Friday, January 20, 2012
What's a Greek urn?
The more you read about Greece and its problems the more you realise what an unholy mess they are in. The country, population and government, are institutionally incapable of telling the truth or balancing their books.
Whilst there is probably a requirement to discount some of the more far fetched stuff, some of what I've read has made me realise that their problems cannot be solved overnight and in my opinion will take several generations to solve if indeed they are solvable at all.
The government lied to the EU in order to get into the euro-zone (to access cheap money) and coincidently one of the men that did this is currently trying to get the country back on track. Hmmmm.
Governments over the ages have made no attempt to solve the problem of endemic fraud from its businesses or citizens. No one pays the correct level of tax. No one.
Benefit fraud is rife. According to a government minister, the level of disability payments would make sense only "if Greece had fought in the Vietnam War."
It was reported that there is an area in Greece that has the highest number of Porsche cars registered. The same area has no one claiming to earn more than €35k.
As I understand it, in order to get the next tranche of EU money they have to convince the next round of bondholders to write off 50% of what they are owed and take 35% in new bonds. This means that in practice they will get 15% of what they are owed.
This has to be agreed before the EU will pump in more money. WHY WOULD THEY DO THAT?