EU Mallarky

Discussion in 'Current Affairs' started by flymo, Oct 28, 2011.

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  1. I just want to become a little clearer on this EU crisis thingy.

    Some countries within the EU project have been spending more money than they have and so have gone to the EU for a loan. Via the EU, the banks have then lent (I'm thinking Greece here) the countries some more money and so happy days for a month or two. Now it comes to paying the banks back but Greece is unable to pay the interest let alone the capital. So it goes back to the EU and does an Oliver Twist ("please sir I want some more") and so it goes on.

    Now with Greece being unable to pay its debts, the EU then fraps the banks down for wanting their money back and tells them to let Greece off of 50% of its debt. (I wish someone will tell my bank to write off half of my debts too). So who is going to compensate the banks then? I presume that will be the likes of you and I by one way or another - unless of course they took a loan insurance indemnity policy out, which then means that the insurance companies will want their money back somehow so that means it will still be the likes of you and I again having to pay more.

    In the meantime Klaus Regling from the newly formed the EFSF (European Financial Stability Facility) (yes it's so bad they have had to create a department to get them out of the pooh - by spending money that they haven't got on this new department) goes scuttling around the world to the new economies asking for money to bail the EU project out of the mire. I hope he flew cattle class.

    This has some analogies to Scotland becoming bankrupt and being bailed out by England. The Europeans must be seen to be a laughing stock.

    As China has only one time zone, I wonder when we will be moving into Beijing time ....
  2. Yes, that just about sums it up nicely.
    The Chinese have bought up enough American bonds that, if they were so inclined, they could release back into the market in one go and effectively bankrupt the USofA. Seeing this, the great thinkers of the EU think it`d be a good idea to put Europe in the same boat.

  3. The Anglo Scottish oil revenue debate is a seperate subject that has been covered extensively elsewhere. This is being edited to keep the thread on track.

    By all means start up a seperate discussion if you wish.

    Last edited by a moderator: Oct 30, 2011
  4. janner

    janner War Hero Book Reviewer

    I received this by way of email this evening, I have never been to Greece and am not in a position to comment on any part of it, does anyone know if any of this is correct?

    Even on a stiflingly hot summer's day, the Athens underground is a pleasure. It is air-conditioned, with plasma screens to entertain passengers relaxing in cool, cavernous departure halls - and the trains even run on time.

    There is another bonus for users of this state-of-the-art rapid transport system: it is, in effect, free for the five million people of the Greek capital.

    With no barriers to prevent free entry or exit to this impressive tube network, the good citizens of Athens are instead asked to 'validate' their tickets at honesty machines before boarding. Few bother.

    This is not surprising: fiddling on a Herculean scale — from the owner of the smallest shop to the most powerful figures in business and politics — has become as much a part of Greek life as ouzo and olives.

    Indeed, as well as not paying for their metro tickets, the people of Greece barely paid a penny of the underground’s £1.5 billion cost — a ‘sweetener’ from Brussels (and, therefore, the UK taxpayer) to help the country put on an impressive 2004 Olympics free of the city’s notorious traffic jams.

    The transport perks are not confined to the customers. Incredibly, the average salary on Greece’s railways is £60,000, which includes cleaners and track workers - treble the earnings of the average private sector employee here.

    The over ground rail network is as big a racket as the EU-funded underground. While its annual income is only £80
    million from ticket sales, the wage bill is more than £500m a year — prompting one Greek politician to famously remark that it would be cheaper to put all the commuters into private taxis.

    ‘We have a railroad company which is bankrupt beyond comprehension,’ says Stefans Manos, a former Greek finance minister. ‘And yet, there isn’t a single private company in Greece with that kind of average pay.’

    Significantly, since entering Europe as part of an ill-fated dream by politicians of creating a European super-state, the wage bill of the Greek public sector has doubled in a decade. At the same time, perks and fiddles reminiscent of Britain in the union-controlled 1970s have flourished.

    Ridiculously, Greek pastry chefs, radio announcers, hairdressers and masseurs in steam baths are among more than 600 professions allowed to retire at 50 (with a state pension of 95 per cent of their last working year’s earnings) — on account of the ‘arduous and perilous’ nature of their work.

    This week, it was reported that every family in Britain could face a £14,000 bill to pay for Greece’s self-inflicted financial crisis. Such fears were denied yesterday after Brussels voted a massive new £100bn rescue package which, it insisted, would not need a contribution from Britain.

    Even if this is true — and many British MPs have their doubts — we will still have to stump up £1billion to the bailout through the International Monetary Fund.

    In return for this loan, European leaders want the Greeks’ free-spending ways to end immediately if the country is to be prevented from ‘infecting’ the world’s financial system. Naturally, the Greek people are not happy about this.

    In Constitution Square this week, opposite the parliament, I witnessed thousands gathering to campaign against government cuts designed to save the country from bankruptcy.

    After running battles with riot police, who used tear gas to disperse protesters, thousands are still camped out in the square ahead of a vote by Greek politicians next week on whether to accept Europe-imposed austerity measures.

    Yet these protesters should direct their anger closer to home — to those Greeks who have for many years done their damndest to deny their country the dues they owe it.

    Take a short trip on the metro to the city’s cooler northern suburbs, and you will find an enclave of staggering opulence.

    Here, in the suburb of Kifissia, amid clean, tree-lined streets full of designer boutiques and car showrooms selling luxury marques such as Porsche and Ferrari, live some of the richest men and women in the world.

    With its streets paved with marble, and dotted with charming parks and cafes, this suburb is home to shipping tycoons such as Spiros Latsis, a billionaire and friend of Prince Charles, as well as countless other wealthy industrialists and politicians.

    One of the reasons they are so rich is that rather than paying millions in tax to the Greek state, as they rightfully should, many of these residents are living entirely tax-free.

    Along street after street of opulent mansions and villas, surrounded by high walls and with their own pools, most of the millionaires living here are, officially, virtually paupers.

    How so? Simple: they are allowed to state their own earnings for tax purposes, figures which are rarely challenged. And rich Greeks take full advantage.

    Astonishingly, only 5,000 people in a country of 12 million admit to earning more than £90,000 a year — a salary that would not be enough to buy a garden shed in Kifissia.

    Yet studies have shown that more than 60,000 Greek homes each have investments worth more than £1m, let alone unknown quantities in overseas banks, prompting one economist to describe Greece as a ‘poor country full of rich people’.

    Manipulating a corrupt tax system, many of the residents simply say that they earn below the basic tax threshold of around £10,000 a year, even though they own boats, second homes on Greek islands and properties overseas.

    And, should the taxman rumble this common ruse, it can be dealt with using a ‘fakelaki’ — an envelope stuffed with cash.. There is even a semi-official rate for bribes: passing a false tax return requires a payment of up to 10,000 euros (the average Greek family is reckoned to pay out £2,000 a year in fakelaki.)

    Even more incredibly, Greek shipping magnates — the king of kings among the wealthy of Kifissia — are automatically exempt from tax, supposedly on account of the great benefits they bring the country.

    Yet the shipyards are empty; once employing 15,000, they now have less than 500 to service the once-mighty Greek shipping lines which, like the rest of the country, are in terminal decline.

    With Greek President George Papandreou calling for a crackdown on these tax dodgers — who are believed to cost the economy as much as £40bn a year — he is now resorting to bizarre means to identify the cheats. After issuing warnings last year, government officials say he is set to deploy helicopter snoopers, along with scrutiny of Google Earth satellite pictures, to show who has a swimming pool in the northern suburbs — an indicator, officials say, of the owner’s wealth.

    Officially, just over 300 Kifissia residents admitted to having a pool. The true figure is believed to be 20,000. There is even a boom in sales of tarpaulins to cover pools and make them invisible to the aerial tax inspectors.

    ‘The most popular and effective measure used by owners is to camouflage their pool with a khaki military mesh to make it look like natural undergrowth,’ says Vasilis Logothetis, director of a major swimming pool construction company. ‘That way, neither helicopters nor Google Earth can spot them.’

    But faced with the threat of a crackdown, money is now pouring out of the country into overseas tax havens such as Liechtenstein, the Bahamas and Cyprus.

    ‘Other popular alternatives include setting up offshore companies in Cyprus or the British Virgin Islands, or the purchase of real estate abroad,’ says one doctor, who declares an income of less than £90,000 yet earns five times that amount.

    There has also been a boom in London property purchases by Athens-based Greeks in an attempt to hide their true worth from their domestic tax authorities.

    ‘These anti-tax evasion measures by the government force us to resort to even more detailed tax evasion ploys,’ admits Petros Iliopoulos, a civil engineer.

    Hotlines have been set up offering rewards for people who inform on tax dodgers. Last month, to show the government is serious, it named and shamed 68 high-earning doctors found guilty of tax evasion.

    ‘We will spare no effort to collect what is due to the state,’ said Evangelos Venizelos, the new Greek finance minister of the socialist ruling party. ‘We promise to draft and apply a new and honest tax system, one that has been needed for decades, so that taxes are duly paid by those who should pay.’

    Yet, already, it is too late. Greece is effectively bust — relying on EU cash from richer northern European countries, but this has been the case ever since the country finally joined the euro in 2001.

    Two years earlier, the country was barred from entering because it did not meet the financial criteria.

    No matter: the Greeks simply cooked the books. Two years later, having falsely claimed to have met standards relating to manufacturing and industrial production and low inflation, the Greeks were allowed in.

    Funds poured into the country from across Europe and the Greeks started spending like there was no tomorrow.

    Money flowed into all areas of public life. As a result, for example, the Greek school system is now an over-staffed shambles, employing four times more teachers per pupil than Finland, the country with the highest-rated education system in Europe. ‘But we still have to pay for tutors for our two children,’ says Helena, an Athens mother. ‘The teachers are hopeless — they seem to spend their time off sick.’

    Although Brussels has now agreed to provide the next stage of its debt payment programme to safeguard the count ry’s immediate economic future, the Greek media still carries ominous warnings that the military may be forced to step in should the country’s foray into Europe end in ignominy, bankruptcy and rising violence.

    For now, the crisis has simply been delayed. With European taxpayers facing the prospect of saving Greece from bankruptcy for the second year in a row, some say even the £100bn on offer will pay off only the interest on the country’s debts — meaning it will be broke again within two years.

    Meanwhile, there are doom-laden warnings that the collapse of the Greek economy could be the catalyst for another global recession.

    Perhaps if the Greeks themselves had shown more willingness to tighten their belts and pay taxes due to the state, voters across Europe might not now be feeling such anger towards them.

    But having strolled the streets of Kifissia, and watched the Greek hordes stream past the honesty boxes on the underground, it does not take a degree in European economics to know when somebody is taking advantage — at our expense.
  5. It's all Greek to me!
  6. janner

    janner War Hero Book Reviewer

    I thought the same!
  7. That's what I would have thought, Flymo - that's normally the way of it; however, the banks should be the losers in this one, as they have been milking the system dry for God knows how long now, paying huge salaries and bonuses to their execs that simply can't be justified in any sense of the word.
    Despite the 'economic crisis' in Euroland, most banks are still reporting vast profits every quarter and stillpaying their people way over the odds, so that would seem the fairest way of doing it.
    As for Greeces' problems, I'd have thought that someone would have rumbled the fact that with everyone taking something out of the pot, and nobody putting anything into it, at some point it would wind up empty - common sense?
    I didn't know just how bad things had become with tax evasion though - thanks for clueing me up.
  8. Mindful of Topstop's original comment, I don't believe that the first part of the equation can be justified; the English parliament has always administered Scotland (since the Act of Union) as part of the United Kingdom, the same as Wales and Northern Ireland.
    Okay, since the advent of devolution, all UK taxpayers have contributed towards the enormous cost of setting up the Scottish Parliament, the Welsh Assembly and Stormont so it hasn't all been one-way traffic; the problem now is the SNP's stance that because the Brent fields are north of the Tweed, all oil coming from them is, by definition, Scottish.
    However, because there still is no mechanism or agreement in place to differentiate between UK national waters and Scottish waters, revenues will continue to be paid to the UK govenment - which of course is Whitehall.
    With respect, that's not stealing - it's strictly in accordance with the original franchises and agreements made in the '60's.
    As Bandy said, 'they didn't have the political and economic institutions to either secure the funds from the robbers at Westminster or to administer them' which is absolutely spot-on; so without the work of the UK govenment to secure extraction rights and agreements with the oil multinationals at the time it was discovered, the stuff would still be under the north sea.
    Whatever the Scottish parliament does now, over 30 years later is up to the MSP's concerned; however if they elect to go for full autonomy it might be worth reflecting on how much longer oil revenues are going to be forthcoming - nothing lasts for ever.
    There again, prospectors may find fresh supplies - who knows?
    Last edited by a moderator: Oct 30, 2011
  9. Topspot has no intellectual grasp of the nuances or the linear or lateral dynamics of debate. Tunnel vision doesn't start to describe his approach to moderation of a thread. Blinkered despotism is an expression that comes to mind. You're not in the mob now, TS. Or are you?
    Last edited: Oct 30, 2011
  10. My post wasn't about the actual facts, rather it was about a sentiment of a poster who tried to represent Scotland as some foreign country leaching off the English. An utterly preposterous proposition when it is far more credible to portray the English as sucking the Celtic fringe dry over the centuries.
    There are parallels with Greece in that now that the resources of those non English countries of the UK are seen as depleted or environmentally damaging there is a movement towards looser union. The difference is that Greece was invited into a loose economic union as a sovereign entity when it was not economically fit to participate. The only way that Greece could be an equal partner is if the union was a sovereign, federal one with a universal political system subsuming the sovereignties of its constituent nations, with a central European bank and an elected federal government dictating fiscal policy, enforcing community wide federal laws and a common federal tax system.

    I'm pretty sure that neither Greece nor Britain want that. It's almost as if Adolph is reaching up from the grave.
    Last edited: Oct 30, 2011
  11. silverfox

    silverfox War Hero Moderator Book Reviewer

    I'll answer this as I think its directed at me - the fact that you can't read the posts properly means that your aim is wide of the mark.

    I have not in any way displayed blinkered despotism (interesting choice of words) at all. The trotting out of the tired old oil revenue arguments was off topic and is not in any way comparable to the implosion of the Greek economy. Indeed you yourself point out the preposterous fact in your second post timed at 1421.

    The blanket culling of post without explanation is crude and autocratic.

    The removal of non contributary posts with the provision of an explanation and the invitation to continue the debate in a seperate thread is Moderation. Your posts were part of those posts, I thought I had left a reasonable trail - obviously not.

    For future reference, and to prevent you from maligning innocent members - Moderators are identified by the large MOD on their avatar. the one that's not there in Topspot's case.
  12. In fairness to you, Foxy, I can see why you'd prefer these comments in a separate thread - issues with Greece and other struggling Eurozone countries aren't really comparable with what's gone on in Scotland; however, as Bandy rightly says, there are some areas of commonality between the way in which the Greek economy has been (mis)managed viz-a-vi the way that the UK government *appears* to have squandered income from the north sea oil rigs to the detriment of the Scots.
    Okay, your call, you're the Mod and we ain't - leave it in your capable hands.
  13. {Raises hand rather meekly} As it was I who had originallymentioned Scotland I think that I had better jump back into the fray.

    My association with Scotland and the now UK and Greece and the EU was not intended into looking at the rights of wrongs of the situation. It was just an observation of how a country can lose one's Sovereignty when they run out of money. In this case Greece becoming beholden to the EU(SSR).
    However, as an, I Englishman I was happy with the way things were before Bliar attempted to buy votes from the Taffys and Jocks with the offer of their own Parliaments. Now it looks as though this has given the impetuous to the Scots to try for full blown independence - to the ruin of the UK as it currently stands. And that I feel would be shame.
    Wales, Ireland (N), Scotland and England are too small to make it big in this new modern world. But together I feel that we are a good fit. Heck, we normally even speak the same language, ... well apart from the West Coast Scottish ... :)
  14. This was what I replied to and I stand by what I posted.

    My reference was to the admission of a state to the EU that had neither the will, the apparatus nor the resources to meet its fiscal regulations. The parallel may be tenuous but it seems to me that Scotland has been put in a similar situation by the British government granting quite far reaching devolution to Scotland, ironically, after it no longer has any real economic value to England. The parallel is that Greece also has no real economic value to the EU and by poor decision making, both nations have been put in a position of needing substantial subsidisation by a paternalistic, suzerain power.

    So, Topstop, you are Silver Fox, right? Certainly, you posted your moderator's explanation under Topspot's moniker.
    I'm so easily confused.
    Last edited: Oct 30, 2011
  15. Whos Fullstop Dandy-E?
  16. Oops! I should have said, "So you are Topspot, Silver Fox?
    Sorry, TS but I'm confused by people posting under others' names.

    Look at post #3...before it disappears.:-D
    Last edited: Oct 30, 2011
  17. Aaaagh! Ive been hacked!

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