I don't know about others on here but somethime I struggle with the idea of what actually happens if a country defaults, e.g. what are the practical implications for you and me? Anyways pulled this piece off the BBC website which I though was quite readable in terms of what is going on with Greece. http://www.bbc.co.uk/news/world-europe-13791879 Ten points on the Euro crisis. 1. The EU leaders are at loggerheads over the issue: should Greece be allowed to do a soft, controlled, partial default on its debts which forces banks and pension funds to lose some of the money they lent to Greece? Germany says yes, the European Central Bank chief Jean-Claude Trichet says no. 2. The question arises because the first Greek bailout, 110bn euros, did not work. Greece now needs another 85bn euros from the EU/IMF, and has to sell at least 30bn euros of assets on top of that because it cannot borrow in the global markets. 3. To justify the new bailout, both under its own rules and because voters in Finland, Netherlands and Germany resent the bailout, the EU is insisting on a new range of austerity measures, amounting to a 10% cut in public spending, a 1/3 cut in the public wage bill and 50bn euros worth of knockdown privatisation. 4. But the Greek PM George Papandreou could not get this through parliament. His majority fizzled to nothing as the details emerged and public pressure mounted. He offered a national unity government to New Democracy, the centre right, who refused; he offered to stand down on condition a new government signed up to the austerity plan, but no-one bought this. 5. So now, the one stable factor in the Euro crisis is gone. The Eurocrats were busy arguing over the terms of the bailout, but now their trusted dialogue partner has gone missing: even if a new government is sworn in on Thursday, how can the EU negotiate if there is no guarantee that the full spectrum of austerity measures can be got through the Greek parliament? 6. This is why the markets have long, already, discounted a hard default: 50 to 70% of the money is, as far as they are concerned, as good as gone. 7. But the moment of actually writing that into the account books will trigger a "credit event" for those who value and insure countries' sovereign debt. This will instantly raise people's aversion to risk: they will do instant de-risking of their own portfolios and you may come to a point where one bank refuses to lend to another. This is a credit crunch and is what the Euro policy makers fear. If it is triggered, it will negatively impact the whole world economy. 8. What's the fallback position? To let Greece default - chaotically or otherwise - but use taxpayers' money to bailout the affected north-European banks. That is what the German political elite is said to be considering. Market people are worried that Dexia, a Belgian bank, could be hit hard, bringing Belgian sovereign debt into the picture next. 9. Who will lose? Any pension fund or bank that lent money to Greece, Greek banks, or Greek people. And Greece will, if it drops out of the Eurozone, be forced to implement austerity anyway. However it will have economic sovereignty, which it does not have now. 10. Is there an alternative? Yes: a Marshall Plan for Europe, where German, French and British taxpayers voluntarily send money to Greece, Portugal and Ireland, shore-up their banks, shore-up their country finances, give them time to do structural reforms; in return they effectively seize control of south Europe's economic policy and impose a single Eurozone tax and spend regime. Another alternative is to let peripheral Europe leave the zone and rebuild it with Denmark and Sweden as a kind of "dark winter night" economic zone, based on sound principles and weak beer. Politics makes all of point 10 currently a non-starter. 11. Is there a wildcard? Yes: the Greek population. They will not accept any more austerity and if they succeed in resisting it, this will give Ireland and Portugal ideas. Another wildcard is the myopia of the Eurozone elite. It is not clear if they really understand points one to 10.
Question about the Euro crisis, if the eurozone collapses and we go back to the punt, is that also the end of the ECB and if so how or will it affect peoples (well mine really) tracker mortgages?
Also the money we owe the IMF, states in EUROs and doesn't contain anything that says or xxx to the value of the EURO amount owed, so we'd get out of paying them back on a technicality. I'd also look into peoples Mortgages/loans etc, to see if that is covered. Most likely anyone from the last 5-7 years WONT say that, and you could get off with it.
oh I should just add, that I am not condoning nor hoping people try and swindle the banks. It's one point I thought should be raised
I don't think anybody can say what will happen in that scenario as it has not been planned for...I think we will see further frantic efforts to save the euro although we need far greater efforts than we have at present....
Lads can anyone give me some info. I need to know what the austerity measures for Ireland are and how the government have responded and tried to meet the IMF Euro agreement deadlines and bring public deficit down. And if they'll have an impact on the welfare system. If anyone has any reading materials too that may be of help/interest. I would appreciate that too. Thanks
http://www.imf.org/external/np/loi/2010/irl/120310.pdf lays down the basic agreements as to what will happen over the next few years
Also more details here http://www.socialjustice.ie/sites/d...es for Structural REforms and Governance_.pdf
Scary,if this is a right synopsis into the Greek bailout..they have to default....Yes/No? http://www.guardian.co.uk/world/video/2012/feb/22/greece-debt-relief-animation-video
I found this an interesting watch. Easy to understand but scary if accurate. http://www.youtube.com/watch?v=V5z0rQRdsiE Sounds like there's a standoff but ultimately, Greece is being sacrificed. You know things are beyond banjaxed anyway, when civilisation's oldest democracy has an unelected interim government and an unelected prime minister that was vice pres of the ECB for 8 years.
There is no doubt over the last few days that the Eurogroup and elite are terrified of Democracy....this is the first time a vote on brutal austerity policies will be put to the people.Greece cant give anymore under the terms put to them. Well done to the Greek government....if only we had a leader with a backbone. http://www.ft.com/cms/s/0/c9c5de02-1d90-11e5-aa5a-398b2169cf79.html#axzz3eNxLL9ad Tsipras was right to walk away. But it was a momentous decision. http://www.theguardian.com/world/20...sage-of-europes-leaders?CMP=twt_gu&CMP=twt_gu Alexis Tsipras must be stopped: the underlying message of Europe's leaders
I'm no lover of the EU/EMF etc., but if you run your country into the ground by brutal mismanagement and have to get bailed out you have to pay the piper. The Greek economy is beyond a shambles and austerity is the only solution to get them back on track it's not the EU's fault they are where they are. If the Greeks are given money and left to their own devices to pay it back how long do you think it will be before they are back at the table with the cap out again claiming bankruptcy. This is the third bailout they are looking for despite austerity measures where would they be now without them?
There is no doubt over the last few days that the Eurogroup and elite are terrified of Democracy....this is the first time a vote on brutal austerity policies will be put to the people.Greece cant give anymore under the terms put to them. Well done to the Greek government....if only we had a leader with a backbone. Sorry I can't do multi quotes! Thankfully we do not have a similar leader or a government to Greece. (And that's not a support for Kenny or Cowen or whoever) but the Greek Government has volunteered to default on their obligations so Democracy in Greece gets you €60 a day, no petrol, and soon no tourists. The IMF wants their repayment as agreed by Greece. And the ECB too. As we have found out, it's not where the money went, who asked for it, etc., it's when you wake up and find out that your money in the bank is potentially gone, overnight. Will you re-elect a Government that has directly caused it, by default ing?
There you go Just press the Quote + button on all the posts you wish to quote, then when you are ready press the quote button and they'll all be pulled into your message window.
Even the IMF now admit that the Greek debt is unsustainable..and they also need another €50 Billion...along with a 20 year grace period. http://www.theguardian.com/business/2015/jul/02/imf-greece-needs-extra-50bn-euros?CMP=share_btn_tw
There was an economist on the news screeching Syriza done this and that..and have caused all the economic hardship in Greece. It had to be pointed out to him that there have been right wing governments in Greece for years before them...and they caused and supported the harsh austerity measures.....he didn't know what to say.