Bankroll the Greeks?

There has been a lot of talk in the media about how the Greeks have got to do something about their pensions if they want any more money (with, rather to my surprise, UK banks' exposure to Greek bonds being roughly the same as that of US and German banks. But I forget now from where I got that particular snippet).

Banks aside, I thought I would find out a bit more about why Greek pensions needed attention and turned up two documents. Greece-1 (reference 1) is pensions at a glance from OECD and its message seems to be that while Greek pensions are no longer particularly generous, having been much reformed in recent years, they still can't afford them. Pensions are set to eat up too big a chunk of their GDP. Greece-2 (reference 2) is a more in-depth look at the Greek pensions scene from Bethlehem, Pennsylvania. Or more particularly from a place described at reference 3 as a premier private residential research university. With this particular offering coming from the Martindale Center for the Study of Private Enterprise at said LeHigh University.

This second story is essentially an expanded version of the first. Greek pensions are indeed a bit of a mess, but the big problem is that Greece is a poor country where people are not keen on paying taxes but where they are keen on collecting pensions. It will be a bit rough on the many poor Greeks, but they really do have to get their house in order, they can't expect to live for ever on charity from the rest of the world, despite their first class contribution to western civilisation in the past.

That said, the bankers must take some of the pain too; they had no business lending all this money to people who can't afford it. Or put another way, don't they look at the balance sheets of outfits from which they propose to buy bonds? Why are their shareholders not getting into a lather about their lack of due diligence? Have the banks behaved much better than the much slagged off Wonga? On which topic, you can turn to reference 4 for last year's thoughts.

With thanks to wikipedia for the postcard.

Reference 1: https://dl.dropboxusercontent.com/u/8152054/Greece-1.pdf.

Reference 2: https://dl.dropboxusercontent.com/u/8152054/Greece-2.pdf.

Reference 3: http://www1.lehigh.edu/home.

Reference 4: http://psmv2.blogspot.co.uk/2014/11/nonsense.html.