on the radio it is suggested that Greece is a financial basket case.
that under the eurozone rules greece does not qualify any longer as a member because of the enormity of its debt.
any money they borrow has to be paid back at a much higher return than other member states
the government are to reduce their public spending as never seen before
i suspect this is going to have repercussions on all of us
Message posted by SusieM on 10 December 2009 at 11:35am - IP Logged
Greece is in an appalling state; we have been slapped with so many fines which I should think they have lost count.
Apparently the Prime Minister George Papandreou yesterday gave the first real indication of a possibility of emergency measures being taken by the government to kick-start the reeling economy, describing the country’s burgeoning debt as a potential threat to “national sovereignty.”
Everybody could go on about it but the situation is very grave indeed.
On a happier note - the sun is shining in the UK for once and a 'cold snap' is about to drift our way and folks the odd snow flake may fall from the sky - probably the day I am due to fly out..
Message posted by journeyman on 10 December 2009 at 12:59pm - IP Logged
It seems odd that the failing economy has had no effect on house-prices; rather frustrating for me as I've been looking to buy in Corfu for ages. And on some websites the asking price for properties (which have been on the market for years) has tripled!! As the Americans are wont to say: 'Go figure!'.
Message posted by Bob and Wendy (Uncle Bob) on 10 December 2009 at 1:23pm - IP Logged
Bob and Wendy
An interesting statement, but true.
It has always been the case that as soon as some interest is shown in a property, be it land, a donkey shed or house, the price doubles overnight as doubless it must have been undervalued before. And so it goes on.
Have to agree - most of the prices are a joke and not particulary funny...... In fact only yesterday an estate agent here told my husband he feels embarassed when he tells people the prices being asked for properties here in Corfu.
Message posted by Bill on 10 December 2009 at 1:38pm - IP Logged
Quote: Originally posted by journeyman on 10 December 2009
It seems odd that the failing economy has had no effect on house-prices; rather frustrating for me as I've been looking to buy in Corfu for ages. And on some websites the asking price for properties (which have been on the market for years) has tripled!!
As the Americans are wont to say: 'Go figure!'.
My opinion only -
House prices in Corfu (I don't know about the rest of Greece) are decreasing in some quarters. You only have to look at the number of estate agents whose websites show "new price" or "reduced" all over the pages. However, there are a number of reasons that many prices are remaining static, or even in some cases increasing. These include:
a)The valuation of land and property for tax purposes has been changed recently and taxes are now far higher. As an example - a friend of mine has a piece of land with planning consent on it that he wanted to sell for 40k. The tax office have valued the land at 80K for tax purposes, ergo, even if he sells it for 40K he will still have to pay tax on the 80K value. Theoretically my pal could sell his land for 40K and end up having to pay up to 16K in tax.
b) Vendors, especially expats, not wanting to lose money on their investment.
c) Vendors, mainly local citizens, historically only sold when they had absolutely no further use for a property. Often inherited these properties are valued at what the vendor wants for them, not necessarily a bricks and mortar type value. The vendor, not being desparate to sell, is happy to wait until someone wants their property sufficiently to pay what they are asking.
d) There are many people out of work here now. For some they believe selling unused property is a way of generating much needed income, but the values placed on these properties are a reflection of those prices at c) above. The mindset is - if Spiros can ask 100K for his 2 bedroomed house, then so can I, even if it's only worth 50K...
e) The same people who are now trying to sell to generate income want as much as they can get - perhaps their business has failed and there is no sign of any other source of funds on the horizon for them.
f) I've noticed that some agents have been inflating prices to a ridiculous level recently - no idea why though!
Message posted by Bill on 10 December 2009 at 1:45pm - IP Logged
I think it will be a completely different story five months down the line and we will see a significant drop in the price of property. Many vendors who have had their overpriced properties on the market will find they infact do need to sell and the only way will be to reduce the price. The Corfiots are suffering already and relatives will be rallied around to help which they do and that may entail having to sell land/property. Its also an island that has lived for quite some time on the never never and the Greek banks are acting very harshly now. I work for an estate agents (for my sins) in the UK and I introduced Corfu into the International Dpt two years ago BUT Corfu outpriced itself and this was very soon brought to light when all the enquiries were for Tuscany, Spain,Barbados and a sprinkling for Corfu.
Fingers crossed though but I truly think Corfu should think about growing their own produces and exporting rather than depending on tourism; some areas the soil is perfect but so neglected.
On that note bye from me.
Message posted by openside on 10 December 2009 at 5:20pm - IP Logged
From an estate agent's point of view, could I just say that it is certainly not estate agents who are inflating the prices in Corfu. As soon as a property is reduced considerably in price for whatever reason, it sells! We would much rather sell than have lots of expensive properties sitting on our books.
Message posted by Bill on 10 December 2009 at 8:07pm - IP Logged
My Greek is lousy so I don't always fully understand news reports on the TV here.
Could anyone shed light on a story I have heard today that Greek car tax is going to increase significantly next year. The particular example I was given was that older cars would be subject to much higher rates, and increases of over 200% were suggested. Can anyone advise whether this is just the rumour factory working overtime or is there some substance in the story?
BTW - I do apologise if my earlier post seemed to infer that I thought that all estate agents are inflating prices on Corfu, that wasn't my intention. My comment was a bit blythe and based purely on one specific property that has recently come on the market very close to my own home. Apparently valued by the agent acting on the vendor's behalf, it is being marketed at a good 35% more than very similar properties in the immediate area. I'm sure this was the exception rather than the rule.
Message posted by Elliemay on 10 December 2009 at 8:36pm - IP Logged
I think we are all in for a hard time - car tax is indeed being increased with the highest increases levied on cars older than five years. Is that old? Not to my mind, and whilst the idea is to penalize older and therefore less "clean" cars (from the emissions point of view), it seems to me to be a tax aimed at those who can least afford it.
There is no doubt, however, that EU money has been pouring into Greece over the last 20 years or so and most of it has not ended up where it was intended to go. So now we are all going to pay for the sins of the few.
Message posted by paleofan on 11 December 2009 at 8:31am - IP Logged
The car tax increase is yet another mandate we have no control over. Here in Ireland it is already in force. The older the car, the more you pay. We swapped our 4 year old car this year for an 08 reg as anything prior to that year is considered 'old' - saving ourselves over time a considerable amount of money, but for people who can't afford to do this it is an ongoing problem. I'm sure the beaurocrats of the EU swanning around Brussels in a variety of public funded top of the range cars are as concerned over this as we are - NOT. As an aside - there was nothing wrong with our 'old' car - in perfect condition and low mileage.
Thanks for the link and advice re car tax. From my own point of view having thought we were going to have to find an extra 600 euros this year (which is what the local rumour-mongers had been quoting in my neck of the woods) I'm quietly relieved that its bad, but not THAT bad!
From a wider perspective I have no doubt that Greece is going to be in for a very rough ride over the coming months and years, and I'm sure it is not alone in Europe in that respect. After some easy years we're all going to have to get better at belt tightening and swallow some harsh taxation.
Message posted by SusieM on 11 December 2009 at 3:02pm - IP Logged
Suzanna (the penny has dropped!!)
The houses that stick with us are the ones that are over priced - do the vendors want to hear that NO. Its always the same but the vendor is always right...
Hope to drop by after the 19th - will you be around?
Message posted by Susanna on 11 December 2009 at 4:44pm - IP Logged
The battered Greek economy suffered another blow after Philippos Sahinidis, Deputy Finance Minister, said that the country’s ballooning debt had reached €300 billion (£270 billion), the highest figure since the restoration of democracy in 1974.
Angela Merkel, the German Chancellor, said that the fate of Greece concerned all EU nations. She said: “What happens in one member state affects all others, especially as we have a common currency, which means we have a common responsibility.”
George Papandreou, the Greek Prime Minister, called an all-party crisis meeting, with the aim of reassuring panicked markets that Athens was ready to “clean up” its economy. He said that a meeting next week was intended to send “a powerful message abroad showing that we’re determined to move forward, to clean up our economy and ... give hope to every Greek citizen”.
Jean-Claude Juncker, president of the eurogroup, made up of the 16 countries sharing the single currency, said that the budget situation in Greece was “tense”, but that the country should avoid bankruptcy.
S&P changes outlook for Spain to negative
Botín urges Spain to act as rating slides
Senior European Central Bank officials have offered reassurance that the crisis in Greece’s finances will not lead to a break-up of the eurozone.
Greece’s sovereign debt was downgraded below A for the first time in more than a decade this week, prompting concerns that the country’s bonds may not be used as collateral by its banks, which are the main buyers of Greek government paper, after 2010.
The €240 billion Greek economy entered recession this year for the first time since 1993 after several years of growth above 4 per cent, which came after a successful but costly Olympic Games in Athens in 2004. Greece is expected to see negative, or at best zero, growth next year.
It faces a host of other problems such as a bloated public sector and rampant tax evasion, which is estimated to cost €30 billion a year. The Government has promised a crackdown on tax dodgers.
Greece is already under the European Union’s excessive deficit procedure after the Government forecast in October that this year’s budget deficit would reach 12.7 per cent of GDP. This is more than four times the maximum 3 per cent limit allowed for eurozone members.
The Greek Government has said that public debt is expected to reach 113 per cent of GDP this year and forecast in last month’s 2010 budget that it would reach 120 per cent of output next year.
Attempting to ease EU and market worries, George Papaconstantinou, the Finance Minister, said this week that he would submit supplementary budgetary measures early next year. Greece is also due to submit a revised stability and growth plan in January.
Platon Monokroussos, the head of financial markets research at Eurobank EFG, one of the largest banks in Greece, said: “Greece has entered a vicious cycle of rising deficits and debt. The current dynamics of public debt imply that without significant measures of sustained fiscal consolidation, the public debt ratio will likely reach or even exceed 140 per cent of GDP by 2013.”
Official statistics released yesterday showed Greek unemployment rising to 9.1 per cent in September, from 7.4 per cent in the same period a year earlier, while youth unemployment rose to 25.7 per cent.
€300bn Greek national debt
€30bn Annual cost of tax evasion in Greece
120% Projected Greek public debt as a proportion of GDP in 2010
9.1% Unemployment rate in Greece
Source: Times research
Message posted by MartynG on 11 December 2009 at 5:57pm - IP Logged
....well, I think everyone knew that is was always a bad idea. In the UK, a lot of people still remember what a rip off decimilization was so thats why no one is keen to go euro .
Well, thank goodness we have Pappandraeu at last !!! theres no wonder the previous PM legged it ss soon as possible.
From what I hear though, they are planning heavy measures for the higher income end of the scale which where they stand more chance of getting some decent income.
With regard to house prices, although I am no in the estate agency business anymore , I know from personal experience that when a house is reduced in price it will sell. Prices have come down quite considerably ( those that are actually selling that is, not the ones that you still see on agency sites for the last 3 years !!)
Message posted by SusieM on 14 December 2009 at 12:23pm - IP Logged
Don’t do anything desperate Susie, just think, Greece may be kicked out of the EU, go back to the Drachma, devalue massively, and start charging sensible prices again, or am I just dreaming on this miserable Monday morning here in Lancashire. Keep your pecker up, it’ll soon be Christmas, then a New Year and I’ll start counting the days I’ll be back on our lovely island, which I’ll always go to at any price.
Message posted by SusieM on 14 December 2009 at 4:18pm - IP Logged
I am back on Saturday and cant wait.
Drachma; whats that - God it seems a life time ago when we were using them; little did we know.
Still I kept some for a rainy day so maybe that wasnt such a bad idea after all..
Message posted by Louha on 14 December 2009 at 8:08pm - IP Logged
Michael Jacques : A devaluation would be the solution but it doesn't exist in the euro system.The other european countries must help the ones which are in a bad situation to protect all the euro zone. So I think to go back to the drachma is only a dream. But it's true, for us it would be a good thing, only for dreaming !
Message posted by journeyman on 15 December 2009 at 1:10pm - IP Logged
That's why I said, if they are kicked out of the EU, they could devalue, I understand they can't do it while they are in it.
Anyway, it will not happen as the european taxpayers will come to the rescue, so keep working!!
Message posted by openside on 15 December 2009 at 4:47pm - IP Logged
The UK govt has revenues of approx £600b and is next year borrowing £230b, the premium paid on UK gilts mean effectively that its has had its AAA credit rating downgraded to AA and if all govt liabilities like public service pensions and PFI wernt miraculously excluded from the national balance sheet our debt to GDP ratio would be way way higher than Greece's paltry 120%
The old adage of 'out of debt out of danger' springs to mind
Still musnt grumble :-)
Message posted by Powerbladder on 15 December 2009 at 7:27pm - IP Logged
Please accept my apologies for interupting (as I haven't been on here for a long time). What will be the effect of all this economic business likely to cause the tourism market to do in 2010? If Greece's finances worsen, what would general prices be like next year to those going there for a holiday etc?
Message posted by NIGEL on 24 December 2009 at 11:30am - IP Logged
Interesting reading Bruce; I was always told not to believe everything your read in the tabloids but sadly this isnt going to go away.
Well the good news is its FRIDAY.
There is a nip in the air and snow forecasted for feb so unlike Davos where the Forum is being held the uk will probably come to a grinding holt.
I have been to Davos quite a few times and it is a stunning journey; arrive in Zurich; connect within mins of leaving airport to train station in the centre of Zurich; within minutes connect with fast double decker train (resembling a rocket) for about an hour; off the train and connect with snow train within three minutes to take you up to Davos travelling through the heavy snow laden trees and villages and guess what arriving bang on time. PERFECT.
Have a good weekend
Message posted by NIGEL on 03 February 2010 at 11:19am - IP Logged
Well Loulou Im not sure how you think it could possibly be different for Corfu (being a Greek island) whos situation I would class as even more worrying, having wrongly relied solely on tourisum for many years. Many have reaped the benefit without re investing and will now be seeing the error of their ways. This coupled with the Greek economic situation will have a devistating effect on the island ! This is of course only my opinion but is based on personal experience of trying to work to survive on Corfu)
Message posted by janmanessi on 03 February 2010 at 7:39pm - IP Logged
Planthead. I agree. Tourism has benefitted some, but caused an awful lot of other potential money earners to be neglected in favour iof the quick buck (and which of us could honestly say we would have resisted that either).
Viv D- sad and extremely hard though the situation is on Corfu they have at least had good years, whereas those struggling in inland villages on the mainland will probably have had far less in the past and even less to look forward to in the future
Message posted by Lavinia on 03 February 2010 at 8:04pm - IP Logged
But they are still building new houses in Corfu - two on the lane leading to our house going up in the last few months. There must be money somewhere and Stamatis taverna in Viros was absolutely heaving on Sunday.
Message posted by Louha on 04 February 2010 at 12:01am - IP Logged
You're right Lavinia : that's why I wonder if Corfu follows the same way as the continent. Of course, Corfu is in Greece but stays an island with all sorts of particularism and a specific geographical situation. Sure it's very hard for the major part of the island. I think that Corfu has got many paradoxes. I've read in a blog the following suggestion : "It is definitely the right moment for someone to re-invent Corfu as - well, how about an off-shore financial centre, so that we can attract some serious business to the island? Apparently this is how Malta keeps afloat, why not Corfu?"
What do you think about that ?
Message posted by S and J on 04 February 2010 at 2:23am - IP Logged
Interesting and depressing, but I did read also that the Greek state owns a huge amount of extremely valuable real estate which corresponds, at least, to the amount of the national debt. I would have thought that this would generate confidence - if nothing else (since presumably the property brings in rental income so can't actually be sold off).
Message posted by GJJW on 04 February 2010 at 10:54am - IP Logged
O.K, so for someone who is not shall we say, literate when it comes to National Debt, how will this effect the toutist trade in Corfu?
If prices rise in the bars and tavernas of Corfu, then less tourists will go to Corfu (already starting to dwindle). However, what is the other solution?
Message posted by Wynne on 04 February 2010 at 12:19pm - IP Logged
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