'D'-day for Greece

[Geoff Kilpatrick]

The IMF's "Sword of Damocles" hangs over Greece today. At 5pm GMT, they find out if they get another tranche of bailout money to pay the bills.

 

 

 

And this article shows why it is completely futile. Europe has to be honest now - it has run out of time. Either break up the Eurozone or create a debt union meaning the Germans are completely on the hook for all the debts.

[Prince Buaben]

The IMF's "Sword of Damocles" hangs over Greece today. At 5pm GMT, they find out if they get another tranche of bailout money to pay the bills.

 

 

 

And this article shows why it is completely futile. Europe has to be honest now - it has run out of time. Either break up the Eurozone or create a debt union meaning the Germans are completely on the hook for all the debts.

 

Silly question

 

If the Eurozone was broken up would that be the end of the Euro as a Currency?

[Geoff Kilpatrick]

Silly question

 

If the Eurozone was broken up would that be the end of the Euro as a Currency?

 

Like all good answers "it depends".

 

 

 

Nothing to stop Northern Europe (Germany, Netherlands, Finland etc) maintaining a single currency but the real problem is their bank's exposure to the PIIGS.

[IronJambo]

Silly question

 

If the Eurozone was broken up would that be the end of the Euro as a Currency?

 

From what I've picked up the Euro as we know it will be dead. The ideology of a single currency isn't going to disappear though and there is talk of a "Super Deutshmark" or some other form of Euro for the stronger and better financially placed countries.

[jamb0_1874]

Will Greece get its next tranche of money, Yes!

 

But thats only because they dont know what else to do. So they will continue to drive along until the whole things goes over the cliff into the abyss and then they will all stand back and look stunned and amazed that its happened.

[I P Knightley]

Do you think they're calling it "Delta Day"?

[Boris]

What would be the consequences if Greece were to default?

[rossthejambo]

What would be the consequences if Greece were to default?

 

I'm not an expert by any means, but I remember hearing that Portugal, Spain, Ireland and possibly Italy might not be far behind, a Domino effect basically.

 

Not sure how accurate that is now as I heard that a few months ago.

[jambovambo]

I'm not an expert by any means, but I remember hearing that Portugal, Spain, Ireland and possibly Italy might not be far behind, a Domino effect basically.

 

Not sure how accurate that is now as I heard that a few months ago.

 

 

Hence "PIIGS" ... Portugal Ireland Italy Greece Spain" ...

[rossthejambo]

Hence "PIIGS" ... Portugal Ireland Italy Greece Spain" ...

 

I did wonder what that meant right enough

[Boris]

I'm not an expert by any means, but I remember hearing that Portugal, Spain, Ireland and possibly Italy might not be far behind, a Domino effect basically.

 

Not sure how accurate that is now as I heard that a few months ago.

 

But...surely these countries are either fecked or they aren't. I don't understand how what happens in Greece can all of a sudden affect these other nations.

 

Basically the World's skint, so can't we just draw a line under it and start again?

[IronJambo]

But...surely these countries are either fecked or they aren't. I don't understand how what happens in Greece can all of a sudden affect these other nations.

 

Basically the World's skint, so can't we just draw a line under it and start again?

 

A nice idea, but rather naive. You mean wipe out world debt and start at zero? Totally devalue every currency, company, and country in the world? Wipe out individuals debts and fortunes?

 

Have you been watching "Fight Club"?

[Prince Buaben]

Remember this isn?t the fabled public debt wracked up by countless lazy, feckless lay-abouts and their ugly children all determinedly doing nothing and expecting to be given flat screen televisions and hospital care they don?t deserve. This is debt created by, agreed to, marketed by and because of which huge bonuses were awarded to, private bankers throughout Europe.

 

 

[Boris]

A nice idea, but rather naive. You mean wipe out world debt and start at zero? Totally devalue every currency, company, and country in the world? Wipe out individuals debts and fortunes?

 

Have you been watching "Fight Club"?

 

No, never seen it!

 

It is very naive, I know, but I don't see how putting a country into further debt to pay off the original debt will help matters.

 

I mean, if Greece were to turn round and say "sorry, but you're getting beggar all from us" what would happen?

[Lovecraft]

No, never seen it!

 

It is very naive, I know, but I don't see how putting a country into further debt to pay off the original debt will help matters.

 

I mean, if Greece were to turn round and say "sorry, but you're getting beggar all from us" what would happen?

 

 

Haven't the IMF been doing this for years in Africa to get hold of all their national resources?

[H J Simpson]

No, never seen it!

 

It is very naive, I know, but I don't see how putting a country into further debt to pay off the original debt will help matters.

 

I mean, if Greece were to turn round and say "sorry, but you're getting beggar all from us" what would happen?

 

I coul be be wrong but in simplistic terms:

 

You borrow ?50k from your brother, ?60k from your sister & ?100k from your mate and then turn round and say your getting he-haw of it back as I'm skint. That obviously has an impact on your brother, sister and your mate as they are all massively out of pocket and in turn are then unable to pay back W, X, Y & Z that they borrowed money from (at a lower rate of interst than you were paying your brother, sister & mate) to give to you.

 

It's not far off a legalised pyramid scheme as eventually there is not enough money to pay everyone and the pyramid of cards comes tumbling down.

[Big G]

Two options left if everyone is being honest.

1. Euro bonds

2. Throw Greece out of the Euro.

[H J Simpson]

Two options left if everyone is being honest.

1. Euro bonds

2. Throw Greece out of the Euro.

 

They never give us 10 points in the Eurovision song contest anyway so I'm all for that.

[westbow]

No, never seen it!

 

It is very naive, I know, but I don't see how putting a country into further debt to pay off the original debt will help matters.

 

I mean, if Greece were to turn round and say "sorry, but you're getting beggar all from us" what would happen?

I think they may become Germany by the Mediterranean, again.

 

More Euros will be printed, the initial loans will be seen as bungs.

[Boris]

 

It's not far off a legalised pyramid scheme as eventually there is not enough money to pay everyone and the pyramid of cards comes tumbling down.

 

If this is the case, then why are they even going down that line in the first place?

 

Surely all it's doing is stoking this up for the same thing to happen in say 20 years time?

 

On a secondary tangent, if it's all about market confidence, doesn't this really highlight the erratic and volatility of the market and therefore no way for a democracy to run (or be run by the market)?

[Socrates]

I coul be be wrong but in simplistic terms:

 

You borrow ?50k from your brother, ?60k from your sister & ?100k from your mate and then turn round and say your getting he-haw of it back as I'm skint. That obviously has an impact on your brother, sister and your mate as they are all massively out of pocket and in turn are then unable to pay back W, X, Y & Z that they borrowed money from (at a lower rate of interst than you were paying your brother, sister & mate) to give to you.

 

It's not far off a legalised pyramid scheme as eventually there is not enough money to pay everyone and the pyramid of cards comes tumbling down.

It's not really ever going to help the situation if you then have to borrow another ?75k from your folks to keep paying your other creditors. That's without even going into the cuts that are demanded, which lead to an even deeper recession, meaning that less tax revenue comes in, and that you then need to borrow even more money to keep paying your debts. There has to come a point where it can be decided that it's just impossible for all the debts to ever be repaid - not that you get off scot-free, but that a realistic agreement about what can reasonably be paid is made.

[Big G]

Well, for what it's worth, at least you don't have the idiots like we do over here, printing money day after day. There's a ponzi scheme if ever there was one. Politics aside, I just don't see how printing money is going to pull the country out of trouble, just like handing wads of cash to Greece is going to do anything. Greece is a cash based economy, tax evasion is rife and there's no way in hell the Greeks will actually see through these austerity measures. I think they're just stalling for time, get the cash and then go back to business as usual, wonder how long the Germans will put up with that ?

[Coco]

 

On a secondary tangent, if it's all about market confidence, doesn't this really highlight the erratic and volatility of the market and therefore no way for a democracy to run (or be run by the market)?

 

Correct - there is no Euro democracy, only nation states subverting their economies to a fake currency. The politicians and bureaucrats created a fake currency, and the perils of a fake currency without free movement of people/fiscal transfers or union were well known. That fake currency is now being blown apart and hopefully the Euro will disappear and the Euro area go back to being a free trade zone without the bureaucracy/cost of the developments of the last 20 years.

[Boris]

Correct - there is no Euro democracy, only nation states subverting their economies to a fake currency. The politicians and bureaucrats created a fake currency, and the perils of a fake currency without free movement of people/fiscal transfers or union were well known. That fake currency is now being blown apart and hopefully the Euro will disappear and the Euro area go back to being a free trade zone without the bureaucracy/cost of the developments of the last 20 years.

 

 

But you're missing thepoint about Govts. being in thrall to the Market.

 

That was the excuse trotted out by Clegg when he formed the coalition with Cameron and is all I seem to hear on the news these days.

 

Naively I thought it was elected Govts that ran countries through the will of the people. What this shows is that there is no democracy, merely a market that tells Govts what to do.

 

Where is the accountability there?

[Coco]

But you're missing thepoint about Govts. being in thrall to the Market.

 

That was the excuse trotted out by Clegg when he formed the coalition with Cameron and is all I seem to hear on the news these days.

 

Naively I thought it was elected Govts that ran countries through the will of the people. What this shows is that there is no democracy, merely a market that tells Govts what to do.

 

Where is the accountability there?

 

There is no problem for Governments and markets so long as Governments do not use future taxation to fund current spending. When they use future taxation i.e. debt they are under the thrall of 'the markets' i.e. the lenders of that money. Those lenders are entitled to ask for a rate of return commensurate with the risk of lending.

 

The coalition have entered a situation where Brown spent many years of future taxation on current spending with little investment return. The lenders and potential lenders to the UK need to have their concerns that there would be more of that strategy assuaged otherwise they would not lend to the UK.

 

Similarly if the bureaucrats had not created a fake currency then they would have not suffered the pressure on that fake currency.

[Boris]

There is no problem for Governments and markets so long as Governments do not use future taxation to fund current spending. When they use future taxation i.e. debt they are under the thrall of 'the markets' i.e. the lenders of that money. Those lenders are entitled to ask for a rate of return commensurate with the risk of lending.

 

The coalition have entered a situation where Brown spent many years of future taxation on current spending with little investment return. The lenders and potential lenders to the UK need to have their concerns that there would be more of that strategy assuaged otherwise they would not lend to the UK.

 

Similarly if the bureaucrats had not created a fake currency then they would have not suffered the pressure on that fake currency.

 

But why should we have a General Election and a coalition is formed not because it is the will of the people but rather to appease "the markets"?

 

That seems essentially undemocratic to me.

[jamb0_1874]

On a side shoot but still to do with the looming crisis,

 

 

 

German industrial firm Siemens has withdrawn 500m euros (?436m) from a French bank and put it in the European Central Bank, according to reports.

 

According to the Financial Times, it withdrew the cash over concerns about the unnamed bank's stability.

 

It was also reportedly drawn to the higher rate of interest at the ECB.

 

Siemens has deposited about 6bn euros in the ECB, in one-week deposits, giving it the option to withdraw the cash with seven days' notice.

 

Banking licenceLast year, Siemens filed a request with regulators for a banking licence to help it expand financial services.

 

It is one of a limited number of companies that have a banking licence which allows them to deposit cash directly with the ECB.

 

The claims add to mounting fears of the impact of the eurozone debt crisis on confidence in the region's banks.

 

The report comes a week after Moody's downgraded French banks Societe Generale and Credit Agricole over their exposure to Greek debt.

 

French banks are the most exposed to Greek sovereign debt, with banks seeing large falls in their share prices over their commitments.

 

Siemens declined to comment.

 

 

It looks like Siemens is working on the premise of a massive crash and positioning itself to buy up any distressed assets as they appear.

[Felix Lighter]

Well, for what it's worth, at least you don't have the idiots like we do over here, printing money day after day. There's a ponzi scheme if ever there was one. Politics aside, I just don't see how printing money is going to pull the country out of trouble, just like handing wads of cash to Greece is going to do anything. Greece is a cash based economy, tax evasion is rife and there's no way in hell the Greeks will actually see through these austerity measures. I think they're just stalling for time, get the cash and then go back to business as usual, wonder how long the Germans will put up with that ?

 

The Germans have a solution for Greece

 

http://www.guardian.co.uk/world/2010/mar/04/greece-greek-islands-auction

 

Which when you think about it,it's what it's all about, asset stripping and wealth transfer.

There are many experts who are saying we are already at the point where the debt cannot be repaid and the longer we keep 'kicking the can down the road' the worse things will be in the long run when it comes to a recovery.

 

Take the U.S debt,it is apparently now so high it is impossible to pay back so surely default is only a matter of time.It stands at 14 trillion at the last count iirc and that doesn't include unfunded liabilities like Obamas healthcare programme,I might be wrong but I'm sure defence spending isn't included either.

 

If the doom and gloomers are right and the 'greatest depression' is just around the corner, then it should be considered that in the depression of the 1930's a much smaller U.S population,of which 90% plus still lived on the land and were self sufficient,suffered an estimated 7 million deaths due to starvation and hunger related diseases.

Today only 5% live on the land,and with around 45 million and rising already on food stamps,well you get the picture.

 

It's all very worrying,not to mention frustrating, as there are solutions being put forward by people who seem to have a grip on their sanity unlike than those who created this mess and who are still pulling the strings.

 

Todays Keiser Report features author Bill Still (who wrote 'The Secret Of Oz' which details the real meaning of 'The Wizard Of Oz')he talks to Max about an alternative system which doesn't involve a return to a gold standard, which so many of his peers do.

 

http://maxkeiser.com/

[southside1874]

If I was Greece, I would default and just get on with it. Either way they will be left in a wilderness for years to come. Their neighbour Italy will follow shortly and trade with them and Spain, Portugal, Ireland and the UK.

 

The whole thing IMO is about us the western capitalist trying to keep control of the safe currency that the world use to exchange goods. Sorry...it isn't safe anymore. We should default soon so that these global companies are brought down without them finding another solution that suits them and leaves us up the proverbial creek. All the currencies are over valued as are all the shares in the companies. Folk are making too much money and are looking for safe places to invest their vast wealth thus making the actual worth of things more.

 

If we all went up to the banks just now and asked for the silver that the bearer promises on the notes, it wouldn't and can't happen.

 

This is why Bin laden hit the World Trade Centres as he expected the close of this trading to create the fall then. Somehow they managed to fumble through and the one thing the Yanks wanted to do before the west collapsed was to make sure Bin Laden never seen it. The recent uprising in the middle east is all about the oil rich nations asking for gold to be exchanged for oil rather than the dolar as they don't trust the worth of the dollar.

 

Why are we putting this off?? A change in the power is going to happen next year and the yanks will love to blame their first black president

[I P Knightley]

I mean, if Greece were to turn round and say "sorry, but you're getting beggar all from us" what would happen?

 

I think that that's when they call in Bono.

 

Be careful what you wish for.

[Boaby Ewing]

I think that that's when they call in Bono.

 

Be careful what you wish for.

 

*Shudders*

 

@ Boris - in very simple terms, if Greece were to just default then almost no one would lend it any cash for years to come. That would mean running a very tight ship and learning to live within their means.

 

Sounds manageable until you realise the amount of their GDP/employment tied up in government services that they'd no longer be able to pay for. So thousands more would be out of a job overnight. Cranking up the drachma printing presses wouldn't even have the benefit of reducing a debt burden (through inflation). Services would go further down the swanny than they would under even the most severe austerity plans proposed.The tax take would be even lower than it is now. It's a vicious cycle.

 

A structured default (where banks agree to take a 'haircut' or small loss on what they've already lent out, but Greece still agrees to pay back what it can, perhaps over a longer timeline) would at least stop the whole country from toppling over while they try to get their house in order. They need to find a way to increase the tax take... and that's not just a question of upping taxes on the wealthiest but actually making sure they collect the ******* lot, from the richest shipping magnate to the local 'cash only' taverna owner.

 

And while you might be happy to see a lot of banks get a bloody nose in the event of a Greek default, it risks a pretty scary chain reaction (if the worst case scenario comes to light). Greece defaulting risks setting off another country like Italy or Spain which actually has a GDP that matters to the world economy. If the PIIGS were all to default a lot of banks would go under as governments can't afford another bailout. Markets then freeze up as no one will lend to anyone then the narrowly-avoided nightmare from Autumn 2008 of the cash machines not working becomes a real possibility.

 

Fancy that much? You might not care for markets much but if countries wish to live beyond their means then they have to at least keep those lending them money relatively sweet. Especially when they've come to rely on that money just to pay for day to day things, from teachers to hospitals. That's the shit-pit Greece have gotten themselves into.

[southside1874]

*Shudders*

 

@ Boris - in very simple terms, if Greece were to just default then almost no one would lend it any cash for years to come. That would mean running a very tight ship and learning to live within their means.

 

Sounds manageable until you realise the amount of their GDP/employment tied up in government services that they'd no longer be able to pay for. So thousands more would be out of a job overnight. Cranking up the drachma printing presses wouldn't even have the benefit of reducing a debt burden (through inflation). Services would go further down the swanny than they would under even the most severe austerity plans proposed.The tax take would be even lower than it is now. It's a vicious cycle.

 

A structured default (where banks agree to take a 'haircut' or small loss on what they've already lent out, but Greece still agrees to pay back what it can, perhaps over a longer timeline) would at least stop the whole country from toppling over while they try to get their house in order. They need to find a way to increase the tax take... and that's not just a question of upping taxes on the wealthiest but actually making sure they collect the ******* lot, from the richest shipping magnate to the local 'cash only' taverna owner.

 

And while you might be happy to see a lot of banks get a bloody nose in the event of a Greek default, it risks a pretty scary chain reaction (if the worst case scenario comes to light). Greece defaulting risks setting off another country like Italy or Spain which actually has a GDP that matters to the world economy. If the PIIGS were all to default a lot of banks would go under as governments can't afford another bailout. Markets then freeze up as no one will lend to anyone then the narrowly-avoided nightmare from Autumn 2008 of the cash machines not working becomes a real possibility.

 

Fancy that much? You might not care for markets much but if countries wish to live beyond their means then they have to at least keep those lending them money relatively sweet. Especially when they've come to rely on that money just to pay for day to day things, from teachers to hospitals. That's the shit-pit Greece have gotten themselves into.

 

They will default as the ###### and freddie mortgage geezers did in the good old USA. Why do folk worry about Greece? You can bolster this country only for the next to default!!! We have all tried our best but it is time to give up. We can go to war with China if you think that is the way forward or we can accept the way it has panned out. Its war that got us in this debt and its never really been our war. It has been a war of greed that doesn't suit.

[Guest Just Came To Say Kello]

The Germans have a solution

 

:omg!:

 

I'll bet they do.

[Boaby Ewing]

They will default as the ###### and freddie mortgage geezers did in the good old USA. Why do folk worry about Greece? You can bolster this country only for the next to default!!! We have all tried our best but it is time to give up. We can go to war with China if you think that is the way forward or we can accept the way it has panned out. Its war that got us in this debt and its never really been our war. It has been a war of greed that doesn't suit.

 

I admire the Churchillian sweep of your oratory.

 

Fanjita and Frederick were a mess but they didn't default as such. Might have been the better option or it might not have been. But I'm glad we didn't get the chance to find out.

 

I'm not sure I follow how the wars in Iraq and Afghanistan led to Greece cooking the books and borrowing well beyond their means exactly, but aye, they didn't do much for the finances of the US and UK.

 

 

 

 

[Das Root]

No, never seen it!

 

It is very naive, I know, but I don't see how putting a country into further debt to pay off the original debt will help matters.

 

I mean, if Greece were to turn round and say "sorry, but you're getting beggar all from us" what would happen?

 

 

This.

[Socrates]

*Shudders*

 

@ Boris - in very simple terms, if Greece were to just default then almost no one would lend it any cash for years to come. That would mean running a very tight ship and learning to live within their means.

 

Sounds manageable until you realise the amount of their GDP/employment tied up in government services that they'd no longer be able to pay for. So thousands more would be out of a job overnight. Cranking up the drachma printing presses wouldn't even have the benefit of reducing a debt burden (through inflation). Services would go further down the swanny than they would under even the most severe austerity plans proposed.The tax take would be even lower than it is now. It's a vicious cycle.

 

A structured default (where banks agree to take a 'haircut' or small loss on what they've already lent out, but Greece still agrees to pay back what it can, perhaps over a longer timeline) would at least stop the whole country from toppling over while they try to get their house in order. They need to find a way to increase the tax take... and that's not just a question of upping taxes on the wealthiest but actually making sure they collect the ******* lot, from the richest shipping magnate to the local 'cash only' taverna owner.

 

And while you might be happy to see a lot of banks get a bloody nose in the event of a Greek default, it risks a pretty scary chain reaction (if the worst case scenario comes to light). Greece defaulting risks setting off another country like Italy or Spain which actually has a GDP that matters to the world economy. If the PIIGS were all to default a lot of banks would go under as governments can't afford another bailout. Markets then freeze up as no one will lend to anyone then the narrowly-avoided nightmare from Autumn 2008 of the cash machines not working becomes a real possibility.

 

Fancy that much? You might not care for markets much but if countries wish to live beyond their means then they have to at least keep those lending them money relatively sweet. Especially when they've come to rely on that money just to pay for day to day things, from teachers to hospitals. That's the shit-pit Greece have gotten themselves into.

 

All fine, but it doesn't really say how lending Greece even more money will actually ever lead to them being able to repay their debts. I fully understand that the Greeks are largely responsible for the situation they find themselves in, but there has to be a limit as to how long you can keep going with the idea that the only reasonable strategy is to borrow more money which it seems unlikely that they can pay back. If there has to be a default, would it not be better for it to be sooner rather than later.

 

Additionally, I can see why it is in many people's interests to paint the most apocalyptic picture possible of what happens if Greece does default. I have a sneaking suspicion the end result may not be as catastrophic as we might think, at least in the long term. You don't see people in Argentina, for example, saying how catastrophic it is that they defaulted, and how they wish that they had continued to try to pay their debts.

[southside1874]

I admire the Churchillian sweep of your oratory.

 

Fanjita and Frederick were a mess but they didn't default as such. Might have been the better option or it might not have been. But I'm glad we didn't get the chance to find out.

 

I'm not sure I follow how the wars in Iraq and Afghanistan led to Greece cooking the books and borrowing well beyond their means exactly, but aye, they didn't do much for the finances of the US and UK.

 

 

 

 

 

:lol:

 

It was in the early hours and I was pissed

[topcat]

Hence "PIIGS" ... Portugal Ireland Italy Greece Spain" ...

 

It worked better before everybody got spooked about Italy

 

As far as I can see if Greece aren't able to pay their debts and can't devalue their currency then they'll just have to devalue their debts. Tell creditors they're getting x cents in the Euro and deal with the consequences.

 

Investors who lent to Greece assuming that it was as creditworthy as Germany will get a slap that they deserve.

[topcat]

But you're missing thepoint about Govts. being in thrall to the Market.

 

That was the excuse trotted out by Clegg when he formed the coalition with Cameron and is all I seem to hear on the news these days.

 

Naively I thought it was elected Govts that ran countries through the will of the people. What this shows is that there is no democracy, merely a market that tells Govts what to do.

 

Where is the accountability there?

 

The current democratically elected governments are accountable for the debts of previous democratically elected governments.

 

This makes government not just accountable to the will of the people but ultimately to the will of the people's parents, grandparents etc.

 

 

 

[Boris]

The current democratically elected governments are accountable for the debts of previous democratically elected governments.

 

This makes government not just accountable to the will of the people but ultimately to the will of the people's parents, grandparents etc.

 

 

 

 

Perhaps, but my point is that unelected and unaccountable organisations/firms/MNC's (whatever...) seem to have a rather undemocratic influence and control over the "will of the people". That's wrong imo. Sure, Govt has responsibility to its credititors, but it also has a responsibility to the people to keep them informed of that. If, for example, the Govt were to put their cards on the table and say "Ok, we cancel Trident and using that money instead we pay off a large amount of the deficit" I reckon the people would be fine with that.

 

It is perhaps the situation that we are in now, or may be in, in due course, that will lead to the people seeing these institutions for exactly what they are and then the people saying "enough is enough, we're tired of this bull" and taking matters into their own hands.

[dobmisterdobster]

Thankyou to the Tony Blair Labour government for keeping us out of the trainwreck of a currency known as the Euro.

[Glamorgan Jambo]

 

 

As far as I can see if Greece aren't able to pay their debts and can't devalue their currency then they'll just have to devalue their debts. Tell creditors they're getting x cents in the Euro and deal with the consequences.

 

Investors who lent to Greece assuming that it was as creditworthy as Germany will get a slap that they deserve.

 

They have already agreed a 21% 'haircut' on some/most Greek debt via a swap facility.

 

You're right that it's German and French banks who hold a lot of Greek/peripheral Eurozone soereign debt. However UK banks are hugely exposed to German and French bank debt so the moment Greece goes into uncontrolled or unilateral default, like many suggest, we'll see problems here... very quickly

 

This crisis is as much about German and French bank undercapitalisation as anything else.

[jamb0_1874]

 

This crisis is as much about German and French bank undercapitalisation as anything else.

 

But these banks under go stringent stress tests, are you saying that these tests have no credibility????

[Boaby Ewing]

All fine, but it doesn't really say how lending Greece even more money will actually ever lead to them being able to repay their debts. I fully understand that the Greeks are largely responsible for the situation they find themselves in, but there has to be a limit as to how long you can keep going with the idea that the only reasonable strategy is to borrow more money which it seems unlikely that they can pay back. If there has to be a default, would it not be better for it to be sooner rather than later.

 

Additionally, I can see why it is in many people's interests to paint the most apocalyptic picture possible of what happens if Greece does default. I have a sneaking suspicion the end result may not be as catastrophic as we might think, at least in the long term. You don't see people in Argentina, for example, saying how catastrophic it is that they defaulted, and how they wish that they had continued to try to pay their debts.

 

Possibly. One of the many differences between this and Argentina though is no one seems to have quite figured out what happens to the euro if that happens. *Grabs popcorn*.

 

Certainly a degree of truth in all that. Personally, I think they will default eventually... but perhaps better that it's a little bit further down the road for all concerned.