A Greek crisis may well become Germany’s problem

tomterm8

Really2 wrote: »

At least we will not be suffering reduced trading and then extra debt to support them also.

As I understand it, the provisions in the european treaties that on a majority vote would require Germany and the eurozone to bail out greece, also apply to us. So, think again. If the eurozone gets into trouble, we will be the ones bailing them out too.

Really2

tomterm8 wrote: »

As I understand it, the provisions in the european treaties that on a majority vote would require Germany and the eurozone to bail out greece, also apply to us. So, think again. If the eurozone gets into trouble, we will be the ones bailing them out too.

Are we eurozone, we don't use the euro.

tomterm8

No, the story is not incorrect, but any bail out of Greece would end up being an issue for the entire european union, and as one of the big players in the EU, we would end up having to pony up for some of it.

Really2 wrote: »

Are we eurozone, we don't use the euro.

The terms in the treaty relating to bailing out EU member states apply to the whole EU, including us.

StevieJ

tomterm8 wrote: »

No, the story is not incorrect, but any bail out of Greece would end up being an issue for the entire european union, and as one of the big players in the EU, we would end up having to pony up for some of it.

But the story is suggesting that only Germany (and maybe France) are involved and only on a voluntary basis .

As Germany wrestles with the question of whether to rescue Greece,

Really2

tomterm8 wrote: »

No, the story is not incorrect, but any bail out of Greece would end up being an issue for the entire european union, and as one of the big players in the EU, we would end up having to pony up for some of it.


The terms in the treaty relating to bailing out EU member states apply to the whole EU, including us.

Not according to an ECB Executive council member.
http://www.telegraph.co.uk/finance/economics/6942125/ECBs-Stark-says-markets-deluded-about-eurozone-bailout-for-Greece.html

Markets are deluding themselves if they think that member states will open their wallets to save Greece," he was quoted as saying by the Italian daily Il Sole 24 Ore.
Mr Stark said Greece's debt problems were of its own making, not due to the global financial crisis.

tomterm8

StevieJ wrote: »

But the story is suggesting that only Germany (and maybe France) are involved and only on a voluntary basis .

As Germany wrestles with the question of whether to rescue Greece,

That aspect is nonsence. It is a european decision.

Really2 wrote: »

Not according to an ECB Executive council.
http://www.telegraph.co.uk/finance/economics/6942125/ECBs-Stark-says-markets-deluded-about-eurozone-bailout-for-Greece.html

Means precisely nothing. He has to say things like that, but the decision to bail is not a decision made by the ECB Executive council.

Really2

tomterm8 wrote: »

That aspect is nonsence. It is a european decision.



Means precisely nothing. He has to say things like that, but the decision to bail is not a decision made by the ECB Executive council.

So have you got the bit which says all EU members are liable?

Rochdale_Pioneers

The notion of Greece being bailed out in isolation doesn't wash anyway. Their instability isn't remotely unique and there are several other nations that aren't that much better positioned. If Greece is let to default they'll fall over like dominoes. If Greece gets bailed out the pressure will increase massively on the rest and they will need a bailout.

I read something earlier suggesting that Greece could attempt some good old fashioned 1970s economics - devalue prices and wages by 30%. Will see a return to the bonkers days of governments trying to dictate to the market what price stuff is sold for? Could be an interesting year. No doubt as Greece falls over the Mail and Express will still be telling people that the situation in Britain is worse than anywhere else.

Mr_Mumble

Greece is to reduce its deficit from 13% of GDP to 3% in 3 years.
Britain is to reduce its deficit from 13% of GDP to 5.5% in 4 years.

Yeah, we can really act all superior about Greece's situation

If 'journalists' were doing their job they'd be asking Brown/Cameron/Clegg if they would use British taxpayer money to bail out Greece. It would be nice to see who will put the interests of the taxpayer before that of the political elite in Brussels.

StevieJ

Good point RP about the domino effect, PIGS to the slaughterhouse :eek: We should know more about the strength of the euro in the next 18 months.

Still, the threat of a Greek default may matter even more to the eurozone than it does to Greece itself. If Greece defaulted, other countries with high debt would all face dramatically higher borrowing costs. The eurozone cannot afford to let Greece default, one German hedge fund manager based in London argues. “That’s the lesson of Lehman Brothers; if you let what you think is the weakest link go.” A Greek default would lead immediately to a challenge to Portugal “and that day to Spain, and in a day or two to Italy”, he said.