Re: Road to a Grecian turn?
 

When you say the reforms, which do you mean?

The OECD places Greece as a very front runner in the Structural Reforms Stakes over the past few years. As you point out, the troika controls the purse strings - their method is reforms for cash and they have disbursed every tranche of the bailout to Greece bar the last one, which is a hell of a lot of reforming.

A primary deficit of 10% in 2009 was converted to a 2.5% primary surplus in 2014. The public sector wage bill was slashed by 30% in 4 years. The same amount has been wiped off the welfare bill. The minimum wage was cut by over 20%. Income tax, VAT and property tax shot up...... to mention but a few.

The result of these reforms is a 30% reduction in GDP - a complete and utter disaster.

Sure - the previous Greek governments implemented the programmes and entered into disussions about their content. But you might have a somewhat different view of who controls what if you were ever unlucky enough to ever stray behind enemy lines and into bailout territory - the Portuguese government, which couldn't have been more compliant, had a little game of pass-the-parcel with the troika a while back as to who "owned the programme" in a very rare moment of divergence with them, each being convinced it was the other. And the troika, whilst they say they are perfectly happy to alter aspects of these programmes, have a very narrow view of what constitutes an acceptable substitution.

Re: Road to a Grecian turn?
 

OECD = IRRELEVANT, we already had this discussion. They are neither the desperate debtor or the frustrated lenders.

Greece a front runner on structural reforms :rofl::rofl::rofl:

Re: Road to a Grecian turn?
 

Yes, I've been looking for where even the OECD said this and I can't find it.

I think getting their own citizens to pay tax is the one reform they really needed to deliver on but they have never even managed this - there are plenty of other reforms that failed along the way though.

Re: Road to a Grecian turn?
 

Perhaps somebody could tell the troika that - they insist Greece carry out reforms identified by the OECD.

The other time I mentioned them was in a different context anyway. This time it was in response to the ludicrous (sorry Vino!) claim that Greece hasn't carried out reforms.

The OECD is probably the only organisation that publishes information about the economic performance and reform of a number of countries in a way that allows comparison. If you can point to a better source of information please do.

If you don't think Greece has implemented reforms, how do you explain the turnaround from deficit to surplus?

Re: Road to a Grecian turn?
 

How much of the Greek government's revenue is raised through taxation? What proportion of GDP does it represent? How does that compare with other countries? Has the tax / GDP ratio risen, fallen or remained stable over the past ten years?

Re: Road to a Grecian turn?
 

I assume you know the answer to your own questions?

Nearly all goverment revenue is tax of one sort or another - for the UK in 2013/14, tax was about 75% of the total revenue raised (mainly income tax, corporation tax and VAT), the remainder is mainly NIC and other charges related to pension, sickness and unemployment.

It's not possible to get a comparable statistic for Greece but at the end of 2014 the cumulative tax owed by Greek citizens was in the order of €76bn. Unfortunately the goverment estimates that only €9bn of this is now collectible owing "insolvency and bankrupticies".

There are billions more in unpaid taxes as a result of the grey economy that the Greek government has failed to crack down on - another failed reform.

So even if the Greek equivalent statistic was available it would be incomparable with the UK figure as a result of widespread Greek tax evasion.

“Greeks consider taxes as theft,” according to Aristides Hatzis, an associate professor of law and economics at the University of Athens. “Normally taxes are considered the price you have to pay for a just state, but this is not accepted by the Greek mentality.”

Re: Road to a Grecian turn?
 

the idea that Greece is a world leader in structural reform is ludicrous - I actually spat my coffee out laughing when I read that

Re: Road to a Grecian turn?
 

I can't see why you're so dubious - unless you really don't know how these bailouts work. Reform, review, cash. No reforms, no cash. Greece has had all of the cash bar the last tranche ie has implemented loads of reform.

Surely its not difficult to see that nations which are being held over a barrel in this manner are having to implement more reforms than those which are not?

Why were there riots in Athens? - because pensions and wages were being slashed, public services cut to ribbons, taxes hiked and the nation's assets sold off cheap. The so-called reforms the troika signed off on when they handed over the money.

Hold onto your coffee while you read this next bit. Greece has probably achieved the fastest and biggest fiscal adjustment ever. Are you going to stick your fingers in your ears and say la la la to that, too?

Re: Road to a Grecian turn?
 

:rofl::rofl::rofl::rofl:


Yes you called it right - the most dysfunctional economy in the developed world is now leading the way on structural reforms and has achieved the biggest and fastest fiscal adjustment ever............................WHY oh WHY are they so bankcrupt then???

It is economic gymnastics in its finest, i.e. cooking the books - no one is buying it Eric as it defies belief.

This is the country in which 64% of people are retired by 54 years of age and the vast majority of them on government pensions (PS the corresponding figure in Germany is 31% and they are all on private pensions.......).

The OECD, EU, Eurozone, ECB and the World Bank have repeatedly called for Greek governments to implement the strucutral reforms (already identified) - progress todate in identifying the need structured reforms is around 100% - progress to date in implementing them 0%.

Let us take your assertion on Greece being the World Leader in structural reform - if you define world leading as needing the highest number of structural reforms to ge tout of the mess they are in, then you are spot on and I apologize for misunderstanding what you said. However, if you really believe they are a world leader in implementing structural reform then I think you are seriously misguided.

Re: Road to a Grecian turn?
 

Roger Bootle has an interesting column in the Telegraph
The eurozone’s economic crisis is far from over - Telegraph
Whilst his record on house prices is well known -Crap - he is to my mind one of the more thoughtful commentators.

Re: Road to a Grecian turn?
 

I'm not saying they were the right reforms but Greece has implemented a huge amount of reform over the past few years, the large majority of it troika-mandated.

Why are they bankrupt? Because they were bankrupt in 2009 before the bailout and because it was insisted then, as now, that the problem be treated not as bankruptcy but as a cash-flow problem. So the upping of the pace of reform in order to get the debt repaid as quickly as possible by a rapid and massive fiscal adjustment (no - not cooking the books. Drastic cuts in public spending) hasn't had the desired result. The opposite, in fact because it has made a terrible situation worse. Depressing the GDP by 30% increases the ratio of debt to GDP - and of course more debt was being piled on all the while.

One of the areas in which successive reforms have been implemented is pensions, which, as I'm sure you know, have been severely cut (40% reduction is the figure I have seen). Aside from that, though, the pension age has risen to 65 and will shortly be 67 with no early retirement before the age of 60.

Re: Road to a Grecian turn?
 

I agree with some of that but unfortunately they are still paying government pensions to 54 year olds and will continue to do so for the foreseable future :nod:

The issue remains the lack of implementation of structural reforms. Therefore, the problem now is quintessentially the same as it was in 2008 (if you spend more than your economy can support you go down the drain) and the current Government want to go on a further spending spree to create the illusion of growth and deliver on their, what some might consider, rash election promises.

They desparately need other countries to lend them shed loads of money for the spending spree. However, the other countries want them to make the structural reforms that are needed to return their economy to function and thereby demonstrate an ability to pay back the loans (or in reality at least service the debt).

Don't forget there has already been a significant default by Greece on its loans from the private banks hence its exclusion from borrowing large amounts from the market. Once they have returned to economic viability then they can self fund the spending spree and everyone will be happy. As I have said before it is time for action not posturing........

The trouble is the posturing and foot dragging that has taken place since the election and the complete breakdown of trust since 20 Feb - the so called "Varoufakis Problem" makes everyone less inclined to help them.

I am sure Syriza, like you, don't consider they have reneged on anything but they have just been cleverly ambiguous in their approach - unfortunately for them and by extension the poorer elements of Greek Society this is not how the IMF, OECD, World Bank, the Not-Troika and the markets have assessed their behavoiur. They have been weighed in the balance and found wanting - time for them to wake up and smell the coffee.

The "Not-Troika" actually want to help this failing state avoid becoming a failed state, admittedly this is for their own interests rather than that of Greece and its people - threats, ambiguity, bluster, footdragging ain't cutting the mustard - time for them to be upfront and honest and pdq.

Re: Road to a Grecian turn?
 

Not to forget that Greece has quite a history of debt default - interesting to read the account of their default in 1893 as it sounds awfully familiar:-

1893 Default
After the Greek government settled outstanding defaults in 1878, the global capital markets opened once again to Greece and, as you might expect, lenders were only too eager to provide funds. This borrowing increased to unsustainable levels and the government suspended payments on external debt in 1893.

In 1898, foreign pressure led Greece to accept the creation of the International Committee for Greek Debt Management. This committee monitored the country's economic policy as well as the tax collection and management systems of Greece.

Re: Road to a Grecian turn?
 

Here is an example of Syriza's world-leading structural reform........

Re: Road to a Grecian turn?
 

Come, come Mike. You know I haven't claimed that Syriza leads the world on structural reforms - the very simple reason for that is that they have only been in office for a very brief period and have been expressly forbidden from implementing any reforms until the entire package under discussion has been ratified.

What I posted previously was a response to the claim that Greece, under the troika, did not implement reforms - and that is clearly false. One crystal clear example of this is perfectly illustrated in Tim Worstall's article (I'll give it the attribution as you still seem content to quote without crediting the source) ie that huge numbers of civil servants were turfed out of their jobs (although he doesn't make it clear that 4,000 would be a very small proportion of the total).

I notice that you're quite keen on Forbes as a source of information so I'm surprised you weren't able to track down anything in there about Greece (and Ireland, Portugal and Spain) implementing more reforms than other OECD countries in recent years.