Greece

[harbingerofdoom]

What do you think they should do?
Why were the rules relaxed to allow them to join in the first place?

A) Leave Euro
B) EU got too confident....

Leaving the Euro isn't a choice, really. The impact on the currency itself would be such that it simply won't happen. The rules may have been relaxed initially in the interests of making the Eurozone as comprehensive as possible but the Greek government at the time was also guilty of presenting false financial information.

They'll be out by the end of the year, and Portugal with them. Ireland and Spain probably too.

I don't think they will even get to the end of the year. Measures in place for return to drachma and already we are seeing the spread to Spain. They have enough from the last bail out until mid July I think but there will be an election before then. They cannot seem to accept the austerity measures presented to them. Today will be interesting for sure 16 banks downgraded overnight and money in Greece and Spain has been being moved to Germany and Switzerland over the last week. It is over for Greece and it isspreading.

What measures are in place for return to the drachma?
I am not aware of any, although I have heard lots of media hype.

The man from ICAT was on radio saying they could implement it immediately but am not sure what it involves obviously as I am an interior designer not an economist

I think that greece should leave the euro. The austerity measures being imposed are unrealistic and bad for everyone. I imagine that a lot of greeks will emigrate probably to England. Greeks who don't emigrate will starve to death.

We need Greece to return to the drachma. In that way the Greece will become a cheap destintion for holiday and this will create jobs and wealth for Greece.

I agree your average jo wants to return to the drachma and those who want to stay in the euro are definitely a more privileged part of greek society and they have been shifting their money out in millions this week.

If they crash out of the Euro, then the country will be in catastrophe and the hardship seem thus far will pale in comparison.

If they exit the Euro in ordely fashion, it will be painful, but there should be time to make some mitigations.

If they accept continuing bail out and concomitant austerity measures, then the pain will be less but the duration possibly much longer.

It's not an encouraging set of options.

If one country leaves the Euro, then that breaches one of the basic underpinnings of what it means to be a unified bloc (as opposed to a club you can come and go from), and I think it may well disintegrate.

According to Katerina Vrana on BBC's this week, the greeks don't want to return to the euro. But she was unable to offer an alternative. The austerity measures sound terrible, aid agencies are giving out food parcels, and people are getting ill from eating out of bins. Pensions and salaries have been slashed, taxes are being added to electricity bills so if you don't pay you are being cut off. This is turn means you can't afford food/heating.

sorry I mean return to the drachma!

The thing is, if the Greek people vote for Alexis Tsipras and his anti-bailout measures next month, then they are voting to exit the euro, whether they realise this and intend it, or not. Without the bailout and the accompanying austerity measures Greece cannot stay in the euro. With predictions that Tsipras' party will win a landslide, the remaining eurozone countries are now cobbling together an exit plan - something that has never been considered before.

Personally, I think a return to the drachma is the only answer for Greece, because the only way out of their current difficulties is to devalue their currency. While they're in the euro they cannot do this. If they return to their own currency, they can.

juneau according to the predictions on the Greek news, Tsipras is not set to win by a landslide. The latest opinion polls put him at 21%, still the second party.

I think the best way out for Greece is the return to the Drachma. But I don't really understand it that well. But if they do and all the money they owe is in Euros it will make the debt worse if the drachma is a poor exchange against the Euro.

But the thing is people might be put of going on holiday to Greece in case things take a bad turn. And they rely so heavily on tourism. It's a mess.

But what gets me is this. If those countries vote against austerity measures, and we in the UK have austerity does that mean in the end we will have to rescue these countries. And we in the UK will all end up even worse off.

Should Greece exit the Euro I believe that the ECB loan will be written off,is this true? The IMF one will still stand.
If that is the case one can see why Germany is keen to keep the country onboard.
Germany has created this by not doing a proper audit in the first place,being so keen for the political ideal.

alexpolis I see the story changed yesterday - on Thurs all the papers and the news here was saying he was in the lead - maybe the change of heart is a result of all the panicking in the press about Syriza winning?

The problem is that what might be best for Greece now (return to the drachma), would be disastrous for the rest of the eurozone and for us in Britain. Not that we can expect Greece to care much about that, given the mess they're in.

Why bad for the UK? we have (comparatively) light exposure to Greek banks. The main threat is secondary from our exposure to French banks that have invested in Greek banks.

ECB announced yesterday that it will not make any further new loans to Greece for the time being. It has not said anything about repayment (or write off) of existing loans, and indicated it wouldn't be making any policy announcements until July.

I doubt they would write off loans to Greece, though. They might agree to an IMF negotiated haircut, or rewrite the length of the term of the loan. But I don't see how it would be politically acceptable to write any off in their entirety. Indeed, on the contrary, there are pretty loud voices saying the bail outs are non-negotiable.

Here's an article from the FT about implications of Greek withdrawal.

In narrow terms of direct impact of just a Greek exit, it is something from which UK should be able to recover well. But if it were the start of a domino effect across the Eurozone, then it is potentially serious.

Cameron on the news now saying it would be catastrophic and says the need to rectify it is urgent. They are discussing the plans in the US now for greece's exit. Greece needs to devalue its currency and become more competitive. It cannot compete with Germany etc so shouldn't have to. There is no way that it won't spread though so I think that i why they are trying to keep them in.

The only way is out, which has been inevitable for some time - in fact since they went in fraudulently on cooked books - cooking assisted incidentally by Goldman Sachs.
Many countries have come out of currencies without the world exploding.
For Greece it means they can start to trade their back to normality but.... living high on the hog like they did in the past will never be an option again - they're gonna have to learn to live within their means, which will hurt.
But there is no other way.
Just like there is no other way for the other over-deficited countries - obv Spain, Portungal, Italy, but also France.
And us - we have also been lving in abubble on Gordon Browns' debt - the 'cuts' have not even started yet.
People are sstill in denial and think if they put their fingers in their ears and sing la-la-la loudly enough mum and da d will make it all go away.
Wake up, and grow up.