The big fat Greek bailout

[temple5]

Originally Posted by Itse

The Greek government would already be running a surplus if it wasn't for the debts.
.

Wow, when you put it like that its amazing. Do the electorate in Greece actually look at it that way?

Without debt payments of 30B/yr Canada would be running a 25B surplus.

I think the Conservatives should use that type of voodoo economics in the next federal election in Canada.

I can just see the Conservative add blitz now, "Canada has the highest surplus of any country outside of China - with the Harper Conservatives at the helm Canada kicks everyone elses a$$ so suck it Justin and Beard-man!" This message was paid for by the CPC and doesnt include debt payments in the budget. PS we would have also included the Green party but come on, that would just be over the top funny

[EldrickOnIce]

Not sure why I'm not following the hilarity. Countries that run a surplus do not create a deficit. This should not be a difficult concept. So the 30B Canada pays in debt servicing would not be required if governments had not run huge deficits to begin with. In the same way, there would be no debt repayment necessary for Greece had the previous governments operated at a surplus, like they are now, instead of a huge deficit.

Regardless, glossed over by most is that this all has very little to do with money, loans or debt repayment - and more political blackmail of a democratically elected government. The EU will be the big loser if this goes badly. Will be interesting to see who blinks fist, when the Greeks once again say Όχι

[temple5]

Originally Posted by EldrickOnIce

Not sure why I'm not following the hilarity. Countries that run a surplus do not create a deficit. This should not be a difficult concept. So the 30B Canada pays in debt servicing would not be required if governments had not run huge deficits to begin with. In the same way, there would be no debt repayment necessary for Greece had the previous governments operated at a surplus, like they are now, instead of a huge deficit.

Regardless, glossed over by most is that this all has very little to do with money, loans or debt repayment - and more political blackmail of a democratically elected government. The EU will be the big loser if this goes badly. Will be interesting to see who blinks fist, when the Greeks once again say Όχι

Ignoring debt obligations ignores what that debt previously purchased and how the economy would be affected had the money not been borrowed. To exclude it from financial calculation is foolish as its a fixed cost like pensions, or infrastructure - its just a deferred payment instead of upfront.

Its not blackmail, its a choice. And they arent trying to remove this gov in particular, the prev gov had the same choice and chose option (1) and the people of Greece voted them out.

(1) Stay in EU with the benifits it provides with a timeline to pay back creditors.

(2) Leave the EU with its benifits and the creditors likely get no return on their current investment and will likely make it up with CC style interest rates to Greece going forward.

[GP_Matt]

If Greece defaults can they declare bankruptcy and clear their debt completely or do their creditors get to seize assets in the process?

[EldrickOnIce]

It's not really about anything but leverage.
Vote no and Greece is in a much stronger negotiating position. Every economist in the world will tell you that more severe austerity measures are the absolute worst possible thing for the Greek economy. Why should they choose to accept that?
It's not about forgiving the debt, but about restructuring it so that the economy has a chance to rebound.

[FlamesAddiction]

Originally Posted by Itse

There's a difference between not wanting to loan Greece any more money, and not doing it because they don't like Syriza as a party.

The first is a financial issue. The second is politics and blatant disregard for the democratic process of Greece. Plus it completely ignores the needs of German taxpayers.

Let's remember: the whole point of the negotiations outside of Greece should be about the debtors getting as much money back as possible. If the negotiations fail and Greek economy enters an even worse downspiral, they just start defaulting on their loans and taxpayers around Europe get nothing. If this wasn't the case nobody would care enough to negotiate with Greece.

If they are more interested in crushing a democratically elected government in Greece than protecting the financial interests of Germans, then they are not doing what they are supposed to be doing, nor what they claim to be doing.

It also doesn't help that the current Greek party in power is pretty open about being pro-Russian. There is all kinds of speculation that if Greece falls out of the Euro, that they will join the BRICS with Russia, China, India, Brazil and South Africa. I think Greece is trying to use that scenario as leverage against the EU and it is rubbing a lot of the other members the wrong way.

There is also speculation that China will step in and bail out Greece, just like they did for some Latin American countries (I believe Panama and Venezuela for example), in order to gain their favour on promoting policies that favour China within the EU. The EU is China's largest trading partner and they have a lot at stake. The Chinese representative has been in Brussels all week. During the whole Grexit crisis, Chinese stocks have fallen more than 10x the entire GDP of Greece.

"Aid" has always been about gaining political favour no matter who it comes from, whether it be America, Germany, France, the IMF, China, Russia, etc... If a country accepts that "aid" and then back tracks or goes looking elsewhere, there are typically punitive consequences.

[CaptainCrunch]

Even if they declare bankruptcy and get rid of a bunch of their loans by default, the government doesn't have enough money now to pay their salaries and pensions, the bank doesn't have enough money to stay liquid.

Greece has been so completely screwed over by successive bad governments and asinine stupid spending policies that it is a fourth world nation.

A vote for yes or no leaves the country destitute and a fleeing point for the younger generation.

[EldrickOnIce]

OXI it is, decisively.
And what now? Lots of uncertainty, for sure.
Will be very interesting.

[carbonrod]

How long until the Y-code Euro notes are not accepted outside of Greece?

[FlamesAddiction]

I was expecting it to be a lot closer, but with something like this, a decisive result either way is probably the best. Whether it is right or wrong, there is at least a clear mandate and direction.


The reaction from world leaders is starting to trickle out:


http://www.cbc.ca/news/world/greek-b...vote-1.3139163


Most of the EU leaders have pretty much said that Greece is done in the Euro Zone. The Greek PM is still adamant that their negotiating position is stronger now and that the EU will be forced to deal with them. Interesting times for sure.

[CaptainCrunch]

Originally Posted by FlamesAddiction

I was expecting it to be a lot closer, but with something like this, a decisive result either way is probably the best. Whether it is right or wrong, there is at least a clear mandate and direction.


The reaction from world leaders is starting to trickle out:


http://www.cbc.ca/news/world/greek-b...vote-1.3139163


Most of the EU leaders have pretty much said that Greece is done in the Euro Zone. The Greek PM is still adamant that their negotiating position is stronger now and that the EU will be forced to deal with them. Interesting times for sure.

I believe that the Greek PM is delusional. I doubt that the Eurozone or the banks are going to be all that eager to sit down and negotiate with what is essentially now a deadbeat.

[Fire]

Stock market to drop tomorrow or it is a big meh?

[Johnny199r]

Originally Posted by Fire

Stock market to drop tomorrow or it is a big meh?

Drop then quick recovery

[GGG]

Originally Posted by CaptainCrunch

I believe that the Greek PM is delusional. I doubt that the Eurozone or the banks are going to be all that eager to sit down and negotiate with what is essentially now a deadbeat.

The option as with all bankruptcy protection cases will be about extracting as much money from Greece as possible.

The Greeks have called the euro zone bluff.

[EldrickOnIce]

There is no doubt, in my mind, that Greece will be implementing their own currency, in some form, by months end.

[Reaper]

Originally Posted by EldrickOnIce

There is no doubt, in my mind, that Greece will be implementing their own currency, in some form, by months end.

A new Drachma.

[EldrickOnIce]

And it will result in abject poverty, in the short term anyway.
Will be interesting

[CaptainCrunch]

Originally Posted by GGG

The option as with all bankruptcy protection cases will be about extracting as much money from Greece as possible.

The Greeks have called the euro zone bluff.

I doubt its a bluff at this point.

The Greeks even with this referendum result don't have a lot of power at the table. The EU pretty much holds the cards, they don't have to renegotiate. Chances are any which way this goes they're not going to get debt money back. As well they effectively can't give Greece debt relief breaks that other countries in a similar situation want.

If they were excesively cruel, they can sit on their hands and wait for the Greek Banks to run out of money in a couple of days. The Greeks can then leave the Euro, print super inflated bills with no value on the international market, and attempt to write off debt.

As it stands now, the Greek economy is at a complete standstill. And economies once they completely grind to a half are very hard to restart.

[Thor]

I just want Iceland to pick up a new currency, Canada dollar sounds nice, no thanks on the Drachma

[BigNumbers]

Originally Posted by Thor

I just want Iceland to pick up a new currency, Canada dollar sounds nice, no thanks on the Drachma

If Iceland was smart, they'd have adopted the Euro by now. An economic study of the impact of the adoption of the euro by Iceland found that the Icelandic króna acts both as a barrier and buffer to international trade, and that by joining the EU and adopting the euro, Icelandic international trade might be 60% higher.

That kind of boost to your int-trade is neigh-impossible to obtain by other means and make all kinds of sense. Hopefully, if Greece comes out, then Iceland can come in.