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The 'Take it Outside' thread This thread will no longer be moderated ***
and if Greece walks away from their debts, they will find it very difficult if not impossible to borrow again.There is no easy way out from here, given how badly the Greek Government has managed their finances up to now. They will have to reduce the cost of the state and simplify their tax and pension rules, whatever happens. And the longer they leave it the more painful it will be.
This is brinkmanship by the Greek PM, nothing more nothing less. A silly and dishonest little game.
Argentina managed well enough. The Greeks got themselves into this, but then they were comprehensively stitched up by the EU to save the Euro.
So I do have somewhat more sympathy for them than I might otherwise have had.
Looking at the size of their economy, they can default on all their debt, devalue, and they'll probably get the start up loans they need from China. I suspect deals could be done over the Piraeus
Will wrote: "and if Greece walks away from their debts, they will find it very difficult if not impossible to borrow again."There is always someone to led, Will. It's all a matter of how much. Bad debtor countries are exactly the same as bad debtor individuals in that respect.
The other thing is, if they default on all their debts, they will be able to borrow at a higher interest rate, because they'll have no baggage.
They will be forced to borrow at a higher interest rate, which will increase the length of time that it will take them to get out of this hole. Future lenders may also ask for deeper cuts than the ones currently on the table.I really don't think the Greek government want Grexit. They are simply trying to water down the EU requirements. The problem with this is twofold. First, it would set a precedent for other countries in a similar position. Secondly, without changing their finances they are never going to get out of this predicament. They will be continually borrowing, at ever increasing interest rates.
The sad thing is that, apart from the collection of tax, much of the restructuring is already going on. I can understand the reluctance to slim down the army and some of the state: a lot of those salaries are supporting a lot of families, and Greece doesn't have our comprehensive welfare system, so without the jobs being created what are all these newly unemplyed, and discontented soldiers going to do?But the choice is simple. Either the EU swallows and takes the haircut that Greece and now the IMF are saying is inevitable, or lose the lot when Greece walks away into the welcoming arms of the Chinese. They would be delighted with some long term leases on sites in the Med, wouldn't they? the new BRICS (sp?) group will welcome Greece with open arms for strategic purposes, and the money will flow.
How will the EU ever get any money back then? Send in the Panzers to collect it or land grab? (And actually that was not a fascietious comment.)
I tend to agree with you Will, I don't believe that the Greek government want to leave the Euro. Also, of course, they don't want to be in a state of enforced austerity for the next 57 years.It is interesting that the natural fault lines between France and Germany are starting to appear, with Hollande making the comment that "Merkel had lost". This, of course, further encourages Greece to be more belligerent.
Merkel has lost, Geoff. She has allowed the deep structural issue with the euro to move from something discussed behind closed doors or in academic papers to being front line news.To survive the Euro needs either full political integration of the EU, or the voters in the richer countries must come to understand that a relatively poor country inside the Euro will need cash forever.
It's not a case of 'Getting their money back': these capital flows are part of any closed economic unit, and the ordinary people are suddenly seeing what this actually means in practice when a currency crosses many borders. 'Getting their money back' is never going to happen, and the political fallout will be enormous
It is quietly happening inside the USA too, although the papers never make very much of it.
Will wrote: "Merkel has lost, Geoff. She has allowed the deep structural issue with the euro to move from something discussed behind closed doors or in academic papers to being front line news.To survive the..."
Merkel could never win this one. The euro was doomed the minute they fudged the numbers to allow Greece, Spain, Italy and some of the others in.
You need a system to allow workers and money to flow. They've got the workers system in place but not the capital flows because a German electorate will not send money south to prop up the Greeks in the way that London/South East allows money to flow out to fund the rest of the UK
As Will says, it happens in the USA. It's the way currency unions balance the books and keep things balanced
It is interesting to note that Germany has never paid its debts. Their World War 1 debts were wiped out by a conference in 1953 cancelling the reparations.Don't talk about the war.
Geoff (G. Robbins) (The noisy passionfruit) wrote: "It is interesting to note that Germany has never paid its debts. Their World War 1 debts were wiped out by a conference in 1953 cancelling the reparations.Don't talk about the war."
As you know, it was a matter of political expediency at the time, but I do agree that it appears hypocritical for the Germans to be acting in this manner towards Greece, given their past.
It's all political expediency.If the Greeks are forbidden their debts, why not the Portuguese, Spanish, Italians and Irish?
At which point I suspect you'll see the German referendum telling them to stuff it
So far the politics seem to lining up like this:Greece and the IMF - without a substantial cut in the sovereign debt, Greece cannot recover within the Euro. Reforms and targetted expansionary policies/ capital flows are needed, or else the Euro breaks.
The ECB: If Greece leaves the Euro, the Sovereign Debt bonds we hold as security for other EU member States financing are worthless and we will need other security or to raise their interest rates substantially on Sovereign loans within the EU.
France, Spain, Italy: Greece must be helped to stay in the Euro!!!!!! (All have their ECB funding secured by their ownership of Greek Sovereign Bonds, amongst others.)
Poland : Stuff the Greeks. We don't like foreigners.
Assorted Balkans Countries: We have even less than the Greeks. Why haven't you given us anything?
Merkel : ........ I've got voters to think about.....
The Speculators : If Greece goes, how long before we can break another country and make even more cash?
Actually I'm not sure who will make money on Greece. People who sold Euros for Dollars will probably have made a reasonable return, but a lot of companies do that anyway.Politically I don't think that it will be possible to cancel Greek debt, and they can never pay their debt back, so it's cancel or default.
I keep wondering about David Cameron in all this. He's supposed to be re-negotiating Britain's membership of the EU, but the rest of Europe has bigger fish to fry. As one commentator put it, Cameron is turning up at a funeral and trying to sympathise with the dead person's family by telling them about the time he had acne problems!
I think it's pretty clear what is going to happen here. Greece does not want to leave the Euro, but the far left Govt has been elected on a so-called anti austerity manifesto. And they cannot stay in the Euro without some form of austerity to reign in their ridiculous overspending.So Greece will come back to the negotiating table to try to get some of their debt written off and to reduce the cuts they gave to make. The rest of Europe cannot allow that to happen because of the precedent that it will set ... and because they won't trust the Greeks to keep their part of the negotiations.
Eventually a deal will be reached which will be not that far from what was on the table before the farcical referendum. The Greek govt will claim it as a victory, but it will be austerity all the same.
I suspect the EU are taking Cameron seriously because firstly, we're a net contributor. Second largest at 3.5 billion. If we go, other countries will have to stump up more or they'll have to cut what they pay out.Secondly, whilst Cameron may well want to campaign to stay in, this might make it harder for them, because he can always point to those who want to get out and explain that they're out of his control and in spite of everything he could lose.
At the moment, from a negotiating point of view, having a bit of a rebellion in the party against Europe is probably no bad thing
A few Labour and Libdem politicians saying that if we don't get proper concessions then they'll campaign for a no vote could also be doing their patriotic duty :-)
The other problem is that we could be in for a perfect storm. Troubles in the EU, Russia unable to sell their oil and gas at a price that they can make a profit on and, last but not least, China desperately trying to keep its stock market from dropping heavily and failing.In a few months we could be looking at this as a tip of the iceberg. Remember, November is only four months away.
Will, I think the Greeks have accepted that this situation cannot continue, and some growth must be introduced as well as the cuts for the country to have any hope of economic survival.Whilst you are lefty bashing by the way, the deal you mention was rejected out of hand by the right wing administration ( the one who actually took the last bailout money then refused to make the cuts they agreed to, generating this issue). Well d0ne for swallowing the propoganda!
I think the referendum, rather than farcical, had a serious point. And you do know that all the Greek political parties (except the actual far right and far left) have joined in agreement on the issue?
no, I am not lefty bashing. I try not to get hooked onto crude and simplistic concepts like left or right. Greece's problems were caused by successive Governments (of all political colours) overspending way beyond their means. These problems have then been exacerbated by the latest government's ridiculous and dishonest anti-austerity claims.Every senior politician across the EU knows this. The only people who don't get it are the gullible public who have been hoodwinked by the propaganda that an overspending nation can rescue itself without some form if cuts.
The referendum was a farce. It was badly written and almost impossible to understand. It didn't offer an alternative. The outcome was hardly beyond doubt given the way it was phrased. But what would have happened if the German people had been asked to vote on whether to write off Greek debts?
The Greek government are playing silly games
The Greek government are responding to a trebled suicide rate, 49% youth unemployment, an exodus of their brightest young people and a failed economic experiment that has reduced GDP by a massive 25%...What's dishonest in saying it isn't working?
What's dishonest is the attitude of Merkel and the EU finance ministers in pretending they are ever going to get any money back out of the mess, to cover the stupid decision to cover the debts incurred by private banks with a massive EU subsidy without asking permission of the taxpayers first! The sooner that she admits the truth that everyone can see, that the money is gone and isn't coming back, the sooner everyone can move on.
We know, because of the IMF document, that the policy has never been to rescue Greece but to rescue the euro. To kick the can down the road until the euro was strong enough to let the Greeks drop out of it. (Because they should never have been in it in the first place.)So from the Greek point of view there is no real point in negotiating anything but support for the drachma because no EU policy will get Greece back on its feet. (Whether any EU policy will get the EU back into sensible growth is another question.)
The referendum was a strange on. The question was technically nonsense in that they were asked to vote for an offer that had been withdrawn.
But you could say that as no other offer would ever be as good as that one, reject that you're rejecting the others.
Also because the consequences of a 'no' vote are almost inevitably to leave the euro,it could be that the voters might be said to have voted for that even if they haven't overtly asked for it. Thus it protects the political parties backs somewhat which is something political parties always try to achieve.
slanted framing of referendum question *shock*see this BBC article on examples of similar from history
http://www.bbc.co.uk/news/world-europ...
And we can't wait to see how Camaron phrases our referendum question... bet it isn't as simple as:In
Out
Don't care
InOut
Stick it to the Scots some more
I think will be the 3 options
Marc wrote: "slanted framing of referendum question *shock*see this BBC article on examples of similar from history
http://www.bbc.co.uk/news/world-europ..."
I loved the comment
"A draft of the referendum on whether the UK should leave the EU was rewritten because it confused a significant minority of people who didn't know the UK was already a member."
Will - you keep focussing on the symptoms and not the cause. The Greeks are in this mess because of overspending. They insisted on wasting money on vanity projects, an inefficient tax and pension system, and a refusal to keep to their commitments about privatisations. They should be spending money on their citizens and not on debt interest. The fact that they can't do this is because of a refusal to embrace austerity before now.Greece is proof that austerity is far better for your citizens than rampant and unfocused overspending.
but let's rephrase it. Austerity is not just about cuts. It is about prioritising public expenditure on the stuff that matters. Greece has spent far too long wasting its money on things that should have been low priority. And it hasn't been fast enough to implement the reforms that it needs.
Greece is the villain in this piece. I feel sorry for its citizens who have been, and continue to be, badly let down by their governments
It's quite interesting to read different countries newspapers /tweets etc. as I read that Merkel dismissed the referendum as irrelevant. The offer they voted on had a deadline which expired before the vote so they voted on an offer which was no longer in existence. It seems to me that the vote was to justify the current government in Greece alone. She also said that the German government was now on holiday, and she had no mandate to recall them to discuss the situation. She also commented that you wouldn't recall your bank manager from his holidays to demand a loan.
I would if I need it to feed my family.Merkel's comments about being on her hols show both how arrogant the Germans are and that the situation of the Greek people matter not. Of course she is right about the referendum only being about Greek domestic politics, but then that would hardly be a first would it? That's what politicians do, they play political games of stratgey
Will wrote: "no, I am not lefty bashing. I try not to get hooked onto crude and simplistic concepts like left or right. Greece's problems were caused by successive Governments (of all political colours) overspe..."Strangely, I find myself agreeing with you. I read an article about how much money Greece wasted on the Athens Olympics, a few years back. The sums were eye-watering, and most of the stadiums and swimming pools ended up abandoned.
ahem, any Olympics is a waste of money and there is rarely a long-lasting legacy. We have Westfield in Stratford and West Ham playing in the Olympic stadium to show for ours. No one asked me as a Londoner if I wanted to cough up for it
Marc wrote: "ahem, any Olympics is a waste of money and there is rarely a long-=lasting legacy. We have Westfield in Stratford and West HJam playing in the Olympic stadium to show for ours. No one asked me as a..."No one asked me, either, but Scotland's cash still flowed south.
I quite agree Will, that all the previous governments in Greece have screwed up royally. But how often can the ordinary people be expected to pay all the costs, to an unacceptable degree, for the ruinous policies of an elite?The new government is inexperienced, but at least it's trying to be honest.
The issue is how the EU deals with the mess that it has in part created with the Euro, and the humanitarian disaster that's about to land.
Again, Merkel is being dishonest by not admitting openly that in any closed monetary system revenues and capital are redistributed fro the rich areas to the poor areas, whatever their reason for being poor may be.
I think she'll decide her political position at home is too weak to offer debt relief. The result will be Grexit. Greece is probably printing drachmas now, under enormous secrecy, and preparing to ... well, exactly how does a state declare it is bankrupt? It can state that it now refuses to repay the IMF and the ECB, and search for new lenders (BRICS? China? Russia? Obama will have a heart attack at the idea of Chinese warships legitimately in the Med and around Greek shores... or at Putin's naval vessels off Piraeus..) which like any new bankrupt it will find once all the revenue funds from not repaying old debt are released...
Lynne (Tigger's Mum) wrote: "It's quite interesting to read different countries newspapers /tweets etc. as I read that Merkel dismissed the referendum as irrelevant. The offer they voted on had a deadline which expired before..."
I think I'd expect my bank to have experienced staff to give holiday cover, Lynne...
But it's all about domestic politics, isn't it? I think the real reason for the referendum was the overt demand from Germany for a regime change in Greece. God knows who to: the Greek conservatives were the ones largely responsible for the current crisis, and had themselves rejected the EU proposals last summer! So the referendum followed by the other parties subsequent unity agreement cut that argument out.
Merkel has constantly promoted the concept of lazy greeks living on handouts, and has given herself no room to move domestically as a result. I think she will be remembered as a major failure now, and the Reichchancellor who ended the Euro.
the Russians would be the obvious ones to jump into the breach, but they're struggling in part thanks to the sanctions over Ukraine. Thank god...
Merkel is in a corner but still trying to sound in control. Yes Will, a bank may have holiday cover but a government obviously just goes on holiday and leaves the place to tick over. How very dare they spoil our vacation :0)
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Geoff (G. Robbins) (merda constat variat altitudo)
(last edited Jul 08, 2015 05:27AM)
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R.M.F wrote: "No one asked me, either, but Scotland's cash still flowed south."And, of course, Scotland paid for all of the Commonwealth Games.
You got more than your money back, unlike the North of England and Wales.
"And, of course, Scotland paid for all of the Commonwealth Games."Actually, we did. :)
And yes, I agree with you over the NE of England. They got a harsh deal over the Olympics. Legacy? My arse!
Marc wrote: "the Russians would be the obvious ones to jump into the breach, but they're struggling in part thanks to the sanctions over Ukraine. Thank god..."The Russians are meeting with the other BRIC nations today, and signed an oil deal with the Chinese, not that long ago. Maybe the sanctions won't be that effective?
I just meant they can't splash the cash to prop Greece up in return for influence
The Chinese could, Marc. The Trillions and trillions of US Export Guarantee credits they are sitting on would fund Greece for ever, in return for access to the Med & the Black Sea.Watch the panic that would ensue. Brit & French fighter jets shadowing Russian bombers along the Channel would be nothing in comparison
true, I was just talking about the Russians
Will wrote: "The Chinese could, Marc. The Trillions and trillions of US Export Guarantee credits they are sitting on would fund Greece for ever, in return for access to the Med & the Black Sea.Watch the pani..."
Chinese stock market seems to be going up in smoke. Maybe China's a glass cannon, after all?
Well, that's a great budget if you're over 25, home owning, and live in the SE of England.
I'm all of those and I'm no better off apart from the tax on 40 quid as the threshold goes up for everyone. Have to pay more for my kids to go to Uni too, cos sure as hell they can't afford it & we've twins, so two in the same year
Marc wrote: "I'm all of those and I'm no better off apart from the tax on 40 quid as the threshold goes up for everyone. Have to pay more for my kids to go to Uni too, cos sure as hell they can't afford it & we..."Ah, so you're one of the squeezed middle :)
Anyway, I'm glad I'm not disabled - they don't exist as far as the Tories are concerned.
just hope all the youth getting squeezed in today's budget remember when they're sat in their detached homes in Nuneaton or wherever in 15 years time at election time...
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With their own currency they can devalue until they hit their natural level at which point their tourism industry will boom (especially with problems on the other side of the Med) and they'll start seeing the economy starting up again.
With regard to pensions, the problem is that for some families you now have three generations being supported by one pension. I think this is one of these problems that will slowly go away on its own. As you get things moving again and people move into jobs you can start looking at slowly allowing the pension age to drift up. What their pension age can be and how much their pension is is rather up to them, but in the real world you need a certain ratio of people earning money and paying tax to the number of people taking a pension off the state (because there's no pension fund in state pensions, it's just paid for out of tax)