Greece ... Thank You

Crandle

Registered User
Messages
7
Are we living in an historical moment in Europe ?

If Greece is cut free (writing this on 25/6/15), is this not the best opportunity for the E.U. and Eurozone to reassess everything. Combine this with the U.K.'s renegotiation of their relationship with the E.U.?
 
I note that if the UK leaves they will join Norway & Switzerland as contributors to the EUs budget ... ... ...
 
Good historical perspective in IT today.

IMHO, it's time the Greeks stopped blaming everybody else and look for solutions closer to home.
 
Good historical perspective in IT today.

IMHO, it's time the Greeks stopped blaming everybody else and look for solutions closer to home.
From all the chat in the media ,
1. It is easy to blame Greeks for their mess.
2. It is easy to blame Eu for letting them into Euro, knowing their figures were iffy..

I can,t help but feel there is but one solution ,( unpalatable as it sounds.)
1.Write off or re-re- stretch at .0005% interest on what they owe.
2. Allow enough ongoing budget leeway that the Greek people are not starved.
Maybe behind the bluster that is what is proposed.

It is said Greece owes billion 300 !
Now if you were a builders provider and someone owed you e300.
If they were a hopeless case would you not gladly take e80?

So in pragmatism, lets face the music and make the decision.
 
Now if you were a builders provider and someone owed you e300.
If they were a hopeless case would you not gladly take e80?

So in pragmatism, lets face the music and make the decision.

True, except it would quickly turn into a moral hazard situation with other countries deep in debt "Where's my NAMA" comes to mind. If Greece wasn't geographically located where was (with Putin making moves in Eastern Europe) they would have been let go well before now. Having said that, Greece is like the gangrenous leg of Europe and should be cut off. The could do with a weak currency that would boost their tourism.
 
If Greece does default, I would expect more interest in our numbers by those who value bonds and our interest rates to start to push up. We're in fine company as you can see. Still, as someone here once said about government borrowings, "sure that's what governments do" it shouldn't matter at all should it? (I notice how the Keynesians have gone all quiet about government borrowings of late too!).

upload_2015-6-26_17-46-27.png
 
Last edited:
if Greece leaves how does that effect the euro v us dollar/sterling (imports e.g. petrol/foodstuffs ?
 
The Greek debt is unsustainable and the reality is that it will not be able to recover without some write off. Some write off now would be good for the European economy generally.

However, there is no point in writing off debt until they are prepared to face up to reality themselves. I don't want to see debt write off so that they can retire at 62 with some retiring at 50. Or debt-write off so that they don't need to bother enforcing tax collection.

And of course, if they do write down debt, then other countries will want their debt written down. Just as when someone in distress gets a split mortgage and someone paying their mortgage in full gets no deal.

Brendan
 
In this piece Karl Whelan argues that the linking of Grexit with Greek default on its official creditors was a spurious linkage drummed up by the ECB at the behest of the Germans. His argument goes that since the banking system's assets are quite unaffected by such a default the ECB should have no difficulty in continuing to support Greek banks within the euro.

So Karl's scenario is that the Greeks should be allowed to say "stuff your official loans" and that should have no impact whatsoever for Greek citizens and their euro deposits. If a professor of economics believes this then perhaps I should stop slating the likes of Sinn Fein for espousing similar economic wisdom.

Here's the reality check. If Greece thumbs it's nose at its official creditors, there will be all hell to pay - otherwise all order in international financial relationships will be doomed.

Although the professor's logic would not require it, this would be the chain of events:

- ECB withdraws ELA
- Greek banks have no euros to give withdrawing depositors
- Greece has to leave the euro and introduce a new drachma
- Economic sanctions are applied if Greece continues to default on its international obligations
- If the Greek central bank defaults on the terms of ELA there is a possible freezing of the deposits of Greek residents in other euro area banking systems; after all it is ELA commitments from the Greek central bank which are backing these
 
Last edited:
Are you sure about this? What sort of sanctions? We are not allowed to go on holidays to Greece? A duty is put on their exports?

I doubt it, but I don't know.

Brendan
Boss I don't know. But there must be surely some ramifications other than we won't lend you again. Beside the official loans the ELA issue is huge. All those deposits which have flown from Greece backed by a promise from the Greek Central Bank to back them (ELA). If the Greek Central Bank simply welched on those obligations that must be subject to some sanction.
 
Are you sure about this? What sort of sanctions? We are not allowed to go on holidays to Greece? A duty is put on their exports?

There will be a need to bring in capital sanctions to ensure that Greek banks and asset managers do not move capital back to Greece from their European branches and subsidiaries (remember the T1 ratios). But beyond that I doubt you will see much by way of sanctions on the EU side.

On the Greek side it is another matter, they have been had a negative balance of payments going back to the 90s and so they will have a desperate need for hard currency so we'll have to see how that pans out. As for holidays, I expect you'll have to do it all in cash and like travelling in places like Hungary in 1980s, pay for everything twice - once in the official currency for the government and once in hard currency on the black market....
 
So the ECB is not yet withdrawing existing ELA. But no new stuff, so I suppose the banks will have to be closed until the referendum.

The outcome of that is very hard to call. 70% support Syriza's hard line and Syriza have asked for a rejection of the terms. But a similar percentage want to stay in the euro and they know rejection of the terms is possibly disaster, a huge risk.

I can see the Greek people accepting the terms out of sheer pragmatism. A bit like Scotland rejecting independence, a vote from the head but not from the heart. I foresee a similar reaction as in Scotland with, paradoxically, a wave of increased support for Syriza even though they lose the referendum.

Betfair are betting 6 to 4 against a Grexit. This is way down from the 8/1 a few days ago but it still says that on balance the punters think there will not be a Grexit.
 
Anyone else notice how quiet the Austerity Alliance / People Before Profit and the other Looney Left brigades have been of late? I would have thought that they would be out marching in the streets supporting their comrades in Greece? Seems like no one is shouting "Burn the Bondholders" now ??
 
Anyone else notice how quiet the Austerity Alliance

Hi Firefly. That is a great name for a new party. The Austerity Alliance. That is what we need in this country. Not the Anti Austerity Alliance.

I heard Paul Murphy on the radio this morning saying "The Greek people are right not to pay the debt, which is not their debt".

Whose debt is it? Unfortunately it was a closing comment so he wasn't asked to explain.

Brendan
 
reuters...

"Prime Minister Alexis Tsipras has told international creditors Athens could accept their bailout offer if some conditions were changed"

I thought the people of Greece were being insulted by all this austerity and demands of the creditors? Tsipras has urged a No vote only yesterday and now has about-turned - hard to see how he and Evel Knievel will survive after calling the referendum!

How can anyone take the Greeks seriously any more, never mind trust them? They've made a huge mistake IMO and lost all credibility and any influence they ever had in the EU.
 
Last edited by a moderator:
Tsipras has urged a No vote only yesterday and now has about-turned

I think he has turned around again even since then and denied that he was making any concessions.

He is claiming that voting no doesn't mean that they have to leave the euro.

He is doing the Greek people a huge disservice. But they probably don't appreciate that.



Brendan
 
Back
Top