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Greece Debt Crisis - Après Oxi

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  • Registered Users, Registered Users 2 Posts: 2,091 ✭✭✭marmurr1916


    Some Greek banks face closure or merger with other banks even if there is a bailout.

    http://www.reuters.com/article/2015/07/08/us-eurozone-greece-bankclosures-idUSKCN0PI2KI20150708

    The damage caused to the banks over the past five months is so bad that some of them aren't viable any longer.


  • Posts: 14,242 ✭✭✭✭ [Deleted User]


    Permabear wrote: »
    This post had been deleted.
    The European Commission did not play by the rules. The European Council did not play by the rules. Don't take my word for it, read the ECB criticism of the weak implementation of SGP, and tolerance of shortcomings even where they were known.

    The SGP under the aegis of the European Commission and the EC effectively made these institutions a supra-national regulator with obligations to the EU/EA, AND to the people of Greece who had relied on the authority of those institutions to oversee fiscal restraint, as all Europeans do.

    The Commission and the European Council [who are democratically well-endowed, as we are often reminded] have failed in their role as a supra-national regulator, as have successive Greek governments, although the latter is usually exaggerated at the expense of the former.

    Neither failure can be ignored.


  • Posts: 14,242 ✭✭✭✭ [Deleted User]


    I can't edit posts, perhaps it's something to do with the boards.ie outage.

    The last sentence in the third paragraph of the preceding post should read, "the latter is usually exaggerated [to the benefit of] of the former."


  • Closed Accounts Posts: 6,360 ✭✭✭KingBrian2


    I'm not trying to drum up pity for Greeks. Nobody in Greece cares about what boards.ie users think. Pity is irrelevant to the facts, and the fact is that the Greek cross-currency swaps were not only legal, they were explicitly acceptable under Eurostat rules [pp. 201--202; ESA95].

    Presumably you don't blame Goldman Sachs for the transaction. They were breaking no rules; neither were Greece.

    This is important because the whole exchange on culpability began by one poster asking a very sensible question: To paraphrase, he asked, 'If Greece were playing by the rules, which turn out to be unwise, or even harmful (like much of the euro architecture), is it Greece who should bear all the costs of the subsequent fallout?'

    That's a legitimate question, it is critical to the Greek argument for debt relief, and it is the question that plenty of idealogues in this thread would rather evade.

    Because the Eurozone has to take some blame here. Not only was the Eurozone weakly designed, not only did it accept the use of derivatives to 'hide' fiscal deficits, it actively ignored deficits when they did arise on the statistics they had before them.

    As late as 2007, the European Commission actually abrogated an Excessive Deficit Procedure on Greece in 2007, on the Commission's own initiative!

    The excessive and emotional outbursts against Tspiras and even the Greek people are perhaps not solely the product of genuine frustration at Greek inertia and obstinacy. Perhaps this multi-lingual rally of Single European Outrage is also intended to distract from the embarrassing realization that the Eurozone and the Commission have failed quite spectacularly in their fumbling attempts at currency union.

    Insofar as this has aggravated the Greek situation, it is fair that both sides share in the costs.

    The Greeks bear the most as they failed to come up with any proposals for the 18 countries that use the € would be prepared to listen to. Time and energy has been wasted while the Greek gvt have pushed the country back into recession. Europe is marching on with tensions on the Ukrainian border and a migrant crisis in the Mediterranean. Europe cannot be preoccupied with one country.

    Despite all the doom and gloom with Greece's debt a more sensitive discussion with the Iranians and Syrians have merited ever more positive news so at least we can see that not all shouting matches like what is happening in Brussels over Athens are taking place. Reasoned calm conversations do take place over arguable more delicate subject matters elsewhere on the globe.


  • Closed Accounts Posts: 6,360 ✭✭✭KingBrian2


    Some Greek banks face closure or merger with other banks even if there is a bailout.

    http://www.reuters.com/article/2015/07/08/us-eurozone-greece-bankclosures-idUSKCN0PI2KI20150708

    The damage caused to the banks over the past five months is so bad that some of them aren't viable any longer.

    That is Syriza's Achilles heel. Who cares what happens to the country? Democracy will trump financial matters. So it should. Look at those banks and you see a different story. Those banks keep the state functional. Allow them to shut down would be like if Chancellor Merkel decided to let the Landesbanks disappear from the German landscape. The Berliners must be thinking "bloody hell" as they watch Greece prepared to dismantle their banks.


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  • Posts: 14,242 ✭✭✭✭ [Deleted User]


    KingBrian2 wrote: »
    The Greeks bear the most as they failed to come up with any proposals for the 18 countries that use the € would be prepared to listen to.
    Lets establish some basic points.

    Any 'moral responsibility' for a catastrophe must first look to its causes, not in its policy responses.

    For example, if I knock you off your bike on my way to work, I can hardly claim to be exempt because I loaned you the healthcare bill.

    We need to look to the origins of the crisis, and why it happened in the first place. The origin being offered by the likes of Permabear, that everything was the Greeks' fault, does not quite square with the role of the European institutions as supra-national invigilators of European fiscal prudence.


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


    This post has been deleted.


  • Posts: 14,242 ✭✭✭✭ [Deleted User]


    Permabear wrote: »
    This post had been deleted.
    Now for the first time in this exchange we are getting somewhere.

    If we can momentarily abstain from allocating specific magnitudes of blame, do you accept that there was some degree of European institutional fault for having failed to adequately react to known shortcomings on Greek government debt during its membership of EMU?

    If you can answer that question reasonably frankly, we might be able to occupy some common hround.


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


    This post has been deleted.


  • Posts: 14,242 ✭✭✭✭ [Deleted User]


    Permabear wrote: »
    This post had been deleted.
    OK, this is progress.

    Since the SGP was a supra-national instrument, I assume we accept a degree of supra-national responsibility?
    However, it was not the known extent of Greek debt that triggered a crisis; it was the sudden revelation of hitherto unknown debt, that successive Greek governments had gone to some lengths to conceal.
    Come now; do you really believe so? The European Authorities expressed their belief in major problems with the Greek economic statistics from [at least] 2004, but there was no crisis until 2010.

    292v1no.jpg

    After the European Authorities [publicly] became aware of serious Greek imbalances from 2004, the ECB became critical of Greek imbalances, DESPITE WHICH the Commission & Council embarked on a response of ignore & delay, in contravention of its obligations to all Europeans, including Greek people, since theirs was a supra-national regulatory framework with common, European obligations.

    I hope that I can pre-empt any immediate response by saying that Greece does indeed bear a significant burden of the responsibility for its own fiscal metrics. This situation, however, must take account of wider EU/ EA failures.


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  • Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭swampgas


    Neither the EU nor Greece are blameless, but they are to blame for two different things.

    The EU failed to protect the Euro itself, and wasted huge chunks of EU money on what appears to be a rogue member state.

    Greece has massively and systematically misrepresented its own finances, damaging the Euro, and should take the hit for the consequences of its deception.

    So what if Greece wasn't stringently policed to ensure it was reporting its economic status properly? Should that even be necessary? Their fiddling of their books is not anyone else's responsibility, it's theirs and theirs alone.

    The moral hazard for the EU is losing the money poured into Greece that will probably never be repaid, and reputational damage to the EU project.

    The moral hazard for Greece is bankruptcy, Grexit and possibly becoming a failed state.

    .


  • Registered Users, Registered Users 2 Posts: 119 ✭✭Jonblack


    Will the US stand by and let it become a failed state with a left goverment. Look at map of were Greece sits and its relation to countries the US is involved with.


  • Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭swampgas


    Jonblack wrote: »
    Will the US stand by and let it become a failed state with a left goverment. Look at map of were Greece sits and its relation to countries the US is involved with.

    If there is a Grexit, a lot will depend on what happens next - will there be a snap election, a military coup, who knows ???


  • Closed Accounts Posts: 164 ✭✭Thomas_.


    swampgas wrote: »
    If there is a Grexit, a lot will depend on what happens next - will there be a snap election, a military coup, who knows ???

    Everything is open there but I think that Tsipras is rather reckoning that it will lead to new GE in Greece with him and his party getting a majority to rule alone.


  • Closed Accounts Posts: 20,296 ✭✭✭✭Jawgap


    Jonblack wrote: »
    Will the US stand by and let it become a failed state with a left goverment. Look at map of were Greece sits and its relation to countries the US is involved with.

    I think the US will pressure the EU to sort it out especially as has been pointed out Greece is two borders away from ISIS/ISIL.
    swampgas wrote: »
    If there is a Grexit, a lot will depend on what happens next - will there be a snap election, a military coup, who knows ???

    I doubt there'd be a coup (though never say never!) as it would lead to the immediate suspension of their EU membership.


  • Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭swampgas


    Jawgap wrote: »
    I think the US will pressure the EU to sort it out especially as has been pointed out Greece is two borders away from ISIS/ISIL.

    The problem is the US doesn't have much leverage, as this is not something that can be resolved behind closed doors. All 18 EZ governments are involved, and their electorates have very strong feelings about this.

    If there is a perception that the US is trying to interfere it could backfire badly.


  • Posts: 24,798 ✭✭✭✭ Yaretzi Angry Goose-step


    USA are more than welcome to buy billions of Greek Bonds at a low interest rate to sort all this out.

    Money talks.


  • Registered Users, Registered Users 2 Posts: 24,767 ✭✭✭✭molloyjh


    swampgas wrote: »
    Neither the EU nor Greece are blameless, but they are to blame for two different things.

    The EU failed to protect the Euro itself, and wasted huge chunks of EU money on what appears to be a rogue member state.

    Greece has massively and systematically misrepresented its own finances, damaging the Euro, and should take the hit for the consequences of its deception.

    So what if Greece wasn't stringently policed to ensure it was reporting its economic status properly? Should that even be necessary? Their fiddling of their books is not anyone else's responsibility, it's theirs and theirs alone.

    The moral hazard for the EU is losing the money poured into Greece that will probably never be repaid, and reputational damage to the EU project.

    The moral hazard for Greece is bankruptcy, Grexit and possibly becoming a failed state.

    .

    I'd agree with this. I do get what A Tyrant Named Miltiades! is saying but I don't agree with the ultimate conclusion (s)he has reached. The EU have a certain amount of responsibility for the situation, to the point where I believe they have a responsibility to try and help Greece out of their self-imposed situation. The EU have been doing just that. They then have a responsibility to the rest of Europe to ensure that something like this doesn't happen again. I've no idea if they've reviewed their processes and procedures to address that.

    They do not have any responsibility in my eyes for carrying any of the burden of the debt. The debt in its entirety belongs to Greece and Greece alone. The EU didn't help, but the EU is not responsible for the actual debt itself.


  • Registered Users, Registered Users 2 Posts: 12,247 ✭✭✭✭BoJack Horseman


    Its easy to call for a deal when you don't have to pay & you only want smooth seas.

    Your right, the USA could buy all of Greece's debt tomorrow if they really cared.


  • Closed Accounts Posts: 20,296 ✭✭✭✭Jawgap


    swampgas wrote: »
    The problem is the US doesn't have much leverage, as this is not something that can be resolved behind closed doors. All 18 EZ governments are involved, and their electorates have very strong feelings about this.

    If there is a perception that the US is trying to interfere it could backfire badly.

    I wouldn't say they're trying to interfere per se - but they would see themselves as having an interest from the perspective of avoiding turmoil in the markets, and one of their most affluent export markets - the EU - suffering a weakening currency at a time when they're trying to add jobs with a strengthening dollar.
    USA are more than welcome to buy billions of Greek Bonds at a low interest rate to sort all this out.

    Money talks.

    Indeed it does - and just behind the German banks, US banks have the greatest exposure to Greece
    Its easy to call for a deal when you don't have to pay & you only want smooth seas.

    Your right, the USA could buy all of Greece's debt tomorrow if they really cared.

    One assumes they would change their tune rapidly if the Greeks took a dig out from the Russians!


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  • Registered Users, Registered Users 2 Posts: 10,886 ✭✭✭✭Bob24


    USA are more than welcome to buy billions of Greek Bonds at a low interest rate to sort all this out.

    Money talks.

    That sums it up. The US will give a few phone calls and tell others what to do, but they don't want to have skin in the game ... meaning at the end of the day their influence is minimal.


  • Closed Accounts Posts: 39,019 ✭✭✭✭Permabear


    This post has been deleted.


  • Posts: 24,798 ✭✭✭✭ Yaretzi Angry Goose-step


    Very interesting article here which claims to be an interview with a Syriza insider.

    Honestly, I think that's probably true enough, there's probably enough valid points raised on both sides of the coin to envisage it being from someone close enough to the coalface.

    It's a bizarre enough interview, the lack of foresight regarding what would happen in the case of a bank run/ default, the lack of understanding of the legal obligations of the ECB to the currency itself (liquidity, ELA etc) are all pretty damning indictments of the Syriza 'strategy'.

    Though I'm hoping that the quote/paraphrase from Dijsselbloem is a misquote and not an accurate portrayal of what he actually said, as that's a pretty scary thing for someone to say.

    Worth a read in any case.


  • Registered Users, Registered Users 2 Posts: 2,091 ✭✭✭marmurr1916


    The head of the Greek banking association has announced that ATMs will run out of cash from Monday.
    Yannis Koutsomitis ‏@YanniKouts 6h6 hours ago

    #Greece banks association head Katseli says banks will have cash in ATM's until Monday


    So that €60 daily ATM withdrawal limit for Greek bank account holders, and unlimited daily ATM withdrawals for visitors to Greece, will become purely theoretical limits - the actual limit in practice for everyone will be €0 per day.

    I sincerely hope this simple fact is uppermost in the minds of the current Greek government.


  • Registered Users, Registered Users 2 Posts: 2,091 ✭✭✭marmurr1916


    OK, this is progress.

    Since the SGP was a supra-national instrument, I assume we accept a degree of supra-national responsibility?

    Come now; do you really believe so? The European Authorities expressed their belief in major problems with the Greek economic statistics from [at least] 2004, but there was no crisis until 2010.

    292v1no.jpg

    After the European Authorities [publicly] became aware of serious Greek imbalances from 2004, the ECB became critical of Greek imbalances, DESPITE WHICH the Commission & Council embarked on a response of ignore & delay, in contravention of its obligations to all Europeans, including Greek people, since theirs was a supra-national regulatory framework with common, European obligations.

    I hope that I can pre-empt any immediate response by saying that Greece does indeed bear a significant burden of the responsibility for its own fiscal metrics. This situation, however, must take account of wider EU/ EA failures.


    The claim that the wider EU authorities should have known that the Greeks were falisfying their accounts is simply not credible. Does the Garda Fraud Squad bear some joint responsibility if a company director commits fraud?

    In answer to your questions posed to Permabear in previous posts about whether the EU institutions bear some degree of responsibility for Greece cooking its books - OXI!


  • Registered Users, Registered Users 2 Posts: 2,091 ✭✭✭marmurr1916


    The Greek cabinet begins a meeting in 30 minutes to make a decision on the final reform proposals. I'd love to be a fly on the wall at that meeting!
    Yannis Koutsomitis ‏@YanniKouts 4 mins4 minutes ago

    #Greece Cabinet council meeting in 30 minutes. Should make final decision on reform proposal. #GreeceCrisis


  • Posts: 24,798 ✭✭✭✭ Yaretzi Angry Goose-step


    Very interesting developments.
    There is growing concern among opposition parties that Tsipras is either unable or unwilling to reach an agreement with lenders. New Democracy leader Evangelos Meimarakis met with Tsipras and four other party leaders on Monday, resulting in the issuing of a joint statement. However, the conservative said on Wednesday that he refused to hold another meeting in private with Tsipras and called on him to address Parliament.

    Meimarakis said that he wanted Tsipras’s comments to be officially recorded, which suggests that the New Democracy chief has become suspicious of the prime minister’s motives. Meimarakis also decided to send ex-ministers Dora Bakoyannis and Costis Hatzidakis to Brussels for discussions with officials there.

    I absolutely hate the interior politics of this situation. There's a chance that both 'sides' (within Greece) are still trying to play a game against each without considering the ramifications of a failure. The side show has to stop.


  • Registered Users, Registered Users 2 Posts: 2,091 ✭✭✭marmurr1916


    Very interesting developments.



    I absolutely hate the interior politics of this situation. There's a chance that both 'sides' (within Greece) are still trying to play a game against each without considering the ramifications of a failure. The side show has to stop.

    Not much chance of a government of national unity emerging if the political parties are still trying to gain party advantage from the situation.

    The other key internal political question is whether Tsipras has the guts to stand up to the hardliners in Syriza who want Greece to withdraw from the euro:
    Greece’s Prime Minister Alexis Tsipras is faced with the ultimate dilemma: accept German-advocated austerity measures opposed by hardliners in his own party or take his country out of the euro.

    While Sunday’s referendum delivered a strong rebuke from Greek voters to the austerity demands, it also put pressure on Tsipras to strike a deal after many people cast their vote as a desire to stay in the euro on better terms. For some hardline members of his Coalition of the Radical Left or Syriza party, however, the vote was a firm sign of rejection of euro membership at all costs.

    “Tsipras will probably face significant party unrest from the left bloc, which is already calling for him to insist on the path indicated in their view by the ‘no’ vote in the referendum,” Nomura analysts including Lefteris Farmakis and Nick Matthews wrote in a note to clients Wednesday.

    The most clear salvo came Thursday from Energy Minister Panagiotis Lafazanis, the head of the so-called Left Platform which controls about 40 hardline leftist lawmakers in parliament, mostly former communists, many of whom advocate unilateral default, bank nationalization and euro exit.

    “We don’t want a third memorandum with tough austerity measures,” Lafazanis said at a conference in Athens. “The Greek people’s ’no’ isn’t going to be turned into a humiliating ’yes’ and a new bailout crematorium.”

    His remarks came a day after Tsipras applied for a three-year loan from the European Stability Mechanism, in a letter promising to implement tax and pension system reforms as soon as early next week.

    The government has until Thursday midnight to present an economic plan that includes spending cuts, in exchange for the new bailout. Failure to deliver a credible proposal will set off a process for the country’s exit from the single currency as early as Sunday, its European partners have warned.

    http://www.bloomberg.com/news/articles/2015-07-09/tsipras-stuck-between-a-german-rock-and-a-greek-left-hard-place


  • Registered Users, Registered Users 2 Posts: 2,091 ✭✭✭marmurr1916


    Why Estonians aren't especially sympathetic towards Greece:
    Janina Lind
    @LindJanina

    @NickMalkoutzis @MatinaStevis
    My mother in Estonia with pension €345 will be ecstatic that we can contribute some more from EST budget, sry

    A €345 monthly pension is far lower than any Greek state pension, even after cuts.


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  • Registered Users, Registered Users 2 Posts: 10,886 ✭✭✭✭Bob24


    Why Estonians aren't especially sympathetic towards Greece:



    A €345 monthly pension is far lower than any Greek state pension, even after cuts.

    Yes these 2 charts show the political challenge for leaders of easter European EZ members:
    - http://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=ny_gdp_pcap_kd&scale_y=lin&ind_y=false&rdim=region&idim=country:EST:GRC:SVK:LVA:LTU&ifdim=region&ind=false
    - http://www.google.ie/publicdata/explore?ds=d5bncppjof8f9_&ctype=l&strail=false&bcs=d&nselm=h&met_y=central_government_deficit_and_financing_of_gdp&fdim_y=revenue_expense:3&scale_y=lin&ind_y=false&rdim=region&idim=country:EST:GRC:SVK:LVA:LTU&ifdim=region&ind=false

    Basically they are all growing, keeping their budget more or less under control, and still poorer that Greece.
    At the end of the day, what is called austerity measures in Greece is just business as usual for them.

    Asking their people to lend/give money to Greece (i.e. that money won't be used at home) whereas they are less well off than Greece and could use the money to improve their own living conditions (which they have been doing with restrain to keep budgets balanced) is political suicide.

    And this is before even mentioning that Greece has benefited from dramatically more EU structural funds to help develop its economy (and at a time when the world economy was doing much better) than those new members have.


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