Congratulations to the Greek left! The movement against austerity....

OP

Original post by Rakas21

The EFSF can get 750bn..

Ha. True.

Greece is a tiny economy, it only owes about 300bn total..

Oh, you're counting in the IMF money, I see.

Is that all of it though, I thought there was a big banking loan issue as well?

Reply 142

OP

It's fun seeing it in terms of lorry loads of money.
http://demonocracy.info/infographics/eu/debt_greek/debt_greek.html

Greece certainly borrowed a lot for a small country. :teehee:

Reply 143

Original post by Fullofsurprises

Oh, you're counting in the IMF money, I see.

Is that all of it though, I thought there was a big banking loan issue as well?

Yeah, the ECB is doing some kind of QE but that goes to the banking system rather than the government. In theory a new central bank can immediately replace that liquidity or the banks can go to the market and just pay more than now.

Reply 144

OP

Original post by Rakas21

Yeah, the ECB is doing some kind of QE but that goes to the banking system rather than the government. In theory a new central bank can immediately replace that liquidity or the banks can go to the market and just pay more than now.

I suppose the real question as always is to what extent there would be contagion from an exit or a default, rather than the crisis of handling the side effects of just the Greek debt.

Still, it's a pretty big pill nonetheless and presumably would in some way create a further drag factor on the Eurozone economy, even if that was just down to restrictions in bank lending or further deflationary effects.

Reply 145

Original post by Fullofsurprises

I suppose the real question as always is to what extent there would be contagion from an exit or a default, rather than the crisis of handling the side effects of just the Greek debt.

Still, it's a pretty big pill nonetheless and presumably would in some way create a further drag factor on the Eurozone economy, even if that was just down to restrictions in bank lending or further deflationary effects.

The threat of contagion is simply the default causing a domino effect or another banking freeze but if we assume an orderly exit then i don't fear that. The real question is how severe the effect in Greece is because it's currently running a primary surplus. If the effect on growth were minimal then theoretically they could keep spending steady and just default on the debt interest, if we see a Russia situation with capital flooding out of the country then there's probably recession and more austerity/a bigger default is likely.

Sure. A bit more volatility will probably hurt business investment. Not sure why there'd be banking restrictions unless the EU were really arsey about it. True, more deflation.

Reply 146

OP

Original post by Rakas21

The threat of contagion is simply the default causing a domino effect or another banking freeze but if we assume an orderly exit then i don't fear that. The real question is how severe the effect in Greece is because it's currently running a primary surplus. If the effect on growth were minimal then theoretically they could keep spending steady and just default on the debt interest, if we see a Russia situation with capital flooding out of the country then there's probably recession and more austerity/a bigger default is likely.

Sure. A bit more volatility will probably hurt business investment. Not sure why there'd be banking restrictions unless the EU were really arsey about it. True, more deflation.

All true.

Isn't capital already fleeing? I read about large movements out of Greek banks over the last few days.

Reply 147

Original post by Fullofsurprises

All true.

Isn't capital already fleeing? I read about large movements out of Greek banks over the last few days.

Capital's been fleeing for years but yeah, they'd probably impose capital controls.

Reply 148

Looks like Germany has won. Greece is already back pedling and has had a request rejected but will no doubt move backward some more.

Reply 149

Midlander

19

Original post by Rakas21

Looks like Germany has won. Greece is already back pedling and has had a request rejected but will no doubt move backward some more.

Operation Skip the Bill unsuccessful?

Posted from TSR Mobile

Reply 150

Original post by Midlander

Operation Skip the Bill unsuccessful?

Posted from TSR Mobile

This is operation 'kick the can for 6 months', it's during that time that they'll have to negotiate or decide to finally leave.

Reply 151

#Ridwan

11

Syriza have blinked. Expect internal revolt.

KKE and Golden Dawn rubbing their hands with glee.

Reply 152

MatureStudent36

5

Original post by #Ridwan

Syriza have blinked. Expect internal revolt.

KKE and Golden Dawn rubbing their hands with glee.

Was it ever going to be any other way?

Reply 153

#Ridwan

11

Original post by MatureStudent36

Was it ever going to be any other way?

I think the Syriza of two years ago wouldn't have blinked, but they've moderated their views since then.

Like I said this is great news for KKE who have been predicting this all along and have been painting Syriza as traitors for ages now.

Some Syriza voters won't want to vote for a communist party and will thus turn to Golden Dawn who will also be happy about today's events.

Will be interesting to see what happens when this goes to a vote in the Greek parliament. ANEL will vote against and there will be a large rebellion among Syriza I'm sure.

Reply 154

OP

Original post by #Ridwan

I think the Syriza of two years ago wouldn't have blinked, but they've moderated their views since then.

Like I said this is great news for KKE who have been predicting this all along and have been painting Syriza as traitors for ages now.

Some Syriza voters won't want to vote for a communist party and will thus turn to Golden Dawn who will also be happy about today's events.

Will be interesting to see what happens when this goes to a vote in the Greek parliament. ANEL will vote against and there will be a large rebellion among Syriza I'm sure.

If Syriza are going to come back from the talks and try to re-impose austerity, there is going to be an incredible amount of discontent in Greece. The barriers are going to go back up!

I am very sceptical that Tsipras can get this through. I think things are going to get chaotic.

Reply 155

OP

Original post by Rakas21

This is operation 'kick the can for 6 months', it's during that time that they'll have to negotiate or decide to finally leave.

Yes, even assuming that the huge amount of trouble that now awaits Syriza on their return can be faced down, all that will really have been achieved is to move the can from being completely stuck in the brown stuff to a marginally less muddy place, with every chance that it will quickly return back to where it came from a few months earlier!

There is no prospect of a proper, managed default and devaluation and I think that the realities are still grim and Greece needs to get out. I wonder how long it will take the Greek people to realise this.

Reply 156

Observatory

The Eurozone has not forced Greece to reduce its government spending. If Greece had not been bailed out by the Eurozone, with subsidised loans at below the market rate of interest, Greece would have found further debt unaffordable and been forced to stop borrowing entirely. Greece would then have had to cut its spending even further, to eliminate the entire deficit. The Eurozone has enabled Greek deficit spending to be much higher than it would have been otherwise.

Since the Eurozone is not prepared to give Greece $x00 billion simply for free, they have insisted that Greece make free market reforms in order to improve their economic performance in the future, and ensure they will be able to repay the debt at least at the subsidised interest rate. This is what Syriza objects to, not the debt, because they are left wing extremists and want to make the Greek economy even less efficient and competitive.

The disagreement with the Eurozone enters because Greece will be unable to repay their subsidised loans without those reforms. In effect Syriza has inherited a massive gift from the Eurozone and is now complaining that it wasn't big enough, the wrapping paper wasn't colourful enough, and the bow wasn't cute enough. This is completely unreasonable both pragmatically and morally.

There is one, and only one, genuine complaint that Greece can make about the Eurozone. The deflationary monetary policy of the Euro, which seems to have been set for the benefit of Germany, is responsible for probably about two-thirds of Greece's 25% unemployment. However, the one thing Syriza is willing to concede is that it wants to stay in the Euro!

(edited 9 years ago)

Reply 157

Observatory