Can someone give me a simplified explanation please.

[flibbage0]

Can someone give me a simplified explanation (maybe a few paragraphs) explaining the euro crisis.

I really don't know much about it and feel like an idiot.

All that I know is that Greece borrowed money, that they can't pay back, which led to them not getting as much money needed for growth which led to more debt?

 

[Vonhelmet]

Greece has a truly laughable economy and should never have been allowed to join the Euro. They were let in regardless. Their economy has become even more hilarious, such that all the other Euro folk are pretty much expected to bail them out. No one wants to bail them out.

 

[doofer]

Have you ever played Monopoly? Ever had it when someone wins everything on the board, but keeps the others playing by giving them some of his money, which he then proceeds to win back anyway and the other players are too stupid to quit thinking they still have a chance of getting back in the game? It's like that but real ****ing life.

 

[Fuzz]

The banks lent out money they didn't have and now they need it back before the **** hits the fan.

 

[flibbage0]

Greece has a truly laughable economy and should never have been allowed to join the Euro. They were let in regardless. Their economy has become even more hilarious, such that all the other Euro folk are pretty much expected to bail them out. No one wants to bail them out.

Why does Greece have such a bad economy?

Unnecessary spending?
People not paying enough tax?

 

[Vonhelmet]

Why does Greece have such a bad economy?

Unnecessary spending?
People not paying enough tax?

Paying tax in Greece is all but optional.

 

[Irish_Tom]

When the Euro came into circulation, the countries that adopted it agreed to a single currency but not a single fiscal policy.

As such, the countries were allowed to carry on taxing/spending as before. Countries which were strong before the Euro continued to do well and countries which were weak before the Euro continued to do poorly.

This left a huge real-world discrepancy between the 'value' of the Euro in various parts of the union. Then the world economic crisis really screwed things over, with various European banks/countries struggling (Greece, Ireland, Portugal etc).

In order to save the whole single currency, those stronger economies (German and France) have had to lend more and more money to the weaker countries to keep them afloat.

However, it's become clearer and clearer that countries like Greece have basically taken the money and not fixed the issues with their economy which got them into trouble in the first place.

We're now at a stage where they are talking about writing off half of Greece's debt (meaning the banks and countries which own that debt being out of pocket) and we're looking at China getting involved.

That's in very simple terms and I'm happy for anyone to correct/amend anything I've said or missed.

 

[flibbage0]

Paying tax in Greece is all but optional.

Really?

No wonder why it's all gone t*** up.

 

[Vonhelmet]

Really?

No wonder why it's all gone t*** up.

I'm being somewhat facetious... But evasion levels in Greece are extremely high.

 

[flibbage0]

When the Euro came into circulation, the countries that adopted it agreed to a single currency but not a single fiscal policy.

As such, the countries were allowed to carry on taxing/spending as before. Countries which were strong before the Euro continued to do well and countries which were weak before the Euro continued to do poorly.

This left a huge real-world discrepancy between the 'value' of the Euro in various parts of the union. Then the world economic crisis really screwed things over, with various European banks/countries struggling (Greece, Ireland, Portugal etc).

In order to save the whole single currency, those stronger economies (German and France) have had to lend more and more money to the weaker countries to keep them afloat.

However, it's become clearer and clearer that countries like Greece have basically taken the money and not fixed the issues with their economy which got them into trouble in the first place.

We're now at a stage where they are talking about writing off half of Greece's debt (meaning the banks and countries which own that debt being out of pocket) and we're looking at China getting involved.

That's in very simple terms and I'm happy for anyone to correct/amend anything I've said or missed.

I read about the 50% cut on the debts to help Greece, but surely they will just end up with the same amount of debt whether it may be in a few months or a few years?

 

[Irish_Tom]

I read about the 50% cut on the debts to help Greece, but surely they will just end up with the same amount of debt whether it may be in a few months or a few years?

Which is why Germany are keen to effectively 'take control' of Greece's government and sort the buggers out.

As you can imaging, this doesn't sit very well with quite a few people.

 

[Vonhelmet]

I read about the 50% cut on the debts to help Greece, but surely they will just end up with the same amount of debt whether it may be in a few months or a few years?

Exactly. Unless they fix the underlying problems in their economy - poor tax collections for one, but there's plenty of others - then things won't get any better in the long term.

 

[Vonhelmet]

Which is why Germany are keen to effectively 'take control' of Greece's government and sort the buggers out.

As you can imaging, this doesn't sit very well with quite a few people.

I do think it would be rather ironically amusing if Germany ended up in charge of Europe.

 

[StriderX]

Politicians screaming as usual about giving the "EURO" the shaken baby syndrome and wondering why its in its death bed.

NEVER CREATE POLITICAL CURRENCIES.

 

[scorza]

I read about the 50% cut on the debts to help Greece, but surely they will just end up with the same amount of debt whether it may be in a few months or a few years?

No, because the idea is that the default is accompanied with austerity measures to cut their spending. The Euro crisis is about a lot more than Greece - Greece is chump change compared to what happens if Italy can't sort its s*** out. Unfortunately until Berlusconi goes I don't think that's going to happen.

IMO you can trace all of Greece's troubles back to the two catastrophes it suffered in the 20th century - firstly there was a mass immigration to Greece causing the population to swell 25% between WW1 and WW2, then there was the German invasion of Greece in WW2

 

[Irish_Tom]

I do think it would be rather ironically amusing if Germany ended up in charge of Europe.

I've been thinking that too.

 

[Duke]

I'm being somewhat facetious... But evasion levels in Greece are extremely high.

And stupidly over generous pensions, which were unsustainable.

 

[flibbage0]

OK, thanks for the clear up guys.

One more question, people talk about the value of the Euro, what can change the value of the Euro in this crisis and why?

As you can tell I know next to nothing about politics and finance.

 

[anything I don't mind]

Some one posted an animated video a few mins long in another thread that explained it perfectly.

 

[mjt]

I'm being somewhat facetious... But evasion levels in Greece are extremely high.

Case in point:

A friend of mine was offered a job in Athens at €4,000 a month.
In the interview he was told to open a bank account in Cyprus where he would receive €2,000, and the other in his Greek bank account.

Another example of Greek logic:
In order to become a truck driver in Greece, a retired driver has to give you a licence. Closed shop.

Every taxi driver will also rip you off. Without fail.

Not really a surprise, is it?
And everyone's getting ****ed off an rioting because the people who caused this mess aren't being held to account.