After years of pain and humiliation Greece may exit Euro AND EU... PVC says...

...I told you so.

Back in 2008 I argued that Greece should be ejected from the Euro so that it's currency could be devalued and its lending situation normalised. This would, I argued, be extremely painful in the short term but better in the medium and long term.

I was widely scoffed at.

http://www.bbc.co.uk/news/business-33164924

"Failure to reach an agreement would... mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country's exit from the euro area and, most likely, from the European Union," the Bank of Greece said in a report.

So... I was right, Greece has spent seven years in depression and now looks likely to exit the Euro anyway, and the acrimony means it may also exit the EU.

Well. Done. Team.

Fingers crossed they keep up the good work!

by 2050 it might end up as a Nordic Alliance which has a chance of working.

~:smoking:

It won't work until they either kick out Germany or Germany annexes everyone else.

Nah, Greece will remain in EU, at least for now.
CORAL is a deeply pro-EU party, completely afraid of doing anything that could be characterized as revolutionary.

It has always baffled me how human communities choose to be led by the biggest idiots available at the time of the election. I'd say the guys in the current greek government are up there on par with, or perhaps even beyond, the imbeciles we have in Romania. Met a random greek in an airport a couple of weeks ago and had a chat, asked him about the "real" situation since I tend to distrust the distortions made by the mass-media, but he confirmed that it's pretty bad for the average person or youngsters entering the field of work.

I know these problems are older, but then the more so, if things are bad why would you put a bunch of populist incompetents in charge?

Well, the current Greek government has a poisoned chalice, the current budget, savagely cut from 2008, is causing the Greek economy to shrink faster than the debt, so although they're lowering the debt in Euro's it's actually rising as a percentage of GDP. So when the Greek government says "we can't make any more cuts" they're right. As it is the shrinking economy is forcing more people onto welfare, more cuts to public services will further raise the welfare bill.

It's a vicious circle, and it requires a default and return to the Drachma, then in ten years Greece will be much better off. The sad thing is that if this inevitably had been acknowledged in 2009 then Greece would ALREADY be better off.

I blame Germany and the Netherlands for this, followed by Belgium and France.

All based on a messed up excel spreadsheet cell.

Oops our austerity conclusions was based on a wrong formula! Oh well it lined up with our bias so well let's double down on the stupidity...

It would be only healthy to kick out whole of Southern Europe from Euro. The economies of Southern Europe need a currency with less value with their service based economies.

Not going to cheer Greece is just a vessel for a bank-baillout, Greeks are being screwed and so are we

"if things are bad why would you put a bunch of populist incompetents in charge?" Err, perhaps because it was the "competent" ones who put Greece where it is now? The "competent" ones who cheated, pillage and evade taxes? After 7 years of the "competent" very efficient economical policy, not only the Greece debts has increased, but the employment is higher than ever. Solution by the "competent": make Greece and the Greeks poorer... It didn't work but let's carry on...

Note: No one can be kicked from the EU or from the Euro. If Greece default, the ECC will have to bail out the creditors.

But yes, this is a big faille in the EU. The EU, we were told, was supposed to protect. And what they want is to cut pensions... What a great plan to rescue a country that was pillaged by the bankers and "investors"!!!

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Originally Posted by Philipvs Vallindervs Calicvla

...I told you so.

Back in 2008 I argued that Greece should be ejected from the Euro so that it's currency could be devalued and its lending situation normalised. This would, I argued, be extremely painful in the short term but better in the medium and long term.

I was widely scoffed at.

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And rightly so.

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So... I was right, Greece has spent seven years in depression and now looks likely to exit the Euro anyway, and the acrimony means it may also exit the EU.

Well. Done. Team.

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Would you care to explain why would Greece be better off?

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Originally Posted by Brenus

"if things are bad why would you put a bunch of populist incompetents in charge?" Err, perhaps because it was the "competent" ones who put Greece where it is now? The "competent" ones who cheated, pillage and evade taxes? After 7 years of the "competent" very efficient economical policy, not only the Greece debts has increased, but the employment is higher than ever. Solution by the "competent": make Greece and the Greeks poorer... It didn't work but let's carry on...

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Well, I hever said the previous ones were any better, but to me, the current guys look like the top of the top in the incompetence department.

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But yes, this is a big faille in the EU. The EU, we were told, was supposed to protect. And what they want is to cut pensions... What a great plan to rescue a country that was pillaged by the bankers and "investors"!!!

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Sadly, there isn't all that much you can do from the outside to protect a nation from the stupidity its own citizens manifest when it's time to vote for their leaders.

Why don't we just declare their debt nullified?
They can obviously not pay it back anyway so nothing really changes from where we are now, except that Greece can start to work normally again.
And then we do that with Argentina and a few other countries as well.
The market will then regulate itself to make sure it won't happen again.

PVC, I distinctly recal you used to say that Greece "should be helped leaving the Euro" or "should be allowed to leave it". Your current way of phrasing is more correct - most Greeks want to stay in the Eurozone, including all their major parties, which is why leaving was never on the table before.

IIRC by the turn of last year (just before the elections) Greece's economy had started to grow again. Greece's debt mostly has extremely low interest rates and long maturity, so it would have been doable (although still not easily).

Instead Greece is stuck with a government that doesn't even want to enact pension age reforms that would bring Greece in line with the rest of Europe - norms which one Syriza member even compared to sub-Saharan Africa.

Can't just let the debt get nullified otherwise everyone knows that the way out of debt is to just accumulate too much of it.

Couldn't let Greece leave the Euro because you guys had to have your union.

Why did anyone think that a political union of nations was going to be anything but a select few dominating over the rest. Who here actually thought that their country mattered, leaving aside the Germans and the French?

UK was right all along not to tie themselves to the Euro. What a ****show.

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Originally Posted by a completely inoffensive name

Can't just let the debt get nullified otherwise everyone knows that the way out of debt is to just accumulate too much of it.

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You say that as though Greece forced people to lend them more money once their debt was so high as a percentage of GDP that new lenders wet their pants from the promise of higher interest due to the higher risk. Why is it okay to take a higher risk for more potential profit and then not to have to accept a loss if it materializes from the high risk transaction? If you invest in a risky startup business for a potentially huge profit but the business actually fails, no politician/Merkel will come and force the startup owners to suffer until they have repaid your investment. As such, the market will/should regulate itself.

A fair way of doing it might be to nullify only the high risk investments with the biggest interest rates first until the country can pay the obligations it made with a low interest rate (low-risk investments where a loss could not be expected at the time the investment was made) if there are any of those left.

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Originally Posted by Sarmatian

And rightly so.

Would you care to explain why would Greece be better off?

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Once Greece was bankrupt it would no longer have to service its crippling debts, freeing up its remaining tax base to actually support the country. It would still need to reform, but it could do so with more breathing room. Most importantly the New Drachma would rapidly devalue against the Euro, causing an influx of German tourists who would regenerate Greece's service sector.

Greece would also be able to set its own interest rates and print its own money (control of fiscal policy)/

It's what they used to do every five years or so before they joined the Euro.

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Originally Posted by wooly_mammoth

Well, I hever said the previous ones were any better, but to me, the current guys look like the top of the top in the incompetence department.

Sadly, there isn't all that much you can do from the outside to protect a nation from the stupidity its own citizens manifest when it's time to vote for their leaders.

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We've reached the point where we're protecting them from joining the Third World, something that was not a danger 20 years ago.

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Originally Posted by Husar

Why don't we just declare their debt nullified?
They can obviously not pay it back anyway so nothing really changes from where we are now, except that Greece can start to work normally again.
And then we do that with Argentina and a few other countries as well.
The market will then regulate itself to make sure it won't happen again.

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So you want them to default?

This begs the question of why your country didn't just give them money seven years ago instead of demanding loans with high interest rates (for a "rescue" package).

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Originally Posted by Kralizec

PVC, I distinctly recal you used to say that Greece "should be helped leaving the Euro" or "should be allowed to leave it". Your current way of phrasing is more correct - most Greeks want to stay in the Eurozone, including all their major parties, which is why leaving was never on the table before.

IIRC by the turn of last year (just before the elections) Greece's economy had started to grow again. Greece's debt mostly has extremely low interest rates and long maturity, so it would have been doable (although still not easily).

Instead Greece is stuck with a government that doesn't even want to enact pension age reforms that would bring Greece in line with the rest of Europe - norms which one Syriza member even compared to sub-Saharan Africa.

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Yes, "helped" to leave, but not given a choice either. Greece has been in a depression for seven years, growth has been mostly negative or stagnant, this isn't working.

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Originally Posted by Philipvs Vallindervs Calicvla

Once Greece was bankrupt it would no longer have to service its crippling debts, freeing up its remaining tax base to actually support the country.

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There is no legal mechanism for countries defaulting, it's not a person or a firm defaulting. As we've seen in Argentina's example. private American investment funds sued Argentina in the US and US court confirmed that Argentina needs to repay the money, irrespective of their default. Argentina didn't even get the rest of the debt written off, they instead got a deal with creditors, those creditors who didn't want to take it to court. After the court's decision, I doubt any creditors would be willing to make a deal.

Greece would be left with majority or all of its debt in dollars or euros. Devaluing their new currency wouldn't have any effect on that.

More importantly, Greece would be cut off from the international financial system. Finding creditors willing to lend would be extremely difficult. Greece would be forced to deal with BRICS, and that would be politically inconvenient for the West.

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It would still need to reform, but it could do so with more breathing room. Most importantly the New Drachma would rapidly devalue against the Euro, causing an influx of German tourists who would regenerate Greece's service sector.

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That is true, but think about that statement - "it would regenerate Greece's service sector". Service sector, like its name implies, is when someone pays for a service. The actual price of goods provided is miniscule compared to the price of service. Lowering the price of the service actually means lowering the price of human labour in the service industry.

In Serbia (then Yugoslavia actually), during the worst part of the crisis in the early nineties, the price of human labour was so small that everything was working 24 hours a day, 365 days a year. Even small shops and street kiosks. Even if you don't sell anything, you basically had a security man for the night. You could pay him a yearly salary and that would be less than the price of an alarm system or a fence.

Greece wouldn't be that bad, but the example is indicative of just how much poorer would Greeks be.

It's a psychological thing - if Greece GDP was a 100$, and during the next 10 years it falls to 90$, everyone is angry. But if Greece defaults and its GDP fall down to 30$, and grows to 60$ during the next 10 years, everyone would be happy that economy is growing again, not understanding they are worse off in the long run. That would happen if Greece defaults and leaves the Eurozone.

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Originally Posted by Philipvs Vallindervs Calicvla

So you want them to default?

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Yes, but they can stay in the Eurozone, thereby devaluing the Euro to further boost out export-oriented economy with all the poor working people.

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Originally Posted by Philipvs Vallindervs Calicvla

This begs the question of why your country didn't just give them money seven years ago instead of demanding loans with high interest rates (for a "rescue" package).

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I hope you didn't expect me to be responsible for that or to have an answer.
Someone just had to punish them however for lying when they entered the Euro. And they couldn't be reasonably expected to put the responsible politicians on trial, so we had to ruin the entire country instead I assume.

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Originally Posted by Husar

Why don't we just declare their debt nullified?
They can obviously not pay it back anyway so nothing really changes from where we are now, except that Greece can start to work normally again.
And then we do that with Argentina and a few other countries as well.
The market will then regulate itself to make sure it won't happen again.

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What happens when Spain, Italy and Portugal do the same? It would be one hell of a shitstorm. I'll leave it to you EUrophiles to pick the bones out of that one.

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Originally Posted by InsaneApache

What happens when Spain, Italy and Portugal do the same?

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The Euro becomes so worthless that everybody wants to build factories here to benefit from the cheap production costs?
Prices of imported products would rise a lot but once all the factories are here, we won't have to import them anymore.

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Originally Posted by wooly_mammoth

It has always baffled me how human communities choose to be led by the biggest idiots available at the time of the election. I'd say the guys in the current greek government are up there on par with, or perhaps even beyond, the imbeciles we have in Romania.

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PR and modern election technologies.

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Originally Posted by wooly_mammoth

Met a random greek in an airport a couple of weeks ago and had a chat, asked him about the "real" situation since I tend to distrust the distortions made by the mass-media, but he confirmed that it's pretty bad for the average person or youngsters entering the field of work.

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So you think that media distort things, but "random guy at the airport" sees the whole picture correctly?

After several personal experiences where I witnessed for myself the two parallel dimensions, namely the "real" reality and the reality manufactured by the press, yes, I'm ready to put more weight on some random guy's opinion on the facts than on what the mass-media says.

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Originally Posted by Husar

Why don't we just declare their debt nullified?
They can obviously not pay it back anyway so nothing really changes from where we are now, except that Greece can start to work normally again.
And then we do that with Argentina and a few other countries as well.
The market will then regulate itself to make sure it won't happen again.

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This has been my position for a long time.

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Originally Posted by Husar

The Euro becomes so worthless that everybody wants to build factories here to benefit from the cheap production costs?
Prices of imported products would rise a lot but once all the factories are here, we won't have to import them anymore.

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No what would really happen is that the people living there would be reduced to living a third world hell like existence. Still that was always the plan all along.

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Originally Posted by Husar

Why don't we just declare their debt nullified?
They can obviously not pay it back anyway so nothing really changes from where we are now, except that Greece can start to work normally again.
And then we do that with Argentina and a few other countries as well.
The market will then regulate itself to make sure it won't happen again.

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I think you are being facesious here but it is worth considering who holds greece's debt, I somewhat doubt it is all in the German national bank and I would think it impossible to get any other bank to just let it go and take the loss on the chin.

To get all the debt nullified would require buying it off the previous owners and it will not be cheap, you could end up spending more money to nullify the debt than you would simply bailing them out.

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Originally Posted by InsaneApache

No what would really happen is that the people living there would be reduced to living a third world hell like existence. Still that was always the plan all along.

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So the greek politicians faked the numbers to join the Eurozone in order to ruin their own country? Why are they not jailed yet?

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Originally Posted by Greyblades

I think you are being facesious here

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A bit, yes.

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Originally Posted by Greyblades

but it is worth considering who holds greece's debt, I somewhat doubt it is all in the German national bank and I would think it impossible to get any other bank to just let it go and take the loss on the chin.

To get all the debt nullified would require buying it off the previous owners and it will not be cheap, you could end up spending more money to nullify the debt than you would simply bailing them out.

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What could the previous owners do about it? As I already explained, if you make an investment with a high interest rate, that usually means there is a high risk. You have to be ready to take a loss or go for a lower interest rate. Not accepting a loss when it happens then makes you a crybaby and everybody should just ignore you. It's not like you "invest" in the lottery for a potential huge return and then make a fuss when you don't get that return. These investments have a far lower risk but you can still lose.

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What could the previous owners do about it? As I already explained, if you make an investment with a high interest rate, that usually means there is a high risk. You have to be ready to take a loss or go for a lower interest rate. Not accepting a loss when it happens then makes you a crybaby and everybody should just ignore you. It's not like you "invest" in the lottery for a potential huge return and then make a fuss when you don't get that return. These investments have a far lower risk but you can still lose.

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...what? The suggestion is to declare the debt nullified, you can't do that unless you own it and the oweners won't sell cheap to the government. And you can't just seize it unless you want to drive investors away from ever doing business with Greece again.

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Originally Posted by Greyblades

...what? The suggestion is to declare the debt nullified, you can't do that unless you own it and the oweners won't sell cheap to the government. And you can't just seize it unless you want to drive investors away from ever doing business with Greece again.

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A government can do it unless the investors have the bigger armies. And that the investors may never want to do business with Greece again may happen, but that is how the market regulates itself. Some of them should not have lent their money to Greece in the first place while Greece will lose some future investments as it happens when you don't handle such things responsibly.
Who owns all the debt anyway? And when will the hedge funds/Paul Singer come to kick Greece while it's on the ground?
https://www.youtube.com/watch?v=uBxpT5ZhxNk

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Originally Posted by Husar

So the greek politicians faked the numbers to join the Eurozone in order to ruin their own country? Why are they not jailed yet?

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Because they're politicians. :wall: