Economic Realities

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A look at the facts surrounding the Greek bailout that has supposedly saved the country’s economy.

TeleSUR English posts on social media:

The IMF and the EU nearly destroyed Greece with its financial bailout. Now, the country is going to market and being sold piece by piece, as almost every industry becomes private.

TeleSUR English

63 thoughts on “Economic Realities

  1. Rob_G

    I’ve not heard of TeleSUR, but another one of their posts is headlined: “Hasta siempre, Comandante Fidel!”

    So, you know – take it with a pinch of salt.

    1. Cathy

      TeleSur is a Pan Latin American news outlet, to the left but generally reflective of the region. It’s a fairly big news organisation , perhaps you don’t care for a Latin American view on world affairs. There is admiration for Fidel Castro in Latin America as he stood up to the aggressive northern neighbour who wished to to turn the entire continent into their own fruit farm/casino resort/oil rig. Of course Fidel was not without his faults as I’m sure you’ll point out to me. TeleSur is of the left , perhaps you’d prefer the Wall Street Journal or Times version of what austerity has done to Greece.

      1. Rob_G

        Now now – I merely suggested that people take it with a pinch of salt.

        If was an paper on flat taxes by the Cato Institute, I would take that with a pinch of salt, just as much as I would a story on the Greek bailout from a news organisation which is funded by the governments of Cuba, Venezuela, and Bolivia.

      2. Jones

        Stood up to America.

        Didn’t stand up to journalists, political rivals, outspoken citizens, homosexuals, the disabled, the incarcerated, etc., etc., etc.,

        But ya know, the healthcare and all that

        1. Cyrano de Bergerac

          Look up the work of the Centro Nacional de Educación Sexual and check your ideology at the door pls

    2. Rob_G

      “A sobering look at the facts surrounding the Greek bailout that has supposedly saved the country’s economy.”

      – no you didn’t.

      Being posted on social media is not equivalent to declaring something an opinion piece.

  2. JIMMYJAMES

    Austerity is violence against humanity by another mother.

    Is it really a necessity when restructuring a country’s economy, course not… you don’t need a .BA in international finance and economics to realise its not, its just a bit of social engineering.

    Akin to kickn a homeless person while they are down.

    1. ReproBertie

      I’m constantly amazed at how people proudly display their ignorance for all to see.

      Lets take Ireland as a simple example. Ireland, thanks to FF inflating the property bubble and then bailing out their developer and banker mates, went into recession. The money needed to fund the workings of the state just wasn’t there. Part of the solution was increased taxes to bridge the gap between income and expenditure. Another part of the solution was cutting back spending to reduce that expenditure. These austerity measures are the sort of simple economics that households up and down the country have to do week on week. It’s all well and good blaming the parent that tightens the budget for not being able to afford the fancy biscuits any more but it’s a denial of the reality of the situation.

      What other option did Ireland, or indeed Greece, have?

      1. ivan

        Yebbut in your own example, you say “Ireland, thanks to FF inflating the property bubble…” which is true, up to a point, but the austerity hit plenty of people were never beneficiaries, firsthand, of the boom. Now the poor certainly ‘benefited’ inasmuch as their benefits and so forth weren’t cut during the good times, but I’m not sure it’s the case that they deserve(d) as much of a kicking as, say, the eejit who reckoned remortgaging the farm to buy a rake of development land was a “good idea”.

        1. Andy

          Every single Irish person benefited from the early years of the boom through:
          – Increased jobs
          – Increased wages
          – Increased spend on education, roads & infrastructure
          – Increased spend on healthcare,
          – Increased social welfare benefits,
          – Reduced taxes

          Sadly, most of the later years was pee’ed away on public sector wages with no productivity.

          The Irish state, excluding anything relating to the banks or developers, ran current budget deficits of :
          €1.6bn (2007)
          €12.8bn (2008)
          €22.6bn (2009)
          €18.7bn (2010)
          €18.3bn (2011)
          €13.6bn (2012)
          €11.5bn (2013)

          That’s €99 billion on paying social welfare, old age pensions, teachers/nurses/garda wages, subventions on bus routes, for park maintenance, medicines, free 3rd level education, etc etc etc

          Without an IMF/EU bailout no one would lend Ireland the money to make up those deficits. So the options were either massive expenditure cut backs or IMF bailouts with minor expenditure adjustments.

          1. Rob_G

            This should be a pop-up on this website, triggered when someone begins to type ‘bailout’, ‘bankers’, etc.

      2. edalicious

        Some would argue that by reducing government spending, the knock-on effect is that people have less money to spend so therefore the economy as a whole slows down, which in turn actually prolongs the recession.

        1. ReproBertie

          A fair point. Equally, increasing tax reduces people’s spending power which has a knock on effect on the economy as a whole.

          Does that mean there was another way to bridge the gap between income and expenditure? If there was I don’t know what it was and I’m just waiting for the anti-austerity cheerleaders to explain it to me.

          1. Rob_G

            Well, you would usually do it by borrowing. But that only works if people are willing to lend money to you, and in the case of Greece, no-one was.

          2. Anomanomanom

            Ask your self why. Rating agencies who are all international bank friendly, give such poor rating that the country cant borrow, forcing a bailout which in alot of cases ended up helping keep the banks a float that then got good ratings and made already rich people richer. Obviously more complex than that but thats basically what happened.

          3. ivan

            In the short term, Repro, there certainly *isn’t* another way because obviously we can talk of what-should-be till the cows come home, but if there’s a shortfall in the books, you just gotta make it up.

            However, as I said above, it is certainly unfair that those who didn’t/don’t benefit get hit as badly, if not worse by the austerity stick, and there’s a problem (probably not unique to Ireland either) where businesses can be too big to fail, and so they get bailed out, often at around the same time. And so, really, with my simplistic D-Minus-in-Economics-101 hat on, it occurs to me that austerity will always be relatively more unfair in the poor than those who tend to cause problems, and there rarely seems to be any political appetite to change that. I suspect that folk would be far more likely to take another whack of the austerity stick if they genuinely thought that their, ahem, “betters” were feeling the odd clip of it as well.

          4. ReproBertie

            ivan I tried to figure out a way to phrase this earlier but gave up. Roughly, I don’t know how austerity can be means tested. That means those who prospered get hit but it also means those that didn’t party get hit too. There’s no interest in fairness when a bunch of economists are dictating recovery terms to a bunch of school teachers. Especially when the school teachers have just seen the books and are still in shock.

          5. ReproBertie

            Personally I find it downright insulting that the very developers that fuelled the bubble are being employed at tax payers expense in NAMA on the grounds that the people who couldn’t make money out of the properties are the bext peopel to make money out of the properties. It’s the Golden Circlejerk looking out for each other as usual but that’s fine because the good people or Ireland are gearing themselves up to re-elect FF because FG were the ones to implement the recovery policies.

            FF had no interest (and thankfully, no chance) in winning the post-Biffo election but if we could have stomached putting them back in for another pension boosting term and forcing them to implement the austerity it would have been the death of them. Of course if FG had failed to win an election in the wake of FF handing the running of the country over to the Troika then it would have been the death of them too.

          6. Rob_G

            @ Anomanomanom

            I think it was more of the case that Greece owed so much money already, had ran a budget deficit for many years (and wasn’t looking at running a surplus any time soon), and banks were worried about getting paid their money back.

            And, sure enough, Greece wasn’t able to service the debt, some lenders took a haircut, and the eurozone (in other words, taxpayers like you and me) had to step in and lend some money so that Greece didn’t collapse completely.

          7. Anomanomanom

            I know that, but certain countries took pleasure out orchestrating very injustice terms. Basically a case of here’s the terms take them or watch people starve, which would have happened in greece.

          8. ivan

            @ Repro That’s fair enough. I don’t think we’re a bajillion miles away ideologically. You got my gander up with your “I’m constantly amazed at how people proudly display their ignorance for all to see.” because that was a response to the phrase ‘kicking a homeless person when he’s down’.

            I’m a sucker for emotive language, and could even ignore the hyperbole that preceded it!. Anyway, yeah, gang of primary schoolteachers on career breaks running the gaff is never gonna end well, is it.

          9. Rob_G

            @ Anomanomanom

            I would dispute that there was any malice involved – I think that certain countries (Portugal and Latvia, for example) might have been a bit ticked off at Greece claiming the poor mouth, and then having themselves to borrow money in order to lend it to Greece, when their economies were actually poorer than Greece’s.

          10. ReproBertie

            Ah the ignorance comment was in reference to austerity being social engineering rather than restructuring the economy.

            I’m no fan of austerity but not liking the medicine doesn’t it any less necessary. The lesson we need to learn from it is to watch who we leave in charge of the economy but we won’t be learning that and well they know it.

  3. eric cartman

    I think everyone is confused about austerity. All it means is cutting government spending (a good thing) and usually privatising some government services (also a good thing)

    Ireland needs a lot more of it to clear out the bloated, overpaid civil servants who constantly stand in the way of progress and reform.

    1. Mr. Camomile T

      Privatising public services to clear out civil servants is like throwing the baby out with the bathwater. If the only way to remove civil servants is to sell off the civil service to the private sector then we’re properly fooked!

    2. Gorev Mahagut

      Privatisation is not a good thing. Look at the British railways. Compare US healthcare to European public health systems.

      Transferring goods from public control to private hands is not progressive or reforming.

      1. Rob_G

        “Privatisation is not a good thing.” – that depends. To your British railways, I could counter with Aer Lingus.

        1. Martin Heavy-Guy

          If Aer Lingus went bust then Ryanair would have a monopoly and a gateway to the US, and that would be the end of yer low-cost fares. The only thing keeping O’Leary from running rampant is Aer Lingus – his stronghold is Ireland.

          Further to that, I had a nice little experience in Leicester earlier this year when I bought an all-day “any journey” bus ticket with one company and was refused entry to the next bus because it was a different company, even though company #1 didn’t serve that route at all. Fancy implementing that in Dublin?

          1. Markgdub

            “The only thing keeping O’Leary from running rampant is Aer Lingus – his stronghold is Ireland”.

            Re: your experience in Leicester, you are essentially telling us you did the equivalent of buying a ticket from Dublin to Gatwick on Ryanair and expected Aer Lingus to fly you there.

          2. Martin Heavy-Guy

            I’m essentially saying that I bought an all-day bus ticket that took me to only very specific locations in the city. If I wanted to go to other locations I needed a different ticket. It’s not about the companies, but about the availability of service.

            Both Ryanair and Aer Lingus fly to London, so I have choice.

            Only one bus company in each case travelled the routes I was taking in Leicester, so choice (and competition) were removed.

      2. DubLoony

        It depends on what is being privatized. Sometimes a state has to step in with massive initial infrastructure because no private sector is going to put in that level of investment.

  4. JIMMYJAMES

    Exactly ReproBertie, ‘households up and down the country’, the second generation who would still sit up,listen & take heed to Haughey’s belt-tightening waffle.

    What was its 38 billion..once the figures go over the 1000 million mark sure whats another billion… its big boy stuff, can’t burn this lot. Prob 48 billion, who the f knows.

    Don’t poke the hornets nest..lets go down the tradtional simple economics route with income and expenditure…” we just don’t have the money to keep the lights on lads”, course you f-ing do…
    you just don’t want to ask certain peoples for it.

    You might aswell be sitting in one merkel’s civics classes, where she dictates that the next pupil to (country) disrupt the class (EU) will be taking an early bath (shower)

    38BILLION!

    Don’t be getting any notions about buying that bread with the sesame seeds in it ReproBertie, or you will find yourself rootn in the bins for it like your greek cousin.

    Know your place.

    ..flagellation whips are on isle 2.

    1. ReproBertie

      Was there a point in there?

      Beyond cutting expenditure and increasing tax, what other option did Ireland, or indeed Greece, have?

      1. Biggins

        they should have been allowed to continue to borrow enough money to ensure there would be no tax increases or pay cuts and the fact that their ability to pay back the money, loaned by taxpayers from other countries, was questioned just goes to show how inconsiderate other countries are to the standard of living that the Irish and Greek had become accustomed to.

  5. JIMMYJAMES

    yo are not restoring a country’s economy through austerity measures, you are keeping a international financial banking system in place..their agenda is not the evolution of humanity

    1. ReproBertie

      So what do you suggest? We tell the international banking system to take a hike and hope we never need to borrow money again?

    2. DubLoony

      Serious question: Have you considered what happens when banking collapses?
      When there is no money at all?

      Like Argentina who ended up with a barter economy, shut out of the ability to borrow for 15 years.

      45% of the population of this country are dependent on welfare payments – pensioners, single parent families, disability payments, carers, unemployed.
      I know they had a rough time. But if the banks had collapsed, the state bankrupt, they would receive nothing at all.

      1. curmudgeon

        Indeed and FF have no stomach to face that. They ( FF, not necessarily the citizens) fared better to simply borrow huge sums at unbelievably massive interest rates and have “future Ireland” deal with the issue of repaying the debt. Currently at 211 billion

  6. Jake38

    The Greeks spent large of amounts of money they didn’t have on bloated public service salaries and pensions. That’s what bankrupted the country.

    1. scottser

      it’s almost mandatory now to insert the word ‘bloated’ before the words ‘public service’ because of shills like you. i pray for the day you need a and e, or a homeless service, or the dole. you have no clue what it’s like to work as a public servant so you really should keep your d1ckwad opinions to yourself.

      1. Jake38

        Many thanks for your insightful analysis and charming phraseology.

        Now jog along. There’s a good fellow.

    2. curmudgeon

      Exactly the same is happening here. Non contributory pensions are unjustifiable and a massive burden on the taxpayers of tomorrow as well. They haven’t even been costed yet, we have to wait til next year (via the CSO) to find out just what the damage is. Hint: it’s a lot

      1. Cian

        perhaps we should get rid of the bloated public sector agency of the CSO then? as all public servants are a drain on our taxes. And then we wouldn’t have to worry about the non-contributory pensions because we wouldn’t know how much they would cost?

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