SURVEY: Should Greece be allowed to remain in the Eurozone?

[Scott]

In your opinion, do you think that Greece should be allowed to remain in the Eurozone?

[Credo]

It's probably best for Greece and for the EU in general for Greece to exit both the Eurozone and the EU. Let them figure out how to get their house in order and then maybe re-join.

[Kerryd]

Greece has created her own financial problems through decades of nepotism and government mismanagement. She has tried to avoid them by borrowing more and more (and schemes like trying to sue/shame Germany into paying off their debts) instead of making fundamental changes, and has now defaulted on her debts.

The Greeks refuse to give up the posh system they've grown used to, that is (apparently) financed in large part with that borrowed money. Up to 1/3rd of working Greeks are employed by their government ! They can't tax the other 2/3rds enough to pay for that and all other functions of their government. Add to that what is a (comparatively) plush pension scheme and it's little wonder they are so far in debt that they are now in default of their obligations.

When the previous government agreed to start making changes in return for "bail out" money, the Greeks protested. Instead of tightening up their belts, accepting responsibility for their own situation and trying to make changes, they voted in a government who promised to reverse those changes and go back to "the good old days". It seems the new government's entire fiscal plan was based on trying to sue Germany for money it alleges it is owed from a bank loan it made back during World War 2 ! Even if that had of somehow miraculously happened, all it would have done is pay down some of what they currently owe, not all of it, and the debt would continue to grow as they continue to spend more than they take in.

Obviously their plan failed and the EuroZone and IMF people are getting tired of throwing money into a bottomless pit. Too many other countries have been in financial difficulties recently and needing bail outs. Too many are starting to think along the same lines - we'll just overspend and borrow more until we can't afford to pay and then demand that our debts be forgiven or there'll be another "crisis". Every time there is a crisis they know there is the possibility that the Euro will lose value and therefore drag down the economies of the more affluent members (the ones who actually pay their debts and provide the money to bail out the others).

At some point you have to draw the line. At some point these debtor countries have to start taking responsibility for their own actions. If Greece can't pay her debts now, even with all the bail-out money she's been given in the past, how on earth does she think she can afford to go it alone (i.e. withdraw from the Euro). Go the Zimbabwe route of constant currency devaluations and start printing Trillion Drachma bills that won't even buy a loaf of bread ?

As for the EuroZone, perhaps it would be better to boot Greece out as all it would really do is strengthen the Euro by having one less liability draining resources from the rest. Most of the market turmoil has probably already happened as various entities hedge their bets one way or another and all their PhD talents have determined all the various outcomes already. Sometimes you just have to cut your losses and move on. Maybe that time is now.

That's just my opinion though, which is worth about as much as the ink this is printed on !

[NongKhaiKid]

The Greek Finance Minister has given an assurance that banks will open on Tuesday but without an injection from the ECB where's the money coming from even with strict currency controls in place ?

[teatree]

Greece has created her own financial problems through decades of nepotism and government mismanagement. She has tried to avoid them by borrowing more and more (and schemes like trying to sue/shame Germany into paying off their debts) instead of making fundamental changes, and has now defaulted on her debts.

The Greeks refuse to give up the posh system they've grown used to, that is (apparently) financed in large part with that borrowed money. Up to 1/3rd of working Greeks are employed by their government ! They can't tax the other 2/3rds enough to pay for that and all other functions of their government. Add to that what is a (comparatively) plush pension scheme and it's little wonder they are so far in debt that they are now in default of their obligations.

When the previous government agreed to start making changes in return for "bail out" money, the Greeks protested. Instead of tightening up their belts, accepting responsibility for their own situation and trying to make changes, they voted in a government who promised to reverse those changes and go back to "the good old days". It seems the new government's entire fiscal plan was based on trying to sue Germany for money it alleges it is owed from a bank loan it made back during World War 2 ! Even if that had of somehow miraculously happened, all it would have done is pay down some of what they currently owe, not all of it, and the debt would continue to grow as they continue to spend more than they take in.

Obviously their plan failed and the EuroZone and IMF people are getting tired of throwing money into a bottomless pit. Too many other countries have been in financial difficulties recently and needing bail outs. Too many are starting to think along the same lines - we'll just overspend and borrow more until we can't afford to pay and then demand that our debts be forgiven or there'll be another "crisis". Every time there is a crisis they know there is the possibility that the Euro will lose value and therefore drag down the economies of the more affluent members (the ones who actually pay their debts and provide the money to bail out the others).

At some point you have to draw the line. At some point these debtor countries have to start taking responsibility for their own actions. If Greece can't pay her debts now, even with all the bail-out money she's been given in the past, how on earth does she think she can afford to go it alone (i.e. withdraw from the Euro). Go the Zimbabwe route of constant currency devaluations and start printing Trillion Drachma bills that won't even buy a loaf of bread ?

As for the EuroZone, perhaps it would be better to boot Greece out as all it would really do is strengthen the Euro by having one less liability draining resources from the rest. Most of the market turmoil has probably already happened as various entities hedge their bets one way or another and all their PhD talents have determined all the various outcomes already. Sometimes you just have to cut your losses and move on. Maybe that time is now.

That's just my opinion though, which is worth about as much as the ink this is printed on !

The EU has to shoulder a lot of the blame too. They allowed Greece into the Euro when it should have been clear that the Greek economy was unsuitable. But of course they were blinded by their fanatical desire for a federal Europe.

I hope the whole political union side of the EU will now start to come crashing down and we can go back to a trading union.

[Scott]

With Greece having voted 'no' in the referendum, will they be forced to leave the Eurozone? Can they voluntarily leave? Is there a mechanism in place for an exit?

[phantomfiddler]

Good riddance to a bunch of parasites

[Credo]

If they run out of Euros can they print their own currency or will that get them thrown out of the Eurozone?

[Incobart]

Europe will be better of if they show they take out the ones that do not good, otherwise Spain Portugal Italy .. can ask the same and then the euro really get weak. They were given a chance if they don't accept put them out, and try to get Denmark or Norway or uk in ..they will be more willing to do if they see they not only have to pump money in the bad ones.

[Incobart]

The referendum is also bullshit. of course nobody like to pay more and get less ..

the question should be :

do we accept the saving and reformations from Europe in order to get more support money again ? yes

or do we not accept, and get no money anymore, solve the problems ourself. no

[janpharma]

This is what happens to a nation built on corruption...might be a lesson for some members of "ASEAN" as well...

[Loptr]

Allowed to stay in the EU? Please, who would want to be ruled by unelected bureaucrats in Brussels and continuously screwed by the banksters?

This is a moot question at this point Scott, considering the Greeks themselves just voted overwhelmingly to thumb their collective noses at the EU, the IMF and the ECB... Look for Italy, Spain, France and others to follow suit...

http://hosted.ap.org/dynamic/stories/E/EU_GREECE_BAILOUT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-07-05-16-04-15

[Merzik]

French debt to GDP is now at 97% ; where Greece was only a few years ago. The list of failing debt-ridden countries to these banks is very long and will only continue to grow.

An interesting fact not well known about the Greek debt:

" ...In the deluge of Western media reportage on the Greek debt crisis, one key aspect remains strangely hidden. That is, the fact that Greeces debt burden of $320 billion has largely been incurred from decades of exorbitant militarism. Some estimates put at least half of the total Greek debt pile more than $150 billion down to military spending.

Before the onset of the current debt crisis in 2010, Greece was spending some 7 per cent of its GDP on military, when many other European countries were allocating about 2 per cent. Even now, five years after economic collapse, Greece is still the highest military spender in the European Union at 2.2 per cent of GDP. Out of the 28-member NATO military alliance, Greece is the second highest such spender after the United States, which allocates about 3.8 per cent of its economic output to military.

The Greek government of Alexis Tsipras and the institutional creditors among the EU, European Central Bank and the IMF have studiously ignored a glaringly obvious option for trying to put Greeces national finances on a sounder footing namely, a massive shrinking of the countrys military.

If Greece were to reduce its military spend by half to around 1 per cent of GDP, as in Italy, Belgium, Spain or Germany, that could generate $2 billion in finances that would meet the IMFs immediate demands and help to avoid the swingeing austerity measures demanded by the EU/ECB/IMF Troika.

But there is a good reason why the Troika of creditors are refusing that option. Greeces military extravagance over many years has been an absolute goldmine for German, French and American weapons industries. Out of the $150 billion in military spending by Greece during the years up to 2010, 25 per cent of the purchases were from Germany, 13 per cent from France and 42 per cent from the US, according to figures from SIPRI.

It is no coincidence that Greeces biggest institutional creditors are the German and French governments standing at a combined $100 billion. Much of the capital lent to Greece was then spent on German and French weapons systems, such as Leopard tanks and Mirage fighter jets, as well as on American F-16s..."

http://www.ronpaulinstitute.org/archives/featured-articles/2015/july/03/greek-crisis-awaits-other-nato-partners/

Edited July 6, 2015 by Merzik

[vogie]

If I don't pay my mortgage, can I remain in my house? But I think Greece will be offered another bailout package.

[Incobart]

Allowed to stay in the EU? Please, who would want to be ruled by unelected bureaucrats in Brussels and continuously screwed by the banksters?

This is a moot question at this point Scott, considering the Greeks themselves just voted overwhelmingly to thumb their collective noses at the EU, the IMF and the ECB... Look for Italy, Spain, France and others to follow suit...

http://hosted.ap.org/dynamic/stories/E/EU_GREECE_BAILOUT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-07-05-16-04-15

who would want to be ruled by unelected ???? bureaucrats in Brussels

maybe the ones that want peace, negotiations, equal rights & laws, more balance, ...

Europe has given already billions to greece as support .. I would rather be thankfull than call them screwers ..

[Lupatria]

They should not have been a member of the EU in the first place.

Let’s say as an entrepreneur I would have successfully gained credit from a bank by providing modified balances. Let’s assume the value of the credit was much higher than the value of my company. Than I refuse to pay any installments, and referred to the repayment demand of the Bank as extortion. In a next step I hold a referendum to let my staff decide if I should pay my debts. At this point I would be in custody already awaiting my trial without room for negotiations with the prosecutor. So who is the OXI here?

[Lupatria]

This is what happens to a nation built on corruption...might be a lesson for some members of "ASEAN" as well...

...especially when you have hundreds of thousand state officials on 'inactive posts' that don't even show up at their workplace but claim full salary...

[Kerryd]

With Greece having voted 'no' in the referendum, will they be forced to leave the Eurozone? Can they voluntarily leave? Is there a mechanism in place for an exit?

"Although the Eurozone is open to all EU member states to join once they meet the criteria, the treaty is silent on the matter of states leaving the Eurozone, neither prohibiting nor permitting it. Likewise there is no provision for a state to be expelled from the euro." (https://en.wikipedia.org/wiki/Eurozone)

The Eurozone started (officially) on 1 Jan 1999 with 11 countries. Greece was added in 2001 (though it supposedly "qualified" for membership in 2000). According to the CIA Factbook, Greece's ratio of public debt to Gross Domestic Product (GDP) went from 89.5% in 2007 to 113.4% in 2009. It currently shows their ratio to be around 174.5% ! That ranks them 3rd worst in the world (behind Japan surprisingly and Zimbabwe - not surprisingly). (By way of comparison, the UK sits at #28 on the list with an estimated (2014) ratio of 79.1%. The US is at #40 with a ratio of 71.2%.)

Greece's problems have been going on for awhile though. Whenever they try and "tighten the belt" the people start protesting. When they "loosen the purse strings" they go deeper in debt and deeper in trouble. It's like the Greek people have no desire to own up to their obligations or make any meaningful changes to the way they do business.

Looking at some Eurozone stats, of all the Eurozone members, Greece has, by far, the largest debt based on the Eurostat 2010 and 2011 numbers. Prior to 2010, Italy was the only country in the Eurozone with a higher debt than Greece, but Italy also had the 3rd largest Gross National Income (GNI) in the Eurozone as well (compared to Greece at the 8th highest GNI).

[Derek M]

Some interesting posts here.

Edited July 6, 2015 by Derek M

[TheAppletons]

With Greece having voted 'no' in the referendum, will they be forced to leave the Eurozone? Can they voluntarily leave? Is there a mechanism in place for an exit?

"Although the Eurozone is open to all EU member states to join once they meet the criteria, the treaty is silent on the matter of states leaving the Eurozone, neither prohibiting nor permitting it. Likewise there is no provision for a state to be expelled from the euro." (https://en.wikipedia.org/wiki/Eurozone)

The Eurozone started (officially) on 1 Jan 1999 with 11 countries. Greece was added in 2001 (though it supposedly "qualified" for membership in 2000). According to the CIA Factbook, Greece's ratio of public debt to Gross Domestic Product (GDP) went from 89.5% in 2007 to 113.4% in 2009. It currently shows their ratio to be around 174.5% ! That ranks them 3rd worst in the world (behind Japan surprisingly and Zimbabwe - not surprisingly). (By way of comparison, the UK sits at #28 on the list with an estimated (2014) ratio of 79.1%. The US is at #40 with a ratio of 71.2%.)

Greece's problems have been going on for awhile though. Whenever they try and "tighten the belt" the people start protesting. When they "loosen the purse strings" they go deeper in debt and deeper in trouble. It's like the Greek people have no desire to own up to their obligations or make any meaningful changes to the way they do business.

Looking at some Eurozone stats, of all the Eurozone members, Greece has, by far, the largest debt based on the Eurostat 2010 and 2011 numbers. Prior to 2010, Italy was the only country in the Eurozone with a higher debt than Greece, but Italy also had the 3rd largest Gross National Income (GNI) in the Eurozone as well (compared to Greece at the 8th highest GNI).

And therein lies the root of the problem.

[kohlenkutscher]

@ Kerryd

I completly agree with you.

[Loptr]

Allowed to stay in the EU? Please, who would want to be ruled by unelected bureaucrats in Brussels and continuously screwed by the banksters?

This is a moot question at this point Scott, considering the Greeks themselves just voted overwhelmingly to thumb their collective noses at the EU, the IMF and the ECB... Look for Italy, Spain, France and others to follow suit...

http://hosted.ap.org/dynamic/stories/E/EU_GREECE_BAILOUT?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2015-07-05-16-04-15

who would want to be ruled by unelected ???? bureaucrats in Brussels

maybe the ones that want peace, negotiations, equal rights & laws, more balance, ...

Europe has given already billions to greece as support .. I would rather be thankfull than call them screwers ..

The concept of a unified Europe is noble and just, the problem is that avarice has bastardized the concept for profits...

[otherstuff1957]

Is the question really 'should Greece be allowed to say in the Eurozone?' or should it be 'does Greece gain any advantage by staying in the Eurozone?'. I suspect that the answer to both questions is probably No.

The ECB, the IMF and Germany are partly to blame for this mess. Let me make an analogy: back in the '90s and early '00s the US banks were handing out money like drunken sailors. Then, the US economy slowed and crashed and over a 10 year period (2005 to 2015), 1 out of 4 US homeowners lost their homes to bank foreclosure. Now Greece's creditors are in the same position as the US Banks were a few years ago when millions of people were defaulting on their loans. However, there is one important difference. Greece's debtors cannot kick the Greeks out of their houses and sell them off to repay the debt! These sovereign debts are basically unsecured loans and if Greece defaults, their debtors have no real recourse.

If I were in charge of Greece, I would do two things:

1.print Drachma's and have them loaded into the ATM's this morning.

2.declare bankruptcy and negotiate repayment of the loans on a basis of 20 cents on the Euro.

[bkkcanuck8]

Greece should be given it's walking papers.... they have made little effort to tackle the large structural problems always looking for someone to help them first. I don't doubt that the debt is unsustainable but why worry about restructuring if Greece won't tackle their internal problems first...... Only if they tackle the internal problems first should they be considered for re-entry in the future....

All the other countries (Italy, Ireland, Portugal, Spain) have made at least a modicum effort in fixing their own problems....

[NeverSure]

Here's what everyone is afraid of, in some form or another. It's called "fractional reserve banking" and it's in play in all major markets.

This is a true story. Only the names have been changed to protect the innocent.

You and I open a new bank. We have no deposits or loans or cash in the safe.

Joe comes in to open an account. He deposits $100. We now have $100 in liabilities because we owe him the money.

Pete comes in and wants to do the same thing. We now have $200 in liabilities - money owed to depositors.

Jane comes in and wants to borrow $100 and we loan her that much of Joe and Pete's deposits. That loan is our asset - money owed to us.

Jane wants her loan proceeds deposited to a new deposit account so we do that.

We now have $300 in total deposits made out of just the $200 that Joe and Pete gave us. We are magicians, creating new money. We have increased the total money supply available to all by 50% with a stroke of the pen. Everyone has $100 but we have just $200 in the vault - Joe and Pete's money.

If everyone wants his money out of the bank at the same time we are screwed. This is a good system in good or decent times and a nightmare when it's contracting.

Greece is contracting and no one in Europe knows what to do about it. They can't give Pete and Joe their money because they don't have it - they loaned it to Jane. Jane doesn't have it because she spent it.

The Euro has already crashed once, about 3 1/5 years ago, and only a loan (currency swap) by the US Federal Reserve of USD$2 trillion bailed them out. Another true story. Watch out below.... Wall Street Journal - The Federal Reserve's Covert Bailout of Europe.

That's not a tinfoil hat site. That's the WSJ.

Cheers

Edited July 6, 2015 by NeverSure

[johnmcc6]

The whole E U is doomed. A mad social experiment that has no hope of becoming a united states of Europe. They are all broke and yet they just keep printing more dollars or Euros to lend to people who have no way of paying it back. The mob in Brussles have never been elected by the people. How nice for a new bunch of power mongers trying to rule the mass's. Only when the whole shebang falls in a heap is there any hope for change. The fireworks are just begining.

[stuurman]

Restructure their debt and let them go back to the Drachma. Maybe in a few decades after they reformed their economy, implemented a proper tax collection system, cracked down on corruption and clientism they could find their way back to the Euro (if it still exists at that point).

Edited July 6, 2015 by stuurman

[Mot Dang]

Because of Greece and their bloody NO vote, this morning the stock market in Sydney fell ~1%, and so did my investments. Exchange rates ($A to Baht) fell by almost a full baht with the Bangkok Bank and other banks. That has wiped out what little gains I made since the crunch in the first quarter of 2015. Thanks Greece, you do know what an International community and economy is ?

How about taking responsibility for your mismanagement and corruption. Sounds like somewhere else I know.

And just as a P.s., the Greek communist party is rubbing it's hands together with glee. What next ?

[Incobart]

I see that 15 % of the people still want Greece get money, If these people all give 500 euro to greece.. the problem is solved !

[sawadee1947]

if they can manage their financial problems there is no reason to leave. And....THEY will decide (not the other Euro Zone members) because there are NO regulations for this case in the EU.

However, if there is no money coming from CB Frankfurt they have to be very creative.

For stability of the Euro Zone it might be better to find a better program for Greece to create more growth. Say Good Bye to austerity. It doesn't work for Greece.