- 23-05-2012, 13:14 #4441
And Ekathimerini (Greek paper) is carrying an article saying Greece would have to exit the Euro over the weekend.
ekathimerini.com | Euro exit scenario gives Greece 46 hours to manage process
Greece may have only a 46-hour window of opportunity should it need to plot a route out of the euro.
That’s how much time the country’s leaders would probably have to enact any departure from the single currency while global markets are largely closed, from the end of trading in New York on a Friday to Monday’s market opening in Wellington, New Zealand, based on a synthesis of euro-exit scenarios from 21 economists, analysts and academics.
Over the two days, leaders would have to calm civil unrest while managing a potential sovereign default, planning a new currency, recapitalizing the banks, stemming the outflow of capital and seeking a way to pay bills once the bailout lifeline is cut. The risk is that the task would overwhelm any new government in a country that has had to be rescued twice since 2010 because it couldn’t manage its public finances.
De La Rue Plc (DLAR), a U.K. company that prints notes for more than 150 countries, is already preparing for a reintroduction of the drachma, the London-based Times newspaper said on May 18. The company has asked production staff to choose potential security threads for use in new banknotes and has retrieved covers from an old collection of copper molds, used for watermarks, the newspaper said, citing people it didn’t name.
De La Rue declined to comment on the newspaper report.
- 23-05-2012, 13:25 #4442
everyone is unprepared because you cant prepare for that sort of thing surely going by the way the EU is behaving its an impossibility.
better greece left at the same time all the fuss kicked over rather than get straddled with hundreds of billions in extra debt while putting off the inevitable.
I still think germany should leave along with finland and holland leaving the southern states and france to devalue the euro wholesale. with them all in the shit then eurobonds could even be feasible.
Ireland could do worse than go back to a punt linked to sterling again
I thought Delarue was down for printing new notes IF the greeks were unable to print enough themselves.what the world needs is an enema, make that two - just to give it a sense of purpose.
US electoral democracy is just a structured system of legalised bribery.
a senior Chinese officer has said, “all the great nations in the world own aircraft carriers – they are symbols of a great nation”. That’s why China has just commissioned its first. By the same token, to opt for a “carrier gap” of some years is to abandon your responsibilities.
- 23-05-2012, 13:55 #4443
Euro zone officials agree to prepare for Greek exit scenario | Reuters
Euro zone officials have agreed that each euro zone country must prepare an individual contingency plan in the eventuality that Greece decides to leave the single currency area, two eurozone officials said on Wednesday. The agreement was reached during a teleconference of the Eurogroup Working Group (EWG), which started at 1300 GMT on Monday and lasted for about one hour.
As well as confirmation from two officials, Reuters has seen a memo drawn up by one member state detailing some of the elements that euro zone countries should consider. The EWG consists of officials who prepare meetings of finance ministers and also form the board of the temporary bailout fund, the European Financial Stability Facility (EFSF).
"The EWG agreed that each euro zone country should prepare a contingency plan, individually, for the potential consequences of a Greek exit from the euro," said one euro zone official familiar with what was discussion on the call. "Nothing was prepared so far on the euro zone level for now, for fear of leaks," the official said. A second official confirmed the EWG agreement on Monday.
The document detailed the potential costs to individual member states of a Greek exit and said that if it came about, an "amiable divorce" should be sought. It also said that Greece decides to leave, support could be given from the EU/IMF to help it do so.
- 23-05-2012, 14:45 #4444
a. An event that may occur but that is not likely or intended; a possibility;
b. A possible but not very likely future event or condition;
As contingency plans exist for far more unlikely scenarios, this one with a 25-30% probablity forecast for the last couple of years will have been covered too.
It would also seem politically prudent to let the Greeks know publicly at this point that the Eurozone can manage just fine without them........
- 23-05-2012, 15:08 #4445
- 23-05-2012, 16:02 #4446
- 23-05-2012, 17:31 #4447
Shock Horror..Despite assurances last week all was well in Spain it appears it is not!!
Premier: Spain urgently needs financing, liquidity - Yahoo!7 Finance Australia
Spain moves ever closer to the bailout it needs to survive!!
Apparently one of the BBC newsnight reporters has been tweeting this as well
- 23-05-2012, 18:42 #4448
I think Grexit has become an increasingly likely outcome. Greece is the in throes of a 5 year depression with a fall of GDP of 20% from peak to present and with 25% of the population unemployed (50% of the young) Add into the equation an election that may deliver a Syriza led coalition or an inconclusive results and its not going to get any better soon. In addition Greece has taken no steps to improve the structure of its economy - for example hairdressers are still classed as being in a dangerous profession and are able to retire at 50% on a good pension. Stay in the euro or not, Greece is going to require a third bailout and further writing off of debt.
As to when Grexit occurs - who knows? the only certainty is that the ECB is going to throw more money at the problem before it does.
One of the ECB's better wheezes. Necessary to stop liquidity in the eurozone drying up, but the bulk seems to have gone to Italian and Spanish banks who engaged in a gargantuan carry trade with their countries sovereign debt. Burrowing from the ECB at 1% and lending to your own government at 5% - 6% is good business - unless of course your country gets bailed out and you take a 50% haircut on the sovereign debt you brought.
Socialisation of Debt
Still going on. Greek, Irish and Portuguese debt is slowly being transferred from the private sector to the eurozone. If there are further haircuts on Greek debt, the eurozone tax payers will be picking up the bill - as indeed they ultimately may do for Irish and Portuguese debt.
Lack of Structural Reform in Club Med
Club Med has yet to start on serious structural reform to make their economies more competitive - for example the closed professions are still present in Italy - with taxi driver licenses being passed down from father to son. Similarly, the red tape that strangles small business is still in place. Without liberalised economies, they're doomed to remain uncompetitive.
Southern Europe is now mired in another recession, which can only make the deficits worse. And Spain is showing increasing signs of distress. For example, Spanish 10 year bonds at still stuck above 6% (6.1% as of today).
Liquidity in the Banking System
There a lot of factual (and anecdotal) evidence that money is slowly draining away from Club Med, which is going to lead to liquidity problems in the future. Greek, Spanish and Italian banks are all being hit. The so called 'bank jog' continues.
There's more than a little to be gloomy about. The situation now is measurably worse than when this thread started. And because of the bailouts, socialisation of debt, LTRO, etc, the bill he euro taxpayers will eventually pick up is getting bigger and bigger.
- 23-05-2012, 19:37 #4449
- Join Date
- Mar 2006
Given that this issue has been the subject of so much debate and angst, I suggest that that is exactly what a great many people fear.
Otherwise, why the hell have you, the media, economists, politicians and governments et al, been rabbiting on about it for so many goddamn months?
Has all this just been a matter of the nomenklatura, the apparatchiks and the media seeking “to make a thing of a thing”?
If it has been, then one must ask the question “Why?”
Last edited by Balleh; 23-05-2012 at 20:41.
- 23-05-2012, 20:20 #4450
- Join Date
- Mar 2006
There is a report in the media today that the Bundesbank says a Greek exit is manageable.
That is a long way from the cognoscenti’s earlier predictions of doom and damnation if Greece did exit.
Unless the Bundesbank means what it says, its comment is mere posturing. I guess the ground is being prepared.
Last edited by Balleh; 23-05-2012 at 20:47.