The big fat Greek bailout

[Mr.Coffee]

Originally Posted by stampsx2

In a way didn't the greeks help prop up the european economy after ww1 and ww2 when the german economy was in ruins?

Disclaimer: i don't support the greeks current policies.

How so?

[EldrickOnIce]

Not to continue to derail, but Alberta does give anything to anyone.
The Federal government distributes equalization payments, under a variety of criterion, to provinces with lower incomes per capita.
This money comes from general revenue.

Alberta doesn't pay anything to any other province through any method of disbursement or equalization payment.

[Yoho]

Thanks NDP

[Mr.Coffee]

Originally Posted by EldrickOnIce

Not to continue to derail, but Alberta does give anything to anyone.
The Federal government distributes equalization payments, under a variety of criterion, to provinces with lower incomes per capita.
This money comes from general revenue.

Alberta doesn't pay anything to any other province through any method of disbursement or equalization payment.

Just because the money takes a break in Ottawa before heading to Quebec doesn't mean it isn't coming from Alberta.

[EldrickOnIce]

Originally Posted by Mr.Coffee

How so?

They, with about 20 other countries, signed the accordi in 1953 restructuring/forgiving Germany of half their war debt.

[EldrickOnIce]

Originally Posted by Mr.Coffee

Just because the money takes a break in Ottawa before heading to Quebec doesn't mean it isn't coming from Alberta.

It comes from general revenue

[carbonrod]

Originally Posted by Mr.Coffee

Also not to derail, but Alberta received transfer payments from Ontario for several years.

Source? I know of only 2 years that Alberta received anything at all since the start of the 'equalization' program. The 57-58 yr and the 58-59 year. Many provinces contributed in these years including Saskatchewan, and Ontario.

Quebec on the other hand has received more than it put in every single year without exception.

[CaptainCrunch]

Just to keep this up to date. Greece's PM promises a tax and pension reform plan for Thursday, but wants another medium term bailout.

The Euro response was basically "Bra we've heard this whole give us money now and we'll sort things out later. Give us a plan by Thursday or we're pretty much done here"

http://www.usatoday.com/story/money/...ooms/29850789/

I think Greece is backed into a corner, it sounds like bank reserves won't last the week.

The people that voted against austerity are going to get a heeping helping of it. Greece is out of maneuvering space.

Tsipas' speech in the European Parliment went over like a Ratt concert at a evangilical church picinic

http://www.nytimes.com/2015/07/09/bu...debt.html?_r=0

[killer_carlson]

From the Head of Department of European and International Studies at Kings College in London.....

Grexit would strengthen, not weaken, the eurozone.

http://www.theguardian.com/commentis...euro-overblown

From the article:

Five years ago the risk of contagion from a Greek default and exit were real. Monetary union remained fragile, with a growing and high divergence in the borrowing costs between the core and periphery countries as investors fled for safety. But this time the markets’ reaction to last weekend’s referendum result has been muted, with the borrowing costs of Italy and Spain rising relatively little from low levels. The economies of Ireland, Spain and Portugal are in a much better shape as a result of structural reforms and fiscal consolidation.

Finally, Grexit would make it more likely that the eurozone will adopt a mechanism for planned exit from the euro. Plans for this have already been drawn up in Brussels and some national capitals to forestall any future danger of countries blackmailing their partners with the threat of irregular exit. Instead of engineering an exit through the back door of a misleading referendum question, governments that feel their electoral mandates are incompatible with eurozone membership can ask their populations in a transparent and informed way about leaving.

[Zarley]

Andrew Coyne had a well reasoned article about the Greek debt situation in the Post the other day:

Coyne: Greece at forefront of Europe’s game of chicken over debt

Perhaps the Greeks think they are calling Europe’s bluff. Except that, at one and the same time, they are calling their own. The Greeks may have formally voted to reject Europe’s terms, but meanwhile they are voting with their bank cards on the likelihood of their demands being met. The massive withdrawals of deposits from the Greek banking system is effectively a vote of no confidence in the very negotiating strategy they have just endorsed at the ballot box.

Left to themselves, it is probable that both Greece and its creditors would prefer to stall and fudge for as long as they can, neither concluding a deal nor decisively breaking off talks. Which is why there will be another stab at negotiations, notwithstanding the creditors’ pre-referendum insistence that no such negotiations were possible. But events may well overtake them: even with withdrawals limited to 60 euros a day, the Greek banks are rapidly running out of cash. Indeed, by the time you read this, it may already have happened.

[CaptainCrunch]

That's a good column thanks for posting it.

One of the bigger problems with Greece leaving the Euro and going back to their own currency is that on the international market that currency will be literally worthless, the exchange rates will be punative. That's not a good place to be for a resource poor country that has to import to meet their energy requirements and import to meet a lot of their other requirements in terms of raw materials. They'll basically be paying like $100.00 to buy a $1.00 item.

that goes the other way in terms of exporting goods, they won't be able to get full value for their few exports, food being at the top of the list. A country like Canada would welcome a sharply reduced Greek Currency because that $162 million that Canada imports to Greece sharply reduces in cost. The problem is that the stuff that Canada sends to Greece becomes hideously expensive.

I very much doubt that countries that export to Greece if they exit the Euro are going to offer generous terms or credit, its almost going to become like a COD or preCOD business relationship.

Where the people there are going to start regreting the No vote is probably this Friday or Saturday when government paychecks, pension checks and other checks start to bounce like flubber.

[GP_Matt]

If Greece does transition to a new currency, does anyone know what happens to their debt?

Would their mortgage/credit card/car loans be owed in Euros or would they be converted, along with their savings accounts and paychecks, to Drachmas?

If they stayed in Euros and the Drachma tanks there could be a huge round of personal bankruptcies throughout the country during the transition.

[CaptainCrunch]

Originally Posted by GP_Matt

If Greece does transition to a new currency, does anyone know what happens to their debt?

Would their mortgage/credit card/car loans be owed in Euros or would they be converted, along with their savings accounts and paychecks, to Drachmas?

If they stayed in Euros and the Drachma tanks there could be a huge round of personal bankruptcies throughout the country during the transition.

They'll try to negotiate some debt forgiveness, but I doubt that the Euro's and banks would be in a mood to listen, especially since there was a 50% write down if I recall not that long ago.

I would think that their savings accounts and paychecks would convert, which would mean a lot of lost value, especially outside of Greece.

Basically the Drachma would have the value of a rock outside of Greek borders, and inside of Greek Borders, they would probably not have a great deal of actual buying power compared to the Euro.

Just an assumption though.

The biggest step would be that Greece would leave the Eurozone, produce their own currency and then declare bankrupts to get out from under their debt, which mean that their ability to run a deficit would be zero because nobody would loan them money or buy their bonds and currencies.

The only organizations that would lend Greece money at that point would be the money mart in France at credit card interest rates (joking)

[EldrickOnIce]

I think could have pulled off an exit from the Euro zone without much/any more hardship (internally)than the have gone through recently... had they actually planned an exit strategy. Instead the hastily called referendum and the fallout (that I am sure is likely to come next) will now have them scrambling in a huge mess both domestically as well as internationally.

[burn_this_city]

A handful of years eating from bread lines will serve as a reminder to future populations and governments that there's no such thing as free lunch.

[EldrickOnIce]

Originally Posted by burn_this_city

A handful of years eating from bread lines will serve as a reminder to future populations and governments that there's no such thing as free lunch.

This also virtually guarantees that Greece isn't the first domino crashing into other wobbly EU dominos, because this isn't going to be pretty for a while.
That said, they are a largely self sufficient nation, or probably could be. One currency for the locals, one for dealing with Internationals. A Cuba, with more open borders.
It's interesting, from an economic theory/modelling perspective. And from a distance...

[CaptainCrunch]

Originally Posted by EldrickOnIce

This also virtually guarantees that Greece isn't the first domino crashing into other wobbly EU dominos, because this isn't going to be pretty for a while.
That said, they are a largely self sufficient nation, or probably could be. One currency for the locals, one for dealing with Internationals. A Cuba, with more open borders.
It's interesting, from an economic theory/modelling perspective. And from a distance...

Except the conversion rate from the internal to external currency would be ludicrous.

Anything that they need to import would be hideously expensive, anything that they export would be severely undervalued.

[EldrickOnIce]

Stolen from twitter



What a difference a couple days makes

[EldrickOnIce]

And as always, Greeks are independent thinkers

[burn_this_city]

Italians don't trust Italians, that's hilarious and unsurprising after visiting there.