Would euro departure help or hurt Europe's currency union?

[AyG]

The Greeks are like Babies they just want to Spend other Peoples Money

I've never met a baby that even has a concept of money, let alone "other people's money" and then having a desire to spend it. Your slur on babies is both offensive and unacceptable.

[sammygood]

let greece borrow money from goldman sachs, they are the bastards that let them in by cooking the books in the first place

[TheAppletons]

So....wasn't the original question about the euro? Love the spirited debate about the US dollar money supply - not so much on this thread. Cheers, guys!

[metisdead]

Off topic posts and replies have been removed. As stated by a member who brought the US Federal Reserve and QE into this topic stated:

This topic isn't about the US.

Please stay on topic.

[sirineou]

Thanks for this sirineou, always good to have some facts on the table.

People tend to forget the background of things quickly (memory is short).

In these Greek/Messy times I'd like to add some text re a topic which concerns me:

What are the Greeks actually saying yes/no to today?

1 Some argue that its about leaving the EU.

2 Some argue that its about leaving the Eurozone.

3 Some argue that its about the most recent offer from the Troika.

I would like to argue that leaving the Eurozone is not an option for Greece.

Simply put; the treaty framework for the Eurozone does not contain any

exit clauses. There are noe legal provisions/instruments for leaving the zone.

You can choose to join or not, but once in you can't leave.

This is in line with how community legislation generally is written.

(you may leave the EU, there is a legal framework for doing that, but its a

complicated and lengthy process)

Many leading economists and politicians frequently mentions the possibility

of Greece leaving the zone. However, this wouldn't be the first and probably

not the last time economists and politicians screw up on what is actually

legally possible. These people are into politics and don't want their

political processes cluttered with legalities, or facts for that matter.

So far I have seen only two frontpage figures saying the same as me;

The Greek minister of finance has stated clearly just about the same

as I say above.

The German minister of finance has stated firmly that regardless of

the Greeks voting yes or no today they will remain both in the EU and the zone.

Since this Greek calamity started to really accelerate there has been quite a number of legal studies on leaving the zone.

(available on www)

As far as I can see they all conclude that leaving the zone and staying in the EU is not viable way forward.

Hence, changes to the treaty are needed in order to provide for exits.

Treaty changes need to be ratified, takes TIIIIIME.

Now.

If things go really haywire in Greece. Something must be done.

You cant have people starving for lack of satang and food or dying

because hospitals cannot buy medicine and other essentials.

Cancel debts and pouring in fresh Euros (free of charge) is a possibility.

There are legal (tricks)/techniques that could be applied to ensure a quick

fix to the treaty to enable exit clauses. These techniques are applied now

and then in other treaty organizations, like WHO, UPU, ITU, IMO, ICAO etc etc provided the membership agree.

There is no tradition in EU for applying such techniques so the path is not readily available.

Also, even if it should come to amending the treaty it is NOT obvious that all zone members would agree to the fix and letting Greece exit.

just my tuppence

Finally some one who has some insight in the situation, an the real issues concerning the current EU situation.

As you said there is no mechanism for a Greek exit. the proposition is used to force the Greek people in accepting a settlement that will only benefit the creditors.

Two days ago the IMF issued a report that the European element in the IMF tried to squelch until after the Vote. it was only with the US element wit in the IMF that it was released,

The IMF report vindicated the Tsipras position, and stated that,

"The document released in Washington on Thursday said Greece's public finances will not be sustainable without substantial debt relief, possibly including write-offs by European partners of loans guaranteed by taxpayers.

It also said Greece will need at least 50 billion euros in additional aid over the next three years to keep itself afloat."

A No vote is the only way forward for Greece, a Yes vote will continue to siphon money out of the Greek economy at a time when Greece needs stimulus, it will condemn the Greek pensioners on a life of poverty where the average pension NOW is 713 euros. this agreement aims to reduce them further .and will eventually lead in Greek default anyway.

There are only two pathways out of this for Greece, one is to grow it's Economy so that the debt becomes a smaller percentage of it's GDP, this pathway requires stimulus not deprivation. Greece does not need to raise tax, and send that tax to German creditors, Greece needs to lower tax, It needs to follow the Irish model, and eliminate corporate tax, at least in some sectors to invite business in. Such move will actually increase tax revenue,by decreasing unemployment, and having more people working consuming, and paying income and VAT tax

and the other one is debt forgiveness as to make the debt a smaller part of it's GDP . It is Ironic that debt relief is opposed by Germans who themselves had Debt forgiveness in 1953 more ironically, Greece being one of the creditors who signed that debt relief.

http://www.usnews.com/news/business/articles/2015/07/02/the-case-for-greece-when-it-forgave-germanys-debt

Personally, I dont understand the German position, Perhaps some one can explain it to me.

A Greek departure would be disastrous to EU, not because of the size of it's economy

but because it would create conditions that put the EU at a disadvantage

Firstly, Greece , as all countries in today's world economy, could not be viable on its own. so which block will it join. Was it a coincidence that Tsipras visited Russia recently?

hat would be the consequences of a Russian influence at Europe's southern flank?

and access to the Med.

Secondly, assume a Greek exit, If Greece's economic condition improves it will signal an advantage to EXIT for other European members. So what should be the EU's reaction to a Greek exit?would it be to help them recover and thrive? so what do the Greeks do, what block are they pushed in.

I can not believe the European leaders are that stupid, and cant understand why this situation was allowed to go as far as it did. they should have done long ago what they will eventually have to do. Perhaps their end game is to create as much pain as possible to discourage others from following in Greece's pathway.

[Aforek]

let greece borrow money from goldman sachs, they are the bastards that let them in by cooking the books in the first place

Is there an opportunity to sue the bastards Goldmansachs ? I am surprised nobody in Eurozone talks about it ?

not enough evidences ?

[NeverSure]

let greece borrow money from goldman sachs, they are the bastards that let them in by cooking the books in the first place

Is there an opportunity to sue the bastards Goldmansachs ? I am surprised nobody in Eurozone talks about it ?

not enough evidences ?

Yeah, lets blame "Goldmansachs" rather than Greece which doesn't know how to manage money and who expects the world to support its folly even if the face of financial disaster.

Geez.

[sirineou]

let greece borrow money from goldman sachs, they are the bastards that let them in by cooking the books in the first place

Is there an opportunity to sue the bastards Goldmansachs ? I am surprised nobody in Eurozone talks about it ?

not enough evidences ?

What Goldmansachs did borders on the criminal, but unfortunately it was not illegal.The Greeks entered in a transaction they did not understand and were taken to the cleaners,

I urge anyone interesting on the issue to read the following article by Bloomberg Business

http://www.bloomberg.com/news/articles/2012-03-06/goldman-secret-greece-loan-shows-two-sinners-as-client-unravels

[nidieunimaitre]

let greece borrow money from goldman sachs, they are the bastards that let them in by cooking the books in the first place

Is there an opportunity to sue the bastards Goldmansachs ? I am surprised nobody in Eurozone talks about it ?

not enough evidences ?

Not enough evidence? Yeah, right.

Does the name "DRAGHI" ring a bell?

Draghi used to be a top employee of the GoldmanSachs banksters.

Draghi is now the chairman of the ECB European Central Bank.

I consider it very unlikely that Draghi's ECB will sue GoldmanSachs, the Greek central bank, the cheating Greek leaders of the time, or the European leaders that were paid handsomely for keeping an eye on things.

Suits may disagree with other Suits, but they all share the same liking for velvet seats, free champagne and free caviar, they are not going to rock that boat.

[nidieunimaitre]

In this Greek tragedy nobody is innocent.

Here's the list, in no particular order.

The corrupt Greek governments that over borrowed, wasted money, falsified their statistics for years, lied their way in into the euro zone.

The Greek Central Bank that was an accomplice to this.

The Greek people who over borrowed, and voted for corrupt parties, while benefitting of the corruption.

The European banksters (mainly French and German) that over lended - "we are too big too fail, let's make huge profits with risky loans, the taxpayers will bail us out if necessary".

Goldman Sachs (with their 'employee of the year', ECB Draghi) who designed the framework for the Greek euro fraud.

The European top Suits (EU, Governments) that always defend their high wages by claiming that without those high wages, no quality managers will be interested in government jobs - they were paid to do a job, to check the Greek statistics.

The European people who continue to vote in corrupt / incompetent politicians.

The neo liberals.

The so called socialists.

The thaivisa posters that knew it all but did nothing.

Myself, a macro economics teacher. I told my students about this fraud (in tempore non suspecto), but I was never able to convince them.... and actually, worst of all, I started thinking that a small country like Greece would never be a major problem.

We are all responsible, but who will suffer? The banksters, the government / EU officials? Or us, the little people?

[nidieunimaitre]

The Greeks are like Babies they just want to Spend other Peoples Money

Exactly!

That is why I always use a condom.

[Basil B]

Thanks for this sirineou, always good to have some facts on the table.

People tend to forget the background of things quickly (memory is short).

In these Greek/Messy times I'd like to add some text re a topic which concerns me:

What are the Greeks actually saying yes/no to today?

1 Some argue that its about leaving the EU.

2 Some argue that its about leaving the Eurozone.

3 Some argue that its about the most recent offer from the Troika.

I would like to argue that leaving the Eurozone is not an option for Greece.

Simply put; the treaty framework for the Eurozone does not contain any

exit clauses. There are noe legal provisions/instruments for leaving the zone.

You can choose to join or not, but once in you can't leave.

This is in line with how community legislation generally is written.

(you may leave the EU, there is a legal framework for doing that, but its a

complicated and lengthy process)

Many leading economists and politicians frequently mentions the possibility

of Greece leaving the zone. However, this wouldn't be the first and probably

not the last time economists and politicians screw up on what is actually

legally possible. These people are into politics and don't want their

political processes cluttered with legalities, or facts for that matter.

So far I have seen only two frontpage figures saying the same as me;

The Greek minister of finance has stated clearly just about the same

as I say above.

The German minister of finance has stated firmly that regardless of

the Greeks voting yes or no today they will remain both in the EU and the zone.

Since this Greek calamity started to really accelerate there has been quite a number of legal studies on leaving the zone.

(available on www)

As far as I can see they all conclude that leaving the zone and staying in the EU is not viable way forward.

Hence, changes to the treaty are needed in order to provide for exits.

Treaty changes need to be ratified, takes TIIIIIME.

Now.

If things go really haywire in Greece. Something must be done.

You cant have people starving for lack of satang and food or dying

because hospitals cannot buy medicine and other essentials.

Cancel debts and pouring in fresh Euros (free of charge) is a possibility.

There are legal (tricks)/techniques that could be applied to ensure a quick

fix to the treaty to enable exit clauses. These techniques are applied now

and then in other treaty organizations, like WHO, UPU, ITU, IMO, ICAO etc etc provided the membership agree.

There is no tradition in EU for applying such techniques so the path is not readily available.

Also, even if it should come to amending the treaty it is NOT obvious that all zone members would agree to the fix and letting Greece exit.

just my tuppence

Seems stupid to me there is no exit...

What is clear Greece is basically bankrupt, it can not afford its extravagant ways, and no one has to lend Greece a single satang.

Same as a drunk beggar asking you or me to give him the price of a meal, you and I know he will just squander it on more booze.

So what happens next...

Greece will probable get no more money in the foreseeable future, or when Alex or who ever succeeds him climbs down, that means the Greek government will have to prioritise spending of whatever money it has coming in from tax revenue, Or print more money which it can not do...

Banks will be out of money within days and I expect Alex will have every door he knocks on with his begging bowl to be politely shut in his face.

Expect to see heavy bank restrictions, withdrawals to be limited even further, pension and welfare payments to be cut, government and civil servants pay to be cut.

Edited July 5, 2015 by Basil B

[NeverSure]

Major news sources are predicting a "no to austerity" vote. With 70% of the votes counted it appears to be 60% no.

[nidieunimaitre]

An absolute majority of the Greeks told Europe to press the RESTART button.

Obviously this will harm the Euro in the short / medium run - but it could save the EU and Euro in the long run.

[StefanBBK]

I don't think the euro will suffer. Greece is not a major player.

I suspect by August/ September Will be an excellent time to buy property in Greece. ....

[sirineou]

any fool knows that if someone owe you money and is sick, you want him to get well soon and get back to work.

Such a task is not accomplished by starving the sick man and taking his medicine away.

I am glad Greece voted No!!

[AyG]

any fool knows that if someone owe you money and is sick, you want him to get well soon and get back to work.

Such a task is not accomplished by starving the sick man and taking his medicine away.

I am glad Greece voted No!!

Except this sick one is a work shy layabout who's maxed out all his credit cards. Better off without him in your life.

[melvinmelvin]

Thanks for this sirineou, always good to have some facts on the table.

People tend to forget the background of things quickly (memory is short).

In these Greek/Messy times I'd like to add some text re a topic which concerns me:

What are the Greeks actually saying yes/no to today?

1 Some argue that its about leaving the EU.

2 Some argue that its about leaving the Eurozone.

3 Some argue that its about the most recent offer from the Troika.

I would like to argue that leaving the Eurozone is not an option for Greece.

Simply put; the treaty framework for the Eurozone does not contain any

exit clauses. There are noe legal provisions/instruments for leaving the zone.

You can choose to join or not, but once in you can't leave.

This is in line with how community legislation generally is written.

(you may leave the EU, there is a legal framework for doing that, but its a

complicated and lengthy process)

Many leading economists and politicians frequently mentions the possibility

of Greece leaving the zone. However, this wouldn't be the first and probably

not the last time economists and politicians screw up on what is actually

legally possible. These people are into politics and don't want their

political processes cluttered with legalities, or facts for that matter.

So far I have seen only two frontpage figures saying the same as me;

The Greek minister of finance has stated clearly just about the same

as I say above.

The German minister of finance has stated firmly that regardless of

the Greeks voting yes or no today they will remain both in the EU and the zone.

Since this Greek calamity started to really accelerate there has been quite a number of legal studies on leaving the zone.

(available on www)

As far as I can see they all conclude that leaving the zone and staying in the EU is not viable way forward.

Hence, changes to the treaty are needed in order to provide for exits.

Treaty changes need to be ratified, takes TIIIIIME.

Now.

If things go really haywire in Greece. Something must be done.

You cant have people starving for lack of satang and food or dying

because hospitals cannot buy medicine and other essentials.

Cancel debts and pouring in fresh Euros (free of charge) is a possibility.

There are legal (tricks)/techniques that could be applied to ensure a quick

fix to the treaty to enable exit clauses. These techniques are applied now

and then in other treaty organizations, like WHO, UPU, ITU, IMO, ICAO etc etc provided the membership agree.

There is no tradition in EU for applying such techniques so the path is not readily available.

Also, even if it should come to amending the treaty it is NOT obvious that all zone members would agree to the fix and letting Greece exit.

just my tuppence

Seems stupid to me there is no exit...

What is clear Greece is basically bankrupt, it can not afford its extravagant ways, and no one has to lend Greece a single satang.

Same as a drunk beggar asking you or me to give him the price of a meal, you and I know he will just squander it on more booze.

So what happens next...

Greece will probable get no more money in the foreseeable future, or when Alex or who ever succeeds him climbs down, that means the Greek government will have to prioritise spending of whatever money it has coming in from tax revenue, Or print more money which it can not do...

Banks will be out of money within days and I expect Alex will have every door he knocks on with his begging bowl to be politely shut in his face.

Expect to see heavy bank restrictions, withdrawals to be limited even further, pension and welfare payments to be cut, government and civil servants pay to be cut.

Maybe stupid. With some hindsight (the only true knowledge) it may look like there should have been exit clauses, maybe even automatically triggered exits when members no longer

meet the criteria for being member of the zone.

But its relatively easy to see (I think) why there are no such clauses. The Euro and the zone is a fairly grand political scheme.

Some would say that the Euro is a political dream come true (for its founding fathers that is). When politicians make grand plans they don't make Plan B, they don't

plan for failure, they plan for success.

If at the time the zone was designed; the designers had voiced the need for a strong European Bank, the need for Eurocrats to peer into national budgets, GDPs, public spenditure, debts

etc etc to ensure soundness of national finances and economies, the zone would probably never have left the drawing board.

********************

Greece probably never really qualified for the zone.

Greece beeing keen and eager to join, the zone members keen and eager to increase the membership of the zone (thinking building the future Europe maybe).

The zone turning a blind or at least half closed eye to the shortcomings in the Greek finances and economy.

Resulting in a larger zone and maybe also in today's mess.

*******************

Dunno, but my gut feeling is that the EU will have to pay for this, (and pay deerly).

I may of course be totally wrong but I cannot but see a solid stream of fresh Euros flowing into Greece.

******************

I guess few people envy Merkel and her job this year. She certainly has more than a fair portion on her plate.

[ggold]

This is the tip of the iceberg - the first domino. The Eurozone was invented by dreamers who when it failed became the same dreamers who thought they could carry Greece and all would be OK. They think they can carry Italy, Spain and Portugal too.

The Eurozone failed a long time ago and this is just the beginning of the inevitable admitting of it.

The Eurozone can't even carry itself. In all of this experimental dreaming the UK's debt has swollen to be almost as much as that of the US as a percentage of GDP and it's climbing. This while supporting every Tom, Dick and Harry that waltzes up to the border and wants in. The UK itself and indeed the Eurozone doesn't have the economic engine to pull this freight.

I think I'll go get a beer and watch these Euro dreamers try to figure out what's for lunch.

total exposure for the UK to Greece is about 10 billion. The UK hasn't and doesn't contribute anything to prop up the Greeks. Also The UK dept is about 1.5 trillion which is about 80% of total GDP.

As the UK isn't in the Euro group (different from being in the EU) it doesn't contribute to EU debt, and is not expected to. The EU would like the UK to join the monetary union because it would strengthen the Euro, But then the UK would have to share that debt also! Never going to happen. IMO

But why the UK would want to be in the EU after this show of unity beats me?

Edited July 6, 2015 by ggold

[melvinmelvin]

This is the tip of the iceberg - the first domino. The Eurozone was invented by dreamers who when it failed became the same dreamers who thought they could carry Greece and all would be OK. They think they can carry Italy, Spain and Portugal too.

The Eurozone failed a long time ago and this is just the beginning of the inevitable admitting of it.

The Eurozone can't even carry itself. In all of this experimental dreaming the UK's debt has swollen to be almost as much as that of the US as a percentage of GDP and it's climbing. This while supporting every Tom, Dick and Harry that waltzes up to the border and wants in. The UK itself and indeed the Eurozone doesn't have the economic engine to pull this freight.

I think I'll go get a beer and watch these Euro dreamers try to figure out what's for lunch.

total exposure for the UK to Greece is about 10 billion. The UK hasn't and doesn't contribute anything to prop up the Greeks. Also The UK dept is about 1.5 trillion which is about 80% of total GDP.

As the UK isn't in the Euro group (different from being in the EU) it doesn't contribute to EU debt, and is not expected to. The EU would like the UK to join the monetary union because it would strengthen the Euro, But then the UK would have to share that debt also! Never going to happen. IMO

But why the UK would want to be in the EU after this show of unity beats me?

You may be right on this but I can see a possible scenario where UK chips in sterling to save the sods in Athens.

[ggold]

This is the tip of the iceberg - the first domino. The Eurozone was invented by dreamers who when it failed became the same dreamers who thought they could carry Greece and all would be OK. They think they can carry Italy, Spain and Portugal too.

The Eurozone failed a long time ago and this is just the beginning of the inevitable admitting of it.

The Eurozone can't even carry itself. In all of this experimental dreaming the UK's debt has swollen to be almost as much as that of the US as a percentage of GDP and it's climbing. This while supporting every Tom, Dick and Harry that waltzes up to the border and wants in. The UK itself and indeed the Eurozone doesn't have the economic engine to pull this freight.

I think I'll go get a beer and watch these Euro dreamers try to figure out what's for lunch.

total exposure for the UK to Greece is about 10 billion. The UK hasn't and doesn't contribute anything to prop up the Greeks. Also The UK dept is about 1.5 trillion which is about 80% of total GDP.

As the UK isn't in the Euro group (different from being in the EU) it doesn't contribute to EU debt, and is not expected to. The EU would like the UK to join the monetary union because it would strengthen the Euro, But then the UK would have to share that debt also! Never going to happen. IMO

But why the UK would want to be in the EU after this show of unity beats me?

You may be right on this but I can see a possible scenario where UK chips in sterling to save the sods in Athens.

That won't happen because if it did, the UK would be in worse a possition than it has been these last 5-6 years. It would be ten steps back from what the cons are trying to do, which is balance the UK book!

I don't think Cameron want's to commit national suicide.

[melvinmelvin]

This is the tip of the iceberg - the first domino. The Eurozone was invented by dreamers who when it failed became the same dreamers who thought they could carry Greece and all would be OK. They think they can carry Italy, Spain and Portugal too.

The Eurozone failed a long time ago and this is just the beginning of the inevitable admitting of it.

The Eurozone can't even carry itself. In all of this experimental dreaming the UK's debt has swollen to be almost as much as that of the US as a percentage of GDP and it's climbing. This while supporting every Tom, Dick and Harry that waltzes up to the border and wants in. The UK itself and indeed the Eurozone doesn't have the economic engine to pull this freight.

I think I'll go get a beer and watch these Euro dreamers try to figure out what's for lunch.

total exposure for the UK to Greece is about 10 billion. The UK hasn't and doesn't contribute anything to prop up the Greeks. Also The UK dept is about 1.5 trillion which is about 80% of total GDP.

As the UK isn't in the Euro group (different from being in the EU) it doesn't contribute to EU debt, and is not expected to. The EU would like the UK to join the monetary union because it would strengthen the Euro, But then the UK would have to share that debt also! Never going to happen. IMO

But why the UK would want to be in the EU after this show of unity beats me?

You may be right on this but I can see a possible scenario where UK chips in sterling to save the sods in Athens.

That won't happen because if it did, the UK would be in worse a possition than it has been these last 5-6 years. It would be ten steps back from what the cons are trying to do, which is balance the UK book!

I don't think Cameron want's to commit national suicide.

Good that you mentioned Cameron. As you no doubt will remember a while ago Cameron bosted that he would endeavour to renegotiate some terms for the UK membership of EU. And then, if winning the forthcoming election hold a EU/out-in referendum. Cameron won the election, with not a very small margin.

What is Cameron doing now? He is not endeavoring to re-negotiate UK terms in Community legislation. Trying to do that is just futile. Cameron is not stupid and he knows that. What he is doing is touring Europe seeking out possible support for a new treaty addon that bolsters the sovereignty of members under certain conditions. If UK/Cameron (with UKs somewhat strained relations to EU) want to sell that, he/Cameron must prove/justify that UK is one of the good guys in the class and supportive of EU, and only in extreme circumstances would seek to apply the provisions in the treaty addon. Getting support for Cameron's ideas would necessitate the support of the EU heavy weights, Merkel, Hollande, et al. What better way to prove commitment than to chip in re Greece, (in return for Merkel / Hollande support for Cameron's addon).

(conspiracy theory, maybe / politics, yes)

[ggold]

total exposure for the UK to Greece is about 10 billion. The UK hasn't and doesn't contribute anything to prop up the Greeks. Also The UK dept is about 1.5 trillion which is about 80% of total GDP.

As the UK isn't in the Euro group (different from being in the EU) it doesn't contribute to EU debt, and is not expected to. The EU would like the UK to join the monetary union because it would strengthen the Euro, But then the UK would have to share that debt also! Never going to happen. IMO

But why the UK would want to be in the EU after this show of unity beats me?

You may be right on this but I can see a possible scenario where UK chips in sterling to save the sods in Athens.

That won't happen because if it did, the UK would be in worse a possition than it has been these last 5-6 years. It would be ten steps back from what the cons are trying to do, which is balance the UK book!

I don't think Cameron want's to commit national suicide.

Good that you mentioned Cameron. As you no doubt will remember a while ago Cameron bosted that he would endeavour to renegotiate some terms for the UK membership of EU. And then, if winning the forthcoming election hold a EU/out-in referendum. Cameron won the election, with not a very small margin.

What is Cameron doing now? He is not endeavoring to re-negotiate UK terms in Community legislation. Trying to do that is just futile. Cameron is not stupid and he knows that. What he is doing is touring Europe seeking out possible support for a new treaty addon that bolsters the sovereignty of members under certain conditions. If UK/Cameron (with UKs somewhat strained relations to EU) want to sell that, he/Cameron must prove/justify that UK is one of the good guys in the class and supportive of EU, and only in extreme circumstances would seek to apply the provisions in the treaty addon. Getting support for Cameron's ideas would necessitate the support of the EU heavy weights, Merkel, Hollande, et al. What better way to prove commitment than to chip in re Greece, (in return for Merkel / Hollande support for Cameron's addon).

(conspiracy theory, maybe / politics, yes)

I didn't say Cameron was anti EU! lol. He has had his answer, that any treaty change would take years if at all? The issue has been fudge before it even got started. But maybe his backbenchers will have something to say about that. The electorate will allow themselves to be fooled, unless there are loud enough voices against.

The only hope is Greece gets pushed out, then there is a run on the PIS Countries Portugal, Italy, minus the G for Greece obviously and Spain, and the Euro collapses before the referendum. Then he doesn't have a hope of a yes vote.

You really should give up on the idea of Cameron chiping in re Greece. That would basicaly load more debt on the Government reverse all the work they claim to have done re the economy. and probably bring riots on the streets of London.

There is no need for the UK to get involved in this, there is nothing to gain from it. Not even some imagined support from other EU leaders. They are more commited to the Idea of intergration than the UK. It would actually bring down Camerons government. He would have a backbench anti EU revolt from which he could not survive. I think he knows that. Besides I doubt he is even thinking of such folly.

[sirineou]

Thanks for this sirineou, always good to have some facts on the table.

People tend to forget the background of things quickly (memory is short).

In these Greek/Messy times I'd like to add some text re a topic which concerns me:

What are the Greeks actually saying yes/no to today?

1 Some argue that its about leaving the EU.

2 Some argue that its about leaving the Eurozone.

3 Some argue that its about the most recent offer from the Troika.

I would like to argue that leaving the Eurozone is not an option for Greece.

Simply put; the treaty framework for the Eurozone does not contain any

exit clauses. There are noe legal provisions/instruments for leaving the zone.

You can choose to join or not, but once in you can't leave.

This is in line with how community legislation generally is written.

(you may leave the EU, there is a legal framework for doing that, but its a

complicated and lengthy process)

Many leading economists and politicians frequently mentions the possibility

of Greece leaving the zone. However, this wouldn't be the first and probably

not the last time economists and politicians screw up on what is actually

legally possible. These people are into politics and don't want their

political processes cluttered with legalities, or facts for that matter.

So far I have seen only two frontpage figures saying the same as me;

The Greek minister of finance has stated clearly just about the same

as I say above.

The German minister of finance has stated firmly that regardless of

the Greeks voting yes or no today they will remain both in the EU and the zone.

Since this Greek calamity started to really accelerate there has been quite a number of legal studies on leaving the zone.

(available on www)

As far as I can see they all conclude that leaving the zone and staying in the EU is not viable way forward.

Hence, changes to the treaty are needed in order to provide for exits.

Treaty changes need to be ratified, takes TIIIIIME.

Now.

If things go really haywire in Greece. Something must be done.

You cant have people starving for lack of satang and food or dying

because hospitals cannot buy medicine and other essentials.

Cancel debts and pouring in fresh Euros (free of charge) is a possibility.

There are legal (tricks)/techniques that could be applied to ensure a quick

fix to the treaty to enable exit clauses. These techniques are applied now

and then in other treaty organizations, like WHO, UPU, ITU, IMO, ICAO etc etc provided the membership agree.

There is no tradition in EU for applying such techniques so the path is not readily available.

Also, even if it should come to amending the treaty it is NOT obvious that all zone members would agree to the fix and letting Greece exit.

just my tuppence

Seems stupid to me there is no exit...

What is clear Greece is basically bankrupt, it can not afford its extravagant ways, and no one has to lend Greece a single satang.

Same as a drunk beggar asking you or me to give him the price of a meal, you and I know he will just squander it on more booze.

So what happens next...

Greece will probable get no more money in the foreseeable future, or when Alex or who ever succeeds him climbs down, that means the Greek government will have to prioritise spending of whatever money it has coming in from tax revenue, Or print more money which it can not do...

Banks will be out of money within days and I expect Alex will have every door he knocks on with his begging bowl to be politely shut in his face.

Expect to see heavy bank restrictions, withdrawals to be limited even further, pension and welfare payments to be cut, government and civil servants pay to be cut.

Maybe stupid. With some hindsight (the only true knowledge) it may look like there should have been exit clauses, maybe even automatically triggered exits when members no longer

meet the criteria for being member of the zone.

But its relatively easy to see (I think) why there are no such clauses. The Euro and the zone is a fairly grand political scheme.

Some would say that the Euro is a political dream come true (for its founding fathers that is). When politicians make grand plans they don't make Plan B, they don't

plan for failure, they plan for success.

If at the time the zone was designed; the designers had voiced the need for a strong European Bank, the need for Eurocrats to peer into national budgets, GDPs, public spenditure, debts

etc etc to ensure soundness of national finances and economies, the zone would probably never have left the drawing board.

********************

Greece probably never really qualified for the zone.

Greece beeing keen and eager to join, the zone members keen and eager to increase the membership of the zone (thinking building the future Europe maybe).

The zone turning a blind or at least half closed eye to the shortcomings in the Greek finances and economy.

Resulting in a larger zone and maybe also in today's mess.

*******************

Dunno, but my gut feeling is that the EU will have to pay for this, (and pay deerly).

I may of course be totally wrong but I cannot but see a solid stream of fresh Euros flowing into Greece.

******************

I guess few people envy Merkel and her job this year. She certainly has more than a fair portion on her plate.

are you aware that only 10% of the bailout funds reach Greece? 90% go directly to the creditors.

This is not a bailout of Greece it is a bailout of the investors who made a bad investment.

For this Greece has endured six years of stringent austerity. So one would think this austerity has put Greece on a pathway to recovery and some people were surprised When the Greeks voted No to further austerity.

So let's examine this,

Six years of austerity saw Billions of bailout euros of which 90% went to creditors, in that time Greece's GDP shrank by 1/4 and not only did not Pay down its debt but its debt increased,

Is there any one of you out there who , if in that situation would have voted for more of that?????

How Greece got to where they are is irrelevant ,

Remember for every responsible borrower there is an responsible lender.what is relevant is . How do we move forward from here?

After world WWII Germany was in ruins, there were many from all the different countries who had suffered greatly who advocated punitive actions against Germany.

They advocated the disarmament and dis-industrialization of Germany. Germany was to become a pastoral agricultural country. But other saw it differently, they realized the threats such stance provided, they were not about to cut their nose to spite their face.

Monies were lend to Germany, it re-industrialized and in 1953 when it was realized that Germany could pot possible pay that debt and continue to grow, a large part of that debt was forgiven and the remaining restructured. Ironically one of the creditors who voted for that, was Greece. Greece who had 1/3 of it's population die during the German occupation.

So now we find Greece in a similar situation, what do we do, Do we consider punitive actions? that would not only hurt Greece but will prove to be detrimental to all of us

will we cut our nose to spite our face, or will we do the only prudent thing and strengthen the Union, Strengthen our southern flank , and build a prosperous future for all of as?

Greece will not leave the Union, if one does all could, If Greece leaves and soon after, does a lot better, as it probably will.

Greeks are industrious,well educated hard working people.

Their luck of success within Greece was only structural, and geopolitical , look at their success when immigrating to other countries. These structural impediments are being removed. With or with out Europe, Greece will recover an prosper,

but if it leaves Europe and prospers, then all the other economically ailing members will bolt for the gates, and the it's R.I.P E.U.

Also if Greece leave do you think it would go at this along, or do you think it will align with others? Hello Putin ....

Luckily for all of us the powers to be , know all of this,

but they also have political considerations.

If they were to immediately go for debt forgiveness. then all the other ailing economies would want the same.a pound of flesh had to be extracted making such pathway unpalatable

Also an easy Debt forgiveness and restructuring would not have being popular with their constituency,

So this Greek Tragedy, had to play out all it's acts, but in the end the IMF recommendations will be implemented, and there will be no Greek exit.

Edited July 7, 2015 by sirineou

[Ace of Pop]

So much waffle . Money Squandered Can be likened to Red Bull Boss handing out money to his idle Kids.

[melvinmelvin]

@ ggold:

I am not disagreeing with your post above.

Its more that in these times with daily dire news I need some amusing thoughts to keep smiling.