Greece...

BlondeHeadOn

From Guardian live updates:


Germany’s vice chancellor is warning that a third Greek bailout would include taxing conditions, as it would be issued under the European Stability Mechanism...


ESM has much more exacting requirements than EFSF. Then clarifies: "ESM is damn complicated"..


Right.


??


http://www.theguardian.com/world/live/2015/jul/06/greek-referendum-eu-leaders-call-crisis-meeting-as-bailout-rejected-live-updates#block-559a79b3e4b032a39a3bab79
14.01

Generali

remorseless wrote: »

indeed, so it would have caused a bigger havoc than just sinking Greece so a better outcome for the majority of EZ.

...the Greek people are paying quite a price for it though.

antrobus

BlondeHeadOn wrote: »

From Guardian live updates:

Germany’s vice chancellor is warning that a third Greek bailout would include taxing conditions, as it would be issued under the European Stability Mechanism...

ESM has much more exacting requirements than EFSF. Then clarifies: "ESM is damn complicated"..

Right.

??

The ESM is a separate agency. I think it is more "complicated" than the EFSF, which it replaces, because it can do more stuff. But it operates on the same principle that money is lent only on certain conditions, mainly the condition that the borrower has to do exactly what the Council says.:)

BlondeHeadOn

antrobus wrote: »

The ESM is a separate agency. I think it is more "complicated" than the EFSF, which it replaces, because it can do more stuff. But it operates on the same principle that money is lent only on certain conditions, mainly the condition that the borrower has to exactly what the Council says.:)

Well that's not likely to work well, is it?

antrobus

BlondeHeadOn wrote: »

Well that's not likely to work well, is it?

Well, one would have to say that prior experience suggests that whilst Greece might agree to the conditions in order to get the money, they might well have second thoughts when it comes to paying it back.:)

remorseless

Generali wrote: »

...the Greek people are paying quite a price for it though.

They are but they also racked a lot of debt by trying to play house (yes because of easy to access cash).

This has been going on for ages now...plenty of time to foresee the result when most of the EZ was telling them what it would have happened! Given the amount of money flowing out of GR seems that some even managed to cash in!

Maybe the rest of the EZ should also be given the chance to vote on a referendum...

AG47

Gavin234 wrote: »

Quote Originally Posted by jrphilps View Post
I hope greece withdraws from the eurozone, they are getting a raw deal. The IMF are a bunch of greedy @#$%suckers.
Yes and no. Unfortunately it's more complicated than that.

Yes, they are debt slaves, but they dug their own hole. They did enter into a deal with the devil, because they wanted to have their cake and eat it too--they wanted something for nothing.

Almost all countries deficit-spend, but Greece really takes the cake for how much they do. In Germany, the normal (full pension) retirement age is 67 (about to be raised to 69), and the early (partial pension) retirement age is 65. In Greece, the normal retirement age is 65, but you can retire with an 80% pension at only 58 years old! (Only Italy has more generous terms--normal retire is 60, early is 57. Wow!)

All that early retirement wouldn't work in Europe with your standard American-style Social-Security Ponzi scheme, as there aren't nearly enough new workers to pay the non-workers (much of Europe has negative population growth). So deficit spending is necessary--lots of it. This would lead to very high inflation, if each country were printing its own money. (I remember visiting Italy in the '80's and spending 10,000 Italian Lire for an icecream cone--is it any surprise how that situation came about?)

So the big spender countries made a deal to enter the Euro-zone: give up the ability to directly print money, in exchange for greater monetary stability by "socializing" or diluting, or averaging out all of Europe's inflation. There were strings attached though--they had to start reigning in some of the spending. Well, the can got kicked, and kicked, and kicked, until all the loans to make ends meet were no longer making ends meet. They could no longer apply for another credit card to pay the minimum payments on all their other credit cards.

So is this the IMF's fault? Somewhat, as I believe they knew going into the deal that they would end up foreclosing on Greece's assets. But Greece also bears plenty of the blame. The root cause of the entire mess is that both the debtors and creditors wanted something for nothing. And at the end of the day, since there is no such thing as a free lunch, the Greek people will end up with nothing for something.

The question is, what happens when Italy, Ireland, Spain and Portugal all want to default next?

Graham_Devon

antrobus wrote: »

The ESM is a separate agency. I think it is more "complicated" than the EFSF, which it replaces, because it can do more stuff. But it operates on the same principle that money is lent only on certain conditions, mainly the condition that the borrower has to do exactly what the Council says.:)

Does it also avoid the need to bring the IMF into the equation?

remorseless

BTW - what happened to the missed IMF payment last week? Forgotten already?

[Deleted User]

AG47 wrote: »

The question is, what happens when Italy, Ireland, Spain and Portugal all want to default next?

Whether they want it or not, they will default one day. It's inevitable.