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Re: Bad news for Greece 

By: zzstar in FFFT3 | Recommend this post (1)
Wed, 22 Jul 15 11:01 PM | 89 view(s)
Boardmark this board | Food For Further Thought 3 		Msg. 14303 of 65535
(This msg. is a reply to 14298 by wilful)
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None of that tourism crap is true, how do I know? I'm there. Boats and plans full. Islands hopping. Got friends coming next week from the U.S., and they ARE EXCITED!! The last mi ute deal allowed the normalcy that did save a good part of the season for them.

Now, it looks like government and opposition are on the same boat. Tonight's vote is crucial. F they manage to come out of this, they will do it, no matter what. There is so much money in Greece, hidden from the government, it's not even funny.

Assholes like this guy say some obvious stuff and try to make it that it will happen. Not, once the leftists in the government are dealt with.

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The above is a reply to the following message:
Bad news for Greece
By: wilful in FFFT3
Wed, 22 Jul 15 10:02 PM 		Msg. 14298 of 65535

How we can already see the debt deal killing Greece
11:46 AM ET, 07/22/2015 - MarketWatch

By Tim Mullaney
Tourism drops sharply, dooming hopes of reviving economy
Well, this didn't take long.
Before the ink is even dry and all the conditions agreed to, there are signs that the deal to "restructure" Greece's debt in exchange for "reforms" is killing the economic goose that in Greece lays what are increasingly toxic fiscal and macroeconomic farts.
The evidence is data released by Booking.com, the largest travel agency in Europe, owned by Priceline Group (PCLN) . As the chart below shows, the chaos surrounding the debt deal slashed the number of people willing to book vacations in Greece nearly to zero. Even now, with the situation ostensibly resolved, the number of cancellations is up nearly 20% from a year ago.
Here's the chart:
Tourism doesn't just matter a little to Greece's economy -- for purposes of generating the imported currency that will let Greece even begin to make payments on the soon-to-be 400 billion euro debt owed by a poor country with a population the size of Ohio, tourism IS the economy.
With few other export industries, and olive oil generating less than $1 billion a year, the 17% to 18% of the economy represented by tourism is where the debt will be serviced, let alone repaid. If it is serviced at all.
The sag in tourism even in the last few weeks tells Greece's fortune -- outright panic when, as is often the case, the situation seems out of control, pockmarking the longer-run situation of torpor and slight decline that has pushed Greece's unemployment rate about 25% and will push it farther up if the deal is implemented.
The economy only gets even worse when the deal takes effect -- complete with a big tax hike on travel to the Greek islands. That's only part of a broader insistence that Greece run a much bigger surplus than even Germany, where unemployment is just 4.7%. We've seen tax hikes and spending cuts applied to an economy in depression -- in the U.S., in 1937, prompting a jump in unemployment (http://www.u-s-history.com/pages/h1528.html)to 19% from 14%. Among other things, they mean that the Greek budget won't run the surplus that official creditors demand.
The options now run from the tragic to the comic.
The tragic begins with the slow-motion train wreck everyone can see coming now, where more austerity leads to a deeper depression, with Europe putting in more money like the 7 billion euro Greece used to make missed interest payments this week. The grimly comic potential of this lies in the prospect of northern European officials pretending this is progress.
After all, you don't need to be a weatherman to see which way the wind is blowing for Greece's third-quarter economy.
The solution, which will not be quick or easy, begins with devaluing Greece's currency and letting what needs to happen, happen. While analogies to Argentina's early-2000s devaluation are popular now, the better analogy may be to the shock therapy regimes that once-corrupt Communist states like Poland and the Czech Republic went through after the Berlin Wall fell.
The devaluation could mean bringing the drachma back -- or, as economists have suggested in recent days with varying degrees of seriousness, fiscally responsible states such as Germany could leave the euro and let debtor nations remaining in the eurozone devalue together.
Either way, Greece is going nowhere without a tourist boom, and a cheaper currency would do much more to make that happen than Europe's bright idea -- which is raising value-added taxes on Greek holidays.
There is no amount of trucking or pharmacy deregulation (reform, if you will) that is going to service a debt that is closing in on double Greece's shrinking gross domestic product. But structural reforms to make Greece's economy sound in 2017 and beyond will only work if the country doesn't drown in debt before it gets there.
-Tim Mullaney; 415-439-6400; AskNewswires@dowjones.com

(END) Dow Jones Newswires
July 22, 2015 11:46 ET (15:46 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.

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