It doesn't really matter what happens Greece, will leave the Euro at some point, and then they'll not be able to pay their state pensions at all. Whilst it'd be nice that many of the Euro entrepeneurs would pay their true taxes, many of them will lose their paper millions/billions, the rest will still pay barely any tax.
Emotionally you can understand Syriza's demands, ultimately the free market will dictate and a small country that excels at tax evasion will not be able to afford pensions that were never sustainably funded by the employed. Only the Germans and the ECB stopped them from heading for depression and hyperinflation. There is no brinksmanship for Syriza, if the IMF and World Bank become the main players they'll really see middle class catastrophy expectancy will shoot down.
As for the creditors, many of the government bonds have been hovered up by Hedge Funds for negligible ammounts. They've probably made plenty money back via the ECB loans for meeting bond repayments.
It's all very easy for us to pass pithy comments, but I look at my parents generation and see many people retiring at 55 or retiring with 'bad backs' in their 40s: not my parents. Some were useless pathetic individuals some weren't, but if my bank offered me early retirement at 55 on final salary what would I you do? There ain't no way that person would have paid enough into his pension pot for final salary of 25 years.
You just know despite the UK not participating in the single currency, even if is camouflaged as an increase in IMF contributions, that Cameron will lie on his back, put his legs in the air and say let the UK pay.
We got shafted with a doubling of IMF contributions a few years back as a thinly disguised contribution to bailing out the Euro.
BBC reporting the Greek Banks are closing ahead of something big coming up. I feel sorry for the ordinary Greeks. As for the Euro, I know Little about big money markets but the Little I know proved (to me) it made no sense. In order to have a single currency, you need a single interest rate, across countries as diverse as Spain, France, Germany, Italy and Austria. When the recession began to bite in Europe, Spain badly needed to cut interest rates, but could'nt as Germany had inflation and with their bigger muscle in the Eurozone, kept the interest rates up. I always remember my ex boss here in Spain laughing about the 'stuck up'English not getting involved in a noble fiscal experiment. Well, experiment with your own economy asshole and look where it got you. The economics of the Eurozone works fine by me but the single currency does'nt work, and never had much of a hope. We're not the USA (and even some of their states are in an economic mess). I wish the Greeks all the besyt, and if they pull out, they can hopefully thumb their nose at the Eurozone (but that probably won't be for a year or two).
The Euro was always a political idea and never an economic one. It was pushed through by Delores and Mieterand to secure their place in history. Neither France or Germany's own economic position met the criteria laid down to enter the Euro but it was all fudged. To have a single currency you need a total fiscal policy, not just the interest rate. I do know about the Euro, I traded it for the first 14 years of its existence. I put together the first ever Euro Deposit deal, 18 months before the currency became live when I got Chase Manhattan Bank London to lend Deutsche Bank Frankfurt €50m for a 6 month term in June 1998 on a forward/forward basis. In the money markets we traded the Euro from Jan 1999, a year before it became a "hard currency". I, along with the majority of my colleagues and clients always believed it would eventually fail, I think we will soon be proved correct.
You are right that the whole project was always political, but I think it was de Gaulle in the early days wasn't it? The thing was that nobody thought to mention the political reasons to the people - even in the original 6 countries. Britain was involved as an observer and didn't like the sound of it but also I think didn't take it seriously enough when there was a real opportunity to get involved and influence.
Now there are so many diverse countries signed up there is no real hope of manageable currency union and I think a small number of countries if they want Union will need to embrace the next stage of the political project and others will end up having to adopt the Euro with no access to the economic levers such as but not limited to interest rates and de/revaluation. But we will see, as Curbs would have said. After all, what do I know? (Don't think Curbs said that too).
avoiding the politics of this, what would happen if a state in the US went bankrupt and from memory I think one nearly has, it equates to the same thing, both in cause and remedy, and similar fiscal mechanisms/powers apply on a central and regional basis, yes?
It's a moot point, but failure by Greece to repay the IMF loan tomorrow does not constitute a default in itself. It would close the door to any IMF funds until the arrears are paid and Lagarde has been, rightly, tough but stated that the door is open IF the people vote to stay in the EA. The EA itself has remained more open to re-start talks at any stage.
Missing the IMF repayment does trigger a cross-default on ECB bonds and this should see tighter capital controls and a very quick deterioration of the economy. Think Argentina in 2001/02 for the effects of the implosion.
Basically, everything is now shut down until next Monday. Some capital controls are already in place. Maximum daily withdrawals from ATMs are €60 and there is a freeze on all non-urgent transfers out of the country - seeking safe haven certainly won't be deemed "urgent"!
I do feel sorry for the current "working generation" but the inability to tackle non-payment of taxes, ridiculous pension ages and payments, holiday entitlement and an atrocious VAT system (depending on where you live) have got them here over many, many years.
The risk of contagion is lower than it was in 2011/12, but I think there's still a level of complacency out there about the risks.
Am in Skiathos now. Prices for meals/drinks etc still really reasonable (I would even say cheap to be fair). ATMs still have cash in (restrictions on withdrawals for locals though) and everything is as normal. I just took extra cash to be fair, to make sure that I don't get caught out.
avoiding the politics of this, what would happen if a state in the US went bankrupt and from memory I think one nearly has, it equates to the same thing, both in cause and remedy, and similar fiscal mechanisms/powers apply on a central and regional basis, yes?
Well, no Federal bailout for the 51st State it seems. You might be remembering the City that went belly up - Detroit? There have been a number of US municipal entities that have filed for Chapter 11. You'll find the list and a map here governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html (But some individual states' legislation do not permit public bankruptcies.)
Seems a real mess, and frankly well beyond my 'A' level economics..... from decades ago.
Not sure after watching 'newsnight' last night that there is a solution.
I thought several years ago there should have been a '2 stage eurozone', the likes of Greece, Spain, Italy, and one for Germany, France etc. But I am informed this would not work, so really do not have a clue. I have had many great holiday's in Greece, the people are very friendly, but can be proud and obstinate. Not sure what the vote at the weekend will do, a vote for the current goverment, seems to validate the position, and be in a stronger position, as they have a mandate from the people?......but will the banks give a toss about that. From years ago paying tax was a bit 'optional', and the retirement age should have been addressed years ago. Trouble is to rush in austerity measures to pensions etc, has to be done over a period of time,as not every everybody in there occupation, can work in there profession/job till mid /late 60s. That issue is about to hit the UK, with the aggregated retirement age going up 69 ish, from 60 ( for woman).
avoiding the politics of this, what would happen if a state in the US went bankrupt and from memory I think one nearly has, it equates to the same thing, both in cause and remedy, and similar fiscal mechanisms/powers apply on a central and regional basis, yes?
The US has fiscal and political union whereas the EU does not. There is a mechanism to move funds from richer areas to poorer ones in the US. And this is what holds things together together with free movement of people and common languages of English and Spanish.
Google California, NY City and Detroit to look at how financial issues have been resolved.
Obama is getting involved with Merkle because this crisis is a distraction* and the outcomes are unknown. Paradoxically the crisis may be leveraged to chart a swifter course to Political and Econimic Union across the Eurozone - with or without Greece. This mabe the only answer to avoid contagion?
Those who predict the end of the Eurozone are failing to calculate the sheer weight of forces which will seek to keep it going. I'm not saying it will go forever, but steps will have to be taken to issue Eurobonds and share risk and this will require major changes to be acceptable to richer Eurozone nations. If Germany, Italy, France and Spain can share a common vision then that's 85% of the Eurozone area by GDP.
In short, you cannot "avoid the politics of this"!
It appears that Syriza have agreed to sell some state assets to bring down the deficit and thus release more funding. They want some debt forgiveness but they have inadvertentdly risked the entire Greek banking sector with their brinkmanship. I can't see the people voting to leave the Euro so this will leave Syriza in a very interesting position.
For me the only answer is growth and they have to find the quickest path towards this.
* A distraction from crafting solutions to IS, Syria, Iraq Putin and North Africa - Blair and Bush have left us with an interesting legacy which might well kick off in our life times. Leaving Greece to drown or even become a Putin satellite state is probably not viewed as a favourable outcome in the Whitehouse.
avoiding the politics of this, what would happen if a state in the US went bankrupt and from memory I think one nearly has, it equates to the same thing, both in cause and remedy, and similar fiscal mechanisms/powers apply on a central and regional basis, yes?
The US has fiscal and political union whereas the EU does not. There is a mechanism to move funds from richer areas to poorer ones in the US. And this is what holds things together together with free movement of people and common languages of English and Spanish.
Paradoxically the crisis may be leveraged to chart a swifter course to Political and Econimic Union across the Eurozone - with or without Greece. This mabe the only answer to avoid contagion?
Agree, the European Central Bank without the same level of power and control as the central US Bank makes no senses at all which is why it will logically force the pace on a United States of Europe so that the likes of Greece cannot foul up the system.
What might counter a pick up in the pace of integration is a groundswell from the citizens of the EU to demand representation of their interests in priority to representing the interests of the financial system. The UK and Greece, as well as other member states, are raising issues of sovereignty and the imbalance between reacting to protect the interests of individual groups of citizens in contrast to the wider political interests of the EU. The EU does not work to promote individuals' interests, only the interests of the Union as if the two must be synonymous.
The vision of a united states of Europe was borne of a time when Europe was bankrupt after WWII and needed to unite to turn a devastated Germany into a functioning democracy and remove the dangers of France becoming a dominant armed superpower on the continent of Europe. The old vision needs re-calibrating, what it has delivered in the past is in the past, but Cameron faces an uphill struggle to derail the momentum and turn it in a new direction that fits the 21st century.
According to the likes of Krugman, Branchflower, Brand and the SNP and Green Party, Greece's anti-austerity measures should mean that Greece should technically be the richest country on the planet and that the UK is on the verge of default and economic collapse. I think all this talk of a Greek crisis is all bollocks fuelled by the right-wing media and BBC. No way all those great economic minds can be wrong.
Monet and his colleagues who cooked up the post war architecture weren't necessarily into the Democratic aspect and saw that it would be best to let technocrats rule.
The latest fightback by Syriza to propose calling for a court ruling on both Greek bank liquidity(support) and Eurozone membership / grexit is going to push the boundaries of our understanding and the Euro structures.
If it's true that nobody can be kicked out then the Eurozone economies have to merge at least in terms of funding and high level budgets. Just as Scotland has some devolution but cannot wreck the budget etc.
It's fascinating as it is history in the making. But not without risks.
Too many long words. am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs from the hills.
Too many long words. am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs from the hills.
Too many long words. am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs peasants from the hills.
Too many long words. am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs from the hills.
whereabouts in Zante?, just come back from there for the 2nd year running - love the place
Too many long words. am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs from the hills.
whereabouts in Zante?, just come back from there for the 2nd year running - love the place
Kalamaki. Family have been loads of times. I've been a couple of times before and like it. quiet little resort with some decent restaurants and a few decent bars. No clubs etc but laganas is only a 5-10 minute taxi ride if that's your thing.
Too many long words. am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs from the hills.
whereabouts in Zante?, just come back from there for the 2nd year running - love the place
Kalamaki. Family have been loads of times. I've been a couple of times before and like it. quiet little resort with some decent restaurants and a few decent bars. No clubs etc but laganas is only a 5-10 minute taxi ride if that's your thing.
that's where we stayed last year, Caretta Beach with about 25 of us (inc 8 kids), superb hotel
Comments
Emotionally you can understand Syriza's demands, ultimately the free market will dictate and a small country that excels at tax evasion will not be able to afford pensions that were never sustainably funded by the employed. Only the Germans and the ECB stopped them from heading for depression and hyperinflation. There is no brinksmanship for Syriza, if the IMF and World Bank become the main players they'll really see middle class catastrophy expectancy will shoot down.
As for the creditors, many of the government bonds have been hovered up by Hedge Funds for negligible ammounts. They've probably made plenty money back via the ECB loans for meeting bond repayments.
It's all very easy for us to pass pithy comments, but I look at my parents generation and see many people retiring at 55 or retiring with 'bad backs' in their 40s: not my parents. Some were useless pathetic individuals some weren't, but if my bank offered me early retirement at 55 on final salary what would I you do? There ain't no way that person would have paid enough into his pension pot for final salary of 25 years.
We got shafted with a doubling of IMF contributions a few years back as a thinly disguised contribution to bailing out the Euro.
http://www.bbc.co.uk/news/uk-politics-13782929
More of the same to come I reckon.
As for the Euro, I know Little about big money markets but the Little I know proved (to me) it made no sense. In order to have a single currency, you need a single interest rate, across countries as diverse as Spain, France, Germany, Italy and Austria. When the recession began to bite in Europe, Spain badly needed to cut interest rates, but could'nt as Germany had inflation and with their bigger muscle in the Eurozone, kept the interest rates up. I always remember my ex boss here in Spain laughing about the 'stuck up'English not getting involved in a noble fiscal experiment. Well, experiment with your own economy asshole and look where it got you. The economics of the Eurozone works fine by me but the single currency does'nt work, and never had much of a hope. We're not the USA (and even some of their states are in an economic mess). I wish the Greeks all the besyt, and if they pull out, they can hopefully thumb their nose at the Eurozone (but that probably won't be for a year or two).
I do know about the Euro, I traded it for the first 14 years of its existence. I put together the first ever Euro Deposit deal, 18 months before the currency became live when I got Chase Manhattan Bank London to lend Deutsche Bank Frankfurt €50m for a 6 month term in June 1998 on a forward/forward basis. In the money markets we traded the Euro from Jan 1999, a year before it became a "hard currency". I, along with the majority of my colleagues and clients always believed it would eventually fail, I think we will soon be proved correct.
You are right that the whole project was always political, but I think it was de Gaulle in the early days wasn't it? The thing was that nobody thought to mention the political reasons to the people - even in the original 6 countries. Britain was involved as an observer and didn't like the sound of it but also I think didn't take it seriously enough when there was a real opportunity to get involved and influence.
Now there are so many diverse countries signed up there is no real hope of manageable currency union and I think a small number of countries if they want Union will need to embrace the next stage of the political project and others will end up having to adopt the Euro with no access to the economic levers such as but not limited to interest rates and de/revaluation. But we will see, as Curbs would have said. After all, what do I know? (Don't think Curbs said that too).
Missing the IMF repayment does trigger a cross-default on ECB bonds and this should see tighter capital controls and a very quick deterioration of the economy. Think Argentina in 2001/02 for the effects of the implosion.
Basically, everything is now shut down until next Monday. Some capital controls are already in place. Maximum daily withdrawals from ATMs are €60 and there is a freeze on all non-urgent transfers out of the country - seeking safe haven certainly won't be deemed "urgent"!
I do feel sorry for the current "working generation" but the inability to tackle non-payment of taxes, ridiculous pension ages and payments, holiday entitlement and an atrocious VAT system (depending on where you live) have got them here over many, many years.
The risk of contagion is lower than it was in 2011/12, but I think there's still a level of complacency out there about the risks.
Well, no Federal bailout for the 51st State it seems. You might be remembering the City that went belly up - Detroit? There have been a number of US municipal entities that have filed for Chapter 11. You'll find the list and a map here governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html (But some individual states' legislation do not permit public bankruptcies.)
"I haven't got your money. When I get it, you'll get it, till then.... Bollocks."
Not sure after watching 'newsnight' last night that there is a solution.
I thought several years ago there should have been a '2 stage eurozone', the likes of Greece, Spain, Italy, and one for Germany, France etc. But I am informed this would not work, so really do not have a clue. I have had many great holiday's in Greece, the people are very friendly, but can be proud and obstinate. Not sure what the vote at the weekend will do, a vote for the current goverment, seems to validate the position, and be in a stronger position, as they have a mandate from the people?......but will the banks give a toss about that. From years ago paying tax was a bit 'optional', and the retirement age should have been addressed years ago. Trouble is to rush in austerity measures to pensions etc, has to be done over a period of time,as not every everybody in there occupation, can work in there profession/job till mid /late 60s. That issue is about to hit the UK, with the aggregated retirement age going up 69 ish, from 60 ( for woman).
Google California, NY City and Detroit to look at how financial issues have been resolved.
Obama is getting involved with Merkle because this crisis is a distraction* and the outcomes are unknown. Paradoxically the crisis may be leveraged to chart a swifter course to Political and Econimic Union across the Eurozone - with or without Greece. This mabe the only answer to avoid contagion?
Those who predict the end of the Eurozone are failing to calculate the sheer weight of forces which will seek to keep it going. I'm not saying it will go forever, but steps will have to be taken to issue Eurobonds and share risk and this will require major changes to be acceptable to richer Eurozone nations. If Germany, Italy, France and Spain can share a common vision then that's 85% of the Eurozone area by GDP.
In short, you cannot "avoid the politics of this"!
It appears that Syriza have agreed to sell some state assets to bring down the deficit and thus release more funding. They want some debt forgiveness but they have inadvertentdly risked the entire Greek banking sector with their brinkmanship. I can't see the people voting to leave the Euro so this will leave Syriza in a very interesting position.
For me the only answer is growth and they have to find the quickest path towards this.
* A distraction from crafting solutions to IS, Syria, Iraq Putin and North Africa - Blair and Bush have left us with an interesting legacy which might well kick off in our life times. Leaving Greece to drown or even become a Putin satellite state is probably not viewed as a favourable outcome in the Whitehouse.
Agree, the European Central Bank without the same level of power and control as the central US Bank makes no senses at all which is why it will logically force the pace on a United States of Europe so that the likes of Greece cannot foul up the system.
What might counter a pick up in the pace of integration is a groundswell from the citizens of the EU to demand representation of their interests in priority to representing the interests of the financial system. The UK and Greece, as well as other member states, are raising issues of sovereignty and the imbalance between reacting to protect the interests of individual groups of citizens in contrast to the wider political interests of the EU. The EU does not work to promote individuals' interests, only the interests of the Union as if the two must be synonymous.
The vision of a united states of Europe was borne of a time when Europe was bankrupt after WWII and needed to unite to turn a devastated Germany into a functioning democracy and remove the dangers of France becoming a dominant armed superpower on the continent of Europe. The old vision needs re-calibrating, what it has delivered in the past is in the past, but Cameron faces an uphill struggle to derail the momentum and turn it in a new direction that fits the 21st century.
I don't know if that's true or not about the photo, but it looks like that did happen
The latest fightback by Syriza to propose calling for a court ruling on both Greek bank liquidity(support) and Eurozone membership / grexit is going to push the boundaries of our understanding and the Euro structures.
If it's true that nobody can be kicked out then the Eurozone economies have to merge at least in terms of funding and high level budgets. Just as Scotland has some devolution but cannot wreck the budget etc.
It's fascinating as it is history in the making. But not without risks.
Beware of Greeks bearing gilts...
am off to Zante in September, can someone tell me if I should get euros now, wait until after Sunday's referendum or book somewhere else entirely as I'll be without a hotel, scavaging for food with the rabid dogs from the hills.
Family have been loads of times. I've been a couple of times before and like it.
quiet little resort with some decent restaurants and a few decent bars. No clubs etc but laganas is only a 5-10 minute taxi ride if that's your thing.
I bet it has changed some what since.
this year we stayed in Tsilivi, loved it