Greece...

princeofpounds

I'm not blaming the EU for the deal expiring.

I'm suggesting that if the deal was good enough last week, why deny to look at the same deal now?

Other than the date, what's changed?

Many things change.


The fact that there is no longer a bailout program means that you need to establish a new program, which requires votes across many many more European parliaments than a simple extension. The apparent ability of Europe to magic up new money was always done in the context of a pre-approved program, which many people forget.


The fact that a referendum was announced means it cannot be pre-judged. What happens if you accept a deal and the people vote no?


The fact that once a government campaigns very publicly to say no to a deal, that government loses all credibility when it asks for a deal. They are either telling the truth to you or telling the truth to their referendum voters. Not both.


For me the most ridiculous thing is the 'No' campaign claiming the banks would reopen and a better deal available if they vote No. The banks will not reopen - who will provide the liquidity for them to do so?

Mistermeaner

This people is why you don't vote for socialists, superficially they appear to take care of the little people but what they actually do is destroy whole nations.

Thrugelmir

Jason74 wrote: »

You would think so, but we've already seen enough to be pretty sure that Greece is being made an example of.

Example of what? Difficult to comprehend a totally different mindset to that which exists in the UK.

The UK media jumped on the bandwagon about the amount of cash that could be withdrawn from an ATM 's. Yet that daily allowance is amounts to twice what an average Greek earns in a month.

Graham_Devon

The IMF have now stepped in, conceeding that debt write downs will have to take place if Greece is to have any possible chance of stabilising.

They also state they are going to need an extra €50bn over the next 3 years, a 20 year grace period before repaying any debts and final payments to be made in 30 years time.

Seems they have distanced themselves from Germany as they state they would not be prepared to put a proposal in for a third greek bailout unless it included a commitment to economic reform and debt relief.

In other words, she's now stating what Tspira's has been saying all along.

Full and detailed report here:
http://www.theguardian.com/business/2015/jul/02/imf-greece-needs-extra-50bn-euros

System

As Graham mentions above, this is similarly investigated by the Wall Street Journal, with further argument for debt relief (I think the FT states 60bn euros...)

princeofpounds

Apparently Varoufakis says that in the event of a 'no', the banks will be open on Tuesday and a deal will have been signed.


I propose we test that statement when we get to Tuesday, as a sign of the probity and honesty of the man.


I do like clear, predictive statements; they are so much more falsifiable.

princeofpounds

The EU has already given huge debt relief. They have not taken principal haircuts, but they slashed the interest rate and gave interest holidays.


The IMF is right, they do need more debt relief. They need it more now than they did in December (when they barely needed any), simply because Syriza chose a negotiation path that destroyed economic confidence and growth.


Further debt relief was always supposed to be part of the third program, once the second program was completed. Remember that Greece signed up to the second program treaty and Syriza themselves committed in writing to close the second program and implement the very reforms they then spent month trying to wriggle out of.


I have no doubt the Greeks will get lots more debt relief, but they will not get it for free, they will need to reform further. In the second program, they got some reforms first, then the debt relief, and then more reforms which they failed to do. Europe simply does not want to make the same mistake of giving money simply for broken promises of reform.

Graham_Devon

Haha.... vote yes, and we'll give you the leader the EU want's you to have...

German Martin Schulz has callled for Alexis Tsipras to resign and be replaced by technocrats

wellused

If there is a Yes vote Alex Tsipras is expected to resign if there is a No vote Greece will find itself very isolated from the rest of the Eurozone. A further haircut will see many German and French banks lose a lot.

princeofpounds

A further haircut will see many German and French banks lose a lot.

Not any more. Exposure is really quite low now. Most of the debt is held by European institutions these days.