Greece says enough, finally.

The ink isn't dry on the deal pledging them to a decade more of austerity (in the best case) and the Greeks want out.



http://www.bbc.co.uk/news/world-europe-15526719

Not a chance in hell that a referendum will pass.

Markets falling again too.

And the Irish government meanwhile are happy with being patted on the head like children for their "success" in turning the country into a giant debt-servicing agency. Tomorrow our government repays a €700 million bond to an unsecured, ungauranteed investor in Anglo Irish Bank. Assholes.

The response is easy.

Kick Greece out of the EU, demand repayment immediately for all money, upon refusal of payment: [-]send in the military[/-] write a strongly worded letter.

The money is owed to private banks. They get paid interest for their risk. They're supposed to take a loss of they make a bad investment.

Kicking Greece out of the EU would decimate the euro at the same time as it made Greece's life a hell of a lot easier. Greece would convert all euro-denominated debts to new drachmas and let all the external debt holders feel the burden of rapidly devalued Greek currency, and it would do so without having to make the politically difficult decision to drop the euro. Greece can only hope to be kicked out of the EU. It would be a free chance for Greece to avoid crippling austerity.

The Greeks were quite content with the arrangement that someone else pay the bills while they were swilling ouzo, dancing, smashing plates, and shouting "Opa!" Now it's time to pay up and their reaction "We thought it was a gift!" Let them default let them pay their own bills for a change. Maybe they'll learn something.

Send in the Euroteam!!!!!

Given this will effectively be a referendum on Greek membership of the EU, I wouldn't go all-in on a vote against austerity.

Chances are it will be 'no', but the Greeks like being in the EU, and they can't have it all ways. And even if they do vote against austerity, they're going to get it anyway - Greece has been borrowing so heavily because it cannot pay it's own internal bills on its own.

A Greece cast outside the EU and a leper on the bond markets will face bigger cuts than what was on the table, they'll have to live off their own tax receipts which means no more well paid state employees, no more nice pensions and a scramble to tackle the endemic tax evasion.

Hopefully this'll indicate to the EU that it's time to stage an exit for Greece, one done in stages and with support so the shock of it's exit won't destroy the EU or Greece. It's time the Eurocrats stopped playing little emperors, and dealt with the reality.

Placing officers loyal to the current regime into power, breaking up a perceived or actual coup plot, or placing officers loyal to Greek democracy in place? Greece knows drama.



Top brass replaced

If it was so easy, why doesn't Greece simply withdraw from the EU?

What's hilarious is I make a joke and the idiots think it is for real.

Why even use smilies if no one is going to pay attention to them?

You can blame our dear friend Rick for that one.

There's nothing about your statement that even slightly deviates from the expected heartfelt righyforge response to the situation.

In other words, you're a fucking liar when you say you were joking.

Who said it was easy?

http://euobserver.com/13/114140

Papendreou has had to sack his entire military command, amid mounting fears of a military coup. Why is this not more prominent in the media?

That sounds eerily familiar.

Has a Papendreou ever been replaced by anything other than a coup or a Karamalis? Probably just taking out half the competition before the elections caused by the likely fall of his government.

LOL at the spectacle over the last couple of days. Papendreou summoned for talks with Merkel and Sarkozy, who in no uncertain terms threaten him that he cannot submit the bailout to a democratic vote. He promptly does a u-turn. But the masks are off and the niceties are abandoned. The European Commission is not in charge. Things are being run directly from the centre, with France and Germany giving the orders.

Meanwhile, Italian bonds keep climbing and are now over 6 percent. When that happened for Greece, Ireland and Portugal, they soon accelerated to 7 and 8 percent, at which point they were excluded from borrowing on the markets.
And since the entire bailout program to date has been about keeping Italy from getting into trouble, it's all on the brink of failure.

Which from my point of view just underlines the utter stupidity of the Irish government honouring unsecured bank debt that was no part of any bailout deal, because of the percieved risk of the ECB pulling funding from our banks in response. As if they'd do that given how fucked up everything already is.

If the common currency is at stake, no country gets a free hand in doing whatever they'd like. It's true that there has been a strong shift of power recently.

Europe needs a fiscal and political union to save the common currency in the long term. All countries should become aware of the fact that Europe can only succeed when individual countries give up some of their sovereignty in favor of a common policy. Germany's pressure on other countries to change their constitutions to limit government spending gives a clear hint on what the future Europe will look like: a lot like Germany.

One thing a lot of people forget is that these countries on the euro-periphery, not having any ability to control their own currency, need to see significant internal wage deflation to restore their competitiveness as exporters and to reduce their unemployment levels to something closer to Germany's.

Six, seven, and eight percent nominal interest rates aren't a big deal when you have 4% inflation taking a bite out of your debt repayments, but in countries that require significant deflation to stick with the euro they represent crippling real interest rates of perhaps 10%-15%. The nominal interest rate gap between these countries and Germany is scary, but the real interest rate gap, with Germany experiencing very mild inflation and demanding severe deflation in the periphery, is preposterous and makes clear that current policy simply can't hold.

Why not let Greece leave the EU and let Turkey in?

Oh they'll learn something, but I don't think it'll be what you want them to. Look at countries that have defaulted on their debt in the last couple decades. Argentina defaulted on its debt in 2002, within six years their GDP was back to pre-default levels. Or how about Russia, which defaulted on its debt in 1998 and now has a GDP nearly six times higher than 1998 levels (mind you that is heavily influenced by natural resources).

If I was Greece, I'd call the EU's bluff. The default of Greece would cause a significant amount of damage to the eurozone.

Default wouldn't hurt Greece at all. It would hurt current Greek creditors. It would end up lowering real Greek borrowing costs because by eliminating service on old debts there would be more resources available to service new debts and less likelihood of a forced default on those new debts.

Contrary to popular misconception, finance and economics aren't morality plays at heart. People aren't going to refuse to lend to Greece based on past actions or demand more interest because Greece was naughty in the past; they'll refuse to lend to Greece or charge more interest if default in the near future looks more likely.

What's puzzling is how little incentive Germany and the rest of the center seems to want to give these countries to stay with the euro. If they don't give Greece a path to default without crippling austerity that also allows Greece to stay with the euro, Greece will eventually up and leave so as to have the option of putting it's house in order after a default, and once that happens the other dominoes will fall and the euro will die. When that happens it's the center that will feel the pain.

Yeah, they tried that last century and it didn't work out too well for them. Germany is now doing with their money what they couldn't finish with their bombs.

I have never seen the real point in the common currency. I mean with computers and all, the exchange rates can be figured in the blink of an eye and people buy with credit cards now so its not a big deal. From what I understand there is still big differences in taxation between countries so businesses still have to figure out the actual cost from country to country when purchasing.

Greece is in such a mess because it's tax receipts couldn't cover it's internal spending before debt repayment. Defaulting won't fix that.

If they default, they're looking at deeper cuts than what the EU wants, and pretty much overnight.

This is why some of us have been banging on about an orderly exit, cushion the fall a lot in order to reduce contagion and the chances of a military coup, and hence Cyprus becoming a warzone again.

Make them hock the Parthenon as collateral.

Leaving the euro, however, will. The fundamental problem here is that German monetary policy involves the rape and pillage of the european periphery. Returning control of Greek monetary policy from Germany, where it effectively lies right now, to Greece will solve several problems, including that one.

Greece doesn't default without leaving the euro, although Greece can leave the euro without defaulting. From the Greek point of view, leaving the euro, whether forced out by default or voluntarily and involving the redenomination of debt, is preferable to anything Germany is offering right now, and it will happen eventually unless a much better offer is made.

Not if Greece leaves the euro, which would be inevitable after a default. Better to leave the euro voluntarily and redenominate debt, but default followed by leaving the euro is still better for Greece than anything Germany's offering.

If Germany doesn't want the euro to break up they're going to have to accede to monetary policy that allows for inflation in Germany sufficient so that deflation doesn't end up crippling the periphery, and Germany hasn't shown any signs of budging on its inflationphobia.

Germany is unwilling to plan an orderly breakup of the euro and also unwilling to engage in the monetary policy needed to make the euro sustainable. Unless Germany grows up and faces the music you're going to see a lot of defaults and a disorderly breakup.

No, it won't solve the issue. The Greek government does not receive enough tax receipts to cover it's current level of internal spending. Euro. Drachma. Melon pips. Matters not, they have commitments in wages, pensions and bills to Greek businesses they cannot currently afford.

Leaving the Euro will give Greece an opportunity to rebuild, however they will still need to radically alter their costs to meet the amount they can generate from tax, and then tackle the endemic tax evasion.

They'll also see a rapid rise in inflation - Greece imports more than it exports, using EU loans to mitigate the imbalance, and it's primary market, agriculture, would have to change as it takes in a lot from the CAP. As a default is likely to tank the New Drachma, that's going to be a whole lot of inflation to import.

I really don't think you understand just how entrenched the Greek economy has become with the EU, which is precisely why an overwhelming number of Greeks wish to remain in it despite the increase in costs they have seen. Like most of the Club Med economies, Greece has used Euro membership to obtain massive inwards inwards investment, and without that would see the quality of life inside tumble.

Whilst German intransigence has it's part to play in all this, the Greeks have hardly been innocent little lambs led to the slaughter. Innocent don't hire Goldman Sachs with the remit to engage in a little bout of book-cooking.

Greece unlike your examples does not have mountains of natural resources to sell.

Not only kick Greeks out of the EU, why don't WE stop trying to bail out that socialististic group of America wanna-be's. How much money are we going to give to them this time? And what the hell do we get from them anyway? And where the hell are we going to get it from? Quit tring to save the damn world and concentrate on letting business fix OUR economy. And for the love of Mike, DON'T let the damn government FIX it. That's the cause of the EU's and OUR problems. Let business run with it and things will work out. And let the OCCUTARDS in NYC die of cold and starvation. They've PROVED they're worth haven't they?