GlesgaKiss

The market cannot do its job without market discipline. In my opinion, EuroBonds are the last thing Europe needs. It just kicks the can further down the road and encourages more of the behaviour that got us where we are today. They might prop up GDP figures now and make things look better for a while, but at what cost?

dpb

What if Santander said it was in trouble tomorrow - i think we'd all be totally in the ****e

jonc

Well Spain's fourth largest bank lost 10% as savers have withdrawn more than a billion euros in the last week. Sounds all too familiar....

alloy

You represent the text book definition of capitalism and Efficient market hypothesis....some times you have to throw the text books out the window and wing it abit, death of the euro will be depression and a generation will suffer...

Cost of Eurobonds is European unity and a move towards US where each state has an element of independence but all conform to the Fed reserve.

alloy

Germany need Greece and other periphery countries in the EU and EMU as their weakness has kept euro low and enabled Ger to enjoy large exports to china and us. A break up in euro would mean relative to its local peers the mark would be expensive therefore Germany's export market would get decimated, their GDP would suffer they double dip.....

GlesgaKiss

I don't represent that at all. Certainly not perfectly efficient markets. What I object to is all other factors being tossed aside for one particular moral goal, which in this case is the extention of our current credit card limit just so no-one has to ever suffer anything that displeases them. The state (whether that be ours or a European state) cannot manage economic affairs like this indefinetely; it's just too much of an ask.

Nevertheless, I do accept the reality of the real world. But as a professional in this environment, you surely have to admit that there is a lot of stuff going on around the globe now that flies in the face of any kind of prudence or common sense.

alloy

Thats hardly news and easy to criticise in retrospect.

Did you see the Peston programme on bbc2 last night?

Also polls showing the Greeks perhaps moving back to New Democracy....http://mobile.reuters.com/article/id...20517?irpc=932

dpb

If I was average greek ( very glad im not ) i wouldnt know which way to turn , and probably not bother turning out

Which would benefit the extremists no end



How far is greece indebted to spanish banks ?

alloy

If I was average Greek, i'd be looking to stick with austerity, the EU and the EMU. All be it a very ugly situation, its a lot prettier than their reality should they default, remove themselves from EMU and then devalue themselves! The fact still remains nearly 3 out of 4 Greeks want to remain in the EU and EMU only they don't want to pay the price...i think its one huge game of hard ball chicken being played right now between EU, IMF, Greece.....but in the end Greece will conform in June elections the only other consideration is will they still be solvent by then?!

Europe needs to move in the direction of America, we need independence for the countries (states) to manage internal affairs, but we need fiscal and monetary policy integrating across the Eurozone as a whole which allows the EMU to devalue themselves as a whole and increase their competitiveness as a whole.... such as the Fed and BOE have done with QE.....

Its very hard to quantify exposure to Greece, its more complicated than simply do they own Greek debt as their are all the derivatives as well such as CDS etc. The problem with a Greek exit is that it sets the president for other members to also remove themselves from the current integration....then there are the logistical issues such as stopping euro fleeing the country, expect an extended bank holiday, troops on the borders, civil unrest....

alcazar

iTrader: (2)

And now the fekkin £ is SINKING against the € again

jef

iTrader: (13)

all this talk is interesting, but hard to apply to real life.

mr normal greek, lives in his house with family and works, and has enough to feed famiily and pay bills.
or is it that theyve not been paying bills?

so in reality - if they "crash" is this going to result in complete social breakdown - riots, looting, buildings/homes damaged or lost?
are families going to be out on the street on the verge of starvation?
is there going to be no jobs, no trade taking place ect?

ive asked this before, but i just cant see, no matter what econimc situation a total collapse of a nation.

all the people are still there, they currently trade within the country and cross border - if the buisness isnt funded from government then how is going to be affected?
im not talking about multi-million euro trade deals, but small buisness trading, mr athens sells whatever (chicken, eggs, milk) or whatever the greeks produce well - and sells it to his long standing customer and/or friend 50miles away across the countries border. is this going to stop?

jef

iTrader: (13)

i dont know if people have picked up that im not a buisness man or market analyist or trader lol,
so it would be great if someone could explain the basics - and then the real life impact.

market trading is obviously very important, but its easy to make the assumption that its just number swapping tbh.
would trading still happen with no collective organisation set up?

if anyone wants to educate me lol thanks briefly and in laymans terms please

alloy

Families aren't paying bills, the govt cant afford to pay hospitals and pharmacies....literally there is no money circulating! To understand the consequence of this have a look into the circular flow of income/money

The whole purpose of them defualt/withdraw EMU/devalue is to increase their competitiveness in terms of making their produce more attractive to export...the alternative is that the larger euro states move their factories down to greece and provide employment but benefit from paying lower wages....all this though is contingent on a more integrated Europe....

ScoobyWon't

Any chance of a Zimbabwe-like hyperinflation scenario if Greece pulls out?

speedking

This is the flaw.

Government can't afford to pay interest so has to cut costs. Decides not to build that new road and hospital. People that build roads and hospitals become unemployed. They can't pay their mortgage so the bank repossesses. Bank can't sell repossessed houses so still can't recoup its money.

Family is out on the streets so now a burden on the economy supported by benefits rather than contributing through taxes. Government has less money, decides to reduce size of army, more unemployed etc.

Selling chickens and eggs is not enough to support the purchase of Porsches (or rather the paying off of the loans that were used to purchase the Porsches).

Greece's main industries are tourism, shipping, industrial products, food and tobacco processing, textiles, chemicals, metal products, mining and petroleum. None of them is going to rescue the country in the short term

alloy

Greek tourism bookings down 50% since May 6th election.....

jonc

This is my understanding of the situation.

If Greece exits the Euro and goes back to Drachma, then yes, times will be even tougher as Drachma will be worth much less than the Euro. Whilst this would make Greek exports more attractive, there will be a huge pain bear to the Greek on the street; everything will be a lot more expensive as the cost of producing goods and imports shoot up. This could mean closure of many local businesses as people will have no money and banks will have no funds to loan out. Their economy will grind to halt. This should be short but the pain will be very sharp. Whether this period could lead to a social breakdown, I wouldn't like to say. This will hinge on whether Greece have an export industry to sustain them through this period but recovery should come much sooner as they become more self sustaining, whereas if they stay in the Euro, the pain will still be there but the period of austerity will be prolonged with recovery taking a lot longer.

For the global economy, there too would be a major crisis within the banking industry as investors halt their business to assess and evaluate to what extent their investors and lenders are exposed to the exit. Spain for example will have some exposure and are already teetering on the edge with could further bring the financial collapse of the Euro which in turn will effect all other global economies invested in Europe. Contingency plans are already being put in place by countries heavily exposed to the Euro crisis to limit the damage this could do to the global economy.

Therefore I'm still on the fence as to whether it would be good should Greece exits the Euro.

David Lock

Well I bet they all love David Cameron telling them what to do

Yes, Mr Cameron, we fecking know that

If a member of your family got themselves in a real mess with credit cards, CCJs etc you would tear your hair out but help them and probably write off some of their debt to you. And you would give them some advice as to future behaviour. Cutting this member of the family off would possibly break up your family.

The EC are just kicking Greece when it is down and they have passed the limit of reasonableness when it comes to imposing austerity.

EC should swallow hard and help Greece whilst imposing measures that will eventually lead to growth such as a decent tax collection system and a freeze on Euro bank withdrawals.

Sure the EC can get them kicked out but this would be cutting of their nose to spite their face, as the saying goes.

dl

EddScott

The country that should leave is Germany.

If Germany had Deutschemarks again, people would buy them. Germany is propping up the Euro with France in there too.

If Germany left the Euro, the pressure on the struggling countries to compete in a single currency would be reduced.



At least we'd all go to Greece on holiday and retire there. Why bother pay 5 euro when you'll probably pay 50p in Dracma.

dpb

But zhat isnt part of zee masterplan

jef

iTrader: (13)

thanks for replies to my question

what about bills that need to be paid on receipt of goods, food, fuel ect. most peoples biggest outlay - were they not payng these either?

not paying bills, usually mean s energy/utilities, as there paid for in lieu?

and thats virtual money, as in just numbers being chaged, cash in hands bieng traded for goods is what generates the movment of money, is it not?

so is it true the average joe in greece and use as a representtive of the masses, just doesnt pay there bills? full stop, and hasnt been for years?

or just selective in what they pay?

interesting stuff

Leslie

Cameron is fully enamoured of Billy Liar's example!

Les