Latvia: Left bloc wins huge vote amid austerity

[Baluarte]

Lefty source: - See more at: http://www.greenleft.org.au/node/54290#sthash.Lw7lZvYj.dpuf

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The Harmony Centre, a coalition of left-wing parties, won 59% of popular vote in the municipal elections held in this Eastern European country on June 1.

The coalition is made up of the social-democratic party Harmony and the Socialist Party of Latvia (heir of the Communist Party, which was declared illegal in 1994).

The coalition belongs to the all-European Union (EU) political bloc European United Left-Nordic Green Left, which includes the major communist-leaning coalitions and parties, such as Greece's Syriza, Germany's Die Linke, France's Left Front, Spain's United Left and Ireland's Sinn Fein, among others.

While the EU and the International Monetary Fund insist that Latvia is an example of the “success” of the draconian policies of “austerity for the poor, huge profits for the rich” that they sponsor and dictate all around, the reality is that Latvia has been ravaged by such policies.

Latvians know better, and voted for change in these elections. The election implies that Latvia, which should hold national elections before the end of 2014, will most likely not enter the Eurozone, as the European Commission and the current government planned to do.

It is also a setback for the United States and its imperial extension: NATO.

The “cablegate” (to which we must thank WikiLeaks and Bradley Manning) showed that the US diplomats were already on their toes before 2011 because of the increased popular support for the Harmony Centre in Latvia, which is not just left-leaning but also sympathetic to the plea of Russian descendants (excluded from automatic nationality rights but representing a third of the country's population) and clearly opposed to EU's impositions and determined to exit NATO.

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Hard-line lefties are not really the solution to any problem, but it's good to at least see the Latvian people showing their discontent and opposing the EU.

It's also very positive that 1) They point out NATO as a source of imperialism, and 2) They are friendly to the sizable Russian minority. Very well done :thumb001:


Why oh why are Latvians unhappy, let's see a fun cartoon about it :D

GREAT LATVIAN SUCCESS STORY:


http://www.youtube.com/watch?feature=player_embedded&v=3IRUBJ8qraY

[Pure ja]

I spot a lot of misconceptions.

1. Municipal elections have very little to do with EURO decisions.

2. IMF and EU per se are not promoting “austerity for the poor, huge profits for the rich”. In fact, EU is not promoting austerity at all, since EU members on average have a 6% annual budget deficit and the cumulative deficit is about 90% of GDP - those are not signs of austerity. As to the "huge profits to the rich", sure, that is what all politicians almost everywhere vote for - it is the reason for their (well)being.

3. IMF and EU "dictate" only to the extent that they lend money to states hopelessly in debt. Those debt states can always find other ways out. In fact, one of the truest austerity paths would be to decline any loans from IMF and EU and manage on its own. I don't see anyone promoting that kind of austerity any more, I wonder why (well, actually I don't).

4. NATO membership has enabled Latvia to cut (to chop-chop-chop-chop until there is nothing left and nothing right) its defense budget. Were Latvia still part of the Russian Empire (formally known as a Federation), Latvian citizens (and non-citizens!) would have to endure military budget of 3% of GDP, instead of the current 1%. Were Latvia independent outside of NATO and Russia, it would have suffered the fate of Georgia by now (Georgia actually had an army, the same can not be said of Latvia).

5. As to the video, it is shamefully basing the comparison on top of the inflated bubble economy and on the trough of the exploded bubble. Oh, and the jobless rate in Spain and Greece are much MUCH worse than that in Latvia.

6. The actual mistakes made in Latvia were: too lax banking regulations which allowed Russian shadow money to inflitrate a certain Latvian bank which went belly up during the crisis and had to be bought out by the Latvian state - the real reason why Latvia needed foreign financial aid in the first place. Perhaps Latvia should have considered the path of Iceland instead, but it was Russia's mob money not Picadilly Circus or Rotterdam. So maybe Latvian government decided that the NATO protection would not have been such a sure deal at all and decided to play it safe.

So you see, what irritates me most, is that you have tried to play up the Russian card, while the Russian card was instrumental in crashing Latvia in the first place. It was not a coincidence, that Latvia was the hardest hit during the last crisis - because Latvia had the strongest economic ties with Russia, and the largest population of soviet-colonists.

[Citizen]

I spot a lot of misconceptions.
1. Municipal elections have very little to do with EURO decisions.


I can assure you it had everything to do with it, the majority of people, both Russian and Latvian are against euro, the people who actually strongly support euro are less than 10%, the statistics are manipulated so it looks like 38% are for it but that includes all the people who don't care or have no opinion. The whole idea to introduce euro and then we will magically get rich and happy that the so called right wing parties are trying to sell is just repulsive for the people, nobody belives that anymore, we heard that BS when we entered EU. Their whole campaign in Riga was indirectly based on this. If we enter monetary union we will have to pay our share in ESM and thats not small money at all, not to mention the loss of sovereignty. Some other reasons why there is so much support for Harmony Center/Honor to serve Riga party is that it actually did a lot of work for the citizens of Riga while the central government was talking about austerity and slashing everyones salary and they managed to do it without taking an IMF loan that put the deficit from 10% of GDP to 40%. Unlike rest of Latvia, Riga is a multicultural city and people don't care if the mayor is Russian or Latvian as long as he does his job, it has nothing to do with NATO or geopolitics, its like your Center party in Tallinn with Savisar.



2. IMF and EU per se are not promoting “austerity for the poor, huge profits for the rich”. In fact, EU is not promoting austerity at all, since EU members on average have a 6% annual budget deficit and the cumulative deficit is about 90% of GDP - those are not signs of austerity. As to the "huge profits to the rich", sure, that is what all politicians almost everywhere vote for - it is the reason for their (well)being.

So there is no fiscal treaty that all EU member states approved capping annual deficit? This is beneficial for developed economies.



3. IMF and EU "dictate" only to the extent that they lend money to states hopelessly in debt. Those debt states can always find other ways out. In fact, one of the truest austerity paths would be to decline any loans from IMF and EU and manage on its own. I don't see anyone promoting that kind of austerity any more, I wonder why (well, actually I don't).

Actually that was what Lithuania did during crisis, they borrowed from markets for a higher interest rate to avoid IMF/EU bailout and austerity conditions which just hurt the economy. EU is all about saving Germany and some other big players, they have no problem sacrificing Greece, Cyprus or Latvia to save their sorry ass.


4. NATO membership has enabled Latvia to cut (to chop-chop-chop-chop until there is nothing left and nothing right) its defense budget. Were Latvia still part of the Russian Empire (formally known as a Federation), Latvian citizens (and non-citizens!) would have to endure military budget of 3% of GDP, instead of the current 1%. Were Latvia independent outside of NATO and Russia, it would have suffered the fate of Georgia by now (Georgia actually had an army, the same can not be said of Latvia).
True, I have nothing against our membership there, unlike EU that is mutually benificial. We spent, I think, 0,5% of GDP I think. In case of Georgia, I have no idea why they want to be in "west"/NATO so much, whats the benefit, the cause of their 2008 war was exactly this, if they stayed neuntral with the Russians they would have no war, there is no economic benefit for a country that is geographically in east to try to make enemies with it, they should take example from Armenia.


5. As to the video, it is shamefully basing the comparison on top of the inflated bubble economy and on the trough of the exploded bubble. Oh, and the jobless rate in Spain and Greece are much MUCH worse than that in Latvia.
I think that video is excellent, the jobless rate is even less in Latvia, most of people work in the shadow economy and pay no taxes so they are counted as jobless. But the minimal salary in Latvia is 280$, most people make 600- 800$ and the price level for general consumables is high, I have studied abroad a lot and in Vienna shops food is pretty much the same price, my mom makes 2200$ (this is considered a high income in Latvia :D ) and we barely managed during the crisis. After the crisis we have poverty rate of 40%, second highest infant mortality, 10% population loss and so on, real success story. Id better take Greece or Spain with its unemployment then.


6. The actual mistakes made in Latvia were: too lax banking regulations which allowed Russian shadow money to inflitrate a certain Latvian bank which went belly up during the crisis and had to be bought out by the Latvian state - the real reason why Latvia needed foreign financial aid in the first place. Perhaps Latvia should have considered the path of Iceland instead, but it was Russia's mob money not Picadilly Circus or Rotterdam. So maybe Latvian government decided that the NATO protection would not have been such a sure deal at all and decided to play it safe.
You are mixing up Parex bank with Krājbanka. Parex bank was owned by Latvian nationals, it had money from both west and east. It was not involved with Russia but with Latvian government, all the gov. workers had its cards, a lot of money was circulated trough it. The political elite (Latvian one) was benefiting from Parex and construction bubble and allowed it, it has nothing to do with NATO and its protection. Krājbanka was owned by Russian con man/businessman and they actually let it fail.


So you see, what irritates me most, is that you have tried to play up the Russian card, while the Russian card was instrumental in crashing Latvia in the first place. It was not a coincidence, that Latvia was the hardest hit during the last crisis - because Latvia had the strongest economic ties with Russia, and the largest population of soviet-colonists.
It had nothing to do with Russia, all those decisions that lead to crisis where made by the same politicians that try to sell us the bright future of eurozone, if you look at Cyprus, eurozone is what might attract more Russian deposits not less. Those Russian colonists never really had any power in government so I cant see how they have any involvment in crisis. It was the politicians in 90's like Godmanis who decided to create this banking industry for personal benefits of himself and his friends, not the general economy of Latvia.

[Baluarte]

It had nothing to do with Russia, all those decisions that lead to crisis where made by the same politicians that try to sell us the bright future of eurozone, if you look at Cyprus, eurozone is what might attract more Russian deposits not less. Those Russian colonists never really had any power in government so I cant see how they have any involvment in crisis. It was the politicians in 90's like Godmanis who decided to create this banking industry for personal benefits of himself and his friends, not the general economy of Latvia.

I agree.

Seems like textbook unfounded. Russophobia

[Citizen]

I agree.

Seems like textbook unfounded. Russophobia

Don't get me wrong, we and Eesti, have very good historical reasons to have animosity towards Russia. This is exploited by the local politicians in Baltics but that kind of thinking has no future, it has been used by the local "elites" to stay in power no matter how much deeper down they drag the rest of population while enriching themselfs. Thinking that the collapse of Baltic economies was some master ploy by Russia is just what the local politicians love to spread, so they don't have to answer for their own misbehavior. In truth the crisis was everywhere and originated in US, Latvia was the hardest hit country with -25% GDP drop because of our 20 years of economic fuckup.

[Petros Houhoulis]

10% of the population fled the country, and they were all young people. Now who's gonna pay the pensions of the older ones?

Crappy austerity doesn't really work anywhere.

[Pure ja]

I can assure you it had everything to do with it, the majority of people, both Russian and Latvian are against euro, the people who actually strongly support euro are less than 10%, the statistics are manipulated so it looks like 38% are for it but that includes all the people who don't care or have no opinion.

Your assurances are not enough.
I was not talking about public sentiment towards EURO.
I was hinting that local governments do not make currency decisions, unless Valka decides to adopt Estonian kroon.
How is the local elections results going to influence the EURO decision? By forcing premature state elections?

In Estonia, local and state elections have consistently produced very different results. Partly because in state elections only citizens can participate while in local elections permanent residents are allowed as well.




The whole idea to introduce euro and then we will magically get rich and happy that the so called right wing parties are trying to sell is just repulsive for the people, nobody belives that anymore, we heard that BS when we entered EU. Their whole campaign in Riga was indirectly based on this.

You should have concentrated on local government issues, not on state currency issues.
Of course, I understand the need to punish ruling parties.




Some other reasons why there is so much support for Harmony Center/Honor to serve Riga party is that it actually did a lot of work for the citizens of Riga while the central government was talking about austerity and slashing everyones salary and they managed to do it without taking an IMF loan that put the deficit from 10% of GDP to 40%.


Let me guess.
The Riga government managed to get a loan from some other financial institution, but because state budget balance also includes local government budgets (at least in some accounting), then the state government had to slash budget in order to balance the spending of local governments. That is what happened also in Estonia - Tallinn spended lavishly and thoughtlessly, while Estonia had to cut the state budget because of that.




Unlike rest of Latvia, Riga is a multicultural city and people don't care if the mayor is Russian or Latvian as long as he does his job, it has nothing to do with NATO or geopolitics, its like your Center party in Tallinn with Savisar.


I don't know what goes on in Riga, but Savisaar does not promote a multicultural city. Savisaar promotes a bicultural city - in russian and in estonian (in that order).




So there is no fiscal treaty that all EU member states approved capping annual deficit? This is beneficial for developed economies.


Capping annual deficits to 3% is NOT austerity by any stretch of imagination.
Austerity means having cumulative budget surplus. Estonia doesn't have it. None of the EU members have it. Norway has it and that's it.




Actually that was what Lithuania did during crisis, they borrowed from markets for a higher interest rate to avoid IMF/EU bailout and austerity conditions which just hurt the economy.


So which option did hurt the economy? Borrowing from the markets? Or borrowing from the IMF?
I was actually suggesting NOT borrowing at all.




EU is all about saving Germany and some other big players, they have no problem sacrificing Greece, Cyprus or Latvia to save their sorry ass.


Greece is a failed state, get over it.
You can't sacrifice a failed state - there is nothing to sacrifice.

Greece citizens do not pay taxes. No taxes - no state - no sacrifice.



In case of Georgia, I have no idea why they want to be in "west"/NATO so much, whats the benefit, the cause of their 2008 war was exactly this, if they stayed neuntral with the Russians they would have no war, there is no economic benefit for a country that is geographically in east to try to make enemies with it, they should take example from Armenia.


For Georgia to benefit from behaving like Armenia, there would also have to be a second Aserbaijan.
Just as there is no room for a second Finland in Russia's politics, there is no room for a second Armenia. And there is no room for a united NATO.

Divide and conquer.




I think that video is excellent, the jobless rate is even less in Latvia, most of people work in the shadow economy and pay no taxes so they are counted as jobless.

So there you have it - no taxes, no state.




But the minimal salary in Latvia is 280$, most people make 600- 800$ and the price level for general consumables is high, I have studied abroad a lot and in Vienna shops food is pretty much the same price, my mom makes 2200$ (this is considered a high income in Latvia :D ) and we barely managed during the crisis. After the crisis we have poverty rate of 40%, second highest infant mortality, 10% population loss and so on, real success story.

The loss of population is due to the relatively easy EU mobility. Leave the EU, pluck the holes in the border - problem solved.
You can only partly blame it on the crisis, if at all. On average, people now live much better off than they did in 1990-91. But in 1990 it was impossible for the 10% to migrate to rich western European countries.



Id better take Greece or Spain with its unemployment then.


Sure, but the paying parties (think of Germany) wouldn't.




You are mixing up Parex bank with Krājbanka. Parex bank was owned by Latvian nationals, it had money from both west and east. It was not involved with Russia but with Latvian government, all the gov. workers had its cards, a lot of money was circulated trough it. The political elite (Latvian one) was benefiting from Parex and construction bubble and allowed it, it has nothing to do with NATO and its protection. Krājbanka was owned by Russian con man/businessman and they actually let it fail.


Whatever, I have read that at least some Russian banking money was pulled out before the failure and some were compensated afterwards. The fact that "nationals" were involved does not negate the involvement of Russian money (especially in Latvia).




It had nothing to do with Russia


I disagree.




all those decisions that lead to crisis where made by the same politicians that try to sell us the bright future of eurozone, if you look at Cyprus, eurozone is what might attract more Russian deposits not less.


Proper financial regulations and oversight would diminish such shoddy practices.




Those Russian colonists never really had any power in government so I cant see how they have any involvment in crisis.


Of course they had power in the Latvian government.
Those Russian colonists have had power in four of the largest parties of Estonia - all the parties in the current parliament.
There is more Russian money circulating Latvia than there is in Estonia.



It was the politicians in 90's like Godmanis who decided to create this banking industry for personal benefits of himself and his friends, not the general economy of Latvia.

That does not negate the influence of Russian money.

[Pure ja]

Thinking that the collapse of Baltic economies was some master ploy by Russia is just what the local politicians love to spread, so they don't have to answer for their own misbehavior.


There is even no need to surrect any master ploy. Mere existence of Russia and an abundance of Russian money is enough.
Of the three Baltic states, Latvia has the closest ties with Russia. Latvia has more Russian money. Latvia is the strategic center of the Baltic states. And yet (or rather because of all that) Latvia has suffered the most. And will continue to suffer more if Latvians do not restrict Russia's influence.

[Citizen]

There is even no need to surrect any master ploy. Mere existence of Russia and an abundance of Russian money is enough.
Of the three Baltic states, Latvia has the closest ties with Russia. Latvia has more Russian money. Latvia is the strategic center of the Baltic states. And yet (or rather because of all that) Latvia has suffered the most. And will continue to suffer more if Latvians do not restrict Russia's influence.

So the Banks in USA and around the world went bankrupt in 2008 because of Russian money as well? Or Cyprus problems more recently, was it because Greek haircut deal ensured that Cyprus banks didnt get all of their money of Greek gov. bonds and vent insolvent or was it the Russian depositors, that magically made the banks fail, also insuring major losses on themselfs? I can assure you, I have no big love for Russian involvment in Latvian affairs but it had nothing to do with economic crisis at all. Our own gov. made the real estate bubble, they ensured there is no tax on real estate deals, basically people bought up property just to later sell it off for a higher price, this is a piramid scheme 101, it was not sustainable and was mostly fueled by Scandinavian banks (with Scandinavian money) not Russians, you know the same big players as in Estonia - Swedbank, DNB, Nordea. Parex was just one of many, it was a local bank so it fell on us to save it, which was wrong if you ask me. Im sorry, I just fail to see where Russian money comes into all of this? Can you give me a chain of events please and enlighten me, because so far you sound like some of our blame shifting cockroach politicians who made the crisis possible with the credit boom.

[Citizen]

Your assurances are not enough.
I was not talking about public sentiment towards EURO.
I was hinting that local governments do not make currency decisions, unless Valka decides to adopt Estonian kroon.
How is the local elections results going to influence the EURO decision? By forcing premature state elections?
When giving its verdict on eurozone accession EC takes public opinion and latest elections in account, if you read their statements about Latvia, its clear they fallow this up and are well informed about it. On the other hand, they need some foolish country to demonstrate that Euro is still something states want to have.



In Estonia, local and state elections have consistently produced very different results. Partly because in state elections only citizens can participate while in local elections permanent residents are allowed as well.

We dont have this, EU citizens can vote in municipalities if they live for a certain period but Latvian aliens (nonecitizens) cant.



You should have concentrated on local government issues, not on state currency issues.
Of course, I understand the need to punish ruling parties.

Im not saying they didnt but getting back on the people in central gov. played a big part too.



Let me guess.
The Riga government managed to get a loan from some other financial institution, but because state budget balance also includes local government budgets (at least in some accounting), then the state government had to slash budget in order to balance the spending of local governments. That is what happened also in Estonia - Tallinn spended lavishly and thoughtlessly, while Estonia had to cut the state budget because of that.

No, that is not how it works here. Municipalities have their own budget, if they have debt it goes into "central government debt" but usually people are talking about "central government debt" which is also one of Maastricht criteria. The revenue for municipalities comes mostly from taxes, mainly individual income tax, where 80% goes into municipality and 20% to the central gov. During crisis this was actually changed in favor for the central gov. I dont recall what where the numbers before 85% to municipality I think. So basically central gov. was the one which went bankrupt and took money off Riga and other cities. Of course Riga gers subsidies from central gov. but all of those where heavily slashed during crisis. So saying that Riga was living rich because it got the money from central. gov is just ridicilous in this case.



I don't know what goes on in Riga, but Savisaar does not promote a multicultural city. Savisaar promotes a bicultural city - in russian and in estonian (in that order).
Nothing special goes on, you should come and visit, Riga is fun. ;)




Capping annual deficits to 3% is NOT austerity by any stretch of imagination.
Austerity means having cumulative budget surplus. Estonia doesn't have it. None of the EU members have it. Norway has it and that's it.

I think treaty like that is a reduction of states sovereignty.



So which option did hurt the economy? Borrowing from the markets? Or borrowing from the IMF?
I was actually suggesting NOT borrowing at all.

Thats like suggesting to buy a house with cash in hand or start a business without taking a loan. There is no problem with borrowing money if you invest it wisely and in the end it turns in more profit than original loan + interest.



Greece is a failed state, get over it.
You can't sacrifice a failed state - there is nothing to sacrifice.

Was it a failed state prior to the crisis? I think the EU failed it. Being in eurozone seriously restricted its maneuvering during the crisis.



Greece citizens do not pay taxes. No taxes - no state - no sacrifice.

I bet there is pretty big shadow economy in Estonia as well. Might be just as big as Greece. Some people always pay taxes, Everyone in my family pays them. But dont you have any friend who works illegaly, say in construction, gets a minimal salary and something extra under the table? ;)



For Georgia to benefit from behaving like Armenia, there would also have to be a second Aserbaijan.
Just as there is no room for a second Finland in Russia's politics, there is no room for a second Armenia. And there is no room for a united NATO.

I dont fallow, I understand that Russia is a military backer for Armenia, which prevents any conflict between Armenia and Azarbaijan over Nagorni-Karabah area, but what it has to do with it. Russia clearly has good bilateral relations with both Azarbaijan and Armenia, they both are even part of CIS, Georgia used to be part of CIS too. I can give some other examples, Belarus, Kazahstan and so on.




The loss of population is due to the relatively easy EU mobility. Leave the EU, pluck the holes in the border - problem solved.
You can only partly blame it on the crisis, if at all. On average, people now live much better off than they did in 1990-91. But in 1990 it was impossible for the 10% to migrate to rich western European countries.

I recall late 90's and early 2000 as much better period than 2004 onwards with EU crap.



Whatever, I have read that at least some Russian banking money was pulled out before the failure and some were compensated afterwards. The fact that "nationals" were involved does not negate the involvement of Russian money (especially in Latvia).
Mind sharing it? I have no such information.




I disagree.

Gimme some arguments.



Proper financial regulations and oversight would diminish such shoddy practices.
Agree.

[Albion]

So the Banks in USA and around the world went bankrupt in 2008 because of Russian money as well? Or Cyprus problems more recently, was it because Greek haircut deal ensured that Cyprus banks didnt get all of their money of Greek gov. bonds and vent insolvent or was it the Russian depositors, that magically made the banks fail, also insuring major losses on themselfs? I can assure you, I have no big love for Russian involvment in Latvian affairs but it had nothing to do with economic crisis at all. Our own gov. made the real estate bubble, they ensured there is no tax on real estate deals, basically people bought up property just to later sell it off for a higher price, this is a piramid scheme 101, it was not sustainable and was mostly fueled by Scandinavian banks (with Scandinavian money) not Russians, you know the same big players as in Estonia - Swedbank, DNB, Nordea. Parex was just one of many, it was a local bank so it fell on us to save it, which was wrong if you ask me. Im sorry, I just fail to see where Russian money comes into all of this? Can you give me a chain of events please and enlighten me, because so far you sound like some of our blame shifting cockroach politicians who made the crisis possible with the credit boom.

Ireland also had that problem. Britain does too, but the supply of houses is kept short by restrictive planning and high immigration meaning the bubble won't burst for a few years yet. This situation was deliberately created by our last (Labour) government. :mad: First time buyers are priced out whilst older folks make a killing and don't give a fuck about future generations because they won't be alive when the country goes to shit - that last partis basically what some older people have told me.

[Graham]

Lefty source: - See more at: http://www.greenleft.org.au/node/54290#sthash.Lw7lZvYj.dpuf

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The coalition belongs to the all-European Union (EU) political bloc European United Left-Nordic Green Left, which includes the major communist-leaning coalitions and parties, such as Greece's Syriza, Germany's Die Linke, France's Left Front, Spain's United Left and Ireland's Sinn Fein, among others.



It's interesting to look at these groups & alliances that form in the EU :). It describes itself as :--
https://en.wikipedia.org/wiki/European_United_Left%E2%80%93Nordic_Green_Left

Ideology

Democratic socialism, Ecosocialism, Anticapitalism and Eurocommunism

Position

According to its 1994 constituent declaration, the group is opposed to the present European political structure, but committed to integration.That declaration sets out three aims for the construction of another Europe: the total change of institutions to make them "fully democratic"; and breaking with "neo-liberal monetarist policies"; and a policy of co-development and equitable cooperation. The group wants to disband NATO and "strengthen the OSCE".

The group is ambiguous between reformism and revolution, leaving it up to each party to decide on the manner they deem best suited to achieve these aims. As such, it has simultaneously positioned itself as "insiders" within the European institutions, enabling it to influence the decisions made by co-decision, and as "outsiders" by its willingness to seek "another Union" which would abolish the Maastricht Treaty.

[Pure ja]

So the Banks in USA and around the world went bankrupt in 2008 because of Russian money as well?

Nope. How so?
You should compare Latvia to Estonia instead.
Estonian banks did not go belly up in the 2008 crisis. Why? Because of marginally better banking regulations and oversight.




Or Cyprus problems more recently, was it because Greek haircut deal ensured that Cyprus banks didnt get all of their money of Greek gov. bonds and vent insolvent or was it the Russian depositors, that magically made the banks fail, also insuring major losses on themselfs?


Cyprus made the mistake of being dependent on both Greece and Russia - a very bad combo.




I can assure you, I have no big love for Russian involvment in Latvian affairs but it had nothing to do with economic crisis at all. Our own gov. made the real estate bubble, they ensured there is no tax on real estate deals, basically people bought up property just to later sell it off for a higher price, this is a piramid scheme 101, it was not sustainable and was mostly fueled by Scandinavian banks (with Scandinavian money) not Russians, you know the same big players as in Estonia - Swedbank, DNB, Nordea. Parex was just one of many, it was a local bank so it fell on us to save it, which was wrong if you ask me.


Part of the bubble was the "scandinavian" loan money.
The other part was the Russian money. You can't deny the influence of Russian money in Latvia. Even if it lurks behind the backs of latvian nationals.




Im sorry, I just fail to see where Russian money comes into all of this? Can you give me a chain of events please and enlighten me, because so far you sound like some of our blame shifting cockroach politicians who made the crisis possible with the credit boom.

I took a long midsummer break, while shifting through old newspapers (Postimees mostly).
All I can come up with is this (in estonian language):

http://www.postimees.ee/48055/kas-moskva-peaks-kartma-parexi-saladuste-sattumist-laane-pankade-katte

I am unable to unearth the article about pulling out Russian money right before the crash. You should be able to recall such articles by yourself.

Just by googleing: Läti Vene raha
brings up a huge heap of results (in estonian, again).

My suspicions rise immediately concerning any "latvian" who denies the influence of Russian money in the Baltics. Comparisons with cockroaches does not help here, because cockroaches were reintroduced en masse to Estonia in 1939-40 by the soviet colonists.

[Pure ja]

When giving its verdict on eurozone accession EC takes public opinion and latest elections in account, if you read their statements about Latvia, its clear they fallow this up and are well informed about it.

They are well informed and they will continue to ignore it and will accept Latvia to the Eurozone with open arms.




On the other hand, they need some foolish country to demonstrate that Euro is still something states want to have.


There you have it.



We dont have this, EU citizens can vote in municipalities if they live for a certain period but Latvian aliens (nonecitizens) cant.


Don't have what, differing elections results in local and state elections?

[Pure ja]

No, that is not how it works here. Municipalities have their own budget, if they have debt it goes into "central government debt" but usually people are talking about "central government debt" which is also one of Maastricht criteria. The revenue for municipalities comes mostly from taxes, mainly individual income tax, where 80% goes into municipality and 20% to the central gov. During crisis this was actually changed in favor for the central gov. I dont recall what where the numbers before 85% to municipality I think. So basically central gov. was the one which went bankrupt and took money off Riga and other cities. Of course Riga gers subsidies from central gov. but all of those where heavily slashed during crisis. So saying that Riga was living rich because it got the money from central. gov is just ridicilous in this case.


You are messing up what I meant.
You did not state that Riga hadn't taken any new loans. If Riga had taken new loans, then that inevitably affects the "state debt balance" and thus also affects the state budget.

I claimed that Riga didn't get money from the central government, but from thin air, and because of that, central government had to take that additional debt into account while trying to achieve budget balance.



Nothing special goes on, you should come and visit, Riga is fun. ;)


That coming from a centre radical, I have my doubts :p
But maybe I will.

[Pure ja]

I think treaty like that is a reduction of states sovereignty.


Well, apparently it should be mandatory for Eurozone member states.
EU membership IS a reduction of states sovereignty.




Thats like suggesting to buy a house with cash in hand or start a business without taking a loan. There is no problem with borrowing money if you invest it wisely and in the end it turns in more profit than original loan + interest.


While that sounds beautiful in theory, in practice several questions arise:
1. Why in the end? What is the end? The very end?
2. The scarcity of examples of states who have actually invested loans wisely and profited from it and paid it back with interest. Finland comes to mind. Maybe Germany. And basically that's it. The others have used any derivative of a pyramid scheme. (edit: both Finland and Germany are deep in debt by now)

And btw, a state can always take a loan from its own citizens and later pay it back with interest. Why take it from outside?



Was it a failed state prior to the crisis? I think the EU failed it. Being in eurozone seriously restricted its maneuvering during the crisis.


Yes, it was already a failed state before the crisis, it was just not evident yet.
And yes, Greece would have had it easier being outside of the Eurozone.




I bet there is pretty big shadow economy in Estonia as well. Might be just as big as Greece.


EU stats claim that greeks work longer than estonians. Yeah, sure. Greece statistics.
I very much doubt that Estonian shadow economy is as large as that in Greece.

[Pure ja]

I dont fallow, I understand that Russia is a military backer for Armenia, which prevents any conflict between Armenia and Azarbaijan over Nagorni-Karabah area, but what it has to do with it. Russia clearly has good bilateral relations with both Azarbaijan and Armenia, they both are even part of CIS, Georgia used to be part of CIS too. I can give some other examples, Belarus, Kazahstan and so on.

Russia uses the "divide and rule" principle in CIS.
Armenia has Azerbaijan. Georgia has South-Ossetia and Abkhazia.
Russia is not part of the solution, Russia is part of the problem.



I recall late 90's and early 2000 as much better period than 2004 onwards with EU crap.


That is because of the easy border crossings within the EU. Schengen Area, etc.

[Citizen]

Nope. How so?
You should compare Latvia to Estonia instead.
Estonian banks did not go belly up in the 2008 crisis. Why? Because of marginally better banking regulations and oversight.

Eesti didn't had big local banks. Scandinavian banks suffered and had to be helped by their parent banks same as here. Parex didn't had this option so it went bust.



Cyprus made the mistake of being dependent on both Greece and Russia - a very bad combo.

Only mistake it made was joining euro, same we are about to make as well.



Part of the bubble was the "scandinavian" loan money.
The other part was the Russian money. You can't deny the influence of Russian money in Latvia. Even if it lurks behind the backs of latvian nationals.

What do you mean by influence, of course Russians, same as Scandinavians invest in Baltics. Im not denying that there are no Russian owned bisinesses in Latvia. But they had nothing to do with crisis, crisis came from US, it was not engineered by FSB or something, that is just tinfoil hat thinking.



I took a long midsummer break, while shifting through old newspapers (Postimees mostly).
All I can come up with is this (in estonian language):

http://www.postimees.ee/48055/kas-moskva-peaks-kartma-parexi-saladuste-sattumist-laane-pankade-katte

I am unable to unearth the article about pulling out Russian money right before the crash. You should be able to recall such articles by yourself.

Just by googleing: Läti Vene raha
brings up a huge heap of results (in estonian, again).

My suspicions rise immediately concerning any "latvian" who denies the influence of Russian money in the Baltics. Comparisons with cockroaches does not help here, because cockroaches were reintroduced en masse to Estonia in 1939-40 by the soviet colonists.

You know its called a bank run, if I had money during that time in Parex I would take it out too. You would not take out money from a bank if you hear that its about to go bust? Also why Latvian in " "?


They are well informed and they will continue to ignore it and will accept Latvia to the Eurozone with open arms.

There you have it.

Which further proves my point that EU is both undemocratic and is all about defending the interests of big players there, mostly Germany and France.



Don't have what, differing elections results in local and state elections?

No, the aliens (noncitizens) which you also have, I know for sure, have no rights to vote in both municipality and parliament. So the election results are pretty much the same if you look at municipalities elections or parliament, the reason why Harmony Center isnt in power in parliament and gets around 35% usually is that parliament takes accaunt whole Latvia and not just Riga city or Daugavpils.


You are messing up what I meant.
You did not state that Riga hadn't taken any new loans. If Riga had taken new loans, then that inevitably affects the "state debt balance" and thus also affects the state budget.

I claimed that Riga didn't get money from the central government, but from thin air, and because of that, central government had to take that additional debt into account while trying to achieve budget balance.

No Riga gets its money from the cirizens of Riga, trough individual income tax of those who are registered there. 80% of this goes to the city budget and 20% to the central gov. So they both have separate budgets. In 2010 (high point of crisis) Riga had a 4% proficit so it spent less that it earned and took no debt at all. Both budgets are completely separate .



That coming from a centre radical, I have my doubts :p
But maybe I will.
Gimme a message if you do! Also why would I be a radical?


Well, apparently it should be mandatory for Eurozone member states.
EU membership IS a reduction of states sovereignty.

Which is the reason why we should have stayed out of it.



While that sounds beautiful in theory, in practice several questions arise:
1. Why in the end? What is the end? The very end?
2. The scarcity of examples of states who have actually invested loans wisely and profited from it and paid it back with interest. Finland comes to mind. Maybe Germany. And basically that's it. The others have used any derivative of a pyramid scheme. (edit: both Finland and Germany are deep in debt by now)

60% of GDP is not deep in debt. Japan has a debt of 210% of GDP and it can sustain it while Greece has half of that and is in recession for 6 years now. Greece is now in austerity vicious circle, austerity causes recession which makes it borrow more which Greece can't do and has to do more austerity to pay its citizens and around it goes for 6 years now. It has nothing to do with failed state.



And btw, a state can always take a loan from its own citizens and later pay it back with interest. Why take it from outside?

Can you in Eesti? We couldn't so far, it was introduced this year but the rates they give are low only 0.3% in a year long LR gov. bond, doesn't even cover inflation.
https://www.krajobligacijas.lv/



Yes, it was already a failed state before the crisis, it was just not evident yet.
And yes, Greece would have had it easier being outside of the Eurozone.
Is USA and Japan also failed states, they both have bigger debt to GDP ratios. Also tax avoidance in USA is pretty big as indicated by recent Apple case, where its both the biggest tax payer and avoider in USA.



EU stats claim that greeks work longer than estonians. Yeah, sure. Greece statistics.
I very much doubt that Estonian shadow economy is as large as that in Greece.

Its eurostat. Also talking to some of my Greek friends I realized that out tax avoidance is bigger than in Greece, in Latvia almost everyone buys stuff on company to avoid taxes, almost all cars are bought like that. Also you have no friend how works in the grey sector, earns minimal or no salary officially and gets paid under table? Really no one?


Russia uses the "divide and rule" principle in CIS.
Armenia has Azerbaijan. Georgia has South-Ossetia and Abkhazia.
Russia is not part of the solution, Russia is part of the problem.

Same could be said about EU and Germany/France.


That is because of the easy border crossings within the EU. Schengen Area, etc.

What? I dont fallow.

[RussiaPrussia]

http://i51.tinypic.com/s4n9sp.jpg

[Pure ja]

Eesti didn't had big local banks. Scandinavian banks suffered and had to be helped by their parent banks same as here. Parex didn't had this option so it went bust.


If Parex was the biggest bank in Latvia, then obviously the local Scandinavian banks (which used to be the brances of Estonian banks before they became scandinavian in Latvia) did NOT have the largest impact in creating the bubble.

And the Scandinavian banks did not suffer considerably. One could say that what they reaped in the Baltics as untaxed profits, they invested in Lehman Brothers. So IF those reserves had still been the reserves of Estonian Hansabank, for example, then perhaps nothing bad would have happened. There was overextending going on during the bubble, with branches in the Ukraine and in St. Petersburg, but overall the reserves produced by local Baltic branches were large enough. The Baltics had been insanely profitable for the Swedish banks before the 2008 crisis, much larger profits than what was lost during the 2008 crisis. And it is again already. On the other hand, what the Swedish and Finnish and Danish banks (and their pensioners as shareholders) take from the Baltics as untaxed profits, they pay it back via EU subsidies. For now.




Only mistake it made was joining euro, same we are about to make as well.


If that is the only mistake you see, then, well, look again.




What do you mean by influence, of course Russians, same as Scandinavians invest in Baltics. Im not denying that there are no Russian owned bisinesses in Latvia. But they had nothing to do with crisis, crisis came from US, it was not engineered by FSB or something, that is just tinfoil hat thinking.


You are deliberately mixing up global crisis with local crisis.
And even the global crisis was only triggered by the US, not entirely caused by it. I am not blaming FSB for creating the global crisis.

I am blaming the mesh of Russian oligarchs / mafia / FSB / Kremlin money, which infiltrated the Latvian banks (including Parex) and caused a considerable part of the local bubble (and some of it was pulled out right before the LOCAL crash). Mind you, the local bubble was later and larger in Latvia than in Estonia. Estonia was cooling down already in 2007. That was again partly the result of the different share of Russian money in action. Estonia continues to be ahead of Latvia in the economic cycle. Estonia's cycle is more aligned with those of Sweden, Finland and Germany, while Latvia's economic cycle is more aligned with that of Russia. I wonder why?



You know its called a bank run, if I had money during that time in Parex I would take it out too. You would not take out money from a bank if you hear that its about to go bust?


I actually divided my reserves into 3 banks and soon invested it into a real estate.

But the point was that some of the Russian origin money was pulled out either right before the restrictions by using inside information, or AGAINST the already imposed restrictions. At least that is what I remember to have read in the newspapers of that time. Both would be illegal.




Also why Latvian in " "?


For several reasons.
Maybe I have read the wrong signals, but to me it seems that you are:
1. supporting the russian-latvian mixed government of Riga.
2. downplaying the influence of Russian money in Latvia
3. being generally anti-EU and anti-Latvian government
4. For some obscure reason stressing you being the Citizen (of Latvia, I assume). Native latvians would not need to stress that.
5. supporting the so-called "centrist" political side. FYI, "centrist" in politics is just a cunning labeling to prevent being called a radical extremist. There are no left and right, really. The parties reside all over the place in a multidimensional issue space. And the "far right" and the "far left" are often closer together than to the centre. So, in a two dimensional space one could envision a circle, with no wings - but in that case that brings the next question where is the centre of a circle? Perhaps the "centrists" are really the wingmen?

And that is why I am labeling "centrists" as "centre radicals" - because that is what they are trying to hide.

There are "centrists" in Estonia. Very few native estonians support them. About 80% of Estonian russians support them. So I guess you get the hint. You are either among the 80% or among the "very few".




Which further proves my point that EU is both undemocratic and is all about defending the interests of big players there, mostly Germany and France.


But it also further proves MY point that local elections results have very little to do with joining the Eurozone.




No Riga gets its money from the cirizens of Riga, trough individual income tax of those who are registered there. 80% of this goes to the city budget and 20% to the central gov. So they both have separate budgets. In 2010 (high point of crisis) Riga had a 4% proficit so it spent less that it earned and took no debt at all. Both budgets are completely separate .


That is just for 2010. What about 2008, 2009, 2011, 2012?
Both budgets being separate does not negate the fact that they are summed up by EU and international financial institutions to get the big picture. That is what the EU 3% budget deficit cap is all about.




Which is the reason why we should have stayed out of it.


I agree that the question of whether to be in or out should always be kept alive.




60% of GDP is not deep in debt. Japan has a debt of 210% of GDP and it can sustain it while Greece has half of that and is in recession for 6 years now.


Japan is largely in debt to its own citizens. Not so with Greece or Portugal.
And even Japan cannot really sustain that, not considering the declining population and even less after Fukushima. Why do you think the Japanese government keeps lying to its citizens about the real ramifications of the Fukushima accident? Because admitting the truth would immediately collapse the Japanese economy as we know it.




Greece is now in austerity vicious circle, austerity causes recession which makes it borrow more which Greece can't do and has to do more austerity to pay its citizens and around it goes for 6 years now. It has nothing to do with failed state.


I haven't heard Greece paying back any loans, let alone interests. Therefore Greece is not really in austerity mode yet. Greece has to borrow more money precisely because it is not in austerity mode yet - it goes around and around for 6 years now. It has everything to do with being a failed state.



Can you in Eesti? We couldn't so far, it was introduced this year but the rates they give are low only 0.3% in a year long LR gov. bond, doesn't even cover inflation.
https://www.krajobligacijas.lv/


Estonia has not introduced any government bonds yet.
But Japan has, a lot.




Is USA and Japan also failed states, they both have bigger debt to GDP ratios.


Again, a large part of the debt (esp in Japan) is to their own citizens.
And the Jupiter (USA) can afford what the ox (Greece / Latvia / Estonia) cannot.
USA can bend the very space-time fabric of the financial universe, to the extent, so far, but not for much longer.
And yes, many consider Japan and USA as already failed states - the so-called living dead.



Its eurostat. Also talking to some of my Greek friends I realized that out tax avoidance is bigger than in Greece, in Latvia almost everyone buys stuff on company to avoid taxes, almost all cars are bought like that.


Even that would not make Greeks paying more taxes than Latvians.




Same could be said about EU and Germany/France.


France is definitely part of the problem.
Germany does not want to be a problem, but others insist.




What? I dont fallow.

EU border crossings and a common job market are too laxed, EU convergence process is too slow and the EU common market is too restricted.

[Pure ja]

http://i51.tinypic.com/s4n9sp.jpg

It would be foolish to assume that Estonia would pay back others loans.
At the moment Estonia is mostly only giving loan guarantees. Even with those loan guarantees, the total balance of inflowing / outflowing money between Estonia and the EU is about even. But additional loan guarantees or actual downpayments that would dip the balance would also quickly bring about a negative sentiment and a will to leave the EU. And to not fulfill the given loan guarantees.

What? Did you honestly believe that if other EU states deep in debt would not pay their loans, that Estonia would?
Don't be that naive. It is just a facade, Estonia is just part of the facade. There is no will to actually pay.

[Citizen]

If Parex was the biggest bank in Latvia, then obviously the local Scandinavian banks (which used to be the brances of Estonian banks before they became scandinavian in Latvia) did NOT have the largest impact in creating the bubble.

And the Scandinavian banks did not suffer considerably. One could say that what they reaped in the Baltics as untaxed profits, they invested in Lehman Brothers. So IF those reserves had still been the reserves of Estonian Hansabank, for example, then perhaps nothing bad would have happened. There was overextending going on during the bubble, with branches in the Ukraine and in St. Petersburg, but overall the reserves produced by local Baltic branches were large enough. The Baltics had been insanely profitable for the Swedish banks before the 2008 crisis, much larger profits than what was lost during the 2008 crisis. And it is again already.

It was not biggest but one of the biggest, there is a difference, most people had home loan in scandinavian banks so they fueled the crisis most. Parex made the same mistakes, I recall they had branches in Ukraine and some EU country I believe.



On the other hand, what the Swedish and Finnish and Danish banks (and their pensioners as shareholders) take from the Baltics as untaxed profits, they pay it back via EU subsidies. For now.

Keep telling that to yourself. We have basically become like a colony to them and not in a good way. They dominate sales (Rimi) banking, all the profits flow away from Baltics to Scandinavia. We give them back out timber. Kinda like African states that only export oil and diamonds and are kept that why by western business domination there.



If that is the only mistake you see, then, well, look again.

I can look all I want.



You are deliberately mixing up global crisis with local crisis.
And even the global crisis was only triggered by the US, not entirely caused by it. I am not blaming FSB for creating the global crisis.

I am blaming the mesh of Russian oligarchs / mafia / FSB / Kremlin money, which infiltrated the Latvian banks (including Parex) and caused a considerable part of the local bubble (and some of it was pulled out right before the LOCAL crash). Mind you, the local bubble was later and larger in Latvia than in Estonia. Estonia was cooling down already in 2007. That was again partly the result of the different share of Russian money in action. Estonia continues to be ahead of Latvia in the economic cycle. Estonia's cycle is more aligned with those of Sweden, Finland and Germany, while Latvia's economic cycle is more aligned with that of Russia. I wonder why?

So when the Russians decided to deposit money in Latvia they did so not to make some profit from interest rate but because to fuel property bubble which was no different than the one in Spain or US and this was their secret plan to break Latvia. Did they also saw the crisis coming when nobody did, if that was so why Russia was quit badly kit as well? Also there is no business cycle in Latvia, we had elections in 2006 which the gov. then in power had to win so they boosted deficit spending which fueled the already high inflation of 10% and housing bubble. We are not aligned with Russia in any way more than you.



I actually divided my reserves into 3 banks and soon invested it into a real estate.

But the point was that some of the Russian origin money was pulled out either right before the restrictions by using inside information, or AGAINST the already imposed restrictions. At least that is what I remember to have read in the newspapers of that time. Both would be illegal.

There was a deliberetly left time when our cronies could take their money out and that was used by everyone because it was legal while morally unacceptable. It was not some Russian plot, it was done by a pretty much same gov. we have now.



For several reasons.
Maybe I have read the wrong signals, but to me it seems that you are:
1. supporting the russian-latvian mixed government of Riga.
2. downplaying the influence of Russian money in Latvia
3. being generally anti-EU and anti-Latvian government
4. For some obscure reason stressing you being the Citizen (of Latvia, I assume). Native latvians would not need to stress that.
5. supporting the so-called "centrist" political side. FYI, "centrist" in politics is just a cunning labeling to prevent being called a radical extremist. There are no left and right, really. The parties reside all over the place in a multidimensional issue space. And the "far right" and the "far left" are often closer together than to the centre. So, in a two dimensional space one could envision a circle, with no wings - but in that case that brings the next question where is the centre of a circle? Perhaps the "centrists" are really the wingmen?

1. So its a bad thing that Russians and Latvians can work together for the good of the city?
2. Im downplaying the role of Russian money in Latvian economic crisis, actually there is no role at all.
3. EU is generally anti-Latvian and so is the current gov.
4. I like movie Citizen Kane, do the math ;)
5. I support policies from both right and left.




And that is why I am labeling "centrists" as "centre radicals" - because that is what they are trying to hide.

Im not hiding anything, Im not supporting radical ideas like genocide or anything.



There are "centrists" in Estonia. Very few native estonians support them. About 80% of Estonian russians support them. So I guess you get the hint. You are either among the 80% or among the "very few".

USA democrats are center right party so are most Scandinavian parties. Being in center means something else in the rest of the world. We are not all in Estonia.



But it also further proves MY point that local elections results have very little to do with joining the Eurozone.

No it has everything to do with people telling what they think about the current course to eurozone even if it means little in the end.



That is just for 2010. What about 2008, 2009, 2011, 2012?
Both budgets being separate does not negate the fact that they are summed up by EU and international financial institutions to get the big picture. That is what the EU 3% budget deficit cap is all about.

mostly 2% debt same as central. gov. budget which is a seperate entity.



I agree that the question of whether to be in or out should always be kept alive.

Current Latvian gov. disagrees, they think that citizens are too stupid to decide something so important as currency which affects countries sovereignty. Imagine if that was an argument during "glasnots" when we voted for our independence...



Japan is largely in debt to its own citizens. Not so with Greece or Portugal.
And even Japan cannot really sustain that, not considering the declining population and even less after Fukushima. Why do you think the Japanese government keeps lying to its citizens about the real ramifications of the Fukushima accident? Because admitting the truth would immediately collapse the Japanese economy as we know it.

As long as they are paying their debt it matters little to who it holds it and Japan hasn't defolted or asked for rescue.



I haven't heard Greece paying back any loans, let alone interests. Therefore Greece is not really in austerity mode yet. Greece has to borrow more money precisely because it is not in austerity mode yet - it goes around and around for 6 years now. It has everything to do with being a failed state.

No it pays them all the time, it cant borrow more becauses its credit ratings are worse than some African states, so it funds those repayments with loans from troika. Some of Greece's loans have been reduced but they still have to pay them, that was called haircut.



Estonia has not introduced any government bonds yet.
But Japan has, a lot.

Maybe you should have them and with a big better rates than we have. That would make Eesti less dependent on international lenders.



Again, a large part of the debt (esp in Japan) is to their own citizens.
And the Jupiter (USA) can afford what the ox (Greece / Latvia / Estonia) cannot.
USA can bend the very space-time fabric of the financial universe, to the extent, so far, but not for much longer.
And yes, many consider Japan and USA as already failed states - the so-called living dead.

It doesn't matter who holds the debt, lot of USA debt is from China I believe. As long as their able to pay it its fine to them.



Even that would not make Greeks paying more taxes than Latvians.

Ok, so I pulled some statistics of shadow economy from quick searches.
Latvia 21.1% of GDP
Greece 24% of GDP
Estonia 19.2% of GDP
Lithuania 18.2% of GDP

Not much of a difference if you ask me. You speak of Greece as if its some Afghanistan like place while in fact, even with crisis and recession, it still has 3x the salaries we have in Baltics.
http://financenet.tvnet.lv/zinas/464263-latvija_enu_ekonomika_samazinajusies_lidz_211
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_05/06/2013_502674



France is definitely part of the problem.
Germany does not want to be a problem, but others insist.

Germany is the main driver of idiotic austerity in Europe...



EU border crossings and a common job market are too laxed, EU convergence process is too slow and the EU common market is too restricted.

And?

[Citizen]

It would be foolish to assume that Estonia would pay back others loans.
At the moment Estonia is mostly only giving loan guarantees. Even with those loan guarantees, the total balance of inflowing / outflowing money between Estonia and the EU is about even. But additional loan guarantees or actual downpayments that would dip the balance would also quickly bring about a negative sentiment and a will to leave the EU. And to not fulfill the given loan guarantees.

What? Did you honestly believe that if other EU states deep in debt would not pay their loans, that Estonia would?
Don't be that naive. It is just a facade, Estonia is just part of the facade. There is no will to actually pay.

Ever heard about Greek haircut deals? Thats not paying the debt which caused crisis in Cyprus which loaned money to Greece. If Greece is truely a failed state then it will never pay its debts back, that includes money from ESM as well.

[Pure ja]

Ever heard about Greek haircut deals? Thats not paying the debt which caused crisis in Cyprus which loaned money to Greece.

Now you are contradicting yourself. Does or did Greece actually pay its debt or not?

My response was essentially that Estonia will give loan guarantees to other EU members for as long as Estonia can do it and for as long as EU can sustain its debt economy. With a general collapse, Estonia will not pay, just as all the rest. So those loan guarantees from Estonia are just a facade - there is no will to actually pay.

[Citizen]

Now you are contradicting yourself. Does or did Greece actually pay its debt or not?

My response was essentially that Estonia will give loan guarantees to other EU members for as long as Estonia can do it and for as long as EU can sustain its debt economy. With a general collapse, Estonia will not pay, just as all the rest. So those loan guarantees from Estonia are just a facade - there is no will to actually pay.
What? You think you will not pay into ESM if asked? You have already payed in ESM, Latvia will pay 200 million euros in next few years and guarantee 1.4 billion if needed. Similar numbers probably for you as well, maybe a bit smaller as you are smaller country. And if Germany will decide Greece is too fucked to pay it all back they already got lent by EU they will not pay it, that includes money from you as well because you entered eurozone in 2009 when there was no ESM.

Greece pays its loans with money from EU in doing so making new debt.

[Pure ja]

It was not biggest but one of the biggest, there is a difference, most people had home loan in scandinavian banks so they fueled the crisis most. Parex made the same mistakes, I recall they had branches in Ukraine and some EU country I believe.


And yet it was the Parex bank that went belly up, not the other banks.




Keep telling that to yourself. We have basically become like a colony to them and not in a good way. They dominate sales (Rimi) banking, all the profits flow away from Baltics to Scandinavia. We give them back out timber. Kinda like African states that only export oil and diamonds and are kept that why by western business domination there.


The profits flow away largely because of taxing differences between the Baltic states. Foreign companies can use those differences very easily.

But one can also argue that these differences or "holes" are there intentionally to lure in foreign "investors", with the aim to better integrate the Baltics with the Nordics and via that to raise interest to the Nordic Battle Group and to give incentives to Sweden and Finland to join NATO to better protect theor Baltic interests. Once integration is strong enough, one can pluck the tax "holes".




So when the Russians decided to deposit money in Latvia they did so not to make some profit from interest rate but because to fuel property bubble which was no different than the one in Spain or US and this was their secret plan to break Latvia.


They saw it as an opportunity, yes. But not just that opportunity.
It was also a good investment. Did you think that all the KGB money that bought out many companies in the 1990s was for nothing?




Did they also saw the crisis coming when nobody did, if that was so why Russia was quit badly kit as well?


In Russia, people are for the state, the state is not for the people.
So Kremlin routinely sacrifices the interests of its own people in order to achieve imperial expansions (hard or soft) in abroad.

Also, it is much easier to pull out from a small and open economy like Latvia, than from a large economy such as Russia.




Also there is no business cycle in Latvia, we had elections in 2006 which the gov. then in power had to win so they boosted deficit spending which fueled the already high inflation of 10% and housing bubble. We are not aligned with Russia in any way more than you.


Of course there is an economic cycle in Latvia. It is trailing behind that of Estonia, which is because the economic cycle of Russia is trailing that of Germany and the Nordics and the EU in general, because half of Russia's exports come from exporting fossil fuels (and half of that is to Europe).




There was a deliberetly left time when our cronies could take their money out and that was used by everyone because it was legal while morally unacceptable. It was not some Russian plot, it was done by a pretty much same gov. we have now.


And yet it was the Latvian banks going belly up, not the Estonian ones.
And the ones with evidently more Russian money.
And in a country with more lax banking regulations due to more political pressure from financial stakeholders, of whom more were of Russian origin.




1. So its a bad thing that Russians and Latvians can work together for the good of the city?


Yes, if that means going against the Latvian government AND against the majority opinion of native latvians.
Riga is just a bigger copy of Tallinn.




2. Im downplaying the role of Russian money in Latvian economic crisis, actually there is no role at all.


There you go again.




3. EU is generally anti-Latvian and so is the current gov.


Are you actually claiming that the majority of native latvians DIDN'T want to join the EU?
Joining EU could turn out to have been the wrong choice, but I am pretty sure that the majority of native latvians were initially behind joining EU (even if there was no referendum on that).




4. I like movie Citizen Kane, do the math ;)


You are still either part of the 80% or part of the "very few" by me ;)




5. I support policies from both right and left.


That is also what centre radicals usually claim.
My suspitions will stand for now, but those are just suspicions based on prejudice (on prior probabilities and Bayesian stats ;) ).




Im not hiding anything, Im not supporting radical ideas like genocide or anything.


You effectively could be, if you are against the majority of native latvians.




USA democrats are center right party so are most Scandinavian parties. Being in center means something else in the rest of the world. We are not all in Estonia.


There is no center in the US politics, center is just an artificial construct to keep the two-party system.
Estonian parties have managed to develop a 4-party system, based on the 2-party system.

You can't possibly convince me that a multidimensional issue space can be reduced into a stable 2D representation and that parties are supposedly stable in that 2D view.

I am not sure, but Taagepera has possibly written about that.




No it has everything to do with people telling what they think about the current course to eurozone even if it means little in the end.


It means everything to you. It means nothing to them, at least for now.




As long as they are paying their debt it matters little to who it holds it and Japan hasn't defolted or asked for rescue.


They are not paying back. They are taking more debt from their citizens to restructure the old loans.




No it pays them all the time, it cant borrow more becauses its credit ratings are worse than some African states, so it funds those repayments with loans from troika. Some of Greece's loans have been reduced but they still have to pay them, that was called haircut.


I haven't heard of any payments, just restructuring.
And most of the loans to be restructured are from the EU countries that help to restructure it.
Essentially Greece gets zero-interest loans for restructuring from the EU.




Maybe you should have them and with a big better rates than we have. That would make Eesti less dependent on international lenders.


For the Estonian state that would be useful only if the interest rate was less than what can be got from abroad. I don't know the rates.




It doesn't matter who holds the debt, lot of USA debt is from China I believe. As long as their able to pay it its fine to them.


That is the problem - they are not paying, they are loaning more, partly to restructure the old loans. A pyramid scheme.




Ok, so I pulled some statistics of shadow economy from quick searches.
Latvia 21.1% of GDP
Greece 24% of GDP
Estonia 19.2% of GDP
Lithuania 18.2% of GDP

Not much of a difference if you ask me.


I am 100% sure that those numbers do not reflect the reality.
Because Greece has been caught violating the Benford-Zipf law on numbers in financial reports to EU, so there is false reporting and cooking up numbers. Estonia and Latvia have not been caught.




You speak of Greece as if its some Afghanistan like place while in fact, even with crisis and recession, it still has 3x the salaries we have in Baltics.
http://financenet.tvnet.lv/zinas/464263-latvija_enu_ekonomika_samazinajusies_lidz_211
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_05/06/2013_502674


A bubble based on cooking numbers and unsustainable loan practices.




Germany is the main driver of idiotic austerity in Europe...


Germany has over 80% of cumulative budget deficit - that is not a sign of austerity by any stretch of imagination.

[Pure ja]

What? You think you will not pay into ESM if asked? You have already payed in ESM, Latvia will pay 200 million euros in next few years and guarantee 1.4 billion if needed.


Aha! But that is not real money - it is just a new loan money given to Brussels. Estonia has payed no money, but Estonian foreign debt has increased. Can you see through the facade? I repeat, there is no will to actually pay.




Similar numbers probably for you as well, maybe a bit smaller as you are smaller country. And if Germany will decide Greece is too fucked to pay it all back they already got lent by EU they will not pay it, that includes money from you as well because you entered eurozone in 2009 when there was no ESM.

Greece pays its loans with money from EU in doing so making new debt.

If Greece will not pay their dept, then Estonia will not pay their debt.

[Citizen]

And yet it was the Parex bank that went belly up, not the other banks.

As I said they didn't had a parent Bank to bail them out.



The profits flow away largely because of taxing differences between the Baltic states. Foreign companies can use those differences very easily.

But one can also argue that these differences or "holes" are there intentionally to lure in foreign "investors", with the aim to better integrate the Baltics with the Nordics and via that to raise interest to the Nordic Battle Group and to give incentives to Sweden and Finland to join NATO to better protect theor Baltic interests. Once integration is strong enough, one can pluck the tax "holes".

Can you explain what you mean by those taxes and holes? Which taxes are those and how does this mechanism works exactly. Also, assuming this is correct which it isn't, what is the benefit of being some Scandinavian colony if that means having your money pumped out and leaving you poor? Thats not really independence, sounds worse that soviet days. The real reason why we have such a Scandinavian domination is that we lack capital and they don't.




They saw it as an opportunity, yes. But not just that opportunity.
It was also a good investment. Did you think that all the KGB money that bought out many companies in the 1990s was for nothing?

I dont fallow, what do you mean by 1990's companies?



In Russia, people are for the state, the state is not for the people.
So Kremlin routinely sacrifices the interests of its own people in order to achieve imperial expansions (hard or soft) in abroad.

Also, it is much easier to pull out from a small and open economy like Latvia, than from a large economy such as Russia.

You do understand that under this "Russian money" there are thousands of depositors and businesses, its not one guy, its thousands of individuals each with its own head on shoulders and own property which this person does not want to loose. Are you suggesting that FSB/GRU individually contacted all those people and forced them to take out money? That is tinfoil hat 101.



Of course there is an economic cycle in Latvia. It is trailing behind that of Estonia, which is because the economic cycle of Russia is trailing that of Germany and the Nordics and the EU in general, because half of Russia's exports come from exporting fossil fuels (and half of that is to Europe).
How are you aligned with German business cycle when Germany has almost 0 growth now but you have highest growth in EU like Latvia? Seems more aligned with us. Gimme more on this Latvia aligned with Russia info, maybe some credible source, sounds really silly so far.



And yet it was the Latvian banks going belly up, not the Estonian ones.
And the ones with evidently more Russian money.
And in a country with more lax banking regulations due to more political pressure from financial stakeholders, of whom more were of Russian origin.

A lot of Russian money is in Scandinavian branches of banks in Latvia as well, we still have 50% of deposits in banks from none residents, mainly CIS countries. Your impression is just wrong.



Yes, if that means going against the Latvian government AND against the majority opinion of native latvians.
Riga is just a bigger copy of Tallinn.

So the goal in Riga isn't the benefit of city and its citizens the main goal is whatt Latvian gov. thinks? Gov. of Latvia has approval of 10% of population atm. Majority of Latvians are against Latvian gov.



Are you actually claiming that the majority of native latvians DIDN'T want to join the EU?
Joining EU could turn out to have been the wrong choice, but I am pretty sure that the majority of native latvians were initially behind joining EU (even if there was no referendum on that).

The support was barely over 50% and that was done with aggressive campaign in media for months. Now majority views it as a big mistake.



You are still either part of the 80% or part of the "very few" by me ;)

We are not as divided as Eesti, Latvians are not Estonians, have you even been in Latvia?



You effectively could be, if you are against the majority of native latvians.

Wait what?



There is no center in the US politics, center is just an artificial construct to keep the two-party system.
Estonian parties have managed to develop a 4-party system, based on the 2-party system.

You can't possibly convince me that a multidimensional issue space can be reduced into a stable 2D representation and that parties are supposedly stable in that 2D view.

Left means socialist policies, more subsidies, more gov. intervention, more taxes for the rich. Right means more free market less benefits to boost emplyment and productivity. Center means not leaning to any of those extremes and taking whats good from both sides.



They are not paying back. They are taking more debt from their citizens to restructure the old loans.

Where do you got this info from, because thats just wrong.



I haven't heard of any payments, just restructuring.
And most of the loans to be restructured are from the EU countries that help to restructure it.
Essentially Greece gets zero-interest loans for restructuring from the EU.

Restructuring means changing the loan deal and reducing the debt payed back, basically forcing losses on the lender. Gov. takes all kinds of debt every year they run a budget with deficit. Some of them are 10 year bonds some less, like 1 year bonds. The total gov. debt as % of GDP you see is a cummulative debt of all those debts taken during many years, they have different maturity. But I can assure you Greece has paid several of them during crisis of the last 6 years because most of them are 10 year bonds and Greece has been borrowing for many decades. Because its economy is falling and it cant borrow in markets EU and IMF lends Greece money to pay those debts and additional budget expenses in doing so the total debt actually increases.



For the Estonian state that would be useful only if the interest rate was less than what can be got from abroad. I don't know the rates.
You mean higher because if you invest money as deposit or gov. bond you want a higher yield from it not lower, at least if youre not insane.



That is the problem - they are not paying, they are loaning more, partly to restructure the old loans. A pyramid scheme.

Yes, they take money from EU and IMF to pay other loans to big banks in EU for example Germany. If EU stops the money flow those banks will go bust and Germany and some other old Europe countries will be hit.



I am 100% sure that those numbers do not reflect the reality.
Because Greece has been caught violating the Benford-Zipf law on numbers in financial reports to EU, so there is false reporting and cooking up numbers. Estonia and Latvia have not been caught.

Yeah, its all cooked numbers, you think that 20% shadow economy is not an indication of failed state?




Germany has over 80% of cumulative budget deficit - that is not a sign of austerity by any stretch of imagination.

Yeah they support it elswhere, while Merkel is promising to introduce minimal wage in Germany after elections now...

[Citizen]

Aha! But that is not real money - it is just a new loan money given to Brussels. Estonia has payed no money, but Estonian foreign debt has increased. Can you see through the facade? I repeat, there is no will to actually pay.

No, if asked you will pay it, same as you cant exceed 3% budget deficit, you signed the treaty so you are gonna do it. Also you are already paying into ESM there is the part you have to pay in every year and the part your gov. guarantees in case the current paid in money is not enough, for Latvia it will be 1.4 billion, but in next few years we will phisically have to pay in 200 million thats not a guarantee, thats a money we will put in.



If Greece will not pay their dept, then Estonia will not pay their debt.

Remember in 2011 your parliament voted to give your money in European Financial Stability Facility (EFSF), Slovakia's government fell because of this vote. That was your money that already went to Greece and there is a chance your not gonna get it back.

[Pure ja]

No, if asked you will pay it, same as you cant exceed 3% budget deficit, you signed the treaty so you are gonna do it. Also you are already paying into ESM there is the part you have to pay in every year and the part your gov. guarantees in case the current paid in money is not enough, for Latvia it will be 1.4 billion, but in next few years we will phisically have to pay in 200 million thats not a guarantee, thats a money we will put in.

Remember in 2011 your parliament voted to give your money in European Financial Stability Facility (EFSF), Slovakia's government fell because of this vote. That was your money that already went to Greece and there is a chance your not gonna get it back.

Estonia has paid nothing from the state budget (from the tax money, so to speak), so far.
The amount that was "paid" was at first taken as a new loan and then given to Brussels.

The only real money that Estonia has "paid" so far to the EU is the currency reserves used to cover the 110% of M0 money of Estonian kroons. And I am not even quite sure if that was paid or if it still sits in the chambers of the Bank of Estonia. So what Estonia has actually paid, was 100% related to Estonia joining the Eurozone, and 0% related to any "payments" to any money lending fund, be it ESFS or ESM or whatever.

Let me try to make the point again in the most simple terms.

Estonia is willing to borrow money for Greece, on behalf of Greece - that will possibly raise Estonian foreign debt from 10% up to 100% in the future.

But Estonia is NOT willing to actually pay real money for Greece, nor to actually pay on behalf of Greece - such abovementioned new loans will only be paid by Greece, if at all.

The end result is that Estonia is only losing its money loaning ability and financial reputation, not any actual money. And it will make more sure that when Greece fails, the rest of the EU (and Estonia) will fail as well.

[Pure ja]

As I said they didn't had a parent Bank to bail them out.


As I said, if those were still independent banks, not Scandinavian bought, then those independent banks would have had ample reserves to draw from - so no trouble. The reserves that Scandinavian banks used during the crisis were smaller than the reserves accrued from the Baltics before the crisis. Shoud I repeat it again?





Can you explain what you mean by those taxes and holes? Which taxes are those and how does this mechanism works exactly. Also, assuming this is correct which it isn't, what is the benefit of being some Scandinavian colony if that means having your money pumped out and leaving you poor? Thats not really independence, sounds worse that soviet days. The real reason why we have such a Scandinavian domination is that we lack capital and they don't.


Read above. We had capital. We sold it to Scandinavian banks cheaply.
But if we transfer all our money from the now Scandinavian banks to our own banks, then we will have capital again. But we will not have integration with the Nordics, thus very little foreign interest to stand against Russia.



I dont fallow, what do you mean by 1990's companies?


Many of the privatized companies in the Baltics were privatized by KGB money. You should know. In fact, I believe that you know, but refuse to show it.




You do understand that under this "Russian money" there are thousands of depositors and businesses, its not one guy, its thousands of individuals each with its own head on shoulders and own property which this person does not want to loose. Are you suggesting that FSB/GRU individually contacted all those people and forced them to take out money? That is tinfoil hat 101.


Based on power law distributions (Pareto 80:20, Benford, etc.), one only needs to influence the top wealthy 10-20%.
And KGB/FSB is not tinfoil hat 101. Estonians know, because the Russian imperial (counter)intelligence was started by Karl Ernst von Baer.
All that is needed is a friendly reminder / suggestion from the Russian Tax Office, maybe they will even mention Khodorkovsky.




How are you aligned with German business cycle when Germany has almost 0 growth now but you have highest growth in EU like Latvia? Seems more aligned with us. Gimme more on this Latvia aligned with Russia info, maybe some credible source, sounds really silly so far.


That is just one quarter. When you look at more quarters, then you can see the alignment. This new growth (not old growth, as you assumed) might be temporary.




A lot of Russian money is in Scandinavian branches of banks in Latvia as well, we still have 50% of deposits in banks from none residents, mainly CIS countries. Your impression is just wrong.


The money numbers are looking right into your eyes and yet you continue to refuse to accept the reality.
My impression is irrelevant. That more than 50% of deposits in Latvia is relevant.

[Pure ja]

We are not as divided as Eesti, Latvians are not Estonians,...?


You are just as divided as Estonia, in fact even more so.




Wait what?


If you are actively working against the majority of ethnic latvians and for Russian interests, then you could effectively be for genocide of ethnic latvians.




Left means socialist policies, more subsidies, more gov. intervention, more taxes for the rich.

Just the 1st and last. The middle ones are generic.
And even the 1st and the last are just token interests.



Right means more free market less benefits to boost emplyment and productivity.


In practice, right often means less free market. The benefits are debatable.




Center means not leaning to any of those extremes and taking whats good from both sides.


Center means fu**ing all sides of people equally (taking from both sides). All except the very rich, including themselves.




Where do you got this info from, because thats just wrong.

Restructuring means changing the loan deal and reducing the debt payed back, basically forcing losses on the lender. Gov. takes all kinds of debt every year they run a budget with deficit. Some of them are 10 year bonds some less, like 1 year bonds. The total gov. debt as % of GDP you see is a cummulative debt of all those debts taken during many years, they have different maturity. But I can assure you Greece has paid several of them during crisis of the last 6 years because most of them are 10 year bonds and Greece has been borrowing for many decades. Because its economy is falling and it cant borrow in markets EU and IMF lends Greece money to pay those debts and additional budget expenses in doing so the total debt actually increases.


Loans consist of the actual loans + accrued interest.
If Greece had paid anything back, at least one component would have had to diminish (in absolute numbers) without a haircut. That hasn't happened. It has only marginally happened via haircuts.




You mean higher because if you invest money as deposit or gov. bond you want a higher yield from it not lower, at least if youre not insane.


No, I mean lower, because otherwise the would be no point for the government to take a loan (give a bond) with a higher interest.
I was looking from the government side.

[Citizen]

As I said, if those were still independent banks, not Scandinavian bought, then those independent banks would have had ample reserves to draw from - so no trouble. The reserves that Scandinavian banks used during the crisis were smaller than the reserves accrued from the Baltics before the crisis. Shoud I repeat it again?

That is your opinion based on wel, nothing it is also actually quit irrelevant to the discussion.



Read above. We had capital. We sold it to Scandinavian banks cheaply.
But if we transfer all our money from the now Scandinavian banks to our own banks, then we will have capital again. But we will not have integration with the Nordics, thus very little foreign interest to stand against Russia.
No we didn't, Baltics are poor so we have no capital, by capital I mean money not just banks can lend but also money people and businesses have. But please explain me all the crap about tax holes you mentioned earlier and how they work, Im dying to know :D Also what is the point of being a Scandinavian slave instead of Russian?



Many of the privatized companies in the Baltics were privatized by KGB money. You should know. In fact, I believe that you know, but refuse to show it.

No, I don't. Name a single company that was privatized by KGB in Latvia.



Based on power law distributions (Pareto 80:20, Benford, etc.), one only needs to influence the top wealthy 10-20%.
And KGB/FSB is not tinfoil hat 101. Estonians know, because the Russian imperial (counter)intelligence was started by Karl Ernst von Baer.
All that is needed is a friendly reminder / suggestion from the Russian Tax Office, maybe they will even mention Khodorkovsky.

So they did that with thousands of people and nobody secretly leaked to media? Really? Have you got any idea how many people that would involve? This sounds just as crazy as the 911 truthers...



That is just one quarter. When you look at more quarters, then you can see the alignment. This new growth (not old growth, as you assumed) might be temporary.

Please show me with some graphs how we align with Russia otherwise its all BS.



The money numbers are looking right into your eyes and yet you continue to refuse to accept the reality.
My impression is irrelevant. That more than 50% of deposits in Latvia is relevant.
They are depositors, they earn money here, actually a lot of them place it here for the Russian gov. not to get to them not because it is in the interests of Russian gov. Jesus...


You are just as divided as Estonia, in fact even more so.

No, we are not, come and see for yourself.



If you are actively working against the majority of ethnic latvians and for Russian interests, then you could effectively be for genocide of ethnic latvians.

Im ethnic Latvian not Russian...




Loans consist of the actual loans + accrued interest.
If Greece had paid anything back, at least one component would have had to diminish (in absolute numbers) without a haircut. That hasn't happened. It has only marginally happened via haircuts.

You make no sense.



No, I mean lower, because otherwise the would be no point for the government to take a loan (give a bond) with a higher interest.
I was looking from the government side.

Nobody will buy gov. bonds like we have, with 0.3% rate a year.

[Citizen]

Estonia has paid nothing from the state budget (from the tax money, so to speak), so far.
The amount that was "paid" was at first taken as a new loan and then given to Brussels.

The only real money that Estonia has "paid" so far to the EU is the currency reserves used to cover the 110% of M0 money of Estonian kroons. And I am not even quite sure if that was paid or if it still sits in the chambers of the Bank of Estonia. So what Estonia has actually paid, was 100% related to Estonia joining the Eurozone, and 0% related to any "payments" to any money lending fund, be it ESFS or ESM or whatever.

Let me try to make the point again in the most simple terms.

Estonia is willing to borrow money for Greece, on behalf of Greece - that will possibly raise Estonian foreign debt from 10% up to 100% in the future.

You have already paid in both EFSF and ESM, of course you took a loan to finance it because otherwise you would have to cut salaries and raise taxes for Estonians to pay into them. When you paid in EFSF in 2011 your debt almost doubled, thats real money you will have to pay back, or how do you imagine it?
http://www.eubusiness.com/news-eu/estonia-economy.nlc
You have also paid into ESM, ESM is composed of paid in capital (you pay now not guarantee) and a guarantee if the already paid in capital is not sufficient. Estonia has already paid in capital 148.8 million euros and will guarantee 1.3 billion. For Latvia it will be 200 million and 1.4 billion if we enter. 148.8 is something you have already borrowed money for to pay in.
http://en.wikipedia.org/wiki/European_Stability_Mechanism
There is a nice table there with the numbers and don't say its wikipedia because it has links to the same numbers in EU official sites.

So now that we are clear that you have borrowed real money to pay into ESM and EFSF how do you imagine you will not pay it? You think you can weasel out of the deal when the bond holders will come to you and ask the money. Will you say - "well we borrowed that money for ESM and EFSF that lent it to Greece sh you go ask them?" Thats not gonna cut it, you will have to pay that money back when the bonds mature. And even if Greece pays back its loans from EFSF and ESM they will not go back to you but to those funds. Buf if Greece is a failed state as you say, then it will not be able to do so and the money will be lost.



But Estonia is NOT willing to actually pay real money for Greece, nor to actually pay on behalf of Greece - such abovementioned new loans will only be paid by Greece, if at all.

The end result is that Estonia is only losing its money loaning ability and financial reputation, not any actual money. And it will make more sure that when Greece fails, the rest of the EU (and Estonia) will fail as well.

First of all, real nice deal, join eurozone and then go down with Greece for no reason. ;) Second you have signed a treaty that compels you to make a 1.3 billion loan if needed, if you fail to do so your country is gone, does that sound like a good deal to you, really?

[Pure ja]

You have already paid in both EFSF and ESM, of course you took a loan to finance it because otherwise you would have to cut salaries and raise taxes for Estonians to pay into them. When you paid in EFSF in 2011 your debt almost doubled, thats real money you will have to pay back, or how do you imagine it?
http://www.eubusiness.com/news-eu/estonia-economy.nlc
You have also paid into ESM, ESM is composed of paid in capital (you pay now not guarantee) and a guarantee if the already paid in capital is not sufficient. Estonia has already paid in capital 148.8 million euros and will guarantee 1.3 billion. For Latvia it will be 200 million and 1.4 billion if we enter. 148.8 is something you have already borrowed money for to pay in.


Precisely. We have paid with borrowed money. Borrowed money is NOT real money, it is BORROWED. Future will tell whether Estonia will pay back the loan. I say that Estonia will pay the loan back only if Greece will pay back the loan they got from Estonia via ESFS and ESM.

Immediate payments to ESFS and to ESM were done using BORROWED money (a new loan), not with real money.
Loan guarantees are essentially a risk of a new future loan.




http://en.wikipedia.org/wiki/European_Stability_Mechanism
There is a nice table there with the numbers and don't say its wikipedia because it has links to the same numbers in EU official sites.

So now that we are clear that you have borrowed real money to pay into ESM and EFSF how do you imagine you will not pay it? You think you can weasel out of the deal when the bond holders will come to you and ask the money. Will you say - "well we borrowed that money for ESM and EFSF that lent it to Greece sh you go ask them?" Thats not gonna cut it, you will have to pay that money back when the bonds mature. And even if Greece pays back its loans from EFSF and ESM they will not go back to you but to those funds. Buf if Greece is a failed state as you say, then it will not be able to do so and the money will be lost.


If Greece won't pay then we will either take new loans to restructure the old loans, or if that is not possible any more, then Estonia will declare itself insolvent and simply not pay, just as Greece. The loan sharks can go f*** themselves (we will make sure not to loan from Russia). The Estonian state will be intact.




First of all, real nice deal, join eurozone and then go down with Greece for no reason. ;)


That is the European motto - all for one, one for one :rolleyes:



Second you have signed a treaty that compels you to make a 1.3 billion loan if needed, if you fail to do so your country is gone, does that sound like a good deal to you, really?

The country will not be gone, it will be insolvent, ie. unable to get additional loans - and that is actually good, since then politicians cannot possibly take new foreign loans any more.

[Pure ja]

That is your opinion based on wel, nothing it is also actually quit irrelevant to the discussion.


The numbers are not my opinion, those are facts.
Also, I suspect that perhaps the Latvian central bank had set a lower mandatory reserves limit. Estonian Bank required 15% of mandatory reserves from each bank. If our own banks would not have been sold, then Estonian Bank would have required even higher mandatory reserves, thus preventing both the bubble and making any bankruptcy less likely.




No we didn't, Baltics are poor so we have no capital, by capital I mean money not just banks can lend but also money people and businesses have. But please explain me all the crap about tax holes you mentioned earlier and how they work, Im dying to know :D Also what is the point of being a Scandinavian slave instead of Russian?


BS. Baltics are rich enough to keep up their own banking, if necessary.

As to the tax holes, I am not using those, so I would have to look it up. I won't do that at the moment. But it has been written in newspapers that at least Swedbank is using those schemes in the Baltics to move money to Sweden. So if you are dying, you have to work for it ;)
Maybe even learn estonian language ;)
I have already given you a tip.




No, I don't. Name a single company that was privatized by KGB in Latvia.


I won't name any companies.
The fact that you even ask that speaks a lot about you.
If it would be proven 100%, then it would have been prevented.




So they did that with thousands of people and nobody secretly leaked to media? Really?


You completely missed the point of power law distributions. Only the very top matters. And they had actually their own interests not to leak, at least not before they had got their own money out. And eventually it did leak, that is how it became public knowledge. It is not like it was a request, just a suggestion or a tip. And it was probably not asked to move money to Russia. It didn't have to be a power vertical at all, it could have worked as a network. You do know what mafia means, right?

As to what happens within Russia, it IS KNOWN that thousands have been influenced by Kremlin henchmen. In general, not specifically regarding any episode of the crisis.



Have you got any idea how many people that would involve? This sounds just as crazy as the 911 truthers...


It is you who desparately try to make it seem crazy.




Please show me with some graphs how we align with Russia otherwise its all BS.


I won't. So let it be BS for you.
You can check for yourself the curvatures before and during the 2008 crisis.
But you would likely not be convinced by curvatures either, and demand statistical models with significance tests. I won't do that either.




Im ethnic Latvian not Russian...


That does not change the possibility. Just circumstances.
Jaak Allik is estonian as well.



You make no sense.


Then it is likely useless to try any more.
If I come up with a better explanation, I will.

[Citizen]

Precisely. We have paid with borrowed money. Borrowed money is NOT real money, it is BORROWED. Future will tell whether Estonia will pay back the loan. I say that Estonia will pay the loan back only if Greece will pay back the loan they got from Estonia via ESFS and ESM.

Immediate payments to ESFS and to ESM were done using BORROWED money (a new loan), not with real money.
Loan guarantees are essentially a risk of a new future loan.

So you think its a real possibility for a country to just not pay its debt back, do you even know an example of a country that did that without some kind of a haircut deal (where the lender who holds the bonds agrees with it). Wouldn't it make sense to borrow money and invest it into education, so you have a new generation of individuals who can create succesful businesses with innovative products and high added value, that would benefit your economy, ESM, EFSF do not benefit Estonia. And don't say your education system is perfect, its nowhere near Finland or Sweden and you teachers don't get 4000 euros a month like finnish ones do.



If Greece won't pay then we will either take new loans to restructure the old loans, or if that is not possible any more, then Estonia will declare itself insolvent and simply not pay, just as Greece. The loan sharks can go f*** themselves (we will make sure not to loan from Russia). The Estonian state will be intact.

Every country has paid its debts if no deal is reached with lenders, Argentina did it too in the end. Why don't the Greece just say "fuck you!" to the German banks who hold their debt? Why not? Because it would be fucked for 100 years then. And if Estonia declared itself insolvent it would still have to pay the debt back when it gets solvent again. We became insolvent for a moment during the crisis, it cost us -25% GDP and 50 reduction of salaries, 20% unemployment and so on. Greece is insolvent now, and if Estonia becomes insolvent then its definitely becomes a failed state and has what Greece has now. ;)



That is the European motto - all for one, one for one :rolleyes:

I'd say to hell with them instead.


The country will not be gone, it will be insolvent, ie. unable to get additional loans - and that is actually good, since then politicians cannot possibly take new foreign loans any more.

Well you will be another Greece or Cyprus, nobody will invest in an insolvent country, in fact investors will pull out, local educated population will leave, unemployment will soar and for a 1.4 million nation its death.

I will not replay to the other post you have, its dragged too far. I can say even the local ultranationals here are not blaming Russians for the crisis. They are blaming Peoples Party and PM then Aigars Kalvītis with his 2006 stimulus when economy was already overheated and to that point they are right, but what they are offering as cure to the economy is actually poision. Wit the recent spy scandal, you can see that no secret is 100% safe, you really think that Russians are better than Americans in this? I doubt it, but even the best failed. Ruskies aren't that good...

[Pure ja]

So you think its a real possibility for a country to just not pay its debt back, do you even know an example of a country that did that without some kind of a haircut deal (where the lender who holds the bonds agrees with it).


Yes, I actually do, and I already mentioned that state - Iceland.




Wouldn't it make sense to borrow money and invest it into education, so you have a new generation of individuals who can create succesful businesses with innovative products and high added value, that would benefit your economy, ESM, EFSF do not benefit Estonia.


Sure. BUT, you can't go on forever with a budget deficit. IF you decide to run an annual budget deficit of 6% of GDP for fancy education, you better make sure that this extra 6% of deficit will annually generate an extra 6% of economic growth. If the economy isn't growing as fast, then you eventually have to cut back and as you yourself have described so many times, cutting back is very painful. So a much better approach would be to run your budget in balance, so that you won't ever have to considerably cut back your budget.

If you plan to run a budget deficit of 6%, then you also have to plan to run a budget surplus of at least 6% in the near future to pay back the loans. And you shouldn't really count on a perpetual global economic growth either.

But spending extra on extra education is not enough. For Estonia much of the problem is that our people are quite competitive outside of Estonia, so the education is sort of good enough already. It is the other areas of life that make them leave.




And don't say your education system is perfect, its nowhere near Finland or Sweden and you teachers don't get 4000 euros a month like finnish ones do.


It is not perfect, but based on international educational tests at secondary school level, only Finland is higher among the Nordics.
Our people perform generally on a good level, but their attitude sucks ("math is hard", "physics is hard", etc.) and that will eventually derail many.




Every country has paid its debts if no deal is reached with lenders, Argentina did it too in the end.


I think you should investigate more.
Greece has gone bankrupt many times before and never have they fully paid back their loans.




Why don't the Greece just say "fuck you!" to the German banks who hold their debt? Why not? Because it would be fucked for 100 years then.


But why should Greece refuse continuous flow of additional money into Greece? They will quit after the flow stops, not a moment before.




And if Estonia declared itself insolvent it would still have to pay the debt back when it gets solvent again.


Nope.



We became insolvent for a moment during the crisis, it cost us -25% GDP and 50 reduction of salaries, 20% unemployment and so on.


The unemployment level was largely unavoidable, but the duration could be shorter.




Greece is insolvent now, and if Estonia becomes insolvent then its definitely becomes a failed state and has what Greece has now. ;)


Nope.
You again fail to realize a key difference between Greece and Estonia.
Greece became insolvent for continuously running annual budget deficits - Greece lived beyond its means.
Estonia would become insolvent for giving aid to Greece, while getting along by itself with otherwise balanced budget - there would be no need for Estonia to haircut its budget, thus no junky need for new loans, and that means no failed state.




I'd say to hell with them instead.


I'd also rather see Greece taking the hard and fast route, instead of endless pain.




Well you will be another Greece or Cyprus, nobody will invest in an insolvent country, in fact investors will pull out, local educated population will leave, unemployment will soar and for a 1.4 million nation its death.


Insolvency is only a problem if you need new foreign loans.
The state would not be insolvent to its citizens. The state would continue to operate with a balanced budget, so there is no reason for your fearmongering.

If Germany would default right now because of the accumulated debt, that wouldn't be the end of the world for Germany. They would be still good by themselves. But Greece would have a rough adjustment.



I will not replay to the other post you have, its dragged too far. I can say even the local ultranationals here are not blaming Russians for the crisis. They are blaming Peoples Party and PM then Aigars Kalvītis with his 2006 stimulus when economy was already overheated and to that point they are right, but what they are offering as cure to the economy is actually poision. Wit the recent spy scandal, you can see that no secret is 100% safe, you really think that Russians are better than Americans in this? I doubt it, but even the best failed. Ruskies aren't that good...

You are again trying to make it more consipratorial than necessary.
All I am trying to say is that the share and influence of Russian money was enough to make the difference between Estonia and Latvia. That's it.

[Citizen]

Yes, I actually do, and I already mentioned that state - Iceland.
No, that was not the case. Iceland had banks that offered deposits for UK and Netherlands citizens. When those banks went bust the gov. fund that guarantees minimum €20,000 compensation was drained by Iceland's citizens and Iceland didn't bail out UK and NL residents so their respective gov. had to do it, so they asked Iceland to compensate, which it refused and there was an international court ruling just recently that was in favor of Iceland so it was legal. Im talking about illegal refusal, its like suggesting that a normal person (not some bum that owns nothing) could try to not pay back a credit to bank, try that and see what happens ;)

http://www.euractiv.com/enlargement/iceland-wins-court-case-uk-dutch-news-517411



If you plan to run a budget deficit of 6%, then you also have to plan to run a budget surplus of at least 6% in the near future to pay back the loans. And you shouldn't really count on a perpetual global economic growth either.

No you just have to grow more than 6% and that covers the previous years debt completely.



But spending extra on extra education is not enough. For Estonia much of the problem is that our people are quite competitive outside of Estonia, so the education is sort of good enough already. It is the other areas of life that make them leave.

If Estonians are as educated as Swedes and are not lazy they should earn the same in Estonia as in Sweden. Because they should be just as competative, that is not the case.




I think you should investigate more.
Greece has gone bankrupt many times before and never have they fully paid back their loans.

Im talking about modern days, with globalization and modern finance.




But why should Greece refuse continuous flow of additional money into Greece? They will quit after the flow stops, not a moment before.

Yes, it works so great for it, of 27.4% unemployment, salaries and pensions reduced every year for 6 years now, people leaving and commiting suicides, yeal great.




Nope.

Russia paid Soviet debts and Iraq paid debts during Saddam but you will not pay your debts :D



The unemployment level was largely unavoidable, but the duration could be shorter.

Please explain.




Nope.
You again fail to realize a key difference between Greece and Estonia.
Greece became insolvent for continuously running annual budget deficits - Greece lived beyond its means.
Estonia would become insolvent for giving aid to Greece, while getting along by itself with otherwise balanced budget - there would be no need for Estonia to haircut its budget, thus no junky need for new loans, and that means no failed state.

You do realize that when a country becomes unable to pay that means both to its citizens and debts, that happens because businesses go bankrupt, investors are pulling out, depositors are pulling out, people are leaving? When Latvia became insolvent it had the same debt as Estonia now - around 10%. During the crisis our debt rose to over 40%. We didn't had a big debt when the crisis started budget had a small deficit, if that was the only problem, we would just cut back on some luxary a bit and live on but when the country becomes insolvent it has much larger impact on whole economy.



I'd also rather see Greece taking the hard and fast route, instead of endless pain.

That would be Grexit and return to drachma and devaluation.



Insolvency is only a problem if you need new foreign loans.
The state would not be insolvent to its citizens. The state would continue to operate with a balanced budget, so there is no reason for your fearmongering.

How would you maintain a balanced budget if your economy collapses? If that was the case Greece could just balance the budget now and crisis over? Say they have a budget deficit of 5% cut expenses by 5% and thing done, right? No, because when they cut the 5% they deepen the recession, more businesses fail, more people lose jobs and pay less taxes, so next year you have the same balanced budget but the revenues are much less now so you have to cut more or run a deficit. You can imagine it like this, so you have a job and you get a cut in salary and you can no longer afford your house, you move into a smaller house next month that has is loud and you cant sleep, you cant work and next month you get another cut in your salary and are forced to move to an even worse house and so on it goes, that's a vicious circle Greece is in it and you don't need a big debt for that. Latvia had just 10% of GDP overall debt and a budget deficit of 1 digit, pretty much like you have lately in Estonia. Second thing you forget is that Estonia is not selfsuficient, most of the stuff you need you need to import, can you really survive without gasoline, natural gas, electricity, chemicals you cant produce locally, equipment you can't produce locally (pretty much all high tech stuff), medicine (don't produce all drugs in Estonia, not even close), if you refuse to pay your debts you would be kicked out of eurozone because other eurozone countries hold your debt, this is what would happen if Greece would leave eurozone, first hit would be the sick, people who have cancer, diabetes and so on, who need to use certain drugs daily. Business would basically stop because nobody would trade with you as you don't respect the law so there is no guarantee you would pay for the stuff you import. There is one state which tried to be self selfsuficient and called it Juche, it was North Korea and it resulted in mass starvation in 90's.



If Germany would default right now because of the accumulated debt, that wouldn't be the end of the world for Germany. They would be still good by themselves. But Greece would have a rough adjustment.

Why, they both have budgets with deficit and high debt?



You are again trying to make it more consipratorial than necessary.
All I am trying to say is that the share and influence of Russian money was enough to make the difference between Estonia and Latvia. That's it.
Switzerland and Luxemburg also has a lot of Russian money, do they also get influenced by Russia?

[Pure ja]

No, that was not the case. Iceland had banks that offered deposits for UK and Netherlands citizens. When those banks went bust the gov. fund that guarantees minimum €20,000 compensation was drained by Iceland's citizens and Iceland didn't bail out UK and NL residents so their respective gov. had to do it, so they asked Iceland to compensate, which it refused and there was an international court ruling just recently that was in favor of Iceland so it was legal. Im talking about illegal refusal, its like suggesting that a normal person (not some bum that owns nothing) could try to not pay back a credit to bank, try that and see what happens ;)

http://www.euractiv.com/enlargement/iceland-wins-court-case-uk-dutch-news-517411


We shall certainly see. But Estonia will not be the first nor the only one to see that.
If Greece or any PIIGS fails, then most of the EU countries will become insolvent in order to bail out of the Greece loans.

As to "illegal refusal", that is all "legal", you just loose your credibility.
It happens all the time with individual persons.

You only need to pay back if you need the credibility.



No you just have to grow more than 6% and that covers the previous years debt completely.


No, you need an extra 6% on top of the usual growth / decline. And you need to sustain that extra growth annually in order to sustain the continuous annual budget deficit. If you can't sustain it, then there will be painful cutbacks.




If Estonians are as educated as Swedes and are not lazy they should earn the same in Estonia as in Sweden. Because they should be just as competative, that is not the case.


For some fields, they are. For most fields, they earn the same as soon as they leave Estonia to Sweden.




Im talking about modern days, with globalization and modern finance.


No difference.



Yes, it works so great for it, of 27.4% unemployment, salaries and pensions reduced every year for 6 years now, people leaving and commiting suicides, yeal great.


Somebody is getting more money in Greece, and that somebody is keeping Greece on its current course.
And even those ordinary people who would like to leave Eurozone do not understand that Greece's economic level would have to decline around 50%.



Russia paid Soviet debts and Iraq paid debts during Saddam but you will not pay your debts :D


Estonia would only pay their own debts, not the ones that were given to Greece or to PIIGS on behalf of Estonia.

And Russia didn't pay all Soviet debts, you should know. A large share of Estonian SSR money was illegally upheld in Moscow. Likely a lot of Latvian SSR's money as well. Not to speak of the soviet occupation costs. Not to speak of the liabilites that Soviet Russia took during the Peace Treaty of Tartu in 1920.




Please explain.


Fast restructuring inevitably brings about temporary unemployment.
The key here is "temporary".




You do realize that when a country becomes unable to pay that means both to its citizens and debts, that happens because businesses go bankrupt, investors are pulling out, depositors are pulling out, people are leaving?


You have it wrong, again.
Estonia would not become unable to pay for its citizens or its foreign partners, since Estonia's internal budget would be in balance.
Estonia would only refuse to pay loans related to Greece and PIIGS.

No Estonian businesses need to go bankrupt, no investors pulling out, no people leaving. Why? Because then the countries in trouble would be those without internal budget balance. And those countries with a balanced budget would have an advantage. That is a simplification, of course.



When Latvia became insolvent it had the same debt as Estonia now - around 10%. During the crisis our debt rose to over 40%. We didn't had a big debt when the crisis started budget had a small deficit, if that was the only problem, we would just cut back on some luxary a bit and live on but when the country becomes insolvent it has much larger impact on whole economy.


You have it wrong again. Estonia at the start of the crisis had reserves that completely covered its foreign debt. Completely. That is not the case any more, but back then Estonia had reserves that gave more manouverability - something that Latvia lacked. And Latvia had a larger bubble and was behind the economic cycle, so when the crisis eventually hit full force, it was harder for Latvia.




That would be Grexit and return to drachma and devaluation.


Yes.




How would you maintain a balanced budget if your economy collapses?


As we have done before. In 1990-91, in 2008. Just like that.




If that was the case Greece could just balance the budget now and crisis over?


Yes. More or less.
They would also have to continue to have a balanced budget and that is a feat that I am afraid that Greece hasn't mastered since the start of the Troyan War.




Say they have a budget deficit of 5% cut expenses by 5% and thing done, right? No, because when they cut the 5% they deepen the recession, more businesses fail, more people lose jobs and pay less taxes, so next year you have the same balanced budget but the revenues are much less now so you have to cut more or run a deficit.


That is the Achilles and the turtle example. Do you really believe that you can get me with that line? Really???
Do you really think that the turtle is faster than Achilles and that Achilles will never surpass the turtle?

And that comes from a latvian who should know what an adjustment looks like, as it was in 1990-92.
Greece will have to go through that either in 1-2 years, or in 10-20 years. Or continue to suffer.




Second thing you forget is that Estonia is not selfsuficient, most of the stuff you need you need to import, can you really survive without gasoline, natural gas, electricity, chemicals you cant produce locally, equipment you can't produce locally (pretty much all high tech stuff), medicine (don't produce all drugs in Estonia, not even close), if you refuse to pay your debts you would be kicked out of eurozone because other eurozone countries hold your debt, this is what would happen if Greece would leave eurozone, first hit would be the sick, people who have cancer, diabetes and so on, who need to use certain drugs daily. Business would basically stop because nobody would trade with you as you don't respect the law so there is no guarantee you would pay for the stuff you import. There is one state which tried to be self selfsuficient and called it Juche, it was North Korea and it resulted in mass starvation in 90's.


All that will not be a problem for Estonia with an internally balanced budget, since we already almost have it.
It will be painful for Greece, but any adjustment is hard. It is either eternal horror or a horrible end.

Would you have chosen the Belarus or the Russian route out of the 1990s crisis, instead of the Baltic route?




Why, they both have budgets with deficit and high debt?


If you can't even discern any difference between Germany and Greece, then why bother?



Switzerland and Luxemburg also has a lot of Russian money, do they also get influenced by Russia?

Switzerland actually has something resembling a democracy, so they are not as influenced as others.
AND, influence comes from a share of money, not from absolute sum of money. I doubt that Russia's position in those two countries is as large as it is in Latvia.

[Citizen]

We shall certainly see. But Estonia will not be the first nor the only one to see that.
If Greece or any PIIGS fails, then most of the EU countries will become insolvent in order to bail out of the Greece loans.

No, Greece is a small country, if EU wanted so, they could eliminate all their debt completely, Greece has just 10 million people. Spain or Italy could cause that.



As to "illegal refusal", that is all "legal", you just loose your credibility.
It happens all the time with individual persons.

Well if you are a credible person your salary will be reduced when it reaches bank and your property sold in auction, if you work illegaly and own nothing, well thats a different case.



You only need to pay back if you need the credibility.
So youre saying that it would be ok, if Estonia refuses to pay its debt and looses credibility?



No, you need an extra 6% on top of the usual growth / decline. And you need to sustain that extra growth annually in order to sustain the continuous annual budget deficit. If you can't sustain it, then there will be painful cutbacks.

No, you don't.



For some fields, they are. For most fields, they earn the same as soon as they leave Estonia to Sweden.

So that means that overall Estonia is less productive than Sweden, why is that if all population is equally productive if they just leave to a different location over a sea?



No difference.
Big difference!



Somebody is getting more money in Greece, and that somebody is keeping Greece on its current course.
And even those ordinary people who would like to leave Eurozone do not understand that Greece's economic level would have to decline around 50%.
Even the radical left in Greece do not want it to exit eurozone.



Estonia would only pay their own debts, not the ones that were given to Greece or to PIIGS on behalf of Estonia.
You do realize that a debt is a debt? The debt holder does not care if you sent the money on vodka and cigaretes or on food and medicine for children, the same bond holders don't care that it went to ESM or EFSF, they gave you money to make a profit from interest and they will want your money back. And if you refuse to pay you will be branded "defaulted", your credit raiting will be reduced to nothing but the fun will not end there, no investor will invest in Estonia and all those who did will pull out, all business deals with you will stop, you can have that if you are 100% self sufficient.



And Russia didn't pay all Soviet debts, you should know. A large share of Estonian SSR money was illegally upheld in Moscow. Likely a lot of Latvian SSR's money as well. Not to speak of the soviet occupation costs. Not to speak of the liabilites that Soviet Russia took during the Peace Treaty of Tartu in 1920.

You mean russia took your soviet roubles, which had no value at that time, Russia assumed all soviet debt but with that it got all perks, like permanent seat at UN security council as a successor of USSR.



Fast restructuring inevitably brings about temporary unemployment.
The key here is "temporary".

Been quit permanent so far.



You have it wrong, again.
Estonia would not become unable to pay for its citizens or its foreign partners, since Estonia's internal budget would be in balance.
Estonia would only refuse to pay loans related to Greece and PIIGS.

Are you really that naive. If you borrowed money to pay Greece then everyone expects you to give back the money, you will never get back money you paid into ESM and EFSF at best it will always stay there, at worst it will be gone but your debt will stay. If you will decide to not pay it, you'll be branded untrustworthy because when you took the debt you promised to pay it, nobody would lend you money if you would say that you'll not pay back a penny as it will just go to Greece next. Once you will be branded as defaulted you'll be where Greece is now, your economy will crash, you will no longer be able to balance budget.


No Estonian businesses need to go bankrupt, no investors pulling out, no people leaving. Why? Because then the countries in trouble would be those without internal budget balance. And those countries with a balanced budget would have an advantage. That is a simplification, of course.
If you will refuse to pay a debt your economy will crash, it doesn't matter that its not fair to pay for Greece or PIGS, you know what a credit blacklist is? You will be on that and nobody wants to invest in a country that does not keep its word borrows money and then refuses to pay.



You have it wrong again. Estonia at the start of the crisis had reserves that completely covered its foreign debt. Completely. That is not the case any more, but back then Estonia had reserves that gave more manouverability - something that Latvia lacked. And Latvia had a larger bubble and was behind the economic cycle, so when the crisis eventually hit full force, it was harder for Latvia.

And now your reserves are gone, you have a budget with deficit actually what your gonna do if there is another crisis in EU or USA?



As we have done before. In 1990-91, in 2008. Just like that.
Its the same thing Greece is going now, you have a recession and you cut back expenses.



That is the Achilles and the turtle example. Do you really believe that you can get me with that line? Really???
Do you really think that the turtle is faster than Achilles and that Achilles will never surpass the turtle?

You completely missed the point, the point is you can't borrow money and then refuse to pay it back and don't get isolated from the rest of countries.



And that comes from a latvian who should know what an adjustment looks like, as it was in 1990-92.
Greece will have to go through that either in 1-2 years, or in 10-20 years. Or continue to suffer.

That as not adjusment, it was theft. Big factories where closed off privatized and assets sold as scrap metal. All the economy was replaced with by cheap labor (slave labor) economy and none resident banking business.



All that will not be a problem for Estonia with an internally balanced budget, since we already almost have it.
It will be painful for Greece, but any adjustment is hard. It is either eternal horror or a horrible end.

You will not be able to balance budget next minute you will refuse to pay a debt.



Would you have chosen the Belarus or the Russian route out of the 1990s crisis, instead of the Baltic route?
I would choose Belarus way, Russia and Baltics had the same approach during early 90's, so called "shock doctorine", ever heard about that? Its basically meant selling off state assets in a really fast way which ensured that most of those companies would go bankrupt and fail but there would still be a nice profit for small group of people. Belarus state still holds control over all major industry. I believe 80% people there work for the state and state owns pretty much all business, they also have 1% unemployment. Sure, this is something that should not be sustained indefinitely and private ownership should be encouriged but in a slow process that does not cause economical collapse like in 90's in Baltics, Russia and Ukraine for example. I belive all major industry should have remained state controled, things like cafes and bars food production companies and so oncould be slowly privatized.




If you can't even discern any difference between Germany and Greece, then why bother?
Well, seems pretty similar, both have pretty big debt and both run a budget with deficit, exactly what is the major difference?



Switzerland actually has something resembling a democracy, so they are not as influenced as others.
AND, influence comes from a share of money, not from absolute sum of money. I doubt that Russia's position in those two countries is as large as it is in Latvia.

Yes, they also have a lot of tax dodgers, criminals, Mexican drug cartels as bank clients so I guess its more of a criminal state than Russian puppet? Also, are you suggesting that Latvia is not a democracy?

[Pure ja]

No, Greece is a small country, if EU wanted so, they could eliminate all their debt completely, Greece has just 10 million people. Spain or Italy could cause that.


The debt of Greece keeps growing, or actually, the loans and loan guarantees keep growing. Even Eurozone can't indefinitely sustain even such a small hole as Greece. If France falls off of the creditors, then it becomes much harder. And Germany itself is also not that far from 100% debt level. So Greece could well become the trigger of a major collapse.




Well if you are a credible person your salary will be reduced when it reaches bank and your property sold in auction, if you work illegaly and own nothing, well thats a different case.


Well, with a state the money circle is within the state, so tough luck to get money from within another state. You can't really sell other country's property either (except for embassy buildings, perhaps), only that country itself can do that.

And with the impending Euro crash, if Greece and PIIGS will not pay, then Estonia will not be alone - the whole Eurozone will be insolvent. And there is no power (besides USA and maybe Russia) to collect the claims.




So youre saying that it would be ok, if Estonia refuses to pay its debt and looses credibility?


Yes, if Estonia would be just one of all the Eurozone members with the same fate.




No, you don't.


Oh, but you do.
Education is something that pays off only years after investments.



So that means that overall Estonia is less productive than Sweden, why is that if all population is equally productive if they just leave to a different location over a sea?


Individually our people are good enough, but as a collective, we are still weaker.




You do realize that a debt is a debt? The debt holder does not care if you sent the money on vodka and cigaretes or on food and medicine for children, the same bond holders don't care that it went to ESM or EFSF, they gave you money to make a profit from interest and they will want your money back. And if you refuse to pay you will be branded "defaulted", your credit raiting will be reduced to nothing ...


...along with all the rest of the Eurozone member states. 50% of Estonia's foreign trade is with the Eurozone members. Additional 20% with the Baltics, so tell me, if Eurozone tanks and becomes insolvent, will Latvia still have trade with Estonia? Please :rolleyes:




...but the fun will not end there, no investor will invest in Estonia and all those who did will pull out, all business deals with you will stop, you can have that if you are 100% self sufficient.


That is just your fearmongering. There is nothing to affect the investors already here. In fact, insolvency of Estonia would be a relief for investors, because a big axe in the form of possible new taxes or tax raises have been lifted off. So in fact new investors will flock to Estonia (instead of Latvia, of course ;) ).




You mean russia took your soviet roubles, which had no value at that time,


No, Russia took the convertible roubles - the ones that really mattered.



Russia assumed all soviet debt but with that it got all perks, like permanent seat at UN security council as a successor of USSR.


The seats are not the issue for Estonia.
Russia's claim to legal continuity of the USSR is mostly their business.

But the difference to your debate is that Estonia would not be in debt internally. Russia WAS in debt internally within the (former) USSR.
And you forgot the old Soviet Russia's debts lingering since 1920 at least.



Are you really that naive. If you borrowed money to pay Greece then everyone expects you to give back the money, you will never get back money you paid into ESM and EFSF at best it will always stay there,


How many times do I have to repeat you that Estonia has not given any real tax money to ESM and EFSF? It was just a loan moeny, not real tax money.



at worst it will be gone but your debt will stay. If you will decide to not pay it, you'll be branded untrustworthy because when you took the debt you promised to pay it, nobody would lend you money if you would say that you'll not pay back a penny as it will just go to Greece next. Once you will be branded as defaulted you'll be where Greece is now, your economy will crash, you will no longer be able to balance budget.


Estonia's economy would only crash as much as the Eurozone economy in general. And contrary to your claim, Eurozone will only reach budget balance AFTER the crash, NOT before that.




If you will refuse to pay a debt your economy will crash, it doesn't matter that its not fair to pay for Greece or PIGS, you know what a credit blacklist is? You will be on that and nobody wants to invest in a country that does not keep its word borrows money and then refuses to pay.


The credibility of Estonia with a foreign debt consisting of 100% of Greece's loans will still be better than the credibility of Latvia, with 100% of Latvia's loans.




And now your reserves are gone, you have a budget with deficit actually what your gonna do if there is another crisis in EU or USA?


Adjust. Can't allow a budget deficit any more.




Its the same thing Greece is going now, you have a recession and you cut back expenses.


Greece hasn't really cut back yet.




You completely missed the point, the point is you can't borrow money and then refuse to pay it back and don't get isolated from the rest of countries.


You are changing the subject.

And it would be the whole Eurozone in isolation.




That as not adjusment, it was theft. Big factories where closed off privatized and assets sold as scrap metal. All the economy was replaced with by cheap labor (slave labor) economy and none resident banking business.


There was theft. And there was adjustment.
Those who sacrifice freedom for security will get neither freedom nor security.
Whatever freedom and democracy problems Estonia has right now, we are still better off than Belarus.




You will not be able to balance budget next minute you will refuse to pay a debt.


There is nothing to balance, it is already in balance.




I would choose Belarus way, Russia and Baltics had the same approach during early 90's, so called "shock doctorine", ever heard about that?

Estonia had the fastest switch, the harshest shock doctrine. And even that was too slow.
Russia's was everything but fast.

If you have a gangrene, you better not wait and chop it over and over again.




Its basically meant selling off state assets in a really fast way which ensured that most of those companies would go bankrupt and fail but there would still be a nice profit for small group of people. Belarus state still holds control over all major industry. I believe 80% people there work for the state and state owns pretty much all business, they also have 1% unemployment. Sure, this is something that should not be sustained indefinitely and private ownership should be encouriged but in a slow process that does not cause economical collapse like in 90's in Baltics, Russia and Ukraine for example. I belive all major industry should have remained state controled, things like cafes and bars food production companies and so oncould be slowly privatized.


Well, at least it is now known where you stand for.
Care to guess what share of latvians share your particular view?




Well, seems pretty similar, both have pretty big debt and both run a budget with deficit, exactly what is the major difference?


Germany's debt keeps others in debt floating, Greece can't do even that.




Yes, they also have a lot of tax dodgers, criminals, Mexican drug cartels as bank clients so I guess its more of a criminal state than Russian puppet?


Swiss and Luxembourg?
I don't think that Latin American cartels have any influence on Swiss or Luxembourg politics.
Then again, perhaps there is an influence to keep banking regulations too laxed.




Also, are you suggesting that Latvia is not a democracy?

Less than that in Switzerland.

[lI]

Well, at least it is now known where you stand for.
Care to guess what share of latvians share your particular view?As far as the privatization goes - my guess is that it is the majority who think like that. Same in Lithuania. Although most people don't consider Belarus as a whole to be in a more favorable position - but that's due to its isolation from the West, not due to the privatization policies.

[Pure ja]

As far as the privatization goes - my guess is that it is the majority who think like that. Same in Lithuania. Although most people don't consider Belarus as a whole to be in a more favorable position - but that's due to its isolation from the West, not due to privatization policies.

You do realize that the privatization is still inevitable in the future?
Why would you believe any better luck with a slow privatization, especially since the old cronies have had ample time to adjust and solidify their positions since the start of perestroika?

[lI]

You do realize that the privatization is still inevitable in the future?For all sectors? I think not.
State owned oil industry works well in Norway. Lithuanian ''Mazeikiai Nafta'' should have never been privatized too.



Why would you believe any better luck with a slow privatization, especially since the old cronies have had ample time to adjust and solidify their positions since the start of perestroika?The old cronies have had enough time to adjust during the quick privatization in Lithuania anyway - it was inevitable either way.

To give you a practical example, if linen processing factories would have been held by state instead of being privatized, they would have likely held out throughout both financial crisis (they would not have been profitable but they would have held out with the help of state subsidies). This year hemp growing has finally been legalized, so those factories would be very much needed to process hemp fibre and they would have finally payed off. But they were privatized and all three have already been closed down a while ago.
TIME was needed for factories to be reorganized and become profitable. Quick privatization did not offer time and resources for this re-organization to happen, so factories simply closed down.

One doubtful perk of destroying the industry is that Soviet immigrants (most of them were imported precisely to work in the industry sector during the Soviet era) poured out from the Baltics to richer Western countries after losing their jobs here. But does the decreased proportion of Soviet immigrants outweigh the damaged sustained by locals? Locals emigrate too, even if at a lower rate.


BTW since you earlier mentioned Iceland, they had a mass emigration of young people to Norway due to the crisis too. In that regard its situation is quite similar to that of the Baltcs, so not very optimistic...





I believe 80% people there work for the state and state owns pretty much all business, they also have 1% unemployment.If you believe in the 1% unemployment rate, you must really be naive. Make extremely low-paid public jobs compulsory for all officially unemployed and the official unemployment figure will drop to record lows in any country. This doesn't mean that the actual unemployment will drop too.

[Äike]

Latvia is so stereotypically Eastern-European in so many ways and the OP just proves that. That video in the end was funny, though. :P

[Citizen]

The debt of Greece keeps growing, or actually, the loans and loan guarantees keep growing. Even Eurozone can't indefinitely sustain even such a small hole as Greece. If France falls off of the creditors, then it becomes much harder. And Germany itself is also not that far from 100% debt level. So Greece could well become the trigger of a major collapse.

The debt keeps growing because Greece has to borrow more to pay for its pensions and gov. expenses like healthcare, education, military but the economy is contracting, so less taxes for the gov. and higher deficit actually. This is why austerity doesn't work, it creates more debt not less, same happened in Latvia, austerity deepened the crisis and we had to borrow a lot more which caused a jump from 10% debt of GDP to 40%.



Well, with a state the money circle is within the state, so tough luck to get money from within another state. You can't really sell other country's property either (except for embassy buildings, perhaps), only that country itself can do that.
I was talking about a phisical person not a state, a state would get isolated economically if it refused to pay a debt.


And with the impending Euro crash, if Greece and PIIGS will not pay, then Estonia will not be alone - the whole Eurozone will be insolvent. And there is no power (besides USA and maybe Russia) to collect the claims.

You do understand that the money is never going back to Estonia, if the international loans are paid back they go straight to ESM...



Yes, if Estonia would be just one of all the Eurozone members with the same fate.

No, you dont get it still, you paid into ESM, its kinda like car insurance or something, your not getting that money back, but you took a loan to pay for your insurance so now you have a loan to repay? Do you get that?



Oh, but you do.
Education is something that pays off only years after investments.
Yes, so it should be done now so the next generation can benefit.



Individually our people are good enough, but as a collective, we are still weaker.

Why would that be so, you hate each other in Estonia?



...along with all the rest of the Eurozone member states. 50% of Estonia's foreign trade is with the Eurozone members. Additional 20% with the Baltics, so tell me, if Eurozone tanks and becomes insolvent, will Latvia still have trade with Estonia? Please :rolleyes:

Im not talking about Eurozone tanking, Im talking about the day you have to pay your bill, heck, you might even by paying that debt back now and it already went into your budgets expenses. Situation is simple you borrowed money to pay into ESM (which is kinda like insurance meant for failing states) and that money is gone, your budget will never get it back, todoo, but your debt is still there. Eurozoe will not fall, it will stagnete for decades even but it will not fall.



That is just your fearmongering. There is nothing to affect the investors already here. In fact, insolvency of Estonia would be a relief for investors, because a big axe in the form of possible new taxes or tax raises have been lifted off. So in fact new investors will flock to Estonia (instead of Latvia, of course ;) ).
If you will refuse to pay your debt there will be more taxes to raise again.




No, Russia took the convertible roubles - the ones that really mattered.
I don't recall we ever used anything like that, we introduced latvian ruble as a temporary currency and I think in 1993 switched to Lat.




But the difference to your debate is that Estonia would not be in debt internally. Russia WAS in debt internally within the (former) USSR.
And you forgot the old Soviet Russia's debts lingering since 1920 at least.
No freaking clue, please enlighten me...



How many times do I have to repeat you that Estonia has not given any real tax money to ESM and EFSF? It was just a loan moeny, not real tax money.
Yes, you will have to use tax money to pay that debt, how do you imagine this? As I said, you might be paying back it now and it just goes into your budget expenses section as debt payments, depending on what kind of bonds you emmited to get that money. Im not talking about any collapse of eurozone, imagine a situation when Germany and France decides to pardon Greece and it does not have to pay back money into ESM or it actually pays it back into ESM, in both cases Estonia does not get the money back but it still holds the debt. There is no collapse but you have to pay the debt from taxpayers money, so what you think Estonia will do? Im pretty sure it pays its debt, Im quit certain it already started to pay that money back and thats money that could have went to improve Estonia but you'll get none of it but still have to pay for it.



Estonia's economy would only crash as much as the Eurozone economy in general. And contrary to your claim, Eurozone will only reach budget balance AFTER the crash, NOT before that.

There will be no crash of eurozone. I have never suggested that. Do you think that it is 100% sure that eurozone will crash soon? If so, it made even less sense for you to join a crashing system.



The credibility of Estonia with a foreign debt consisting of 100% of Greece's loans will still be better than the credibility of Latvia, with 100% of Latvia's loans.

No, a debt is a debt, the holders of your debt don't care why you borrowed the money, all they know is that they want it back+interest and you'll have to pay it with your tax money. There are no Greece loans of Estonia, there is only Estonian debt and Latvian debt.




Greece hasn't really cut back yet.
Best joke in a while, I think they have already reduced their salaries and pensions by 30% or 40%. Maybe they have to revert to slaver and stop paying people. Seems to work well in NK gulag camps.




You are changing the subject.

And it would be the whole Eurozone in isolation.
No, this is actually an unlikely scenario.




There was theft. And there was adjustment.
Those who sacrifice freedom for security will get neither freedom nor security.
Whatever freedom and democracy problems Estonia has right now, we are still better off than Belarus.
How would you know that?



There is nothing to balance, it is already in balance.
No:
http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weorept.aspx?sy=2007&ey=2015&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=87&pr1.y=2&c=939&s=GGXONLB_NGDP&grp=0&a=




Estonia had the fastest switch, the harshest shock doctrine. And even that was too slow.
Russia's was everything but fast.
You have no idea about wild capitalism in Russia in 90's.



If you have a gangrene, you better not wait and chop it over and over again.
Well its nice that you consider industry and manufacturing a gangrene.


Well, at least it is now known where you stand for.
Care to guess what share of latvians share your particular view?
Quit a lot of Latvians share my views, even if they dislike Belarus or Lukashenko, they are usually quit pro slight autoritarianism and bigger state involvment in economy. Lukashenko is quit similar to our last president before occupation Kārlis Ulmanis, he is still the most popular president of all time (came to power in a bloodless coup - undemocratically).
en.wikipedia.org/wiki/Karlis_Ulmanis



Germany's debt keeps others in debt floating, Greece can't do even that.

You do know that that is only based on credit raiting, one slip by the germans and they will not be able to borrow, its kinda like with stocks, one small sign that the company is failing and its stocks fall.



Swiss and Luxembourg?
I don't think that Latin American cartels have any influence on Swiss or Luxembourg politics.
Then again, perhaps there is an influence to keep banking regulations too laxed.
No clean individual needs to hide his income in secret bank account that gov. can't access or monitor.
Swiss Bank main clients are mafia by your logic it is controlled by mafia as its economy is totally dependent on this.



Less than that in Switzerland.
Yes, and Switzerland its a lot more democratic than Estonia as well. Estonia didn't hold a referendum on euro as well while Swiss has a referendum for almost everything, even PowerPoint as I recall.





Latvia is so stereotypically Eastern-European in so many ways and the OP just proves that. That video in the end was funny, though. :P
What video?

[Citizen]

If you believe in the 1% unemployment rate, you must really be naive. Make extremely low-paid public jobs compulsory for all officially unemployed and the official unemployment figure will drop to record lows in any country. This doesn't mean that the actual unemployment will drop too.

90% of jobs in Latvia are "extremely low-paid" I think in Lithuania as well.

[Aunt Hilda]

Latvia is so stereotypically Eastern-European in so many ways and the OP just proves that. That video in the end was funny, though. :P

op isn't even European.

[Citizen]

op isn't even European.
The video in the start of thread is by Mark Fiore, pretty famous American political satirist and cartoonist. I do fail to see whats so "eastern european" about it, seems really like the humor states love.

[Aunt Hilda]

The video in the start of thread is by Mark Fiore, pretty famous American political satirist and cartoonist. I do fail to see whats so "eastern european" about it, seems really like the humor states love.

I think he meant the accent.(even though its not an east euro accent)

[lI]

90% of jobs in Latvia are "extremely low-paid" I think in Lithuania as well.
With less than $10/per month wages (https://en.wikipedia.org/wiki/Economy_of_Belarus#Unemployment)? The minimum wage in Latvia is something like 30 times bigger than that, same in Lithuania. And the cost of living can hardly be much lower in Belarus because Belarusians from neighboring regions come to Lithuania for shopping. $10/per month is like a joke.

[Citizen]

For less than $10/per month wages (https://en.wikipedia.org/wiki/Economy_of_Belarus#Unemployment)? The minimum wage in Latvia is something like 30 times bigger than that, same in Lithuania.

Thats not salary, its "unemployment benefits" thats the money you get if youre a long time unemployed, in Latvia you get nothing in like 3 months. I think it starts at 70% of you salary of Last 3 years and then its reduced very fast, could be wrong, I haven't hold a job in my 26 years in Latvia. GDP per capita of Belarus is almost the same a in Latvia but its GINI is a lot smaller (so the income is distributed a lot more equally because it didn't had the privatization and large income disparity as Latvia did)

[Pure ja]

The debt keeps growing because Greece has to borrow more to pay for its pensions and gov. expenses like healthcare, education, military but the economy is contracting, so less taxes for the gov. and higher deficit actually. This is why austerity doesn't work, it creates more debt not less, same happened in Latvia, austerity deepened the crisis and we had to borrow a lot more which caused a jump from 10% debt of GDP to 40%.


Austerity is not the problem in Greece. There is no austerity in Greece yet.
The state of the failed state of Greece is the problem in Greece. And if you claim Latvia has the same problem, then there is a strong possibility that Latvia might be a failed state as well.

Anyone who claims that living within his/her own means is wrong is insane.
Living beyond his own means is wrong and unsustainable in the long run.

Keynes wrote about accumulating reserves FIRST during the good times, so that later on one could spend the reserves in hard times.
Estonia has done that before and during the crisis. Anyone entering the crisis with a sizable foreign debt has not been practicing keynesianism.




You do understand that the money is never going back to Estonia, if the international loans are paid back they go straight to ESM...


Oh, but you are wrong.
Estonia is a shareholder in ESM. If ESM will be disbanded, then Estonia will get back its share, as much as there is.
And Greece should also pay interests for what it gets from ESM, at the moment those interests are funneled back to Greece.
And Greece's interests should be higher than that of Estonia's. So principally, Estonia only pays back its own loans to the extent that it gets from Greece.




No, you dont get it still, you paid into ESM, its kinda like car insurance or something, your not getting that money back, but you took a loan to pay for your insurance so now you have a loan to repay? Do you get that?


Read above. The interests should be covered by Greece's interests. Or whoever got the loan from ESM.




Yes, so it should be done now so the next generation can benefit.


Not with overspending elsewhere.




Why would that be so, you hate each other in Estonia?


In comparison with Finland, I'd say that the soviet occupation and colonisation are still having its effect. Will continue to have for some generations at least, possibly as much as 10 centuries. The social togetherness or cohesion took a strong hit, and despite all the song festivals it is still hard to develop local and regional and state interstanding.

But Finland and Sweden are moving closer to us with their own immigration problems.
That is actually the only point where Belarus might have an advantage.




Im not talking about Eurozone tanking, Im talking about the day you have to pay your bill, heck, you might even by paying that debt back now and it already went into your budgets expenses. Situation is simple you borrowed money to pay into ESM (which is kinda like insurance meant for failing states) and that money is gone, your budget will never get it back, todoo, but your debt is still there. Eurozoe will not fall, it will stagnete for decades even but it will not fall.


Read above.
The money is not gone. Interests should be covered in principle by Greece's interests. At the moment they aren't.
Whatever Estonia has "paid" into the ESFS and ESM, together it has not been larger than the currency reserves that Estonia had during our own money period. It is just another kind of reserve. But any additional ESM-like fund payments would become a problem - to the extent that Estonia might leave EU.




If you will refuse to pay your debt there will be more taxes to raise again.


Not if Estonia declares insolvency for servicing those Greece loans.




I don't recall we ever used anything like that, we introduced latvian ruble as a temporary currency and I think in 1993 switched to Lat.


How old are you? I find it hard to believe that any teen or young or adult would be unfamiliar with the convertible rouble concept.




No freaking clue, please enlighten me...


You have to read through the Peace Treaty of Tartu, 1920, between Estonia and Soviet Russia. The economic and cultural parts.




Yes, you will have to use tax money to pay that debt, how do you imagine this? As I said, you might be paying back it now and it just goes into your budget expenses section as debt payments, depending on what kind of bonds you emmited to get that money. Im not talking about any collapse of eurozone, imagine a situation when Germany and France decides to pardon Greece and it does not have to pay back money into ESM or it actually pays it back into ESM, in both cases Estonia does not get the money back but it still holds the debt. There is no collapse but you have to pay the debt from taxpayers money, so what you think Estonia will do? Im pretty sure it pays its debt, Im quit certain it already started to pay that money back and thats money that could have went to improve Estonia but you'll get none of it but still have to pay for it.


Read above.
Interests cover interests.
If Greece doesn't pay, then Estonia:
a) leaves the Eurozone or also EU
b) increases its foreign debt until becomes insolvent, in the latter case won't pay

There is a situation where ESM money just sits idly, when no Eurozone member needs it, then there would be no interest running, but I think we can disregard that unlikely scenario.



There will be no crash of eurozone. I have never suggested that. Do you think that it is 100% sure that eurozone will crash soon? If so, it made even less sense for you to join a crashing system.


If the austerity-fearmongers get their will through and Greece and PIIGS don't adjust fast, then a crash is likely.
But remember, Estonia is about even with the EU at the moment. The moment Estonia gets into negative territory, sentiments to leave EU will grow rapidly.



No, a debt is a debt, the holders of your debt don't care why you borrowed the money, all they know is that they want it back+interest and you'll have to pay it with your tax money. There are no Greece loans of Estonia, there is only Estonian debt and Latvian debt.


Nope. The creditors obviously look deeper into how someone got into debt and make their decisions based on that.
It is called individual credit rating and credit history, in case you haven't heard of that. They take the details into account.




Best joke in a while, I think they have already reduced their salaries and pensions by 30% or 40%.


I don't think so.




How would you know that?


I simply can't think of anything better in Belarus.
Perhaps you can help?




No:
http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weorept.aspx?sy=2007&ey=2015&scsm=1&ssd=1&sort=country&ds=.&br=1&pr1.x=87&pr1.y=2&c=939&s=GGXONLB_NGDP&grp=0&a=


That balance probably includes the initiating ESM loan.
Without that loan Estonia's budget was in balance - it was planned to have a slight deficit but the year turned out better than expected.




You have no idea about wild capitalism in Russia in 90's.


i know quite enough.
The wild part was precisely because of the slow turn, not a fast shock therapy.




Well its nice that you consider industry and manufacturing a gangrene.


I don't. But obviously you do.
Industry and manufacturing are just part of the whole.




Quit a lot of Latvians share my views, even if they dislike Belarus or Lukashenko, they are usually quit pro slight autoritarianism and bigger state involvment in economy. Lukashenko is quit similar to our last president before occupation Kārlis Ulmanis, he is still the most popular president of all time (came to power in a bloodless coup - undemocratically).
en.wikipedia.org/wiki/Karlis_Ulmanis


Estonians have got over the adoration of Päts. He was running shoddy banking affairs with Soviet Russia.
You should get over as well.

Estonians can prefer some privatized companies as state-owned, but in general authoritarianism is not favoured. And state-economy is also not favoured.




You do know that that is only based on credit raiting, one slip by the germans and they will not be able to borrow, its kinda like with stocks, one small sign that the company is failing and its stocks fall.


Personal credit history and personalized credit rating takes into account the how and why.
Germany doesn't need to borrow relatively as much (or perhaps not at all) as Greece needs.



Yes, and Switzerland its a lot more democratic than Estonia as well.


So?

[Pure ja]

For all sectors? I think not.
State owned oil industry works well in Norway. Lithuanian ''Mazeikiai Nafta'' should have never been privatized too.


The old cronies have had enough time to adjust during the quick privatization in Lithuania anyway - it was inevitable either way.

To give you a practical example, if linen processing factories would have been held by state instead of being privatized, they would have likely held out throughout both financial crisis (they would not have been profitable but they would have held out with the help of state subsidies). This year hemp growing has finally been legalized, so those factories would be very much needed to process hemp fibre and they would have finally payed off. But they were privatized and all three have already been closed down a while ago.
TIME was needed for factories to be reorganized and become profitable. Quick privatization did not offer time and resources for this re-organization to happen, so factories simply closed down.


These are all very nice plans, but how does that (state-ownership) work in practice in Lithuania?

For example Estonia had a so-called state grain warehouse. In 2004 it turned out that 13 000 tonnes of grain was missing / stolen - over 4 trainloads, nobody had noticed anything. If that had happened in the USSR, at least some persons would have got severe punishment. The joys of state-ownership in a post-soviet democratic country.

[Citizen]

Austerity is not the problem in Greece. There is no austerity in Greece yet.
The state of the failed state of Greece is the problem in Greece. And if you claim Latvia has the same problem, then there is a strong possibility that Latvia might be a failed state as well.
Would abolishing wages and introducing slavery would be enough austerity? Is austerity means to an end or vica versa? Greece has had a lot of austerity.

Also I do believe Latvia is a failed state but for a different reason, the low birth rates and high emigration ensures that in 30 years country is unsustainable, we will have 3 pensioneers on 4 workers at best. Estonia has the same problem, even more as you are a smaller nation so you might die out faster. Russia and Ukraine has it too but Russia has 140 million, it will take hundreds of years for the ruskies to die out.


Anyone who claims that living within his/her own means is wrong is insane.
Living beyond his own means is wrong and unsustainable in the long run.

Can an average Estonian afford a flat without taking a loan? Can you start a business without taking a loan?



Keynes wrote about accumulating reserves FIRST during the good times, so that later on one could spend the reserves in hard times.
Estonia has done that before and during the crisis. Anyone entering the crisis with a sizable foreign debt has not been practicing keynesianism.

I agree.



Oh, but you are wrong.
Estonia is a shareholder in ESM. If ESM will be disbanded, then Estonia will get back its share, as much as there is.
And Greece should also pay interests for what it gets from ESM, at the moment those interests are funneled back to Greece.
And Greece's interests should be higher than that of Estonia's. So principally, Estonia only pays back its own loans to the extent that it gets from Greece.

You understand that the amount of shares you have make you just as influential as the amount of seats you have in European Parliament, that is you have no influence at all. |There is a likely scenario that Germany and France decides to reduce the amount of debt Greece owns to ESM and the rest will just have to pay in more money to ESM, you know for the greater good of EU.



Read above. The interests should be covered by Greece's interests. Or whoever got the loan from ESM.

Who will cover the 148 million you borrowed. Maybe in 100 years you will get it back trough interest. :)



In comparison with Finland, I'd say that the soviet occupation and colonisation are still having its effect. Will continue to have for some generations at least, possibly as much as 10 centuries. The social togetherness or cohesion took a strong hit, and despite all the song festivals it is still hard to develop local and regional and state interstanding.

But Finland and Sweden are moving closer to us with their own immigration problems.
That is actually the only point where Belarus might have an advantage.

We have song festival too, its happening right now, do we have it on the same period, each 5 years or its different in Eesti.



Read above.
The money is not gone. Interests should be covered in principle by Greece's interests. At the moment they aren't.
Whatever Estonia has "paid" into the ESFS and ESM, together it has not been larger than the currency reserves that Estonia had during our own money period. It is just another kind of reserve. But any additional ESM-like fund payments would become a problem - to the extent that Estonia might leave EU.

Is this your personal opinion or has the gov. of Estonia stated that it will leave EU if ESM requires more money from Estonia? Im sure the government didn't made a statement like that, if it did, I have to ask, why join? Its highly likely that it will be the case in future.



Not if Estonia declares insolvency for servicing those Greece loans.

If you are insolvent you become like Greece or Cyprus now.



How old are you? I find it hard to believe that any teen or young or adult would be unfamiliar with the convertible rouble concept.
26, we never had anything like that, or maybe I don't get what a convertible rouble is, we had Latvian rouble, which was a temporary money.
http://www.bank.lv/public_files/images/img_lb/about/latvian/images/lrub_av.jpg



Read above.
Interests cover interests.
If Greece doesn't pay, then Estonia:
a) leaves the Eurozone or also EU
b) increases its foreign debt until becomes insolvent, in the latter case won't pay

There is a situation where ESM money just sits idly, when no Eurozone member needs it, then there would be no interest running, but I think we can disregard that unlikely scenario.
Scenarios a and b are quit realistic so why join eurozone? You don't get a lot of interest from Greece, EU lends to it at almost no interest as well.



If the austerity-fearmongers get their will through and Greece and PIIGS don't adjust fast, then a crash is likely.
But remember, Estonia is about even with the EU at the moment. The moment Estonia gets into negative territory, sentiments to leave EU will grow rapidly.
I don't know, you paid 148 million to help save a foreign state, its clearly not in the interests of you.



Nope. The creditors obviously look deeper into how someone got into debt and make their decisions based on that.
It is called individual credit rating and credit history, in case you haven't heard of that. They take the details into account.

You know, before crisis Greece had same credit rating as Germany, all eurozone had 1 rating, that was actually the problem with eurozone.



I don't think so.

Its reduced by 30% and will have to reduce more:

Guardian.co.uk Greeks have already suffered a 30% cut in wages and can look forward to steep cuts in the minimum wage as well as pensions as the price for securing the latest €130bn bailout which, with €34.4bn rolled over from the original €109bn rescue package, gives €164.4bn available over the next three years.
http://www.guardian.co.uk/business/2012/feb/21/greeks-face-further-wage-cuts-bailout



I simply can't think of anything better in Belarus.
Perhaps you can help?

Cheap natural reasources, everything is owned by locals or state not foreigners who drain the money to Sweden or Denmark, retained manufacturing and economy that is not based on banking, no oligarchs and quit equal income distribution as shown by low GINI coefficient.



That balance probably includes the initiating ESM loan.
Without that loan Estonia's budget was in balance - it was planned to have a slight deficit but the year turned out better than expected.
Im just saying, you don't have a balanced budget all the time.



i know quite enough.
The wild part was precisely because of the slow turn, not a fast shock therapy.
Russia in 90's had a dancing drunk for a president who allowed oil and gas to be privatized, cant get more wild and stupid than that.



I don't. But obviously you do.
Industry and manufacturing are just part of the whole.
Part of what?




Estonians have got over the adoration of Päts. He was running shoddy banking affairs with Soviet Russia.
You should get over as well.

Estonians can prefer some privatized companies as state-owned, but in general authoritarianism is not favoured. And state-economy is also not favoured.
Ulmanis authoritarian period was the most prosperous time of Latvia, why would we get over it? The current economic model has ensured that the country will dissapear in 30 - 50 years.



Personal credit history and personalized credit rating takes into account the how and why.
Germany doesn't need to borrow relatively as much (or perhaps not at all) as Greece needs.
As I said, Greece had the same ratings before crisis as Germany and all eurozone.



So?
So you might be influenced by Russia too...

[Citizen]

These are all very nice plans, but how does that (state-ownership) work in practice in Lithuania?

For example Estonia had a so-called state grain warehouse. In 2004 it turned out that 13 000 tonnes of grain was missing / stolen - over 4 trainloads, nobody had noticed anything. If that had happened in the USSR, at least some persons would have got severe punishment. The joys of state-ownership in a post-soviet democratic country.

Same can happen with a private company, a lot of privatized companies where bankrupted on purpose to get quick gain by selling everything as scrap metal. We have a privatized metallurgy company, its one of biggest exporters and gives many jobm turns out its owners have paid themselfs millions in salary in just few years while the gov. guranteed them 50 million so they can take a loan, now its bankrupt gov. has to pay a loan for them and they are sitting on their millions. You just have to have strong laws against embezzlement both in private and public sector.

[Pure ja]

Same can happen with a private company, a lot of privatized companies where bankrupted on purpose to get quick gain by selling everything as scrap metal. We have a privatized metallurgy company, its one of biggest exporters and gives many jobm turns out its owners have paid themselfs millions in salary in just few years while the gov. guranteed them 50 million so they can take a loan, now its bankrupt gov. has to pay a loan for them and they are sitting on their millions. You just have to have strong laws against embezzlement both in private and public sector.

The problem with state ownership is that you can't introduce responsible management from the top down. Responsible cooperation has to be learned from the bottom up - starting from the village level. The soviet system largely erased the local cooperation, soviet collective farms were a joke. I consider it impossible to evolve from a soviet style state economy to something like that in the Nordics without severely limiting state-economy in between. Perhaps Belarus in time will make it possible, but at the moment I don't see any success in their path. Nordics did not start from a soviet style state system.

[Pure ja]

Would abolishing wages and introducing slavery would be enough austerity? Is austerity means to an end or vica versa? Greece has had a lot of austerity.


If taxes are a definition of slavery to you, then yes to the second part.
And what kind of austerity exactly are you talking about, when Greece is still paying for dead pensioners and 100% of people in a local community are blind and thus eligible for financial support?

Is getting rid of a 14th montly salary called austerity now? How about the 13th monthly salary? What kind of a calendar are the Greeks using there anyway? A lunar calendar? Mayan calendar?

I don't see austerity in Greece for as long as Greece is still having budget deficit and Greece pensions and minimum wages are above that of Estonia and Latvia. And don't come to argue that they have financial trouble heating their homes.




Also I do believe Latvia is a failed state but for a different reason, the low birth rates and high emigration ensures that in 30 years country is unsustainable, we will have 3 pensioneers on 4 workers at best. Estonia has the same problem, even more as you are a smaller nation so you might die out faster. Russia and Ukraine has it too but Russia has 140 million, it will take hundreds of years for the ruskies to die out.


3 on 4 is actually not bad.
The rest of the necessary workforce can be replaced with robots.




Can an average Estonian afford a flat without taking a loan? Can you start a business without taking a loan?


Yes. And yes.

50% of real estates in Estonia are being bought without a loan.
And you really don't have to buy an apartment, you can just rent it.

You can start a business in 5 minutes in Estonia. You don't even have to leave Latvia for that.




I agree.


Then would you cut the crap on "austerity"?




You understand that the amount of shares you have make you just as influential as the amount of seats you have in European Parliament, that is you have no influence at all. |There is a likely scenario that Germany and France decides to reduce the amount of debt Greece owns to ESM and the rest will just have to pay in more money to ESM, you know for the greater good of EU.


Enlarging ESM is quickly becoming impossible. Finland is betted to be the first to leave Eurozone if any additional fundraising is started. Estonia and Germany will be next. Our very own superman Jürgen Ligi opened his mouth and commented that he had suggested to think about the rules of leaving Eurozone already 2 years ago.




Who will cover the 148 million you borrowed. Maybe in 100 years you will get it back trough interest. :)


So be it. If it goes for the good cause of keeping EU together. But with attacks on "austerity", I don't think saving EU is possible.
You can form your own "austerity" attacking club with Latvia and Greece and PIIGS, while Estonia will form another one with Finland, Sweden Germany and the rest of the Nordic countries.




We have song festival too, its happening right now, do we have it on the same period, each 5 years or its different in Eesti.


The main ones are over every 5 years. The smaller ones every year.




Is this your personal opinion or has the gov. of Estonia stated that it will leave EU if ESM requires more money from Estonia? Im sure the government didn't made a statement like that, if it did, I have to ask, why join? Its highly likely that it will be the case in future.


Estonian government members have made remarks, that any additional fundraising would become a serious problem.
Estonia joined Eurozone out of solidarity. Sensless attacks on "austerity" (while in reality the attacks are on true keynesianism) make sustaining that solidarity impossible.




If you are insolvent you become like Greece or Cyprus now.


Nope. Read above.
One can debate whether Estonia was insolvent in 1990-91, but Estonia most certainly did not become that of Greece or Cyprus.
Not in 1919, not in 1991, not in the future.




26, we never had anything like that, or maybe I don't get what a convertible rouble is, we had Latvian rouble, which was a temporary money.
http://www.bank.lv/public_files/images/img_lb/about/latvian/images/lrub_av.jpg


Convertible roubles were in parallel to the ordinary roubles during the soviet times, even way before the start of perestroika. It is how foreign trade was managed back then. So you can see, that Estonia has lost its foreign currency reserves more than once, and still got up again without turning into Greece.




Scenarios a and b are quit realistic so why join eurozone? You don't get a lot of interest from Greece, EU lends to it at almost no interest as well.


Out of solidarity, to the extent that the net balance between Estonia and EU would not become strongly negative.




You know, before crisis Greece had same credit rating as Germany, all eurozone had 1 rating, that was actually the problem with eurozone.


Yes, and that was one of the problems. Greece should have had a much lower rating.




Its reduced by 30% and will have to reduce more:

http://www.guardian.co.uk/business/2012/feb/21/greeks-face-further-wage-cuts-bailout


That is not enough. And I am sure that the 30% figure is just statistics with a Greece quality mark on it.




Cheap natural reasources

You mean strongly subsidised energy markets? In that way Belarus will never get to adopt new energy efficient building codes, like the PassivHaus standard.




everything is owned by locals or state not foreigners who drain the money to Sweden or Denmark, retained manufacturing and economy that is not based on banking, no oligarchs and quit equal income distribution as shown by low GINI coefficient.


That is just a facade and the GINI coefficient is probably misleading.
I am sure that the soviet GINI was superb, but in reality the soviet elite commanded much of the better assets within the country.
You being only 26 means that you can't possibly remember that. You don't remember the empty shops, you don't remember the food stamps, you don't remember the famines.




Im just saying, you don't have a balanced budget all the time.


Our budget is imbalanced only to the extent of the ESM payments. Otherwise it is balanced.




Russia in 90's had a dancing drunk for a president who allowed oil and gas to be privatized, cant get more wild and stupid than that.


The state still commands all the natural resources above and underground and mining license permits, taxes, etc. The companies own squat, just operating equipment and workforce. Have you any idea what share of the gas is flaring or leaking out from the state-owned equipment in Siberia? Have you any idea how many oil is leaking out? A lot. Money corrupts. Only local people and local government would be responsible. Yeltsin should have given local regions as much independence as possible.



Part of what?


The whole.
You know, Soviet Union was not just industry.




Ulmanis authoritarian period was the most prosperous time of Latvia, why would we get over it? The current economic model has ensured that the country will dissapear in 30 - 50 years.


Your knowledge of the soviet times is patchy at best. Your knowledge of Ulmanis times are worse still.

As to the present, either close the borders or deal with the situation, without budget deficits.

[Pure ja]

Sensless attacks on "austerity" (while in reality the attacks are on true keynesianism) make sustaining that solidarity impossible.


Btw, such false labeling also applies to "centrist" politics.

[Pure ja]

Oh, and with your Citizen attitude, next time Latvia comes asking loan money, Estonia will give it only with a guarantee of lands around Valka or Metsepole or Koiva (Gauja).

[Citizen]

If taxes are a definition of slavery to you, then yes to the second part.
And what kind of austerity exactly are you talking about, when Greece is still paying for dead pensioners and 100% of people in a local community are blind and thus eligible for financial support?

Is getting rid of a 14th montly salary called austerity now? How about the 13th monthly salary? What kind of a calendar are the Greeks using there anyway? A lunar calendar? Mayan calendar?

I don't see austerity in Greece for as long as Greece is still having budget deficit and Greece pensions and minimum wages are above that of Estonia and Latvia. And don't come to argue that they have financial trouble heating their homes.

Latvian and Estonian salaries are slavery, yes, taxing someone so much that he can no longer afford to live like a human is slavery. What dead pensioneers and 14th salary. They get some bonuses at the end of year and thats a normal practice for all loyal employees.



3 on 4 is actually not bad.
The rest of the necessary workforce can be replaced with robots.
Yes, robots will be invented just around the time with lightsabers and faster than light space travel of course in next 30 or so years. :D 3 or 4 pensioneers on 4 workers is totally unsustainable, you would have to give half your salary in just pensions alone. Taxes would be around 80% to 90%.




Yes. And yes.

50% of real estates in Estonia are being bought without a loan.
And you really don't have to buy an apartment, you can just rent it.

You can start a business in 5 minutes in Estonia. You don't even have to leave Latvia for that.

How much an average flat cost in Tallinn? In Riga a nice flat for 1 or 2 persons is around 40 000 to 100 000 euros, average salary is like 500 or 600 euros in Latvia, in Estonia its 700 - 800 I think? From official data only 10% of Latvians are able to afford a flat with bank loan, rest 90% are not able to do that at all. Imagine how small is the % of people who can by flat without a loan, this data is from Latvian commercial bank association, if you need I can you you a link as always. Those 50% are probably foreign nationals, the same who buy luxary houses in Jurmala, Russians, not Estonians or its a small % of society who can afford that, in any case the majority of Estonians can't afford to buy a flat with their 800 euros a month when it costs 40 000.



Then would you cut the crap on "austerity"?

Did you even understand your own sentence.



Enlarging ESM is quickly becoming impossible. Finland is betted to be the first to leave Eurozone if any additional fundraising is started. Estonia and Germany will be next. Our very own superman Jürgen Ligi opened his mouth and commented that he had suggested to think about the rules of leaving Eurozone already 2 years ago.

There are no rules of leaving eurozone.



So be it. If it goes for the good cause of keeping EU together. But with attacks on "austerity", I don't think saving EU is possible.
You can form your own "austerity" attacking club with Latvia and Greece and PIIGS, while Estonia will form another one with Finland, Sweden Germany and the rest of the Nordic countries.

I wish Latvia was smart and started to look at China and Russia instead of pigs or north.



The main ones are over every 5 years. The smaller ones every year.

We have the same, do you have them now, we have them just now. I guess you also celebrate 23.june with campfires and songs? ;)



Estonian government members have made remarks, that any additional fundraising would become a serious problem.
Estonia joined Eurozone out of solidarity. Sensless attacks on "austerity" (while in reality the attacks are on true keynesianism) make sustaining that solidarity impossible.
True Keynesianis actually support deficit spending, they believe that WW2 spending ended the Great Depression in US, go look it up.




Nope. Read above.
One can debate whether Estonia was insolvent in 1990-91, but Estonia most certainly did not become that of Greece or Cyprus.
Not in 1919, not in 1991, not in the future.
Thats soviet social engineering, basically programming people to be mindless drones, you can ignore peoples aspirations, ensure that they get like 800 euros a month and they will not revolt. Not gonna happen in societies where freedom predominated for hundreads of years.




Convertible roubles were in parallel to the ordinary roubles during the soviet times, even way before the start of perestroika. It is how foreign trade was managed back then. So you can see, that Estonia has lost its foreign currency reserves more than once, and still got up again without turning into Greece.

Never heard of it, as far as I know, all foreign trade was done with USD, even if such a currency ever existed it was backed by reserve currencies, like USD, we cant complain that we didnt get them, we succeeded unilaterally.



Out of solidarity, to the extent that the net balance between Estonia and EU would not become strongly negative.

I dont care about solidarity in EU.



Yes, and that was one of the problems. Greece should have had a much lower rating.

But it didn't, which shows how wrong the current economic paradigm is.



That is not enough. And I am sure that the 30% figure is just statistics with a Greece quality mark on it.

Keep believing that if that makes you sleep well at night, reality is that Greece now is under a pretty strict observation and its almost impossible to cheat on any statistic data.



You mean strongly subsidised energy markets? In that way Belarus will never get to adopt new energy efficient building codes, like the PassivHaus standard.

They are not subsidized, they buy Russian energy on a price that is waaay under market price.



That is just a facade and the GINI coefficient is probably misleading.
I am sure that the soviet GINI was superb, but in reality the soviet elite commanded much of the better assets within the country.
You being only 26 means that you can't possibly remember that. You don't remember the empty shops, you don't remember the food stamps, you don't remember the famines.
There where special shops, it wasn't a problem if you where a member of party, veteran or family with many children.




Our budget is imbalanced only to the extent of the ESM payments. Otherwise it is balanced.

And I said that ESM is dragging you down.



The state still commands all the natural resources above and underground and mining license permits, taxes, etc. The companies own squat, just operating equipment and workforce. Have you any idea what share of the gas is flaring or leaking out from the state-owned equipment in Siberia? Have you any idea how many oil is leaking out? A lot. Money corrupts. Only local people and local government would be responsible. Yeltsin should have given local regions as much independence as possible.
Yeltsin was a clown, dancing drunk while his country going downhill.



The whole.
You know, Soviet Union was not just industry.
Have you really replaced with anything better, Estonia, like Latvia is produced nothing except timber and other raw materials, thats why our GDP is so low.



Your knowledge of the soviet times is patchy at best. Your knowledge of Ulmanis times are worse still.

As to the present, either close the borders or deal with the situation, without budget deficits.
Go read on the period, Latvia now is the second poorest country in EU, back in the day we where one of Europes prosperous nations, its a well documented fact, go google it up. :)

[Citizen]

Oh, and with your Citizen attitude, next time Latvia comes asking loan money, Estonia will give it only with a guarantee of lands around Valka or Metsepole or Koiva (Gauja).

I'd give you Valka any time, its a dump.

[Pure ja]

Latvian and Estonian salaries are slavery, yes, taxing someone so much that he can no longer afford to live like a human is slavery.


That is rubbish. Nowadays it is incomparably easier than in the 1980s or in the 1950s. You are yearning for a relative parity.
The soviet system was unsustainable. The welfare states of the western world are largely unsustainable. And yet you still desire more, more, more. If there is no job, make one yourself. Find teammates.



Yes, robots will be invented just around the time with lightsabers and faster than light space travel of course in next 30 or so years. :D 3 or 4 pensioneers on 4 workers is totally unsustainable, you would have to give half your salary in just pensions alone. Taxes would be around 80% to 90%.


Robots were invented already 100 years ago.
Your browser is spell-checking as you type.




How much an average flat cost in Tallinn? In Riga a nice flat for 1 or 2 persons is around 40 000 to 100 000 euros, average salary is like 500 or 600 euros in Latvia, in Estonia its 700 - 800 I think? From official data only 10% of Latvians are able to afford a flat with bank loan, rest 90% are not able to do that at all. Imagine how small is the % of people who can by flat without a loan, this data is from Latvian commercial bank association, if you need I can you you a link as always. Those 50% are probably foreign nationals, the same who buy luxary houses in Jurmala, Russians, not Estonians or its a small % of society who can afford that, in any case the majority of Estonians can't afford to buy a flat with their 800 euros a month when it costs 40 000.


Sure, buying a flat starts from about 30-40 000 EUR in Tallinn. Less wealthy can't and shouldn't afford a flat for 100 000.
I was born into a flat with 7 people in 63 m2.
Previous city generation had to make do with 5 persons in 30 m2.

But in central Europe and elsewhere less than half own their own flats. Anyway, why should you invest in a flat in a house which is not PassivHaus compliant?



Did you even understand your own sentence.


Yes. Never mind.




There are no rules of leaving eurozone.


When there is a will, there is a way.




I wish Latvia was smart and started to look at China and Russia instead of pigs or north.


Noone is stopping you.
It's your risk.



We have the same, do you have them now, we have them just now. I guess you also celebrate 23.june with campfires and songs? ;)


Yes, sure. :D

http://www.youtube.com/watch?v=mX97wSdyQH4&feature=related




True Keynesianis actually support deficit spending, they believe that WW2 spending ended the Great Depression in US, go look it up.


No. True Keynesianism supports sparing first at good times and spending second at bad times.

[Pure ja]

Thats soviet social engineering, basically programming people to be mindless drones, you can ignore peoples aspirations, ensure that they get like 800 euros a month and they will not revolt. Not gonna happen in societies where freedom predominated for hundreads of years.


Make your own economy then. Gift economy. 20% of unemployed should be able to make their own gift economy.




Never heard of it, as far as I know, all foreign trade was done with USD...


As I understand, it all went through one bank in Moscow.




I dont care about solidarity in EU.


:confused:

And yet you feel for the bad fate of Greeks and desire good life of western europeans.




Keep believing that if that makes you sleep well at night, reality is that Greece now is under a pretty strict observation and its almost impossible to cheat on any statistic data.


If you believe that stats can be magically fixed in a year or two, then you are quite naive.
Stats are only as good as the organisation. Failed state generates failed stats. That is another lesson that you have forgotten from the soviet times.



They are not subsidized, they buy Russian energy on a price that is waaay under market price.


Deal with the devil. Would you believe that Russia would sell to all its clients under market price? Baltics has been paying way over the market price for many years now.




Yeltsin was a clown, dancing drunk while his country going downhill.


Yes, and that is partly why it is foolish to believe that the reforms in Russia were a quick shock therapy. It was a shock, but it was anything but quick.




Have you really replaced with anything better, Estonia, like Latvia is produced nothing except timber and other raw materials, thats why our GDP is so low.


Lot of our economy works on subcontracts.
A lot provides services.
At times half of Ericcson mobile phones were put together at Estonia. A lot of Nokias as well.
There are also lot of small companies doing whatnot :)




Go read on the period, Latvia now is the second poorest country in EU, back in the day we where one of Europes prosperous nations, its a well documented fact, go google it up. :)

Tough luck. Deal with it.

[Hercus Monte]

GREAT LATVIAN SUCCESS STORY:


http://www.youtube.com/watch?feature=player_embedded&v=3IRUBJ8qraY
funny video, it's a pity that the Latvian government in not willing to take any criticism about their austerity policies.


have the budget cut's been restored?

[Pure ja]

funny video, it's a pity that the Latvian government in not willing to take any criticism about their austerity policies.


have the budget cut's been restored?

No. They keep cutting the military budget.
Chop-chop-chop-chop, until there is nothing left and nothing right.
And then comes Zapad 2013.

http://windowoneurasia2.blogspot.com/2013/08/window-on-eurasia-if-us-attacks-syria.html

[Hercus Monte]

No. They keep cutting the military budget.
Chop-chop-chop-chop, until there is nothing left and nothing right.
And then comes Zapad 2013.

http://windowoneurasia2.blogspot.com/2013/08/window-on-eurasia-if-us-attacks-syria.html
thats very considerate of them. it's nice that they still remember us. (Might this have anything to do with the scheduled meeting between Obama and the Baltic leaders?)

[Pure ja]

thats very considerate of them. it's nice that they still remember us. (Might this have anything to do with the scheduled meeting between Obama and the Baltic leaders?)

Don't know.

But besides military force, Kremlin is contemplating soft subvertive force as well.

http://windowoneurasia2.blogspot.com/2013/07/window-on-eurasia-russia-can-bring-to.html

[Hercus Monte]

Latvia, always the weakest link, bless them.