Is the end nigh for the Euro? [vol. 3]
Discussion
ts and giggles. 
Digga said:
turbobloke said:
Indeed.
Earlier I spoke of an asset grab, clearly not all assets can be spirited away and Syriza may regard those that remain as fair game. How it would work in practice is another matter.
There is a very real risk that many Greeks could follow their cash, effectively taxed into exile, gambling that it's better to start their lives again in a better economy.Earlier I spoke of an asset grab, clearly not all assets can be spirited away and Syriza may regard those that remain as fair game. How it would work in practice is another matter.
Walford said:
Digga said:
turbobloke said:
Indeed.
Earlier I spoke of an asset grab, clearly not all assets can be spirited away and Syriza may regard those that remain as fair game. How it would work in practice is another matter.
There is a very real risk that many Greeks could follow their cash, effectively taxed into exile, gambling that it's better to start their lives again in a better economy.Earlier I spoke of an asset grab, clearly not all assets can be spirited away and Syriza may regard those that remain as fair game. How it would work in practice is another matter.
Walford said:
Digga said:
turbobloke said:
Indeed.
Earlier I spoke of an asset grab, clearly not all assets can be spirited away and Syriza may regard those that remain as fair game. How it would work in practice is another matter.
There is a very real risk that many Greeks could follow their cash, effectively taxed into exile, gambling that it's better to start their lives again in a better economy.Earlier I spoke of an asset grab, clearly not all assets can be spirited away and Syriza may regard those that remain as fair game. How it would work in practice is another matter.
London estate agents were hiring French speakers after Hollande was elected and started being a silly socialist - were just as many Greek speakers hired after Greece went titsup, can't remember reading anything on that.
Digga said:
turbobloke said:
Greek speakers hired after Greece went titsup, can't remember reading anything on that.
AFAIK the Greeks seem much better at speaking English, so probably not.
or other assets though...Andy Zarse said:
Look at the enormous debt burden which is Greece is now carrying. As of the end of the third quarter of 2014 it amounted to some 315.5 billion Euros or some 176% of Greece’s GDP. Here we see complete failure as the default/private sector haircut of 2012 was supposed to reduce this ratio to 120%.
Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
Is it the case that the consequences of a Greek debt default have been moved from the original lenders to the EFSF? ie Have the original lending institutions off loaded their risk to some central fund?Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
RYH64E said:
Andy Zarse said:
Look at the enormous debt burden which is Greece is now carrying. As of the end of the third quarter of 2014 it amounted to some 315.5 billion Euros or some 176% of Greece’s GDP. Here we see complete failure as the default/private sector haircut of 2012 was supposed to reduce this ratio to 120%.
Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
Is it the case that the consequences of a Greek debt default have been moved from the original lenders to the EFSF? ie Have the original lending institutions off loaded their risk to some central fund?Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
.
Edited by Walford on Monday 26th January 12:09
RYH64E said:
Walford said:
There is no risk, the money is Gone, it wont ever be paid back.
In which case, who's lost out? The lending institutions or some EU fund?Is that indicative of the historic or current position?
Claudia Skies said:
RYH64E said:
Too good a deal will have other bankrupt countries lining up to default.
Precisely.......including UK!
If it "repatriates" all the infrastructure businesses and property (etc.) that it has sold off over the past few decades it can sell them off again. Ponzi refuelled.
RYH64E said:
Andy Zarse said:
Look at the enormous debt burden which is Greece is now carrying. As of the end of the third quarter of 2014 it amounted to some 315.5 billion Euros or some 176% of Greece’s GDP. Here we see complete failure as the default/private sector haircut of 2012 was supposed to reduce this ratio to 120%.
Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
Is it the case that the consequences of a Greek debt default have been moved from the original lenders to the EFSF? ie Have the original lending institutions off loaded their risk to some central fund?Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
Most of the original debt issued by Greece was owned by banks and other financial institutions. It was deemed to be pretty rock solid since Greece was a member of the Euro and bond "spreads" between north and south were fairly small. It was accepted that since there was a common currency then a Euro of Greek paper must be worth the same as a Euro of German paper. One of the main ideas behind the Euro was to give stability to such things. Banks saw they could make small but easy profits on Greek debt as the yield was a bit higher than on Bunds. Anyway, that was the theory...
Come 2008, things had turned ugly and the "stability" turned out to be little more than a chimaera. All the Greek banks were bust as they were stuffed with Greek debt, issued by the Greek government, who in turn were bust. The worst thing for the ECB (AKA Germany and France) was that northern banks also had masses of Greek debt on their books and unless some idiot was prepared to buy it at near par they also were bust...
So the EFSF was created to buy up the debt and thus bail out
Of course, these countries all "opted out" of the ESFS and the outstanding debts were shared between the remaining apparently solvent countries like Germany France and yes, poor old Italy. Naturally, countries like Italy don't have any money so the borrowed from the market at say 6% to lend to Greece at 3.5%. Again, can you see another problem here...
So we have the ESFS buying up the bonds which now sit on the balance sheet of the ECB. Naturally this balance sheet only has one side so the Greek debt is always shown as being at par, not mark to market. The ECB even somewhat tactlessly in my view, boast of the profits they make from the interest Greece pays.
Anyway, to answer your question, yes the original lenders are off the hook and the ECB is firmly on it. I personally await the day Tsipras pulls the plug, Greece defaults and the ECB will learn that actually their balance sheet does have two sides after all. Poor old Mario will watch in horror as column after column on his Excel spread sheet turns red!
Andy Zarse said:
Anyway, to answer your question, yes the original lenders are off the hook and the ECB is firmly on it.
That's what I thought, a cynic might wonder who exactly the original deal was intended to bail out... I think many would consider the bail out to be a complete success and a good job well done, regardless as to whether the ECB gets any of their money back, they can always print some more if they need it.
Andy Zarse said:
RYH64E said:
Andy Zarse said:
Look at the enormous debt burden which is Greece is now carrying. As of the end of the third quarter of 2014 it amounted to some 315.5 billion Euros or some 176% of Greece’s GDP. Here we see complete failure as the default/private sector haircut of 2012 was supposed to reduce this ratio to 120%.
Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
Is it the case that the consequences of a Greek debt default have been moved from the original lenders to the EFSF? ie Have the original lending institutions off loaded their risk to some central fund?Interestingly, I also understand that 77% of the assets* held by the European EFSF bail-out vehicle is in the form of Greek debt
Most of the original debt issued by Greece was owned by banks and other financial institutions. It was deemed to be pretty rock solid since Greece was a member of the Euro and bond "spreads" between north and south were fairly small. It was accepted that since there was a common currency then a Euro of Greek paper must be worth the same as a Euro of German paper. One of the main ideas behind the Euro was to give stability to such things. Banks saw they could make small but easy profits on Greek debt as the yield was a bit higher than on Bunds. Anyway, that was the theory...
Come 2008, things had turned ugly and the "stability" turned out to be little more than a chimaera. All the Greek banks were bust as they were stuffed with Greek debt, issued by the Greek government, who in turn were bust. The worst thing for the ECB (AKA Germany and France) was that northern banks also had masses of Greek debt on their books and unless some idiot was prepared to buy it at near par they also were bust...
So the EFSF was created to buy up the debt and thus bail out
Of course, these countries all "opted out" of the ESFS and the outstanding debts were shared between the remaining apparently solvent countries like Germany France and yes, poor old Italy. Naturally, countries like Italy don't have any money so the borrowed from the market at say 6% to lend to Greece at 3.5%. Again, can you see another problem here...
So we have the ESFS buying up the bonds which now sit on the balance sheet of the ECB. Naturally this balance sheet only has one side so the Greek debt is always shown as being at par, not mark to market. The ECB even somewhat tactlessly in my view, boast of the profits they make from the interest Greece pays.
Anyway, to answer your question, yes the original lenders are off the hook and the ECB is firmly on it. I personally await the day Tsipras pulls the plug, Greece defaults and the ECB will learn that actually their balance sheet does have two sides after all. Poor old Mario will watch in horror as column after column on his Excel spread sheet turns red!
As Guam indicated earlier there really has been an excellent response on PH to this matter and I have been seriously impressed with many of the posts and with the integrity of the arguments put forward in those posts by a wide range of individuals. I do think that many of those arguing from both sides of the question have actually demonstrated a far greater understanding of the economics involved than many of the supposed knowledgeable pundits commenting in the pressing meda.
Well done chaps is what I say. It has been a most rewarding experience for me. The knowledge displayed has been excellent.
Whatever is decided with the fate of Greece and the other falling EU states, I would hope by now that most reasonably knowledgeable individuals interested in the consequences of this matter can appreciate that this has become a classic demonstration that modern politicians have no interest in resolving or improving the problems of society but merely seek, celebrity ,self aggrandisement and a lucrative seat on the gravy train that such a position nowadays provides.
The EU leaders are simply seeking to emulate the activities of Mr Blair and Mr Brown from the last Labour government whereby, both have ammassed huge personal fortunes and found gainful positions in unelected Quangos and International politics which has enabled Mr Blair for example to spend tens of millions of pounds personally in the last four years and amass great personal wealth.
Modern EU leaders are quite happy to defraud the poor EU taxpayers and throw money around because in doing so some of it rewards them directoy and longer term their Gold plated pensions and investments will ensure comfortable retirements somewhere safe, stable and secure. Modern politicians are utterly motivated by self interest. That is one of the reasons why I do hope the UK will elect a different assembly to the last two governments who actually begin to listen to the real concerns and fears that reasonable people have been expressing for some time, and actually change the way the country is run.
I now expect a brief period of respite in the EU position and substantial political paper hanging over the cracks in the EU. I would not be surprised if a dreamland scenario is proposed to enable Greece to remain within the EU short term. The fundamental problem is that the EU is wedded to the idea that all these States will recover. This is utter nonsense.
The failing states will steady slipped further and further into peranent Insolvency which will only get worse for Portugal, Italy, Ireland Greece, Spain, Cyprus, Malta and all the other failing members of the Euro. This will end one way. Defaults will occur with these insolvent bankrupt states. Who pays then? The EU taxpayers. Without consultation of recompense. That is where this nonsense is leading. Matter of time.
Steffan said:
Whatever is decided with the fate of Greece and the other falling EU states, I would hope by now that most reasonably knowledgeable individuals interested in the consequences of this matter can appreciate that this has become a classic demonstration that modern politicians have no interest in resolving or improving the problems of society but merely seek, celebrity ,self aggrandisement and a lucrative seat on the gravy train that such a position nowadays provides.
The EU leaders are simply seeking to emulate the activities of Mr Blair and Mr Brown from the last Labour government whereby, both have ammassed huge personal fortunes and found gainful positions in unelected Quangos and International politics which has enabled Mr Blair for example to spend tens of millions of pounds personally in the last four years and amass great personal wealth.
Modern EU leaders are quite happy to defraud the poor EU taxpayers and throw money around because in doing so some of it rewards them directoy and longer term their Gold plated pensions and investments will ensure comfortable retirements somewhere safe, stable and secure. Modern politicians are utterly motivated by self interest. That is one of the reasons why I do hope the UK will elect a different assembly to the last two governments who actually begin to listen to the real concerns and fears that reasonable people have been expressing for some time, and actually change the way the country is run.
perfect assessment of the politicians and senior bureaucrats of today. the question i have is, is it the case that the people of europe now have the leaders they deserve ? are these people a reflection of european society as a whole ? i find it hard to believe this situation has evolved without the 500 or so million people of the eu being complicit in some form. The EU leaders are simply seeking to emulate the activities of Mr Blair and Mr Brown from the last Labour government whereby, both have ammassed huge personal fortunes and found gainful positions in unelected Quangos and International politics which has enabled Mr Blair for example to spend tens of millions of pounds personally in the last four years and amass great personal wealth.
Modern EU leaders are quite happy to defraud the poor EU taxpayers and throw money around because in doing so some of it rewards them directoy and longer term their Gold plated pensions and investments will ensure comfortable retirements somewhere safe, stable and secure. Modern politicians are utterly motivated by self interest. That is one of the reasons why I do hope the UK will elect a different assembly to the last two governments who actually begin to listen to the real concerns and fears that reasonable people have been expressing for some time, and actually change the way the country is run.
thanks gentlemen for the posts above...When I listen to Messrs Peston and Verity trotting out their shallow assessments of EU business and economics on the BBC, and then read some of the posts on here, I am left in no doubt that the mainstream media is pretty much extinct as a source of informed and considered comment. They just don't know it yet.
Certainly in the case of Greece, I'd argue that nearly everyone knows what's wrong, but most people think it's the others who are worst or should begin to reform first. Backhanders (Fakelaki), buying political favours, the black market, tax evasion, cronyism, state non-jobs - no one is blind to what has been happening there, but likewise, many are actually hooked into it.
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