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So as I understand it the deal was agreed to save Greece but it isn't final until a load of laws and amendments get through the Greek parliament. These laws and amendments have to be passed by end of play tomorrow otherwise we are back to the same situation it was all in on Sunday morning. So nothing is yet certain.
This hasn't stopped the media claiming disaster has been averted for now and the EU issuing us a bill for something we have no say in. Does anyone else think this situation is just a little bit bonkers?!?
These laws and amendments have to be passed by end of play tomorrow otherwise we are back to the same situation it was all in on Sunday morning.
I think we can take it as read that we'll be back in the same situation pretty imminently, and the whole farcical, ****ed-up Eurozone-merry-go-round will keep spinning
Alternatively, it all takes a new direction.
France manages to push the suggestion of deploying the EFSM and gets other EU members to agree.
Of course, Dave and George will refuse and remind everyone about the 2010 agreement.
France and Co refuse to listen and insist on using EFSM.
UK says no and is made to look to be the bad guy unless it agrees to EFSM and receiving a bill for the bail out.
So, barring a miracle, the last week or so of Euro leaders' meetings and the Greek referendum has been one giant waste of time and money 😆
It's like a grown-up, very large primary school playground 😯
Shall we start a sweepstake on when Germany (who are bankrolling this really) take their ball away?
Germany can't take its ball away. The way the Euro is structured surpresses the true value of a single German currency, with the rest of Europe effectively subsidising German exports, by collectively devaluing the Euro, compared to the deutschmark.
If the Eurozone implodes, then the German currency is no longer artificially deflated, and its exports all of a sudden reflect the true strength of the German economy. You see all those fleets of Leased Beemers and Audis clogging up the fast lane, sat half an inch off your bumper? Well you wouldn't be seeing so many of those any more, because they'd rocket in cost, making the German car industry, as well as all its others, uncompetitive overnight.
The Greeks know this.
Its a high stakes game on both sides this. Not as one sided as the Germans would have everyone believe
So Greece knows that Germany cannot risk them leaving as it would cause German exports to suddenly become excessively expensive and hit their GDP.
Germany knows that if Greece goes belly-up then it could cause a domino effect and that will cause the Eurozone to go into further depression and hit their GDP.
If the Eurozone keep on 'lending' Greece money that it cannot afford to repay then things will continue for the time being until the EU runs out of money itself and cannot support the Greek economy, causing the Eurozone to collapse.
Is there a case for making Greece default by withholding funds then rebuilding from the ground up their financial affairs? I know this would cause short-term problems but it's looking more favourable to long-term instability as we lurch from one crisis to another, with all the other bad-case scenarios still lurking to strike at any moment. At least the EU could all work towards fixing a defined set of problems that will be foreseeable in the main rather than the knee-jerk reactions we are currently going though!
My knowledge of world financial affairs is a bit rusty as I switched off from it all for the last few months so trying to catch up!!
It's like a grown-up, very large primary school playgroundOh you've only just noticed and all the things we were told not to do as a child governments do everyday. My my what an example they set for the rest of the plebs! it's no wonder the world is a clusterf$$k of deceit with a nice shiny lip service multicultural corporate brochure, keeping up appearances façade, hhhhmmmmmmm what to do............
The balancing act Gemany is doing is working out if the unofficial subsidy its receiving for is exports is bringing in more than it continues to pour into the bottomless moneypit that is the Southern Eurozone. Or what the export income it would lose would be if it collapsed.
You can tell by their enthusiasm to keep it going which way the maths is presently stacking up.
An interesting theory is that the Euro would probably work as a (hugely devalued) currency if Germany left it. That would be brilliant for everyone else. But that wouldn't work for Germany. So that aint happpening!
So basically Merkel's the key player to watch in this current round? If she changes message about whether to help Greece or not is the main indicator of which way it's going to go.
Binners is spot on Germany simply can not afford Greece to collapse, Germany has been running a false economy for many years propped up by the euro. This is not a one sided fight and France is no better protected than Germany they are potentially at much greater risk than Germany (higher unemployment, restrictive labour market etc) the last thing France or s
Can't imagine that the latest from the IMF is going to make easy reading for Germany.
http://uk.reuters.com/article/2015/07/14/uk-eurozone-greece-imf-report-idUKKCN0PO1C920150714
Binners is spot on Germany simply can not afford Greece to collapse, Germany has been running a false economy for many years propped up by the euro. This is not a one sided fight and France is no better protected than Germany they are potentially at much greater risk than Germany (higher unemployment, restrictive labour market etc) the last thing France or Spain or Italy want is a Greece with a massively devalued Drachma currency - for all their posturing it's the Germans and French who are really s******g themselves Greece has nothing to loose compared to those two.
Binners is spot on Germany simply can not afford Greece to collapse
Well, Germany have been doing their level best to force Greece out of the Euro since they have now outlived their usefulness, saturated the market with BMWs(*) and Bosch fridges, and now cost money. Question is, what happens next, when the process repeats in Spain or Italy or France.
(*) Much as I love the Greeks, they are a bunch of bloody idiots. When I'm there I drive quite a bit and I'm overtaken all day long by Beamers, Mercs and Audis, and I can hardly get past them parked on our narrow lane to get home.
Dr J - a lot of these 'loans' to Greece were really just finance deals on all those Beamers, Mercs and Audis. And other products of the German economy. Do you think they were allowed to spend that money on whatever they liked?
Like Model T Fords - any colour you like as long as its black, the Greeks could buy whatever they wanted..... as long as it had Made in Germany stamped on it
This thread is getting ridiculous now. Like a combination of JHJ and a Radio 5 phone in.
I may not be an economist, but if the Euro is massive undervalued compared to what the duetschmark would be, does this not mean that Germany is overpaying for all its imports. Stuff like raw materials and white goods etc. Swings & roundabouts no? This is a seriously one eyed discussion if you ask me and I don!t even know particularly like the Germans
In what way Molls?
Do give us your interpretation of events, and point out which bits you think are ridiculous?
I may not be an economist, but if the Euro is massive undervalued compared to what the duetschmark would be, does this not mean that Germany is overpaying for all its imports.
Its a double edged sword. But I'd imagine Germany's balance of payments are in far far better shape than any other European economy
[url= http://www.usatoday.com/story/money/business/2015/03/04/german-exports-benefit-from-weak-euro/24263857/ ]Here[/url] is a slightly less Euro-centric view on the German position within the Euro, from the other side of the pond to us
The whole EU is just German racketeering? Really?
No Molls. Don't be a simpleton. What is a fact is that Germany has benefitted enormously, economically, from the Eurozone project through effectively having its currncy artificially defalted by a week Eurozone. effectively a subsidy.
The irony is that as Greece drags the value of the Euro down further, Germany indirectly benefits even further through cheaper exports.
Something you won't ever hear them acknowledge in their increasingly stern and authoritarian dictats
What is a fact is that Germany has benefitted enormously, economically, from the Eurozone project through effectively having its currncy artificially defalted by a week Eurozone
Aye but you seem to be accusing them of engineering it deliberately and cynically..?
I don't think there's any question of their deliberate and cynical actions over greece, is there?
Aye but you seem to be accusing them of engineering it deliberately and cynically..?
Er, Mutti is well known for her short term, tactical decision-making.
Northwind - Member
I don't think there's any question of their deliberate and cynical actions over greece, is there?
I think that since Greece has gone tits up the Germans have looked to protect their own interests rather than share the pain with the Greeks. But that is different from them deliberately constructing the Euro in order to exploit their poorer Southern neighbours, which is how some of these posts read.
+1 what invg said.
which is how some of these posts read.
Ah. Not my reading - I've always assumed that Germany has maximised it's export opportunities under the benign environment the Euro created, and don't want (for obvious domestic reasons) to upset that particular apple cart.
I haven't seen any commentators or economists saying much different from this:
http://www.irishtimes.com/opinion/tormenting-greece-is-about-sending-a-message-that-we-are-now-in-a-new-eu-1.2283593
but where were they all when it was taking shape/
I don't think that anyone's suggesting some Bond Villain-esque master plan from Berlin in the establishment of the common currency.
All I'm saying is that it's a bit disingenuous, to say the very least, for Germany to be hectoring poorer nations like they are, while totally refusing to even acknowledge the vast economic premium they've reaped from the effective Euro devaluation, since the crash.
A crash which, lest we forget, the irresponsible lending of their own reckless bankers was largely responsible for, but.... And it may sound familiar this.... they were effectily bailed out by the European taxpayer and suffered no penalty whatsoever!
Now, to listen to Merkels re-writing of events, Germany is the victim in all of this, instead of what it is.... entirely culpable in this whole sorry mess, but conversely, it's largest beneficiary
All I'm saying is that it's a bit disingenuous, to say the very least, for Germany to be hectoring poorer nations like they are, while totally refusing to even acknowledge the vast economic premium they've reaped since the crash. A crash for which the irresponsible lending of their own reckless bankers were largely responsive
Ok I prefer the more reasonable tone 🙂 and that does make sense, BUT can you really hold the government to account for the actions of the banks who happen to be headquartered in Germany? Bankers gotta bank.
I was using "Trots" as a lazy short hand for "irrelevant frustrated revolutionaries".
There is nothing irrelevant imo about arguing in favour of withdrawal from the Eurozone and the EU.
What I find irrelevant are pseudo-lefties who, whether in the UK or Greece, invariably end up embracing the exact same policies which they have put so much time and energy denouncing.
I hear that Tsipras might resign after implementing the very policies which he was elected to oppose.
Which nicely sums up the complete futility of listening to waffling bourgeois pseudo-lefties, wherever they may be.
BUT can you really hold the government to account for the actions of the banks who happen to be headquartered in Germany? Bankers gotta bank.
It was govt policy to generate the piles of cash that the banks had to dispose of somewhere.
Germans are taking huge risks with Greece, pretty much everyone believes they won't get all their money back. Poll in a German paper says 78% are against the bailout v3.
@DrJ German and French banks (in particular but all eurozone really plus RBS) had lent Greece many billions well before 2008 crises when interest rates where cut. It was the 2009 Greek government which admitted the country had been lying about its debts and misreporting loans for many many years, it was that admission which triggered the real crises.
@ernie, no I'm not in favour of debt forgiveness as you well know 🙂 I'm in favour of calling a default and then negotiating a recovery value (20, 30, 40 cents on the euro ?) and ejecting Greece from the euro and the EU.
Ironic isn't it that it was another bank - Goldman Sachs - that cooked the books for them. Yet nobody has pulled them up, have they? And we're paid huge sums to do so. Allegedly half a billion.
Because it's all the Greek governments, fault isn't it?
Never the bankers. Oh good lord, no!
They can do no wrong, can they? And should never ever be called to account for their limitless greed, reckless behavior, total absense of ethics, or treading the finest line possible between the legal and Illegal.
Perish the thought
[i][b]"Its conclusions validate what Greece’s Syriza government has been saying all along. The debt cannot be repaid. Any formula that fails to recognize this merely stores up an even bigger crisis down the road".[/i][/b]
[url= http://www.telegraph.co.uk/finance/economics/11739985/IMF-stuns-Europe-with-call-for-massive-Greek-debt-relief.html ]IMF stuns Europe with call for massive Greek debt relief[/url]
[i][b] "The findings are explosive. The document amounts to a warning that the IMF will not take part in any EMU-led rescue package for Greece unless Germany and the EMU creditor powers finally agree to sweeping debt relief.
This vastly complicates the rescue deal agreed by eurozone leaders in marathon talks over the weekend since Germany insists that the bail-out cannot go ahead unless the IMF is involved". [/i]
[/b]
jambalaya - Member
....@ernie, no I'm not in favour of debt forgiveness as you well know I'm in favour of calling a default and then negotiating a recovery value (20, 30, 40 cents on the euro ?) and ejecting Greece from the euro and the EU.
I like that approach.
As I see it banks are a business, and lending has risks, especially when it's to top up other bad debts, so the banks should share some of the pain of poor business decisions.
You do realise that the banks who took those risks have already been bailed out, and it's the EU taxpayers taking the haircut?
Wasn't that epicyclo's point ? That's how I took it anyway.
In additional news, the IMF notes that the earth is round....
Lagarde and co should resign. To state the obvious now after all the time that has been wasted and the pain endured by so many goes against the words (and responsibilities) of her contract IMO.
The debt dynamics didn't work before and they certainly don't now in fact it's against IMF rules to support the latest version and indeed the previous bail outs. But hey, rules are made to be broken....apparently.
No winners here.
ernie_lynch - Member
Wasn't that epicyclo's point ? That's how I took it anyway.
Yes.
I reckon if we are going to give welfare to an industry, then it should be in public ownership seeing as the public is paying for it.
Looks like the EU have been exposed again as doing what they do best: making policy for some mythical world that exists only in their heads, rather than the real one we all actually live in. But then that sums up the whole Eurozone project from day 1, so why change now?
Nige and his NO vote chums are still sat back saying nothing. They don't have too. Why would you? Has anyone got the remotest confidence that Europe will be any nearer resolving this shambles by the time the referendum comes round? Or will we be, at best, exactly where we are now, or, at worst.... god only knows where?
[quote=epicyclo ]
ernie_lynch - Member
Wasn't that epicyclo's point ? That's how I took it anyway.
Yes.
I reckon if we are going to give welfare to an industry, then it should be in public ownership seeing as the public is paying for it.
Ah, sorry, it's getting all confusing. I thought you were supporting jamba's suggestion because you thought the banks would take the pain of defaulting the debts. From what I can work out the banks who originally took the risk no longer have any exposure to this.