# Greek debt write-off -What about us?



## horusd (31 Oct 2011)

In the last sting from a dying wasp, outgoiing ECB top knob Trichet says no, nein and non to a write-down of other countries debt a la Greek style. Greece was a special case and everyone else must cough-up, says Trichet. From the getgo this debt foisted on us was immoral. We should never have agreed that stupid bank rescue. 

There may be valid reasons not to repudiate this debt now. I don't know if there are? The only ones that would matter to me would be that doing it negatively effects our self-interest, I personally don't give a hoot for French German or British banks that made bad lending decisions. That's how Capitalism is supposed to work.


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## onq (31 Oct 2011)

Greece should not have been allowed to join.

They misrepresented their position when they applied.
They failed to take corrected measures as required in 2004.

Look on them as a poison pill, just like the American sub-Prime mortages racket.
Look for Goldman Sachs fingerprints all over the packaging of the Greek financial crisis.

Greece having gotten a write off throws us back on our resources but we will be better for it.


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## Gekko (31 Oct 2011)

More than a hint of LOS to this thread...


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## zztop (1 Nov 2011)

Has it anything to do with the fact that 70% of the debt is
owed to German & French banks..


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## NorfBank (1 Nov 2011)

onq said:


> Greece having gotten a write off throws us back on our resources but we will be better for it.



Approved but not accepted and unlikely to be accepted by the Greeks in a referendum.

[broken link removed]


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## PaddyBloggit (1 Nov 2011)

so what happens if they reject it?

and more importantly ... what impact will a rejection have on us?


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## aristotle (1 Nov 2011)

The referendum will not be passed, they will default on all\most of their debt, leave the eurozone, and re-introduce their own currency.


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## bryanod (1 Nov 2011)

Over 70% of Greeks still want to remain in the Euro so if the referendum boils down to that it may not be so cut and dried that it won't pass. Could end up being a masterstroke if it passed as people can't really continue to riot and complain.


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## Sunny (1 Nov 2011)

It's a roll of the dice by the PM. Risky as hell but if he can get it passed, it might lead to a better political climate and less unrest. 

Wouldn't be surprised if the wording of the question was something like 'Do you wish to remain in the Euro'? rather than asking do you support the austerity and bailout packages.


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## Firefly (1 Nov 2011)

Sunny said:


> It's a roll of the dice by the PM. Risky as hell but if he can get it passed, it might lead to a better political climate and less unrest.
> 
> Wouldn't be surprised if the wording of the question was something like 'Do you wish to remain in the Euro'? rather than asking do you support the austerity and bailout packages.



I think the PM knows that in order to protect his job he will leave the people decide and then implement their decision


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## AlbacoreA (1 Nov 2011)

Sunny said:


> It's a roll of the dice by the PM. Risky as hell but if he can get it passed, it might lead to a better political climate and less unrest. ...



+1. 

If they vote no, the unrest would get a lot worse.


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## onq (1 Nov 2011)

Its as well to remember that this is less about supporting Greece than it is about making a safety net for the French Banks who are exposed to the debt.

ONQ.


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## Smart_Saver (2 Nov 2011)

Based on the above question and the chaos it has thrown into the markets regards the whole Euro situation should our Government as a representative of it's people hold back on paying out the money owed to these *Unguaranteed* *Bondholders* until all this with Greece unravells and is sorted out ?

After all it has been raised that this could well lead to the ultimate downfall of the Euro as the pressure is now increasing dramatically on Italy, and all the experts reporting seem to conclude that if Italy falls, then the Euro is doomed irregardless of all the implemenatations put in place for the ESFS.

Also - with all due respect to the Greeks at least their Prime Minister is offering them the option to see if they wish to go down the road dictated currently by Europe.


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## Chris (2 Nov 2011)

horusd said:


> In the last sting from a dying wasp, outgoiing ECB top knob Trichet says no, nein and non to a write-down of other countries debt a la Greek style. Greece was a special case and everyone else must cough-up, says Trichet. From the getgo this debt foisted on us was immoral. We should never have agreed that stupid bank rescue.
> 
> There may be valid reasons not to repudiate this debt now. I don't know if there are? The only ones that would matter to me would be that doing it negatively effects our self-interest, I personally don't give a hoot for French German or British banks that made bad lending decisions. That's how Capitalism is supposed to work.


Amen to that. Greece probably needs closer to an 80% default, and a referendum will allow the politicians to force this. A 50% default will still leave them with 120% debt/GDP, which is still not close to a solution; about half that would be required for a country to be able to recover.
If they did this then their problem would boil down to getting their tax system working and balancing the budget. But they would be forced to do so in a very short space of time and they would be very well positioned to start an economic recovery. None of this would require leaving the Euro.



Sunny said:


> Wouldn't be surprised if the wording of the question was something like 'Do you wish to remain in the Euro'? rather than asking do you support the austerity and bailout packages.


I was actually thinking that earlier today. It does seem from some interview snippets with Papandreou that the question will be more in line with "should we leave the Euro" rather than "should we accept the latest bail out deal".


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## onq (3 Nov 2011)

It will be ironic if Greece, the so-called cradle of democracy, leaves and if Turkey (too Muslim to be allowed to Europe in the eyes of some pundits) then joins.

Turkey has been knocking on the door for a long time and there are 1.7 Million people of Turkish ethnicity already living in Germany


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## horusd (3 Nov 2011)

Funny(not really) if Greece rejects the referendum. No money, and presumably no Drachma's lying around. 8 billion will not be paid to Greece. How on earth are they going to manage at all?
 It's theoretically alright to threaten Greece with the door out of the Euro zone, but practically how would this play out? Greece could end up entering a severe period of civil, economic and political strife. I imagine lots of Greeks, especially the young are leaving.


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## Sunny (3 Nov 2011)

The real problem now is that Greece could take everyone else with them. Even though, it looks like the idea is losing political support in Greece so it might not happen


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## PaddyBloggit (3 Nov 2011)

From 'BreakingNews.ie:

_"The exit of the eurozone’s weakest member could  trigger a dangerous domino effect that could quickly see Ireland and  Portugal, the other two countries that have received bailouts, also  leave the currency bloc and cause the financial collapse of Italy and  Spain, which are barely hanging on."_

from:

[broken link removed]


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## 44brendan (3 Nov 2011)

David McWilliams is a strong proponent of Ireland exiting the Euro and embracing a currency (EURO lite/Punt) that can be devalued and thus allowing more competitiveness with our main trading partners (UK & USA). I don't think its that simple. We will still carry the country's debt in hard EUROs and would potentially lose the support of the ECB and stronger EURO countries. We could also risk losing the 150B of liquidity support for our Banks. Similarily with the Greeks. They could find the pain to be a lot more accute outside the currency than in. 
The main problem in assessing the alternative options is the absence of any clarity on the potential upsides/downsides of each option. Most economists appear to be biased towards their own partiality and tend to provide very little in-depth analysis on the alternatives.


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## Purple (3 Nov 2011)

44brendan said:


> David McWilliams is a strong proponent of Ireland exiting the Euro and embracing a currency (EURO lite/Punt) that can be devalued and thus allowing more competitiveness with our main trading partners (UK & USA). I don't think its that simple. We will still carry the country's debt in hard EUROs and would potentially lose the support of the ECB and stronger EURO countries. We could also risk losing the 150B of liquidity support for our Banks. Similarily with the Greeks. They could find the pain to be a lot more accute outside the currency than in.
> The main problem in assessing the alternative options is the absence of any clarity on the potential upsides/downsides of each option. Most economists appear to be biased towards their own partiality and tend to provide very little in-depth analysis on the alternatives.



While I agree that exiting the Euro would be very bad for Ireland as far as I know only the British have stipulated that we repay their loan in a particular currency, in their case GB pounds. I am open to correction.


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## 44brendan (3 Nov 2011)

The implication of your comments are that Ireland could effectively repay Euro borrowings on a 1 for 1 par value with a new devalued currency. Greece therefore could redeem their debt by extensively devaluing the "new Drachma" and repay in Drachmas rather than Euros. I acknowledge that anything is possible in the world of macroeconomics but this I fear is unlikely. Albeit it would be a great solution for  us


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## Sergiofern (3 Nov 2011)

Hi,

First time post, very interesting debate. I am from Spain living in Dublin and I think very soon Spain will have a debate on a referendum just likes Greece. I listened to a radio programme late last night and there was interesting contributors about if Ireland should have a referendum. Some person had set up a facebook page on this topic and most people who posted said yes. Do you think Ireland should have a referendum on the bail out?

Sergio


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## 44brendan (3 Nov 2011)

"Do you think Ireland should have a referendum on the bail out?"
The difficulty with this type of referendum is that a decision is made based on "populist" rather than "informed" opinions. I.e. Those who would not support a bail out or austerity would find it very easy to gain popularity. The alternative view would be difficult to sell to a mass audience. Ie such as "Its Frankfurts way or Labours way". When Gilmore entered Government he discovered that empty rhetoric may help in winning an election but subsequently reality does bite.


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## Slim (3 Nov 2011)

Sergiofern said:


> Hi,
> 
> First time post, very interesting debate. I am from Spain living in Dublin and I think very soon Spain will have a debate on a referendum just likes Greece. I listened to a radio programme late last night and there was interesting contributors about if Ireland should have a referendum. Some person had set up a facebook page on this topic and most people who posted said yes. Do you think Ireland should have a referendum on the bail out?
> 
> Sergio


 
Would you ever expect the 'turkeys' to vote for Christmas? No offence, it's a common expression here and it means you won't vote for what disadvantages you.


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## Sergiofern (3 Nov 2011)

I think Ireland should be allowed to vote on a referendum, it would make the Government stronger if they had the courage to negotiate with the EU. Also, the Government would have to explain fully the implications of both a yes vote and a no vote. Irish people are very intelligent and take grate offence at being regarded as too stupid to understand what they are voting on. See what happened last week with one of the referendums Apart from forums like this and others like Twitter and Facebook, there has been no public debate on this topic. 





44brendan said:


> "Do you think Ireland should have a referendum on the bail out?"
> The difficulty with this type of referendum is that a decision is made based on "populist" rather than "informed" opinions. I.e. Those who would not support a bail out or austerity would find it very easy to gain popularity. The alternative view would be difficult to sell to a mass audience. Ie such as "Its Frankfurts way or Labours way". When Gilmore entered Government he discovered that empty rhetoric may help in winning an election but subsequently reality does bite.


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