Greece's debt crisis odyssey - article worth a read

BlondeHeadOn

I posted earlier today about whether Greece should be ejected from the euro, and then found this analysis on the Beeb website.

Very interesting stuff - it takes the form of a useful flowchart.

http://www.bbc.co.uk/news/business-14977728

"Greece and its lenders are locked in discussion. The "Troika" of lenders - the European Union, International Monetary Fund and European Central Bank - say Greece must take more painful steps to cut its borrowing. But Greece faces riots and mass protests on the streets of Athens. The government could lose its grip on parliament - only 155 of 300 MPs backed the last round of austerity in June. At stake is the next 8bn euro tranche of bailout money, which Greece desperately needs to avoid total crisis. Starting from the top, follow the decision tree to decide what happens next...."

There are 5 possible outcomes according to this, entitled:
Pyrrhic Victory
Depression
Moral Hazard
Political Turmoil
or
Global Meltdown.

Under Global Meltdown it has the outcome as:

GLOBAL MELTDOWN
Switching back to the drachma leads to a huge financial and legal mess. Italy and Spain may be unable to borrow and face a run on their banks amid fears they may also leave the euro. Major European banks could collapse sparking another global financial crisis. In Greece the drachma is likely to plummet in value, boosting the economy, but causing painfully high inflation

Mmm. Doesn't sound quite so great, when you put it like that....

The_White_Horse

the public sector won't go without, don't you worry.

pqrdef

The_White_Horse wrote: »

the public sector won't go without, don't you worry.

You mean the hospitals and police might keep going, when obviously that's the last thing anybody should be worrying about?

ILW

pqrdef wrote: »

You mean the hospitals and police might keep going, when obviously that's the last thing anybody should be worrying about?

Generally the buracrats do pretty well through these situations.

Seems the Brussells pen pushers are all going on strike because they have been asked to do a 40 hour week. They say it will destroy their work/life balance.

shortchanged_2

The_White_Horse wrote: »

the public sector won't go without, don't you worry.

The_White_Horse

i tell it like it is. this whole problem is much bigger than the banking crisis. look at every country with massive problems. they all have massive inflated public sectors, with people retiring young on large pensions and have no money to fund it. the west is buckling under the strain of their public sectors. it is as clear as day.

CLAPTON

BlondeHeadOn wrote: »

I posted earlier today about whether Greece should be ejected from the euro, and then found this analysis on the Beeb website.

Very interesting stuff - it takes the form of a useful flowchart.

http://www.bbc.co.uk/news/business-14977728

"Greece and its lenders are locked in discussion. The "Troika" of lenders - the European Union, International Monetary Fund and European Central Bank - say Greece must take more painful steps to cut its borrowing. But Greece faces riots and mass protests on the streets of Athens. The government could lose its grip on parliament - only 155 of 300 MPs backed the last round of austerity in June. At stake is the next 8bn euro tranche of bailout money, which Greece desperately needs to avoid total crisis. Starting from the top, follow the decision tree to decide what happens next...."

There are 5 possible outcomes according to this, entitled:
Pyrrhic Victory
Depression
Moral Hazard
Political Turmoil
or
Global Meltdown.

Under Global Meltdown it has the outcome as:

GLOBAL MELTDOWN
Switching back to the drachma leads to a huge financial and legal mess. Italy and Spain may be unable to borrow and face a run on their banks amid fears they may also leave the euro. Major European banks could collapse sparking another global financial crisis. In Greece the drachma is likely to plummet in value, boosting the economy, but causing painfully high inflation

Mmm. Doesn't sound quite so great, when you put it like that....

if greece had defaulted 3 years ago and left the euro then both they and everyone else would probably be much better off by now;

greece would have a very little debt now having defaulted; their currency would be much lower and so their export and tourism business would be much stronger

and the rest of us wouldn't be in a financial crisis caused by fear of greece defaulting; true it would have been a problem three years ago but then greeces debts were much less then and so the disruption would have been less too

so is it best to muddle on for a few more years and never solve the problem?

BlondeHeadOn

CLAPTON wrote: »

if greece had defaulted 3 years ago and left the euro then both they and everyone else would probably be much better off by now;

greece would have a very little debt now having defaulted; their currency would be much lower and so their export and tourism business would be much stronger

and the rest of us wouldn't be in a financial crisis caused by fear of greece defaulting; true it would have been a problem three years ago but then greeces debts were much less then and so the disruption would have been less too

so is it best to muddle on for a few more years and never solve the problem?

That seems to be the plan.....

purch

so is it best to muddle on for a few more years and never solve the problem?

They appear to be following that plan.......but it doesn't appear to working out too well !!!!!

Ilya_Ilyich

Greek default is a forgone conclusion. Yet every month we're taking the opportunity to force further anti-working-class measures upon them as conditions of our 'bailouts'. It's an incredibly transparent example of class warfare that is setting back progress by decades. Or alternatively is successfully accelerating the onset of the revolution, depending on your view!

nearlynew

While the banks are in charge every country and its people are f*cked.


A total reform of the current economic and and political structures are our only hope for a prosperous and sustainable future.