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White smoke in Greece. A Greek deal imminent.
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All that talk of Grexit, well this afternoon Greek and EU officials have started on an accord in finalising a deal. In the last few minutes Greek PM Alexis Tsipras has said we are now close to a deal. Greek demands on wages, pensions and longterm debt have been agreed.
Open europe has tweeted.
#Greece and its creditors are starting to draft a staff-level agreement, Greek gov't official says. (@Reuters)
Open europe has tweeted.
#Greece and its creditors are starting to draft a staff-level agreement, Greek gov't official says. (@Reuters)
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the house of cards will topple
and the greeks know it so will keep milking the germans till the next time
What would be your alternative solution ?
If Greece left the eurozone an adopted a new currency, there could well be a currency flight, as people move their money out of Greek banks to somewhere safer. After all, would you want your savings in the euro currency turned into a savings in a new drachma currency ?
No one really knows for sure what would happen to Greece if they adopted a new currency. But you can reasonably expect devaluation and rising import costs driving up inflation.
The Bank of England been thinking about this, too.
http://www.marketpulse.com/20150407/boe-asked-uk-banks-contingency-plans-case-grexit/
At each stage of this financial mess, all the options are awful. It's a case of picking the least worst solution.
Greek markets jump as Alexis Tsipras says Greece is on the 'final stretch' towards bail-out deal.
Greece and creditors reported to have begun drafting an agreement during Brussels talks.
Nobody really knows what would happen if there were a Grexit or a general collapse of the eurozone. I suspect that uncertainty focuses the minds of most heads of government across the Europe. And that includes David Cameron who said on 9 February 2015, "Given uncertainty around Greece & the Euro, it was important I chair a meeting to ensure the Government is prepared for all eventualities."
So far the eurozone bailouts including the Greek ones have not cost the German tax payer or any other tax payer a cent. No one has defaulted on any of their loans. In fact Germany thus far has profited from the bailouts.
It's only a matter of time before someone in the markets slips up and calls them out on the BS being spouted causing a runaway situation neither the Greeks or the EU can control.
Then I wonder how much money the UK government will profit on their own loan to the Irish government ?
Not sure what rate the UK treasury borrowered money on the markets at the time, suspect less than 2%. You charged us in Ireland 4.9% for the 3.4 billion loan. So yep, ye guys have a profit too, just like the Germans.
Don't get the partner poppers out yet mate. This has been a constant theme of the last few months. Deal, No Deal,Deal, No Deal. Even if they do a deal it will be a fudge where they kick the can down the road for another year or two. And subjugation of Greece by Germany is nothing to celebrate. #democracyeustyle
wrong people lost money in the 2012 bailout
On 2 May 2010, the Eurozone countries, European Central Bank (ECB) and International Monetary Fund (IMF), later nicknamed the Troika, responded by launching a €110 billion bailout loan to rescue Greece from sovereign default and cover its financial needs throughout May 2010 until June 2013, conditional on implementation of austerity measures, structural reforms and privatization of government assets. A year later, a worsened recession along with a delayed implementation by the Greek government of the agreed conditions in the bailout programme revealed the need for Greece to receive a second bailout worth €130 billion (now also including a bank recapitalization package worth €48bn), while all private creditors holding Greek government bonds were required at the same time to sign a deal accepting extended maturities, lower interest rates, and a 53.5% face value loss. The second bailout programme was finally ratified by all parties in February 2012, and by effect extended the first programme, meaning a total of €240 billion were to be transferred at regular tranches throughout the period from May 2010 until December 2014. Due to a worsened recession and continued delay of implementation of the conditions in the bailout programme, the Troika accepted in December 2012 to provide Greece with a last round of significant debt relief measures, while IMF extended its support with an extra €8.2bn of loans to be transferred during the period from January 2015 until March 2016.
That's true. Anyone who thinks a deal will solve everything is sadly mistaken. Another kicking of the can down the road #eustyle. Looking forward to when the Spanish equivalent of Syriza wins later this year. That will be true get the popcorn time for the Euro. You can't buck the markets!!
Other peoples money doesn't last forever.
There are two types of haircuts, OSI (Official sector involvement) and PSI (Private sector involvement) All european tax payers through our governments via the IMF and ESM come under OSI. A tiny amount of people, known as investors or gamblers come under the PSI umbrella. Tax payers in europe through their governments have not lost one cent or one penny on the above Greek deal in your post as their/our countries come under official sector involvement. Bailouts in europe have three components as far as tax payers are concerned, named the troika (IMF/ECB/ESM) all OSI and none to date have taken a haircut from any recipient bailout country. So tax payers thus far in the EU have not sufferered, some bankers, hedge funds, investors, yes.
Your last sentence is nonsense. The EU stole money from Cypriot bank accounts.
I agree with you.
So what's to be done about Greece ?
First of all, I get your point and am not going to dodge it. I will start by saying this part of the debate begun with someone referencing German tax payers, it could have also been French taxpayers or British taxpayers or even American taxpayers through the IMF. Creditors that are not bailout recipient countries have not lost a cent or penny nor risk losing any money in a Cypriot style. Creditor countries that are bailout recipients but pay into the ESM to loan out money including Ireland have not lost one cent, of that group that includes, Greece, Portugal, Spain and Cyprus, one group, the Cypriots took at hit. So you are technically right there. But in the main, creditor countries to the IMF and ESM including Finland, Austria, Germany, Britain and so on, their taxpayers have not taken a hit.
http://www.zerohedge.com/news/2015-05-27/jpmorgan-warns-greece-not-investable-germany-denies-any-deal-progress
Let them leave. It will be a very rough ride but will be worth it in the end. Then the whole edifice will start to crumble and sanity will once again prevail in Europe.
This is exactly the point I made above. Until a concrete deal is announced don't believe a word of the reporting.
Look at Martym8's post. As I said, don't get the party poppers out.