Greece about to default

[fskimospy]

It's all Germany's fault.

This DB doesn't even know 50% of the debt was already forgiven.

I'm sure he is quite aware of the previous debt haircut. Unlike you, he's also probably aware that it wasn't 50% of their debt or anything even close to that. It was a 50% write down on a portion of their debt, much of which was already held by Greek banks.

Before you try and call someone else out for being ignorant you should have your own facts straight.

 

[glenn1]

They voted no for "austerity" but will get it anyways and worse when trying to stand alone. Greece imports a ton of things that they need for everyday life. There will be a humanitarian crisis soon.

This. I don't know what will happen come Tuesday and after, but I can guarantee that one of the possible outcomes isn't going to be Germany and the other creditors paying for some grand new Keynesian stimulus program for Greece. The Argentina example is useful here, the devaluation in 2002, 2014, and again soon. Either way enjoy reversion to North Korean quality of life, Greek deadbeats.

 

[Svnla]

I saw an old man was crying on the newscast because he could not get any money from his wife's pension. I wonder how would they able to survive.

Will that ever happen in the US? Stay tuned.

 

[Greenman]

I saw an old man was crying on the newscast because he could not get any money from his wife's pension. I wonder how would they able to survive.

Will that ever happen in the US? Stay tuned.

It's already happening. City's across the US are looking at being unable to meet pension payments. They promised a lot more than the system can support. The idea that you work for 20 years and then are supported by the government for the rest of your life is not only unsustainable, but insane.

 

[theeedude]

This. I don't know what will happen come Tuesday and after, but I can guarantee that one of the possible outcomes isn't going to be Germany and the other creditors paying for some grand new Keynesian stimulus program for Greece. The Argentina example is useful here, the devaluation in 2002, 2014, and again soon. Either way enjoy reversion to North Korean quality of life, Greek deadbeats.

Greece introduced Euro in 2001. It did not have North Korea quality of life in 2000, so you can stop being a drama queen.

 

[DucatiMonster696]

This just in....Yanis Varoufakis resigns. Yes you heard it correctly Greece's finance minister calls it quits.


Greece's Finance Minister Yanis Varoufakis stands down

http://www.cnbc.com/id/102806716

 

[AtenRa]

Cost competitive in what? What goods is Greece going to become a powerhouse exporter of?

We have many things we already export, we are competitive in many areas such as quality, uniqueness etc etc.
There are other areas you can grow your economy and increase income, such as Tourism, our Shipping Industry (one of the biggest fleet by tonnage).
But with the measures taken (High taxation, bureaucracy, uncertainty of new measures all the time, no liquidity, no vision from the state, returned Taxes can take more than 2 years for exported goods etc etc) makes it even harder to do businesses and invest in your own country.
That is the reason we voted NO in the referendum in first place, no more measures that shrink the economy and make it even more difficult to all of us to even make a new start.

 

[svenge]

That is the reason we voted NO in the referendum in first place, no more measures that shrink the economy and make it even more difficult to all of us to even make a new start.

You'll get a "new start" alright, but it'll be with Drachmas and absolutely no access to international capital markets. Enjoy your hyperinflation!

 

[WhipperSnapper]

A currency calculator website calculated that 1.6 billion Euros is $1,773,173,437. That just seems like chump change for the U.S. government.

If Greece has a population of 10,815,197 (Wikipedia), then it averages out to about 148 Euros per person. They really can't come up with that?

 

[Charmonium]

This just in....Yanis Varoufakis resigns. Yes you heard it correctly Greece's finance minister calls it quits.


Greece's Finance Minister Yanis Varoufakis stands down

http://www.cnbc.com/id/102806716

I think both sides realize that they need dial back the rhetoric. Maybe Varoufakis' leaving is the first step in the process. It doesn't really mean much in practical terms since you can alway find someone to throw under the bus to make it seem like you're doing something. The EU perception seems to be that he was deliberately obstructing any negotiations, which is probably true but I assume that's what he was instructed to do. So dumping him might signal some softening of the Greek position.

Then again, Tsipras has to be looking at this as a mandate to continue resisting EU demands so you have wonder just how accommodating he's going to be in the future.

No matter how you look at it, something's got to give. You can't have an EU member state getting int'l humanitarian aid because you've essentially forced them into debtor's prison. This isn't 19th century England. But on the other hand, there's no way the EU is going to continue helping Greece finance itself w/o some sort of viable endgame.

 

[AtenRa]

You'll get a "new start" alright, but it'll be with Drachmas and absolutely no access to international capital markets. Enjoy your hyperinflation!

Let me guess, you are one of those that invested their money by betting for Greece exiting the Euro Zone

 

[svenge]

Let me guess, you are one of those that invested their money by betting for Greece exiting the Euro Zone

Nope. Investing money in anything where Greece is even tangentially involved is a terrible idea, as the last several years has shown.

 

[BigDH01]

Let me guess, you are one of those that invested their money by betting for Greece exiting the Euro Zone

I don't have any vested interest in it, but there is a very real possibility that Greece will have to leave the EZ. Greeks voted not to accept terms, it's very possible your creditors feel the same way.

 

[Newell Steamer]

So, a poster from Greece relays what is happening - and people are doubting them - based on,.. what? Are you naysayers in Greece and seeing something different?

Most professionals have even stated they aren't sure what can or will happen next,.. yet, posters on these forums know what will happen. Arm Chair Expertism at it's finest.

Keep it up jackasses.

 

[Greenman]

So, a poster from Greece relays what is happening - and people are doubting them - based on,.. what? Are you naysayers in Greece and seeing something different?

Most professionals have even stated they aren't sure what can or will happen next,.. yet, posters on these forums know what will happen. Arm Chair Expertism at it's finest.

Keep it up jackasses.

It's called speculation and opinion, it's very common in here. It's also very common for those that don't agree with it to become angry, like you.

 

[theeedude]

I think both sides realize that they need dial back the rhetoric. Maybe Varoufakis' leaving is the first step in the process. It doesn't really mean much in practical terms since you can alway find someone to throw under the bus to make it seem like you're doing something. The EU perception seems to be that he was deliberately obstructing any negotiations, which is probably true but I assume that's what he was instructed to do. So dumping him might signal some softening of the Greek position.

Then again, Tsipras has to be looking at this as a mandate to continue resisting EU demands so you have wonder just how accommodating he's going to be in the future.

No matter how you look at it, something's got to give. You can't have an EU member state getting int'l humanitarian aid because you've essentially forced them into debtor's prison. This isn't 19th century England. But on the other hand, there's no way the EU is going to continue helping Greece finance itself w/o some sort of viable endgame.

Endgame involves a huge debt write off.
Much bigger write off than if EU did not insist on austerity and crash the Greek economy for 5 years.
Much bigger write off than if EU faced up to the mess its austerity created last week instead of crashing the Greek banking system.
Now EU will have to pay for all their failed experiments on Greece in the form of a debt write off (or an even bigger loss if they prefer a Grexit).

 

[werepossum]

Do fanciers of Greek sex count?

The Supreme Court says yes.

The shit is about to hit the fan in Greece. The banks are reportedly down to their last €500M. So there is no way the banks can reopen next week. Additionally, the ECB has restricted their lending to those banks.

http://www.businessinsider.com/greek-banks-only-have-500-million-euros-left-2015-7

Not to worry. Any day now that primary surplus is going to kick in with all those splendid multipliers that come from spending more than you take in.

On a more serious note, the banks should still be able to operate electronically; one can have as much fiat money as one wishes. The EZ folks aren't going to be happy since that effectively devalues the euro, so if Greece does this they will be firewalled and definitely kicked out of the EZ. But short term it might be the best solution as most business can be conducted electronically. (I am assuming here that Greece has its own clearing houses, required to make that work even short term.)

Greek people Today voted NO to more Αusterity measures that destroyed the economy.
Greeks Today voted YES to Reforms and for Growth measures.

And just to get it straight, The Greek people will pay every cent they got as a loan, but they will do so by Growth of the Economy, like Germany did after the Second World War, and not by inhumane High Taxation forced in a destroyed economy by the EU Austerity measures.

Also to point out that, nobody in the EU can force another country to leave the Union just because it suits their needs or plans. Only each country themselves can leave the EU by their own will.


ps: Switzerland and Norway are not in the European Union.

http://europa.eu/about-eu/basic-information/money/euro/index_en.htm

Hmm, would that "every cent they got as a loan" include the parts of the loans that have already been cut 50% twice?

It may be true that Greece cannot be ejected from the EU - at this point I wouldn't rule it in or out, but it's certainly a possibility - but Greece can certainly be ejected from the Eurozone. That would put it in a sort of limbo as there is nothing set in place for an EU nation to go back to its own currency. Depending on how vindictive the other nations wish to be, that may lead to Greece bailing on their own as being unable to compete with one's neighbors AND defaulting on one's loans from those neighbors (not to mention failing to honor one's promises of reform) might make life alone seem more attractive than life within the EU once the support ends.

One good thing short term for Greece - as the newly reincarnated drachma rapidly assumes room temperature, there should be a flood of tourism (to take advantage of the exchange rate) as well as a flood of domestic spending to get something of value before one's drachmas drop further in value. Personally though I'm betting that Greece sees this as proof that deficit spending is prosperity and as a consequence, transitions to communism within two to five years, depending on whether the EU props them up a bit.

It's also worth pointing out that Sunday's referendum was whether to accept or reject a bailout deal that was already off the table, after Greece's default.

Best of luck to you and your countrymen in the coming tribulations.

 

[unokitty]

Yanis Varoufakis: Interview Austin, TX Nov 2013.

If you can believe what the Greek finance minister, and self-described Marxist, Yanis Varoufakis said 18 months ago in Austin, TX, the no vote was pretty much what he wanted.

Now, since Dr. Varoufakis has had 18 months to prepare his plans, I'll be looking forward to seeing them unfold...

Though, I suspect that a positive change may be more difficult than the former economics professor anticipates.

Anyway, best of luck to the Greek people!

Uno

All along Dr. Yanis Varoufakis's plan was to quit?

Negotiate in bad faith. Call your colleagues terrorists. Promise the Greek people if they vote no that you can get them a better deal almost immediately.

Then quit.

It is his prerogative to abandon the Greek people. At least, he hasn't abandoned his wife.

Then again, unlike the Greek people, his wife is a multimillionaire.

Even self proclaimed Marxist economic professors have their priorities...

Uno

 

[BigDH01]

Endgame involves a huge debt write off.

Says who? I don't think the Greeks are holding a gun to the head to the EZ even though they think they do. The EZ could tell them to ah heck off.

Much bigger write off than if EU did not insist on austerity and crash the Greek economy for 5 years.

There's plenty of blame to go around, but as much as I'm in favor of stimulus and MMT the Greeks do need to make real reform. Otherwise you're just throwing good money after bad.

Much bigger write off than if EU faced up to the mess its austerity created last week instead of crashing the Greek banking system.

Do you think the other citizens of the EZ have any rights? Can they choose not to support the promises the Greek government made to its people?

Now EU will have to pay for all their failed experiments on Greece in the form of a debt write off (or an even bigger loss if they prefer a Grexit).

So far, I think the only organization that has really gotten stiffed is the IMF. The IMF gets a huge chunk of its funding from the US. The Greeks also told you to ah heck off yesterday so they can keep evading their taxes. I don't know about you, but I pay my taxes and don't relish the idea of paying for someone else's Greek island.

 

[Phynaz]

Enjoy your hyperinflation!

This is one thing that came to mind for me. I hope it doesn't come to this.

 

[fskimospy]

Not to worry. Any day now that primary surplus is going to kick in with all those splendid multipliers that come from spending more than you take in.

A primary surplus is by definition the exact opposite of spending more money than you take in. You may be a bit confused about the terms here.

Funny thing is that those fiscal multipliers are most likely the reason why Greece is in the dire condition it's in. When the multiplier is above 1 cutting spending shrinks your economy faster than it shrinks your debts, making it self defeating. Just another addition to the annals of austerity's failure.

The strangest part to me is that Greece has been trying it the way of austerity for half a decade now, with utterly catastrophic results. How is it that people are facing the reality of that failure with a call for even more austerity? When do you admit failure? Ever?

 

[Jhhnn]

I think both sides realize that they need dial back the rhetoric. Maybe Varoufakis' leaving is the first step in the process. It doesn't really mean much in practical terms since you can alway find someone to throw under the bus to make it seem like you're doing something. The EU perception seems to be that he was deliberately obstructing any negotiations, which is probably true but I assume that's what he was instructed to do. So dumping him might signal some softening of the Greek position.

Then again, Tsipras has to be looking at this as a mandate to continue resisting EU demands so you have wonder just how accommodating he's going to be in the future.

No matter how you look at it, something's got to give. You can't have an EU member state getting int'l humanitarian aid because you've essentially forced them into debtor's prison. This isn't 19th century England. But on the other hand, there's no way the EU is going to continue helping Greece finance itself w/o some sort of viable endgame.

Greece is the biggest patsy in the scheme of malfeasance by the international banking elite & the leaders of their former govt. They knew all along that the day would come that Greeks wouldn't be able to pay but they made oodles of money in the meanwhile. At this point, they must have made enough so that they can just break the deadbeat's legs & be done with it. It'll keep the other debt slaves in line, paying the vigorish. Otherwise, they wouldn't drive such a hard bargain.

 

[theeedude]

Says who? I don't think the Greeks are holding a gun to the head to the EZ even though they think they do. The EZ could tell them to ah heck off.

Greece would default, and then they'd have to write off even more debt as a loss.

There's plenty of blame to go around, but as much as I'm in favor of stimulus and MMT the Greeks do need to make real reform. Otherwise you're just throwing good money after bad.

They have made reforms. They ran a surplus in the middle of a depression. US can't even balance the budget during a boom. The problem isn't lack of reforms, it's that the reforms prescribed are wrong and cause more damage than good.

Do you think the other citizens of the EZ have any rights? Can they choose not to support the promises the Greek government made to its people?

They have a right to choose between voluntarily partial write off and a default by Greece and a forced write off of even more of their debt. No one is denying them this choice.

So far, I think the only organization that has really gotten stiffed is the IMF. The IMF gets a huge chunk of its funding from the US. The Greeks also told you to ah heck off yesterday so they can keep evading their taxes. I don't know about you, but I pay my taxes and don't relish the idea of paying for someone else's Greek island.

The austerity the creditors imposed targeted primarily the poor and working Greeks, not island owners. One reason listed by the Europeans for rejecting the Greeks last proposal was they set a corporate income tax too high and value added tax too low.

 

[glenn1]

So, a poster from Greece relays what is happening - and people are doubting them - based on,.. what? Are you naysayers in Greece and seeing something different?

Most professionals have even stated they aren't sure what can or will happen next,.. yet, posters on these forums know what will happen. Arm Chair Expertism at it's finest.

Keep it up jackasses.

We know enough about the basic outcomes to make a reasonably comprehensive decision tree. There are several branch points: Greeks self-fund government Y/N), Creditors offer another bailout (Y/N), Bailout includes austerity (Y/N), Greeks implement austerity (Y/N, can be imposed by creditors or voluntary if no bailout), Greeks able to make debt service (Y/N), Greeks default outright (Y/N), Grexit (Y/N), Communist revolution (Y/N).

The only one we can be reasonably sure of it that Greek debt will not be forgiven, too many EU players are absolutely refusing this scenario as well they should.

http://www.ft.com/cms/s/0/1a2b9dd2-9bf0-11e4-b6cc-00144feabdc0.html#axzz3f7p4PDAB

 

[BigDH01]

Greece would default, and then they'd have to write off even more debt as a loss.

But it would avoid even larger losses in the future and avoid the moral hazard that would cause Spain, Italy and other southern countries to also hold a gun to the head of the northern countries.

They have made reforms. They ran a surplus in the middle of a depression. US can't even balance the budget during a boom. The problem isn't lack of reforms, it's that the reforms prescribed are wrong and cause more damage than good.

And then they expanded the public sector again and now they are once again running a deficit. Basically, Greece has a problem with tax evasion, corruption, and cronyism, if those aren't fixed (has an attempt been made there?) then Greece is not going to succeed.

They have a right to choose between voluntarily partial write off and a default by Greece and a forced write off of even more of their debt. No one is denying them this choice.

I could see it going either way. Greece isn't that large and writing them off might be worth it to send a message to the PIIGS that the rest of the EZ won't be held hostage.

The austerity the creditors imposed targeted primarily the poor and working Greeks, not island owners. One reason listed by the Europeans for rejecting the Greeks last proposal was they set a corporate income tax too high and value added tax too low.

The black market in Greece accounts for 25% of their GDP. You really think it's just island owners participating in that? Or how about the fact that professionals are the primary tax dodgers?

http://www.theguardian.com/world/2012/sep/09/greece-tax-evasion-professional-classes?CMP=twt_gu

Would you rather talk about economic freedom or corruption? Greece is terrible in those measurements as well.

I don't have a problem with Greece wanting to avoid austerity, I just don't think the other EZ nations (or the US) should pay for their corrupt system. Ditch the Euro, end austerity, and fix yourself.