Road to a Grecian turn?
Feb 10th 2017, 8:05 am
#1156
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Re: Road to a Grecian turn?
Due to the amount of debt held in Greek banks and the amount by which that debt was cut, combined with the fact that those banks immediately had to be recapitalised to the same amount, plus the fact that there was other debt held by Greek public institutions which was involved in that haircut, the real reduction to the Greek state was apparently around half that.
Is any economy self-sustaining? We're all so intermingled these days, aren't we? But the answer to your question is no and in fact Greece has balanced its budget and produced a primary surplus of 2% in 2016, against forecasts of 0.5% and doubling the 2015 surplus.
Feb 10th 2017, 8:20 am
#1157
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Re: Road to a Grecian turn?
I think it may well be impossible for any country to ever leave the Euro. France will likely be looking at this if Le Pen gets in but I really do not see how it could be achieved.
unlikely to happen anytime soon and maybe impossible whilst it is trapped in the Euro
Feb 10th 2017, 8:32 am
#1158
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Re: Road to a Grecian turn?
If Greece is forced out of the Euro and not remained a member of the EU, this could resulted in such a large economic shock that could kill off the Greek economy for the medium term. In my humble view, the best result for the Greeks is for them to exit the Euro zone but remain a member of the EU. Start their own currency and default on all the current debts it has. However, I don't think the Germans will buy this idea.
I also read somewhere that the idea Schäuble floated of Greece taking a break from the euro wasn't at all as generous as it might sound on the surface
Feb 10th 2017, 8:34 am
#1159
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Re: Road to a Grecian turn?
And at least part of the conditions imposed as a result of accepting the loans make it less possible to repay those loans.
Last edited by Red Eric; Feb 10th 2017 at 8:42 am.
Feb 10th 2017, 9:24 am
#1160
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Re: Road to a Grecian turn?
I cannot see how the Greek economy can recover in the short term.
In theory, in the Greek case, being a member of the single market and single currency, the only way out of an economic downturn is by internal depreciation in capital and labour cost. By doing this 'should' resulted in the following -
1) The cost of production in Greece is a lot lower than the other countries in the currency block, so businesses will start to move to Greece to take advantage of the cheap labour and capital there.
2) Greek workers will use their freedom of movement rights in the single market to move to other Euro zone / EU country with high wages.
However, point (1) never happened. The Euro group, by forcing the Greeks to reform its economy and regulations, hopes businesses will start to move to Greece so that its economy can grown and reduce unemployment at the same time.
If Greece is forced out of the Euro and not remained a member of the EU, this could resulted in such a large economic shock that could kill off the Greek economy for the medium term. In my humble view, the best result for the Greeks is for them to exit the Euro zone but remain a member of the EU. Start their own currency and default on all the current debts it has. However, I don't think the Germans will buy this idea.
In theory, in the Greek case, being a member of the single market and single currency, the only way out of an economic downturn is by internal depreciation in capital and labour cost. By doing this 'should' resulted in the following -
1) The cost of production in Greece is a lot lower than the other countries in the currency block, so businesses will start to move to Greece to take advantage of the cheap labour and capital there.
2) Greek workers will use their freedom of movement rights in the single market to move to other Euro zone / EU country with high wages.
However, point (1) never happened. The Euro group, by forcing the Greeks to reform its economy and regulations, hopes businesses will start to move to Greece so that its economy can grown and reduce unemployment at the same time.
If Greece is forced out of the Euro and not remained a member of the EU, this could resulted in such a large economic shock that could kill off the Greek economy for the medium term. In my humble view, the best result for the Greeks is for them to exit the Euro zone but remain a member of the EU. Start their own currency and default on all the current debts it has. However, I don't think the Germans will buy this idea.
But whoever said the EU was rational?
The ECB made it very plain to Italy two weeks ago that Lex Monetaewould prevail. Italy can just about afford to escape. Greece are condemned to eternal servitude. Given the ECB's attitude their ONLY way out is to leave both. At present.
Of course of Merkel loses or is seriously weakened, the ECB might become more accommodating. But that might depend on whether you think that would indicate a dilution of Germany's hostility to a transfer union. Personally i do not.
Feb 10th 2017, 10:14 am
#1161
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Re: Road to a Grecian turn?
Having agreed with you on that, I regretfully note that your incorrect assertion that the Greek government had already done everything asked of them and hence talks on debt forgiveness should start remains uncorrected.
My view is that any solution will need to be complex and multi-faceted and the narrow perspective that debt relief by itself will resolve anything needs to be challenged as it is patently ridiculous.
Feb 10th 2017, 10:15 am
#1162
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Re: Road to a Grecian turn?
Time will tell - I for one don't know one way or the other.
Last edited by Garbatellamike; Feb 10th 2017 at 10:23 am. Reason: typo
Feb 10th 2017, 10:17 am
#1163
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Re: Road to a Grecian turn?
Feb 10th 2017, 10:22 am
#1164
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Re: Road to a Grecian turn?
Feb 10th 2017, 10:35 am
#1165
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Re: Road to a Grecian turn?
Having agreed with you on that, I regretfully note that your incorrect assertion that the Greek government had already done everything asked of them and hence talks on debt forgiveness should start remains uncorrected.
My view is that any solution will need to be complex and multi-faceted and the narrow perspective that debt relief by itself will resolve anything needs to be challenged as it is patently ridiculous.
My view is that any solution will need to be complex and multi-faceted and the narrow perspective that debt relief by itself will resolve anything needs to be challenged as it is patently ridiculous.
I said they had done what was agreed in order for the debt relief talks to be initiated. They have been through this before, though - they were supposed to be started once Greece had produced a primary surplus, which in fact happened under a previous government and a previous bailout. They weren't forthcoming then, either. There's always something that can be produced to make it look as though it's foot-dragging on Greece's part which is delaying the process, though.Nor, incidentally, have I metioned "debt forgiveness" as far as I can remember. Debt relief / restructuring, yes but I'm pretty sure any sort of reduction in the sum owed has been ruled out. Not that I'd be averse to it happening - I just think it's been firmly enough stated that it won't to accept that, at least for the time being.
Feb 10th 2017, 10:37 am
#1166
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Re: Road to a Grecian turn?
And from what I read it wouldn't involve Greece even being in control of the currency - but I haven't got a handy link to anything official on that.
Feb 10th 2017, 10:51 am
#1167
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Re: Road to a Grecian turn?
http://albertobagnai.it/wp-content/u...ootle_2012.pdf
The big problem is that there is no way you could even start work on an exit from the Euro without it becoming known. I think at the point the economy implodes. And remember also that the EU bill on exiting the EU (which would have to part and parcel of a Euro exit) would remain denominated in Euros.
Feb 10th 2017, 10:56 am
#1168
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Re: Road to a Grecian turn?
Re: your first paragraph - that is because I never said that, so there's nothing to correct I said they had done what was agreed in order for the debt relief talks to be initiated. They have been through this before, though - they were supposed to be started once Greece had produced a primary surplus, which in fact happened under a previous government and a previous bailout. They weren't forthcoming then, either. There's always something that can be produced to make it look as though it's foot-dragging on Greece's part which is delaying the process, though.
Nor, incidentally, have I metioned "debt forgiveness" as far as I can remember. Debt relief / restructuring, yes but I'm pretty sure any sort of reduction in the sum owed has been ruled out. Not that I'd be averse to it happening - I just think it's been firmly enough stated that it won't to accept that, at least for the time being.
I said they had done what was agreed in order for the debt relief talks to be initiated. They have been through this before, though - they were supposed to be started once Greece had produced a primary surplus, which in fact happened under a previous government and a previous bailout. They weren't forthcoming then, either. There's always something that can be produced to make it look as though it's foot-dragging on Greece's part which is delaying the process, though.Nor, incidentally, have I metioned "debt forgiveness" as far as I can remember. Debt relief / restructuring, yes but I'm pretty sure any sort of reduction in the sum owed has been ruled out. Not that I'd be averse to it happening - I just think it's been firmly enough stated that it won't to accept that, at least for the time being.
Of course YOU didn't mention debt forgiveness - I DID!!!! Several times!!!! - do keep up ffs.
Feb 10th 2017, 10:57 am
#1169
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Re: Road to a Grecian turn?
I'm not sure that what Bootle worked on had much to do with what Schäuble allegedly had in mind for Greece.