Greece...

Froggitt

But he wants both ends of the stick.....in Euro and no austerity.

pertgave

The BBC Radio 4 Today is reporting on Greece deferring the payment to the IMF as a provocation by it's government to show it's creditors that they would rather 'snap than bend'.

What I read in the German press is that Greece has been authorised to bundle the payments at the end of the months, as so the creditors are sympathetic to the steps being taken.

I don't see Greece exiting the Euro. It wouldn't eliminate their debts.

Froggitt

Of course it would. Default and Grexit would go hand in hand.

antrobus

BlondeHeadOn wrote: »

What would you do now if you were Alexis Tsipras?

I'd organise a snap referendum on whether to stay in the euro or not, and do it this month - to get a mandate to either stick with the austerity measures or Grexit.

He has to do it quickly before all the Greeks disappear on holiday for the Summer....

The Greek banking system would not survive for more than about, oh, five minutes, after the annoucement of a 'snap referendum' on the Euro.

P.S. Grexit is not an alternative to 'austerity measures'. Grexit is simply a different kind of austerity.

worldtraveller

If there was to be a Grexit it would certainly need to be, and probably would be, a "controlled" Grexit, supported by the eurozone, with significant debt write-offs. A straight, unsupported Grexit, would be a catastrophe, whatever way you look at it, for both Greece, but also the wider economies & markets. Therefore, should a Grexit occur (and, although I've always believed it to be the best option, I'm certainly not expecting it), it is most likely to be very much "controlled", with significant financial support (well, more of the same! ), IMHO.

Brock_and_Roll

Sometimes it helps to take a step back from all this so you can see the wood from the trees....

The only reason that we are having all these protracted discussions is because this is not just about money, its about politics. In other sovereign default situations the lenders would make a cold calculation as to the ability of their borrower to repay then take the appropriate actions, write-offs, rescheduling, default etc. Clearly if it were just down to money alone, then Greece is hopelessly insolvent with no prospect of paying back its current debts in full.

So for the politics.....The EU would rather Greece stay in the Euro to prevent contagion risk. The Greek government would also like to stay in Euro as they know the immediate economic chaos that would result from a Grexit which politically they would get the blame for, allowing some other party to come to power and claim credit for the subsequent recovery!

So, in my view the one thing that Greece will not do is walk away to a Grexit. If they are going to leave, they want to be forced out in order to deflect the blame.

Syrzia were elected on a mandate to resist austerity etc so either way they may not feel they have the mandate to sign up to a tough deal, or exit the Euro both of which will have huge negative economic consequences.

So I am increasingly of the view that there is at least a 50% chance that Syrzia will call an election prior to agreeing to any deal - probably not an election in Greece that anyone would want to win!

Generali

worldtraveller wrote: »

If there was to be a Grexit it would certainly need to be, and probably would be, a "controlled" Grexit, supported by the eurozone, with significant debt write-offs. A straight, unsupported Grexit, would be a catastrophe, whatever way you look at it, for both Greece, but also the wider economies & markets. Therefore, should a Grexit occur (and, although I've always believed it to be the best option, I'm certainly not expecting it), it is most likely to be very much "controlled", with significant financial support (well, more of the same! ), IMHO.

I suspect by it's very nature, a Grexit is the nuclear option and likely to be uncontrolled.

The net impact? Pretty small to anyone living outside Greece IMHO.

Part of the point of all this fannying around has been to let BNP and Deutsche sell their holdings of Greek bonds. Those are long gone. There is no contagion, Greece is a tiny percentage of EZ GDP. Wouldn't be much fun for the Greeks but I can't imagine the current situation is much fun either.

antrobus

worldtraveller wrote: »

If there was to be a Grexit it would certainly need to be, and probably would be, a "controlled" Grexit, supported by the eurozone, with significant debt write-offs....

If the 'Brussels Group' are unwilling to offer "significant debt write-offs" in order to keep Greece in the Eurozone, I can't see them offering "significant debt write-offs" to help them get out .

Generali wrote: »

I suspect by it's very nature, a Grexit is the nuclear option and likely to be uncontrolled....

I have an idea that if it happens, it will happen as a result of a Greek default, and will happen because everybody in the world starts acting on the basis that euros in a Greek bank are not euros. Except the Greeks, who will continue to pretend otherwise.

Generali wrote: »

....
The net impact? Pretty small to anyone living outside Greece IMHO.

Part of the point of all this fannying around has been to let BNP and Deutsche sell their holdings of Greek bonds. Those are long gone. There is no contagion, Greece is a tiny percentage of EZ GDP. Wouldn't be much fun for the Greeks but I can't imagine the current situation is much fun either.

I presume that the ECB, or whatever entity owns all that Greek debt, will have to crystallise a Very Big Loss. But since everyone appears to think that Greece isn't going to pay the money back anyway, I can't see that making that much difference.

worldtraveller

antrobus wrote: »

If the 'Brussels Group' are unwilling to offer "significant debt write-offs" in order to keep Greece in the Eurozone, I can't see them offering "significant debt write-offs" to help them get out

Offers are purely part of the negotiations, nothing more, nothing less.

IMHO, there will inevitably be significant debt write-offs in finality, whether they stay, or go.

antrobus

worldtraveller wrote: »

Offers are purely part of the negotiations, nothing more, nothing less. ...

No offers of any write offs have been made so far. Not that I've noticed, anyway.

worldtraveller wrote: »

...IMHO, there will inevitably be significant debt write-offs in finality, whether they stay, or go.

That might, or might not be the case. What I was doubting was your assertion that thre would be significant debt write-offs as part of a 'controlled Grexit'. Which would be something else entirely.