Greece...

CLAPTON

pqrdef wrote: »

The EU has already said they would have to leave the EU. That was on legal grounds.

But it would be fatal to the euro to allow countries to drop out without major consequences.

And Greece would need to put up trade barriers, because it's not strong enough to survive in a free trade area.

The Eu officials says many things, few of which are true.

The is clearly no reason for Greece to leave the EU unles it wants to; just a bullying threat by the EU.

I see no reason for Greece to put up trade barriers; a weak currency will help correct their balance of payments problems.

And of course the massive bailout funds could be used to help Greece in ways other than those proposed.

WhiteHorse

The Greek euro-experiment is not a failure, it's a success. For a few measly bits of virtual paper, the EU just bought itself another country.

Zorz_2

Graham_Devon wrote: »

And some hard hitting words from Robert Peston...

http://www.bbc.co.uk/news/business-17110089

Both observations are spot-on.

It shouldn't surprise anyone though, this isn't the first time something like that happens. Politicians are shortsighted, and so are the "markets". They only plan ahead until the next elections and next quarter respectively. They put their ideological bias above reality. When the facts don't suit their "vision", they choose to ignore them.

As for the second one, well of course... The ECB refused to take a haircut on the greek bonds it held (even though it got most of them at a discount, in the secondary market!) but it was keen to force other bondholders to accept a "voluntary" haircut on their bonds. Talk about insanity... Of course, the ECB is a bit like Nicky Santoro (Joe Pesci's role in Casino). You don't want to owe that guy money. And if he owes you, good luck getting paid...;)

AndyGuil wrote: »

Any party that says it will stop paying the debt will win. Germany won't be able to stop elections, that would be illegal and unethical.

Unfortunately, the situation is well past illegal and unethical for a long time now...:mad:

ILW

CLAPTON wrote: »

And of course the massive bailout funds could be used to help Greece in ways other than those proposed.

Probably such things as a 100% tax rebate and all civil servants retiring at 35. It's what the Greeks do with other people money. The can't help themselves.

CLAPTON

ILW wrote: »

Probably such things as a 100% tax rebate and all civil servants retiring at 35. It's what the Greeks do with other people money. The can't help themselves.

Given huge sums have already been poured into Greece, it would be a better use of funds to help Greece to leave the euro in a reasonably orderly way which would benefit the other countries too.

pqrdef

CLAPTON wrote: »

And of course the massive bailout funds could be used to help Greece in ways other than those proposed.

There wouldn't be any massive bailout funds, because helping Greece isn't the political purpose of the bailout.

I'm sure there'd be an aid programme, but like aid in general, it would be reckoned in millions rather than billions.

Mrs_Bones

The IMF is stretching it's remit to breaking point. It was never set up to back up and bailout out failing currencies like the Euro. If Greece leaves the euro then that is the time the IMF should step in to help out the disaster that will happen in Greece.

It's really time that it's head Christine Lagarde stepped down. Someone who can take an unbiased position and who is not associated with the Euro or a country that it matters so much to should take charge. Christine Lagarde has to many conflicts of interest.

Graham_Devon

Mrs_Bones wrote: »

The IMF is stretching it's remit to breaking point. It was never set up to back up and bailout out failing currencies like the Euro. If Greece leaves the euro then that is the time the IMF should step in to help out the disaster that will happen in Greece.

It's really time that it's head Christine Lagarde stepped down. Someone who can take an unbiased position and who is not associated with the Euro or a country that it matters so much to should take charge. Christine Lagarde has to many conflicts of interest.

That's exactly why she was chosen.

vivatifosi

Graham_Devon wrote: »

That's exactly why she was chosen.

Well that, and the fact she doesn't have a pen1s.

On the subject of the IMF, there was an interesting article yesterday saying that China and Japan were going to work together as a bloc moving forward to decide what funds to commit to the IMF.

Graham_Devon

Greek MP's have now approved a new law which provides a debt write down, or "debt swap".

Banks and other private creditors will be asked to take a 53.5% loss on their bonds, wiping out 107bn euros (£90bn;$142bn) of Greek debt.

Now that the debt swap has been approved, MPs will also be asked to back further austerity measures.

Included in the debt swap law are collective action clauses (CACs) which will force all private bond-holders to take a loss on their investments if two-thirds of investors back the government's offer. For the swap to go ahead, 50% of investors will have to respond to it.

Is this not a default?