Greek financial crisis

[TheForeigner]

I am asking both Greeks and non-Grreeks who are well informed, what has caused the Greek crisis an why is it not over?

[Laberia]

In few words, because the Greeks have spent the money of the next thirty years.
There are also other reasons that will be mention here from other users. Someone will try to exaggerate and others will try to minimize.

[Egyptian]

In few words, because the Greeks have spent the money of the next thirty years.

how so ? explain.

[brennus dux gallorum]

I am asking both Greeks and non-Grreeks who are well informed, what has caused the Greek crisis an why is it not over?

Because of the inability of Greece to compete with countries that established strong economies through stealing 3rd world's wealth, or other countries that have received debt relief 5 times in their history, like Germany, or with countries which have not gone to war for 5 centuries, like Scandinavians

The only sure is that crisis is global, not Greek exclusively, it gets worst for most of the planet, and for sure corruption in Greece is another reason for Greek debt in particular

BTW how can you ask a non-greek for something like that?

[Laberia]

how so ? explain.

The Greek government-debt crisis (also known as the Greek Depression)[2][3][4] is the sovereign debt crisis faced by Greece in the aftermath of the financial crisis of 2007–08. The Greek crisis started in late 2009, triggered by the turmoil of the Great Recession, structural weaknesses in the Greek economy, and revelations that previous data on government debt levels and deficits had been undercounted by the Greek government.[5][6][7]

Causes
In January 2010, the Greek Ministry of Finance published Stability and Growth Program 2010.[16] The report listed five main causes, poor GDP growth, government debt and deficits, budget compliance and data compatibility. Causes found by others included excess government spending, current account deficits and tax avoidance.

[TheForeigner]

BTW how can you ask a non-greek for something like that?[/QUOTE]

Well informed individuals can be of different nationalities.

[Laberia]

Raine, you stupid creature at least explain your thumb down.

[wvwvw]

In few words, because the Greeks have spent the money of the next thirty years.
There are also other reasons that will be mention here from other users. Someone will try to exaggerate and others will try to minimize.

Greece's borrowing before the crisis was below the EU average. The whole world lives in fact on borrowed money, Netherlands, Belgium's, Italy's USA's debts are unsustainable. Virtually every Western country lives on borrowed money, and they are not growing enough to pay back the interests of their loans. It is also agreed by top economists, that these countries will have to default. Greece is simply the top of the iceberg, and part of her problems have to do with the faulty design of the monetary union. Biggest part of her problems are incompetent politicians.

[wvwvw]

11.02.10Monthly Review Press

by Rick Wolff

Spoiler!

Global capitalism imploded in 2007. The central causes of capitalism's crisis include:

• the end of real wage increases in the US and the substitution of rising worker debt far beyond what workers could sustain;
• the buildup of excess global industrial capacity;
• the explosion of speculation and excess risk-taking by banks, other financial and non-financial corporations, and the rich;
• the systematic misrepresentation of credit risks by capitalist rating firms;
• the failure of supervision and regulation by governments increasingly dependent on corporations and the rich (for campaign contributions, lobbyists' supports, etc.) over the last quarter century;
• the growing indebtedness of governments;
• the huge imbalances between trade and capital flows among nations (and, above all, the trade deficits of the US and the trade surpluses of the PRC)

In this list, the role of Greece is minor almost to the vanishing point. But Greek workers loom large among the proposed victims of the capitalist crisis they did not cause.

When the global capitalist crisis hit in 2007, Greece like most other countries boosted its deficit finance. It had already been running high government deficits largely based on very rosy predictions of Greece's economic prospects given its low (for Europe) wages and rising productivity in the years before 2007. So Greece has borrowed a lot (although other countries who borrowed more and for similar reasons are not -- yet -- being treated like Greece).

The problem for Greek national debt is that other, larger, richer capitalist nations -- those whose capitalists' actions were the leading causes of the global crisis -- have also vastly increased their borrowing. Lending to the latter is far safer than lending to the poorer, often more indebted countries like Greece, Portugal, etc. So lenders are requiring them to pay much higher interest rates just to meet their current debt obligations (and they probably need to borrow more, just like other countries, to avoid another nasty recessionary downturn). Lenders are also threatening to stop lending unless these poorer countries lower the ratio between their debt and their GDP (the widely used measure of the country's total output and thus its ultimate ability to pay back its debts).

To make the billions in extra interest payments and/or to lower their outstanding debt, governments in countries like Greece would have to raise taxes on their people or cut spending on their peoples' needs or both. Those steps would provide those governments with the funds to pay higher interest rates on their debt and lower the total of outstanding debt.

In simple English: the global capitalist crisis first brought an economic downturn to Greece, and now the "recovery" seeks to impose on the Greek people an indefinite period of economic suffering as global lenders provide funds to the richer, larger capitalist economies elsewhere so that they can avoid what is demanded of the Greeks. The same leaders of business and government who produced the crisis are managing the "recovery" in just this way.

Nor should we fail to mention that the Greek government and its business leaders are now forced to make a big decision too. Will they go along with the plan? Will they force the mass of Greek workers and their families to pay higher taxes, earn lower incomes, and lose government services to "service Greece's creditors"? Or will they be blocked from doing so by the Greek peoples' resistance? That's what is at stake in the mass strikes now rocking Greece.

And how might that resistance handle matters differently? In the immediate future, they might finally demand an end to the massive evasion of Greek taxes by its billionaire and millionaire elite on both their corporate and personal accounts. Let them finally pay -- according to their exalted abilities -- to service Greece's creditors. However, given their equally notorious mechanisms of tax evasion, honed over centuries, it would be better -- and sooner rather than later -- to abolish private Greek enterprises and reorganize them as worker-controlled enterprises sharing power with the government. Their joint project would then be to produce a "recovery" not just from this particular capitalist crisis but from the system that reproduces capitalist crises every few years.

Such a Greek resistance might also stimulate and inspire parallel movements in other countries whose people are likewise boiling because they bear the costs of a crisis they did not cause and a "recovery" that is not theirs. And so it should be, because the Greek resistance would need allies elsewhere to succeed and vice versa. Capitalism's global crisis is a burden for the working classes of the world, but it is also an opportunity. To suffer the former while missing a chance to grab the latter would only make this crisis yet more tragic

[Scholarios]

in short, corruption.