Greece - a glimpse of our future?
Discussion
http://www.reuters.com/article/idUSLDE61824V201002...
Some of the first detail that I've seen on how Greece plans to tackle its problems.
The really interesting development is this :
"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"
The black or shadow cash economy is going to come under increasing attack as governments try to ensure they are seeing all available streams of income. We already have cash transaction reporting here, neatly disguised as terrorist money laundering safeguards but I wonder how long it will be before we see some real limits being placed on what you can do with cash across the rest of Europe.
Interesting times.
Some of the first detail that I've seen on how Greece plans to tackle its problems.
The really interesting development is this :
"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"
The black or shadow cash economy is going to come under increasing attack as governments try to ensure they are seeing all available streams of income. We already have cash transaction reporting here, neatly disguised as terrorist money laundering safeguards but I wonder how long it will be before we see some real limits being placed on what you can do with cash across the rest of Europe.
Interesting times.
Durruti said:
http://www.reuters.com/article/idUSLDE61824V201002...
Some of the first detail that I've seen on how Greece plans to tackle its problems.
The really interesting development is this :
"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"
The black or shadow cash economy is going to come under increasing attack as governments try to ensure they are seeing all available streams of income. We already have cash transaction reporting here, neatly disguised as terrorist money laundering safeguards but I wonder how long it will be before we see some real limits being placed on what you can do with cash across the rest of Europe.
Interesting times.
Considering how prevalent the black economy, or tax evasion, has been in Greece, I am surprised this didn't happen years ago.Some of the first detail that I've seen on how Greece plans to tackle its problems.
The really interesting development is this :
"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"
The black or shadow cash economy is going to come under increasing attack as governments try to ensure they are seeing all available streams of income. We already have cash transaction reporting here, neatly disguised as terrorist money laundering safeguards but I wonder how long it will be before we see some real limits being placed on what you can do with cash across the rest of Europe.
Interesting times.
thinfourth2 said:
Oh money wise
I thought we were heading towards good food and decent weather
Greece = good food?I thought we were heading towards good food and decent weather
ETA: There's not much on here that gets me excited anyway..
http://en.wikipedia.org/wiki/Greek_cuisine
Edited by bluetone on Monday 15th February 11:46
HundredthIdiot said:
Tangent Police said:
Greece as well as the rest of the Southern European states needs to exit the Euro, apply a bit of currency devaluation and then allow up rates to encourage investment.
Their debts are in Euros.DSM2 said:
Durruti said:
http://www.reuters.com/article/idUSLDE61824V201002...
Some of the first detail that I've seen on how Greece plans to tackle its problems.
The really interesting development is this :
"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"
The black or shadow cash economy is going to come under increasing attack as governments try to ensure they are seeing all available streams of income. We already have cash transaction reporting here, neatly disguised as terrorist money laundering safeguards but I wonder how long it will be before we see some real limits being placed on what you can do with cash across the rest of Europe.
Interesting times.
Considering how prevalent the black economy, or tax evasion, has been in Greece, I am surprised this didn't happen years ago.Some of the first detail that I've seen on how Greece plans to tackle its problems.
The really interesting development is this :
"From 1. Jan. 2011, every transaction above 1,500 euros between natural persons and businesses, or between businesses, will not be considered legal if it is done in cash. Transactions will have to be done through debit or credit cards"
The black or shadow cash economy is going to come under increasing attack as governments try to ensure they are seeing all available streams of income. We already have cash transaction reporting here, neatly disguised as terrorist money laundering safeguards but I wonder how long it will be before we see some real limits being placed on what you can do with cash across the rest of Europe.
Interesting times.
Tangent Police said:
HundredthIdiot said:
Tangent Police said:
Greece as well as the rest of the Southern European states needs to exit the Euro, apply a bit of currency devaluation and then allow up rates to encourage investment.
Their debts are in Euros.Of course, you could argue that the magic wand of leaving the Euro would enable them to meet their Euro-denominated debt obligations, but there are other arguments the other way.
For instance, foreign investors might like the depreciated cost base, but not like the exchange rate volatility.
Ultimately it's easier to just make your population poorer directly by increasing taxes, reducing minimum wage and cutting public sector pay. Except the last part of that equation usually creates massive "industrial" action (public sector unions in Ireland are just getting warmed up on this one). Not sure what the public sector is like in Greece.
The fundamental problem is that the cost of leaving the Euro is both astronomical, and unknown. Several things would happen. The new Greek Drachma would depreciate hugely against the Euro sending the cost of the existing debt spiralling. The interest that the new Greek government would have to pay on its bonds would soar. All foreign investment would disappear. It is likely that the economy would further collapse into a long term slump as a consequence of the economic impact. A debt default is more or less ineviatble under these circumstances. The survival of the incumbent government would be highly questionable.
Ergo the "nuclear" option is not one that anyone wants to pull the trigger on, albeit there are arguments why a one-off purge might be the preferred (least bad) long term solution.
Ergo the "nuclear" option is not one that anyone wants to pull the trigger on, albeit there are arguments why a one-off purge might be the preferred (least bad) long term solution.
HundredthIdiot said:
Tangent Police said:
HundredthIdiot said:
Tangent Police said:
Greece as well as the rest of the Southern European states needs to exit the Euro, apply a bit of currency devaluation and then allow up rates to encourage investment.
Their debts are in Euros.Of course, you could argue that the magic wand of leaving the Euro would enable them to meet their Euro-denominated debt obligations, but there are other arguments the other way.
For instance, foreign investors might like the depreciated cost base, but not like the exchange rate volatility.
Ultimately it's easier to just make your population poorer directly by increasing taxes, reducing minimum wage and cutting public sector pay. Except the last part of that equation usually creates massive "industrial" action (public sector unions in Ireland are just getting warmed up on this one). Not sure what the public sector is like in Greece.
s, we're out of here" and then the t together. They then pay off their debts. Clearly, they both have to avoid things like nasty clawback clauses "If you're successful, we'll come and shag your mum" etc. Seriously, Greece's priority isn't debt at the moment, it's actually getting some investment/GDP. THEN they can deal with how to pay the debt off. Otherwise it's just slinging money in a hole.......which isn't very wise. Besides the
Tangent Police said:
I thought that historically (which is irrelevant in this case, as it's unique) a currency starts off as weak and then gradually gains strength. So, here's the scenario. Greece say "Right you s, we're out of here" and then the Germans European Finance Managers say "Right, you plan to introduce the Popudopolus?" We'll peg the Popudopolous (debt) at P1.60=€1. Immediately, the popudopolous drops to P1.80 to P2.00 and then investment comes in, they do an anti-brown and get their st together. They then pay off their debts. Clearly, they both have to avoid things like nasty clawback clauses "If you're successful, we'll come and shag your mum" etc.
Seriously, Greece's priority isn't debt at the moment, it's actually getting some investment/GDP. THEN they can deal with how to pay the debt off. Otherwise it's just slinging money in a hole.......which isn't very wise. Besides theGermans ECB won't have it.
Right, but who holds the debt? Surely you can't just unilaterally convert debt currency because a bunch of politicians say so. And what happens if the Popudopolous halves in value?s, we're out of here" and then the t together. They then pay off their debts. Clearly, they both have to avoid things like nasty clawback clauses "If you're successful, we'll come and shag your mum" etc. Seriously, Greece's priority isn't debt at the moment, it's actually getting some investment/GDP. THEN they can deal with how to pay the debt off. Otherwise it's just slinging money in a hole.......which isn't very wise. Besides the
Maybe the ECB could take on the currency risk. No idea. Who understands this stuff? I don't.
Small countries are attracted to the stability of big currencies.
HundredthIdiot said:
Small countries are attracted to the stability of big currencies.
In the same way that lemmings are attracted to the sea. I'm not 100% of the process by which the currencies were convertied from Pre-Euro to Euro. There must have been a process of looking at an average "value" relative to something static and then everyone saying "Are you cool with that?" I assume that an exit strategy would peg the debt to a pretty constant "value" and then an arbitary currency created. Perhaps 1 Euro could equal 1 Popudopolous?
I'm not 100% sure how a lot of UK debt is made "inflation proof" but it is. There is a clause. It would be surely simple to correlate payments with the interest rate of Greece.
On one hand, the EU chucks money hand over fist at the south, but the price of a strong Euro is that no-one buys oranges/olives/holidays and GDP stops. To boot, they have spunked all their good-times money on a massive lumbering public sector.....sound familiar
It would be possible to make the debt repayments (or more likely, the interest repayments) independent of the currency fluctuations.
The question is this. Are they better off out of Europe? Assuming there are is no trade embargo, I'd say so.
The only thing for this sorry state of affairs (which is true for the rest of the PIIGS) is that the political superstate experiment carries on. I think that's the only real benefit to them at the moment.
Germany trying to act like the bully/chief at the moment is not helping.
This whole situation is pointing towards the Eurozone breaking up, or it taking a big step towards neutralising the differences between states (both politically and economically).
What do you reckon will happen next?
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