the greek PM believes he will have a `mandate` from his people
well - the rest of the EU and ECB also have a mandate from `its` people - and they will let a failed state fall.
wont be long before food riots are in the streets
the greek PM believes he will have a `mandate` from his people
well - the rest of the EU and ECB also have a mandate from `its` people - and they will let a failed state fall.
wont be long before food riots are in the streets
The problem with a PM believing he has a mandate is that when it goes wrong, he resigns and the country is still eyebrow deep in the proverbial.
I know they didn't want the migrants to go there but this is a tad extreme!
Capitalization is the difference between helping your Uncle Jack
off a horse and helping your uncle jack off a horse.
Interesting to see what happens here. I'm convinced the Euro project will never be allowed to fail no matter what. They'll sew it together like Frankenstein's monster if they have to.
I really don't see Greece exiting. If they do it'll be interesting to see how the powers that be spin it.
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Greece still have everything to lose.
If the creditors believe they are going to lose money regardless, they might just delay long enough for Greece to become desperate enough to take any deal.
A complete misunderstanding of the situation. It is in no ones interests, least of all the other Eurozone members, to allow Greece to fail. Quite apart from the ludicrous initial decision of allowing Greece into the Eurozone in the first place, which doesn't cover anyone, least of all the ECB in glory, as Greece owes a substantial amount to other Eurozone members, rhetoric along the lines of 'allowing a failed state to fail' is just that, rhetoric. Already we saw last night a more conciliatory tone from Germany and the Greek Finance Minister resigning, seen a nod to Germany, and I expect a deal broadly in line with what was already offered, plus a few concessions towards Greece to be agreed. Although……
The big question is how far the Greek Government, buoyed by the referendum, will push for a debt write down. That is really the problem for the Eurozone, because if there was a plan for a potential deal along those lines, the Governments of Ireland, Portugal, Spain etc who didn't get one yet implemented austerity plans will a) campaign strongly against it and b) be under enormous pressure at home because they didn't get one. On the other hand, I think it's clearly evident that Greece's debt is unsustainable and, even with the proposed reforms, will always be unsustainable. Which all goes back to the initial decision to allow them in in the first place – the Eurozone cannot make decisions such as that, knowing that the books given to support Greece's entry were cooked, and then wash their hands of any responsibility when the inevitable crap hits the fan. It was well known that the Greek economy was based on cash transactions, where tax evasion was not so much a crime as opposed to a culture. The notion that this would change, as if by magic, when they joined the Eurozone was a fallacy, based on the furthering of a 'project' rather than being based on sound economics.
As such, although I think a deal will be done, if Greece were to leave it will be, for my money, as a result of internal pressure from within Greece, rather than Greece being booted out per se. Interestingly, I put a bet on Greece leaving the Eurozone at 11/1 only last week, and those odds have now gone in to 5/4, although they are still odds on to remain.
Let's not forget that "debt write down" is just a cosy euphemism for 'give them the money', ie it will never be recovered. The question then becomes whether the ECB and/or the IMF are going to throw more good money after bad in the hope that the Greek economy will reform - which on past record, is unlikely. If one of those institutions does lend money, it will only only be a matter of time before the same thing happens again.
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Greece have an under the table deal going down with russia, this is the next step in russia euro invasion.
Indeed, but I presume that the current Greek Government will say that any proper reform of the economy led by them will only take place if there is a write down. It is a bit of a catch 22, but there seems very little point, for the creditors or the debtors, in kicking the can down the road if the debt is truly unsustainable.
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There's only two real options right?:
Option 1 - (Comes in two flavours) - Bail out in order to keep them in the process. Either loan them more money and keep the process going as it is or write-off the debt completely. Either way you have to resign yourself to maintaining a problematic family member in order to keep the family together. This will likely involved the hope of eventual 'rehab' either by a direct 'intervention' of some sort or else more gradual change over time.
Option 2 - Cut Greece loose. This will require a few economic and political sums; is it better financially and politically, in the long run.
Anyone else have a third option?
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We will end up with another bail out, resulting in resentment from the people of those nations having to pay up, and also from the nations who have had similar problems like ireland but have actually dug deep and been responsible. And no doubt we will be back in this position again in the not too distant future.
That is typically the EU way. But this time, I'm not so sure.
First, Tsipras has few friends at the eurogroup top table, not least due to his rhetoric. Second, Greece is going to cost either the eurogroup or the wider EU a fortune either with a writedown or further loans. But unlike a few years back, Germany and others consider adequate firewalls to be in place to reduce catastrophe to merely expensive mess. They may or may not be right. Third, will extending further loans improve the Greek situation long-term, or merely leave EU leaders back here again in a few months, having lent Greece billions more, and STILL not seen the reforms they consider essential for recovery?
I have a feeling that, this time, all told, Merkel may have concluded that the first rule of getting out of holes is to stop digging.
Either way, the world will probably know in a matter of days, or even hours, when we find out what happens when, and indeed IF the Greek banks re-open, which will depend critically on whether the ECB turns the emergency liquidity assistance tap back on or not.
I've fixed that for you now. The notion that the Eurozone bears no responsibility for what has happened, and is only down to Greece being irresponsible is fantasy. If that were the case, you wouldn't have the problems that have existed in Italy, Spain, Portugal, Ireland etc. The real problem is with the Eurozone project itself. It is flawed.
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