Millions in Europe crushed into poverty by crisis

[yeokiwi]

The problem with greece is that there is no competitiveness in the country.The country itself was relying on loans to sustain their lifestyle. It is just like a poor family living off loans with many kids and the parents are unskilled.

Thailand, Indonesia and Malaysia were not exactly in the same class as Greece. They had mismanaged their fiscal policies during the Asian crisis but essentially, they had cheap labor, cheap land and agriculture products to rebuild their economy and repaid the debts.

One of their way out is to export labors just like many other asian countries.
But, how much does a Greek maid cost?

[Hongwei]

风水轮流转... One day it will be our turn. Are u ready for it?

Agree, we mustn't be too complacent and think that it wouldn't happen..

[corydorus]

Austerity needs not be returning to balancing the budget within a year or two. It is about lowering their cost structure no matter how long it takes. Encouraging growth now will only prolong the lifestyle they can't afford due to their high cost level and being part of Euro.

The people needs to be pushed back to the right level of lifestyle else even with loans forgiven, it's a matter of time they will ask for help again. People who buy Greece bond again after they can return to the bond market, chances are it will be another write down down the road. Is a matter of time.

[specuvestor]

^^ focus on GDP growth is to generate enough tax income and also change the negative feedback psychology of the masses. That is the root of Thaksinomics. It is to stop the cardiac arrest and not focus on prolonging high fat diet lifestyle. Nobody in a crisis, except maybe the wall street bankers, thinks their lifestyle can be continued. A good recent example is the recovery in Iceland

The problem with greece is that there is no competitiveness in the country.The country itself was relying on loans to sustain their lifestyle. It is just like a poor family living off loans with many kids and the parents are unskilled.

Thailand, Indonesia and Malaysia were not exactly in the same class as Greece. They had mismanaged their fiscal policies during the Asian crisis but essentially, they had cheap labor, cheap land and agriculture products to rebuild their economy and repaid the debts.

One of their way out is to export labors just like many other asian countries.
But, how much does a Greek maid cost?

the root of AFC was pte enterprise issuing cheap US$ loans due to inflexible exchange rate and hence depleting national reserves. The world had changed for us after China devalued the RMB, as it changed for Greece after CDO crisis (not forgetting it's financials were precarious when it joined Euro by fraud), but people are slow to adjust. That is not very different from Greece. If Euro, or drachma, was to depreciate 50% like in AFC, your equation of high cost in Greece would be totally different. It is not free of course, and like us they would all have to pay the inflation tax, which is much easily accepted politically due to tragedy of the commons. That would ironically force them to be more efficient due to "higher" domestic cost. Problem with Greece stuck in Eurozone is massive self feeding deflationary spiral with no way out. There has to be a mechanism for the economy to adjust, which is lacking now.