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Is Greece going to set off the long feared next wave of the Great Recession?

 
 
georgeob1
 
  1  
Reply Sat 4 Jul, 2015 03:15 pm
@Foofie,
It wouldn't surprise me at all if the IMF, the EU Banks and the EU leadership agreed to a reduction to the principal value of Greek debt, provided the Greeks have already enacted sorely need structural reforms designed to end their long-term dependence on government employment asnd pensions and have some real economic growth going for them. In the absence of that, the Greeks will need endless bailouts. That, I believe is the motivation for the EU intransigence on the matter, and I agree with them on it.
Foofie
 
  1  
Reply Sat 4 Jul, 2015 03:27 pm
@georgeob1,
georgeob1 wrote:

It wouldn't surprise me at all if the IMF, the EU Banks and the EU leadership agreed to a reduction to the principal value of Greek debt, provided the Greeks have already enacted sorely need structural reforms designed to end their long-term dependence on government employment asnd pensions and have some real economic growth going for them. In the absence of that, the Greeks will need endless bailouts. That, I believe is the motivation for the EU intransigence on the matter, and I agree with them on it.


Well, it's nice to see that you have a firm opinion.
hawkeye10
 
  -1  
Reply Sat 4 Jul, 2015 03:34 pm
@Foofie,
Foofie wrote:

georgeob1 wrote:

It wouldn't surprise me at all if the IMF, the EU Banks and the EU leadership agreed to a reduction to the principal value of Greek debt, provided the Greeks have already enacted sorely need structural reforms designed to end their long-term dependence on government employment asnd pensions and have some real economic growth going for them. In the absence of that, the Greeks will need endless bailouts. That, I believe is the motivation for the EU intransigence on the matter, and I agree with them on it.


Well, it's nice to see that you have a firm opinion.

do we really want to see a failed state where Greece is located?

THe moralists dont have a choice, they have to give greece reasonable credit terms and keep the banks alive. That is the price the Europeans are going to have to pay for letting greece in and then not supervising them well.

Quote:


Finance ministers are debating Athens’ demands for a loan that would tide the country over until June, allowing time to negotiate a permanent solution for Greece’s economic woes. The sums involved are large, and the Greek demands raise questions about the monetary and macroeconomic framework of the entire eurozone. They should not be agreed too hastily. But these issues, important though they are, should not blind politicians to Greece’s outsize geopolitical significance.



This is a country that bridges north and south, and east and west, like no other. It forms Nato’s southern tip. And the relationships it enjoys with Russia, Iran, China and others are unique within the alliance. Even if keeping Athens securely inside the European political and security order were to come at a high price, it is one that is likely to be worth paying.
Greece is responsible for securing a large and volatile part of the EU’s external border. This role is only likely to become more important, given the conflicts unfolding in north Africa and the Middle East.
The country’s strategic importance as a gateway to Europe has grown — even as its economy has shrunk by a quarter. It is one of the few eurozone countries that meet their Nato commitment for military spending (because of which, incidentally, it ranks among the most important customers of German and French weapons makers).
Politicians elsewhere in Europe are understandably concerned that their taxpayers will be made to pay for Greece’s past fiscal profligacy. But they should also remember that the country’s valuable contribution to the common defence of Europe goes largely uncompensated.

http://www.ft.com/intl/cms/s/0/f98c73b6-b761-11e4-981d-00144feab7de.html#axzz3exd1Pntm
georgeob1
 
  3  
Reply Sat 4 Jul, 2015 04:06 pm
@hawkeye10,
I don't know what you mean by "moralists" and I don't know just what of the several obvious risks that follow both with keeping greece associated with Europe and others that follow with letting it go you have in mind here.

It is clear that letting Syriza get away with its childish posturing and bluffing will ensure that (1) No economic reform will occur in Greece (2) Not only will the debt not be repaid, but Greece will continue to need future handouts to keep the association intact; and (3) Major downstream polcal and economic problems will beset the EU from Spain, Portugual and perhaps Hungary. Together all that will clearly eclipse any risks associated weith an exposed southeast flank in the region.
hawkeye10
 
  -1  
Reply Sat 4 Jul, 2015 05:35 pm
@georgeob1,
Quote:
Together all that will clearly eclipse any risks associated weith an exposed southeast flank in the region.

Well in that case we have to hope that China steps up to their status as new world solo super power and fixes this for us....Though they might run this through Putin in spirit of team play (the new Chinese-Russian cooperation) and to avoid showing their fangs economically just yet. They are of course showing their fangs by taking possession of the south china sea and daring us and the Japs to do anything about it.

Tell you one thing, I would hate to be South Korea, Japan, or Taiwan right now. Vietnam will be fine but they know now that the only possible answer when china wants something is "as you wish". Hong Kong better figure this out too, they got handed over to these people by the Brits, and now that they are chinese they damn well better fall in line.
georgeob1
 
  3  
Reply Sat 4 Jul, 2015 06:48 pm
@hawkeye10,
I recognize all that. However investing in Greece as an ally isn't much of a bet for anyone right now. In my judgment bailing Grerece out now would kill any possibility of economic reform in that country, and would doom the EU to continuing subsidies and bailouts for a very needy and dysfunctional economy over the long term. Perhaps more importantly new, related issues in Spain Portugual and perhaps even Italy and France would quickly emerge. All that would amount to an immediate and very threatening, difficult problem for Germany and the EU collectively. The new exposure on the southeast flank would be far easier to manage.

You haven't offered any useful commentary on this tradeoff yet.
hawkeye10
 
  -1  
Reply Sat 4 Jul, 2015 08:38 pm
@georgeob1,
Quote:
You haven't offered any useful commentary on this tradeoff yet.



I said that if Europe will not do it then we have to hope that China does. Which you have to know is true. If china will not then may that is wise for them, maybe not, I took no position on the matter. You are not going to get the reforms that you want if Greece comes apart, you are going to get Afghanistan, Somalia, Yemen....in Europe.

That cant be allowed to happen.

And other thing, Greece somewhere has to get some credit for their record of defense spending, and for their good relationships with nations that the Europeans need better relationships with. I think the fix is for Europe to argue that Greece is a special case, that they are going to get extra consideration because of the other things that they bring to the table, and because bad EU/IMF policy put them through unneeded hell for 5 years. Greece has not done everything that they were told to do but they did most, and they are no better off now than they were 5 years ago. The policy imposed upon them failed. When what you are doing does not work do something else, anything else.
CalamityJane
 
  1  
Reply Sun 5 Jul, 2015 11:00 am
The German "Spiegel" reports that preliminary counts favor a NO vote.
That's what Tsipras wanted and his finance minister Varoufacis chimed in - both wanted to resign should the referendum turn out against their wishes.

Regardless, I would hope that the EU honors the referendum decision and is helping Greece to find a solution, even if it means an exit from the EU.
0 Replies
 
georgeob1
 
  2  
Reply Sun 5 Jul, 2015 11:01 am
@hawkeye10,
I don't agree. China is interested in buying potentially profitable infrastructure in Greece (such as major ports) but neither able or interested in financing a long term deadbeat, over which it doesn't exercise easy control. Chinas doesn't do what you suggest even among its immediate neighbors in Asia. What you fear is at most a remote, fairly easily thwareted prospect. The continuing appetite of Greece for permanent subsidies is real and with us now.
0 Replies
 
Walter Hinteler
 
  1  
Reply Sun 5 Jul, 2015 11:01 am
It seems (as of now) that the "No-vote" will get a majority, by about 3%.

Intersting article in the Independent: Greece referendum: The Monty Python sketch that (sort of) explains the Greek debt crisis

From that above quoted article:
Quote:
The German word schuld means both debt and guilt.

Schuld is Germanic origin, a abstract verbal noun, "skulan". (Simalr in the Baltic languages.)
georgeob1
 
  1  
Reply Sun 5 Jul, 2015 11:05 am
@Walter Hinteler,
Walter Hinteler wrote:

It seems (as of now) that the "No-vote" will get a majority, by about 3%.


If so, the hangover after the flush of "victory" in this confrontation, with an emboldened Syriza still in power, is likely to be a big letdown for the Grereks.
Walter Hinteler
 
  1  
Reply Sun 5 Jul, 2015 11:22 am
@georgeob1,
59% 'No' it's said just now.
ehBeth
 
  1  
Reply Sun 5 Jul, 2015 11:25 am
@Walter Hinteler,
wow. that's quite a different number from what the polls were showing when I went to sleep last night

any current news on the turnout? the last the CBC said was "very low turnout"
Walter Hinteler
 
  1  
Reply Sun 5 Jul, 2015 11:28 am
@ehBeth,
There's nothing official until now.
0 Replies
 
georgeob1
 
  2  
Reply Sun 5 Jul, 2015 11:41 am
@ehBeth,
I've looked but haven't seen any reports based on actual vote counts, but other reports tend to confirm Walter's statements about a NO result. Under Greek law voting is mandatory, but I don't know if that is generaally enforced or even applies in this case. Varoufakas and other Syriza ministers are claiming victory, and the former is reportedly meeting with Greek bankers to draft his next rounds of demands. The Polls in Greece should be closing about now (9:00 AM PDT)

I also saw a report that Chancellor Merkel is planning a visit to Paris tomorrow to confer with Prersident Hollande. That should be anb interesting conversation.

Certainly a difficult situation. I hope the EU leaders remain firm but responsive to constructive Greek proposals (as they have done so far.).
0 Replies
 
CalamityJane
 
  1  
Reply Sun 5 Jul, 2015 12:06 pm
So far it's 60.3 % for NO and 39.7 % a YES vote, lt "Spiegel". So far, only 20 % of votes were counted.
The Greek are celebrating today, tomorrow they'll have a huge hangover.
I don't think that the common citizen understands the implication of a NO outcome.
georgeob1
 
  2  
Reply Sun 5 Jul, 2015 12:15 pm
@CalamityJane,
There has been an air of self-delusion about all this since the Striza party emerged and unexpectedly overturned the previous Greek government. If, as appears likely, "NO" prevails, and an emboldened Syriza government then boastfully submits new "demands", the EU leadership should respectfully and leisurely study them while the remaining EUROS in Greece flee the country and their economy collapses. Capitulation will occur quickly when money based commerce stops and the Greeks find that no one wants to lend them money.
Walter Hinteler
 
  1  
Reply Sun 5 Jul, 2015 12:23 pm
@georgeob1,
Those 60+% seem really very high - but it wasn't really clear for many, what they voted, it seems.

In Brussels, talks about humanitarian aid already started ...
CalamityJane
 
  1  
Reply Sun 5 Jul, 2015 12:50 pm
@georgeob1,
Satire: the IMF has sent a reminder to Greece to pay their debt.
The penalty fee for defaulting is 2.50 Euro.

http://1.bp.blogspot.com/-NawPIZ3eJRI/VZbOGrtXI7I/AAAAAAAAfQg/ihO8YBIWgUU/s1600/IWF-Mahnung.jpg
0 Replies
 
CalamityJane
 
  1  
Reply Sun 5 Jul, 2015 12:52 pm
@Walter Hinteler,
It's over 61 % NO votes by now.....
0 Replies
 
 

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