 monthly salary is paid out at holiday seasons, typically in the summer. The creation of these bonuses are related to the economic situation in 1960's and 1970's: during their summer holiday, many people took a temp job in Sweden, and pay in Sweden was so much better that once there, many decided to stay. A "return bonus" was commissioned in Finland after negotiations between employers and employee unions, to motivate people come back to their normal jobs at end of annual leave. This has since those times transformed into a part of the regular compensation package for everyone. In shorter employments, you earn both holiday days and the holiday bonuses, which are then paid out typically at end of employment if you're not in a regular job.)
DK 3739
LU 3009
FI 2622
IE 2621
DE 2574
ES 1634
GR 1028
PT 984
HR 848
PL 693
BG 316Practically all the serious ones across many countries and many languages.
If we really all agree on the problems of Greece, it could be the first time ever all members of UE agree on something spontaneously...
To get a perspective of how inadequate German and EU (generally speaking) technocrats are at basic macro-economics take a look at Ben Bernanke's blog, on Germany's trade surplus[1].
NOTE: Noting @derriz posts I'd say there's a strange patterns emerging. He probably jumps into conversations just to make a point: Greeks are bad and they get what they deserve while Germans are good and we should follow their example. I will just say that this view is naive and stupid :-)
[1] http://www.brookings.edu/blogs/ben-bernanke/posts/2015/04/03...
I'm from one of the other PIIGS, lost my job and had to emigrate. I lived through bank and property implosion and unemployment increasing more than 3-fold. I saw friends lose effectively ruined.
However, the other PIIGS have all faced the unfortunate reality of their position, recognized their OWN mistakes and tried to correct things by cutting back on public and private wages and government spending. After a few years of pain, they are all seeing improvement - particularly falling unemployment.
Only Greece seems to think the party can keep and what's even more irritating is that they are angry and bitter towards the very people - the voters other EU countries - who have made huge sacrifices to provide them with almost a quarter of a trillion euro to ease them over the required adjustments. Put yourselves in the shoes of a politician in a poorer (than Greece) EU country sending money to Greece instead of spending it on hospital, schools, etc. in their own country.
It's time for a reality check, my sick-in-the-stomach friend. It's time for Greeks to consider the plausible possibility that they bear some of the responsibility for its own unfortunate state. But I guess it's easier to blame German trade imbalances, international capitalism, the IMF, the EU, the US, bankers, anyone besides Greeks themselves for the problems of Greece.
That said, I wish you all the best in life. Stay strong.
1. His lack of [...] is really high. ( Does this make sense?)
2. His understanding of[...] is really low/poor.
Cheers :p
Syriza was voted in to end austerity at minimum. They are nowhere near achieving this promise. Furthermore, their brinkmanship within the EU has made this even more unlikely.
All that has changed since winning the election is a steep degradation for the prospects of the Greek economy on almost every metric. The economic recovery early this year was snuffed out. Tax revenues have declined. Cost of sovereign borrowing is up. Bank deposits are flowing out.
I feel sorry for Varoufakis. He seems like a very sensible economist. Unfortunately the extreme elements of Syriza are driving Greece out of the eurozone and into much bigger trouble.
Do they not trade more with Turkey (and Germany) and about a handful of other countries?
Yes, the EU are of bigger importance, but OTOH those trade partners are still there. Only the exports to Russia are lost. If the trade amount relative to GDP really is 1%, that would amount to more than 2 billion Euros in lost trade. Greece is small and in a precarious financial situation, I can understand why they risk to affront other EU members for those 2 billion.
Compare with Finland and Sweden when the Soviet Union fell.
They were hit a lot harder but they cleaned up and enacted reforms. They certainly didn't complain that Greece was unreasonable for not lending (or giving) them money so that things could continue as before.
There's a delay on replying sometimes but it isn't karma-related.
Of course, regarding requirements for compensation from Germany, it would have made sense to ask those in 1980, i.e. before joining an economic community with Germany, a community whose purpose was to put back wars and their compensation requirements, and start up a free trade area and bind economies together to avoid further clashes and wars.
A mandatory loan from the Greek government to finance the German war effort would be at around 11 billion euros now. It is a multiple of that for many other EU countries.
I'm not saying that this "repay the war debt" is a good idea, but there certainly are a lot of hard to contest historical arguments for the validity of a small part of their claim.
As for high stakes... well, the stakes for someone coming into the finance ministry of Greece in this Europe are huge no matter how you look at it.