23 Jun 2011

Wake up! Greek debt is NOT a bore

As a reporter, over time, you become aware of the stories that bore. They rarely bore me, but they are seen by some to bore the reader or viewer. Northern Ireland during the interminable Troubles was one such. The Middle East generally fights not to be so too. Today it is Greek debt. What’s it got to do with us? Ostensibly little – perhaps £4 billion of direct exposure. Thus Greek debt is a bore.

But Lehman Brothers’ crash has taught us that consequence, in financial matters, is rarely about what you can see, but much more about what you cannot see. And so it is with Greek debt. As the former City Minister Paul Myners pointed out on Channel 4 News on Tuesday, the UK’s “indirect” exposure to the Greek financial crisis is potentially massive – £100s of billions. UK banks, insurance companies, and finance companies have underwritten, insured, and reinsured vast amounts of French, German, and Italian lending to Greece and its banks.

The Government likes to portray what’s happening to Greece as essentially a Eurozone problem. As the UK is not a member of the “Euro club”, Messrs Cameron and Osborne like to take a seat, if anything, beyond the back seat, or even no seat at all. Hence at last Sunday’s meeting of Eurozone finance ministers to discuss the Greek crisis, there was no UK official or Minister present.

Yet what happens to Greece may well impact the UK more than any other European country. No one actually knows the exact figure of Britain’s indirect exposure to the crisis. The FT today reports that the UK itself is exposed to the tune of £12.5 billion in government underwriting of Greek government borrowing. The only figure I can find detailing the UK banking system’s exposure to Greece is an overall exposure to the eurozone of £700 billion (FT), of which £300 billion is described as vested in “weaker Eurozone economies” – Greece, Portugal and Ireland.  Our Business Correspondent Siobhan Kennedy tackled this issue a couple of nights ago and was told by one economist advising the IMF that default was “inevitable”.

French and German banks are the most directly exposed to Greek debt. British banks have underwritten or insured as much. So that there is a coalition of interest inside and outside the Eurozone not to see Greece fail. But find me an economist who does not forecast that Greece will default – their only dispute is when.

Fourteen Tory MPs from the 2010 Commons intake have today broken cover to urge David Cameron to get involved. He is at least today en route to Brussels for the regular European Summit. But a Downing Street source tells me the Prime Minister’s briefcase is filled with almost nothing on the debt crisis – “it’s their problem”, my source tells me. Instead, his brief concentrates on cutting red tape.

Most City analysts reckon that when Greece finally sneezes it will be Ireland and Portugal  who will catch pneumonia. The UK’s exposure to their debt dwarfs our Greek woes. An Irish and/or Portuguese default would, my city source assures me, collapse the UK banking system and our economy with it – one of the minor downsides of being at the hub of global insurance, reinsurance, and underwriting.

Hey! You at the back, stop yawning! Greek debt is not a bore. It has the potential to affect every man, woman and child in the UK.  Don’t worry though – Nick Clegg, visiting Rio,  says he wants each of us to be given shares in our nationalised banks – RBS and Lloyds…the very banks that are in the maelstrom of the UK’s exposure to Greek, Portuguese and Irish debt.

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61 reader comments

  1. oxchris says:

    I agree that this story is not a bore and is very close to home but the war in Afghanistan is a bore and how much is that costing us financially and in needless deaths?

  2. Kes says:

    The true exposure is not about the absolute sums of debt owed but the amount returned to the investor after haircuts (reduction in capital amount) and any currency effects. As of 31 Dec, the UK’s gross exposure (banks and governments) in USD Dollar terms to some “challenged” debtor countries was roughly:
    Ireland $188 billion
    Portugal $24 billion
    Spain $114 billion
    Italy $77 billion
    Greece $15 billion
    Total $418 billion
    Recovery rates would be hard to predict, but Greece looks like about 50 cents on the dollar. Apply that (probably wrongly but as a guide) and UK is in the hole for about $200 billion or circa £125 billion. Not boring at all.

  3. adrian clarke says:

    Of course in the UK debt is boring.The nation is running on debt both of government and personal.No wonder channel 4 bring out the harbingers of doom whenever it is mentioned,but Lord Myners????? He who made a fortune in City Investment,and with Nat West before it was bought out by Royal Bank of Scotland.He knows all about debt and was city minister to GB after helping finance his tilt at PM.Wasn’t it suggested he lied about knowing and accepting the details of Fred Goodwins pension??
    The perfect man to lecture on Greek debt!!!!
    Of course it is serious,as it will be for the rest of the world if Greece defaults,but look how the Greek population, particularly the public sector are reacting to the need to stop their profligacy and cut back.
    It is very reminiscent of what our public sector union leaders are threatening.A debt crisis created by left wing politicians, many who grew fat causing it, like Lord Myners,now the answer to getting us out of it being resisted by the ultra left led public servants,who if todays figures are correct take home vast salaries,way above those they are trying to use as their political battering ram.
    The country can not afford them , fullstop.

  4. Saltaire Sam says:

    If I understood your report correctly, some banks made a lot of money out of packaging and repackaging ‘insurance’ for the various loans made to Greece etc. Presumably it was partly on the basis of those ‘profits’ that huge bonuses were paid out.

    When you also take into account the mis-selling of insurance that the banks are now repaying and the mortgages to people who clearly couldn’t afford the repayments, it makes you wonder how much of those bonuses were based on real profits.

    Now, we the ordinary tax payer, face yet another crisis which will hit us personally in the pocket, while the bankers with their millions offshore will no doubt ride it out again with a smirk.

    How long before the distortion of capitalism, gloablism and market forces is re-examined? Presumably when we find a way to disadvantage those who create the chaos.

    It might need a revolution, perhaps starting with us all dumping our smelly household rubbish on the doorsteps of the perpertrators just as they’ve dumped their financial rubbish on us.

    1. adrian clarke says:

      Sam i agree but it is not as simple as blaming capitalism or globalism for that is now the way of the world.
      The blame lies fairly and squarely with the financial sector,which got away with it because they were financing GB’s Socialism and his wanton spending.The chickens have come home to roost but the bankers are still getting away with it.
      The only way to put them in their place in this country is to switch funds to an ethical bank such as the Co Op.Let the rest go to the wall if they can not put their houses in order,for i am afraid parliament does not have the guts to take them on

    2. Peter Stewert says:

      Some combination of Saltire and Adrian would make for a great political mind. A Sam Clarke?

      Far be it from anyone to defend politicians that sat back and let the finance industry do as they pleased, but the sudden collapse in company tax revenues (particularly from “The City”) placed government spending on an unsustainable footing. Cut spending all we want, cut it all in fact, and we’ll not pay down a penny of debt unless we start seeing the tax base growing as a result of the economy growing or capitalists showing some gratitude for the social care the state provided to them during the crisis. thi is the problem with Greece,where the size of the debt hardly matters because the country can’t pay their debts.

      Ethical banks (or just plain old retail divorced from the investment/”products” banking world)is the only way to go in the UK because we need banks. We don’t need investment firms, we can afford to let Singapore or Hong Kong underwrite them since we’d hardly notice the absence of their trace tax revenues.

    3. Meg Howarth says:

      You’ve just made an excellent case for a tax on land, Peter. As William Keegan noted in yesterday’s Observer: ”Nobody likes paying taxes, but tax avoidance appears to have been developed into an art form in modern Greece’.

      As land can’t be hidden or off-shored, taxing land would have strengthened Greece’s tax base, and could almost certainly wipe out the current debt.

      Simple, really, for both Greece and the rest of the world. What’s needed, of course, is the political will. In the UK, Vince Cable seems to be returning to pre-election form and is the only politician that’s dared to mention a tax on land since, as far as I can gather, Winston Churchill.

      NB Bravo, as usual, Sam for an excellent and imaginative suggestion. This is what we need more of – UKUncut and ClimateRush are outstanding examples.

  5. margaret brandreth-jones says:

    Are the debts recoverable? If they should ever be recovered when will that be and won’t inflation have progressed so much that it will be tiddlywinks.Big boys playing the bankcruptcy games don’t seem to understand how many years protracted legalities last and the loss of power those owed and those who owe, lose.

    It is the most boring bit of news I have ever heard , it bores directly into euro finances and us too. You have talked about us as outsiders. We don’t use the Euro , but we are definitely not outsiders.

    Of course we hear so much about finances we simply don’t believe anyone any more and just say ‘ok, right, sure’

    There are far more important things than money, but try telling that to the starving and homeless and just watch the greasy grins on those opportunist legal criminals who get away with hedging their goodies in the channel isles.

    What they want for a fix on buzz T.V. is more and more violence, to heighten viewers senses just a little more and then dampen future horrors by comparison. It is a drug addiction where no one is satisfied with news of a local robbery any more : they want more and more gore.

  6. Mudplugger says:

    When all these international chickens come home to roost, it’s the innocent citizens everywhere who will end up getting ‘plucked’.

    There should be a huge list of the politicians, regulators, supporters, bankers and lawyers who created this house of cards so that, when it collapses, they should be the first to lose their jobs, assets, houses and futures.

    They were content to take the gains on the up-swing but seem masterful at avoiding any penalties when it inevitably all turns sour, as many of us knew it would.

    Some, like Edward Heath, are long dead and, regrettably, can no longer be held to account, but Newgate Prison is too good for any survivors.

    But more likely is that they will all continue to prosper, eventually retiring with their gold-plated pensions, remote as ever from the millions of little people who will be paying the high personal price of this folly on their behalf for generations.

  7. Y.S. says:

    Well if the bankers did not want to listen to us about bonuses … as they need incentives.
    Perhaps a few of the financial institutions need to go down with Greece as an incentive not to play casino.

  8. P.A.B says:

    So is it ignorance of the true situation that results in Cameron and Osborne talking so complacently or are they gambling that the Greek crisis will be resolved?
    The last 24 hours have seen more rubbish from our political leaders. Take the cost of the Libyan adventure. The Defence Secretary explains the increase from the estimated tens of £millions to £260m as down to using more expensive bombs that reduce the risk of civilian deaths – the inference surely being that they initially thought they could use the cheaper sort of bombs that did result in civilian deaths?
    As for the Clegg’s idea of giving shares in RBS and Lloyds to taxpayers, to be sold when the price enables the taxpayer to make a profit and the Government to get back what it paid for them, what if taxpayers decide to hold onto the shares? Isn’t the Government obliged to continue to service the debt that they represent? When would they expect taxpayers to sell – with a 5p profit per share or 50p? And would this be after selling costs? Is there a precedent for a Government to put the management of national debt into the hands of individual citizens? Bonkers.

    1. Tom Wright says:

      A statement from either Osborne or Cameron on the likely possibility of a Greek default might well precipitate it. It would be seen – quite rightly – as irresponsible, and many, many, guilty parties would be quick to call a press conference and point the finger to take the heat off themselves.

      I doubt its complacency, more like fear: they know its coming, about the last thing the would want is to pick up the blame.

  9. Moonbeach says:

    I’m sorry but Greece will never manage its debts. Thus money given to them will surely be wasted.

    I watched the film “Inside Job” again last night and the greed of the Bankers and their political lackeys was breathtaking.

    The poorest in our society will pay for the greed of the ‘economic engineers’ in every country. The creators of the mess will walk away with Billions again.

    Banks need draconian measures taking against them. Deregulation as advocated by that complete waste of space Greenspan and his genius supporters allowed bankers to get away with Ponsi schemes that gave them fortunes for no risk. He also made a fortune himself.

    Brown and Blair did away with regulation and look how poor they became as a result of their failure! Cameron, the weak, has done nothing.

    We, the disenfranchised taxpayers, fund their greed. Tax bankers til their pips squeak as Denis Healey might have said.

    Let these countries fail. It may hurt us. But the bankers will be hurt more and sanity may have a chance to return.

    1. adrian clarke says:

      Moon beach i totally agree.I have advocated many times taxing bankers bonuses out of existance,and also imprisoning those that lose other peoples money by their profligate gambling.If the CPS does not consider they have an offence to charge them with, it is up to parliament to create one.
      I am sure that would be more popular than any legislation enacted to date by the coalition.

  10. margaret brandreth-jones says:

    Have just read John Redwoods very sensible proposal for the future of Greece and other struggling eurozone nations.

    He suggests that they are given the option of leaving the eurozone and going back to their old monies ,like ourselves ,where they would not be restricted to eurozone difficulties and be allowed to solve their problems in their own Countries. For other Countries it would cost Europe less in bail outs and allow them to operate more independently and gain strength.

    1. Kevin Richmond says:

      John Redwood talks a lot of sense. The problem is that the PIIG crises is the unintended consequence of a political construct called “the euro” and the socialist European politicos who created it will do/spend anything to save it – including impoverishing every citizen of the EU, before they consider taking the correct action which is to allow the euro to collapse and countries return to their old currencies. The euro has been a disaster.

    2. margaret brandreth-jones says:

      We know this and as David Cameron pointed out that we do not have to give any more in bail outs due to the John Majors of this country who kept our currency for us only.

      It is therefore vital to play nice with China

  11. Ushbho says:

    Not boring at all, and our government representative clowns should certainly take a seat somewhere at the front, but they should first watch Debtocracy and then look to see if one of the solutions proposed by the film is remotely palatable, here is one of the proposed solutions to the Greek crisis

    The solution suggested for the Greek crisis is the formation of a committee for the analysis of the debt in a similar way that Ecuador did. If the analysis proves all or part of the dept to be odious the people should not have to pay for it and therefore it should be erased.

    Lets not ignore what’s right in front of our nose please, the bad smell won’t go away. Boring is often dangerous.

  12. Marverde says:

    I watched you last night interview that “former City Minister Paul Myners” (why not call him a FORMER BANKER, is he not, or has he taken out a superinjunction too?) and ended up fuming. With both of you.

    With him because it was so obvious what he was after. There was a banker making sure we don’t let Greece default because the private banks and private insurers would lose money either then or when the next countries do. Merkel wanted the private banks to take a share of the loss. I say they should take it ALL. So, the “former banker” scares the suckers (us) into propping up the system, AGAIN. The system is absolutely crap for society, but let’s keep patching it up so that those people don’t suffer.

    And you made me fume too by using “WE/our debt/the UK’s exposure” instead of “you/your debt/the bankers/insurers’ exposure”. Jon, you walked into his trap. Let’s separate those people from “us”. We are not in debt. We are not heavily exposed. We haven´t got to pay anything to anybody. No more private profit and public loss. Let them SINK!

    1. margaret brandreth-jones says:

      we are in debt, but theirs is greater than ours.

  13. Arthur Lambchop says:

    Incredible how scarey the Greek debt and consequent defaults by Ireland, Portugal etc. Incredible how little people seem to see how close we are to a major major catastrophe. Is it just me? Makes me want to buy some gold nuggets and live in a cave!

  14. HewsonJack says:

    If your blog and supporting comments are correct then this is really frightening. Retroactive legislation to split casino and domestic banking must be rushed through and tell Mr Clegg we don’t want shares in nationalised Banks – we just want our living standards back specially for those unfortunates at the bottom of the pile.

  15. Ray Turner says:

    Good point Jon. You’ve woken me up. I’ll take a lot more interest in this story now.

  16. Kevin Richmond says:

    It is surely typical of British society that a juror who trivially committed contempt of court was sentenced the other day to eight months in prison, yet the political scum and financial gamblers who brought Britain to its knees are still being interviwed by TV news stations et al as if “they” are victims of the debt crises along with the rest of us.
    As adrian says if there’s not already a law to book the likes of the evil Comrade Brown and the bankers, let’s write one and make it retrospective. Done. Justice will be served.

  17. Alsatiare Dagwell says:

    The followwing input is indirect connaotations;

    I remeber watching the 2004 Olmpics, the BBC did a piece on non attendance at the venues and the observation taht many of the venues were indeed not even a quarter full for the less popular events or at the preliminary statges;

    Why the **** then is there such a denand for tickets taht you need to apply for them online?
    Shouldn’t they just be fiorst come forst serve as like the box office for thearte tickets,

    As a borna nd bred Londoner I know its always been epxensic aand this in inself is an incentive not to atternd/ but just watch ont he box; Rely on the rich clan like Beckahn to buy the tickets, but no doubt he’ll gert in fr

    and am dreading rthe extra taxes and revenue I need to pay in order to fund the games via my bills and council tax?.

    Wonderhopw much extar Jon snow has to pay in his council tax bill?. I’m sure he’ll be able to affiord iot on his salary and working only 4 days

    Is it ebcause of htose half empty stadiums not yirleding the dividends to repay the costs involved which is why Greece is in such finanacial turmoil now?.
    Is this what London has to look forward to after 2012?

    1. adrian clarke says:

      Alsatiare Dagwell .I think that though you have a very good point,the Greek crisis is caused by weak government, Coalitions that pandered to the public sector and spent money they didn’t have.
      Very reminiscent of the Blair and Brown government,particularly Brown as Chancellor.This government is trying to take steps to following the Greek situation and unfortunately the public sector if they get their way would have us follow the Greek situation.The Olympics might bring some relief but if we let the militant left destroy not only our currency but our standard of living we will deserve the outcome

  18. Adil says:

    Do you think that perhaps it would be better to restructure the Greek debts such that the interest is 0 and they payback over a longer period? Seems to make business sense. I understand that the organisations that lent to Greece may only make a fraction of what they were hoping for, but at least they will have helped ruining another country.

    As for Mr Clegg. Sir, we’ve gone down the route of allowing the public to buy a share of their national assets. I don’t think it will make banks more careful where they invest (witness the insanity of the housing market and the lunatic pension funds). We will see more reckless investments in dubious companies that provide quick profits. Simply because we are uneducated investors. We expect short term gain and are not too fussed how the gains came about. It would be by far much better to institute legislation to prosecute those that make unethical investments. If there is concern that this regulation would turn many investment companies from operating in the UK I would say do we want them? Would it not be better to have ethical investment companies than the fools that choose short term gain over long term growth? But, maybe I am misguided.

    1. Tom Wright says:

      Adil, not misguided – ethically spot on.

      However, restructuring as you put it, is what a bank would call a default. A default in Greece and an exit from the Euro would precipitate the same in Portugal, Spain and Ireland. Seeing as the banks are owed staggering amounts by these countries, they would face going under again and this time most likely no public bail out would suffice. As the retail banking and investment banking arms are still on the same corporate balance sheet, this might well sink the economy. Globally.

      The position of the EU insider club is dictated by the massive exposure of French and German banks. The position of Britain by our own exposure. They are all looking for a way of describing the inevitable Greek default that does not sink them, and it adds up to deferring the problem until the banks have the funds, or reform allows casino banking to sink without shafting retail. They hoped not to face this.

      Osborne’s reform can do it. Just. What a shame its so timid, and risks being too late – I hope they quietly rush it through.

  19. adrian clarke says:

    Channel 4 was at its bias yet again tonight. The government says we will not bail the Greeks out out but Cameron didn’t tell us the state of our banks involvement.Though the two are linked , Cameron was stating that Britain will not give money to bail out the Greek Euro.That is the correct course to follow .We are not a Euro country.As for the banks,if Greece defaults on its debt and has to leave the Euro ,although some banks have huge funds at stake ,Greece will continue to repay debt , even at a slow rate ,and maybe from a different currency.If its finances collapse it will affect its citizens more than the outside world.The strikers will perhaps realise the mess they are in and it might serve as a stark reminder to those public servants who believe the tax payer can fund their gold plated pensions at the current rate, that by striking they are putting everything at stake.

  20. Noel Bell says:

    It should be the case that Greece goes through some some tough budgets. Ireland has had to.
    The ECB and the IMF helped cause the economic mess in Ireland. Ireland should have had higher interest rates to ward off rising asset prices yet were forced to keep interest rates low as she was pegged to the low interest rate of the Euro that better suited the Germany and French economies. The new Irish government should renegotiate the ECB/IMF bail out terms as there are cards to play. For one the Eurozone paymasters do not want to spread market panic by having the spectre of sovereign debt default within its borders. Therefore peripheral countries in the Eurozone should strike a harder bargain when seeking to have their borrowing protected from the harshness of the Bond markets. There are only about 1.8m workers in Ireland and it is tragic that they are now burdened by this level of debt caused by the casino gambling antics of the financial cowboys running Anglo Irish Bank and co.

  21. Saltaire Sam says:

    Interesting report in the Observer about the row in the coalition about how to fund care for the elderly.

    It seems there is a plan that we should all take out an insurance policy to cover the costs.


    Many of us thought we had when we paid our National Insurance to cover unemployment, pensions and care when we couldn’t cope any more – the clue is in the name.

    it was the politicians who decided to use that money as just another branch of income tax, a wheeze to make them look as though they weren’t high taxers (a bit like VAT)

    They squandered the money on things we can’t afford like nuclear weapons, wars, MPs’ expenses and a myriad other schemes and now, like the bankers before them, they want us to pick up the tab for their profligacy.

    Doesn’t that amount to fraud or do you only get locked up these days for going on facebook?

    1. Mudplugger says:

      I agree that the people rightly expected care in exchange for National Insurance contributions but, if that had been the rule, there wouldn’t be a problem.

      Trouble is, there are millions now in the country who have never contributed, but who expect to receive all the care they ever need without charge. A boat can only carry so many passengers before it is overloaded and sinks – and that is the problem with the current Welfare State model.

      Perhaps we should have the same approach to late-life care as applies with State Pensions – you only get the full amount if you have contributed for enough years. Anyone who has contributed the full 30 years could get all their late-life care free of charge, those who have failed to contribute fully should be required to pay the same proportion as their ‘missing years’.

      Indeed, we could take the same approach with all NHS healthcare – any adult currently contributing to NI gets it free, anyone with 30 years contributions gets it free for life, anyone with gaps in contributions must pay the ‘missing proportion’ for any state healthcare taken.

      Wonder which party will pick that up for their next manifesto ?

    2. Marverde says:

      Mudplugger… your reasoning needs plenty of adjusting. For instance, how would the UK produce the next generation once women stopped having children to achieve their 30 years? Unless you are suggesting that their partners pay double during the gaps. Are you? Fine with me. No children. And I do not complain about subsidizing the ones who have. It´s called society, and I do believe there is “such thing”.

    3. Mudplugger says:

      Marverde – obviously I haven’t addressed all the operational details of such an approach here but, in application, there would be a wide range of ‘substitute stamps’ as currently exist in the NI/Pension system, perhaps even smarter to accommodate most legitimate circumstances (including child-breaks, carers etc.).

      But that’s detail, the key message was about making the ‘reward’ of State Care better related to the ongoing or historic contributions of the recipient – that was the founding expectation of the Welfare State and one which we may all find some benefit in revisiting.

  22. Meg Howarth says:

    William Keegan in today’s Observer when assessing role of external (Eurozone) and internal factors in Greek debt situation: ‘Greece was outstandingly egregious in its fiscal profligacy and its lack of prudent economic governance. Nobody likes paying taxes, but tax avoidance appears to have been developed into an art form in modern Greece’.

    And a blogger responds: ‘The blight at the periphery of the Euro zone is not about devaluation, it is about models of capitalism that gave up wealth creation and bought into property speculation, Greece, Portugal, Spain, Ireland and the UK all with deep problems, and all with the fading rash from property hot spots’.

    Here we have it full square: property. Property is indeed theft, now from the taxpayer who pays tax on his labour (income tax) while the enormous and obscene amounts of unearned income from property-price inflation keep inflating the bubble, in the interests only of a tiny minority against the many.

    Greece (as should every country) introduce a tax on land immediately. Land can’t be hidden or offshored, so tax avoidance is impossible. It would give the country a sound tax base and set an example for the UK to follow.

    1. Moonbeach says:

      I assume Meg that you do not own a property. But you might rent one.

      A tax on land/property would affect your landlord/council and the extra charges would be passed on to you.

      But I read total, stomach churning anger and envy here; “Don’t tax me but take as much as you like from them”! Theft indeed. Claptrap.

      My wife and I have worked extremely hard to move from council houses in Liverpool and South London to owning our lovely house.

      To achieve this, we gave up many of the things that I see on Council House estates (cars, TVs, ‘beer and fags’ )in order to escape those depressing ‘couldn’t care less’ elements.

      Our hardwork over the years meant that my wife and I have paid enormous sums of money in taxes that Governments and Councils waste. How dare you accuse us of theft.

      Property price inflation was caused by bankers making huge, risk free, loans to people at the bottom of the pile that they knew could never repay them. Bankers are the villains and should be penalised for their profligacy.

      Capital gains will take care of ‘windfall’ profits in the unlikely event that a house owner sells up and moves back into tenancy!

    2. Saltaire Sam says:

      Moonbeach, you either missed the point or deliberately ignored it. A great deal of personal wealth is based on property and land inflation, money that is not ‘earned’ and not taxed.

      No one enjoys paying tax and we all deplore wastage – I personally would cancel Trident today and save £20bn+

      But what some of us complain about – and it has nothng to do with envy – is that whatever tax systems there are should be fair. That’s why I feel strongly about tax dodgers and the unfairness of indirect taxes that hit poor people harder than the rich.

      If my wages go up by 30 per cent in a year, I pay more tax but if someone like the Duke of Westminster’s properties increase by 30 per cent that’s untaxed.

      All of us who own property have benefitted from this to a greater or lesser extent and if it is your only property, it is an illusory gain because it is ususally the heirs who benefit. But where someone owns a great deal of property or land, there is a real question about whether or not they are contributing their fair share from cash for which they did nothing but enjoy ownership.

    3. adrian clarke says:

      Meg your argument and tone is the reason that LVT as considered by Moon beach is seen as a tax of envy.One can but applaud his attempts to escape the council estates of Liverpool and London , but equally as bad are his demeaning words to such council house dwellers.Why should they not have cars and TV’s?
      All his words show are that it is possible to escape to a different life if one has ambition enough.
      Both arguments are about tax and though i now support LVT for what i believe you were trying to say Meg and that is tax avoidance.I do not believe it will replace anything other than Council Tax and Business rates.I believe it could have a beneficial effect on certain payers but certainly a greater effect on those that evade taxes.
      I certainly wouldn’t accuse property owners of theft but would agree with moon beach on the profligacy and waste committed by Government and local Councils whilst often feathering their own nests both in monies ,power and secrecy.
      I believe that such people should heed those that elect them and be subservient to us,

    4. Meg Howarth says:

      Sorry you believe that selfish short-term interest trumps any other possible motivation for human action – or ideed outlook on the world – Moonbeach. NB When it comes to property, even that short-term interest you assume everyone shares may have a sandy foundation, by the way!

      Under Blair, Labour became and remains the party of the petty bourgeois property-owner. Even intelligent capitalists talk increasingly of a tax on land. What we get from Ed Balls instead is the ludicrous suggestion – stuck in the blind alley of GDP growth as he is – that VAT be lowered, to encourage more unsustainable and often damaging consumerism. As long as Labour’s way behind the curve on economics, and treats housing need as a short-term problem rather than a symptom of an unjust and unequal society based on property ownership rather than the satisfaction of human need it can have no long-term solution to housing or an adequate response to the Tories and the landowning leeches.

    5. Meg Howarth says:

      Forgot to add that envy is a thoroughly bourgeois notion, Moonbeach. The Establishment wants us to be envious. It keeps the/their status quo firmly in place.

    6. Meg Howarth says:

      A major reason for the obscenity of property-inflation in London – house-prices up 12-fold since the late 80s in some streets – is, according to a housing economist, the buying of land/property by the huge conglomerates. This means serious social inequality.

      No tone was intended, Moonbeach or Adrian, and apologies if it seemed otherwise. ‘Propery is theft’ is a C19 quote, can’t remember who said it, though. Will check asap.

      As usual, in haste.

    7. adrian clarke says:

      Meg i have to side with Moonbeach on the bulk of your argument ,which you completely ruin by turning it into a class argument.People choose to buy their own houses not because they are generally class conscious but because it beats paying a landlord rent and in the eyes of many they have something to hand down to their offspring and although i support you on LVT i am afraid not for the same reasons.I wonder where you would have everyone live? If it is in state houses does that make the state part of the bourgeois class in your eyes.As for house price values they are subject to demand and yes there were greedy speculators out there,many who have received their cummupance in the crash and deservedly so .
      Unfortunately i find your left wing politics do not really belong in this country that has always rejected all forms of Communism,for the left wing ideas of spend spend spend without earn earn earn is part of the reason we are where we are today

    8. Moonbeach says:

      We should all meet to discuss this!

  23. CWH says:

    I strongly recomend this article to anyone who is interested in the Greek situation – and in our own situation.

    Democracy vs Mythology: The Battle in Syntagma Square:

    It ends with this quote:

    “”Nassim Nicholas Taleb is the Lebanese-American philosopher who formulated the theory of “Black Swan Events” – unpredictable, unforeseen events which have a huge impact and can only be explained afterwards. Last week, on Newsnight, he was asked by Jeremy Paxman whether the people taking to the streets in Athens was a Black Swan Event. He replied: “No. The real Black Swan Event is that people are not rioting against the banks in London and New York.”””

  24. bore says:

    If the world were not quite so full of know-it-all macho men and women then perhaps the resulting primitive systems and primitive expectations of others might not exist together with all the misery and anger they create. A boring idea, but it probably has something to do with the ‘Greek’ situation.

  25. Woo says:

    Jon I’ve just heard you say on the News that “there is very little sympathy” around many European countries for the protests of the Greeks about the European central bank’s and the IMF imposed austerity programme…I’ve got no idea how you reached that opinion… but if I may say so you appear to be overly sympathetic to the IMF and so called orthodox economics. The same IMF failed to see or at least warn us about the most serious world economic crisis since the great depression. I have zero faith in the economic programmes of the IMF and every sympathy with ordinary Greeks protesting at the weight of the austerity programme upon them. I completely agree that this appears to be an ‘Odious Debt’ and news broadcasters should stop being part of the problem. You interviewed a doctor who tried to correct media stereo types about excessive wages in Greece, I think that you should have backed him up by drawing attention to OECD figures on working hours and working lifespan in Greece. You appear to be out of touch with how much sympathy many of us in Europe have for the mass of the ordinary Greeks. Stop being part of the problem!

    1. Marverde says:

      >>you appear to be overly sympathetic to the IMF and so called orthodox economics. The same IMF failed to see or at least warn us about the most serious world economic crisis since the great depression. I have zero faith in the economic programmes of the IMF and every sympathy with ordinary Greeks protesting at the weight of the austerity programme upon them

      Absolutely spot on! I could have given you 1000 thumbs up for that.

    2. adrian clarke says:

      Woo,Jon and the news are not part of the problem.The Euro IS the problem .Greece should never have applied to join it and those running it should not have accepted Greece into it.
      I believe certain governments,the Irish Greek,Spanish Italian and Portuguese saw it as a panacea.The answers to all their problems,but it could never hope to live up to their expectations.
      It could only work if the Euro countries became a federation controlled from either France or Germany.Though the EU is trying to attain that status it will never succeed except by force,and that should never be an option.
      It is time for Greece and others to leave the Euro and ALL countries to be given the choice by referendum of staying in or leaving the EU

  26. adrian clarke says:

    Even if one might consider Greek debt a bore, and how unseemly the violent opposition to the austerity measures being voted through the Greek parliament , it is time we took a longer look at our response to the current attempt by unions to destroy our parliamentary democracy.
    Who is in charge of the country, the unions or parliament? For that is what this dispute boils down to .Can the country afford the public sector pension bill? It clearly can not.Is it wrong that women are asked to work until the same age as men before they can retire on a pension? How can it be when they seek equality on everything else? Can any government afford to let the Unions succeed.If they do is there any point in future elections to parliament.Should a minority of the population hold the majority to ransom to get their way?If the answer is yes i suggest the country alliance restart their objection to the hunting ban , because the numbers in each dispute are similar.
    As to this dispute the border agencies spokeswomen last night has no idea why her members are striking.She said to uphold our security a day after they let a banned hate preacher in .Some security!!!!!

    1. Saltaire Sam says:

      Ah, Adrian, how predictable. Do you really believe that people working in the public sector have no right to challenge their employer, the government?

      Factually you are wrong. The country can afford the pensions – they are set to decline as a percentage of GDP.

      It might be different if the government were putting the extra contributions into the pension but they are not, the money is being used to bring down the debt. i.e. it’s another tax.

      People are quick to compare public with private pensions but is the fact that the private sector has been shafted an excuse to shaft the public? And if the govt can renegotiate a contract every time it is convenient – there has already been a new deal four years ago – where does it stop and how can people trust any deal that is reached?

      Francis Maude blustered his way through a Today interview this morning and demonstrated clearly that the government’s motives are nothing like they say. They are once again hitting ordinary workers while leaving their tax-dodging mates untouched and then lying about it. They are a disgrace.

    2. adrian clarke says:

      Saltaire for once we have to differ :) Like Greece, despite your assertions using Jon’s projected amount of GDP the state pensions will amount to in 5 years hence,it is clearly an unaffordable and totally unrealistic debt to saddle the tax payer with.For like it or not it is the tax payer who pays for these pensions and also to try and rid us of the debt left us by the previous administration.
      You talk of contracts being broken yet that is exactly what GB did to private pensions. Incidently not paid for by the tax payer but by the employer and employed.
      The sad fact is all parties agree the Pensions are unsustainable in the current climate and the rhetoric from the left wing union leaders(check their affiliations to the Socialist Workers etc)show quite clearly this is not about pensions but about opposition to the cuts.As i said ,who rules the country?
      As for hitting the ordinary worker, you fail to look or consider the Private sector workers who i would say are the ordinary workers who have been forced to take pay cuts or freezes without the advantage of feather bedded pensions and pay their taxes to pay such pensions.
      How hypocritical Saltaire.

    3. Marverde says:

      Don’t waste your time, Sam. Use your exceptionally clear mind and willingness to enlighten others by choosing those that are still open and receptive.

      What a brilliant cover the Indi had today! I love their front pages.

    4. adrian clarke says:

      Marverde is it a clear mind to ignore all tax payers in the private sector.Is it a clear mind to say tax payers can afford to continue upgrading public sector workers with their taxes whilst their own pensions are in decline.
      That might be why you admire the front page of the least read daily paper published.It is like the private sector pensions in serious decline.
      Like most supporters of the Feather bedded pensions you have a closed mind to the problems created by the last administration and the need to put our finances back in order.
      The fact that it is suggested public sector pensions will cost less in terms of GDP is nothing to do with decreasing costs but the change to the age when they become payable.An extra 5 then 6 years for women and and 1 then 2 years for men plus more if they are teachers and currently retire at 60. .I suspect you are a supporter of male /female equality which i support..Of course you will also support, in the search for equality women should receive their pensions initially at 65 then 66 followed by 67 in parity with men.

  27. Meg Howarth says:

    ‘They are once again hitting ordinary workers while leaving their tax-dodging mates untouched and then lying about it. They are a disgrace’ – well-said, Sam. Just as in Greece.

  28. Marverde says:

    Gosh! Who was that obnoxious MP the Tories fielded tonite to defend their policy on pensions??? Jon, just say no ministers were willing and leave the chair empty!

  29. Saltaire Sam says:

    Once again showing my appalling economic ignorance, I have to confess to being completely confused.

    We are told daily by our politicians that the country is a basket case only being rescued by the genius of Cameron and Osborne. And it’s clearly working because every night Krishnan reveals that the stock market is up and the pound has improved against the dollar.

    The snag is – and here is the confusion for a poor old dimbo – the same politicians tell us that Greece and through them Europe are even worse, and we should be afraid in case we dare to contradict Cammie and Ossie and send us the same way.

    Yet for all the panic over whether the euro will even survive, Krishnan tells us that benighted currency has got stronger in relation to the pound.

    Is it me, or do the markets bear absolutely no relationship with what is happening in the real world, but are a giant casino where spivs try to get even richer by econd guessing each other?

  30. Marverde says:

    Why did you spend ANY precious airtime on that stupid story about etiquette and class idiocy? Is Channel 4 News becoming TV-tabloid? I can tell you it didn’t follow nicely after so little time spent on the strike and pension issue.

    Not clever, Channel 4, not clever.

    1. adrian clarke says:

      Marverde you can not see beyond yours and channel 4’s political bias.The reason there was so little time spent on the strike and Pension issue is that except for the teachers it was a pretty damp squib,and even for them it was not the chaos they promised.Even the Labour party dare not support them because they too realise neither the early retirement nor the current state pensions can be afforded.
      So you got the “stupid story on etiquette” .Though why stupid defeats me.Many of the young appear to have few manners and this dragged it into the limelight somewhat.

  31. Saltaire Sam says:

    Everyone is tightening their belt but the Duchess of Cornwall has two people to buy her clothes for her? Good to know our cash is going on really important things.

    1. adrian clarke says:

      Do you think they will bring more trade and tourists to the UK?

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