Possibility of Civil War in Greece?

Thanks for a well documented and thought provoking article Mark.

This should serve as a warning to everyone to reduce their debts, particularly their credit cards, as quickly as they can.

Some good points but the title of the article is misleading, it is of the "will the sky fall to our heads" stock of headlines... The answer is no, not much of a possibility really.

Also the credit card analogy is not accurate either, the finances of states do not work as credit cards (ignore what Dave and George wants us to believe). Unless as a credit card holder you are allowed to print your own money and set your own interest rates. The LTV model is not accurate either, UK fares better in this crisis because it is allowed to devalue its currency (already devalued around 20% since the crisis, eurocountries can not do this) and also the maturity of their loans averages 13.99 years. Countries that face problems at the moment are countries with debt (this is true and in this case the ...LTV is rather relevant) that needs repayment now or soon. In a financial climate of limited liquidity they are charged high enough rates to make their debt unsustainable ie Italy and Spain at the moment. I can't remember the figure but Spain's ...LTV is much better than UK's I think but look the interest rates that the two countries are asked to pay.

And another opinion on the question of where do the states owe money to: pretty much every developed state had to bail out the banks when the system collapsed. Particularly for UK this added massively to the goverment debt levels due to how big the financial sector is in this country. In a way the banks' debt never disappeared, it was just passed to the goverments and it now weighs heavily on their balance sheets.

It is already well reported that Greek wealth owners have been buying proporty in London like there is no tomorrow. Why? Fears about the (distant I believe) possibility of Greece going back to some form of drachma and tax invasion reasons possibly too. Implications? Well, other than overheating the London property market, there are little direct implications to the Greek day to day life. Yes, it makes more difficult the greek economy to grow. But it is part of a number of changes that happen there as part of the crisis; massive immigration to countries such as Australia (that actively advertises in the greek media for highly skilled professionals).

I also disagree with some other assumptions made here but let me mention just a fourth party that has actually been asked to "bail out" Greece (in the true sense of the word for the first time as they look to take a haircut on the loans they gave out): the private sector i.e. the banks (not ECB) that have accumulated enough interest already from the interest payments that a 50% haircut is in reality something around 20% of actual loss. And this is part of Merkel's "moral argument" that includes the private sector taking a hit for their irresponsible past lending...

I think this is a warning to everyone that rents more than the most basic room to anyone that gets housing benefits. The hard working classes may rebel at some point and be no longer willing to proving more than bread, water and bare minimal shelter to the benefit classes. (Think of the effect on rent and hence values in some areas that at present have the best returns.)

I hope I never see the UK become a place where thoes who have are unwilling to help those who have not. I realise that funds are stretched and that benefits need to be controlled but there are many vulnerable people in this country who are unable to take care of themselves and God help us all if we allow them to suffer for those who misuse the "system". Tigher controls are needed and the realisation that we cannot afford to pay benefits to those who have recently entered the country until they have made some contribution to the "pot".

Landlords need to keep an eye on the changes that are coming in the benefit system and in particular position themselves safely when the Universal Credit kicks in and direct payment and specific LHA payments no longer exist. I am working hard with all my local authorities to ensure that the PRS continues to thrive because without us everyone will be in trouble.

I have no comment on the grown up content of your very interesting post Mark but thank you for your well informed comments.

"I hope I never see the UK become a place where thoes who have are unwilling to help those who have not."

Totally agreed, but the time maybe coming when the working population are not willing to provide a none-working couple without children with anything more than a room that is just about big enough for a double bed in a basic HMO.

I hope the current package of reforms (Universal Credit etc) works well and are not water down too much – otherwise something more radical may be demanded by the voters in a few years’ time.

The sad fact is that most people are only willing to help others if it does not reduce their standard of living to below what they have got used too – we are starting to see the standard of living of people in good jobs reducing to be lower than what their parents had.

I do see your point Ian but "there but for fortune..." Everyone in work is just a P45 away from needing the help of others and every tenant is a P45 or a change of personal circumstances away from needing LHA We must all be mindful that no one thrives if they feel less than they are and in order for people to get back on their feet they need at the very least a "home" where they feel safe and comfortable. The length of time a person is claiming and the reasons for their claim need to be monitored carefully to ensure that benefits do not become a barrier to work. I have been told many times "I cant afford to work because I will loose too many benefits" and this is unacceptable but it is OUR fault, we have allowed the safety net to become a cage and we all must accept responsiblity and let Government know that this must change. I would like to see a gentle evolution to ween people off benefits and put those who are "working the system" on warning, what I fear is a revolution that will affect the most vulnerable members of our society - not least children who have no control over what their parents do or do not do.

Mary,

I think that people that lose their jobs should get more benefits then they do at present with the amount reducing over time, possibility with the level of benefits depending on their average income before they lost work (After all it takes time to move to somewhere cheaper). The real resentment is building up towards the families that have 2 or more generations when on-one has ever worked, but yet they get larger homes that the people that do work. As well as all the single people that said they had a right to steal a large screen TV from a shop because they can’t afford to buy one.

It used to be considered irrational for someone to have children if they could not afford to bring up the children, now in large parts of some cities, a baby is considered the quickly way for a girl to get her own flat!

I have never understood way we are so keen to take benefits away from people on the first day of their new temp job, then make then wait many weeks after the end of the job for the paperwork to be processed to get back on benefits.

In the last year or so, I have notices a real change in the attribute of the people I work with over this sort of issues. Hopefully noone will delay the evolution of the benefit system; otherwise I too FEAR a revolution.

Yes Ian we need to divide the genuinely needy from the greedy and stop incentivising people to choose not to work.

You make a really good point about giving people some overlap when they go into temporary work or on a trial basis - many people are afraid to do this because of the delay in benefits if they fail.

Yes I know what you mean about the change in attitude and we need think very carefully about MOTIVATION see my blog on Maslow & Motivation

What would happen, if Greece did Go Bust