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EU to accept that Greece should default on some of its bonds
Comments
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Cannot think of anything I would particularly want from Greece.
Mrs LM has occasionally been known to do a nice cheese and spinach pie containing feta cheese.....
I would rather buy it from Sainsbury's and get Nectar points rather the 'barter' for it with some dusky Greek on an Athens street corner....0 -
No. There shouldn't be any impact on private transactions. The ECB have agreed to accept Greek debt as collateral (i.e. Greek banks can borrow money off the ECB using Greek debt despite the default) so the Greek banking system is highly unlikely to seize up.Does it mean that if I have something that someone in greece wants and they have something I want we cannot exchange?"The state is the great fiction by which everybody seeks to live at the expense of everybody else." -- Frederic Bastiat, 1848.0 -
Loughton_Monkey wrote: »So Greece is allowed to 'default' [not pay back] some of its bonds.
French and German Banks, who own a lot of this debt, take a 'haircut'. These banks will require bailing out by French & German governments.
Greece will not get any further loans, so will default even more. So iterate the above process a few times.
Britain will no longer be able to sell to Greece. Sales to the rest of Europe will fall dramatically as they rein in spending.
Britain goes into recession again. Government has to increase borrowing. This comes at draconian higher rates, perversely causing the need for even greater loans at even higher interest. Ditto France, Germany, and most of Europe. [Contagion]
Starting with Eurozone, the whole of Europe plunges deeply into recession. IMF goes bankrupt. Britain quickly follows. Trade virtually ceases.
Poverty, famine, riots, wars, and corruption - at a scale previously only known in Africa - hit the entire European continent.
.........
Once the population has been decimated by 50%, and the remainder have 'fully come to terms with' the sins of over-spending, the folly of Brother Brown's profligacy, and the idiocy of recruiting so many Bouncy Castle Attendants, China will write out a cheque, from petty cash, to neutralise all the debts and clear up the balance sheets so we re-build ourselves and once again become a large market for China.
Oh dear. Better start clearing out my bunker in that case.0 -
The BBC Business bloke, not Robert Peston, the other one, summed it up pretty well for me.
Basically he suggested we've, or they, have bought 3 years. "They've made it [the immediate problem] go away". But it's further loans on top of loans that cannot be paid. For this to work, Greece would have to see very substantial growth. This isn't going to be the case, therefore, the taxpayers of other countries who have substantial growth will be bailing out Greece. This includes UK taxpayers.
The risk has been moved to governments, i.e. taxpayers, and away from the private sector, otherwise they would never have got this through.
What did tickle me was the IMF stance. It's completely changed. Suddenly everything is just fantastic, great, working so well, nothing can go wrong.0 -
Graham_Devon wrote: »The BBC Business bloke, not Robert Peston, the other one, summed it up pretty well for me.
Basically he suggested we've, or they, have bought 3 years. "They've made it [the immediate problem] go away". But it's further loans on top of loans that cannot be paid. For this to work, Greece would have to see very substantial growth. This isn't going to be the case, therefore, the taxpayers of other countries who have substantial growth will be bailing out Greece. This includes UK taxpayers.
The risk has been moved to governments, i.e. taxpayers, and away from the private sector, otherwise they would never have got this through.
What did tickle me was the IMF stance. It's completely changed. Suddenly everything is just fantastic, great, working so well, nothing can go wrong.
Paul Mason. Some of his blogs are really very good (but then he did participate in he recent strikes at the BBC so makes you wander...)
Greece will default more significantly but hopefully this plan kicks the can far away enough for Spain, Ireland and Italy to totally differentiate themselves. I'd imagine the days of big budget deficit will be vanishing fast across Europe.
That or there's another catastrophe.0 -
Paul Mason. Some of his blogs are really very good (but then he did participate in he recent strikes at the BBC so makes you wander...)
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Participate in the strikes? Mason is an NUJ 'Father of the Chapel' and a 'former member' of the Far Left group, 'Workers Power'. The Labour supporting Harry's Place described him as the 'SWP pin-up boy'.
A curious choice as an economics editor for the 'famously impartial' BBC, you might think.0 -
Participate in the strikes? Mason is an NUJ 'Father of the Chapel' and a 'former member' of the Far Left group, 'Workers Power'. The Labour supporting Harry's Place described him as the 'SWP pin-up boy'.
A curious choice as an economics editor for the 'famously impartial' BBC, you might think.
Interestingly, he's also the world's fattest man:
http://www.news.com.au/world/worlds-fattest-man-paul-mason-needs-surgery-to-live/story-e6frfkyi-12257891387980 -
All governments function this way. There's no way the UK Treasury could meet its obligations on gilts except by selling more of them at the same old yields.So is it a default?
If market sentiment were to turn against UK gilts, we would be in immediate deep trouble.
So really the investors don't bet on the government's absolute ability to repay, they bet on their own collective willingness to keep lending.
Markets like this are just positive feedback loops and self-fulfilling prophecies. Panic is caused by fear of panic.
But it works the other way too. If the French banks and other buyers of Greek bonds rediscover their confidence that they can carry on buying at 3.5% yields and nothing bad will happen, then they'll be able to carry on buying at 3.5% yields, and nothing bad will happen."It will take, five, 10, 15 years to get back to where we need to be. But it's no longer the individual banks that are in the wrong, it's the banking industry as a whole." - Steven Cooper, head of personal and business banking at Barclays, talking to Martin Lewis0 -
Isn't it amazing?
20 posts through a thread on the economy of Greece, and not a single mention of the most obvious question:
What's a Grecian Earn?0
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