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

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

Author
Discussion

anonymous-user

53 months

Thursday 2nd July 2015
quotequote all
From BBC:-
the radical left Exarcheia neighbourhood, exhausted young anarchists lounge outside bars and cafes, and let the banners hanging across the central square speak for them.
"No to EU and IMF terrorism," reads one.
"€ + Germany = oppression," reads another.

Meanwhile the Germans and the majority of Europeans are at work, paying their way...And I expect will punish their leaders at election time if they fund that lot!!

Art0ir

9,401 posts

169 months

Thursday 2nd July 2015
quotequote all
What's to stop the Bank of Greece issuing Euros?

s2art

18,937 posts

252 months

Thursday 2nd July 2015
quotequote all
Art0ir said:
What's to stop the Bank of Greece issuing Euros?
The law? Wouldnt that be the equivalent of counterfeit money?

EskimoArapaho

5,135 posts

134 months

Thursday 2nd July 2015
quotequote all
Oops. Care of Uncle Sam and Wikileaks comes this, showing that Merkel knew all along that the Greeks couldn't repay:

https://twitter.com/DerekinBerlin/status/616539666...


Art0ir

9,401 posts

169 months

Thursday 2nd July 2015
quotequote all
s2art said:
The law? Wouldnt that be the equivalent of counterfeit money?
David McWilliams posted this at the start of the year

Prediction said:
Here is where it gets interesting and here also is where the Greeks may have an ace. At this stage, the Greek central bank is able to simply print money in exchange for Greek government IOUs – as long as the ECB allows it to do so. If the ECB governing council says that Greece can’t print money, it is tantamount to kicking Greece out of the Euro because the only way the Greek banks can get their hands on euros is for the Greek central bank to print Euros that are technically counterfeit notes.

Would the Greeks do this? Why wouldn’t they? What’s to stop them? Surely after everything the Greeks have been through, a few central bankers in Frankfurt wagging their fingers at them isn’t going to terrify them. The alternative is that the Greek public realises that there is no money in the banks and there is a full-scale bank run. In order to stop this, the Greek central bank would have to limit the amount of money a Greek depositor can take out, for example €1,000 a day. This cap is a capital control and it goes to the very heart of monetary union. In the monetary union, an Irish euro is supposed to be as good as a German euro, which is meant to be the same as a Greek euro.

But if there were capital controls, then that wouldn’t be the case. Greek euros would be trapped euros, imprisoned in Greece. This is the tipping point. The problem now, as the politicians squabble, is that the tipping point will not be driven by political summits or political agendas but by the fears of the Greek depositors. What would you do if you were Greek? Panic? Once the people panic, it’s all over and no amount of talk will stop it. The only thing that can stop a bank run is actually money in the ATMs. If you rush to the ATM fearing there is no money in it and there’s loads of money coming out, then your fear evaporates. You then call your mate to assuage his fears and so on. But if in contrast, there is no money or not as much as you want to take out, your fear heightens and you tell everyone and this is how a bank run happens.

If the country experiences a bank run, then there is no hope for it because the economy seizes up completely. People hoard the money they have and there is no commerce. It is not hard to see how the EU has only one strategy in Greece – the nuclear strategy. If it presses the button, who knows where this ends?

Walford

2,259 posts

165 months

Thursday 2nd July 2015
quotequote all
News flash, Greeks to produce better car than Merc, Audi, or BMW at half the price, and sell it all over europe, problems solved

Snoggledog

6,948 posts

216 months

Thursday 2nd July 2015
quotequote all
Walford said:
News flash, Greeks to produce better car than Merc, Audi, or BMW at half the price, and sell it all over europe, problems solved
Running of olive oil of course. smile

Wills2

22,669 posts

174 months

Thursday 2nd July 2015
quotequote all
EskimoArapaho said:
Oops. Care of Uncle Sam and Wikileaks comes this, showing that Merkel knew all along that the Greeks couldn't repay:

https://twitter.com/DerekinBerlin/status/616539666...
Anyone could see they couldn't repay in fact everyone knew they didn't meet the criteria to join in the first place, the news I suppose is that she can no longer say she didn't know.


Steffan

10,362 posts

227 months

Thursday 2nd July 2015
quotequote all
All very informative and interesting on here. The steady rising tide of expressed opinion that Greece has benn taking the proverbial and that lending more money to Greece, really is demented madness, has been steadily spreading across Euorpe. The IMF have apparently decided that Greece need a 20 year moratorium on debt relief and a further loans of 50 Billion Euros in order for Greece to stand even a slight chance of ever beginning to recover and then who knows how long the repayments will take, if there ever are any repayments? Pity that knowledge was not available before Mrs Lagarde lent Greece the money they have.

Given the five years of support and the hundreds of Billions of Euros lent to Greece by the EU and the pathetic agressive attune of Greece to negotiations with the EU it wouldj seem to me to be an act of palpable madness for the EU to lend Greece any more money. Have they not already lost enough!?

The longer this nonsense goes on, the lower the credibility deficit of the EU is sinking, and the more money the EU are going to lose over this nonsense. To my mind anyone suggesting more money be lent to Greece has lost the plot. Time fior the EU to man up, face the problems they have created for theselves and let Greece flounder off somewhere else. There can never be a future in lending abject economic failures more money. Just throwing good money after bad. Time the EU faced reality.

confused_buyer

6,610 posts

180 months

Thursday 2nd July 2015
quotequote all
Steffan said:
The longer this nonsense goes on, the lower the credibility deficit of the EU is sinking, and the more money the EU are going to lose over this nonsense. To my mind anyone suggesting more money be lent to Greece has lost the plot. Time fior the EU to man up, face the problems they have created for theselves and let Greece flounder off somewhere else. There can never be a future in lending abject economic failures more money. Just throwing good money after bad. Time the EU faced reality.
In fairness, they have lent very little actual money to Greece since 2010 (I think it is about €10bn). Virtually all of the money simply flowed from the EU/ESFS/IMF to private lenders so swapping private debt for public to avoid bank defaults in France and Germany.

Furthermore, is having an effective failed state on the borders of EU really a good idea? And what happens, as inevitably will happen on current directions, when we are discussing Italy in place of Greece?

Greece is a basket case no doubt, and the origins of the problem lie in Greece (but they are not the only ones) but the EU/IMF have to also face up to the fact that their decisions in 2010 and subsequently have been a fiasco.

Tsipras will probably go - a deal will be cobbled together which will last 3 months and we'll be right back where we started until there is a military coup or something in Greece.

voyds9

8,488 posts

282 months

Friday 3rd July 2015
quotequote all
confused_buyer said:
Furthermore, is having an effective failed state on the borders of EU really a good idea? And what happens, as inevitably will happen on current directions, when we are discussing Italy in place of Greece?

Greece is a basket case no doubt, and the origins of the problem lie in Greece (but they are not the only ones) but the EU/IMF have to also face up to the fact that their decisions in 2010 and subsequently have been a fiasco.
It wouldn't surprise me if EU/Germans/French decided it was cheaper and for the greater good to keep backing Greece by some underhand method rather than risking EU/Euro collapse.

Welshbeef

49,633 posts

197 months

Friday 3rd July 2015
quotequote all
Another risk is with the country on its knees radicals suddenly provide some hope and with that we could have IS on our front door with direct access into Europe through the Bulgerian boarder.



Why not make the debt repaid over say 200 years and at sensible interest rates. That way creditors will long term get their money back and then some over little to no chance now.
Country gets the stability it needs and we need Germany to actually invest into Greece with factories so they can actually produce something and suck up some of the unemployment. They need farming to come back become totally self sufficient to the point they can export - given time.
I'm sure wine could be very well made in Greece long warm season perfect conditions.

Or swap debt for assets - IE actual islands for the debt which can be bought back at any time by Greece when affordable.

AJS-

15,366 posts

235 months

Friday 3rd July 2015
quotequote all
I like the idea of taking Greek assets in a way. The trouble is that if the debt was never secured on assets in the first place you would need Greece to agree to this. Politically very unlikely.

If I was in a position to influence such things I would set up an international bankruptcy court, perhaps as part of the IMF or perhaps stand alone. You probably would still have to be quite specific about what debts were secured against at the outset though.

Blackpuddin

16,409 posts

204 months

Friday 3rd July 2015
quotequote all
Technology gives every country the potential to make money out of something if the ruling elite can be bothered to get off their jacksies and think about it. In the case of Greece, why did nobody ever think to invest in energy production? With their natural resources they could have been a huge energy exporter.

confused_buyer

6,610 posts

180 months

Friday 3rd July 2015
quotequote all
Greece was Greece when the banks lent the money. It isn't as if they hadn't got a bit of history when it came to it.

If a Bank, as we all know all too well, lends money to someone who then goes bankrupt then they lose it. That is the risk of lending.

For all that it may be Greece's fault, those who lent it in the first place also have to take some responsibility, and some of the losses.

aeropilot

34,299 posts

226 months

Friday 3rd July 2015
quotequote all
Steffan said:
Time the EU faced reality.
Not a hope of that.

That would be an admission that 'The Project' is a failure, and the EU dictators simply won't have that, and that's the card the Greeks have been playing all along.....despite the apparent dangerous situation they are in.

I'm still expecting the EU to eventually roll over to protect 'The Grand Plan'.....

AJS-

15,366 posts

235 months

Friday 3rd July 2015
quotequote all
Sorry if it's been posted already but there's a very good article in the Telegraph about this

http://www.telegraph.co.uk/finance/economics/11687...

Certainly Greece has messed up but not alone.

Mermaid

21,492 posts

170 months

Friday 3rd July 2015
quotequote all
aeropilot said:
Steffan said:
Time the EU faced reality.
Not a hope of that.

That would be an admission that 'The Project' is a failure, and the EU dictators simply won't have that, and that's the card the Greeks have been playing all along.....despite the apparent dangerous situation they are in.

I'm still expecting the EU to eventually roll over to protect 'The Grand Plan'.....
There is a wholly illogical situation, toss of a coin will determine the future.

confused_buyer

6,610 posts

180 months

Friday 3rd July 2015
quotequote all
AJS- said:
Sorry if it's been posted already but there's a very good article in the Telegraph about this

http://www.telegraph.co.uk/finance/economics/11687...

Certainly Greece has messed up but not alone.
The whole point of a central bank is that it is lender of last resort. The ECB has simply decided not to fulfill this role with Greece. It sounds small semantics but the fact that it hasn't will have serious ramifications when other countries start getting into more trouble (which they will, beacause the Euro is fundamentally flawed) in the future.

Mermaid

21,492 posts

170 months

Friday 3rd July 2015
quotequote all

It seems there are questions as to whether the referendum and how it is being conducted is legal.