Greek Financial Crisis

[davek]

They have not Dave, they have played a game of brinkmanship. They want a deal on their terms and basically put off repayment for much longer. Now if you were one of the creditors, would you want your money back or not?

You cant grow your way out of immiseration...and that's what's on offer.

This is an exercise now in bullying, which will serve its purpose as an example to any others thinking of declining the wonderful life offered by neo-liberalism. They should be careful what they wish for though. If they push and push to a point where civil war breaks out then the army will be on the streets and the Generals in power, and then where is their Shangri-La of a family of liberal 'democracies'?

 

[The Esk]

intransigence" is harsh. There's enough there to tell us compromises, redrafts and extensions have been made (to death).

With respect, I don't think intransigence is harsh. There's a much bigger game being played than "just" Greece by the Troika and particularly driven by the German Government. The plans put forward throughout the whole crisis going back to 2008 have been little more than bank bailouts. If you examine who the beneficiaries of the lending to Greece have been, it's not the Greek people, it's not the Greek Government, it's been the holders of Greek debt, i.e. the banks and the German banks in particular by moving privately owned debt (owned by the shareholders of the German Banks) to the European taxpayer

All was going satisfactorily (as long as you are not Greek) until January and Syriza joined the party. Backed by their electoral mandate they've said enough is enough,no-one can grow the Greek economy whilst there's the most extreme form of austerity. How can we raise taxes if earnings have fallen by 40% in real terms, unemployment is at record highs and there's little corporate profitability?

So, the elected Greek Government have come along and thrown a big spanner in the works - the problem is that whilst the German Banks in particular have shifted debt liabilities from their balance sheet to the taxpayer, no-one knows what levels of potential liabilities exist from derivative exposure. Take Deutsche Bank as an example - total derivative exposure across their balance sheet is 20 times greater than the value of the German economy. Even if just a fraction of that is contaminated by the Greek fall out then the effects are plain to see.

The ruling institutions of the EU are playing an enormously dangerous game in pushing Greece to the wall - they may feel they have to because that's what EU taxpayers are demanding. However the cost of doing so may be so many times greater than the cost of extending credit timelines which is effectively all that Syriza were asking for.

There'll be plenty of midnight oil burning in Frankfurt, tonight and for the foreseeable as the German Banks come to terms with the potential costs of a Greek default.

 

[roydo]

total derivative exposure across their balance sheet is 20 times greater than the value of the German economy. Even if just a fraction of that is contaminated by the Greek fall out then the effects are plain to see.

That would be the dreaded Credit Default Swaps then mate? Been awfully quiet for a few years them.

Or is that different?

 

[The Esk]

That would be the dreaded Credit Default Swaps then mate? Been awfully quiet for a few years them.

Or is that different?

All sorts of derivative products mate, CDS's being just one. They all have a similar effect if the go wrong because of the leverage.

 

[roydo]

All sorts of derivative products mate, CDS's being just one. They all have a similar effect if the go wrong because of the leverage.

Yeah, I know. The figures are terrifying if the worst happened.

But if it did, I guess we would just have to start all over again.

 

[Toffeelover]

You cant grow your way out of immiseration..and that's what's on offer.

This is an exercise now in bullying, which will serve its purpose as an example to any others thinking of declining the wonderful life offered by neo-liberalism. They should be careful what they wish for though. If they push and push to a point where civil war breaks out then the army will be on the streets and the Generals in power, and then where is their Shangri-La of a family of liberal 'democracies'?

Dave by the use of the word in bold you reveal your Marxist leanings which to be honest we all have known you are on the very left of politics. Now as for Greece and their financial situation contrary to what you espouse this is not a plot by capitalists to bring the country down. Rather from the poor to the very rich they have brought this on themselves over the years, really there is no one in their society who is blameless. Interesting in chasing your Marxist ideology you choose to ignore this which is not surprising. The Greeks at all levels have defrauded their country and brought it to this parlous state following which they turned to borrowing money which in their hearts knew they would not be able to pay back this side of armageddon.

Instead of taking it from your view point try the other way, you have loaned £50 to a mate, two months later he say he can't pay it back, what do you do? Say okay forget it?

 

[Toffeelover]

With respect, I don't think intransigence is harsh. There's a much bigger game being played than "just" Greece by the Troika and particularly driven by the German Government. The plans put forward throughout the whole crisis going back to 2008 have been little more than bank bailouts. If you examine who the beneficiaries of the lending to Greece have been, it's not the Greek people, it's not the Greek Government, it's been the holders of Greek debt, i.e. the banks and the German banks in particular by moving privately owned debt (owned by the shareholders of the German Banks) to the European taxpayer

All was going satisfactorily (as long as you are not Greek) until January and Syriza joined the party. Backed by their electoral mandate they've said enough is enough,no-one can grow the Greek economy whilst there's the most extreme form of austerity. How can we raise taxes if earnings have fallen by 40% in real terms, unemployment is at record highs and there's little corporate profitability?

So, the elected Greek Government have come along and thrown a big spanner in the works - the problem is that whilst the German Banks in particular have shifted debt liabilities from their balance sheet to the taxpayer, no-one knows what levels of potential liabilities exist from derivative exposure. Take Deutsche Bank as an example - total derivative exposure across their balance sheet is 20 times greater than the value of the German economy. Even if just a fraction of that is contaminated by the Greek fall out then the effects are plain to see.

The ruling institutions of the EU are playing an enormously dangerous game in pushing Greece to the wall - they may feel they have to because that's what EU taxpayers are demanding. However the cost of doing so may be so many times greater than the cost of extending credit timelines which is effectively all that Syriza were asking for.

There'll be plenty of midnight oil burning in Frankfurt, tonight and for the foreseeable as the German Banks come to terms with the potential costs of a Greek default.

Paul they were really only talking of a short term extension, in reality I think it was said some where it could take 50 years for the Greeks to pay their debts.

 

[Fearthainn]

Dave by the use of the word in bold you reveal your Marxist leanings which to be honest we all have known you are on the very left of politics. Now as for Greece and their financial situation contrary to what you espouse this is not a plot by capitalists to bring the country down Rather form the poor to the very rich they have brought this on themselves over the years really there is no one in their society who is blameless. Interesting in chasing your Marxist ideology you choose to ignore this which is not surprising. The Greeks at all levels have defrauded their country and brought it to this parlous state following which they turned to borrowing money which in their hearts knew they would not be able to pay back this side of armageddon.

Instead of taking it from a marxist try the other way, you have loaned £50 to a mate, two months later he say he can't pay it back, what do you do? Say okay forget it?

What a load of rubbish, an utter simplistic view of things.

How did the average Greeks brought this on themselves, by working more hours than most Northern Europeans? The majority of tax is owed by a minority of people/businesses.

 

[daylightrobber]

Dave by the use of the word in bold you reveal your Marxist leanings which to be honest we all have known you are on the very left of politics. Now as for Greece and their financial situation contrary to what you espouse this is not a plot by capitalists to bring the country down. Rather from the poor to the very rich they have brought this on themselves over the years, really there is no one in their society who is blameless. Interesting in chasing your Marxist ideology you choose to ignore this which is not surprising. The Greeks at all levels have defrauded their country and brought it to this parlous state following which they turned to borrowing money which in their hearts knew they would not be able to pay back this side of armageddon.

Instead of taking it from your view point try the other way, you have loaned £50 to a mate, two months later he say he can't pay it back, what do you do? Say okay forget it?

I'd say don't lend money unless you can afford to lose it.
For all the criticisms of Greece not managing their finances properly, serious questions need to be asked of those lending.

 

[The Esk]

Paul they were really only talking of a short term extension, in reality I think it was said some where it could take 50 years for the Greeks to pay their debts.

I understand that mate, but you cannot pay off debts by shrinking the economy - we've seen that here in the UK, in the early 80's, early 90's and the period from 2008. When economic activity reduces and/or growth is weak, debt rises. UK national debt has doubled since 2009 because reduced tax revenues have not kept up with Government expenditure.

The austerity measures placed on Greece were designed to benefit the debtors, you have to give the patient some medicine so that the patient can become healthy again. The Troika refused to do that and the Greek people spoke. Hence we are where we are.

 

[davek]

With respect, I don't think intransigence is harsh. There's a much bigger game being played than "just" Greece by the Troika and particularly driven by the German Government. The plans put forward throughout the whole crisis going back to 2008 have been little more than bank bailouts. If you examine who the beneficiaries of the lending to Greece have been, it's not the Greek people, it's not the Greek Government, it's been the holders of Greek debt, i.e. the banks and the German banks in particular by moving privately owned debt (owned by the shareholders of the German Banks) to the European taxpayer

All was going satisfactorily (as long as you are not Greek) until January and Syriza joined the party. Backed by their electoral mandate they've said enough is enough,no-one can grow the Greek economy whilst there's the most extreme form of austerity. How can we raise taxes if earnings have fallen by 40% in real terms, unemployment is at record highs and there's little corporate profitability?

So, the elected Greek Government have come along and thrown a big spanner in the works - the problem is that whilst the German Banks in particular have shifted debt liabilities from their balance sheet to the taxpayer, no-one knows what levels of potential liabilities exist from derivative exposure. Take Deutsche Bank as an example - total derivative exposure across their balance sheet is 20 times greater than the value of the German economy. Even if just a fraction of that is contaminated by the Greek fall out then the effects are plain to see.

The ruling institutions of the EU are playing an enormously dangerous game in pushing Greece to the wall - they may feel they have to because that's what EU taxpayers are demanding. However the cost of doing so may be so many times greater than the cost of extending credit timelines which is effectively all that Syriza were asking for.

There'll be plenty of midnight oil burning in Frankfurt, tonight and for the foreseeable as the German Banks come to terms with the potential costs of a Greek default.

Great stuff. Cuts through all the tripe.

 

[Toffeelover]

What a load of rubbish, an utter simplistic view of things.

How did the average Greeks brought this on themselves, by working more hours than most Northern Europeans? The majority of tax is owed by a minority of people/businesses.

You should go back and read the posts mate. Have you been on holiday there? I have and as said before where ever I went for a drink, petrol or a restuarant they all demanded payment in cash, no debit catrds, no CCs so what does that tell you? How about if you ask for a bill the waiter writes it down on a napkin? Add to that I know people who have used buses and witnessed the driver pocketing the cash and giving no ticket.

So what are your experiences? Please note Greece were on top of the table for tax evasion.

 

[Toffeelover]

I'd say don't lend money unless you can afford to lose it.
For all the criticisms of Greece not managing their finances properly, serious questions need to be asked of those lending.

What you say is true but Greece had to borrow in order to make ends meet. So if the lenders had said on yer bike where would Greece have been there then?

 

[roydo]

What you say is true but Greece had to borrow in order to make ends meet. So if the lenders had said on yer bike where would Greece have been there then?

They are about to find out.

 

[daylightrobber]

What you say is true but Greece had to borrow in order to make ends meet. So if the lenders had said on yer bike where would Greece have been there then?

Well, for a start the lenders should've been more careful with their money a long time ago. If they had been, the impact would've been less catastrophic for all than it will now. The lenders need to acknowledge their role in that respect.