Greece...

Cyberman60

jjlandlord wrote: »

At the end of the day, if an independent country wants to do something then it can just do it.
It boils down to the consequential cost for everyone and how strong the country is to impose its will.



Yes, but you said that leaving the euro would mean that they could renege on the debt, which is not the same and incorrect.

Either way they can renege on their debts. Greece hold the aces as they have absolutely nothing to lose, and this could be the start of a few other countries exiting the Eurozone, such as the other PIGS.

jjlandlord

Cyberman60 wrote: »

Greece hold the aces as they have absolutely nothing to lose.

It's clearly incorrect to claim that they have nothing to lose.

However, the other side also has a lot to lose. Therefore it's a good old poker game.

Cyberman60

jjlandlord wrote: »

It's clearly incorrect to claim that they have nothing to lose.

However, the other side also has a lot to lose. Therefore it's a good old poker game.

They will lose the 'choke' of the Euro, lose their debts, adopt the drachma and start growing their economy again. Staying in the Euro is a no-go. Everything to gain by exit IMO and the EU know that.;)

danothy

Cyberman60 wrote: »

Greece hold the aces as they have absolutely nothing to lose

Can they not lose the aces then?

antrobus

Cyberman60 wrote: »

Either way they can renege on their debts. Greece hold the aces as they have absolutely nothing to lose, and this could be the start of a few other countries exiting the Eurozone, such as the other PIGS.

That's where you are wrong.

If Greece "hold the aces"why is it that they have signed up to an "unequivocal commitment to honour their financial obligations to all their creditors fully and timely"? Only just days ago Syriza were saying that they weren't going to sign up for an extension of the bailout deal, and they weren't going to talk to the troika any more, and now they've signed up to an extension of the bailout deal, and agreed to talk to the troika.

antrobus

Cyberman60 wrote: »

They will lose the 'choke' of the Euro, lose their debts, adopt the drachma and start growing their economy again. Staying in the Euro is a no-go. Everything to gain by exit IMO and the EU know that.;)

If that's the case, why hasn't it happened?

ruggedtoast

antrobus wrote: »

The Greek authorities reiterate their unequivocal commitment to honour their financial obligations to all their creditors fully and timely.

http://www.consilium.europa.eu/en/press/press-releases/2015/02/150220-eurogroup-statement-greece/

Going back to the drachma ain't gonna make that pile of Euro denominated debt any smaller.

Besides, you misunderstand;

Mr Schauble's willingness to expel Greece from the euro is widely shared in Germany. The country’s Council of Economic Experts issued a joint letter on Friday arguing that the eurozone is able to cope with the trauma of Grexit and is likely to emerge stronger in the long-run after shaking off its perennial problem child. “It could boost the credibility of the institutional framework,” said the text, adding that the “catastrophic” condition of the Greek economy had nothing to do with Troika austerity policies.

http://www.telegraph.co.uk/finance/economics/11426378/Greece-averts-bankruptcy-and-softens-austerity-in-last-ditch-deal.html

The Germans would be quite happy if Greece quit. It's the Greeks that want to stay in.

The Germans turned a blind eye to Greece meeting none of the Euro entry criteria. They then had a gay old time selling vast amounts of debt to Athens which the Greeks promptly used to pay German workers to make luxury cars and granite topped kitchen units.

Greece is by no means the only country on whom they have used this model. Germany is no honest broker in this situation.

jjlandlord

Interestingly the big recession Greece has been experiencing has just erased one part of the massive boom its GDP has experienced since 2002.

I'm no expert but I suspect that the boom was due to the cheap money they could borrow thanks to the euro and all the subsidies they received from the EU as a 'poor' country.

Without these 2 factors, today they might have had less debt, but their GDP might not have been any higher than it is now.

Their economy really does need to deeply reform.

The issue is whether the treatment administered at the moment is likely to kill the patient and hurt the neighbours in the process.
If the patient runs away he may still die... and hurt the neighbours in the process.

antrobus

ruggedtoast wrote: »

The Germans turned a blind eye to Greece meeting none of the Euro entry criteria. ....

Everybody turned a blind eye to the fact that no one quite met the Euro entry criteria. That's not the issue.

The issue is that Greece fudged the figures on an epic scale.

Donnakou

In its decision, the Council took the view in the light of the Commission and ECB report that:

Greece fulfilled the criterion relating to the!average rate of inflation; during the previous year, the inflation rate reached 2!%, which was lower than the reference value (2.4!%);Greece was not the subject of a decision on the existence of an excessively high!government deficit!(Decision!2000/33/EC), as the annual government deficit did not exceed the reference value (3!% of GDP) and the government debt ratio was approaching the reference value (60!% of GDP) at a satisfactory rate;Greece had been a member of the exchange-rate mechanism of the!European Monetary System!(EMS)!and subsequently of!ERM II!for two years without devaluing its currency's central rate;Greece met the criterion of the!long-term interest rate; over the previous year, the interest rate reached 6.4!%, which was lower than the reference value (7.2!%);Greek!domestic legislation, including the statute of the national central bank, was compatible with the Treaty and the Statute of the European System of Central Banks (ESCB).

TAKEN FROM the official EU Council Decision journal entry.... surely Greece entered the Euro the same as Cyprus and Malta !

antrobus wrote: »

Everybody turned a blind eye to the fact that no one quite met the Euro entry criteria. That's not the issue.

The issue is that Greece fudged the figures on an epic scale.