Greece needs to quit the eurozone

ellis000

I think it is pretty obvious that all the discussions are a sham and the Euro group want Greece out. They don't want to be seen to push them over the cliff but are engineering things for the hapless Greeks to jump. I would guess that this has long been the plan but the negotiations and summits were there to give the German and French banks time to swap out their Greek bonds. Shows these liars and crooks up for what they are.

Heartless Curmudgeon

My first glance at the piccy made me think it was of a noble Lord already in Police mode.

Closer examination show how right you are James. And so brave of you to break ranks first and say what everyone with any sense, already knows.

IJ

You say austerity will make it worse - is their austerity different to the UKs??

Nickle

Perhaps the Greek banks should take advantage of the EU. Freedom of movement of capital and people.

Step one. Move your incorporation to Germany or France.

Step two. Greeks default - 100%.

Germans/French now have to bail out the banks, Greeks included.

Nickle

There's a dance of scorpions going on.

The EU knows the consequences of a 100% default. After all, with no bailout they may as well default for the lot, instead of 80%.

That default takes out the French banks and more. That has a huge cost.

So its a negotiation. How much do the French/Germans pay, to keep the Greeks from defaulting, compared to the cost of dealing with the default?

The Greeks are trying to extract as much as possible. The others trying to pay as little as possible.

Maggie

I'm not sure the Greeks deserve your sympathy. These are the people who don't pay their taxes and retire at 40 after paying themselves unsustainably high salaries and pensions. They them complain that everybody but them is to blame and that the rest of the Europe should give them large sums of money with no strings attached. They're just not very sensible.

Man in a Shed

Surely the Greek plan has to be to default *after* getting the next bailout. The German's probably now realise this and need them to default before hand.

Jon Stack

My sympathies with the Greeks here. They know that there is no way they will be able to implement the plan. Tax revenues are already collapsing and over 10% of the population emigrated in 2010. Who knows what the figure will be for subsequent years. They were missold the euro. I am sure the full default will happen at some stage after the bailout money arrives, but before it departs.

Neil

In all good capitalist society, the ideal is to keep the indebted in debt and keep taking the interest. The EU governors don't want Greece to default simply to keep them under control and in crippling debt. A decisive government in Greece would have defaulted two years ago.

Ian Walker

ellis000: The Germans don't want the Greeks out of the Euro - their crappy economy artificially depresses the currency, which in turn helps the Germans turn their strong (helped by protectionist courts) manufacturing and service sectors into strong exports.

And the French don't want them out because then they'll never see their money again.

Mathematically, the most sensible plan would be for the Germans to temporarily leave the Euro. Can't see the politics going for that though.

Chris

Devaluation is not the answer. Getting the national finances in order is the answer.

If devaluation worked, Britain would have the most successful economy in the world.

Dan Grover

I don't think that's true, Ellis - there are a lot of German and French banks with a LOT of liability in Greece. It's not Greece that's being protecting by bailing them out and forcing them to stay in the Euro, it's France and German.

Not only that, but there's the "risk" (as far as the Euro finance ministers are concerned) that it could quite easily be the beginning of a domino toppling scenario, especially if, after a few years of independence and devaluation, Greece begins to grow again - mostly likely at a much faster rate than the rest of the Eurozone.

Peewit

No shit Sherlock.

Axstane

It is necessary to realise that a country which has almost no industry and collects almost no income tax cannot afford a welfare state. Greece is totally bankrupt and will remain so. They were lured into the Eurozone by golden promises and did gain some infrastructure projects - the contracts for which mostly were awarded to countries from N. Europe. Now they discover that it was the Philosophers Stone but Fools Gold.

The end result is not a happy one for Greece which had a mild boom followed by a colossal bust.

The Oncoming Storm

The issue here is that the Eurocrats will never give up on their pet project even if it means the entire EZ is reduced to eating grass because of the austerity needed to save the Euro. Things like mass unemployment and societal collapse are irrelevant.

ellis000

I stand by my comments. It is inconceivable that Germany and France can be seen to push Greece out but the conditions they are setting make it inevitable. I would hazard a guess that the appointed PM Lucas Papademos is in on this also. I am not a pointy head conspiracy theorist but there is no question that these endless summits and the ECB's provision of free money was designed to save the German and |French banks - not the Euro or Greece. Their proportion of Greek debt will now be manageable and the risk has been spread.

daniel maris

You're probably right but "needs" is not "will".

Everyone around here just before Christmas was predicting that Greece would definitely leave the Euro. I said that was unlikely. I think people were and still are underestimating the determination of the pan-European elite to make the Euro succeed.

Herbert Thornton

Maggie (Feb 10th, 2:51pm)

1. You wrote - "I'm not sure the Greeks deserve your sympathy. These are the people who don't pay their taxes and retire at 40 after paying themselves unsustainably high salaries and pensions. They them complain that everybody but them is to blame and that the rest of the Europe should give them large sums of money with no strings attached. They're just not very sensible."

I agree entirely. But doesn't something embarrassingly similar also apply also to much of the population of Britain? - e.g. -

Herbert Thornton

2. "I'm not sure the population of British deserve much respect. A substantial segment of them are people who object both to working and to paying taxes and who live entirely unproductive, idle lives. Many of those moreover are not even genuinely British, but are religious revolutionaries and potential terrorists whom the British as a whole are too stupid to deport.

Herbert Thornton

3. The bulk of the population complain while believing that everybody but them is to blame for their grievances while at the same believing that the idlers and subversives are entitled to their extravagant handouts, both in money and housing. Even most British mainstream politicians believe that there's nothing wrong with this. They - both population and politicians - are just not very sensible."

David L

About half of the bail-out money is designed to underwrite Greece's creditors. And the austerity imposed by "Merkonomics" (cuts without either devaluation or investment) means that Greece's ability to pay is dwindling by the month.

The Germans are the paymasters, but don't trust the Greeks. The Greeks no longer trust the Germans. The only people still in favour of the EU bailout are the Greek politicians (who know where their bread is buttered, and the eurozone financial institutions (ditto).

To add to the mess, the EU has shilly-shallied for about nine months. Well, the sh*t has hit the fan. The Greeks have taken to the streets (as other countried with EU-imposed governments may do, in time).

The Greeks are damned if they default, damned if they don't. If I were Greek, I'd default, mainly because if there has to be a meltdown, I'd rather find a way through it within my own nation and history. But ina quite unworthy and malicious way, I'd quite like to take the euro bankers down with me.

Kennybhoy

Herbert Thornton on February 10th, 2012 7:02pm

Spot on.

Herbert Thornton

The EU is like a camel.

Greece is like a straw.

I hope Greece clings firmly to the camel's back.

Adam Nixon

Herbert Thornton

Your amusing parallel is faulty in many ways,. One is this: the Greeks have been spendthrift and irresponsible with other people's money. They have received immense gifts from the EU's Social Fund, Cohesion Fund, Regional Development Fund etc. for decades. The UK, by contrast, pays (net) into the funds.

Herbert Thornton

Adam Nixon (Feb 10th, 10:54pm)-

In what way is my parallel faulty? It expresses my hope that the burden of supporting Greece will lead to the collapse & disappearance of the pretentious Euro.

Fergus Pickering

Maggie, you really cannot say things like, 'The Greeks are... ' what? All the Greeks? Are they ALL lazy buggers who won't get out of bed in the morning.

For what it's worth, my clever and well-read wife who understands about finance (how lucky somebody in this house does) has been saying that stuff about a Franco-German plot to screw the Greeks for quite some time. According to her the failure of the euro is mostly the fault of the Germans who found the mark made their excellent goods too expensive, and (say) Italian goods too cheap.

Boudicca

A Greek Party with a policy of leaving the Euro might not win many votes. Several polls have returned results saying that the Greek people want to stay in the Euro - they just don't want the extreme austerity that the Francfort Group are forcing on them.

Of course Greece should leave the Euro; it should never have been allowed in the zone in the first place. But all the time the Greek people think otherwise, it will be difficult to force them out.

Any German proposing to holiday there this summer is a brave man. I'd stay well away.

Adam Nixon

Herbert Thornton:

Because the Greeks have taken billions of other people's money (in gifts, not loans) and still ended up broke. The UK pays its way, and other countries' way too.

I think we are at cross-purposes. I was replying to your triple post of 7pm approx, not your camel-related post of 9.37.

Which I also found amusing, thanks for it.

David Ossitt

Herbert Thornton on February 10th, 2012 7:02pm

Correct in every particular.

Erasmus

Rather worrying to see the spectator come out and back the position of the Greek communist party. Walking away from your debts and debauching your currency not exactly classic conservative views? As the uk has shown very well, devaluation comes at the cost of high inflation and falling living standards. Greece is growing exports far faster than the uk.

David Smart

All this talk of lazy Greeks and tax avoiding Greeks and other such stereotypes are probably true up to the extent that it is true of most societies,the difference being the percentages,affected by cultural mores,we are affected by the institution of the Welfare State,others by many decades of corrupt practices.
Certainly "cash in hand " is the accepted practice of the self employed fraternity who will sort out the needs of the middle classes fraternity (the blind eyed leading the blind eyed )
So no talk of the deserving or non deserving,we are where we are, and the unvarnished truth is that The European State will go as far as is possible to save Greece.They may well fail but not through neglect nor through lack of effort.

daniel maris

The Greek and the UK economic profile is not that different. In both industry is not far off being 20% of the economic output.

daniel maris

I agree David Smart. As I said, people underestimate just how determined the European elite are to make the Euro work.

Stereotypes are unhelpful in dealing with economics.

Herbert Thornton

Adam Nixon (Feb 11th, 11:01) -

You say that the Greeks have taken billions of other people's money.....and still ended up broke. I don't dispute that.

But I don't see how the UK can realistically be said to be "paying its way and other countries' way too" when the 'paying' is being achieved by simply printing extra money to make those (and other) payments.

Printing extra money also amounts to taking other peoples' money - because it reduces the value of their money - and of course the worth of every unit of the money. It's not honest economics at all. It's smoke and mirrors economics.

The Greeks may have taken billions of other peoples' money, they at least spent it on themselves. But British politicians have too often simply thrown their own county's money down the drain, as did Tony Blair and Gordon Brown when they disposed of Britain's gold reserves at the bottom of the market and, for no discernible benefit to Britain but instead to Britain's great detriment, gave up the immense yearly E.U. rebate that Mrs Thatcher had negotiated.

The Greeks have been quite clever spendthrifts - but have, as you say, ended up broke. The British, on the other hand have been foolish spendthrifts with a blind belief in smoke and mirrors economics. And, it seems, they still are.

The Remittance Man

It's all well and good prescribing the jump ship, default and devalue cure, but Greece is just a symptom of something far worse - the Euro is unworkable. Greece is the issue today, because she was the worst behaved of the eurozone members, but once she's gone (or fixed), whose next?

Spain, Portugal Italy and even France are all trapped in an unbalanced and unbalancable currency union. They all have populations who expect "northern" standards of welfare and bennies yet none of them can realistically afford them.

They may not have reached the crisis levels the Greeks have, but they are edging inexorably closer. If the Euro isn't abandoned, we're going to be seeing Athens II, II and IV on the streets of Lisbon, Madrid and Rome.

Adam Nixon

Herbert Thornton

Thanks for your reply. What I was getting at was that, until the crisis broke and we bailed the banks out, we had a pretty low national debt (about 35%) and had ejoyed a long period of economic growth. We were major net contributors to the EU and to other organisations. The dizzying deficit levels didn't come till the crisis erupted.

As regards your other points, well, you rather bolster my position that we paid our way and other countries' too. Greece being merely a particularly salient example.

Maddy1

After taxes the grim reaper rules!!!!!!

Herbert Thornton

Adam Nixon (Feb 12 12:40pm) -

Maybe I'm misunderstanding what you're saying, but your point seems to amount to saying that under Tony Blair and Gordon Brown, Britain was healthily solvent and that they carefully & prudently kept it so.

To my mind the very opposite is true: and matters have since got worse and are continuing to do so.