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If Greece will leave the Euro on Sunday, will this open a Pandora's Box?

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  • SarkSark Guangdong, PRC
    Posts: 1,138
    Oh boy
  • Gustav_GravesGustav_Graves
    Posts: 11,119
    DaltonCraig007 wrote: »
    I saw an article on the BBC where the writer of said article was rejoicing that Greece was off the hook after it paid the sum that was due to the IMF. I'm sorry, but what on earth is that guy smoking? The only reason Greece was able to pay was with the help of the huge loan they received last week. Once that loan is all used up, Greece will need another 80 billion euros or so to pay off the next deadlines that will come in 6 months time. And once that loan is gone too, Greece will then need what will be a 5th bailout plan, and so on.

    Greece should have had it's debt written off, and/or be temporally removed from the Euro Zone at the start of the crisis 7 years ago. What would have been a huge (but short) blow to everyone then, will now be catastrophic now for Greece in it's current situation. And the more Merkel and Francois Hollande wait to aknowledge this is the only solution to this mess, the more catastrophic the solution will turn out to be.

    Monsieur and Madame Non (Hollande and Merkel) are basicly kicking the can as far as possible, not seeing they are making matters worse with their indecision.

    First of all, especially from Eurosceptical Brits I would expect that they understand it's a very hard thing to sell to all other EU nations: Writing off debts. Just put yourself for a while in the shoes of all other EU nations, except Greece.

    Poorer countries like Slovenia, Lithuania, Slovakia and Latvia also paid their dues. And especially for them (the prime ministers and presidents) it's impossible to say to their citizens: "We're going to write off the money that you gave to Greece via taxes".

    Secondly, Hollande and Merkel are not one of the same sides of a coin. Merkel is a conservative, just like David Cameron. But Hollande is a social-democrat/socialist. And Mr Hollande is actually in favor of writing off all these debts.

    And trust me, that's going to happen within 12 months. But it will be done silently, away from the big media-radar. Because once that gets scrutinized, more EU countries will be against future bailouts. It was actually part of the agreement that was signed 1,5 weeks ago. But first, CAN GREECE PLEASE reform their economy first? That's especially important for the long-term.

  • DaltonCraig007DaltonCraig007 They say, "Evil prevails when good men fail to act." What they ought to say is, "Evil prevails."
    edited August 2015 Posts: 15,718
    IMF has just announced the 3rd bailout has changed nothing, the Greek debt is now totally unsustainable, and the only solution now is to massively write off the Greek debt.

    This was painfully obvious from day 1, and should have been done atleast 6 years ago. Is it an economical and mathematic certainty that Greece will need a 4th bailout within the start of the year 2018. How much more money will we send until the inevitable happens and the whole thing comes crashing down?
  • Suivez_ce_parachuteSuivez_ce_parachute
    Posts: 2,015
    Hm, I read the beginning of the thread, funny to see that predictions in the short term are far harder than predictions in the long term. I mean, when you claim you can predict how the world will be in 30 years, at least you can spend 29 years and 364 days claiming you're right :)
  • PanchitoPistolesPanchitoPistoles 2.0
    Posts: 4,619
    A somewhat, but not completely off-topic question to those who know more about economics than I do: When people talk about how much in debt certain countries are, they always talk about public debt (aka government debt) and external debt, but they never talk about net international investment position. Why? Isn't that net international investment position a very important indicator?

    An example:
    - Country "A" owes £1000 to the rest of the world. The rest of the world owes country "A" £1100. Net international investment position of the country is +£100.
    - Country "B" owes £500 to the rest of the world. The rest of the world owes country "B" £400. Net international investment position of the country is -£100.

    Let's say the GDP of country "A" is exactly the same as the GDP of country "B". Politicians would tell people that country "A" is in a far worse situation than country "B", since its debt is twice as large, even though country "A" is far better off than country "B" if you look at the whole picture.

    So why do they almost never talk about net international investment position? Also, how does public debt figure into this?
  • ThunderfingerThunderfinger Das Boot Hill
    Posts: 45,489
    There is far more debt than money in the world. It can never be payed. It is a brilliant scam.
  • Suivez_ce_parachuteSuivez_ce_parachute
    edited August 2015 Posts: 2,015
    Hm, the "debt" of a country is not owned "by other countries". It is also owned by private entities, or even individuals. Some of which are citizen/companies/funds/... of the country they own the debt of. There is no such thing as a net balance. Look who has the biggest share of the US "debt", it's not China, not at all...

    I write "debt" because using that word is exactly the reason why such questions are asked while, in the end, they're quite meaningless. As I'm not bilingual, I won't venture in explaining all the subtleties of the words, but ask yourselves one question : what does happen when a country has no debt ? Who is "rich" then ?
  • DragonpolDragonpol https://thebondologistblog.blogspot.com
    edited August 2015 Posts: 18,281
    So what do we think of the resignation of the Greek Prime Minister Alexis Tsipras on 20 August 2015 due to many of his MPs voting against the EU Bailout Package?

    There is a new General Election set in Greece for September 2015, even though they only had one last in January 2015.

    P.S. For those interested in participating I have started a similar thread on AJB007 Forums entitled 'Crisis in Greece (2015): Any Solutions?':

    http://www.ajb007.co.uk/topic/46278/crisis-in-greece-2015-any-solutions/
  • DragonpolDragonpol https://thebondologistblog.blogspot.com
    edited August 2015 Posts: 18,281
    Yes, there was of course excessive spending (not only in Greece I might add) but does not Germany owe a historic blood debt to Greece and its peoples? As a historian and Greece fan (I've never been but would love to go there some time) I am reminded of how valiantly Greece fought during World War II and their contribution to delaying Hitler's invasion of the Soviet Union in 1941 (to great detrimental effect on Nazi Germany) should never be overlooked. They remain one of the only countries to push the invading Fascist Italian Army under Mussolini out of Greece and into the neighbouring Italian territory of Albania (which they took over in 1939). The British landed in Greece to help them in the fighting but when the Germans went to help their Italian ally they had to pull out of the country (like at Dunkirk in France in 1940). As a result of this unprovoked attack by the Axis powers I think that Germany should write off their debt up until 2015 (or see their return to their old currency the drachma) as a late recognition of their fight against the fascist hordes in the last war. It may not be a popular belief but it's one that I stick by. The Germans never really paid sufficient reparations after the war to Greece so now is the time to recognise the damage they caused to this great country once and for all. I'll end with a quote from Prime Minister Winston Churchill on the Greeks' fighting in the Greco-Italian War (1940-41) during World War II:

    "Hence we will not say that Greeks fight like heroes, but we will say that heroes fight like Greeks."
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