Grexit

[holepuncture]

Capital controls on Greek banks, citizens restricted to 60euros a day withdrawals, businesses hit hard and essentially unable to function.

 

Should they blow off the debt (this current fallout is such a small slice of their debt)? Is it fair to let millions suffer for generations to service the 'debt' to major financial institutions (and their international 'investors')?

 

Can they revive the Drachma? I think people will still holiday there, countries will still trade with them etc

 

A Grexit would leave a Brexit holding the potentially fatal blow, does this give the UK leverage on our membership renegotiation?

 

Good luck to them, it cant be nice right now for the Greek public.

[aintforever]

They should just blow off the debt and use the Drachma again, would be painful in the short term but better long term.

 

All this debt is just numbers on a computer screen anyway. Sooner or later every will just have to blow it off. There is no way the UK, US or anyone will pay off such ridiculous amounts. How long have we had austerity? We haven't even come close to start thinking about breaking even yet alone paying any of it off.

Edited 29 June, 2015 by aintforever

[hutch]

Certainly strengthens DC's negotiating position.

[buctootim]

The Greeks have had 20 years of a lifestyle they couldnt afford, paid for with borrowed money. They've gone bust and defaulted on their debts 5 times in the past 200 years. Its a myth its money generated on a computer screen - its real cash lent from other peoples pension funds and taxes.

 

Britain paid back a debt of 240% of GDP after WW2. The current Irish debt reached 123% but has now fallen to 109%. The Greek debt is 170%. They could do it, they just don't want to, again. I feel sorry for individuals but as a nation, **** em. Why should they walk away and Spain, Portugal, Italy etc pay? Why not let them default too, and the African nations. Then we can try to bail the banks out, except they would have with such massive debts we couldnt. Global trading in beads and cowrie shells anyone?

[Mystic Force]

Having met some greek people and there attitude towards government i am not supprised how this went down. They dont have enough money for there country to function, so they borrowed. If they default no one is going to lend them money and they wont be able to pay for anything still.

[buctootim]

Having met some greek people and there attitude towards government i am not supprised how this went down. They dont have enough money for there country to function, so they borrowed. If they default no one is going to lend them money and they wont be able to pay for anything still.

 

Basically for the past few decades they've elected whichever government promised them the most and ignored the fact it was all borrowed money. Combine that with very generous pensions for public employees and lax tax collection and you've got a perfect storm.

[st alex]

The Greeks have had 20 years of a lifestyle they couldnt afford, paid for with borrowed money. They've gone bust and defaulted on their debts 5 times in the past 200 years. Its a myth its money generated on a computer screen - its real cash lent from other peoples pension funds and taxes.

 

Britain paid back a debt of 240% of GDP after WW2. The current Irish debt reached 123% but has now fallen to 109%. The Greek debt is 170%. They could do it, they just don't want to, again. I feel sorry for individuals but as a nation, **** em. Why should they walk away and Spain, Portugal, Italy etc pay? Why not let them default too, and the African nations. Then we can try to bail the banks out, except they would have with such massive debts we couldnt. Global trading in beads and cowrie shells anyone?

 

But then you'll moan that they're all coming over here to get jobs.

 

Too much of the global economy is built on credit (debt) - I think this version of capitalism is starting to show it's not working very well and there ought to be an inquiry.

[buctootim]

But then you'll moan that they're all coming over here to get jobs.

 

Too much of the global economy is built on credit (debt) - I think this version of capitalism is starting to show it's not working very well and there ought to be an inquiry.

 

 

Where have I moaned about people moving for work within the EU? I agree about debt, but its a problem of politicians and globalisation not capitalism. Debt has been used by politicians in many countries to convince people they are richer than they really are, and so get themselves re-elected. Greece is just the worst example.

[Seaford Saint]

It would be great to have a time frame of events and when they occurred...As far as I can figure out....Greece ordered 2 warships and other military equipment from Germany but could not afford to pay.....the Greek entry into the EU and the Euro was fudged with little or no due diligence on the EU side. This did not matter to the creditors as they were allegedly guaranteed to get their money back. The Greek bailouts did not go to Greece but to the creditors.....more and more debt interest was heaped onto the Greeks. How much of what Greece is said to owe is debt interest payments?

 

There is an expression called odious debt where the borrowers know the lenders cannot afford to repay and this might be the case here.It is apparently illegal to loan under such conditions. Whilst I acknowledge that the Greeks have corrupt govt and endemic tax avoidance I have a feeling that the real criminals were rewarded for their efforts. I bet Goldman Sachs are involved somewhere.....

[hutch]

It would be great to have a time frame of events and when they occurred...As far as I can figure out....Greece ordered 2 warships and other military equipment from Germany but could not afford to pay.....the Greek entry into the EU and the Euro was fudged with little or no due diligence on the EU side. This did not matter to the creditors as they were allegedly guaranteed to get their money back. The Greek bailouts did not go to Greece but to the creditors.....more and more debt interest was heaped onto the Greeks. How much of what Greece is said to owe is debt interest payments?

 

There is an expression called odious debt where the borrowers know the lenders cannot afford to repay and this might be the case here.It is apparently illegal to loan under such conditions. Whilst I acknowledge that the Greeks have corrupt govt and endemic tax avoidance I have a feeling that the real criminals were rewarded for their efforts. I bet Goldman Sachs are involved somewhere.....

But to be fair, that's not the present issue. It's not about the current Greek debt.

 

As I see it the lenders are being quite open. If you want to borrow more money, these are our terms. If you don't like our terms, go and borrow from somebody else.

 

Same rules your bank would apply if you wanted a loan.

[OldNick]

its Pompey on a national scale, spend and live the life and then not want to pay.

The Greeks are just playing the politics of who blinks first. Let them off this and then when the next time occurs??? Bus drivers retiring at 55 on big pensions FFS

[hutch]

its Pompey on a national scale

Only if they get away with it

[holepuncture]

The Greek bailouts did not go to Greece but to the creditors.....more and more debt interest was heaped onto the Greeks. How much of what Greece is said to owe is debt interest payments?

 

There is an expression called odious debt where the borrowers know the lenders cannot afford to repay and this might be the case here.It is apparently illegal to loan under such conditions. Whilst I acknowledge that the Greeks have corrupt govt and endemic tax avoidance I have a feeling that the real criminals were rewarded for their efforts. I bet Goldman Sachs are involved somewhere.....

 

It seems like a vicious circle of taking on more debt to service todays debt, but the interest keeps accumulating, to the benefit of the ECB/IMF.

 

Pap would have been all over this!

[Weston Saint]

Let us not forget that if they default and leave the EU then all the Greeks in Europe no longer have the freedom of movement at will be classed as jolly foreigners.

 

Same with us. If we leave after the referendum next year all those living in Spain and Portugal on the same freedom of movement will have to come home to a cold Britain again. No wonder they want a vote!!

[bridge too far]

It seems like a vicious circle of taking on more debt to service todays debt, but the interest keeps accumulating, to the benefit of the ECB/IMF.

 

Pap would have been all over this!

 

Not unlike Wonga

[Window Cleaner]

Same with us. If we leave after the referendum next year all those living in Spain and Portugal on the same freedom of movement will have to come home to a cold Britain again. No wonder they want a vote!!

 

Not really, they'll just have to apply for residence permits again, same as we all did before about 1990. Plenty of non-EU nationals live all over Europe, it's just a couple of bits of paperwork more. As it is any EU country can still expel any EU citizen (except their own) if they do not possess enough for subsistance and have been there for less than 5 years..

Edited 29 June, 2015 by Window Cleaner

[buctootim]

It seems like a vicious circle of taking on more debt to service todays debt, but the interest keeps accumulating, to the benefit of the ECB/IMF.

 

Pap would have been all over this!

 

Thats no different to what we are doing - Britain hasnt eliminated the budget deficit yet so we are borrowing to pay the debt interest. The expectation is that cuts and growth will close the gap. Greece is actually slightly ahead of us - they have a slight budget surplus before debt repayments - the problem is Syrizia is reneging on previous commitments and reversing some of them so this years surplus is less than last years. Its the trend which is important.

[Sour Mash]

Let us not forget that if they default and leave the EU then all the Greeks in Europe no longer have the freedom of movement at will be classed as jolly foreigners.

 

Same with us. If we leave after the referendum next year all those living in Spain and Portugal on the same freedom of movement will have to come home to a cold Britain again. No wonder they want a vote!!

That's pretty unlikely to happen. Plenty of people have lived in Spain prior to freedom of movement, I can't see Spain wanting to get rid of them any time soon.

[Verbal]

its Pompey on a national scale, spend and live the life and then not want to pay.

The Greeks are just playing the politics of who blinks first. Let them off this and then when the next time occurs??? Bus drivers retiring at 55 on big pensions FFS

 

If it's OldNick on a national scale shouldn't you be adding: '...and they're bound to get away with it'?

[Verbal]

Let us not forget that if they default and leave the EU then all the Greeks in Europe no longer have the freedom of movement at will be classed as jolly foreigners.

 

Same with us. If we leave after the referendum next year all those living in Spain and Portugal on the same freedom of movement will have to come home to a cold Britain again. No wonder they want a vote!!

 

Jeez, have you managed to discover some hitherto unheard of animosity towards Greeks in Britain? Well done. Your second para is also nonsense.

 

Seems the UKIP idiocracy is in the ascendancy again on here.

[Lord Duckhunter]

To have monetary union without fiscal union will always lead to this. The Euro is a disaster for all but a handful of northern European nations , to have The Greeks, Portuguese and Spanish in monetary union with the Dutch & Germans is madness. The EU have caused unbelievable misery to the Greeks with this vanity project , a project that was doomed from the start.

 

You'll not find a British politician admitting to wanting Britain to join the EU ( although there were plenty) , but you'll not find any of the Establishment against the principle of the euro . With their little Englander approach they were perfectly happy for the Greeks to **** themselves provided we werent in it . People like Redwood & Cash were against the principle of the Euro across the whole of Europe and these people have been proved right.

 

It is incredibly unstable to have the Greeks in this state .

 

I've been to Greece many times and the people are fantastic, they do not deserve to suffer this madness inflicted on them for ideological reasons. Whatever happens they're in for a couple more years of real pain, but if they can control their own currency they'll bounce back quicker . They'll then become a model for Cyprus and the Portuguese to follow suit and hopefully the whole damn house of straw will collapse and the people of Europe can govern themselves again.

[Lord Duckhunter]

That's pretty unlikely to happen. Plenty of people have lived in Spain prior to freedom of movement, I can't see Spain wanting to get rid of them any time soon.

 

Correct.

 

This " send the Brits home" is complete and utter nonsense. I was in Cyprus recently and there's plenty of Russians living there. How many Americans are there in France or Australians in the UK, how man Swiss work in Germany ? My son completed a piece of paper and is now working in Australia.

 

You don't need to be in the EU to live or work abroad, its just a scare story put about by euro nutters like ken Clarke.

[Weston Saint]

Jeez, have you managed to discover some hitherto unheard of animosity towards Greeks in Britain? Well done. Your second para is also nonsense.

 

Seems the UKIP idiocracy is in the ascendancy again on here.

Except I am a moderate conservative and always have been. Cannot stand the UKIP or what it stands for.

 

I was merely making a comment on what I thought would happen but many of you say that is not so. Fair enough!

[Seaford Saint]

The Greek financial trouble started decades ago when government after government increased the size of the country’s payroll. A “you scratch my back…” system rewarded supporters of the two biggest political parties with government jobs. This practice eventually led to a Greece where one in five citizens of working age held a government job.

 

At one point politicians stopped offering so many government jobs and instead began handing out raises to those already working for the government. This, coupled with notoriously poor tax collection enforcement, had Greece scrambling to keep the money flowing.

 

The country turned to its neighbors and began to borrow. The lenders offered money with little question, because as a member of the European Union, Greece was required to adhere to strict financial restrictions including not allowing its national budget deficit to exceed 3 percent of its economic output. Greece’s debt soared, but no one was concerned because the Greek government continued to report a national deficit of 3.4 percent.

 

The final blow was struck with the election of a new government that discovered the country’s financial books had been “cooked” for years. The 3.4 percent deficit was a lie, and Greece was really operating on a national deficit of just over 15 percent. This revelation, coupled with the demise of Lehman Brothers Holdings—a New York City-based investment bank—in 2008 and the worldwide economic crisis that followed, led Greece’s lenders to enact stricter borrowing rules. The country’s borrowing costs skyrocketed, and in an instant, it became impossible for Greece to repay its debt without taking further loans.

 

European Union countries and the International Monetary Fund stepped up in 2010 with a 110-billion-euro bailout (a euro equals about 1.33 U.S. dollars). The money was given with the condition that Greece implement severe “austerity” measures including deep government spending cuts and wage lowering. These measures led to a dangerously sluggish Greek economy. A second bailout of 130 billion euros has been agreed to, with 30 billion going to the country’s private debtors and 40 billion going to the Greek banks, which are expected to report massive losses.

 

Despite all of the austerity measures and bailouts, experts estimate that Greece may not reach financial stability until the year 2020 or later.

 

Pensions have already been cut by close to 50% to an unlivable level especially for the poor – the troika requires more cuts. Already now most of public services and assets have been privatized, hospitals and schools closed – they want more. The public administration has already been reduced to a minimum, causing huge unemployment - they want more. They also want additional taxes which further affect the poor.

 

The Greek govt that cooked the books had help from Goldman Sachs allegedly, their expertise enabled Greece to be able to join the EU giving the corrupt Greek govt access to funds. Where was the EU's due diligence in this application? I strongly suspect that Greece as a country was set up. The lenders who have already received lots of monies etc from bail outs...again how much of the money owed is debt interest?

[hutch]

The Greek financial trouble started decades ago when government after government increased the size of the country’s payroll. A “you scratch my back…” system rewarded supporters of the two biggest political parties with government jobs. This practice eventually led to a Greece where one in five citizens of working age held a government job.

 

At one point politicians stopped offering so many government jobs and instead began handing out raises to those already working for the government. This, coupled with notoriously poor tax collection enforcement, had Greece scrambling to keep the money flowing.

 

The country turned to its neighbors and began to borrow. The lenders offered money with little question, because as a member of the European Union, Greece was required to adhere to strict financial restrictions including not allowing its national budget deficit to exceed 3 percent of its economic output. Greece’s debt soared, but no one was concerned because the Greek government continued to report a national deficit of 3.4 percent.

 

The final blow was struck with the election of a new government that discovered the country’s financial books had been “cooked” for years. The 3.4 percent deficit was a lie, and Greece was really operating on a national deficit of just over 15 percent. This revelation, coupled with the demise of Lehman Brothers Holdings—a New York City-based investment bank—in 2008 and the worldwide economic crisis that followed, led Greece’s lenders to enact stricter borrowing rules. The country’s borrowing costs skyrocketed, and in an instant, it became impossible for Greece to repay its debt without taking further loans.

 

European Union countries and the International Monetary Fund stepped up in 2010 with a 110-billion-euro bailout (a euro equals about 1.33 U.S. dollars). The money was given with the condition that Greece implement severe “austerity” measures including deep government spending cuts and wage lowering. These measures led to a dangerously sluggish Greek economy. A second bailout of 130 billion euros has been agreed to, with 30 billion going to the country’s private debtors and 40 billion going to the Greek banks, which are expected to report massive losses.

 

Despite all of the austerity measures and bailouts, experts estimate that Greece may not reach financial stability until the year 2020 or later.

 

Pensions have already been cut by close to 50% to an unlivable level especially for the poor – the troika requires more cuts. Already now most of public services and assets have been privatized, hospitals and schools closed – they want more. The public administration has already been reduced to a minimum, causing huge unemployment - they want more. They also want additional taxes which further affect the poor.

 

The Greek govt that cooked the books had help from Goldman Sachs allegedly, their expertise enabled Greece to be able to join the EU giving the corrupt Greek govt access to funds. Where was the EU's due diligence in this application? I strongly suspect that Greece as a country was set up. The lenders who have already received lots of monies etc from bail outs...again how much of the money owed is debt interest?

It's amazing how often the same stuff gets cut and pasted, but you ought to quote your source. The original is at least a year old, from when there really were 1.33 dollars to the euro

[Seaford Saint]

It's amazing how often the same stuff gets cut and pasted, but you ought to quote your source. The original is at least a year old, from when there really were 1.33 dollars to the euro

 

It is from 2 sources and some original thoughts of my own. It could be argued that the Greeks were stitched up as were the Irish and ourselves in 2008. The question is whether what I have cut and pasted is a true and accurate account. I am not learning anything from the mainstream media. Odious debt is a possibility for the Greeks. Then there is the oil and gas reserves around the waters of Greece. I know the US had a warship in Corfu a few years ago with some sort of surveys going on.

[Whitey Grandad]

Let us not forget that if they default and leave the EU then all the Greeks in Europe no longer have the freedom of movement at will be classed as jolly foreigners.

 

Same with us. If we leave after the referendum next year all those living in Spain and Portugal on the same freedom of movement will have to come home to a cold Britain again. No wonder they want a vote!!

 

Leaving the Euro and leaving the EC are separate issues.

[hutch]

It is from 2 sources and some original thoughts of my own. It could be argued that the Greeks were stitched up as were the Irish and ourselves in 2008. The question is whether what I have cut and pasted is a true and accurate account. I am not learning anything from the mainstream media. Odious debt is a possibility for the Greeks. Then there is the oil and gas reserves around the waters of Greece. I know the US had a warship in Corfu a few years ago with some sort of surveys going on.

I think the question is if it is true, why anybody would think it was anybody's fault but the devious Greek politicians and the mindless sheep that elected them. That's the problem with democracy. If you're daft enough to elect a bunch of idiots with no coherent plan then you have to live with the consequences.

[aintforever]

The Greeks have had 20 years of a lifestyle they couldnt afford, paid for with borrowed money. They've gone bust and defaulted on their debts 5 times in the past 200 years. Its a myth its money generated on a computer screen - its real cash lent from other peoples pension funds and taxes.

 

Britain paid back a debt of 240% of GDP after WW2. The current Irish debt reached 123% but has now fallen to 109%. The Greek debt is 170%. They could do it, they just don't want to, again. I feel sorry for individuals but as a nation, **** em. Why should they walk away and Spain, Portugal, Italy etc pay? Why not let them default too, and the African nations. Then we can try to bail the banks out, except they would have with such massive debts we couldnt. Global trading in beads and cowrie shells anyone?

 

The Greek government have a duty to do what's best for the people of Greece, not what's best for a bunch of bankers or pension funds from anywhere else.

 

If you lend money to people who cannot afford to pay it back that is your own fault. Greece should just leave the Euro and just print their own cash and go back to having zero debt. The UK is doing Ok because we just printed **** loads of money, let Greece do the same, screw the banks.

[SOTONS EAST SIDE]

Buctootim mentioned Italy. But have they not cooked their books too, so they could meet the entry conditions of the euro. And then covered up, as not to be another Greece....

[Seaford Saint]

The Greek government have a duty to do what's best for the people of Greece, not what's best for a bunch of bankers or pension funds from anywhere else.

 

If you lend money to people who cannot afford to pay it back that is your own fault. Greece should just leave the Euro and just print their own cash and go back to having zero debt. The UK is doing Ok because we just printed **** loads of money, let Greece do the same, screw the banks.

 

I think the question is if it is true, why anybody would think it was anybody's fault but the devious Greek politicians and the mindless sheep that elected them. That's the problem with democracy. If you're daft enough to elect a bunch of idiots with no coherent plan then you have to live with the consequences.

 

Not sure it is just the politicians from Greece who are culpable......I actually think that the name of the game here is control and that an audited entry into the EU was never part of the plan as the ultimate aim is control of countries economies and assets.

[CHAPEL END CHARLIE]

I think the question is if it is true, why anybody would think it was anybody's fault but the devious Greek politicians and the mindless sheep that elected them. That's the problem with democracy. If you're daft enough to elect a bunch of idiots with no coherent plan then you have to live with the consequences.

 

I can only wholeheartedly agree with the above and wonder how it has come to pass that this ancient nation, a place that lays claim to being the very seedbed of western democracy, has somehow managed to develop the most immature electorate and political class in Europe?

 

You get the impression that deep down this nation tacitly believed that Eurozone membership was the answer to all their problems and they could carry on retiring at 50 and not paying their taxes because the rest of the Eurozone would always bail them out if 'push came to shove'. However, the notion that the rest of the Eurozone will 'blink' first and back down before Greek political and financial irresponsibility is a act of sheer wanton folly that can only led to disaster. The world does not owe Greece a living as if they alone are somehow immune from the economic realities of life.

 

This nation has now exhausted both its credit and its creditability - an object lesson in the dangers of democracy without responsibility and the EU's first 'failed state' perhaps.

[CB Saint]

Easy for us to barrack the Greek electorate for being mindless sheep when we have no concept of what life is like for the ordinary greek

 

After five years of recession, 25% shrink of GDP, 50% youth unemployment - who here would want to take more of the medicine that the EU proposes?

[buctootim]

Easy for us to barrack the Greek electorate for being mindless sheep when we have no concept of what life is like for the ordinary greek

 

After five years of recession, 25% shrink of GDP, 50% youth unemployment - who here would want to take more of the medicine that the EU proposes?

 

But its a 25% fall from a level which was artificially inflated by borrowed money - it was never real sustainable GDP generated by production. The Greeks GDP per capita nearly tripled from $11,900 in 2000 to $31,700 in 2008. It was just a debt fuelled consumption bubble. Now the flow of new money has stopped they're getting huge withdrawal symptoms. EU policies aren't the cause.

[CB Saint]

But its a 25% fall from a level which was artificially inflated by borrowed money - it was never real sustainable GDP generated by production. The Greeks GDP per capita nearly tripled from $11,900 in 2000 to $31,700 in 2008. It was just a debt fuelled consumption bubble. Now the flow of new money has stopped they're getting huge withdrawal symptoms. EU policies aren't the cause.

 

This is the equivalent of giving a junkie free heroin only to withdraw it after they have become utterly dependent upon it, and then wondering why the junkie kicks off.

 

The GDP may have gone up, but so have the prices. The greeks have not got three times as much money on the hip than they did 15 years ago. The GDP has fallen 25%, but the prices haven't.

[buctootim]

Its looking like Tsipras has really overplayed his hand / misread the mood of the country. He went for a referendum, presumably convinced the voters would back him by voting No in an attempt to blackmail the lenders - but Ashcroft polling reckon the Yes vote is odds on.

[bridge too far]

I liked this in the Daily Telegraph

 

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100027028/europe-has-subjected-the-greek-people-to-a-cruel-experiment/

[buctootim]

I liked this in the Daily Telegraph

 

http://blogs.telegraph.co.uk/finance/ambroseevans-pritchard/100027028/europe-has-subjected-the-greek-people-to-a-cruel-experiment/

 

 

Its a fair summary of 'where we are' (or as much as it can be given the article is a year old) but not of 'how we got here'. The reason the Troika has been relatively harsh is because successive Greek governments have lied and failed to deliver on previous agreements - and the longer it dragged on without meaningful intervention the worse the situation got. Greece should never have been allowed into the eurozone, they should never have borrowed the money on false pretences and the Greek people should never have elected whoever promised them the most jam today. There is plenty of blame to ago around.

[Batman]

Its looking like Tsipras has really overplayed his hand / misread the mood of the country. He went for a referendum, presumably convinced the voters would back him by voting No in an attempt to blackmail the lenders - but Ashcroft polling reckon the Yes vote is odds on.

 

dead cert then...

[holepuncture]

Not sure it is just the politicians from Greece who are culpable......I actually think that the name of the game here is control and that an audited entry into the EU was never part of the plan as the ultimate aim is control of countries economies and assets.

 

Interesting perspective.

 

Who "owns" the IMF? They do seem keen to dictate governmental policy in Greece.

 

I think they should default, it's inevitable in the long run, a couple of tough years and the Drachma will kick on. People are more important than 'debt' owed to these institutions

[melmacian_saint]

This talk of Drachma, FDI and Tourism as the key to Greece's recovery is a bit misleading.

 

Greece's economy has no real strategic sectors. Shipping has no value to the real economy- it's companies are there exclusively because of fiscal advantages. Tourism is becoming a commodity: average spend in segments such as summer holidays or weekend breaks keeps going down with lowering ticket prices and the emergence of more basic forms of accommodation. Foreign Direct Investment is only attracted if 1)there is political stability (no guarantee of that in Greece's history) or 2)there are clusters or industry-specific infrastructure worth exploiting, and a market to cater for. Let's face it, olive oil and feta cheese are not booming.

 

Suggesting that a country with 15 million people can sustain itself or boost its recovery with these sectors, being stuck with high inflation and predictably high financing costs for a good few years, is IMO a bit delusional. And the recent history of the UK economy should teach us how hard and challenging a process of industrial transformation can be.

 

Greece may achieve some stability with its own currency, but it will be at the expense of a long-run decline in living standards and institutional quality. This, after years of hardship, is a sound cocktail for further instability as people see no improvements in a medium-term.

 

I can't really see them leave the Euro or the EU, but surprisingly the strongest case for this will always come from Brussels. The Euro needs credibility, which in the case of a currency is only achieved with time, and a default by Greece at the very first "bust" period of the economic cycle is effectively a default by the Eurozone (i.e. a default by Germany, Netherlands, France etc.). As different a case as it can be, the impact would be larger than many predict, interest rates would rise at a time where the ECB is desperately trying to make the Euro more competitive and "cheaper" for all.

For a country to leave it shows that a debt held in Euro has effectively no value as if things get dirty then anyone can just wash their hands and walk away. If Wales defaulted, would the Bank of England be too happy with a Wexit? What about Denmark if the whole of Jutland defaulted on the kroner and dropped it, where would that leave the credibility of their financial system?

This is effectively what we are talking about with Greece.

 

A final point about Greece, the birthplace of western civilization. This is true, but it's gone. There is nothing but history and ruins from those times. Modern Greece is closer to the Ottoman Empire and the Middle-East in its culture and society than to most of Europe, and indeed foreign assistance has been constant, either by involvement in war, strategic positioning or simply financial insolvency. And they've profited from that: as a quick example, Greece threatened to veto the entry of Portugal and Spain to the then EEC if its infrastructure development funds were not increased.

Edited 2 July, 2015 by melmacian_saint

[Jonnyboy]

http://www.businessinsider.com/goldman-sachs-shorted-greek-debt-after-it-arranged-those-shady-swaps-2010-2?IR=T

[Jonnyboy]

...

[hutch]

http://www.businessinsider.com/goldman-sachs-shorted-greek-debt-after-it-arranged-those-shady-swaps-2010-2?IR=T

A five year old article about a fourteen year old loan for 1 billion Euros? You realise the debt in the news is 320 billion, don't you?

[Batman]

which way will this go.

I hope they vote NO

[SuperMikey]

My mate's voting in this today:

 

 

No idea how it's going to go - people seem to be losing confidence in Tsipras but they don't want to give in to what they see as bullying by its creditors.

[bridge too far]

Greece's finance minister at the London Conference of 1953, signed a treaty agreeing to cancel 50% of Germany's debt. Because it was the right thing to do.

Edited 5 July, 2015 by bridge too far

[Lord Duckhunter]

Greece's finance minister at the London Conference of 1953, signed a treaty agreeing to cancel 50% of Germany's debt. Because it was the right thing to do.

 

They're only interested in what's right for the EU, not Greece .

[bridge too far]

Early indications are that it's a victory for Oxi!

[Batman]

Lots of reports of a NO vote in greece.