10 ms·

Right, so the EU powers that be have two options: 1. Admit they were wrong and dismantle the Euro, or 2. Use it as an excuse to centralise more power in Bruss

• gaius 17y ago
  The problem isn't the spending policy, tho'. Go to Athens and you will see the problem very clearly. The habour is full of yachts, the streets are jammed with luxury cars and the people covered in designer labels and bling. This is a wealthy place, you might think, then look at little closer. The place looks like a building site and here's why: in Greece you pay no taxes on a building 'til it's completed, but since the weather is fine all year anyway, why not just leave the top floor unfinished? And they do, private individuals and corporations alike. You see, the Greeks want a level of government spending like Germany or Sweden. They're even willing to vote in the taxes to fund it. But they're not willing to actually pay those taxes, and so they just don't. Greece is a poor country full of rich people. In that sense the austerity measures will be easy to implement: corruption is everywhere. As is a strong sense of entitlement... Compare that to Germany or Sweden where paying your tax is seen as a civic duty. I did quite like the German idea that the Greeks ought to sell off their islands to other countries to raise cash.
  • dpapathanasiou 17y ago
    "But they're not willing to actually pay those taxes, and so they just don't." It runs deeper than that: Greece is the last Stalinist economy in Europe (despite never being behind the Iron Curtain). The government is so massively bureaucratic and corrupt that most people there consider it foolish to pay taxes to such an entity. This article goes into the background, and, on a hopeful note, suggests how that could change in the future: http://www.aei.org/article/101804 http://www.aei.org/article/101804
    • jbooth 17y ago
      Unless there are a whole bunch of Greek collective farms and forced labor camps that I'm unaware of, "stalinist" might be overstating it.
      • dpapathanasiou 17y ago
        You're right about the lack of forced labor camps, but "Stalinist" is how local economists describe the situation. To give you some idea: if you want to start a company, it will take you a minimum of 40 days to visit various bureaucrats and get permissions. When you hire employees they will come with union strings and have a Soviet-era worker mindset (i.e., they can do whatever work they want, incompetently or not, and they still expect to get paid, etc.), which is probably where the phrase comes from. The Calomiris article goes into more detail.
        • jbooth 17y ago
          Well then those quote "local economists" are idiots with no sense of history. "Mildly socialist, corrupt and inefficient" is how any economist who has a brain, local or otherwise, would describe it. "Stalinist" is for Sarah Palin, the Tea Party and other groups who are more concerned with "impact words" than actually understanding anything. EDIT: Just to make it more clear how inaccurate and inflammatory that comparison is, Stalin by many estimates killed more people than Hitler. I'll repeat that. Stalin by many estimates killed more people than Hitler. Want to rethink the comparison maybe?
          • dpapathanasiou 17y ago
            I understand your point, but it's not my term (e.g., here's a recent citation in English http://www.guardian.co.uk/world/2010/mar/28/greece-bond-issue http://www.guardian.co.uk/world/2010/mar/28/greece-bond-issu... and there are other articles in Greek using the same phrase). Their references to that term allude to red tape on a large scale, centralized economic planning, indifferent and unmotivated labor, etc., not the death camps and killing. (And that last phrase reminded me of this: http://bit.ly/bh96ml http://bit.ly/bh96ml apropos of nothing).
  • bd_at_rivenhill 17y ago
    Hopefully the Germans will be smart enough to force the scheduling of the bailout payments to be done in such a way that it pushes the Greeks to cut their spending. Maybe something like make the first payment equal to about 95% of what seems to be needed in order to cover their interest payments and then decline from there.
  • elblanco 17y ago
    > in Greece you pay no taxes on a building 'til it's completed, but since the weather is fine all year anyway, why not just leave the top floor unfinished? And they do, private individuals and corporations alike. This. Athens reminded me a little bit of Cairo, with mile after mile of "unfinished" occupied buildings. It seems also that good policy is a major problem. No taxes till complete? That's fine, now make it illegal to move into an incomplete building. No sane person can make a rational argument that people should be able to move into construction sites.
    • sesqu 17y ago
      I would make that argument, especially if I'm personally involved in the building (not sure about the legalities here). Maintaining a house no one lives in is pretty expensive, so there's every reason to have someone move in as soon as the house can manage weather protection, food storage, and ventilation. Further, if you're personally involved in advancing those concerns, you're already spending at least 10 hours a day in the building. Now, leasing the place out while there are holes in the floor is probably against a law, but there's no reason why buildings couldn't be continuously developed incrementally with user feedback. And occasionally, they are.
  • shykes 17y ago
    "The place looks like a building site and here's why: in Greece you pay no taxes on a building 'til it's completed, but since the weather is fine all year anyway, why not just leave the top floor unfinished?" Interesting. The exact same thing happens in south Italy.
  • jrockway 17y ago
    Sounds a lot like California.
• fab13n 17y ago
  Yep, Europe has set itself up in a situation where sooner or later, it'll have to get a unified economic policy. But it doesn't look like a bad thing to me: * European countries are too small to be meaningful in worldwide economic (or military) matters: our markets would be too atomized, we wouldn't have any negotiation power unless we "harmonize" our positions: I'd rather have the decisions be taken together, rather than harmonized as an afterthought. * Granted, today Brussels doesn't work democratically and lacks real power, especially when it comes to monetary policy. Giving real power to that shapeless bureaucracy seems stupid at first sight. For European elections, most parties are attached to a single country, have "national" (i.e. totally off-topic and inapplicable) programs, aren't kept accountable for anything once elected; the vast majority of voters either don't have a clue what a Euro-MP's purpose is, or would bet that they have none. But all of this would change quite rapidly, if Brussels was to get some real, strategic, intelligible power: real programs would become defensible during elections, the purpose of real pan-European parties would become clear, and if elected people ran on a real program, they could be held accountable of it (well, at least as much as in normal democraties anyway).
  • eru 17y ago
    I agree somewhat with the sentiment that a stronger EU can be good. But I do not see why we should see harmonization as so important. Unilateral free trade is always possible. Also, Switzerland seems to be doing fine as a small and independent country.
    • fab13n 17y ago
      Without harmonisation: * We can't decide anything about inflation, interest rates, at monetary policies. * There's an incentive for fiscal dumping: you set your tax rates for mobile capital so low that you drain wealth from the 26 other countries; knowing that common market and currency makes more things mobile and therefore drainable Besides, free trade is a fairy tale: we practice free trade according the WTO rules, but the real business is the negotiation where WTO rules are decided. As Europe, you've got enough weight to have your word, as most businesses can't afford to forgo the whole European market. Most of them can forgo France, or Germany, or Spain.