Syriza to get majority in Greece.

[JFKvsNixon 11]

Yes of course it can. It'll still be in the EU, in the single market.

 

A tough 3-5 years but no tougher than the hell they have now.

 

Where will Greece find the Money to run the country? I guess that there is the IMF for a loan, but they'll probably only give it with terms and conditions that may well be harsher than what the EU was offering.

[Speckled Hen 10]

Where will Greece find the Money to run the country? I guess that there is the IMF for a loan, but they'll probably only give it with terms and conditions that may well be harsher than what the EU was offering.

 

If Greece defaults it will be defaulting to the IMF. There is no one left to lend them money other than private investors. The Greek government has no cash and would likely print billions of drachma to pay wages which would simply trigger massive inflation in Greece.

 

The yield on Greek 10 year bonds increased by 50% over the course of today. In other words the cost of the Greek Government borrowing increased by 50% over an 8 hour trading period.

Edited June 29, 2015 by Speckled Hen

[I1L2T3 10]

Where will Greece find the Money to run the country? I guess that there is the IMF for a loan, but they'll probably only give it with terms and conditions that may well be harsher than what the EU was offering.

 

Inward investment from other countries. Some countries outside the EU will be willing to invest. Renewal of badly neglected infrastructure would be invest-able

 

Investment dovetails with the Greek/Cypriot/Israeli gas fields that are now under development. Maybe enough by itself over a couple of decades to recover a few percentage points of GDP.

 

Tourism, obviously. Numbers would probably surge.

 

It has a fair amount of industry, a sizeable agricultural sector, and shipping

 

It's quite a big diverse economy. It would still be in the EU. It would be fine given a few years to recover.

 

---------- Post added 29-06-2015 at 21:44 ----------

 

If Greece defaults it will be defaulting to the IMF. There is no one left to lend them money other than private investors. The Greek government has no cash and would likely print billions of drachma to pay wages which would simply trigger massive inflation in Greece.

 

The yield on Greek 10 year bonds increased by 50% over the course of today. In other words the cost of the Greek Government borrowing increased by 50% over an 8 hour trading period.

 

Most of Greek debt is held by private investors, well over 80%

 

The thing that most people are missing is Greece has today placed the ace card. It has said that it will not bail out private Greek banks. That means they go boom in the same way as in Iceland. And that means a banking contagion that will threaten some very big institutions in the Eurozone core.

 

It's not actually the Greeks that are playing with fire here because they have nothing to lose. The Troika is taking enormous gambles because the Greeks could just say right we're out the Euro, our banks are going too and they're taking some of your biggest banks with them. Thankfully Britain is not badly exposed to Greek debt but the contagion would still cause us big problems. But France etc.... boy oh boy!!!!

 

When you understand that you understand the reason for the strength of the threats from the Troika. Greece is right to stand up to them.

[tzijlstra 11]

People are so confused about this that it is silly. Firstly, it isn't "The EU" that is holding Greek debts, it is the EU, the IMF and several other big institutions that agreed to buy Greek bonds BECAUSE THEY BEGGED THEM TO.

 

It is very simple: If you get a friend coming along who tells you a sob-story and you agree to lend him 10K. How happy would you be if he came to you and said: "I had a chat with my parents, I can't pay you back, so bye". Because that is EXACTLY what Syriza is trying to do. And don't talk to me about mandate, no lender cares if you feel you have a mandate or not, and on what promises you were elected in - you run the country, you pay. If we changed the payment-terms each time a new government came in the world would be in chaos.

 

What is happening is that Greece wants to find a way out of being massively in debt that won't cost them. There isn't one. By trying to weasel their way out of made agreements they have just increased their own problems massively. If Greece leaves the EU, mandate or not, its people are going to suffer tremendously.

 

Educate yourself by having a look at Argentina, it defaulted in 2001 due to a massive depression tearing the economy down. Its debt was restructured but Argentina has always had to rely solely on its own GDP to get things done. That might look OK at first, until you realise that the Peso has devalued from around 1AP=1$ to 8AP=1$.

 

What does that mean? That nobody wants to invest in Argentina, you put money into that economy and you never get it back, your 1000 dollar investment in 2002 would now be worth 125 dollars.

 

Ah, but GDP is still growing! Hmmm not really, it basically flat lined (despite huge fluctuations) since 2000. That means that any economy that does grow is overtaking Argentina and has been doing so since then.

 

What does that mean in reality? Argentinians can't afford to buy a McDonald's is the easy answer, the complicated answer is that slowly all value is being eroded from Argentina and it is not likely to recover from that. The effect is that the people, you know, those that Syriza claims to represent in Greece, are on a massive poverty-upswing since 2000. And we are talking real poverty, not 'oh my god I can't buy me fags' poverty.

 

Of course, Argentina is cooking the books to make it all look better and the Greeks are good at doing that. But let's be clear - Greece is headed for a disaster.

[I1L2T3 10]

People are so confused about this that it is silly. Firstly, it isn't "The EU" that is holding Greek debts, it is the EU, the IMF and several other big institutions that agreed to buy Greek bonds BECAUSE THEY BEGGED THEM TO.

 

It is very simple: If you get a friend coming along who tells you a sob-story and you agree to lend him 10K. How happy would you be if he came to you and said: "I had a chat with my parents, I can't pay you back, so bye". Because that is EXACTLY what Syriza is trying to do. And don't talk to me about mandate, no lender cares if you feel you have a mandate or not, and on what promises you were elected in - you run the country, you pay. If we changed the payment-terms each time a new government came in the world would be in chaos.

 

What is happening is that Greece wants to find a way out of being massively in debt that won't cost them. There isn't one. By trying to weasel their way out of made agreements they have just increased their own problems massively. If Greece leaves the EU, mandate or not, its people are going to suffer tremendously.

 

Educate yourself by having a look at Argentina, it defaulted in 2001 due to a massive depression tearing the economy down. Its debt was restructured but Argentina has always had to rely solely on its own GDP to get things done. That might look OK at first, until you realise that the Peso has devalued from around 1AP=1$ to 8AP=1$.

 

What does that mean? That nobody wants to invest in Argentina, you put money into that economy and you never get it back, your 1000 dollar investment in 2002 would now be worth 125 dollars.

 

Ah, but GDP is still growing! Hmmm not really, it basically flat lined (despite huge fluctuations) since 2000. That means that any economy that does grow is overtaking Argentina and has been doing so since then.

 

What does that mean in reality? Argentinians can't afford to buy a McDonald's is the easy answer, the complicated answer is that slowly all value is being eroded from Argentina and it is not likely to recover from that. The effect is that the people, you know, those that Syriza claims to represent in Greece, are on a massive poverty-upswing since 2000. And we are talking real poverty, not 'oh my god I can't buy me fags' poverty.

 

Of course, Argentina is cooking the books to make it all look better and the Greeks are good at doing that. But let's be clear - Greece is headed for a disaster.

 

Argentina wasn't in a single market of 505m people.

 

The massive poverty upswing has mainly happened since 2008, under pro-bailout Greek governments

[The Joker 10]

People are so confused about this that it is silly.

 

<snip>

 

But let's be clear - Greece is headed for a disaster.

 

many thanks for this post, and to all the contributors to this topic, it's been an interesting and enlightening read.

 

But it doesn't alter my support for Syriza one bit.

 

I still admire their anti-austerity platform. And if the Greek economy does collapse, I'm hoping it will bring the germanese economy down too

[I1L2T3 10]

many thanks for this post, and to all the contributors to this topic, it's been an interesting and enlightening read.

 

But it doesn't alter my support for Syriza one bit.

 

I still admire their anti-austerity platform. And if the Greek economy does collapse, I'm hoping it will bring the germanese economy down too

 

Let's not forget the vast majority of the 'Greek' bailout funds have been used to prop up Eurozone core private banks that were over-exposed to Greek debt pre-2008. Few of the bailout funds actually found their way into the Greek economy.

 

We've had some of our bad times (sadly more to come) because much of our banks' exposure was in sub-prime mortgage markets that unwound outside the Eurozone core. The French and German banks have been heavily insulated and they have yet to experience a true unwinding of their bad positions in Eurozone land. The Greeks like I said hold the trump card in that respect - they can unleash contagion.

[Happ Hazzard 10]

I hope Greece does leave the EU, it will be the spark that lights the fire that brings the whole stinking etifice crashing down. We will all be better for its demise (except maybe the Germans but who cares about them?).

[L00b 441]

Argentina wasn't in a single market of 505m people.

Neither has Greece been, in proper 'prudential' terms. And neither may they be, shortly.

The massive poverty upswing has mainly happened since 2008, under pro-bailout Greek governments

Correct.

 

Same approach as most people with 'heavy' finance have taken since that time, whether individuals or nation states: stop splurging on non-essentials, budget rationally, pay down the loans, get saving.

 

Most who were in just as serious doldrums as Athens (and with arguably worse structural deficit issues) are now getting on their feet, with the Irish as the posterboy of well-run, population-friendly austerity policies that have paid off.

 

Those who have fudged and dodged...well.

 

Spain, Iceland, Puerto Rico, Greece, Argentina, Venezuela...it's not as if there aren't a lot of precedents spanning decades that clearly show what always happens when a country runs out of other people's money good and proper.

 

The EU and ECB can and will prop Continental banks over-extended about Greece, whatever the EU rules say about that. Don't kid yourself, Tsipras has been out out of aces a long while.

 

Clocked his and Varoufakis'tweets tonight, including the (proven to be a lie-) denial about Juncker's late deal offer tonight and (empty, desperate-sounding-) threats of legal action against a Grexit? Solid comedy gold stuff...if it wasn't so tragic for the Greek people.

Edited June 29, 2015 by L00b

[I1L2T3 10]

I hope Greece does leave the EU, it will be the spark that lights the fire that brings the whole stinking etifice crashing down. We will all be better for its demise (except maybe the Germans but who cares about them?).

 

They won't leave the EU but one of the interesting things that is pertinent to us is the referendum angle. EU technocrats like subservient governments and really doesn't like it when governments actually ask people what they want. They'll be bricking it over the UK's referendum. It's a pretty good strategy for forcing the technocrats into understanding the EU has to mean different things to different countries and not just what the Germans and French want.

 

---------- Post added 30-06-2015 at 00:00 ----------

 

Neither is Greece.

Correct.

 

Same approach as most people with 'heavy' finance have taken since that time, whether individuals or nation states: stop splurging on non-essentials, budget rationally, pay down the loans, get saving.

 

Most who were in just as serious doldrums as Athens (and with arguably worse structural deficit issues) are now getting on their feet, with the Irish as the posterboy of well-run, population-friendly austerity policies.

 

Those who have fudged and dodged...well.

 

Spain, Iceland, Puerto Rico, Greece, Argentina, Venezuela...it's not as if there aren't a lot of precedents spanning decades that clearly show what always happens when a country runs out of other people's money good and proper.

 

The EU and ECB can and will prop Continental banks over-extended about Greece, whatever the EU rules say about that. Don't kid yourself, Tsipras has been out out of aces a long while. Clocked his and Varoufakis'tweets tonight, icluding the denial about Juncker's late deal offer tonight and threats of legal action against a Grexit? Solud comedy gold stuff, if it wasn't so tragic for the Greek people.

 

Last time I checked Greece is in the EU. The EU-28 has a population of 500m+. The EU is a single market. Therefore Greece is in a single market of 500m+ people. Prove that wrong if you can. You won't be able to.

 

Greece isn't planning to leave the EU. To force exit the other 27 countries have to agree. None of them want Greece to exit. By hook or by crook the other 27 will be heavily involved in getting Greece back on its feet after a Grexit.

 

The EU and ECB can only prop up the core's private bank against Greek losses with a series of massive QE exercises along with holding interest rates on the floor indefinitely, the consequences of which will be dramatic further down the line.

 

Greece holds a stronger hand than you think

[L00b 441]

Just spent 15 b@#%$* minutes prepping a reply and this b@#%$* iPad lost the work-in-progress while I checked another tab for a source...so you'll have to wait til morning

[geared 318]

Greece holds a stronger hand than you think

 

The heads of the larger EU economies have been preparing their 'Grexit' game for quite a while now.

 

They have been dealing directly with the new Greek government ever since they came to power, and they will have seen the writing on the wall for some time.

 

You'll probably be quite surprised how quickly their Plan B swings into action to prevent a massive fallout.

 

Germany/France especially are very unhappy with the Greeks, Germany is pretty much pushing to get rid of them.

There's no chance they will let themselves go down with Greece.