Just how much of a mess is Greece in, and what will happen?

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RegisterMe
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Post by RegisterMe »

The main reasons that Britain is not as vulnerable as Greece are (and forgive me, I don't have all the figures to hand):-

1. That we entered the crisis with a lot less debt outstanding, compared to our GDP, than Greece. So yes, whilst we have borrowed an obscene amount of money, it's actually brought us broadly into line with the borrowings of other European countries.
2. That we have a much more efficient and effective tax collecting system than Greece. There is much less of a grey / black economy in play. This gives the markets more confidence that we will actually be able to pay our debt down.
3. The maturity of our debt. It's at the longer end of the yield curve than Greece's. What this basically means is that we have borrowed money for ten years and twenty five years, rather than Greece which has been borrowing for one year and five years. Our debt is more stable, and we have more room for manouvre. Simplest analogy? Greece has been borrowing money on its credit card, whilst the UK has a mortgage. Credit cards are an expensive way to borrow money...
4. The pain we have to inflict on our economy, in the form of tax rises, pay cuts, and reductions in service, are much less extensive than those required in Greece. We have to tighten our belts, they have to cut a limb off.
5. That we are not tied to the Euro.

The main "gotcha" for the UK is the off balance sheet liabilities in the form of unfunded public sector pensions and PPP deals. If we were being honest with ourselves (and everybody else) we would add this pile of debt to everything else. As it is we basically ignore it through accounting slights of hand. To be fair though I suspect every country suffers from this to an extent.

So whilst we have some serious problems they are nothing on the scale of Greece's. We have a hangover, they are being wheeled into the operating theatre.
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thetack
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Post by thetack »

one other difference between the UK and greece, if both countries put up income tax too 40% the brits would winge and pay it, the greeks would riot, i am not beign funny the money markets know that the UK tax payer is a more pliable source of revenue than the greek one so we have more chance of paying back our debts.
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Post by Tsar_of_Cows »

thetack wrote:one other difference between the UK and greece, if both countries put up income tax too 40% the brits would winge and pay it, the greeks would riot, i am not beign funny the money markets know that the UK tax payer is a more pliable source of revenue than the greek one so we have more chance of paying back our debts.
Also we have a ridiculously big military which we spend silly amounts of money on, if it all gets *really bad* we can cancel expensive projects like Eurofighter and the QE2 aircraft carriers and even pull out of Iraq/Afghanistan and save ourselves eye wateringly large amounts of money.
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Post by imperium3 »

thetack wrote:one other difference between the UK and greece, if both countries put up income tax too 40% the brits would winge and pay it
We do, a sizeable portion of the population already pays that much, I should think.

The real danger that the UK is in, as Lyth rightly says, is what I would call the "infrastructure bomb" caused by decades of short-sighted construction and mismanagement. The rail and road networks are overloaded and desperately in need of maintenance. Water and power supply is nearing capacity, with AFAIK no major works in place to improve them in the near future. Add to this the continuing credit crisis and the likelihood that the incoming Conservative government (however much I hate them, it's sadly certain that they'll get elected) will tear apart public spending - transport being an easy sector to cut back on because it generally doesn't cause such a reaction as the NHS or police being cut. When this bomb strikes (IIRC 2012-13 was cited but I'm not sure) it is likely that we'll be stuck with collapsing infrastructure and a government with no money to rectify the problem.

I do hope I'm wrong :D
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Post by Dragoongfa »

Tsar_of_Cows wrote:
thetack wrote:one other difference between the UK and greece, if both countries put up income tax too 40% the brits would winge and pay it, the greeks would riot, i am not beign funny the money markets know that the UK tax payer is a more pliable source of revenue than the greek one so we have more chance of paying back our debts.
Also we have a ridiculously big military which we spend silly amounts of money on, if it all gets *really bad* we can cancel expensive projects like Eurofighter and the QE2 aircraft carriers and even pull out of Iraq/Afghanistan and save ourselves eye wateringly large amounts of money.

We already have a 40% income taχ for anyone who has income above 60.000 euros.

The income tax goes like this:

0-12.000 - 0%
12.001-16.000 - 18%
16.001-22.000 - 24%
22.001-26.000 - 26%
26.001-32.000 - 32%
32.001-40.000 - 36%
40.001-60.000 - 38%
60.000 =< - 40%

No one has rioted about this yet.

We also have spent around 5% of the annual GDP for the last 20 years for the military but geographically we are at a weird position.
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Post by Lyth »

Tack - we could increase tax revenue yes but we are already bleeding a stone, more we tax the more business's that leave the country which in turn forces more tax on the remaining companies and individuals. We need to boost and revive our economy not shrink and kill it. The reason we have been so historically a haven for venture capitalism is because of our low tax's.

Tsar - Our military capabilities are already at breaking point, your absolutely right we could bin all of our projects but they are the only reason half our troops are using out of date equipment with the promise of future advantages plus DERA and her sister company do alot for our economy.

-Pulling out of Iraq/Iran will have disastrous consequences that will ripple throughout our world, I too look forward to an end of it but we've started so we should finish. Allowing those that have given up their lives to have died for nothing is a dishonour I hope I don't live to see.

I don't claim to be right about our economy being worse, it's just as I see it. Greece's problem seems alot more manageable than ours without the rising unemployment, fleeing business's or infrastrucutre issues.

I apologise for taking this thread off topic, better get back to it now. :)
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Post by RegisterMe »

You're not taking it off topic Lyth, you providing comparison and contrast, and that's no bad thing :-).

Anyway, to comment on Dragoonfa's post re personal tax in Greece, here's the UK's for 2010-2011:-

Starting savings rate: 10%
£0-£2,440

Basic rate: 20%
£0-£37,400

Higher rate: 40%
£37,401-£150,000

Additional rate: 50%
Over £150,000

£1=~1.158 euros

EDIT: To put it in the same terms as Dragoonfa, UK tax rates expressed in Euros:-

0-2826 - 10%
2827-37398 - 20%
37398-173700 - 40%
173701 - 50%

In short, in the UK we pay more tax. A lot more.
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Dragoongfa
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Post by Dragoongfa »

The UK does have tax allowance Register Me:

http://www.adviceguide.org.uk/index/you ... mounts.htm

For under the age of 65 the tax free income allowance is: £6,475

6.475 x 1.158 = 7458 euros

For those over the age of 65 the tax free allowance is: £9,490

9.490 x 1.158 = 10989.42 euros

Also non taxable income (which we don't have anymore):

http://www.adviceguide.org.uk/index/you ... ome[/list]

I can safely say that, without any tax deductible income low income Greeks are kinda on a better position but mid to high income are worse, compared to UK citizens.

EDIT:

Also there is the legendary receipt scheme that comes into play, in short in order to be eligible for the first 12.000 that are not taxable you must have the appropriate amount of receipts.

First 6000 euros, no receipts needed (you don't have to report such a low income).

Second 6000 euros, 10% of the amount in receipts which means 600 euros.

That covers the low incomes.

Higher incomes are a bit frakked up:

Anything above 12.000 to 40.000 needs 30% of that amount in receipts, if you don't get that 30% the difference is taxed by 10% in addition to the normal income tax.

So a Greek with an income of 25.000 will have to collect receipts that amount to 7.500 euros and thus his tax will be 2940.

If he fails to collect 7.500 and collects 6.000 euros worth of receipts he will have to pay an additional 1500 * 10%= 150 euros for a total of 2940 + 150= 3090 euros.

For those whose income is above 40.000 they will have to collect 12.000 in receipts or they will lose their non taxable 12.000 euros.
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Post by thetack »

you missed my point it was not economic but social the british people will submit to financial pain more readily than the greeks, the Uk is therfore less likly to fall into political meltdown and therefore not as likley to defult.
the exact level of tax is not important the level of subserviance is
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Post by Dragoongfa »

thetack wrote:you missed my point it was not economic but social the british people will submit to financial pain more readily than the greeks, the Uk is therfore less likly to fall into political meltdown and therefore not as likley to defult.
the exact level of tax is not important the level of subserviance is
We would be more willing to submit to financial pain if 2 criteria were met:

1)Removal of all legal lapses of politicians, corporates, journalists and etc;

Lapses that deny any and all prosecutions for mismanagement, embezzlement and briberies.

2)Reinstatement of the death penalty, on par with the Chinese, who don't take embezzlement lightly.

I guarantee you that we will agree to almost anything if the EU will allow us to do the above.
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Post by Lyth »

I got your point Tack, I just meant it wasn't the individual that kept the country going. You can't tax people that aren't working because all the business's went under or moved which would be the result of the extra tax burden regardless of willingness to comply which I do disagree with.

The interest rate issue is a good example, average consumer products have increased in price by 10-20% over the last year whereas saving and fiscal rates have dropped by upto 2% in most places, increase council tax or national insurance and you will have a riot on your hands.
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Post by Usenko »

Tsar_of_Cows wrote: Also we have a ridiculously big military which we spend silly amounts of money on, if it all gets *really bad* we can cancel expensive projects like Eurofighter and the QE2 aircraft carriers and even pull out of Iraq/Afghanistan and save ourselves eye wateringly large amounts of money.
Whilst that is true, you really don't want to get into that situation. This would be kind of like solving your personal debt problems by selling your car and buying a $500 clapped out jalopy - in the short term it would get you out of trouble, but in the long term you'd be stuck with obsolete equipment that winds up costing a larger amount of dosh. This would only be a good idea as a temporary fix while you worked on increasing your income (or decreasing your other debts).

It's actually worse, because (for example) if you cancel the QE2s you are going to have to make do with the Invincibles, which are analagous to an old car that's well designed and well maintained but nonetheless well used and worn out. Even the best machinery has a limited lifespan before it is costing you more than it would be worth.

And buying a carrier isn't as easy as buying a car (which is no fun at all, as I can attest!) - they have to be designed and built, a process that takes about 10 years AT MINIMUM.
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Post by JTressy »

Usenko wrote:
Tsar_of_Cows wrote: Also we have a ridiculously big military which we spend silly amounts of money on, if it all gets *really bad* we can cancel expensive projects like Eurofighter and the QE2 aircraft carriers and even pull out of Iraq/Afghanistan and save ourselves eye wateringly large amounts of money.
Whilst that is true, you really don't want to get into that situation. This would be kind of like solving your personal debt problems by selling your car and buying a $500 clapped out jalopy - in the short term it would get you out of trouble, but in the long term you'd be stuck with obsolete equipment that winds up costing a larger amount of dosh. This would only be a good idea as a temporary fix while you worked on increasing your income (or decreasing your other debts).

It's actually worse, because (for example) if you cancel the QE2s you are going to have to make do with the Invincibles, which are analagous to an old car that's well designed and well maintained but nonetheless well used and worn out. Even the best machinery has a limited lifespan before it is costing you more than it would be worth.

And buying a carrier isn't as easy as buying a car (which is no fun at all, as I can attest!) - they have to be designed and built, a process that takes about 10 years AT MINIMUM.
Cancelling current military projects (QE aircraft carriers are 'only' a few billion), and even pulling out of Afghanistan, still doesn't do much re: the current deficit (£160 billion per YEAR!). Even the Trident upgrade, which is projected at £100 billion over the next 30 years, is a drop in the ocean compared to spending on the NHS, public sector pay etc etc. I'm not trying to defend military spending, although I agree with the above post that the QE carriers are a good investment, but everything has to be taken in context! There is a crude calculator on the Financial Times website which gives you an idea of the scale of cuts needed, to really reduce the UK deficit down requires a LOT of cuts. Still, not as bad as Greece...
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Post by Tsar_of_Cows »

Bah. I hate politics. I don't really understand Economics TBH and I'm poorly informed and can't find decent information on anything because all the figures are screwed around with by civil servants.

It's hard to find out even relatively simple things like "has violent crime fallen over the last 20 years?" because you'll go to statistics.gov.uk and find the statistics are all screwed by not including various forms of crime for bulls**t reasons and not including various areas for reasons that amount to "well, violent crime has been increasing there so we ignore them".
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Post by Lyth »

Greece got the deal.
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Post by RegisterMe »

Indeed they did. A total of 110 billion euros. Contingent on pushing through some extremely painful reform, and external monitoring of their economic performance.

I hope they pull it off.
I can't breathe.

- George Floyd, 25th May 2020
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Post by Rive »

Lyth wrote:Greece got the deal.
Their politicians did.... We will see how it works out for the public.
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Post by Dragoongfa »

Yes, I am fine.

No, I did not protest.

Yes, I am pissed off.

http://news.bbc.co.uk/2/hi/europe/8661385.stm

One of the women was pregnant, so 4 victims...
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Post by RegisterMe »

That's awful :-(.
I can't breathe.

- George Floyd, 25th May 2020
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Post by BeidAmmikon »

And that's how international bankers take over a country.

Fight back, Greece, against the economic terrorists that helped ruining your country and who now OWN it. I am sure the PEOPLE do not want these parasites to own their lives.
There's a beginning for all, the higher you get the harder you fall. Let the parasites remember this.
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