Greece...

antrobus

Sapphire wrote: »

Given an exit, how could Greece be physically stopped from using the Euro, which is being used in the country right now?

I believe that the simple answer would be that Greek Euros will be regarded by everyone as different from Euro Euros.

Generali

From my favourite provider of English-language Greek news:

http://www.ekathimerini.com/4dcgi/_w_articles_wsite3_1_15/06/2015_551025

You don’t need to be Henry Kissinger or Zbigniew Brzezinski to see that Greece is facing major geopolitical challenges. History has taught us that whenever Greece is experiencing a period of instability, Turkey takes advantage of this weakness to set a precedent. The Greeks were violently evicted from Asia Minor during a period of major turmoil in Greek politics. The end of the military dictatorship of 1967-1973 was followed by Turkey’s occupation of northern Cyprus, and the handover of power from Andreas Papandreou to Costas Simitis came just before the Imia crisis in 1996.

Now Turkey is also in crisis. Its foreign policy has seen nothing but a string of failures, the mighty Recep Tayyip Erdogan is battered yet remains as arrogant as ever, and what will happen over the next few weeks is completely unpredictable.

To be fair, Ankara has not sought to take advantage of the Greek crisis so far. But in recent months it does seem to be testing the waters. It knows of Greece’s weaknesses and also that Athens has spent all of its political capital on the debt negotiations.

Athens needs to be extremely wary.

The Imia crisis taught us that the challenge is to avert an unnecessary escalation of tension without ceding sovereign rights. So far, it seems that we have learned our lesson but this does not mean that Greece can let it’s guard down.

Turkey is not Greece’s only concern. The wave of undocumented migrants is also a significant threat and one that is extremely difficult to control. It not only constitutes a major financial burden but it is also impossible to know whether there may be radical elements hiding among the thousands of people fleeing war and poverty.

Last but not least, there appears to be some strange plan underfoot from Turkey to infiltrate the Balkans, and Albania in particular, which cannot come to any good in the future.

From the comment section.

Generali

A rewrite of FT's international version lead article:

http://www.ibtimes.co.uk/greece-eu-crisis-take-it-leave-it-time-approaches-tsipras-accuses-creditors-pillaging-1506306

Greek Prime Minister Alexis Tsipras has accused creditors of "pillaging" his country for the past five years as EU leaders have started making plans for a "state of emergency."

His comments, to an Athens daily, came as talks between Athens and the creditors over a cash-for-reform deal came to a crashing halt on 14 June.

Without a cash-for-reforms deal with the EU and the International Monetary Fund, Greece is expected to default on a €1.5bn (£1.1bn; $1.7bn) debt repayment to the IMF due by the end of June 2015.

Athens's bailout deal with the EU also runs out on 30 June and Tsipras has been trying to unlock the final €7.2bn instalment.

The creditors are demanding that Greece cut pension payments to civil servant, slash the number of public sector worker and raise VAT.

Speaking to Greek newspaper Efimerida ton Syntakton, Tsipras warned: "Further cuts to pensions after five years of pillaging under the bailouts can only be viewed as serving political expediency.

Generali

It might be worth me expanding on something I wrote earlier.

If Greece defaults, it will still need to raise debt. Pensions and salaries are paid on a weekly or monthly basis whereas taxes tend to come in quarterly or annually (if at all).

Obviously if Greece has just defaulted to the Troika (and probably everyone else too) then they will still need some way of getting around this need to borrow.

The simplest way is to pay people with IOUs.

You pass a law saying, for example, that for each EUR100 that the state owes you, you will instead receive EUR80 in cash and EUR20 in the form of an IOU whose value lies with the bearer. This IOU behaves a lot like cash except you can't use it to pay your taxes and it may or may not end up being redeemed by the Government at some point in the future.

So as a 55 year old Greek pensioner who is clearly far too old to carry on as a teacher or a GP, you get your EUR1,000 as usual only EUR800 is in cash (or bank deposit) and EUR200 is in IOUs. You then go to the shop with your IOU and the shopkeeper will accept them in return for goods although probably not to the same value as EUR200 in cash would get you. You might get EUR190 or 180 or EUR10-worth of goods depending on the mood of the shopkeeper really.

Now the economy is at the mercy of one of the first economic laws: Gresham's Law. That is, put simply, 'bad money drives out good'. Imagine you were paid in two forms of currency, EUR and EUR IOUs, which would you spend first? The IOUs of course. Any savings you'd hold in EUR cash. The IOUs would circulate faster and faster as nobody would want to hold on to them for any period of time. Over time, the IOUs start to drive the EUR out of existence as EUR are being hoarded and only spent if absolutely necessary.

Froggitt

Greek Prime Minister Alexis Tsipras has accused creditors of "pillaging" his country for the past five years as EU leaders have started making plans for a "state of emergency."

And of course the reality is that Greece has been pillaging other European countries for the past 15 years, which is why they are in stuch up to their eyeballs.

[Deleted User]

Froggitt wrote: »

Greece has been pillaging other European countries for the past 15 years

Expand on that, including sources and logical statements please.

antrobus

Generali wrote: »

It might be worth me expanding on something I wrote earlier......The simplest way is to pay people with IOUs. ....

Apparently the ECB has an 'adverse scenarios group' which has already thought of that.:)

http://www.reuters.com/article/2015/04/17/us-eurozone-greece-ecb-exclusive-idUSKBN0N824Y20150417

kabayiri

Generali wrote: »

...
Now the economy is at the mercy of one of the first economic laws: Gresham's Law. That is, put simply, 'bad money drives out good'. Imagine you were paid in two forms of currency, EUR and EUR IOUs, which would you spend first? The IOUs of course. Any savings you'd hold in EUR cash. The IOUs would circulate faster and faster as nobody would want to hold on to them for any period of time. Over time, the IOUs start to drive the EUR out of existence as EUR are being hoarded and only spent if absolutely necessary.

Canny Greeks will find a way to get tourists to take the EUR IOU currency form I reckon

purch

Generali wrote: »

Last but not least, there appears to be some strange plan underfoot from Turkey to infiltrate the Balkans, and Albania in particular, which cannot come to any good in the future.

Oh good.

That sounds just the sort of thing we could do with at the moment :eek:

kabayiri

The Greeks are clearly responsible for many of their troubles.

However, shouldn't many of these highly paid ; probably academically gifted; EU politicians accept that they have created an inflexible Euro system which does not allow for certain situations which were always likely to occur.