As Roger's recent post has suffered from thread drift, here's what might be (a) a sobering thought or (b) more of the same:
"Greece will be unable to find the €1.6bn (£1.1bn) sum it is due to hand the International Monetary Fund (IMF) next month, one of the country’s ministers has admitted." (Telegraph)
If Nikos Voutsis, Interior Minister, is correct, it will be interesting to see how much further the European Central Bank and the others involved will go to prevent Greece's departure, having already compromised considerably.
It all exposes a fundamental problem with the EU: the "hard-working" northern Europeans versus the "relaxed" southerners. A close economic union does actually depend on a shared philosophy and culture, never mind what would happen in an ever-closer political union.
Whatever the UK does, the Franco-German "European project/dream" of the United States of Europe looks like a long way off realisation, unless certain present members drop out.
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Within the UK, there are regions that are supported financially by others.
A USE (for which the Eurozone is a pilot phase) will have to work the same way. The richer members will have to get used to it.
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Germany/Finland/Holland are not going to end up with an open chequebook. Their voters will not let them..
And since Greece fails to collect taxes, a bailout is the last thing it needs.
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If the situation gets much worse in Greece I can see another military coup in the not too distant future.
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If they could wait until next weekend when we'll be safely back home that'd be great :)
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>> If they could wait until next weekend when we'll be safely back home that'd be
>> great :)
Just make sure you are in a bar when it all kicks off.
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After my post earlier in the year, we've managed two holidays to Greece this year. Three weeks in total. But we're not going to book anything else just yet.
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To be on the safe side I plan on spending most of my time in a bar anyway ;)
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I would certainly have no qualms about going. Buy a bike and ride home if necessary ! :-)
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Accept a 50% haircut on your Greek bonds, or 0% return when they pull out of the Euro.
Last edited by: Lygonos on Sun 24 May 15 at 16:31
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Why go to Greece anyway, when you can go to Turkey. Neighbs have just returned from ten days in Didim.
They had an 'ansome time out there. Spoke very highly of the locals/food etc. etc.
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Go to Turkey and get to see a real revolution in next door Syria.
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>> Go to Turkey and get to see a real revolution in next door Syria.
>>
My employer has sent me an email this weekend inviting me to the company summer meeting in October along the coast from the Syrian border.
I've asked them if flak jackets and AK47s are provided or if we have to provide our own. Considering they wanted me to pay them 400€ for them to give me an iPhone 6 for work use I think I can guess the answer.
I've also asked if I can bring my aunt Kate Adie along too (she's not really my aunt believe it or not).
Last edited by: gmac on Sun 24 May 15 at 17:37
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>> Go to Turkey and get to see a real revolution in next door Syria.
>>
........and there are moves to admit Turkey to the EU.
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>> >> Go to Turkey and get to see a real revolution in next door Syria.
>> >>
>>
>> ........and there are moves to admit Turkey to the EU.
Turkey has applied and been rejected. Is that what you meant? Doesn't quite fit with your agenda when described accurately does it.
Last edited by: Zero on Sun 24 May 15 at 21:15
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>> Why go to Greece anyway, when you can go to Turkey.
Because I want to go to Greece and think the Greek's I know are wonderful, kind people that are also hard working.
The issue with simply writing off a large percentage of the debt (again) is they need further bailouts to keep running the country.
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>> Germany/Finland/Holland are not going to end up with an open chequebook. Their voters will not
>> let them..
>>
>> And since Greece fails to collect taxes, a bailout is the last thing it needs.
>>
The UK is a net contributor to EU funding. What say WE lock away our chequebooks, too?
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>> Germany/Finland/Holland are not going to end up with an open chequebook. Their voters will not
>> let them..
For now; but eventually it will be the EU chequebook. There will eventually be a much greater disparity within the Eurozone between where the taxes are raised and where they are spent. The cross-subsidies between countries could be similar to those between UK regions.
goo.gl/SUTzBW (Table in Daily Mail)
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>> >> Germany/Finland/Holland are not going to end up with an open chequebook. Their voters will
>> not
>> >> let them..
>>
>>
>> For now; but eventually it will be the EU chequebook. There will eventually be a
>> much greater disparity within the Eurozone between where the taxes are raised and where they
>> are spent. The cross-subsidies between countries could be similar to those between UK regions.
>>
>> goo.gl/SUTzBW (Table in Daily Mail)
>>
Funny how the German and UK electorate have not had their say on this.
The Politicians do not seem interested in running parallel election either. Ireland have had to go twice to get the 'right' answer.
Imagine a May 8th 2016 across all 27 states. In or out.
The sewers would back up in Brussels and Strasbourg.
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>>
>> Funny how the German and UK electorate have not had their say on this.
>> The Politicians do not seem interested in running parallel election either. Ireland have had to
>> go twice to get the 'right' answer.
>>
>> Imagine a May 8th 2016 across all 27 states. In or out.
>>
>> The sewers would back up in Brussels and Strasbourg.
>>
I would imagine the voters in Germany would have their say at the next local and governmental elections. As will the German members of the ECB.. It would be electoral suicide so it is unlikely to happen.
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>Within the UK, there are regions that are supported financially by others.
And in other confederations as well.
The USA is the current prime example but I understood the same thing happened in the USSR.
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>>Within the UK, there are regions that are supported financially by others.
What, like Scotland?
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>> >>Within the UK, there are regions that are supported financially by others.
>>
>> What, like Scotland?
>>
>>
And Wales . And NI
And Northern England.
And Liverpool.
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London might start to wonder why there was no food in the shops if it weren't for the rest of the UK.
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>> London might start to wonder why there was no food in the shops if it
>> weren't for the rest of the UK.
>>
Exactly. Thus is why the term "wealth creators" gets up my nose so much, as if the surplus that accrues to the capitalists (to coin a phrase) morally belongs to them.
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>> London might start to wonder why there was no food in the shops if it
>> weren't for the rest of the UK.
>>
You mean there would be no food imports? :-)
tinyurl.com/kcqyapg
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>> >>Within the UK, there are regions that are supported financially by others.
>>
>> What, like Scotland?
>>
No we were thinking more like Hull.
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Didn't they used to be in The Premier League?
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>> Didn't they used to be in The Premier League?
Yes someone had to prop it all up when Fulham fell out. I guess that mob from the Stadium of Plight can do it next year.
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>> >> Didn't they used to be in The Premier League?
>
With a bit of luck Norwich will be later today.
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Is Delia still shouting drunkenly from the stands?
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>> Is Delia still shouting drunkenly from the stands?
>>
Probably still drowning her sorrows after her beloved Labour Party lost the election !
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Probably and with reason . They've just one 2-0
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Shouldn't they replace the Canary with a Yo-yo ? Up one season, down the next...
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"With a bit of luck Norwich will be later today."
Congratulations, CG!
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>> Didn't they used to be in The Premier League?
Ouuch!
They played a mean game yesterday against Man U, just couldn't finish. Pity they could not have done that all season. But they have been dogged with injuries most of the season.
Last edited by: Fullchat on Mon 25 May 15 at 23:13
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A bit patronising hard working northern countries against the south.The Greeks are to blame but also the European banks who lend the money.There is also Spain and Portugal with very high unemployement.The banks have to ease on the Greeks for he amount of money they own.
Greece won't be allowed to drop out in my opinion for what its worth.
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How do you understand this stuff though Dutchman? Damned if I do.
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>> How do you understand this stuff though Dutchman? Damned if I do.
>>
It's incomprehensible.
Before a bank will lend to an individual or a company, it asks searching questions about what the money will be used for, what additional income will be generated in order to service the loan, and will want to see a realistic business plan, cash flow, etc. Also they will probably want some security or charge on property against failure to repay.
But when a country goes to a bank, and is asked the purpose of the loan, it simply says "Because we can't afford to pay off the last loan", so the bank says fine, and hands over some more money.
And then it goes on doing this year after year until finally the bank is bankrupt too.
That's called international finance.
Last edited by: Cliff Pope on Mon 1 Jun 15 at 09:59
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>>But when a country goes to a bank, and is asked the purpose of the loan, it simply says "Because we can't afford to pay off the last loan", so the bank says fine, and hands over some more money.
And then it goes on doing this year after year until finally the bank is bankrupt too.
That's called international finance.<<
No, it's called the European Central Bank directly financing a government, in contravention of the terms of the Lisbon Treaty - but no-one seems to have noticed, or wants to.
Presumably this week's repayment to the IMF will, once again, be covered by the ECB. How long can this economics of the madhouse go on?
Last edited by: Mike Hannon on Mon 1 Jun 15 at 10:48
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>>
>> No, it's called the European Central Bank directly financing a government, in contravention of the
>> terms of the Lisbon Treaty - but no-one seems to have noticed, or wants to.
>> Presumably this week's repayment to the IMF will, once again, be covered by the ECB.
>> How long can this economics of the madhouse go on?
>>
Well the ECB wants the Greeks to do certain things the Greeks don't want to do: like collecting taxes, reducing pensions and firing some Government employees.**
The Greeks don't want to - the Greek Government was elected on the basis it would not.. **
The ECB don't want the Greeks to go bust as a few of the EC's banks would likely go too.. and the Germans/Dutch/Finns refuse to allow the ECB to write off Greek debts (which is essential in the short term if Greece is going to get its finances in order)
And if the Greeks do go bust, and leave the Euro, the EC banks will lose most of their money and the Greeks initially will be much poorer and have to collect taxes, cut pensions and Government employee numbers.. (see ** above)
I expect the Greeks to leave as there is no obvious solution that all concerned can agree on. Which is the worst of all choices in the short term.. but in the long term best for both the EC and the Greeks as it just reflects reality - which is that Greece should never have joined without reforming first..
Last edited by: madf on Mon 1 Jun 15 at 13:09
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............and if Greece leaves will it trigger other departures?
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>> ............and if Greece leaves will it trigger other departures?
>>
You mean so they can become very much poorer like the Greeks will be if they leave?
If they want to , they'll go.. In reality, you cannot stop them...
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"Greek prime minister Alexis Tsipras is facing open rebellion in his ruling Syriza party over Greece's future in the eurozone, raising the spectre of snap elections being called as early as this month.
The extreme “Left Platform†faction of Syriza, who make up a third of the party’s membership, have promised to defy creditor powers, and called for a reinstitution of the drachma, as the government enters its fifth month of arduous bail-out negotiations."
......................................................................
.
tinyurl.com/qgaezxa
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Well I am off to Crete on Friday and have no worries whether the Greeks stay in or out quite frankly as long as the weather is hot and the Mythos is cold.......
I am looking forward to meeting up with old friends there and will get an idea of the feelings of the locals.
Last edited by: helicopter on Tue 2 Jun 15 at 11:01
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If they left would it mean cheap summer hols? I've no plans for late August/ first few weeks in September. Maybe i could get cheapo bare boat charter with a few friends.
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>>If they left would it mean cheap summer hols?
Cheap holidays, but less in the way of facilities and probably less stable.
Greece has got a big hole to dig its way out of. The problem is, even if they solved their Euro, EU and current debt problems, they'd still be left with their traditional issues of significant senior corruption.
They have a long way to go, and resolving their current debt issues and agreements is only the first step.
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"They have a long way to go, and resolving their current debt issues and agreements is only the first step."
Er... yes... kind of.
"Long way to go" suggests the Greeks are able and willing to make the journey. I'm not at all sure of that.
The present Greek government was elected on the basis of putting the nasty northern EU states in their place - it was easy to conflate German intransigence with the Greeks' dreadful WW2 experiences - and I'm not sure much else is driving them.
My best guess at the moment is a Grexit soon and some kind of loose ties with the EU. A run on Greek banks - it's already started. Change and effective devaluation of the currency. Tourism would have to be kept as cheap as possible - the Greeks are desperate for this source of income. Probably the scenario for the avid Brit is to fly out with your pockets stuffed with pounds and change them once there. Actually, not stuffed - you won't need that many.
The repercussions on the wider EU will be interesting to watch, and how our Dear Leader's negotiations with Europe may be affected is another imponderable. I wouldn't bet on an easier passage for him.
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>> The repercussions on the wider EU will be interesting to watch, and how our Dear
>> Leader's negotiations with Europe may be affected is another imponderable. I wouldn't bet on an easier passage for him.
>>
Some of us can but hope!
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>>Well I am off to Crete on Friday and have no worries whether the Greeks stay in or out quite frankly as long as the weather is hot and the Mythos is cold.......
Say allo to my friends Martin & Maureen from Plymouth if you see 'em. Martin wears a hat all the time being as he is follicly challenged, and Maureen, being arf Greek and alf Egyptian, is a bit-of-a-stunner.
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Grexit gets closer... and closer...
"Greece misses IMF payment in warning shot as showdown with Europe escalates"
(Headline in the Telegraph)
Article: tinyurl.com/nbtnlkv
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>> Grexit gets closer... and closer...
>>
>> "Greece misses IMF payment in warning shot as showdown with Europe escalates"
>> (Headline in the Telegraph)
>>
>> Article: tinyurl.com/nbtnlkv
>>
House of Cards?
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www.bbc.com/news/world-europe-33020420
Greece is b*****ed.
Its merely a matter of what form that is going to take.
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BTW, I wonder what would happen if China rolled along and told Greece "I'll give you the money, no strings, other than you have to leave the Euro".
Russia would do it, but probably can't afford it.
That'd make the EU sit up and pay attention.
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>> Russia would do it, but probably can't afford it.
Russia is broke partly because the Greeks can't pay back what they have already leant them.
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Russia is not broke, but its people are.
Both Russia and Argentina have very low national debt ratios; I think Russia is about 1/15th of the UK per citizen.
In both cases this is because the countries defaulted on international loans. Thus their debt vanished in a puff of smoke. Mind you, nobody would then lend them any money, so they had to find money elsewhere, and in both cases they took it off their own citizens - investments, assets, savings, pensions etc. etc.
And then people wonder why money is flowing out of Greece so fast that there is a fast walk on the banks. Not a run yet, but it could happen.
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Some places in Euro land won't take Greek printed/minted euros!
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>> Some places in Euro land won't take Greek printed/minted euros!
>>
Such as where? What are they banknote spotters? Are people really analysing serial numbers on them. Sounds like one of those urban myths or done by a handful of tinfoil hat wearers!
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Greece's problem is unsolvable because it ceded sovereignty on its currency. All its debts are effectively denominated in somebody else's currency.
ISTR that was also part of Russia's problem. I think copped all the debt after the break up of the USSR and much of that was rolled over into Euro denominated bonds which they had to cover with rapidly devaluing roubles. It was fairly inevitable that Russia would default with half its government income need to cover interest, but the greater moral default was arguably the billions that were actually stolen from the IMF bailout loans.
Lots of trouble to unwind yet. Only question is how graceful or disruptive that will be. I have absolutely no idea what might happen. We are drifting collectively back into that curious situation that obtained before the banking crisis - lots of people thought it must be unsustainable but nobody really gave much thought to how it would end. I was with a group of people on holiday when Northern Rock started to wobble, and several were heading off home to queue up to withdraw their money - nobody could quite believe it.
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> All its debts are effectively denominated in somebody else's currency.
Exactly. You cannot revalue your own currency, because you don't have one.
The EU is right about one thing, if you're going to have a single currency then you need central control of pretty much all finances and economics.
I just think that's an argument for not having a single currency, not an argument for having central control.
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Greece is going to go completely and totally wrong. People with their money in the country are going to lose it all, or certainly see it devalued beyond all reason.
I cannot see an alternative to them resorting to their own currency, which will be worthless outside Greece. Paying with hard currencies while on holiday will become common. Refer to Turkey in the mid 80s for many things that we will see in Greece.
I simply cannot see how anything else can happen.
Two things are rather more difficult to understand;
> What impact will this have on the Euro and the EU?
> How long before Greece recovers ? (it'll be years, but it will happen).
If you've got both the balls and a sufficiently long term view, there's going to come a point not too distant where Greece will be a fantastic long term investment opportunity, assuming proper protection of course.
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The smart ones in Greece will have taken all of their Euros out of the country long ago. When the Drachma devalues they will bring in their Euros and turn it into a tidy sum of Drachma.
For a lot of people, the introduction of Drachma will have no effect on savings - they have none. But it will be terrible for the country and the citizens (of which I have many friends) whilst things get back on track.
I think it's inevitable now that they leave the Euro. Even if they get most of the debt written off, things need to change in Greece at the top.
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I'm a great fan of Judge Judy and one of her pieces of advice is never to lend money, expecting it to be returned, to anyone who is a friend or relative. You will always end up being made to look like the bad guy, making unreasonable demands, failing to "make allowances", failing to put family/friendship first. You will be blamed for even wanting your money back. You will look like the villain and the one who has not repaid their loan will feel much put upon and full of virtue.
Her advice, if approached for money and you feel obliged to help, is to say, "I've got $xxx and that's all. Take it, and never ask me for money again."
This is the Greeks' latest line: "Greece's prime minister has warned international creditors not to impose humiliating terms on his country as it seeks urgently needed bailout funds." (www.bbc.co.uk/news/world-europe-33020420)
Last edited by: Observer on Fri 5 Jun 15 at 19:45
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Apparently today's opinion poll published in Greece shows a 3-1 majority for staying in the Euro. So they just want to go on pleasing themselves at (almost) everyone else's expense. There's really no hope for them now, is there?
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>> Apparently today's opinion poll published in Greece shows a 3-1 majority for staying in the
>> Euro. So they just want to go on pleasing themselves at (almost) everyone else's expense.
>> There's really no hope for them now, is there?
As Mark has said, they are bust one way or another.
You could say they are a parable for everybody. The whole of Europe, pretty well all the western developed world in fact, is borrowing, living on promises, call it what you want.
Interesting article here - a bit flowery and overworked but he gets to the point eventually -
woodfordfunds.com/insight/pampas-precedent/
which is that the sustained impact of the China effect is deflationary; Chinese production costs now set the bar for manufacturing cost and accordingly manufacturing sector wages in the UK and elsewhere have to stay low - the jobs that have been created in recent years have mainly been low wage ones.
The seemingly increasing wealth divide in the UK is less to do with the Labour or Tory government than this "deflationary shock". If we want well paid manufacturing jobs then productivity has to be higher - through investment in factories, skills and quality which the Germans have been better than just about everybody at.
Meanwhile we are living on money that collectively we do not have. The government is spending more than it has coming in every month, subsidising jobs and taxes with additional borrowing. The profitable growth that was expected to reduce and eliminate this has consistently been lower than forecast.
I have heard a lot recently about the productivity puzzle - UK productivity is about 20% lower than the pre-crisis trend suggested it would be by now and still only around the level it was in 2007.
www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2014/qb14q201.pdf
Manufacturing was presumably less efficient for a period while firms were hanging on to labour while having lower sales, but that should have worked through by now. I haven't heard a good explanation of this but I can only assume that the numerator in the productivity function is a financial measure (i.e. GDP/sales revenue) and the denominator is person-hours (or days or years) worked. So the answer to the puzzle may be the relative increase in jobs that are low paid.
Southern Europe had this in spades. They were far less productive than UK, France, Germany anyway and had gone into the Euro at the wrong exchange rates. Unemployment in Spain is still over 20%.
There may not be a catastrophic upheaval, but the likelihood is that we will all have to get used to lower levels of prosperity either in terms of our disposable income or the levels of public services over time. The squeeze is on.
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Grexit gets closer? - Manatee
