Greece - A New Hope

khorum_sl said:

Syriza is campaigning to stay in the EU but Greek banks are saying otherwise. Syriza wouldn't want to preside over the Greek secession since once the EU isn't around to catch all the blame, the Greeks might actually realize who they voted for.

The Troika has exhausted all the haircuts its creditors are willing to take so 30-50% debt forgiveness isn't happening. Remember that during the last round of debt forgiveness, Greece's creditors had already taken a 54% haircut. That's why Syriza hasn't pressed too hard on further debt forgiveness despite the fact that ONLY more debt forgiveness or just plain default are the only real options for Greece having a chance to dig out. Staying in and keeping that insane 175% debt-to-GDP ratio means that even if the Greek economy somehow grew at the rate of China's 7%, it'll keep sinking further and further into debt since it still wouldn't be able to service the debt and it would keep outgrowing the economy.

There's really no mechanism for kicking Greece out of the EU---there's not much in the Lisbon Treaty for leaving the EU at all tbh---so the likely scenario is quite literally the worst one: Greece stays in and their economy crashes without a clear path to fix it and Brussels kinda keeps them around to point at whenever a European city thinks about hosting the summer Olympics.

Click to expand...

According to the Lisbon Treaty...'Article 49 A

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 188 N(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

Greece has to pay 360 BILLION euros. The EU, IMF demand they pay that amount in almost the same period of time as Portugal did (we all know they will not pay, just like Portugal didn't and Portugal "only" asked for 70 billion). When the former governments of Nea Demokratia ("Social Democrats") and PASOK ("socialists"), the only 2 parties that ruled Greece since '73, approved for more and more bailouts, everyone applauded. IMF, EU, Merkel, etc...they all said it was needed and they were in right path. And NOW a government , which the ruling party only got there because the other 2 only did shit FOR DECADES and the greek people was fed up, just wants more time and less harsh measures to fufill the agreement, everyone is like "oh those bastards, they don't want to pay."
So they want Greece to become some kind of beggars.

Fuck the EU really. Solidarity between people and blablablabla ...yeah yeah. Germany and France say jump and the rest will jump just because.
Just want GB to say yes, Le Pen in power and maybe, MAYBE then, european leaders will realize how incompetent they are.
Oh and one more thing, does the EU realize how important is Greece's geostrategic position? because even if Turkey is a NATO member, we all know how they deal things in that area. We need a country we can trust to secure that region.

double post

aaron_sl said:

A quick note about the speculation I posted earlier about Russia/China "lending" money to Greece in exchange for possible military bases. If they were to do that, and boy is that ever a big if, then the loan would be similar to many other loans the Russians and Chinese make to strategic partners: either not expected to be paid back at all (or at least not in full) unless shit hit's the fan (see the Ukraine for example, Russia has made lots of loans to them that they didn't expect to have to repay - until the Ukrainians became hostile). Or, if they are repaid, they are repaid in grants of land for bases, stakes in important and/or strategic government owned firms (Russia likes to buy state owned weapons firms from former USSR sates like this) or other important assets like that.

Still, I think this has become a moot point. Even if the Greek government was still interested in any Russian/Chinese pivot, the Western powers simply couldn't allow that and would make sure such a thing never happened, even if it meant facilitating a military coup.

Click to expand...

This about sums it right. So, it really becomes a matter of Obama, or whichever big player from the West, making the call to the European creditors and telling them to fuck right off. I'm surprised it hasn't happened already.

France doesn't have a major problem with bailing out Greece, it's really the German that are quite literaly in the streets when there are talks of printing money. It woudn't be a real problem in France if Greek debt was canceled overnight. Actually I went to see the comments on a couple of right wing (Figaro, Le Point) on the DSK proposal for Greece, and even there you have a lot of support for it.

It's Germany, Holland, Luxembourg that are really strongly in favor of hurting greece "because they have been bad", who believe that "austerity hurts, so it must be good".

Gurgeh_sl said:

France doesn't have a major problem with bailing out Greece, it's really the German that are quite literaly in the streets when there are talks of printing money. It woudn't be a real problem in France if Greek debt was canceled overnight. Actually I went to see the comments on a couple of right wing (Figaro, Le Point) on the DSK proposal for Greece, and even there you have a lot of support for it.

It's Germany, Holland, Luxembourg that are really strongly in favor of hurting greece "because they have been bad", who believe that "austerity hurts, so it must be good".

Click to expand...

add Finland to that list

Actually DSK plan makes the most sense, we don't even need to cancel the debt, but just cancel interest for a very long time, do not feed Greece more money and see what happens. Since Greece budget is currently balanced (not including interests of the debt) it could work. That would most certainly maximize the outcome for everyone, Greece would recover faster than a cataclysmic exit from eurozone, lenders would recover more money in the long run, because right now, they'll recover nothing at all if Greece leaves.

Origin_sl said:

This about sums it right. So, it really becomes a matter of Obama, or whichever big player from the West, making the call to the European creditors and telling them to fuck right off. I'm surprised it hasn't happened already.

Click to expand...

It has happened, several times. They are ignoring the US advice - don't forget, until very recently the Euro currency area didn't engage in the QE economics used by the USA to buffer the effects of the financial crisis. The Germans definitely do not see eye to eye with the USA on economic policy. and the French are historically very territorial about the EU and what they see as outside interference.

Running Dog_sl said:

It has happened, several times. They are ignoring the US advice - don't forget, until very recently the Euro currency area didn't engage in the QE economics used by the USA to buffer the effects of the financial crisis. The Germans definitely do not see eye to eye with the USA on economic policy. and the French are historically very territorial about the EU and what they see as outside interference.

Click to expand...

QE is not good for countries with trade surpluses like Germany since that means they can't export the resulting inflation. People had to obtain Euros to exchange for German products, and QE means the Euros Germany got in exchange are now worth less. Contrast that with a country with a trade deficit like the US, where QE means the dollars we exchanged for goods are now worth less than they were when we exchanged them.

ohkcrlho_sl said:

According to the Lisbon Treaty...?Article 49 A

1. Any Member State may decide to withdraw from the Union in accordance with its own constitutional requirements.
2. A Member State which decides to withdraw shall notify the European Council of its intention. In the light of the guidelines provided by the European Council, the Union shall negotiate and conclude an agreement with that State, setting out the arrangements for its withdrawal, taking account of the framework for its future relationship with the Union. That agreement shall be negotiated in accordance with Article 188 N(3) of the Treaty on the Functioning of the European Union. It shall be concluded on behalf of the Union by the Council, acting by a qualified majority, after obtaining the consent of the European Parliament.

Click to expand...

Yep, the Greeks have to choose to leave, there isn't a structured way for Brussels to kick them out. And recent polling shows around 80% of Greeks wanting to stay in the EU. Unfortunately those same Greeks also voted for Syriza.

So the closest thing the EU can really do is make it as uncomfortable as possible for Greeks to stay in the EU. Which is exactly what they did on Sunday when theECB refused to extend further emergency credit to keep Greek banks open this week.That's a MASSIVE massive blow especially considering that the ECB essentially exists to mitigate contagion risks of financial crises like this one, and they must've known that cutting liquidity on a Sunday would precipitate exactly that sort of risk on Monday opening bells:

CNN Money_sl said:

The crisis in Greece now has the full attention of investors around the world ? and they don?t like what they see.

European markets were hammered early Monday morning, with both the German DAX and French CAC opening 4.4% lower. Portugal?s stock market was down nearly 6%, while Britain?s FTSE fared better, shedding only 2%. Those losses were trimmed by late morning.

European bank stocks were particularly hard hit. Spain?s Banco Santander (BCDRF) gave up 5.7% in early trading, while French bank Credit Agricole (CRARF) lost 6.7%.

?While Greece is the weakest member of the euro and might not have the largest economy by any means, the global implications to Greece failing to repay its debts remain largely unknown and this is why worldwide indices will continue facing downside pressures,? noted FXTM chief market analyst Jameel Ahmad.

Click to expand...

So the EU can't kick them out and the Greeks STILL want to stay so the worst case scenario remains the most likely one: a decimated rump state with no prospects in the next couple decades AND OPEN BORDERS. It'll be like the dustbowl scenario withGreeks playing modern-day okies in Germany.

Kinda curious why the Guardian's commie squad haven't harped on that yet. The northern european euroskeptics have been howling about it for a while.

Hoss_sl said:

I thought I heard on the radio that they're allowed to withdraw something like 68 euros a day unless it's a retirement fund.

Click to expand...

Recently, if you're dumb enough to wait until now then you deserve to wait in the long lines and get nothing.

Xequecal_sl said:

QE is not good for countries with trade surpluses like Germany since that means they can't export the resulting inflation. People had to obtain Euros to exchange for German products, and QE means the Euros Germany got in exchange are now worth less. Contrast that with a country with a trade deficit like the US, where QE means the dollars we exchanged for goods are now worth less than they were when we exchanged them.

Click to expand...

...which is one of the problems with the Euro - what wouldn't work for Germany, would have been beneficial to countries like Spain, Portugal and Italy. It's supposed to be a common currency after all. One commentator wasn't entirely joking when he said that it should be Germany that leaves the Euro rather than Greece; it would be a weaker currency but it's lower value would be more helpful to the poorer nations.

The referendum Greece is going to hold in the next few days is going to be pivotal. It's very possible the Greek government will lose it, with the people voting to keep the Euro currency even if it means ever harsher cuts. There would have to be another election, and who knows who would get in power in that one.

If the Greek government wins then the currency controls will remain in force, probably for years. They'll have to print their own currency, and when that happens, the markets will go after Spain and Italy - and that's already starting to happen, with their costs of borrowing going up on the chance it becomes possible for them to quit the Euro and devalue their currency.

Germany leaving the EU isn't a net negative outcome for Germany. It's a disastrous outcome for the EU.

We'll need a NO-PUSSY thread, an aired-spoilers-only thread and the full-on bigdick R+L=Greece thread that everyone really reads anyway.

kake. Germany sort of IS the EU.

If germany leaves the EU you better start investing in American war bonds. And jet planes. Cause that means they're fed up with this whole peaceful economic conquest kick and are thinking about something more direct and dependable.

khorum_sl said:

Germany leaving the EU isn't a net negative outcome for Germany. It's a disastrous outcome for the EU.

Click to expand...

No, it would be a disaster for Germany. Back in the 90's, Germany wasn't doing so well, partly because of the reunification, but also partly because their money was much stronger than the rest of Europe. Back then a Mercedes or a BMW would cost at least 2 or 3 times more than a Renault, Peugeot or whatever local constructor you had. Suddenly with the Euro, a Mercedes only cost 20% more than a Peugeot. What are you going to do ? Buy a Mercedes, or a Peugeot. Right.

Basicaly Euro was Germany's way to devaluate their money and further improve the competitivity of their industry, especialy since they are mostly exporting in Europe : instead of being paid in Francs, Drachma or other weaker currency, they are now being paid in Euro.

You just have to check Switzerland export, it's has taken a hit since they stopped having a fixed rate for Euro and their money went up 20%, Germany would have just the same problem, even worse, it wouldn't be a mere 20% with most of the southern and easter countries, which would then only be able to afford local or asian products.

Don't get confused between leaving the Euro (currency) and leaving the EU (union). You can be in the EU but not have the Euro. The Greeks are voting on whether to leave the Euro, not the EU.

Is Greece considered Too Big to Fail?