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

[eldar]

Steffan said:

I do wonder how long the EU can keep up the effective news blackout In the mainstream meda. Very little comment on the matter considering how blatantly dishonest the whoe sorry affair has become. Tragedy what a bottomless cheque book full of other peopes money can be abused into supporting. Without their knowledge. Bad News for Greece, the EU and Europe. Dreadful news for the taxpayers of the EU solvent states who will be picking up the bill.

This seems to sum it up. Greece enters the Euro based of dishonesty and blind optimism. When it goes wrong, more dishonesty and a super-corporate desire to just look the other way.

The wheels will fall off eventually.

[gruffalo]

Even if an extra Euro 5Bn of loans have been made available to Greece then this does not cover them for the summer.

Currently their public sector pay and pension payments are around 2Bn a month, on top of that they have 12.69 in payments to the IMF and on short term bonds that needs servicing before the end of July.

Does any one know what the monthly income for the Greek government is, is it enough to cover these payments with the 5Bn in Junker loans?

[maffski]

Gargamel said:

I fully expect Greece to rent somewhere nice in the South of France for the season.

Maybe this is the solution? The entire population of Greece relocate and they sub-let the country to the Chinese.

[Steffan]

gruffalo said:

Even if an extra Euro 5Bn of loans have been made available to Greece then this does not cover them for the summer.

Currently their public sector pay and pension payments are around 2Bn a month, on top of that they have 12.69 in payments to the IMF and on short term bonds that needs servicing before the end of July.

Does any one know what the monthly income for the Greek government is, is it enough to cover these payments with the 5Bn in Junker loans?

I do not think Greece is currently running a real surplus at all

see: http://www.forbes.com/sites/timworstall/2015/02/16...

Which really does underline the compete nonsense this "solution" has become.

Various contributors on here have suggested that the Greek government is not able to pay the salaries of numerous government employees and way behind with its payments for medical supplies etc. Perhaps unsurprisinly there has been a great deal of fiddling going on in the production of the Greek economic figures that are being used as the supposed basis for recovery.

In consequence it is becoming very difficult to be clear as to what the reality of this position really is. It seems highly unlikely to me that Greece coud last through the summer with just the possible additional gift (NOT a loan when the Debtor is already hoplessly insolvent) of €5 Billion but the EU will pretend this is a loan.

Draghi and the ECB may find some way of creating yet more finance available t to Greece which might keep things going fit a few weeks. Since no Solvent EU Sovereign State is prepared to accepy liability for a a penny piece of the debts of Greece and Greece is already totally and transparently insolvent and getting steadily worse and worse this can only result in Greece collapsing. Tragedy for Greece and a huge mistake for the EU.

[Timmy40]

maffski said:

Gargamel said:

I fully expect Greece to rent somewhere nice in the South of France for the season.

Maybe this is the solution? The entire population of Greece relocate and they sub-let the country to the Chinese.

Can't we swap Scotland for Greece?

[Gargamel]

Capital flight in Greece has now hit 30bn Euro's since December last year.
Even if they wanted to "do a Cyprus" I am not sure there is anything left now.

ELA from the ECB is currently 82bn Euro's, This is on top of the 350bn Euro loans. So frankly a 5bn Euro gift to keep the lights on through the summer isn't really moving the dial.

There cannot be a solution to Greece without a debt write off, long dating everything and a re capitalisation of the banks. None of those things are worth doing with massive economic reform. Syriza will not reform the labour market, nor the public sector, nor will it privatise stuff.

I am glad I don't have to fix it.

[maffski]

Timmy40 said:

Can't we swap Scotland for Greece?

Give it a few years of independent borrowing powers and we might not have to.

[steveT350C]

Portugal has been mentioned numerous times here as comparable to Greece, though not in MSM....

http://www.telegraph.co.uk/finance/economics/11616...

Edited by steveT350C on Wednesday 20th May 19:35

[Walford]

Ed Balls is out of work

[Steffan]

Walford said:

Ed Balls is out of work

Indeed he is thankfully. Probably not if Yvette Cooper wins the Labour party nomination as leader. Fortuitously that should ensure Labour never get back into power in the UK. Praise the Lord, I though Ed Miliband was least electabe and least endearing politician I have ever had the misfortune to have to listen to.

However Yvette Cooper could just be worse. Not all bad here in Britain is it?

[anonymous-user]

Walford said:

Ed Balls is out of work

Its ok though, you gave him a nice £88,000 payoff for being fired so don't worry.

[Walford]

fblm said:

Walford said:

Ed Balls is out of work

Its ok though, you gave him a nice £88,000 payoff for being fired so don't worry.

seams very reasonable, to be rid of him, considering the damage he could have done to the UK

[Andy Zarse]

Labour should bring this lot back. They were better than Milipede & Co...

http://youtu.be/Km2D1tTSARQ

[Steffan]

Andy Zarse said:

Labour should bring this lot back. They were better than Milipede & Co...

http://youtu.be/Km2D1tTSARQ

Quite. I was thoroughly both surprised and seriously pleased when the UK electorate saw what Milliband really was, appreciate the danger he coud be and voted for far less incompetent candiates in the election in parties other than Labour. Good for the country I think. Labour will take decades to recover from the worst election result there has been, for Labour, I hope.

On the Greek failure front the stage managed spats between the various EU leaders and Syriza are continuing. Problem the EU has is that there is no way that this mess can be seen as anything other than the responsibility of the EU. Greece should never have been in this Euro market. Greece could never afford the costs involved. As Greece falling out of the EU leaving Billions of unpaid debts must inevitably demonstrate very, very clearly.

Five years of supposed recovery, some 300 Billion Euros of loans to a hopelessly insolvent sovereign state and absolutely nothing to show for this waste except, very clearly, that the EU are not the financial wizards they try to portray themselves to be. Draghi and co will have exactly the same problem. No competent Bank Director would have allowed such a monumental risk to be taken in lending without adequate security to an already visibly insolvent and failing state at the time these loas were authorised. But that is exactly what Draghi and co have done in this case. The consequences to the EU and ECB of the failure occurring and causing serious questions about the roles of those resonsible are what is holding this nonsense together currently. The EU is desperate to find a way to keep this rolling along. Sadly reality is knocking on the EU door.

Latest media reports suggest that the prospects are looking even more steadily bleak for Greece actually being able to continuing to hold this together. The begging bowl approach may secure a little more cash for Greece but this cannot be continued much longer. Greece is not going to recover. As the EU are about to discover.

See:


http://www.theguardian.com/business/live/2015/may/...

http://www.telegraph.co.uk/news/worldnews/europe/g...

[Walford]

Did he say "no parallel currency" or "no parallel universe"

[menousername]

Sorry if this has been covered but this thread moves too fast...

But does anyone know the extent of the UK banking sector's exposure to Greece here?

Should we be worrying yet?

[grantone]

menousername said:

Sorry if this has been covered but this thread moves too fast...

But does anyone know the extent of the UK banking sector's exposure to Greece here?

Should we be worrying yet?

It's something I've been pondering, I've struggled to find an answer fully, but, I think....

A lot of private creditors had already got out by 2010/2011 by selling debt to public institutions.
A condition of the 2011 second Troika bailout was that private creditors accepted a ~50% face value cut, so a lot of the private write-off is already done.

This BBC article has an info graphic at the end that shows the rough split of the outstanding debt earlier this year.

60% Eurozone
15% Other Bonds
10% IMF
6% European Central Bank
3% Greek Banks
3% Other Loans
1% Foreign Banks
1% Bank of Greece

http://www.bbc.co.uk/news/world-europe-31072321

So looks like a default wouldn't have a big direct impact on UK banks.

This article has a similar breakdown, plus more detail of the Eurozone loans.

http://www.euronews.com/2015/02/03/greek-debt-who-...

Total Country (per person)
€56bn Germany (€700)
€42bn France (€642)
€37bn Italy (€623)
€25bn Spain (€531)
€12bn Netherlands (€708)
€7bn Belgium (€646)
€6bn Austria (€683)
€4bn Finland (€687)
€?bn Slovakia (€278)
€?bn Portugal (€105)

[gruffalo]

France, Italy, Portugal and Spain don't have that kind of money to lose.

I can see a deal being done to kick the can even further down the road!

[tertius]

gruffalo said:

France, Italy, Portugal and Spain don't have that kind of money to lose.

I can see a deal being done to kick the can even further down the road!

Quite, Greece don't want to leave, the EU don't want them to leave - some sort of "solution" will be found.

[rovermorris999]

Let's hope Greece don't win Eurovision, it'd bankrupt them.