Greece ... again

Discussion in 'Current Affairs, News and Analysis' started by ghost_us, Sep 19, 2011.

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  1. Stocks drop as Greek default looms- MSN Money

    What's the thought on that side of the pond? Are we going to have bailouts for the perpetual under-performers in the EU or is this kind of a twice and done sort of thing?
  2. No, the Germans are nearing the end of their tether with the Greeks, they have a history of carrying out threats :)
  3. I'm also kind of hoping it kicks something off in Europe. :)
  4. Such as?
  5. The view from where I live in the Eurozone is that things are coming to a head - Greece is quite simply unable to service its debt. It can't even collect its taxes properly any more since the tax collectors are not playing ball.

    Greece has already been bailed out and it has not helped one iota (to use an appropriate turn of phrase); the situation they are now in is no better than at the time of the last bailout, so throwing good money after bad doesn't seem to be the best way forward. Put simply, Greece's finances are****ed. The question is when the EU will decide to either pull the plug on Greece or made hugely radical changes to fiscal management in the Eurozone. Neither is an easy option.

    As a bit of an aside, a blerk in the pub (café) told me that when Greece goes under, then Greek minted Euros will no longer be legal tender in the Eurozone but that money in a Euro account outside Greece will be okay - I have noticed since the bloke told me that, that whenever I get Euros from an ATM they are always Greek ones (tin foil hat time).

    And going back to your quote, a report from an economic research company in a place called Valhalla is never going to be cheerful reading :)
  6. Living as I do on Crete, I am hoping that whatever happens we stay in the Euro, however it is not looking good from here.
    The only saving grace & correct me if I am wrong is Greece's strategic position within Europe, & the world. To that end NATO/Europe needs to keep Greece on side but at what coast that is the question?
  7. Alsacien

    Alsacien LE Moderator

    Its pretty straightforward.
    There is insufficient mechanism in place to cope with the situation, particularly enforcement of rules/agreements and creation of structures to deal with abnormal situations.
    Any substantial or legal change means re-opening the EU treaty (Maastricht) in some way - a political steaming turd.
    Dynamic decision making with 17 parties who have to pander to a national electorate is impossible, so everything movement takes an age.
    Anything agreed still has to approved nationally e.g. the July decision. Too much democracy (despite popular opinion) with no person or body empowered to decide anything of substance without giving everyone a national opt out.
    A new structure - the EFSF - will take over the show and remove some of the political overhead soon, but it is not big enough for the job and will be vulnerable to the markets.
    Everything agreed regarding Greece is subject to targets, meaning constant review under the spotlight every few weeks. Given the world economic situation and the state of Greece to start with, this is not a quick fix.

    The heads of the EU sheds need to map out what they are going to do short term and long term and provide the needed guarantees - but no leadership is apparent that can precipitate this and they are having to be forced into a no more options corner.

    Easy to understand, very hard to fix.
  8. Alsacien

    Alsacien LE Moderator

    Not the Greek Euro bollocks again - not like you to buy into daft crap like that.
  9. Alsacien

    Alsacien LE Moderator

    No danger of Greece leaving the Euro voluntarily.
    However expect at some point a new set of game rules and a viable way out that will not upset the apple cart if you cannot keep to them....
  10. How about the EU accepts Turkey's attempts to join and reduces the relative importance of Greece's strategic position? Very Machiavellian, I know...

    @Alsacian: Agreed.
  11. Wordsmith

    Wordsmith LE Book Reviewer

    The only thing that might save Greece's bacon for another year of two (despite being to all effects and purposes bankrupt) is that the cost of letting Greece default probably outweighs the cost of propping them up for another year or two.

    The European banking system would take a big hit (and who knows what horrors are lurking in the Credit Default Swaps). French banks in particular look to be in line for a pretty bad time - enough that the French government might have to recapitalise them. Lending to businesses will drop Europe wide - as the banks will have to rebuild their balance sheets - thus hitting economic growth.

    So I suspect we're back to the 'kicking the tin can down the road' strategy - the hope being that the other European countries will be in a better position to take the hit in a year or two's time. The banks will love that. As the EFSF, etc, buy up more sovereign debt, the banks slowly get it off their hands. Risk is thus being transferred from banks to taxpayers.

    Unfortunately, the strains in the banking system are steadily building and I suspect something will give in the next few months. It's an ugly picture that could get far worse. If Greece defaults, the markets will take an even dimmer view of Italy - and that's a country too big to fail.

  12. Not sure if you in the UK are aware of the Cyprus,Israel,Greece thing going on, but believe it or not, there is Oil in theses here parts, & we are not talking the Olive kind.
    Cyprus, Israel move closer on East Med gas -

    And Turkey is not invited to the party apparently.
  13. Alsacien

    Alsacien LE Moderator

    Cypriots and Israelis - probably the 2 most untrustworthy nations in the world. I expect the good people of Kibris and the worlds 5th or 6th biggest standing army may have a view on the matter if it ever materializes...

    Beware of Greeks bearing gifts - especially if a Cypriot is delivering it via a Jewish middle man!
  14. There is a lot going on in this neck of the woods right now, enough to say that although Greece is without doubt a very hot potato, it is still very much a key area within Europe. And to that end, is I hope going to be given time to get it's house in order.
    But yes you do make a very good, & amusing point.
  15. I will be amazed if the Eurozone keeps all of its existing members.

    If the Greeks abscond from the Euro who seriously thinks their politicians will be able to resist the urge to inflate away their sovereign debt?

    Historically current events are the precursor of war. Could go either way at the moment.