Greece

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dusty2
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Re: Greece

Post by dusty2 »

The Euro partners were stupid to try and bail out Greece in the first place. Their debts were accumulated when they weren't in the Euro zone, so why should European country's be obliged to save them. They should have defaulted on the lot of them, then started with a clean slate. Start with Greece completely bankrupt would have been the best solution. Beggars can't be choosers, like Greece is now.
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ghariton
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Re: Greece

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e-kathimerini:
Let's not forget what prompted George Papandreou's ill-fated and panic-stricken effort to unburden himself of the weight of government by calling a referendum: the need for radical reforms, the popular rage that this has provoked and the sporadic violence of small but persistent groups. When the myth that our governments don't need to govern (as long as they just pretend to) crashed against reality, it was natural that something would give. The weakest link, from his election two years ago, was George Papandreou. The man who carries the banner of consensus and transparency, at home and abroad, caused irreparable damage to his own and Greece's credibility with improvisations that managed to surprise even his closest aides. He seemed to lose his cool under pressure from protests and the merciless attacks of opposition parties.

Who will withstand the blows that brought down George Papandreou? Which prime minister, which government will ignore the reactions that will accompany the implementation of measures whose adoption by parliament has already caused a rupture in society – measures such as dismissals in the public sector, new cuts to wages and pensions, harsher taxation, privatization and the utilization of public assets?

Today our country needs a prime minister who will feel secure enough not to be shaken by public outbursts and will be able to shoulder the burden of his responsibilities domestically and in dealing with our foreign partners. When the PASOK government, with an adequate majority, did not dare to support its own decisions, and the whole of the opposition damned them, will the members of a coalition be able to implement measures that some of its members were fighting? Will the parties that stay out of government, the unions and other organized groups consider the danger that Greece faces? Or will they be encouraged by Papandreou's woes and so continue to invest in chaos? The virulence of the demonstrations against the reforms will determine, to a great extent, the legitimacy of the new government and its negotiating power with our creditors. This will determine our future.
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Re: Greece

Post by Shakespeare »

Dithering until a danger becomes critical ensures nothing more than that it will become critical.

I don't think the Greeks will face reality until they are kicked out of the Euro.
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Re: Greece

Post by Benchwarmer »

ghariton wrote:Many people have expressed their indignation at the greed of Wall Street bankers. But it seems that greed is more widespread than Wall Street.
George
After soaking the American taxpayers for $2 trillion, the Wall Street investment banks are now focusing their attention on Greece. One country at a time :lol:
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Re: Greece

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What if Greece drops the Euro and reverts to the drachma? Would Hungary be the model?
Hungary’s sovereign credit grade may be cut to junk this month after Standard & Poor’s Ratings Services placed the country’s lowest investment grade on “CreditWatch with negative implications.”

<snip>

“There is no real reason for Hungary’s downgrade,” Peter Szijjarto, Orban’s spokesman, said in an e-mailed statement today, citing plans to reduce the budget deficit and public debt levels in 2012.

The steps included raising revenue by effectively nationalizing $14 billion of assets held by private-pension funds, levying extraordinary taxes on the banking, energy, retail and telecommunication industries and forcing banks to swallow exchange-rate losses on foreign-currency mortgages.

To protect the policies from oversight, the Constitutional Court was stripped of its right to rule in most economic issues. An independent Fiscal Council was dismantled and a new one set up dominated by Orban’s allies.
Isn't democracy grand?

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Re: Greece

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ghariton wrote:What if Greece drops the Euro and reverts to the drachma? Would Hungary be the model?
Hungary’s sovereign credit grade may be cut to junk this month after Standard & Poor’s Ratings Services placed the country’s lowest investment grade on “CreditWatch with negative implications.”

<snip>

“There is no real reason for Hungary’s downgrade,” Peter Szijjarto, Orban’s spokesman, said in an e-mailed statement today, citing plans to reduce the budget deficit and public debt levels in 2012.

The steps included raising revenue by effectively nationalizing $14 billion of assets held by private-pension funds, levying extraordinary taxes on the banking, energy, retail and telecommunication industries and forcing banks to swallow exchange-rate losses on foreign-currency mortgages.

To protect the policies from oversight, the Constitutional Court was stripped of its right to rule in most economic issues. An independent Fiscal Council was dismantled and a new one set up dominated by Orban’s allies.
Isn't democracy grand?

George
Does the term "de juvu" ring a bell?
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Nemo2
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Re: Greece

Post by Nemo2 »

Shine wrote: Does the term "de juvu" ring a bell?
No. :?


(Is it a quote from that well known female amanuensis Ms Pelling? :wink: )
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Re: Greece

Post by Shine »

:oops:
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ghariton
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Re: Greece

Post by ghariton »

e-kathimerini:
Uprooted by a national debt crisis and a deepening recession that has eaten up their jobs, incomes and pensions, many Greeks are now returning to their families’ rural past in search of a future.

Just as young graduates are moving abroad rather than risk joining the 18 percent of Greeks who are out of work, families struggling to maintain their living standards are looking for a simpler life away from the city.

Elisabeth Kokoreli and her husband Vanguelis Tsaprounis quit Athens earlier this year to live permanently in their second home on the island of Evia, where he grew up.

Although they had long been thinking about a change of lifestyle, they were forced to act after the cost of raising a family in the capital, at about 3,000 euros ($4,000) a month, far outstripped their earnings.

Now, their two daughters are settled in the local school in Vassilika and Tsaprounis, a 42-year-old painter, has set about learning the farming skills needed to make the most of the land that he has inherited.

”I am very happy,” said Kokoreli, a 40-year-old dance therapist. ”We have a better chance at a future here. In Athens, it was a constant struggle.

”It has been a big change for me, but I like this new way of life.” Her family is part of an increasing exodus from the cities to the villages, reversing a trend dating back to World War II which has seen the population of Athens triple to four million -- two-fifths of all people living in Greece.

Agricultural labour has surged seven percent since 2008, while people who work on the land now make up 12.5 percent of the active population, compared to 11.3 percent in 2008.
Wow. I sure hope I never have to take up farming.

More importantly, we last saw "back to the land" movements in the 1930s. It was not a success then, and it won't be a success now. But it does illustrate the level of despair.

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Wallace
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Re: Greece

Post by Wallace »

Nemo2 wrote:
Shine wrote: Does the term "de juvu" ring a bell?
No. :?


(Is it a quote from that well known female amanuensis Ms Pelling? :wink: )
Did you say "deja vu?" That suddenly reminded me of my favourite joke:
Quasimodo was ringing the bells of the Cathedral one day, when he stepped too close to the swinging metal.
The great bell hit him smack on the face and he was thrown over the parapet onto the ground a hundred feet below.
A crowd quickly gathered asking "who IS this dead hunchback?"
An old lady struggled forward and looked at him closely.
"I don't know his name", she said slowly, "but his face rings a bell."

:rofl:
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Re: Greece

Post by Bylo Selhi »

An appealing joke that made me chime in resounding, reverberating laughter. I clamour for more :thumbsup:
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Re: Greece

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First time I heard it it resonated with me.....but now it's starting to take its toll.
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scomac
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Re: Greece

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ghariton wrote:Wow. I sure hope I never have to take up farming.

More importantly, we last saw "back to the land" movements in the 1930s. It was not a success then, and it won't be a success now. But it does illustrate the level of despair.

George
Oh, I don't know, George. Sure, the 30's were a disaster, but it's pretty tough to pick up a new skill set like farming in the midst of a 10 yr, drought. With nature conspiring against you, success was doomed for even the most skilled practitioner.

Perhaps a better comparative would be the situation in the Soviet bloc countries prior to the fall of communism in eastern Europe. A colleague of mine spent some time travelling in the Ukraine in the mid to late 80's as part of a consultancy group that were attempting to promote more modern and efficient practices on the State Farms and Collectives. Conditions were pretty deplorable as I recall in terms of facilities, equipment and production versus western standards. Never-the-less, each worker was granted a small parcel to provide for their own needs and the results that were being achieved there was nothing short of startling in contrast with little in the way of resources to work with, so I think it could be done on a communal basis when folks are motivated by their own needs.
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Re: Greece

Post by newguy »

scomac wrote:Perhaps a better comparative would be the situation in the Soviet bloc countries prior to the fall of communism in eastern Europe.
Or Cuba, they did pretty well according to a documentary I saw.

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Re: Greece

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newguy wrote:
scomac wrote:Perhaps a better comparative would be the situation in the Soviet bloc countries prior to the fall of communism in eastern Europe.
Or Cuba, they did pretty well according to a documentary I saw.

newguy
As did the Kibbutzim.
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Re: Greece

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scomac wrote:A colleague of mine spent some time travelling in the Ukraine in the mid to late 80's as part of a consultancy group that were attempting to promote more modern and efficient practices on the State Farms and Collectives. Conditions were pretty deplorable as I recall in terms of facilities, equipment and production versus western standards. Never-the-less, each worker was granted a small parcel to provide for their own needs and the results that were being achieved there was nothing short of startling in contrast with little in the way of resources to work with, so I think it could be done on a communal basis when folks are motivated by their own needs.
I emphasized the part of your post which I think is key.

As I understand it, the biggest boost to Soviet agriculture was allowing individual farmers to have individual operations in parallel to the collectives and state farms. I remember a statistic for the 1970s that over half of the food was grown on the 2% (or so) of the land that had been turned into private plots.

The collective farms turned out to be massively inefficient. Some 40% of a crop would rot in the field or waste during transportation because there were no individual incentives to take care. Similarly, farm equipment was not maintained and often left to rust in the rain or snow. (Why bother to put it away?)

The result was that one of the richest agricultural regions in the world was dependent on imports of wheat. (And the Canadian Wheat Board played an important role negotiating these shipments. If collective agriculture comes back into favor, Canadian exports will spike again and the Wheat Board will rediscover its role.)
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Re: Greece

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After the lack of success regarding their latest bond issue, I'm beginning to wonder if it is possible that it will be Germany rather than Greece to abandon the Euro. In the long term, does it make sense for Germany to amalgamate with a bunch of fiscal basket-cases?
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Re: Greece

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Spidey wrote:After the lack of success regarding their latest bond issue, I'm beginning to wonder if it is possible that it will be Germany rather than Greece to abandon the Euro.
Gavyn Davies over at ft.com is running through that scenario, amongst others.
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Re: Greece

Post by ghariton »

Financial Times discusses some of the legal implications of the diagram in the above post.

Namely, what happens to contracts and agreements denominated in Euros, if the country of jurisdiction withdraws from the Euro and replaces it with its own new currency?

Hint: A field day for lawyers.

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Re: Greece

Post by Shine »

Hint: A field day for lawyers.
I wonder how clear the exit strategies and regulations were specified during the initial honeymoon as the Euro emerged.
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Re: Greece

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Shine wrote:I wonder how clear the exit strategies and regulations were specified during the initial honeymoon as the Euro emerged.
Apparently, they weren't given any attention at all.

Many couples, deeply in love when they marry, can't imagine a breakup, much less plan for one.

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Re: Greece

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ghariton wrote:
Shine wrote:I wonder how clear the exit strategies and regulations were specified during the initial honeymoon as the Euro emerged.
Apparently, they weren't given any attention at all.

Many couples, deeply in love when they marry, can't imagine a breakup, much less plan for one.

George
There are obvious lessons here for Quebec separation ,realistically we would face similar problems with our shared currency. :(
If the bride goes bankrupt the groom only has financial problems because he married the lady! If he had stayed single he would be free and clear!
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Re: Greece

Post by Shine »

izzy wrote:
ghariton wrote:
Shine wrote:I wonder how clear the exit strategies and regulations were specified during the initial honeymoon as the Euro emerged.
Apparently, they weren't given any attention at all.

Many couples, deeply in love when they marry, can't imagine a breakup, much less plan for one.

George
There are obvious lessons here for Quebec separation ,realistically we would face similar problems with our shared currency. :(
If the bride goes bankrupt the groom only has financial problems because he married the lady! If he had stayed single he would be free and clear!
Very interesting. In Canada such disputes would inevitably be argued at the SPOC but in Europe disputes and litigation regarding contractual agreements, following the collapse of the Euro, would be argued where and under whose jurisdiction?
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Re: Greece

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Re: Greece

Post by Wallace »

The prospect of default by Greece and other EU countries appears closer. The "Economist" spells out in fairly minute detail the consequences in this article.
The prospect that one country might break its ties to the euro, voluntarily or not, would cause widespread bank runs in other weak economies. Depositors would rush to get their savings out of the country to pre-empt a forced conversion to a new, weaker currency. Governments would have to impose limits on bank withdrawals or close banks temporarily. Capital controls and even travel restrictions would be needed to stanch the bleeding of money from the economy. Such restrictions would slow the circulation of money around the economy, deepening the recession.

External sources of credit would dry up because foreign investors, banks and companies would fear that their money would be trapped. A government cut off from capital-market funding would need to find other ways of bridging the gap between tax receipts and public spending. It might meet part of its obligations, including public-sector wages, by issuing small-denomination IOUs that could in turn be used to buy goods and pay bills.

When cash is scarce, such scrip is readily accepted by tradesmen. In August 2001 the Argentine province of Buenos Aires issued $90m of small bills, known as patacones, to employees as part of their pay. The bills were soon circulating freely: McDonalds even offered a “Patacombo” menu in exchange for a $5 pata c ón. Argentina broke its supposedly irrevocable currency peg to the dollar a few months later.

Scrip of this kind becomes, in effect, a proto-currency. In a stricken euro-zone country, it would change hands at a discount to the remaining euros in circulation, foreshadowing the devaluation to come. To pre-empt further capital outflows, a government would have to pass a law swiftly to say all financial dealings would henceforth be carried out in a new currency, at a one-for-one exchange rate with the euro. The new currency would then “float” (ie, sink) to a lower level against the abandoned euro. The size of that devaluation would be the extent of the country’s effective default against its creditors
In another part of the article it states that the consequences for the stockmarkets would be at least as disastrous as the Lehman Bros fiasco, as far as credit is concerned.

Not good. Although the market is holding up for now (Christmas optimism), the storm clouds are brewing and I'm seriously considering getting out of the market again towards the end of 2011 or early in 2012.
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