tag:blogger.com,1999:blog-5882645467378797266.post920247157131173299..comments2023-07-17T11:55:51.363+02:00Comments on ObservingGreece: "Starve the Beast?" (the Greek state)kleinguthttp://www.blogger.com/profile/12491174042954678023noreply@blogger.comBlogger5125tag:blogger.com,1999:blog-5882645467378797266.post-25521885936294571362013-09-11T17:54:04.901+02:002013-09-11T17:54:04.901+02:00How can you be like the Germans? The Germans have ...How can you be like the Germans? The Germans have their mighty industries. We don't.<br /><br />Then, when we compare the public institutions, the two societies are nothing alike.<br /><br />So what's left? To try and have these virtuous current-account surpluses. But that wouldn't work if everybody tried to do it simultaneously, would it?<br /><br />In the meantime, here is a very good analysis of the latest Greek GDP figures:<br /><br />http://kkalev4economy.wordpress.com/2013/09/06/greek-gdp-2013q2-update/Jim Sliphttps://www.blogger.com/profile/15325962115410722474noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-61271185992044138092013-09-05T11:51:31.323+02:002013-09-05T11:51:31.323+02:00Thank you for providing Friedman's analogy. I ...Thank you for providing Friedman's analogy. I wasn't familiar with it. It is a good one!<br /><br />Neither did I know that the Eurozone was designed as the trade-off you describe. My sense was/is that the Eurozone was designed to make everyone behave like the Germans do.kleinguthttps://www.blogger.com/profile/12491174042954678023noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-37568711735256498542013-09-04T16:00:57.685+02:002013-09-04T16:00:57.685+02:00The Eurozone has been conceived as a trade-off.
T...The Eurozone has been conceived as a trade-off.<br /><br />The surplus nations would enjoy a lower currency-rate than if they were on national currencies. This is an indirect subsidy on their industries.<br /><br />The deficit nations would enjoy borrowing on lower interest, without the danger of currency devaluation. This was the suprlus mechanism of the Eurozone.<br /><br />This trade-off doesn't exist anymore because the European banking system doesn't function anymore (and the ECB allowed it to happen). That is why there is a crisis, and so that is why the Eurozone has no reason of existing anymore either.<br /><br />Internal devaluation is an unbalanced and needlessly complicated adjustment, which Milton Friedman described as if "having each individual change his habits instead of changing the clock in summer time. Obviously it is much simpler to change the clock that guides all, than to have each individual separately change his pattern of reaction to the clock. It is far simpler to allow one price to change, namely the price of foreign exchange, than to rely upon changes in the multitude of prices that together constitute the internal price structure."<br /><br />http://www.interfluidity.com/files/friedman-flexible-exchange.html<br /><br />If Milton Friedman can't convince the neoliberals, then I don't know who will.Jim Sliphttps://www.blogger.com/profile/15325962115410722474noreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-67081294479083255582013-09-04T10:08:15.700+02:002013-09-04T10:08:15.700+02:00The point herr Klaus is exactly as you said "...The point herr Klaus is exactly as you said "excluding oil and shipping, Greek exports in 2012 were still below the level of 2008!<br />But this what explain?<br />I think the quality of reforms and inefficient business environment.<br />The real issue is to create environment so as people to take initatives.<br />Daniel Gros is making a mistake to the extend that the cost for a entrepreneur to start a business is still high. Banks still funding is negative for 2013 because capital requirments are weak but also NPL are around 30%.Also as you know deposits are minus 70 b euros so there is a problem.<br />It's difficult to observe an increase in industrial equipment for very small businesses when e.g when you pay 1.75 for gas or heating diesel 1.4, when taxation system is totally a mess. We ve said to reduce bereaucracy but if you see how many new legislation forms written only in 2012-13 you would become a librarian!.<br />Cost of energy, in industries and for individuals and self employed is must. <br />Look at it practically in two areas.<br /> First we ve said we have a primary surplus, but if you are able to see the budget execution because i can't we have 1.5 bil like subsidy!!! from SMP (eu central banks) and for 7 months period gov paid less obligations 1,135 bil compared to 2012 (2035 2012--- 2013 900). <br />This all are around 2.6 bil our primary surplus?<br />There is a forced as i am saying primary surplus, a killing surplus.<br />Second what i am saying is reduce gas prices 1.25 like Bulgaria and heating at 1.00e, reduce energy cost ( in natural gas from Russia we paying 30% more than in central europe)!<br />Only this will liberate professions better like taxi or trucks or buses which are almost closed professions will make some people to spent money for lower consumption cars and the revenues for excise tax definetely will increase. We are minus 2.5 bil in revenues from excise tax herr Klaus compared to 2010! With minus 2.5 bil we are trying to improve our budget image. This is not happening!<br />See it like a company when in financial distress plus with other major changes ( restructuring etc) the real target is to increase sales even without profits.<br />The most important in budget execution is that public investment program is also curtailed around 200 mil in June July period! If this practise followed next months PIP will reduced around 1-1.5 bil this year.<br /><br />What development you see?<br /><br />The Greek economy is not like Germany with industries ready to reclaim competitive advantages.<br /><br />The current account deficits will still exist?<br />Yes but with the targeted reduction i mention the recession will tackle a bit.<br />Development is the major target that mention when came in Greece mr Schaeuble.<br />Finally,the very small greek companies will hire personel, we need to give them space, foreign investments are a need but 500000 small entepreauners if only make one hiring many issues will resolved.<br /><br />MS<br />Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5882645467378797266.post-24573565512679109052013-09-03T21:07:09.017+02:002013-09-03T21:07:09.017+02:00Daniel Gros (I've read many of his articles) s...Daniel Gros (I've read many of his articles) strikes me as a particularly repulsive figure, because of his grisly cynicism.<br /><br />It's unfortunate that of the three things that the troika could've done (austerity, reforms, investments), they limited their efforts on the first one.Jim Sliphttps://www.blogger.com/profile/15325962115410722474noreply@blogger.com