Syrzia Won!

Graham_Devon

The markets don't seem phased in the slightest.

The news was making a big deal of the "carnage" this could create on the markets today. One commentator suggested the Euro would be very volatile.

What happened there?

danothy

wotsthat wrote: »

They could adopt a neo-drachma today if they wanted to. The cash machines would be emptied of Euros and stashed away with the rest of the stash. Anyone daft enough to be left with more than a working amount of Euros in Greek bank would see them re-denominated in Neo-drachma immediately.

New banknotes (like there's not a design already) could be in circulation next week if Andrex could fit it into their schedule.

There was talk a while back (2012?) of Greece needing to print currency in secret if they were going to switch, and speculation that it might actually be under-way. If the speculation was on point, then it might well be sitting ready to go ...

Graham_Devon

And Syriza have now joined forces with the far right party, "Greek Independents".

This was regarded last night as the worst case scenario for Germany if a coalition were formed in Greece, due to the manifesto from the Greek Independent party.

But there appears to be no reaction at all.

CLAPTON

debts don't of course have to be written off; it's just they they don't ever need to be repaid.

antrobus

Generali wrote: »

....Greece have to default....

Again? Are they going for the record?

Marktheshark wrote: »

Storm in a tea cup.
Like all political parties they wont deliver what they promised as "the time is not right".
Same here, remember Dave and his cast Iron promise we would have a EU referendum, unfortunately, time is not right.
Syriza will just keep kick the ball down field and deliver nothing it promised it would.
Watch this space.

I was thinking more of Harold Wilson and his infamous promise to 'renegotiate' the terms of Britain's membership of Europe.

wotsthat

Graham_Devon wrote: »

The markets don't seem phased in the slightest.

The news was making a big deal of the "carnage" this could create on the markets today. One commentator suggested the Euro would be very volatile.

What happened there?

Commentators like to report exciting surprises that, in reality, aren't that surprising.

jjlandlord

Generali wrote: »

Strictly speaking it'll be a bunch of Cyrillic characters so neither is right!

Greek characters!

Generali

michaels wrote: »

So what will actually happen, will there be another can-kicking deal that allows both sides to save some face or will there be a default and what would that mean on the ground, Greece can not instantly adopt the neo-drachma for practical reasons and yet Greek issued euros are likely to be toxic. Do the other defaults of countries like Argentina supply any pointers?

The last Argie default I hope doesn't give a guide as to what is to come. They defaulted in 2001 having confiscated bank accounts (and pensions I think?) first. They then paid out to bondholders, preferring some over others thus ignoring the important principle of pari passu, the idea that in a default all bond holders should be treated the same. The courts are still trying to resolve that one.

The bailout led to bonds being issued under UK law I believe. As a result any default should take into account pari passu in theory. In practice that is going to be hard to do as it will render the Greek banking system insolvent instantly. Foreign banks have mostly or entirely gotten out of Greek Govies so any impact will be limited to their exposure to Greek banks which will need to close for a few days to allow for an orderly disclosure of losses and tests of solvency. The Greeks could recapitalise with neo-Drachma to get round pari passu I guess.

I think that the Icelandic default is likely to give the best clues to the way forward for Greece: 6-12 months of absolute chaos with things that aren't made locally being largely unavailable in the shops. Then as the current account reaches balance post currency devaluation and the first debt markets for the new currency open, essentials will become available again and normal life can resume.

Generali

jjlandlord wrote: »

Greek characters!

Isn't the Greek alphabet Cyrillic? Shows what I know.

mayonnaise

shortchanged wrote: »

Has the can been kicked for the final time?

It's reality time now, times up for pretend and extend.

shorty and his cans

Pretend and extend will continue.
The Syriza peeps are already toning down the rhetoric.
Another 'Eurogeddon' for the UK press to get excited about, nothing new here.
Debts will be reshuffled, extended, kicked in the long grass. Like the cans.