Greek Financial Crisis

[Toffeelover]

I'm saying that the level of debt is not the reason why things are as they are in Greece, because their debt repayments are lower than our own. So the suggestion that it is punitive debt that is holding Greece back is not right.

No Bruce as I have stated to Bizarro the cultures are very different.

 

[roydo]

We repay what we borrow, so folks will lend us money.

Not so certain that Greece can/will pay back what it borrowed, so the actual size of said debt, either as a % of GDP or in ££££ is largely irrelevant.

 

[Bruce Wayne]

So you're saying its the fact that the Greek government somehow think they don't have to repay debt is the reason?

It seems as though their government got elected under the pretense that they wouldn't have to. They painted the Troika as the bogeyman as it's much easier to blame others than look at yourself. It came across then as a massive game of chicken and I'm not sure they're going to win it, which is bad for Greece.

 

[Bruce Wayne]

We repay what we borrow, so folks will lend us money.

Not so certain that Greece can/will pay back what it borrowed, so the actual size of said debt, either as a % of GDP or in ££££ is largely irrelevant.

I think the whole debt thing is a red herring here. Japan have a higher total debt as a % of their GDP, whilst the repayments per year in Greece are lower than many nations (including our own).

The issue appears to be that a condition of lending Greece the money was that they get their house in order, which the government don't appear to want to do. I'm sure if they were lent money at 2.5% with no strings attached they'd snap hands off for it.

 

[roydo]

I think the whole debt thing is a red herring here. Japan have a higher total debt as a % of their GDP, whilst the repayments per year in Greece are lower than many nations (including our own).

The issue appears to be that a condition of lending Greece the money was that they get their house in order, which the government don't appear to want to do. I'm sure if they were lent money at 2.5% with no strings attached they'd snap hands off for it.

They would. But who would lend them that amount on those terms?

 

[bizzaro]

They would. But who would lend them that amount on those terms?

Liverpool Football Club mate.

 

[Bruce Wayne]

They would. But who would lend them that amount on those terms?

That's going to be the whole Syreza find themselves in if they default isn't it? Do they go for a short-term 'win' in return for what will surely be a lot of longer-term pain?

 

[roydo]

That's going to be the whole Syreza find themselves in if they default isn't it? Do they go for a short-term 'win' in return for what will surely be a lot of longer-term pain?

Pretty much. Long term, they are best out of the thing, unless they want to become a German/French state, with economic control ceded to them.

 

[Toffeelover]

Let's be clear about Greece, they could surely continue using the Euro out side of the Eurozone just like a couple of Caribbean Islands use the dollar!

 

[Caolam]

He's right mate.

Difference is. People in the UK expect to pay their taxes (or at least the taxes they are legally required to pay). Its viewed as immoral to engage in excessive tax avoidance or people going further than simple tax efficiency measures.

Debtors are forced to pay creditors in the courts.

The government is held to account by the electorate and people can see if the government is acting improperly and don't make excuses for government economic incompetence.


This is why the UK isn't viewed as a risk - PROVIDED that the debt and deficit position does not worsen and that a plan is in place to reverse it in the longer term

And piigs will fly

 

[davek]

It seems as though their government got elected under the pretense that they wouldn't have to. They painted the Troika as the bogeyman as it's much easier to blame others than look at yourself. It came across then as a massive game of chicken and I'm not sure they're going to win it, which is bad for Greece.

That's not true. A deal was there to be done last week when the Syriza Government agreed to do €8B more austerity, which was brokered by Hollande the French President. Then the IMF wouldn't sign off on it because they wouldn't wear the tax hike that was proposed along with it and the fact Greece was still asking for a partial write off of debts. Since then a variety of national governments are against any negotiated settlement. They want complete surrender to austerity to pacify their own constituencies.

I think the European governments and agencies have pushed Syriza too far and they've been shocked and outflanked by the referendum call. The harder left in that party are now in control and will push for grexit. Greece, because of the people on the street, are too tough a nut for the EU/Troika to crack. They've been through a crucible and cant be intimated by anyone at this stage. Hopefully Spain pick the baton up after the Greeks default.

 

[dholliday]

That's not true. A deal was there to be done last week when the Syriza Government agreed to do €8B more austerity, which was brokered by Hollande the French President. Then the IMF wouldn't sign off on it because they wouldn't wear the tax hike that was proposed along with it and the fact Greece was still asking for a partial write off of debts. Since then a variety of national governments are against any negotiated settlement. They want complete surrender to austerity to pacify their own constituencies.

I think the European governments and agencies have pushed Syriza too far and they've been shocked and outflanked by the referendum call. The harder left in that party are now in control and will push for grexit. Greece, because of the people on the street, are too tough a nut for the EU/Troika to crack. They've been through a crucible and cant be intimated by anyone at this stage. Hopefully Spain pick the baton up after the Greeks default.

as I said earlier in the thread, the referendum may well see a vote for austerity...so no default.

 

[thirdmantackle]

Oh yes, which ones? because do not recall, LLoyds, Barclays, RBS or HSBC saying they were owed billions.

Sorry, meant Irish banks.
Anglo, aib, bank of Ireland, permanent tsb could ALL have gone to the wall

 

[thirdmantackle]

The saddest thing in all this is the Irish government telling the Greeks to toe the official line and take the hard punishment.

Cause they know if the Greeks get a deal, it will leave the Irish government looking very silly, with a general election coming up.

 

[davek]

as I said earlier in the thread, the referendum may well see a vote for austerity...so no default.

It could happen given that the Syriza-led government were only elected with 40% of the vote. It depends how the referendum is taken by the people: a straight in/out decision or, more likely than not, a way of handing their negotiators (via a large no vote) a stronger bargaining position to take back to the table.

I think the Greek public can see their representatives have bent over backwards to cut a deal and that national pride and credibility is a big issue here.