So now we are about to get a National Unity government which signs off on the bail-out. Thats fine but what about the referndum that was offered, once that Pandora's box is opened I'm not sure they can just close it. Playing with fire, gonna be trouble on the streets....
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How utterly f******* are we now?
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Posted 6 months ago #
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how can a currency leave the euro though? I don't see how it can work. Greece could create some 'new' drackmahs, but no-one would want to exchange their euros for them as the drackmahs would quickly become worthless??
Posted 6 months ago # -
They may create a new drachma and announce a set FX conversion rate. This is unlikey to benefit holders of the new currency (in Argentina they forced conversion of $ into peso at 1:1 crippling people's savings) so they are likely to withdraw money from banks now and ship it offshore. A withdrawal of liquidity from Greek banks would be very destabilising.
Posted 6 months ago # -
retro83 - Member
"ahwiles - Member
the euro is successfull; lots of countries adopted it.
a lot of people think that europe is in trouble because of the euro, it isn't.
europe is in trouble because they/we have been spending too much/taxing too little. running up massive debts in the belief that economic growth would allow us to meet the repayments."
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Can you explain that a little further please?
My understanding is that it is not all of Europe which is in deep trouble, but individual countries, and that because those particular countries share a currency with the stronger European economies their options for fixing their current problems are very much limited. So whilst it may not have caused the problem it is making it much harder to resolve.
I am a financial simpleton though.
er, yes. not all of europe is in trouble/lots of debt; not all of the 'euro zone' is in trouble/lots of debt; Germany for example.
Germany haven't been spending money like drunken sailor in a whore-house for the best part of a decade. Greece has, and it's in trouble now because:
A) they thought that their economy would grow, allowing them to meet the debt repayments - it didn't.
(they were planning on a pay-rise: i don't know about you, but i call this sort of behaviour 'bloody stupid' - take note Ed Balls)
B) their national debts have been reclassified as 'dodgy' - meaning they have to pay more in interest.
i think it's fair to say that right now, and for the next few years/decades, Greece will suffer if it stays in the euro.
the euro needs greece more than greece needs the euro.
i may be wrong, i am also a financial simpleton.
Posted 6 months ago # -
Another finacial simpletons two-peneth
Isn't the problem the domino effect. If Greece leaves the Euro, there will be a bolt for the exits by Portugal, Italy, Spain and Ireland as big banks go bust. Resulting in utter chaos as no-one would know the true level of any individual currencies?
Aren't they talking about devaluations of up to 80%
Posted 6 months ago # -
a question to mull over: would you lend money to greece?
if so, under what conditions?
high interest?
power of veto over national spending policy?
Posted 6 months ago # -
Should I have a kebab for lunch or wait till tea time when it may be cheaper ?
Or will the Germans have moved in on the kebab teritory and i will only be able to get sausages for tea ?
Posted 6 months ago # -
Good article in the Guardian
Posted 6 months ago # -
So, PM resigns, general election, weak new government, ongoing financial chaos, another election, more chaos, more demos, army steps in to maintain order...
... Military Junta again, other partner countries look likely to leave EU in protest, Greek membership of EU suspended, EURO nations introduce protectionist trade embargo's against Greece - massive protest from other none Euro EU nations - Existence of EU now at risk, EU military coalition of German and Italian troops moves into Greece to restore democracy, Former Eastern bloc nations resign from EU in protest, Russia moves to protect former protectee's from rampant German expansionism by rolling over Polish border, NATO charter invoked, US army REFORGER plan kicks into place, UK and France move to protect German Border from Russian threat, Russian submarine accidentally rams US sub protecting naval supply convoy, NATO air alliance carries out airstrikes on Russian military key points within Poland, Russian armoured forces roll into Germany approaching Fulda Gap, weakened NATO forces unable to hold at the gap and left with no option but to carry out tactical Nuclear Strike to decapitate forward columns of russion forces, Russiand respond with targetted Nuckear strikes on NATO Airbases, US responds with massive retaliatory strike on Russian military targets, Russians respond with strategic launches on US cities.
Posted 6 months ago # -
I guess that's the worst case scenario sorted then!
Posted 6 months ago # -
Ever the optimist eh?
But other than that Z-11, do you think things will work themselves out?
Posted 6 months ago # -
http://www.ft.com/cms/s/0/0a35504a-0615-11e1-a079-00144feabdc0.html#axzz1cd6wYb7H
Fun (?!?) little diagram from the FT.
Isn't the problem the domino effect. If Greece leaves the Euro, there will be a bolt for the exits by Portugal, Italy, Spain and Ireland as big banks go bust. Resulting in utter chaos as no-one would know the true level of any individual currencies?
Binners, my take on last 24 hours is that the major European players have moved beyond Greece. They have to manage the default and possible exit but much more importantly they need to ring fence Italy. But the SIV proposal looks a long way from the finished article and the amount of money probably not enough.
Posted 6 months ago # -
Binners - Dunno, but Branston baked beans are on Buy 1 get 2 free at Tesco
Posted 6 months ago # -
Spain, Italy, Greece, Portugal and Ireland, you know, these Catholic Countries really should take more protection.
Posted 6 months ago # -
They may create a new drachma and announce a set FX conversion rate. This is unlikey to benefit holders of the new currency (in Argentina they forced conversion of $ into peso at 1:1 crippling people's savings) so they are likely to withdraw money from banks now and ship it offshore. A withdrawal of liquidity from Greek banks would be very destabilising.
There's also millions of Greeks with € mortgages and loans, converting them would be popular, unless of course you happen to own the debt
Posted 6 months ago # -
the Euro is here to stay
In name only, I'm afraid
As a concept - as soon as one country drops out because the others can't or won't support it - it's finishedPosted 6 months ago # -
Why?
I don't beleive Greece will drop out anyway but even if it did I see no reason why It should be and no one has shown me a reason why it would be the end of the euro
Posted 6 months ago # -
I got the impression this is the problem Uncle Jezza
The domino effect. If Greece leaves the Euro, there will be a bolt for the exits by Portugal, Italy, Spain and Ireland as big banks go bust, interest rates on servicing sovereign debt go through the roof, and they subsequently default too.
Resulting in utter chaos as no-one would know the true level of any individual currencies?.
Not that I'm an expert, but yesterday William Hill were giving odds of a Greek default and leaving the Euro at 11-10. Have you ever known bookies lose? And that was before todays shennanigans
Posted 6 months ago # -
but even if it did I see no reason why It should be and no one has shown me a reason why it would be the end of the euro
The Euro has already failed
Take Spain, 33% less competitive against Germany since the introduction of the Euro
So what can it do about it? can't devalue any more, all it can do is to cut wages and jobs
The Euro is stopping he Meds from taking action to strengthen their economies and it looks very much like the Euro [Germany & France] is coming to the end of their altruistic appetite.if they do, the Euro as a concept [not a currency] is dead
Posted 6 months ago # -
Italy......gonna be ugly
Posted 6 months ago # -
From today's FT:
How would Greece legally exit the eurozone?
This might require a good lawyer. Extensive as they are, the European Union treaties do not actually provide for a country leaving the eurozone. (Until now, it was taken for granted that the traffic would all be headed in only one direction).The treaties do include a sort of emergency clause that allows the European commission, the EU’s executive arm, to make proposals to deal with extraordinary events that are a threat to the single currency. So it could probably use this as a basis to draft a Greek exit, if necessary. As with all EU matters, the process would not be immediate. The other 26 member states would have to unanimously approve, as well as the European Parliament.
Thanks to a clause in the Lisbon treaty, which came into force in 2009, Greece could take a more radical approach and opt to leave the EU altogether. (This clause was added at the behest of the UK, to prove to its eurosceptic voters that the bloc was not a straightjacket that could never be removed). In this case, Greece would require only majority approval from other member states.
But, on top of all the other acrimony, its departure would result in potentially fraught negotiations over its EU payments. Greece, for example, receives tens-of-billions of euros in development funds while its farmers harvest bumper crops of agricultural subsidies. The fate of these payments, which are programmed over several years, and other EU accounts could take some time to sort out. There would also be the question of whether a non-EU Greece would still want to maintain links to the single market, as Norway and Switzerland do.
What about the banks?
One of the gravest challenges of introducing a new Drachma would be preventing a run on Greece’s banks. As soon as customers sensed such a move was in the works, they would almost certainly attempt to drain their euro accounts and move them to safer ground, such as Germany. As the crisis has worsened, Greek banks have already experienced an outflow of deposits. Changing currencies would almost certainly force the government to impose emergency capital controls to prevent a full-fledged bank run.
What would happen to euro-denominated contracts?
This would be another headache of Olympic proportions. All domestic contracts – from property leases to employment contracts – would probably have to be amended to reflect the change from euros to the new currency. Far more contentious would be cross-border contracts. Companies selling goods to Greece would insist that they continue to be paid in euros while Greeks would probably try to pay in the new currency or at reduced rates. Much litigation would ensue.
Posted 6 months ago # -
If the euro is such a mess why is the pound still so weak against it.
Are we even worse than them?Posted 6 months ago # -
because we have the ability to to take measures to manipulate the value of our currency to aid the economy - low interest rates etc.
no Euro country can do that, they have to suffer whatever rate the ecb sets for them along with any consequencesPosted 6 months ago # -
zippykona - Member
If the euro is such a mess why is the pound still so weak against it.
Are we even worse than them?thats a point I have tried to make but been roundly ignored.
Posted 6 months ago # -
thats a point I have tried to make but been roundly ignored
in part because we have lower interest rate than the euro so it weakens the pound - why is that bad?
Posted 6 months ago # -
portugese girl at work was saying her dad wants to move all his savings to her bank account here
the run on the greek banks if they did leave would just be the start, next would be portugal, ireland, spain, italy?
im not sure it would be wise for greece to leave the euro and i think sarkomerkin knows this
Posted 6 months ago # -
Posted 6 months ago #
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