Good Article on The Endgame in Greece

[accelerator]

Hi Guys

Here's a good article by economist Jeffrey D Sachs on "The Endgame in Greece":

http://www.project-syndicate.org/co...e-eurozone-default-by-jeffrey-d-sachs-2015-06

Rgds

 

[Theo]

Greece is a country where incompetent demagogues are voted as political saviors, who then feed an entire nation to the lions. Here's a great read: http://blogs.wsj.com/expat/2015/06/16/a-greek-abroad-ambassador-defender-expert-apologist/

 

[katherine]

I am convinced that Greece will default soon. You don't get blood from a stone.
But I think it could stay in the eurozone, because breaking up would be disastrous for the zone as a whole.

What could happen ?
I think there will another bailout + restructuring of the debt + wiping out a big chunk of the debt because it can't be repaid anyway.
Also, I see the possibility of confiscating bank assets like they did in Cyprus, in a last-ditch attempt to suck whatever money is within reach of the government...
But the Greeks will continue to suffer and become poorer.

I think the other EU countries should take heed, because their turn will come too. This is what happens when you mismanage your budget.

PS: History has taught us one thing: fiat currencies always fail, even if it takes a century. Besides, Greece has already defaulted a few times in the past. From a historical perspective, it is a replay.

 

[angel69]

An eventual "Grexit" (Greece exiting the Eurozone) will affect the US more than many realize, and I think that'll have to happen, things are too out of control. It'll affect the whole world in fact, not just Europe. Merkel has done well as Europe's de facto president so to speak and if Sarcozy hadn't lost reelection things would be better. I agree with Katherine that Greece's default is now impending, they can't get lucky that many times. Although many will not agree, Greece is a good example of socialism run amok. I saw report by a credible, not biased source that a Greek woman needed to open her own, simple small stationery business and she had to go thru 21 different processes due to all that red tape. In Hong Kong she'd be set up in an hour. There are other examples in Greece's case that make your jaw drop

It's now 50/50 as to whether the Eurozone will even exist in 10 years. Experts concur that a centralized monetary policy as was meant when the euro was formed just will not work with no fiscal coordination among the countries. A disaster was avoided with Greece a couple of years ago thanks to the wealthy countries, ie mostly Germany. But the conditions to ensure that this will never happen again with Greece or any country are still not in place. That simply means this: the Eurozone will cease to exist and countries will go back to before unification and their own currencies, or they will need to become the United States of Europe. There cannot be an 'in between' as we've seen. After Greece is dealt with again this time around you'll still have Portugal which is still vulnerable, and even Spain. And if Spain falters that's a much larger economy, then there will be no Eurozone left, period

 

[asfas]

thanks to the wealthy countries, ie mostly Germany.

I don't think so.
Here is a list of countries by external debt (Wikipedia)
Germany has a huge foreign debt too.
In fact, I am not sure there exist any strong national economies any more.

 

[katherine]

The link you posted includes private debt. If we are just talking about sovereign (public) debt: https://en.wikipedia.org/wiki/List_of_countries_by_public_debt
But the figures are bad enough. In fact, a lot of countries are technically bankrupt.

 

[Theo]

For those quick to engage in "OMG" statements about the current state of the Greek economy, keep in mind the debt is an artificial number of compounded debt with exuberant interest added, and does not represent true expenses. The games played on the backs of Greeks by foreign 'investors' (speculators) can be summarized in the Lehman Brothers bankruptcy aftermath. Billions were made by speculators that turned Greek debt papers into gambling fodder, thus sending the debt skyrocketing.

The Greek governments since 2008 have attempted to define a path to reversing this ballooning by imposing anti-social measures, restricting public employees, pensions and wages, and by increasing direct and indirect taxation to a point that it's not bearable any more.

Despite great advancement by the right wing / socialist coalition government, in January early elections were held due to an impasse in voting for the president of the Greek republic. So Greeks elected a leftist government this time, that consists of mostly old PASOK socialists - the very core that ruled Greece from the 80's and for 20 years - and the current stance of the Greek government asks for no more overseeing of the management of funds, and delivering a debt 'haircut'.

Unfortunately, Eurozone bankers (aka "banksters") continue to play a game that has an underlying political agenda; for example, Angela Merkel's seemingly hard stance is in fact friendlier than that of her own minister of finance; the political domino will expand in strong economies of the Eurozone, primarily Germany.

What needs to be done, is elimination of a large portion of this artificially ballooned debt, lowering of taxation for investments and the attraction of capital to rejuvenate the economy. Even if Greece unilaterally stopped payments, the switch to a new drachma currency would create issues with inflation temporarily; the market would then become even more competitive as a tourist destination. However, that does not solve the issue long term, as manufacturing production needs to be increased and modernized. Greece is looking into investments from Russia (gas pipeline co-oped with Turkey and Bulgaria) and China (shipping sector).

One needs to understand that Greeks are not alone in how they perceive this financial slavery to banks and hedge funds; Spain, Portugal, Italy and even France are facing similar issues.

 

[katherine]

Bank run has begun: https://euobserver.com/news/129166
Watch out for next week. I expect more bad news.

 

[accelerator]

The crisis always seems to hit mid-summer, I think it must be something to do with the weather. To be honest, I was expecting the crisis to peak in summer.

 

[Simon Byrne]

For those quick to engage in "OMG" statements about the current state of the Greek economy, keep in mind the debt is an artificial number of compounded debt with exuberant interest added, and does not represent true expenses. The games played on the backs of Greeks by foreign 'investors' (speculators) can be summarized in the Lehman Brothers bankruptcy aftermath. Billions were made by speculators that turned Greek debt papers into gambling fodder, thus sending the debt skyrocketing.

The Greek governments since 2008 have attempted to define a path to reversing this ballooning by imposing anti-social measures, restricting public employees, pensions and wages, and by increasing direct and indirect taxation to a point that it's not bearable any more.

Despite great advancement by the right wing / socialist coalition government, in January early elections were held due to an impasse in voting for the president of the Greek republic. So Greeks elected a leftist government this time, that consists of mostly old PASOK socialists - the very core that ruled Greece from the 80's and for 20 years - and the current stance of the Greek government asks for no more overseeing of the management of funds, and delivering a debt 'haircut'.

Unfortunately, Eurozone bankers (aka "banksters") continue to play a game that has an underlying political agenda; for example, Angela Merkel's seemingly hard stance is in fact friendlier than that of her own minister of finance; the political domino will expand in strong economies of the Eurozone, primarily Germany.

What needs to be done, is elimination of a large portion of this artificially ballooned debt, lowering of taxation for investments and the attraction of capital to rejuvenate the economy. Even if Greece unilaterally stopped payments, the switch to a new drachma currency would create issues with inflation temporarily; the market would then become even more competitive as a tourist destination. However, that does not solve the issue long term, as manufacturing production needs to be increased and modernized. Greece is looking into investments from Russia (gas pipeline co-oped with Turkey and Bulgaria) and China (shipping sector).

One needs to understand that Greeks are not alone in how they perceive this financial slavery to banks and hedge funds; Spain, Portugal, Italy and even France are facing similar issues.

Totally agree with all of the above, you forgot Ireland in the list

 

[Theo]

The bottom line is, the Greek economy won't be rejuvenated by extending the current terms of debt repayment. There's a lesson to be learnt here: using Greece as a test-bed for financial games has backfired and will continue even after a default on the loan payments. Greece exiting the Eurozone will definitely affect the Eurozone and the euro, it's not something that has happened before. The politicians are aware of this, hence the games being played currently, the bank(s)ters only see numbers, never human lives. From the beginning of the crisis in 2009, an estimated 10,000 Greeks have committed suicide. In a nation of 11 million, that's like erasing a town from the map. 'Congratulations' to the registrant of https://whois.domaintools.com/greekbankruptcy.com - I hope the domain will be useless next year.
 

The crisis always seems to hit mid-summer, I think it must be something to do with the weather. To be honest, I was expecting the crisis to peak in summer.

Greek tourism peaks during summer and its satellite months. It's the busiest time of the year for the Greek economy, that relies heavily on the tourist section to deliver 'performance'. Unfortunately, that's also the Achilles' heel of Greece; without heavy industry there is no investments. Turkey is doing so much better in this sector.

 

[zzzkkk]

When I owe you 1000$ then I have a problem. When I owe you 1,000,000$ then you 've got the problem my friend. Now, officially Greece owes something more than 320,000,000,000$ (billion) .... who has the problem ??? Well the truth is everybody has a BIG problem, whoever thinks the opposite is a fool.

 

[katherine]

And when you're dead, you're dead. You can't be 'half-dead'.
I hope everybody has a plan B if things go wrong.

 

[Theo]

The European Union never considered the imbalance of wealth between the core countries of central Europe and the poorer ones of the south. The status of the current debt of Greece is due to interest rates compounding and bets against its economy by futures investors. At any rate, here's what Greeks can't lose no matter what the currency is.

 

[zzzkkk]

Well half dead no... But you can be in coma. Be sure that greek politicians are seriously ill and most of them idiots , poorly educated with strange persisting obsessions about government, state, business etc....most of them are dreaming of the old Soviet Union model and are real fans of Fidel Castro, Chaves and Maduro. Well people do vote and elect them due to serious lack of other alternative choices or strictly because of straight "client" interest. They really hope to keep their well paied salaries or pensions while half of greek population is suffering from unemployment and heavy taxation! NO WAY this model can go on ...​

 

[Theo]

So the Greek prime minister Alexis Tsipras announced Greece will be voting on the latest measures via a referendum (YES/NO). The referendum will take place on Sunday, July 5th.

In other words, he did not want to take the political responsibility he was elected for!

Once again, the average Greek will become the "jackass" that hauls the heavy load out. There are reports of bank runs overnight. Let's hope that despite the seriousness of this situation there is a cool-headed response among the expected uproar. After today's decision, this is the first and only time that a leftist government has been elected.

 

[zzzkkk]

Totally agree !!! And watching on TV all latest, it is clearly that things are going to get tough....

All around the world agree that is YES or NO to Euro and Europe, only greek idiots (ministers & prime minister) say it has nothing to do with Euro....(!!!!) it is a YES or NO to austerity measures .... Ha ha ha, these guys are either unbelievable STUPID or TRAITORS !

 

[Theo]

Some analysis of the news from The Guardian: http://www.theguardian.com/world/20...erendum-on-bailout-terms-offered-by-creditors

Queues to withdraw cash.