Praise the Heavens - Greece is holding a referendum

[LemonDifficult]

I was wondering when someone would, like, mention Democracy.

The Greek PM has played a political blinder. He's refusing to take the historical buck for the austerity measures, he's making the people listen to his message, and he's making sure that whatever details get thrashed out on the latest Euro Zone Package have to go Greece's way so that the Greeks will approve it.

Oh, and he's also doing the morally correct thing in a democracy and putting this massive piece of legislation to the Greek people. Respect.

And proof that the markets don't like democracies (not really) they're falling. Not good that bankers thought we lived in a world where they really did have the last word.

I don't think so, there's bugger all he can do to stop the collapse - Greece is absolutely 100% unutterably fucked no matter what, unless everyone agreed to starve themselves to death from now on...No "cuts" can go far or deep enough to even service the debt, let alone start a move into rebalancing the economy.

The worst thing they can do is to have another "austerity package," it means selling and privatising everything possible, so that any potential and possible profit leaves the country immediately, leaving even less likelihood of rebuilding the economy, and it still won't save them. There will still be a default down the line, only by then all the vulture countries will have got their claws into the businesses.

They need consensus. They have never lived in a proper democracy, never learnt to pay taxes etc, they need to figure out how to run their own country and what sort of country they want.

some online news sites are reporting that the PM is set to resign. Nothing official though, but rumour is rife. Some anti-govt groups are already claiming victory.

Somehow I can't see a referendum actually happening!

funny, Hully, I was just reading a Greek article that said almost exactly what you have just said.

What a scary situation alex - when the economy gets to the poiont where you seriously consider upping sticks and coming back to the UK.

because tis obvious, alex!

yes, Getorf. And in the UK, I would be starting from scratch, I'd quite literally have nothing. My mum would probably put us up until we could find somewhere to live, but there are so many things to think about. How would we pay for it? What would we be entitled to until we find jobs? I have been living abroad for 12 years now and I have 3 children, it is not an easy decision.

So either way, Greece is screwed

Accept package, have deep cuts, strikes, social unrest and no guarantee that it will go anywhere near balancing the budget
Don't accept package, leave the Euro, be left to own devices, social unrest and no guarantee that it will go anywhere near balancing the budget.

and there I was complimenting you on your superior intellect, Hully!

oh yes

nicely summarised, AbsofCroissant.

Edith - presumably they could indulge in some QE though, if out of the Euro to repay some of the debt?

scaryteacher - the fear is that Greece would just print off x amount of drachmas, hand them to its creditors and say "there, debt paid". Except, of course, the drachmas would be completely worthless, and falling by the minute.

Well, if I was Greece now, I'd get out of the Eurozone by Christmas. That way Portugal won't have a chance to split the January cheapy holiday bookings.

You saw it here first, folks.

scary: well, they could I suppose, but against that backdrop I think QE would also mean hyperinflation.

The choice is between managed default (ie disaster with some smidgens of control) or bankruptcy (just disaster).

alex, what do you think will happen next?

I think that his own party will oust Papandreou.

There will be a bit of a reshuffle.

They will take another look at the bailout package and perhaps change one or two minor details just so they can say they've achieved something. This will be presented as a major issue, and hey presto the referendum will no longer be required.

The Greek economy will continue to go down the tubes.

Alternatively, the opposition will force an election. Papandreou and his party (Pasok) will lose, but it's unclear whether the main opposition party will win, as they are not too popular at the moment either. A coalition government will probably have to be formed with one of the smaller parties. Disaster.

Greece will continue to be unable to deal with its debt.

Default is inevitable, whoever is at the helm. The question is when.

Spokesperson just said G Pap is still dead set on referendum, no backing out tonight. They also think he'll win the vote on Thursday.

I've just read that there are more porsche cayennes in Greece than people declaring over £43,000 income. I've also read that the Greek rich have already taken most of their money and left. Everyone thinks there will need to be a tax crackdown and - surprise - people don't fancy paying any more tax.

Given this, surely now a brain drain/business drain from Greece is inevitable? And coupled with the tsunami of stories about fecklessness the Germans are at some point going to flip and tell their politicians to pull the plug: what they were trying to avoid (default) is just happening anyway.

Do none of the Greek people want the referendum? I'd want it.

The brain brain from Greece started a long time ago, and businesses are already relocating.

Of course people don't fancy paying any more tax - why should they when they can see little return on it? We now have to pay for healthcare, schools are receiving no funding, except teacher salaries, things are getting worse and worse. Tax bills are now so enormous people just can't cope any more.

The very wealthy are always all right. They have their Swiss bank accounts and so on. I can't comment on the numbers of porsches.

People I've been talking to want the referendum, but mostly as a means to vote against Papandreou rather than what it's supposed to be about.

Several people I know support a return to the drachma, but they have no idea of the possible consequences.

What I can tell you, however, is that nobody at all that I know is in favour of the bailout package.

People are afraid, like I've never seen before here.

'What I can tell you, however, is that nobody at all that I know is in favour of the bailout package.'

And that's the crucial bit of information. Someone just tweeted The Telegraph comment on this - 'An outbreak of democracy'. I'm very glad the Greek people will be consulted. it did seem as though they were being stiched up for French bankers.

What future does Greece have under the EU as a sovereign nation? None.

If it defaults, or comes out of the Euro, the IMF will step in, and be able to do more without being tied by Euro constraints.

The EU have behaved badly here by allowing Greece to join the Euro in the first place. They are only so worried now as it is French banks that are over exposed to Greek debt, and Sarko doesn't want to lose the AAA rating so close to the elections. This whole 'rescue' package isn't about Greece, it's about France. It's also about the fonctionnaires here in Brussels not wanting their pet project to fail, and refusing to see that actually, people might want a say in how they are governed and might chose the default option rather than decades of austerity.

The 'rescue' package wasn't even a done deal - I don't think the debtors and bond holders had agreed to the levels of haircut proposed.

It's interesting that Paps has just sacked his entire high command and put new Heads of the military in place.

Scary times for Greece. Also who's going to be next? Spain, Italy......?