Greece about to default

[Charmonium]

Why can't Greece default on it's debts and use it's tax base to run the country as usual? Obviously, their budget would have to be balanced, but that should be easy as there would be no interest piling up. It seems to be the direction they are headed in, and it gives them back control of their economy.

I don't think they take in enough in tax revenue to cover expenses, especially govt pensions and the like.

 

[Greenman]

I don't think they take in enough in tax revenue to cover expenses, especially govt pensions and the like.

In which case they will have to use their own currency so they can print themselves into a balanced budget. I just read that it will take at least a year and a half to make that happen. How do they survive a year and a half with no medium of exchange?

 

[LegendKiller]

In which case they will have to use their own currency so they can print themselves into a balanced budget. I just read that it will take at least a year and a half to make that happen. How do they survive a year and a half with no medium of exchange?

Then they have the Argentina problem. Not many people will lend them money, they have a shitty economy, no military, and no confidence that they'll pay their debts because they don't even pay their taxes. Thus, they will have a large amount of inflation.

 

[waggy]

Why can't Greece default on it's debts and use it's tax base to run the country as usual? Obviously, their budget would have to be balanced, but that should be easy as there would be no interest piling up. It seems to be the direction they are headed in, and it gives them back control of their economy.

even if they did raise taxes enough to cover it. from what i read they have so much corruption that it wouldn't matter.

greece is fucked. it's going to have to cut back on shit and tax everyone. not sure they want to do that though. they seem to thinkt hey can continue how they are.

 

[Greenman]

Then they have the Argentina problem. Not many people will lend them money, they have a shitty economy, no military, and no confidence that they'll pay their debts because they don't even pay their taxes. Thus, they will have a large amount of inflation.

Inflating what? There won't be a currency to inflate, unless they stick with the euro, and that apparently means a death spiral.

It looks like they are going to have to restructure their entire government, along with slashing pensions and social welfare. It's going to be ugly.

 

[waggy]

Inflating what? There won't be a currency to inflate, unless they stick with the euro, and that apparently means a death spiral.

It looks like they are going to have to restructure their entire government, along with slashing pensions and social welfare. It's going to be ugly.

lol no matter how you look at it. they are in a death spiral. been that way for a long time. they don't care to get out of it either.

 

[LegendKiller]

Inflating what? There won't be a currency to inflate, unless they stick with the euro, and that apparently means a death spiral.

It looks like they are going to have to restructure their entire government, along with slashing pensions and social welfare. It's going to be ugly.

They have been living on borrowed time for their social programs, the Euro gave them the time. However, it was a devil's pact because it just layered on more debt without the ability to inflate out of it.

 

[Moonbeam]

Self hate in action. I'll show Europe. I'll eat worms.

 

[Murloc]

once they go back to the dracma they will finally be forced to cut their crazy social benefits and early pensions (crazy compared to what is produced and who actually pays taxes).
If they just print money and don't actually try to spend less, their currency should devaluate so much that the market will force them to.

 

[AtenRa]

Let's be serious here. The Greek people can't repay the debt, it is impossible. You guys have almost no economy relative to the debt you owe. Your Target2 payments are even bigger.

Yes, 30-50% of the debt should be cut.

The austerity is needed, your pubic social works programs are simply too rich for your own good. Your retirement age too low. Your pensions too high. Your tax receipts too low because of people dodging them and corruption in the government prevent them from being enforced.

No, Reform measures should be enough to reform and start up the economy once again, we should shrink the public sector by 50% at least by privatizations, public pensions should be reformed in to private pensions.
Taxation reforms should be made for every sector, you cannot have 26-29% taxation on your Revenue in the private sector. Taxation enforcement should be better but also Taxation should be fair for everyone. Also Taxation should help to increase the economy not to shrink it.

Then, maybe, you guys will realize you can't depend on a stable currency to create more "wealth" than you owe.

We can create more wealth if we will be given the opportunity and the freedom to do so. Germany was in a worst place in 1945 than Greece is now, they were given the opportunity and the freedom to make a better economy by the private sector. We can create more wealth, we have many ways to increase the private sector, but there are those that doesnt profit from that and they oppose to such measures.

So to sum up, yes to correct reforms that help the economy and yes to correct private growth measures(agriculture, Shipping industry, Tourism industry, Exports etc) and NO to more austerity/High taxation measures that shrink the economy and create a deficit every year that needs more austerity/Taxation measures to be taken.

 

[Charmonium]

Inflating what? There won't be a currency to inflate, unless they stick with the euro, and that apparently means a death spiral.

It looks like they are going to have to restructure their entire government, along with slashing pensions and social welfare. It's going to be ugly.

So basically what they were voting against. It sort of makes you wonder if this wasn't the intention all along. You can't get people to agree to the EU requirements because it makes them feel like slaves. So you create a situation where you know that they're going to go in the opposite direction but it ends up leading them exactly where you want them to go anyway. It's sort of the same logic you use with a 2 year old.

I don't know if I give the EU that much credit for being devious and manipulative.

 

[svenge]

Germany was in a worst place in 1945 than Greece is now.

The only commonality between Germany circa 1945 and Greece today is that both countries' ruin was brought upon them by their respective leaders. Better hoard your Euros while you still can, because Greeks won't be seeing any more of those (or any other hard currency) ever again...

As for the logistical problem of printing trillions of Drachmas (assuming an exchange rate of 1 EUR = 1000 Drachma) all at once, I suggest subcontracting with Hasbro and overprinting existing stocks of Monopoly money.

 

[nickqt]

Yes, 30-50% of the debt should be cut.



No, Reform measures should be enough to reform and start up the economy once again, we should shrink the public sector by 50% at least by privatizations, public pensions should be reformed in to private pensions.
Taxation reforms should be made for every sector, you cannot have 26-29% taxation on your Revenue in the private sector. Taxation enforcement should be better but also Taxation should be fair for everyone. Also Taxation should help to increase the economy not to shrink it.



We can create more wealth if we will be given the opportunity and the freedom to do so. Germany was in a worst place in 1945 than Greece is now, they were given the opportunity and the freedom to make a better economy by the private sector. We can create more wealth, we have many ways to increase the private sector, but there are those that doesnt profit from that and they oppose to such measures.

So to sum up, yes to correct reforms that help the economy and yes to correct private growth measures(agriculture, Shipping industry, Tourism industry, Exports etc) and NO to more austerity/High taxation measures that shrink the economy and create a deficit every year that needs more austerity/Taxation measures to be taken.

Bring back the drachma which clearly won't be valued very high compared to the Euro/Pound/Dollar. Your trade goods are now super cheap, and taking a vacation in Greece will be super cheap (assuming society doesn't go to hell during all of this).

Good for Greece. And good for the Dollar.

Everyone, their sister, and their dipshit cousin in Arkansas now knows that the Euro is not fully functional and that using the Euro as a reserve currency is a bad idea.

The Dollar remains king. If there was any doubt about exploiting the virtually zero percent interest rate on Treasuries to invest in infrastructure the last 6+ years, this is the sign that we should be doing it now. Investors are basically paying the US government to hold their money.

 

[Moonbeam]

Bring back the drachma which clearly won't be valued very high compared to the Euro/Pound/Dollar. Your trade goods are now super cheap, and taking a vacation in Greece will be super cheap (assuming society doesn't go to hell during all of this).

Good for Greece. And good for the Dollar.

Everyone, their sister, and their dipshit cousin in Arkansas now knows that the Euro is not fully functional and that using the Euro as a reserve currency is a bad idea.

The Dollar remains king. If there was any doubt about exploiting the virtually zero percent interest rate on Treasuries to invest in infrastructure the last 6+ years, this is the sign that we should be doing it now. Investors are basically paying the US government to hold their money.

How much is that in real money?

 

[Charmonium]

Bring back the drachma which clearly won't be valued very high compared to the Euro/Pound/Dollar. Your trade goods are now super cheap, and taking a vacation in Greece will be super cheap (assuming society doesn't go to hell during all of this).

That could actually work. Balance of trade FTW.

The real issue is going to be whether or not Greece survives intact in the interim. If it's really going to take a year or more to get the Greek economy on the drachma, that is going to be one very long, suck-ass year.

 

[Jaskalas]

Now we get to witness the meaning of economic collapse.

 

[AtenRa]

The only commonality between Germany circa 1945 and Greece today is that both countries' ruin was brought upon them by their respective leaders.

Yes, but Germany was allowed to cut its debt after WW II and make payments to repay its dept by its exports . All the allied countries including Greece let Germany increase its economy after the end of WW II. That is what Greece is asking now, to be able to increase its economy and make reforms in its public sector in order to be able to repay its dept.

Enforcing Austerity measures that shrank the economy every year further and thus making the repayment of the country's dept not viable is not the answer and everyone knows it.
We have done that for the last 5 years and we have found out it is not working. All those measures enforced by the Troika on the last 5 years completely destroyed the economy and had zero affect. Year after year we had a deficit and we had to take more austerity and heavy taxation measures to combat the deficit created by the same measures taken supposedly to combat it.

https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts

Under the London Debts Agreement of 1953, the repayable amount was reduced by 50% to about 15 billion marks and stretched out over 30 years, and compared to the fast-growing German economy were of minor impact.[2] An important term of the agreement was that repayments were only due while West Germany ran a trade surplus, and that repayments were limited to 3% of export earnings. This gave Germany’s creditors a powerful incentive to import German goods, assisting reconstruction.[3]

 

[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.

What we should do is veto the present policies. And bring things to a head. If I were the Greek prime minister I would declare that I would never going to get out of the Eurozone. “If you want to throw me out, go ahead and do it. Do your worst. Switch off ELA support to the banks and let everything go to hell. But I’m not getting out of the Eurozone. I’m also not going to fire 4,000 public sector workers in December. I’m not going to redeem the ECB for the bonds that it’s holding. And I’m not going to be talking to the Troika until and unless we have a European Union and Council in which we sit down and discuss reasonably and rationally what needs to be done. Now if you want to dismantle the Eurozone in the process by unilaterally discontinuing ELA support to my banks go ahead. If you want to get out of the euro yourselves, be my guest.”

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

 

[AtenRa]

No need for the drachma, we can do it within the Euro Zone and the Euro. We just need to increase our economy once again and make the necessary reforms in the Country.

 

[nickqt]

Yes, but Germany was allowed to cut its debt after WW II and make payments to repay its dept by its exports . All the allied countries including Greece let Germany increase its economy after the end of WW II. That is what Greece is asking now, to be able to increase its economy and make reforms in its public sector in order to be able to repay its dept.

Enforcing Austerity measures that shrank the economy every year further and thus making the repayment of the country's dept not viable is not the answer and everyone knows it.
We have done that for the last 5 years and we have found out it is not working. All those measures enforced by the Troika on the last 5 years completely destroyed the economy and had zero affect. Year after year we had a deficit and we had to take more austerity and heavy taxation measures to combat the deficit created by the same measures taken supposedly to combat it.

https://en.wikipedia.org/wiki/London_Agreement_on_German_External_Debts

All of that is a feature, not a bug.

http://www.theguardian.com/commentisfree/2012/jun/26/robert-mundell-evil-genius-euro

Take away a country's ability to control the currency it uses, and you can force it to sell of its assets for firesale prices. In essence, the ECB is Germany's IMF/WorldBank; the same institutions that work on behalf of US interests to gobble up state assets in poor countries around the world.

https://www.imf.org/External/Pubs/FT/staffp/2004/02/pdf/brune.pdf

And here in observable reality, the people with the wealth and power benefit, not the average citizen in the country. Unless you're delusional and think the benefits of the political process flow to the poor. The poor get crumbs while the wealthy get land and governments.

 

[Charmonium]

No need for the drachma, we can do it within the Euro Zone and the Euro. We just need to increase our economy once again and make the necessary reforms in the Country.

Except your banks only have €500M in reserves. That's nothing for all practical purposes. So what are you going to use for money?

 

[UglyCasanova]

I think the rest of Europe is frankly tired of hearing about the "pain" of austerity. Austerity is such a subjective term to begin with. Is having to pay your taxes and not retire at 50 considers austerity? If so, what is so painful about it? Is having to actually be competitive and create a functional economy (not one based on debt and false promises with no real production to show for it) insulting to the Greek "pride"?

Syriza seems to think so, and at this point the rest of the EU should rightfully tell them to go frick themselves.

 

[chucky2]

Well, what we know from Spenders is austerity is defined as not being able to blow as much money as last year even though you can't pay for last year let alone this year. Anything less than more spending than last year is austerity.

 

[Charmonium]

Here's a taste of what could be in store for Greece

The banks won't be able to reopen on Tuesday as scheduled unless the ECB resumes emergency lending -- and that appears unthinkable without an unequivocal commitment from the Greek government to reform.
Some essential services are starting to feel the pinch, too.
Dr. Theo Giannaros, head of the Elpis hospital in Athens, told CNN that supplies of medicines and basic foodstuffs were running low.
The prospect of a failing state in southeastern Europe alarms policymakers from Brussels to Washington. Greece is a member of NATO, but has been flirting with Russia. And it is the gateway to Europe for many migrants fleeing war, terror and poverty in the Middle East and Africa.

 

[AtenRa]

Except your banks only have €500M in reserves. That's nothing for all practical purposes. So what are you going to use for money?

Lets wait and see what happens on Monday/Tuesday, then we talk again.