Is the end nigh for the Euro? [vol. 3]

[Steffan]

RYH64E said:

fblm said:

YankeePorker said:

Steffan said:

The problem of repayment is essentially a problem for Greece.

Given the 100s of billions of € of debt that they have, the problem of repayment is a problem for the lenders too.

Quite. Owe the bank 100 grand and they've got you by the balls, owe the bank 100 million and you've got them by the balls.

I think they've prepared for this situation, that's why the risky debt was tranferred from the original lending institutions to the ECB/EU States. There's no real risk anymore, the EU/ECB can stand the loss and no independent institutions will fail, which is just as well because the money is lost in any event. It's a sunk cost, the question is do the EU throw good money after bad or do they cut their losses and let Greece sink.

I do agree. I also agree with Andy Zarse that Greece has a binary choice. Stay and make the repayments or default and fall out of the EU into who knows what? I also agree with comments of Fbfm. Much sensible comment on this thread currently.

I do think that, as others have suggested, the EU has used the opportunity that this presented to them to protect themselves and their internal institutions from what might otherwise have been catastrophic consequences. Which is a practical approach. I also think that the EU are going no further in reducing the debt of Greece.

This is really down to Greece to decide where they are going. This is essentially a Greek problem. I think the EU could now ride Greece falling away. How such a matter would affect the EU and it's policies longer term remains to be seen. I certainly think if the EU were to seriously entertain changing the agreement from that already agreed then the immediate consequences in terms of other debtors seeking the same relief are the primary concern for the EU here. For that very good reason I cannot see how the EU can or will allow any fundamental changes to the level of debt that Greece must repay to remain within the framework of the EU.

Down to Greece and who knows what they will do? Perhaps make one last attempt to remain within the EU and shoulder their debts? Problem for me is that I cannot see how Greece can actually afford to repay these debts realistically. Wait and see I think. Longer term I do think Greece will fall away from the EU because I think the country never could afford to be in a currency dominated by Germany, with Socialists constantly seeking new ways to do spend money the country never had in the first place. Lesson to all sovereign states I think. I hope every other EU satellite in southern Europe notes the lesson.

[Mrr T]

Steffan said:

I do agree. I also agree with Andy Zarse that Greece has a binary choice. Stay and make the repayments or default and fall out of the EU into who knows what? I also agree with comments of Fbfm. Much sensible comment on this thread currently.

I do think that, as others have suggested, the EU has used the opportunity that this presented to them to protect themselves and their internal institutions from what might otherwise have been catastrophic consequences. Which is a practical approach. I also think that the EU are going no further in reducing the debt of Greece.

This is really down to Greece to decide where they are going. This is essentially a Greek problem. I think the EU could now ride Greece falling away. How such a matter would affect the EU and it's policies longer term remains to be seen. I certainly think if the EU were to seriously entertain changing the agreement from that already agreed then the immediate consequences in terms of other debtors seeking the same relief are the primary concern for the EU here. For that very good reason I cannot see how the EU can or will allow any fundamental changes to the level of debt that Greece must repay to remain within the framework of the EU.

Down to Greece and who knows what they will do? Perhaps make one last attempt to remain within the EU and shoulder their debts? Problem for me is that I cannot see how Greece can actually afford to repay these debts realistically. Wait and see I think. Longer term I do think Greece will fall away from the EU because I think the country never could afford to be in a currency dominated by Germany, with Socialists constantly seeking new ways to do spend money the country never had in the first place. Lesson to all sovereign states I think. I hope every other EU satellite in southern Europe notes the lesson.

Do you mean EZ rather than EU. I cannot see how Greece would need to leave the EU even if it left the EZ.

[Walford]

But surely if they default on EU dept, they will be force out the EU

[craig7l]

I have actually found myself logging into this thread a couple of times a day for the most unbiased and somewhat up to date views and opinions out there. Credit to all.

However my feelings of the outcome have not changed from my postings previously in the last week or two on the final outcome.

I constantly see a swing between a greek problem and an EU problem underlying in peoples postings.

I could be wrong and will be back to post update if I am - but I still believe due to numerous reasons that an (token) offer will be put together on 11th Feb that will be snapped up by Syriza.

we will all soon see...

[tobinen]

Indeed this thread (not read all of it but recently) is very interesting. I did study 'A' level economics but that was too long ago to really remember. Surely Greece has to default and start again?

[anonymous-user]

tobinen said:

Indeed this thread (not read all of it but recently) is very interesting. I did study 'A' level economics but that was too long ago to really remember. Surely Greece has to default and start again?

The trouble is IF they are allowed to do that inside the EZ then the house of cards starts to look like it really is - built on sand - and it all comes crumbling down. None of the self serving Eurocrats would allow such a thing.

It's a horrible horrible mess created by the dishonest and run by the dishonest.

[YankeePorker]

craig7l said:

I have actually found myself logging into this thread a couple of times a day for the most unbiased and somewhat up to date views and opinions out there. Credit to all.

However my feelings of the outcome have not changed from my postings previously in the last week or two on the final outcome.

I constantly see a swing between a greek problem and an EU problem underlying in peoples postings.

I could be wrong and will be back to post update if I am - but I still believe due to numerous reasons that an (token) offer will be put together on 11th Feb that will be snapped up by Syriza.

we will all soon see...

Syriza proudly include the word "radical" in their party description and have been elected because of their anti-austerity bluster. If they accept a token offer that will not allow then to significantly improve the lot of the poorer Greek population then I would expect them to be booted out in short order with riots on the streets of Athens again. That would be a wet dream for the power brokers of Brussels!

[Mrr T]

Walford said:

But surely if they default on EU dept, they will be force out the EU

Its sounds as if they should but I believe:
a) The only provisions in the treaties which allow a EU country to exit the EU are Article 50 of the Lisbon treaty.
b) There are no provisions which allow the other EU members to throw out a member.

[Steffan]

craig7l said:

I have actually found myself logging into this thread a couple of times a day for the most unbiased and somewhat up to date views and opinions out there. Credit to all.

However my feelings of the outcome have not changed from my postings previously in the last week or two on the final outcome.

I constantly see a swing between a greek problem and an EU problem underlying in peoples postings.

I could be wrong and will be back to post update if I am - but I still believe due to numerous reasons that an (token) offer will be put together on 11th Feb that will be snapped up by Syriza.

we will all soon see...

Glad you are enjoying the thread. That was the plan but, as the Soothsyers remind us, "The best laid plans of mice and mem........". I really do think the quality and content of many of the posts on here have been absolutely excellent.

You may well be right and I am beginning to think that an attempt at continuing within the EU by Greece could well be the outcome. However I still believe that the Greek debt is way beyond the level Greece can actually afford to sustain and therefore whatever the hopes and aspirations of Greece the Economics of the situation suggest to me that in the end default is coming. Maybe a delay but that in my view is the only realistic outcome. I regret the difficulties that will cause within Greece.

But as every Sovereign State must now realise Socialist dream worlds of Milk and Honey for all, with early reitrement at a young age great free health care and longevity and happy governmental over borrowing and overspending are not actually sustainable or realistic policies. If there is one thing that all western governments should adopt it is economic policies that are actually affordable.

The promises of governments to give all things to all men at no cost are just self serving hot air. Cynically made to win elections Everyone must work for their own good and the good of everyone else. Employment is necessary and needed and retirement must return to an affordable level not a vote winning fraud which is part of the reason that the Mediterranean countries are in this mess. I regret to say with idiots like Millband and co about I think that may take some time to sink in.

I am hopeful that the lessons of this massively serious matter are well learned by all western economies. No one can afford to live beyond their means. If their means are minimal then getting better means in the responsibility of the individual. The state may seek to help particularly with short term support to allow a new job to be found. But the absolute economic disgrace that took place in the UK under the last Labour governments was unaffordable and remains unaffordable That lesson needs to be hammered home.

[LongQ]

Mrr T said:

Walford said:

But surely if they default on EU dept, they will be force out the EU

Its sounds as if they should but I believe:
a) The only provisions in the treaties which allow a EU country to exit the EU are Article 50 of the Lisbon treaty.
b) There are no provisions which allow the other EU members to throw out a member.

Not sure about that.

Countries joining the EU now have to commit to adopting the Euro within, iirc, 2 years.

Thus it would not make much sense if they could later be ejected from the EZ but stay a member of the EU. (But then when did sense ever apply here?)

[Mrr T]

LongQ said:

Mrr T said:

Walford said:

But surely if they default on EU dept, they will be force out the EU

Its sounds as if they should but I believe:
a) The only provisions in the treaties which allow a EU country to exit the EU are Article 50 of the Lisbon treaty.
b) There are no provisions which allow the other EU members to throw out a member.

Not sure about that.

Countries joining the EU now have to commit to adopting the Euro within, iirc, 2 years.

Thus it would not make much sense if they could later be ejected from the EZ but stay a member of the EU. (But then when did sense ever apply here?)

For the countries joining in 2004 and 2007 there is no time limit they have to meet various economic criteria.

http://ec.europa.eu/economy_finance/euro/adoption/...

So far only Slovakia have done so. I expect a number of the countries may soon be employing GS to produce report to say why they cannot join!!!

[Digga]

garyhun said:

The trouble is IF they are allowed to do that inside the EZ then the house of cards starts to look like it really is - built on sand - and it all comes crumbling down. None of the self serving Eurocrats would allow such a thing.

It's a horrible horrible mess created by the dishonest and run by the dishonest.

If there is a lesson in all of this,it surely must be that politics cannot ever be put ahead of fundamentals; economic, scientific, geographic, demographic and human realities.

I've just finishing reading Mark Beaumont's account of his global circumnavigation by bicycle. It's a truly great adventure book, the cycling is incidental and secondary to the whistle-stop tour of the world, and it paints an interesting picture of places he felt 'safe' in and also places he felt at home in. There are some revealing surprises.

Relevant to this thread was his relief at getting back to Europe (the last leg were the days he covered Lisbon to Paris) and the dawning on him of the fact that nowhere in the world is like Europe and that it has a unique richness of culture and civilisation. It is this, which I think the UK and the rest of Europe should seek to maintain, whilst co-operating econpmically, but which is paradoxically at threat from the totalitarian control of the single currency.

[Gargamel]

It would be extraordinarily brutal for the EU to position Greece to a Euro Currency exit, and then pull the plug on their EU member status too.

Just about the most severe provocation to push Greece into Russia's chilly embrace.

I would suggest in that Greece would remain in the EU as the rest of the periphery would allow Greece to stay in, simply as a backstop should they find themselves the next tail end charlie in the currency union.


I restate my position, 50% debt write off, everything out to 25 year or 50 years loans. Capital controls of some kind as a firewall/temporary measure. Requirement for a current account surplus either temporarily suspended or at least reduced to 1.5%

[craig7l]

YankeePorker said:

craig7l said:

I have actually found myself logging into this thread a couple of times a day for the most unbiased and somewhat up to date views and opinions out there. Credit to all.

However my feelings of the outcome have not changed from my postings previously in the last week or two on the final outcome.

I constantly see a swing between a greek problem and an EU problem underlying in peoples postings.

I could be wrong and will be back to post update if I am - but I still believe due to numerous reasons that an (token) offer will be put together on 11th Feb that will be snapped up by Syriza.

we will all soon see...

Syriza proudly include the word "radical" in their party description and have been elected because of their anti-austerity bluster. If they accept a token offer that will not allow then to significantly improve the lot of the poorer Greek population then I would expect them to be booted out in short order with riots on the streets of Athens again. That would be a wet dream for the power brokers of Brussels!

its blatantly obvious the desperate people of Greece looking for an answer put their trust in a party that cant deliver on its manifesto promise... that wont be a first. or the last time.

I firmly believe the only way out of this mess to limit damage liability for the LONG term is to default and drachma the country.
However the short term ramifications will be immense and Syriza would be lynched. They haven't got the consensus of the people to destroy the euro in greece.
Therefore I believe they will take a token gesture to pacify for "short termism" politics.

I'm afraid that is the world we live in.

Steffan rightly puts his case across of the situation with Greece and I would suggest few can argue with the reasoning behind the facts. - if Greece/syriza take a token gesture it wont be the end to the matter but just more of the same delay tactics. - we will see......

[Andy Zarse]

Away from Greece, here's an example of how the EU debt repayment strategy is failing even for Spain, currently enjoying nice GDP growth of 2.7%...

http://www.bloomberg.com/news/articles/2015-02-05/...

[anonymous-user]

Mrr T said:

Do you mean EZ rather than EU. I cannot see how Greece would need to leave the EU even if it left the EZ.

If Greece go the full default, new currency route the EU will seek to punish them as hard as they can; they can't let it be seen as a template for future default. IMO of course they will kick them out the EU too.

[Andy Zarse]

Mrr T said:

Steffan said:

I do agree. I also agree with Andy Zarse that Greece has a binary choice. Stay and make the repayments or default and fall out of the EU into who knows what? I also agree with comments of Fblm. Much sensible comment on this thread currently.

Do you mean EZ rather than EU. I cannot see how Greece would need to leave the EU even if it left the EZ.

Yes, I've queried this with Steffan in the past but I confess I can't remember whether it was an oft-repeated typo or he feels leaving the EZ instantly results in termination of EU membership?

[Steffan]

Andy Zarse said:

Mrr T said:

Steffan said:

I do agree. I also agree with Andy Zarse that Greece has a binary choice. Stay and make the repayments or default and fall out of the EU into who knows what? I also agree with comments of Fblm. Much sensible comment on this thread currently.

Do you mean EZ rather than EU. I cannot see how Greece would need to leave the EU even if it left the EZ.

Yes, I've queried this with Steffan in the past but I confess I can't remember whether it was an oft-repeated typo or he feels leaving the EZ instantly results in termination of EU membership?

I may well be wrong on this, not for the first or last time, no doubt, as others will be aware, but it seems to me that if Greece decides to pull out of the EZ it is unlikely that they would wish to remain within the EU. I could well be wrong and I am not saying that this is inevitable but I cannot personally see why they would remain within a union which has required actions from Greece in repaying its debts that Greece does not wish, or cannot afford to achieve. I have therefore made the error of taking the two as one which actually tthey are not as AZ and Mrr T have rightly suggested. I therefore do appreciate the efforts of Andy Zarse and Mrr T to remind us of true position.

I do take the point that in theory this is certainly possible, but it seems most unlikely to me. The concept of a bruised and battered country facing desperately serious unknown financial duffuculties alone, essentially actually wshing to remain within a union in which, whoever's fault it may be, that country has been bruised and battered substantially, seems most unlikelyto me. But I do indeed accept that remains a possibility.

Real question here I think is does Greece actually have the ability to repay it's very substantial debts. My experience in Insolvency, which was remarkably educational, indeed, really quite remarkably educational, was that there comes a point when no matter how much the debtor would like to shoulder the debt burden and make restitution, the size of the debts becomes beyond the resources of the debtor. The debtor simply cannot service the debt.

Therefore at that point Insolvency become inevitable. The old phrase "If wishes came true we would all be Kings", does very effectively describe the position of truly insolvent debtors looking for a way out of the box. That sees to me to be the case sadly, for Greece. I cannot see that Greece can sustain such a massive (in relation to the size of the Greek economy) debt. For that reason I have always thought that Greece was on a sticky wicket. Given the ECB decision the sticky wicket has got a great deal stickier. I can only see defaul by Greece coming. No doubt others will be taking a different view.

[Andy Zarse]

Steffan said:

Andy Zarse said:

Mrr T said:

Steffan said:

I do agree. I also agree with Andy Zarse that Greece has a binary choice. Stay and make the repayments or default and fall out of the EU into who knows what? I also agree with comments of Fblm. Much sensible comment on this thread currently.

Do you mean EZ rather than EU. I cannot see how Greece would need to leave the EU even if it left the EZ.

Yes, I've queried this with Steffan in the past but I confess I can't remember whether it was an oft-repeated typo or he feels leaving the EZ instantly results in termination of EU membership?

I may well be wrong on this, not for the first or last time, no doubt, as others will be aware, but it seems to me that if Greece decides to pull out of the EZ it is unlikely that they would wish to remain within the EU. I could well be wrong and I am not saying that this is inevitable but I cannot personally see why they would remain within a union which has required actions from Greece in repaying its debts that Greece does not wish, or cannot afford to achieve. I have therefore made the error of taking the two as one which actually tthey are not as AZ and Mrr T have rightly suggested. I therefore do appreciate the efforts of Andy Zarse and Mrr T to remind us of true position.

I do take the point that in theory this is certainly possible, but it seems most unlikely to me. The concept of a bruised and battered country facing desperately serious unknown financial duffuculties alone, essentially actually wshing to remain within a union in which, whoever's fault it may be, that country has been bruised and battered substantially, seems most unlikelyto me. But I do indeed accept that remains a possibility.

Real question here I think is does Greece actually have the ability to repay it's very substantial debts. My experience in Insolvency, which was remarkably educational, indeed, really quite remarkably educational, was that there comes a point when no matter how much the debtor would like to shoulder the debt burden and make restitution, the size of the debts becomes beyond the resources of the debtor. The debtor simply cannot service the debt.

Therefore at that point Insolvency become inevitable. The old phrase "If wishes came true we would all be Kings", does very effectively describe the position of truly insolvent debtors looking for a way out of the box. That sees to me to be the case sadly, for Greece. I cannot see that Greece can sustain such a massive (in relation to the size of the Greek economy) debt. For that reason I have always thought that Greece was on a sticky wicket. Given the ECB decision the sticky wicket has got a great deal stickier. I can only see defaul by Greece coming. No doubt others will be taking a different view.

I don't know what you're all worrying about anyway. Weren't we told this by the great man?

http://www.bbc.co.uk/news/business-22832471

[Walford]

So where would this leave a Greek, who was living and working in England, in unskilled employment