Greek Financial Crisis Thread

[Hydesland]

Well as others pointed out the potential damage is so bad for the EU, that even if the risk is small, it is not a gamble they are willing to take. And Greece is not even the poorest EU country.

Except last I heard they've already been offering debt restructuring, so apparently they are willing to risk it.

[Pollona]

Yeah. But you'll definitly lose your place as "THE leader power" and no matter what you think, with this prestige gone, so will most of the advantages you had.

Yeah, after all it's YOUR alliance. We don't have problems intervening when the problem concern us directly or one of our old colony but for the rest, it's your business. Britain may consider itself as the 51th state and follow you in all your stupid moves, but we are good by ourself.

Sorry to tell you that but brute force ain't always the better way and some time you need to give time to time, for the moment Russia isn't a real problem as long as it's keep bullying it's weak neighboor we don't care about and we will eventually resolve Greece's case.

"An appeaser is one who feeds a crocodile, hoping it will eat him last."
Winston S. Churchill

Yes and I am sure the Ukrainians and Baltics are quite happy to be eaten so long as France is safe (for now). And France had its time as a superpower. How did that turn out? Not well. Subsidizing countries hurts your economy and benefits theirs. Besides China has plenty of power with no outside defense commitments. You do not need to subsidize others to be strong.

This is just a side show distraction from the conversation about the Greek debt crisis. It would be wise to not be lead into further arguments about NATO and your opposing commentor's obsession over deriding the USA and glorifying a buffoon country. It's not worth it for the thread.

Best to focus on the ramifications and rumors coming out of the EU summits.

[Arkolon]

Could you clarify for everyone that you are effectively denying that Grexit would have far-reaching and negative consequences on financial markets

It would have negative consequences, but it would hardly be an apocalypse and I expect the markets to shrug it off after a while depending on the reaction of the PIIGS. Again, the banks simply aren't dangerously exposed to Greek debts at all - and they have junk status so any exposure would be offset with CDS etc... Nobody would be surprised at all, everybody already sees it coming, unlike Lehman say. Obviously there will be your usual knee-jerk reaction causing stock markets and currencies to tank for a while, but unless there is evidence of political contagion they will soon recover.

So your argument really lies on a very big "maybe", assuming that political contagion does not spread (which is pretty much inevitable), and regardless of that currencies and markets would tank anyway? I'm not seeing many positives for your outlook here, mate. Anyway, it doesn't seem as if things will be as clear-cut as Grexit/austerity. The deal being hacked out now may include a Greece that issues IOUs/New Drachmas without leaving the currency union as well as accepting a bailout. To me, that sounds like a reasonable compromise where the consequences of a Grexit would stay within Greece itself, without plaguing the rest of the continent.

[Novus America]

"An appeaser is one who feeds a crocodile, hoping it will eat him last."
Winston S. Churchill

Yes and I am sure the Ukrainians and Baltics are quite happy to be eaten so long as France is safe (for now). And France had its time as a superpower. How did that turn out? Not well. Subsidizing countries hurts your economy and benefits theirs. Besides China has plenty of power with no outside defense commitments. You do not need to subsidize others to be strong.

This is just a side show distraction from the conversation about the Greek debt crisis. It would be wise to not be lead into further arguments about NATO and your opposing commentor's obsession over deriding the USA and glorifying a buffoon country. It's not worth it for the thread.

Best to focus on the ramifications and rumors coming out of the EU summits.

Fair enough. Back on topic.

[Pollona]

Many economists argue that, while painful in the short term, a Grexit would be ultimately beneficial in the long term.

That's a pretty good argument for the Eurozone countries to simply let Greece go rather than attempt any new bailout or debt relief. Why bother renegotiating the debt then when Greece is clearly not interested? They want a situation where they can stay in the Euro but not accept the measures for further lines of credit. On that thinking they should stumble out of the Euro.

I don't advocate a Grexit but it would switch the silly emphasis on creditor concessions to the laughable economic policies of the Greek Government.

[Novus America]

Well as others pointed out the potential damage is so bad for the EU, that even if the risk is small, it is not a gamble they are willing to take. And Greece is not even the poorest EU country.

Except last I heard they've already been offering debt restructuring, so apparently they are willing to risk it.

Some debt restructuring is inevitable. So long as Greece gives enough in return it is acceptable. No strings debt forgiveness is not.

[Hydesland]

So your argument really lies on a very big "maybe", assuming that political contagion does not spread (which is pretty much inevitable)

No it's not. I've yet to see especially convincing arguments for this, only shitty scaremongering from the press. See my explanation as to why I don't think it's that plausible here: viewtopic.php?p=25178655#p25178655

, and regardless of that currencies and markets would tank anyway?

Currency and stock markets are very volatile, over the last few years they have been tanking and surging several times a year without much effect on the real economy.

[Oil exporting People]

I was surprised to find a Pro-Greek, Anti-German article on Breitbart:

Germany is using its size and wealth to compel its Eurozone partners to take a hard line toward Greece, but in the end, Germany has much to lose by forcing the Aegean nation to choose between more austerity and dumping the euro.

Merkel’s government has cultivated the notions that the Greek government is run by reprobates unwilling to reform Athens’ finances, austerity is the golden path to prosperity, and establishing a new Greek currency is either impossible or guarantees disaster.

None of those are true.

Entering 2015, Greece had cut spending and raised taxes enough to accomplish a primary budget surplus—revenue exceeds expenses net of interest on debt—by one percent of GDP.

Five years of austerity has reduced the Greek economy to a state of dysfunction. GDP is down 25 percent and unemployment exceeds 25 percent. Private sector wages are down by a similar amount, but Greece has failed to attract investment sorely needed to expand exports and eventually pay its debts.

The latter is no surprise, because the austerity imposed meltdown has pushed at least 35 percent of private bank loans into nonperforming status, and bankruptcy courts are overwhelmed. Even before the recent bank closures and capital controls, credit was extraordinarily difficult to find, and small businesses were shutting down throughout the country at an alarming pace.

More austerity—without debt relief—would further pummel the Greek economy and take its debt to GDP ratio—now an astonishing 177 percent of GDP—to even more absurd heights. And when Greece ultimately defaults, German losses on holdings of Greek debt—both public and private—will be much greater than if Germany and other creditors wrote down Greek debt now.

Reckoning with the situation requires cutting Greek sovereign debt by as much as half and empowering the European Central Bank to provide Greek banks with massive creditor of last resort financing—much as the Fed and Treasury did for U.S. banks during the financial crisis.

Neither of those is likely to happen, and either Greek Premier Tsipras signs up for more bloodletting and inevitable economic collapse or persuades Greeks to quit the euro.

Other governments have successfully introduced new currencies. For example, when states such as the Ukraine and Georgia were set loose from the former Soviet Union they replaced the ruble.

Simply, Athens has to issue drachma bank notes and remark bank deposits and exiting loans to the new currency.

Bank depositors would take losses, but the EU restructuring of the banks in Cyprus imposed haircuts on depositors. Whatever workout is devised for the Greek banks as part of a new austerity plan would eventually do the same.

Private creditors throughout Europe would take losses too, but with the Greek economy in free fall, those are already inevitable even if not yet acknowledged by private-sector accounting.

Czech Republic has the crown and Poland the zloty, and both weathered the financial crisis and tough times that followed much better than Portugal, Ireland, Greece, and Spain—all of whom required bailouts or assistance of some sort—because a currency that can adjust prices of imports and exports to the underlying competitiveness of an economy simply provides more flexibility than the euro.

Set loose from the euro, Greece at least would have a chance at prosperity, but the rub for Germany is the other Mediterranean nations could follow Greece’s example if it proved successful. Then a downsized euro—whose underlying value was more dominated by German competitiveness—would rise substantially in value against the dollar and other key currencies

As structured now, the euro is undervalued for Germany and overvalued for southern European economies, guaranteeing German export success, trade surpluses, and prosperity. Without those weak sisters, Germany’s real competitiveness would be exposed and its industrial might—with a fairly valued currency—might not prove so mighty after all.

[New Werpland]

I was surprised to find a Pro-Greek, Anti-German article on Breitbart:

Germany is using its size and wealth to compel its Eurozone partners to take a hard line toward Greece, but in the end, Germany has much to lose by forcing the Aegean nation to choose between more austerity and dumping the euro.

Merkel’s government has cultivated the notions that the Greek government is run by reprobates unwilling to reform Athens’ finances, austerity is the golden path to prosperity, and establishing a new Greek currency is either impossible or guarantees disaster.

None of those are true.

Entering 2015, Greece had cut spending and raised taxes enough to accomplish a primary budget surplus—revenue exceeds expenses net of interest on debt—by one percent of GDP.

Five years of austerity has reduced the Greek economy to a state of dysfunction. GDP is down 25 percent and unemployment exceeds 25 percent. Private sector wages are down by a similar amount, but Greece has failed to attract investment sorely needed to expand exports and eventually pay its debts.

The latter is no surprise, because the austerity imposed meltdown has pushed at least 35 percent of private bank loans into nonperforming status, and bankruptcy courts are overwhelmed. Even before the recent bank closures and capital controls, credit was extraordinarily difficult to find, and small businesses were shutting down throughout the country at an alarming pace.

More austerity—without debt relief—would further pummel the Greek economy and take its debt to GDP ratio—now an astonishing 177 percent of GDP—to even more absurd heights. And when Greece ultimately defaults, German losses on holdings of Greek debt—both public and private—will be much greater than if Germany and other creditors wrote down Greek debt now.

Reckoning with the situation requires cutting Greek sovereign debt by as much as half and empowering the European Central Bank to provide Greek banks with massive creditor of last resort financing—much as the Fed and Treasury did for U.S. banks during the financial crisis.

Neither of those is likely to happen, and either Greek Premier Tsipras signs up for more bloodletting and inevitable economic collapse or persuades Greeks to quit the euro.

Other governments have successfully introduced new currencies. For example, when states such as the Ukraine and Georgia were set loose from the former Soviet Union they replaced the ruble.

Simply, Athens has to issue drachma bank notes and remark bank deposits and exiting loans to the new currency.

Bank depositors would take losses, but the EU restructuring of the banks in Cyprus imposed haircuts on depositors. Whatever workout is devised for the Greek banks as part of a new austerity plan would eventually do the same.

Private creditors throughout Europe would take losses too, but with the Greek economy in free fall, those are already inevitable even if not yet acknowledged by private-sector accounting.

Czech Republic has the crown and Poland the zloty, and both weathered the financial crisis and tough times that followed much better than Portugal, Ireland, Greece, and Spain—all of whom required bailouts or assistance of some sort—because a currency that can adjust prices of imports and exports to the underlying competitiveness of an economy simply provides more flexibility than the euro.

Set loose from the euro, Greece at least would have a chance at prosperity, but the rub for Germany is the other Mediterranean nations could follow Greece’s example if it proved successful. Then a downsized euro—whose underlying value was more dominated by German competitiveness—would rise substantially in value against the dollar and other key currencies

As structured now, the euro is undervalued for Germany and overvalued for southern European economies, guaranteeing German export success, trade surpluses, and prosperity. Without those weak sisters, Germany’s real competitiveness would be exposed and its industrial might—with a fairly valued currency—might not prove so mighty after all.

Libertarians trying to retain their anti-establishment image by aligning themselves with Greece and painting Germany as the cheating big government baddie.

[Greed and Death]

http://www.thelocal.de/20150707/german- ... by-hackers

Greek Hackers have taken over German missile launchers and are threatening Berlin unless they send bailout money.

[Parti Ouvrier]

Debts are actually not the pressing issue, aside from payments to the Troika for the programs. A good deal of the debt in question has no interest on it, either by current design or because it's not going to be charged as long as Greece isn't improving. The debts are also not due anytime soon.

Debts aren't right no a pressing issue, but I just used them as an example that austerity doesn't even work to reduce the national debt, much less for everything else.

Concessions? The largest issues that keep the Greek budget inflated beyond reason remained virtually untouched while new spending was added. And even then the Greeks walked out of every agreement that had supposedly been reached.

This is not true, the EU and Greece had been negotiating for weeks, finnally, Greece sent a proposal that made HUGE concessions, indeed, here the right-wing media said Tsipras had ''surrended'' and that ''there is no other way, only austerity''. Well, the EU decided that was not enough and sent another proposal, (remember, the EU, not Greece) and Syriza felt that it was not given the mandate to apply the measures which were sent to them, and so they held the referendum, and Greeks decided enough is enough.

<snip>

Syriza has capitulated and the EU has what it wants, a sort of semi-regime change (a common front government), not that Syriza was in any position to offer even the limited reforms they originally proposed before the elections, eg withdrawal from NATO, cuts to military, ect.
http://inter.kke.gr/en/articles/The-KKE ... s-parties/

[Parti Ouvrier]

http://www.thelocal.de/20150707/german-missiles-taken-over-by-hackers

Greek Hackers have taken over German missile launchers and are threatening Berlin unless they send bailout money.

The key word is 'briefly' taken over by hackers.

[Parti Ouvrier]

Again: that is a PR issue.

Let us make a silly story that can function as an analogy.In the eyes of many, Greece is acting like a spoiled wife. One who married a reasonably well-of husband and then asked to borrow his creditcard to buy that awesome swimsuit. To which the husband replied "sure, but buy a nice suit to wear to job interviews as well - so you can apply and become self-sufficient". Wife agrees, but of course does not actually buy the suit nor goes to any job interviews - instead preferring beach parties. This repeats a few times. Husband then becomes slightly less well to do. Has to take out another mortgage, exchange his car for a smaller one, and perhaps even touch that college fund set aside for their promising kids.
So asks his wife again to help and actually find a job, to sell some of those swimsuits she bought or at least start buying the groceries in a less expensive store. The wife responds by asking all her friends if she looks better in a swimsuit or pants; and then uses the result of that referendum to tell the husband "no to all". And then whines he is being unreasonable and demanding.

That is a *mild* version of how people view Greeks. Less mild people just see a bunch of ungrateful beggars.

Actually, try this one: Imagine the whole thing from the perspective of an African country. The amount of effort going into saving Greece compared to what any of them have gone through to get funding from the IMF and then the Greeks reject the deal on the table. White fucking privilege on an international level.

I wouldn't have expected you to make a Maoist point like that Laerod.

[Greed and Death]

http://www.thelocal.de/20150707/german-missiles-taken-over-by-hackers

Greek Hackers have taken over German missile launchers and are threatening Berlin unless they send bailout money.

The key word is 'briefly' taken over by hackers.

Of course the German's just cut the power and issued arrest warrants for the hackers, but that leaving that off makes suspense.

[Natapoc]

The key word is 'briefly' taken over by hackers.

Of course the German's just cut the power and issued arrest warrants for the hackers, but that leaving that off make suspense.

For casual readers who don't verify post accuracy... the article says nothing of Greek hackers nor of threats to Berlin or Bailout money but it would be quite funny if this actually happened.

[Greed and Death]

Of course the German's just cut the power and issued arrest warrants for the hackers, but that leaving that off make suspense.

For casual readers who don't verify post accuracy... the article says nothing of Greek hackers nor of threats to Berlin or Bailout money but it would be quite funny if this actually happened.

Why did you have to ruin the joke ?

[Natapoc]

For casual readers who don't verify post accuracy... the article says nothing of Greek hackers nor of threats to Berlin or Bailout money but it would be quite funny if this actually happened.

Why did you have to ruin the joke ?

Give me some credit... I let it go on for a while. I saw your post and read the article right after you posted it.

I gave you some time for your fun

[Greed and Death]

Why did you have to ruin the joke ?

Give me some credit... I let it go on for a while. I saw your post and read the article right after you posted it.

I gave you some time for your fun

But if people thought the debt crisis might lead to world war III they might have been more inclined give Greece a break.

Your lack of fun has almost ensured that Greece is ruined.

[Natapoc]

Give me some credit... I let it go on for a while. I saw your post and read the article right after you posted it.

I gave you some time for your fun

But if people thought the debt crisis might lead to world war III they might have been more inclined give Greece a break.

Your lack of fun has almost ensured that Greece is ruined.

More than likely they would bring freedom and democracy™ to athens.

[Greed and Death]

But if people thought the debt crisis might lead to world war III they might have been more inclined give Greece a break.

Your lack of fun has almost ensured that Greece is ruined.

More than likely they would bring freedom and democracy™ to athens.

That's about enough out of you Capitalist Roader.

[Novus America]

http://mobile.nytimes.com/2015/07/08/bu ... ?referrer=

Greece still has no plan. The EU has said Sunday is a "final" deadline.

[Cyrisnia]

http://mobile.nytimes.com/2015/07/08/business/international/greece-debt-eurozone-meeting.html?referrer=

Greece still has no plan. The EU has said Sunday is a "final" deadline.

"Merkel, can it be like 3 Sundays from now in 2 years?"
"k"

[Novus America]

http://mobile.nytimes.com/2015/07/08/business/international/greece-debt-eurozone-meeting.html?referrer=

Greece still has no plan. The EU has said Sunday is a "final" deadline.

"Merkel, can it be like 3 Sundays from now in 2 years?"
"k"

Yes, I seriously doubt this will be resolved in a week, and that the EU will not have to give yet another extension.

Seems like Tsipras does have a strategy, infinite obstruction and delay.

[Minoa]

Source: http://www.bbc.co.uk/news/world-europe-33437797

The eurozone has given Tsipras a final deadline of this Thursday to secure a deal with creditors, or that is it: the banks face the prospect of going bust on Monday, some say it may be earlier.

I have never expected a situation like this.

[Geilinor]

Source: http://www.bbc.co.uk/news/world-europe-33437797

The eurozone has given Tsipras a final deadline of this Thursday to secure a deal with creditors, or that is it: the banks face the prospect of going bust on Monday, some say it may be earlier.

I have never expected a situation like this.

Two days. If it goes down, Tsipras is at fault and Greece is ruined.