Greece must make more cuts, not clear how much -EU

[Joanne98]

Source: Reuters

BRUSSELS, March 2 (Reuters) - Greece must tighten its belt further to reach this year's deficit-cutting target, but it is not yet clear by how much, the European Commission said.

Economic and Monetary Affairs Commissioner Olli Rehn on Monday discussed with Greek authorities the need for deficit-cutting measures on top of those already taken by Athens.

No bailout plans were discussed, but "both parties understand ... there is a need for additional measures and these should be presented as soon as possible... in order to make sure that the target of 4 percent is reached," Commission spokesman Amadeu Altafaj said on Tuesday.

Greece has committed to cutting its budget deficit to 8.7 percent of gross domestic product this year from 12.7 percent in 2009 and to bring the deficit to below the European Union ceiling of 3 percent in 2012.


Read more: http://www.reuters.com/article/idUSLDE6211N720100302?type=marketsNews

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Greece needs to pull out of the EU so they won't be stuck with the inflexible euro.

[unhappycamper]

1. Or perhaps Greece should stop buying stuff from Goldman Sachs. n/t

[dipsydoodle]

2. pull out ?

I'm not sure how they do that ? Might prove equally difficult just pulling out of the Euro. One solution might be for Turkey to buy Greece. :sarcasm:

[muriel_volestrangler]

6. 2 years' notice to unilaterally pull out, set by the Lisbon Treaty Article 50

http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-european-union-and-comments/title-6-final-provisions/137-article-50.html

Or sooner, if negotiations with the rest of the EU solve it before then. How that affects pulling out of the Euro, I'm not sure.

[dipsydoodle]

8. Because it may not previously have been considered

as a likely event, and hence not included in the Lisbon Treaty, maybe Greece could sell their membership to Turkey. :shrug:

[HeresyLives]

3. Greece needs to stop spending money

it doesn't have...no matter what currency they're on.

[denverbill]

4. Why are tax increases always forbidden these days?

After all, we've cut taxes on the affluent by more than 1/2 in the last 30 years and surprise, surprise, have enormous deficits.

But to fix the deficits, the solution is always 'cut spending'.

Tell you what - you want your war in Afghanistan? Fine, the poor will fight it, so let the rich pay for it.

[WriteDown]

5. In this case, the wealthy have already fled Greece...

The solutions are elusive.

[Igel]

9. Because not all countries have low tax rates.

In Greece the percent of GDP that's taken as taxes is 31-33%, as of 2006. The estimates vary by reporting authority--Greece collects so many different kinds of taxes summing them up over the entire population is a non-trivial problem. In any event, given the current deficit as a percentage of GDP that rate would have to increase to around 45%. And that's on average. Since the lowest income wage earners would starve, it means the middle and upper classes would have punitive tax rates and see no increased services (merely a continuation of what they've already got).

Average retirement age is 61-63 although, again, getting a handle on that average isn't a simple task. Raising the average retirement age would help produce more GDP and more taxes, while reducing expenses. It's produced large protests and widespread strikes.

Fertility is at 1.3. The population is aging, and the retirement spike is just beginning. For every 20 retirees there will be 13 people paying into the retirement system.

Federal taxes in the US have, since the late '40s, been about 20-22% of GDP. Regardless of what the highest tax bracket was. In fact, within a couple of years of changing the highest tax rate, the taxpayers in that bracket return to paying about the same amount of their income. The direction of the change doesn't really matter, except for the short term. High tax rate --> high effort to shelter money; low tax rate --> much less effort to shelter money.

[Statistical]

10. People in Greece are protesting both paying taxes and cutting spending.

They truly are delusional.

At least teabagger just want one side. Now they are delusional because they don't realize the impact of those cuts.


Still Greece is in a whole new category of fantasy land.

Greece announces cuts to govt workers = strikes & protests.
Greece announces they will increase enforcement of tax payments = strikes & protests.
I mean it is pretty obvious you need one or the other and they probably need BOTH.

[xchrom]

7. Greece had financial turmoil before the EU. Nt