Posted by bad_luck on 10/6/2015 2:12:00 PM (view original):
We can never become Greece. You'd know that if you actually worked in finance.
Remember what greece was like before 2008:
The Greek economy was one of the fastest growing in the Eurozone from 2000 to 2007: during this period it grew at an annual rate of 4.2%, as foreign capital flooded into the country newly backed by the euro.[21] This capital inflow coincided with a higher budget deficit.[13]
Now look at the greek government reports explaining the cause of the crisis:
In January 2010, the Greek Ministry of Finance published the Stability and Growth Program 2010.[16] The report listed these five main causes for eruption of the current government-debt crisis:
GDP growth rates:
After 2008, GDP growth rates were lower than the Greek national statistical agency had anticipated. In the report, the Greek Ministry of Finance reported the need to improve competitiveness by reducing salaries and bureaucracy,[16] and the need to redirect much of its current governmental spending from non-growth sectors such as military into growth-stimulating sectors.
Government deficit:
Huge fiscal imbalances developed during the five years from 2004 to 2009: "the output increased in nominal terms by 40%, while central government primary expenditures increased by 87% against an increase of only 31% in tax revenues." In the report the Greek Ministry of Finance stated their aim to restore the fiscal balance of the public budget. They intended to implement permanent real expenditure cuts (meaning expenditures would only be allowed to grow 3.8% from 2009 to 2013, which was below the expected inflation at 6.9%). Overall revenues were expected to grow 31.5% from 2009 to 2013, secured not only by new, higher taxes but also by a major reform of the ineffective tax collection system.
Government debt-level:
Mainly deteriorated in 2009 due to the higher than expected government deficit and high debt-service costs. An urgent fiscal consolidation plan was needed to ensure that the deficit would decline to a level compatible with a declining debt-to-GDP ratio. The Greek government assessed that it was not enough to implement structural economic reforms, as the debt would still increase to an unsustainable level before the positive results of such reforms could be achieved. On this basis the government's report emphasized that in addition to implementing the needed structural economic reforms, there was an urgent need in the coming four-year period to implement packages of both permanent and temporary austerity measures (with a size relative to GDP of 4.0% in 2010, 3.1% in 2011, 2.8% in 2012 and 0.8% in 2013). Implementation of this entire package of structural reforms and austerity measures, in combination with an expected return of positive economic growth in 2011, would then result in the baseline deficit being forecast to decrease from €30.6 billion in 2009 to only €5.7 billion in 2013, while the debt-level relative to GDP would stabilize at 120% in 2010–2011 and begin declining again in 2012 and 2013.
Do you see any similarities? Why are you so hellbent on going down the same path?