Greek Financial Crisis Thread

[Baltenstein]

Well you still have Merkel and Dijselbloem.

But how would Syriza find another tough guy so that they don't have to even think about capitulating? It pays to have a Plan B if the referendum doesn't scare the Eurogroup.

Perhaps the sacrifice of Varoufakis to the European Gods was necessary so that Syriza gets a better deal (debt reduction, investment package etc) from them? If so, Tsipras has struck a masterpiece.

[Qart chadast]

Well you still have Merkel and Dijselbloem.

But how would Syriza find another tough guy so that they don't have to even think about capitulating? It pays to have a Plan B if the referendum doesn't scare the Eurogroup.

Its not so much about being the tough guy. Varoufakis had made a good amount of "enemies", those ofcourse weren't fond of having to sit with him at the table again. Now he resigned so his nation could enter into fresh talks without anger already being present. He did what any proper politician would have done. I'm sure though that the new guy is guided by Varoufakis and so Greece will still demand a fair treatment.
Currently its mainly waiting on what Germany is going to do. I hope the French take over the German role for a bit, the French seem to be much more willing to find a proper agreement that benefits both nations while Germany is only being an ass.

[DBJ]

Grexit is by far the most likely outcome. Doesn't seem like the germans want to renegotiate.

[Baltenstein]

But how would Syriza find another tough guy so that they don't have to even think about capitulating? It pays to have a Plan B if the referendum doesn't scare the Eurogroup.

Its not so much about being the tough guy. Varoufakis had made a good amount of "enemies", those ofcourse weren't fond of having to sit with him at the table again. Now he resigned so his nation could enter into fresh talks without anger already being present. He did what any proper politician would have done. I'm sure though that the new guy is guided by Varoufakis and so Greece will still demand a fair treatment.
Currently its mainly waiting on what Germany is going to do. I hope the French take over the German role for a bit, the French seem to be much more willing to find a proper agreement that benefits both nations while Germany is only being an ass.

There's not going to be any "take over". The question is if France is now going to back Greece's position so that the final deal will be a compromise between the German and the Greek government's positions.

[Stormwrath]

1. Well yes, but joining the euro is a requirement for every EU member so it is not that Greece had any choice. The UK and Denmark were fortunately enough to make an opt-out while the Czech Republic, Hungary and Poland are secretly delaying the adoption of the euro because they know it very well it will harm them.

I disagree on the underlined statement. I'm pretty sure the EU member-states have an opt-out option, not just the UK and Denmark.

But how would Syriza find another tough guy so that they don't have to even think about capitulating? It pays to have a Plan B if the referendum doesn't scare the Eurogroup.

Perhaps the sacrifice of Varoufakis to the European Gods was necessary so that Syriza gets a better deal (debt reduction, investment package etc) from them? If so, Tsipras has struck a masterpiece.

Greco-Roman pantheon or Norse pantheon?

[Qart chadast]

Its not so much about being the tough guy. Varoufakis had made a good amount of "enemies", those ofcourse weren't fond of having to sit with him at the table again. Now he resigned so his nation could enter into fresh talks without anger already being present. He did what any proper politician would have done. I'm sure though that the new guy is guided by Varoufakis and so Greece will still demand a fair treatment.
Currently its mainly waiting on what Germany is going to do. I hope the French take over the German role for a bit, the French seem to be much more willing to find a proper agreement that benefits both nations while Germany is only being an ass.

There's not going to be any "take over". The question is if France is now going to back Greece's position so that the final deal will be a compromise between the German and the Greek government's positions.

If there isn't such "take over" then nothing will change. Keep in mind that Germany is the dominant player so far in the negotiations a large majority of the demands towards Greece come from Germany. If Germany doesn't change its attitute, wether under French pressure or not, Greece is likely to go bankupt and the blame will be all over Germany. Such "take over" is needed as Germany needs to change its stand, not much, but it cannot ignore the Greek people and it cannot afford an unstable Euro.

[Laerod]

1. Well yes, but joining the euro is a requirement for every EU member so it is not that Greece had any choice. The UK and Denmark were fortunately enough to make an opt-out while the Czech Republic, Hungary and Poland are secretly delaying the adoption of the euro because they know it very well it will harm them.

I disagree on the underlined statement. I'm pretty sure the EU member-states have an opt-out option, not just the UK and Denmark.

Your opinion is wrong. There is no opt-out option. Sweden has shown that you can technically opt-out by failing to join certain mechanisms, but de jure there is no opt-out for anyone but the UK and Denmark.

[DBJ]

There's not going to be any "take over". The question is if France is now going to back Greece's position so that the final deal will be a compromise between the German and the Greek government's positions.

If there isn't such "take over" then nothing will change. Keep in mind that Germany is the dominant player so far in the negotiations a large majority of the demands towards Greece come from Germany. If Germany doesn't change its attitute, wether under French pressure or not, Greece is likely to go bankupt and the blame will be all over Germany. Such "take over" is needed as Germany needs to change its stand, not much, but it cannot ignore the Greek people and it cannot afford an unstable Euro.

The last thing germany wants is to create a moral hazard and financial markets working under the assumtion that they aren't going to let any eurozone nation default, no matter the cost.

[Arkolon]

If I was Varoufakis, I'd have abandoned the sinking ship long ago Anyway, good on him, I think he's putting negotiations in front of his own ambitions which is great for Greece. Now we wait and see if the rest of the Eurogroup wants to comply before the banks collapse.

[Greed and Death]

Fear not Greece I consulted the oracle of Delphi, she said Greece is safe until America wins the world cup thrice.

[The Alma Mater]

Such "take over" is needed as Germany needs to change its stand, not much, but it cannot ignore the Greek people

Why not ? The Greek people have been ignoring them for decades after all.

[Qart chadast]

If there isn't such "take over" then nothing will change. Keep in mind that Germany is the dominant player so far in the negotiations a large majority of the demands towards Greece come from Germany. If Germany doesn't change its attitute, wether under French pressure or not, Greece is likely to go bankupt and the blame will be all over Germany. Such "take over" is needed as Germany needs to change its stand, not much, but it cannot ignore the Greek people and it cannot afford an unstable Euro.

The last thing germany wants is to create a moral hazard and financial markets working under the assumtion that they aren't going to let any eurozone nation default, no matter the cost.

Its not like Germany has to agree with the Greeks, its about giving the Greeks some more space and time to solve the crisis. The current attitude of Germany towards Greece hasn't improved anything in Greece, its basicly a fail and its time for Merkel to realize that she isn't going to solve the Greek crisis this way.

[Arkolon]

The last thing germany wants is to create a moral hazard and financial markets working under the assumtion that they aren't going to let any eurozone nation default, no matter the cost.

Its not like Germany has to agree with the Greeks, its about giving the Greeks some more space and time to solve the crisis. The current attitude of Germany towards Greece hasn't improved anything in Greece, its basicly a fail and its time for Merkel to realize that she isn't going to solve the Greek crisis this way.

The 'Greek crisis' is a debt crisis that is solved through debt repayment. Austerity and the plan Merkel has for Greece is essentially the only conventional way to tackle a debt crisis.

[Qart chadast]

Such "take over" is needed as Germany needs to change its stand, not much, but it cannot ignore the Greek people

Why not ? The Greek people have been ignoring them for decades after all.

No they have not. And if Germany wants to keep Greece into the Eurozone while keeping a proper Euro then no, they cannot ignore the Greek people. Ignoring the voice of the Greek people would lead to Greece leaving the Euro and if Germany keeps acting like an ass and keeps making attempts to destroy the Greek economy then they could even leave the EU all together. Germany has taken the wrong approach towards Greece from the moment things went bad, economic experts already warned for such scenario to happen back in 2010/2011, yet the EU led by Germany wouldn't listen. Now see where that got us.

[Qart chadast]

Its not like Germany has to agree with the Greeks, its about giving the Greeks some more space and time to solve the crisis. The current attitude of Germany towards Greece hasn't improved anything in Greece, its basicly a fail and its time for Merkel to realize that she isn't going to solve the Greek crisis this way.

The 'Greek crisis' is a debt crisis that is solved through debt repayment. Austerity and the plan Merkel has for Greece is essentially the only conventional way to tackle a debt crisis.

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

[Teemant]

The 'Greek crisis' is a debt crisis that is solved through debt repayment. Austerity and the plan Merkel has for Greece is essentially the only conventional way to tackle a debt crisis.

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

Greece had to only pay back to IMF and ECB. Payments to creditors were delayed (pushed back) to somewhere 2020s.

[DBJ]

The last thing germany wants is to create a moral hazard and financial markets working under the assumtion that they aren't going to let any eurozone nation default, no matter the cost.

Its not like Germany has to agree with the Greeks, its about giving the Greeks some more space and time to solve the crisis. The current attitude of Germany towards Greece hasn't improved anything in Greece, its basicly a fail and its time for Merkel to realize that she isn't going to solve the Greek crisis this way.

It's not Merkels job to solve the Greek crisis, it's the job of the greek government and right now it seems all they have done since they took over is make things worse.

[Arkolon]

The 'Greek crisis' is a debt crisis that is solved through debt repayment. Austerity and the plan Merkel has for Greece is essentially the only conventional way to tackle a debt crisis.

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

Greece is earning money, and until June 30th Greece was on track to paying off all of its debt repayments. That is a success of austerity, as the debt crisis was essentially being solved. Unfortunately, Syriza, and all those who voted OXI, prolonged it to where we are today. I'm not going to pretend I don't see where they're coming from what with their living conditions, but compared to the alternatives voting OXI was the cruddiest choice. Greece was also about to sign a bailout package that came with reforms and lots of money, which would have helped solve the Greek crisis as it meant fulfilling debt repayments and instating much-needed reforms... which voting OXI basically blocked which is why the mess we are in now is worse than it was two weeks ago before this episode of the Greek crisis began.

The banks will collapse soon and Greece will begin printing out New Drachmas to keep the economy breathing, bringing the country down to its knees in front of the Eurogroup, and all those who voted OXI will have no one to blame but themselves.

[DBJ]

The 'Greek crisis' is a debt crisis that is solved through debt repayment. Austerity and the plan Merkel has for Greece is essentially the only conventional way to tackle a debt crisis.

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

GDP growth was improving before pre-Syriza.

[Teemant]

Its not like Germany has to agree with the Greeks, its about giving the Greeks some more space and time to solve the crisis. The current attitude of Germany towards Greece hasn't improved anything in Greece, its basicly a fail and its time for Merkel to realize that she isn't going to solve the Greek crisis this way.

It's not Merkels job to solve the Greek crisis, it's the job of the greek government and right now it seems all they have done since they took over is make things worse.

True. Merkel was elected by German people and in Germany to do what's best for Germany. Greece people shouldn't assume that other politicians should put Greece interest above theirs.

Greece talks about democracy now but actually people in creditor countries are against giving Greece more money. This democracy argument may not work so well for them.

[Shofercia]

Ten years is fine, and the whole "Murika recovrd cuz WWII" is a myth. When you spend resources to build bombs, that's detrimental to your economy.

having huge portions if not most of your country smashed into ruins is also detrimental to your economy, much more so than making bombs. hmm. one wonders if perhaps, just maybe, every other major competitor having their economies wrecked may have benefited the united states?

You are aware that the Great Depression ended before WWII ended, and that there wasn't much trading during the actual war, correct? Yes, it helped the US become a dominant player, but that was after the US actually recovered from the Great Depression. If only we had the data:

Oh wait, we do! See that little dip there, in the 1940s? Yeah, that's what we call a drop in US RGDP during WWII. Oh, and the shaded part? That's the Great Depression. You'll note that it ended before 1945.

[Qart chadast]

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

Greece had to only pay back to IMF and ECB. Payments to creditors were delayed (pushed back) to somewhere 2020s.

They can't pay back anyone aslong as they aren't making any profit, that's the entire reason why its a problem.

Its not like Germany has to agree with the Greeks, its about giving the Greeks some more space and time to solve the crisis. The current attitude of Germany towards Greece hasn't improved anything in Greece, its basicly a fail and its time for Merkel to realize that she isn't going to solve the Greek crisis this way.

It's not Merkels job to solve the Greek crisis, it's the job of the greek government and right now it seems all they have done since they took over is make things worse.

Its not no, but she's the key at this point.
No, they haven't made it that much worse at all, barely anything has changed in matter of fact.

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

Greece is earning money, and until June 30th Greece was on track to paying off all of its debt repayments. That is a success of austerity, as the debt crisis was essentially being solved. Unfortunately, Syriza, and all those who voted OXI, prolonged it to where we are today. I'm not going to pretend I don't see where they're coming from what with their living conditions, but compared to the alternatives voting OXI was the cruddiest choice. Greece was also about to sign a bailout package that came with reforms and lots of money, which would have helped solve the Greek crisis as it meant fulfilling debt repayments and instating much-needed reforms... which voting OXI basically blocked which is why the mess we are in now is worse than it was two weeks ago before this episode of the Greek crisis began.

The banks will collapse soon and Greece will begin printing out New Drachmas to keep the economy breathing, bringing the country down to its knees in front of the Eurogroup, and all those who voted OXI will have no one to blame but themselves.

Sources?
The problem in these EU packages is that it fails to create jobs, it drives people homeless and it eats away the last bits of money the remaining people have. The entire reason why the Greek people voted no was becouse of the EU destroying Greece with its packages. A country needs people and it needs jobs. Just imagine if all those people had a job and a house, do you have any idea how much money that would bring in for Greece? Yet the EU, ECB and IMF keep pushing on "reforms" that aren't doing anything good to Greece or its people.

Meh, i doubt it. There are plenty of reasons to keep the banks standing and there are plenty of alternatives to solve the crisis. The Greek government is already looking at the NDB for example. Also, there was a time where there was a simular situation in Iceland, and look at them today, they're doing just fine. Its not like this is the end for Greece or anything, even going bankrupt won't be the end and it can be fixed fairly quickly.

You seem to forget that Greece isn't earning any money at the moment to repay anything and all that the EU has done so far has made things worse. If Greece wants to repay its debt it first has to make profit, which it doesn't, and never will this way. Reforms and investments is what Greece needs, nothing more and nothing less.

GDP growth was improving before pre-Syriza.

Growth =/= making money.

[TomKirk]

until June 30th Greece was on track to paying off all of its debt repayments.

Whatever gave you such an impression? They met the May repayments by confiscating revenues from local government units and using the "emergency reserve" at the IMF which was supposed to be replenished by June. That is, even after smashing the kids' piggy banks, most of the bill was "paid" with a bunch of IOU's. The payment due at the beginning of June was simply impossible: there wasn't enough money in the sofa cushions or from cashing in the pop bottles to come anywhere near enough.

[Arkolon]

until June 30th Greece was on track to paying off all of its debt repayments.

Whatever gave you such an impression? They met the May repayments by confiscating revenues from local government units and using the "emergency reserve" at the IMF which was supposed to be replenished by June. That is, even after smashing the kids' piggy banks, most of the bill was "paid" with a bunch of IOU's. The payment due at the beginning of June was simply impossible: there wasn't enough money in the sofa cushions or from cashing in the pop bottles to come anywhere near enough.

How does that contradict that until June 30th, Greece had paid (or was on track paying) all of its debt repayments?

[Mollary]

The guy thought to be replacing Varoufakis is Oxford trained and has a PhD in Econ, he also seems to be less abrasive and as a consequence, I think this might actually result in an agreement.