Greek debt default-very likely!

#2
muhandis89 said:
http://www.bloomberg.com/apps/news?pid=20601090&sid=aq_vuFaKzuVI
...according to a lot of economists. So what happens if it does? Does that not result in a run on the Euro, which makes the Euro cheaper thereby lessening the costs of exports to its Banker, the Germans, enabling the German economy to grow.

This in turn strengthens the Euro (as Germany are its Bankers) and everybody in the Eurozone is happy. Apart from the Greeks of course who have just watched its already unaffordable loan become more expensive.

This is how it was explained to me - but I'm no economist.
 
#3
Lets be honest everyone who lent to Greece is going to have to take a serious haircut and Spain and Portugal and...
 
#4
Think of how many Billions of Pounds have been sunk over the last 40 years into Northern Ireland,Scotland and Wales, sometimes England´s own fault for closing Industries etc but still a serious bloodletting of financial resourses;Same thing with Greece and Spain but that doesn´t mean that the Union will collapse with it or the Euro go flying out of the window.

You sometimes need to lick a lot of windows to get a clear view!! :twisted:
Only joking lads!
 
#5
If Greek defaults on debt it is not the end of the world. The banks & financial organisations that lent Greece money will have significant losses, but probably nothing terminal (and hopefully no taxpayer support is required).

However, after losing money on their Greek debt, banks would be very wary about other EURO countries in the same position, and the value of Spanish, Italian, Portuguese and Irish debt bonds would fall. This devaluation of assets would create a similiar scenario as the US morguage credit crunch that kicked off the current crisis. We would see more taxpayer payouts to banks and likely some European (including UK) financial institutiuons failing. Not good for anyone either paying tax, relying on public services or with savings and pensions.
 
#7
Analysts at the French financial group AXA see a serious likelihood that the eurozone will break in half or disintegrate, dismissing Europe's €750bn (£623bn) rescue package for Club Med debtors as a stop-gap measure that misdiagnoses the problem.

In the case of Greece the joint IMF-EU policy will increase Greek public debt from 120pc to 150pc of GDP by 2014, arguably making matters worse.

A number of ex-IMF officials have said the policy is doomed to failure since there is no devaluation or debt relief to offset the ferocious fiscal squeeze, and may endanger the credibility of the Fund itself. The IMF had floated the idea of a debt restructuring but this was blocked by the Brussels.

The strategy assumes that voters in Greece and other Club Med democracies will endure years of pain for the sake of foreign creditors.

Contagion from a Greek default would be harder to control than fallout from the Lehman collapse. "This has huge implications for banks. These bonds didn't just disappear; they went somewhere, allegedly into French money markets and insurance companies, or on to French balance sheets," she said.

"The markets are very nervous because they can see that there is a fatal flaw in the system and no clear way out," said Theodora Zemek, head of global fixed income at AXA Investment Managers.
http://www.telegraph.co.uk/finance/7827867/AXA-fears-fatal-flaw-will-destroy-eurozone.html

Years yet to run on this one
 
#8
drei-streifen said:
If Greek defaults on debt it is not the end of the world. The banks & financial organisations that lent Greece money will have significant losses, but probably nothing terminal (and hopefully no taxpayer support is required).

However, after losing money on their Greek debt, banks would be very wary about other EURO countries in the same position, and the value of Spanish, Italian, Portuguese and Irish debt bonds would fall. This devaluation of assets would create a similiar scenario as the US morguage credit crunch that kicked off the current crisis. We would see more taxpayer payouts to banks and likely some European (including UK) financial institutiuons failing. Not good for anyone either paying tax, relying on public services or with savings and pensions.
No taxpayer support. Yeah, ok. I won't cum in your mouth and the check is in the mail.

Dream on...This is going to cost the UK, Europe, and the US BIG TIME.
 
#10
MrShanklysboots said:
muhandis89 said:
This is how it was explained to me - but I'm no economist.

As it happens I am. Without restructuring the debt (not paying it all back) and massive government spending cuts, and I mean massive, well beyond just the deficit, default is a mathematical certainty.

The bailout money was just kicking the can down the road a bit. Just like every bailout and splurge since the end of the dot.com boom, and the boom that was created after that bust to avoid any pain then.

Greece is not the only country in that boat. We have at very least a couple of legs in it ourselves. If you don’t have a great head for numbers but want to see the scale of the problem check out this link:
http://citywire.co.uk/money/europes-debt-muddle-made-scarily-clear/a402845
You can see why the bailout can’t work as anything more than a temporary measure, and why if Greece goes the spiral effect will kick in.
 
#12
bullet_catcher said:
China appears to have signed a series of deals with Greece. Not sure if it wll save the Euro, but the Chinese appear optomistic about the future.

Article here http://www.smh.com.au/world/china-rides-to-the-rescue-of-debtburdened-greece-20100616-ygkg.html
All at fire sale prices that would have had Stavros spitting with rage last year, yes the Chinese are optimistic about the future, the Chinese future. Mind you they will do a far better job of running Greece that the locals.
 
#16
#18
muhandis89 said:
The Greeks simply do not have the industrial or fiscal base,to pay back these 'Euro' loans!
They do make lovely food though and, once shaved, their women are quite tasty
 

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