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Roddy

Greece - what happens next?

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So what happens now?

 

I cannot work out if G-Pap (Greek PM) is criminally insane or a brilliant political genius.

 

The arguments for insanity are obvious but the alternative viewpoint has had limited discussion. It is clear that Greek needs a root and branch structural change to be a viable economic entity going forward and frankly as things were the government had neither the mandate nor the political will to push through the necessary changes.

 

However by calling a referendum I think G-Pap has forced the opposition to either put up or shut up - ie it is well known what they are against - it is not clear what they are for. What they (ie the opposition and the protestors forget) is that the EU / ECB / EFSF are giving Greece money and not the other way round. The objective of the money is to help Greece reach a sustainable economy. They can't 'force' Europe and particularly Germany to give much more money.

 

There have also been suggestions by various economists that Greece should exit the Eurozone and that somehow this will lead to a miracle of economic growth. I have a number of big concerned with this viewpoint:

Firstly there will be growth in nominal 'new drachma' terms but in real hard currency terms it is likely it will take many years for Greeks to regain their current standard of living. Remember that

Greece only has limited exports. If there is rioting on the streets (see below re banks) it is likely the tourist industry will be ruined for 2-3 years.

Secondly what interest rate will markets demand of Greece for the next five years?

Thirdly I think it highly likely that between now and any referendum every Euro of deposits will leave the Greek banking system - and the entire banking sector only exists due to the grace of the ECB. What happens the day after Greece leaves the Euro? In fact I think if there is even a risk that Greece will exit the Euro there will have to be soldiers on the streets to protect the banks. The present riots will be nothing compared to what will happen if the banks close and the govt. cannot pay its bills.

 

Indeed it seems to me that the best solution for Greece and Greeks is to accept austerity and stay within the Eurozone. I am wondering if G-Pap came to the conclusion that this was the only way he could force people to recognise this?

 

 

Thoughts, views and comments welcome?

 

Roddy

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G-Pap does the only right thing from his POV: cover his @$$! If he didn't, he would create kind of a Dolchstosslegende and end up like some early Weimar politicians. So, it's a very clever move indeed, entirely logical. Only, Merkel & co. feel now somewhat bum-fudged, because they prefer not to ask their people about their actions. Well, they need to wake up. This is too important to be left to a few clueless people (politicians). It is better to let this be decided by a majority of clueless people (THE people), because at least they can blame themselves then.

 

Greece has a huge problem one way or the other. Anyway, I read 60% are against the bailout deal, but 70% want to stay with the Euro (for all the nice transfer payments, I suppose). So, we'll see.

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There's a holiday in some of the German states today. But given that Angie hasn't even commented on this yet, you can assume that everyone is frozen in shock. :o Ask the PEOPLE, what the fudge??!??

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I put it this way: if they say 'Yes', there's gonna be MAJOR change. Greece is going to get weeded, will become a little more German. :)

 

If it's a NO, the Mediterranean Laissez-faire will continue under a "new" currency: the good old inflatable Drachma.

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I put it this way: if they say 'Yes', there's gonna be MAJOR change. Greece is going to get weeded, will become a little more German. :)

 

If it's a NO, the Mediterranean Laissez-faire will continue under a "new" currency: the good old inflatable Drachma.

 

1. Think Rogoff and Rheinhart said that Greece has been in default 50% of the time since 1800 or independence to 2006 (think Greece had independence in 1832) - table 6.6

2. Worth remembering 20 yrs ago Greece was one of the poorest western European countries

 

This is not going to be good for Greece if they exit

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This is not going to be good for Greece if they exit

Like with the whole global calamity, the damage is already done and the catastrophe is there. So, this is NOT about WHETHER they will go down the cr@pper, but HOW they will go down the cr@pper. There was an illusion of prosperity in Greece, and now we need to go back to normal or a little below normal for a few decades.

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I put it this way: if they say 'Yes', there's gonna be MAJOR change. Greece is going to get weeded, will become a little more German. :)

 

If it's a NO, the Mediterranean Laissez-faire will continue under a "new" currency: the good old inflatable Drachma.

 

If it's a NO, then it might still become a little more German as the Germans buy up most of the country :rolleyes:

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I've always thought the northern countries should leave the Euro to the Club Med countries. The Euro would become a second rate currency and either a Northern Euro created or national currencies re-created.

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That picture tells you all you need to know about the EU 'negotiations'.

She could just be pointing out a crumb on his 'tache.........

....while Sarkozy is thinking...."Aaaaah, I wasn't going to tell eem.. let eem look the silly on sa tv...."

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http://www.athensnew...portal/8/49916. - grief - the heads of the armed services got replaced in Greece overnight - I refer to my earlier comment re bank runs and needing soldiers on the streets - I don't want to read too much into this but worth watching this move

 

God forbid they should equip their armed forces with the latest olive-pip-peashooters and squashy overripe kumquats

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Seems like G. Pap has been planning this for a while:

 

Interior Minister Haris Kastanidis is a key figure in this Referendum riddle

 

Research by The Slog has revealed that the Referendum Law being invoked by George Papandreou is a mere 29 days old. There is evidence that the Greek leader purposefully promoted the man behind it, and that thus his use of it was premeditated. But his exact motive remains unclear.

 

The newly-passed Referendum Law allows for various forms of referendum. However, right at the end of the law is this proviso:

 

‘As concerns referendums on issues of national importance, the quorum will be decided by the competent parliamentary committee.’

 

Papandreou has made it clear that he is calling a ‘national importance’ referendum. Imagine that.

 

http://hat4uk.wordpress.com/2011/11/01/greek-referendum-revealed-how-papandreou-planned-it-well-in-advance/

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I have noticed you dont seem to like Greece very much but seem happy with Turkey !

 

well it has nothing to do with gold investments, however i have thankfully avoided investments in double deficit countries like greece due to the gold super tax that might one day be imposed on companies like EGU.

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http://www.telegraph.co.uk/finance/financialcrisis/8846201/Debt-crisis-live.html

Mr Buiter poses an interesting question. Even if Greece votes 'yes' to the bail-out - who's going to keep the country afloat in the mean time?

 

Even if it won, it's difficult to see if the IMF will disburse payment [for its existing bail-out loan] in the mean time – and if the IMF doesn't disburse then other countries will not want to disburse either. The worry is that in December [when the next aid tranche is due] there will be a disorderly default.

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Greek 2-year notes apparently went over a 100% yield today. How fantastic for paper bugs to get in on such great interest rates! What a great opportunity to diversify those gold holdings... I am sure all the Drachma needed will be there when called upon. Oh, wait.

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It has been called off. These cowards. No democracy for Europe in the foreseeable future. Welcome to a brave new world.

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latest at 8:45pm UK time, until they drop another one,

 

 

Greek crisis: Referendum cancelled as national unity talks continue

 

• Public vote on bailout now off the table

• New national unity government could now be formed

• Finance minister Venizelos opposes vote on euro membership

 

http://www.guardian.co.uk/business/blog/2011/nov/03/greek-crisis-referendum-eurozone

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