The Greek debt crisis....why?

[InDespair]

cant find another thread about this so.....

Before anyone accuses me of being thick or burying my head in the sand, I can';t always watch the news in full, and I dont read newspapers. (and Im sure others are wondering too).

Who exactly is in debt?

the people?

the banks?

How did they get themselves into this mess, and why and how do they expect a bailout?

what have they spent all their money on?

And what about tourism?

Laymans terms please.

"German Finance minister has said Greece can stay in the Eurozone even if the Greeks don't use the Euro temporarily. How can that work. "

It can't. If they go back to the Drachma, then they will have left the Eurozone by definition.

It's quite frightening in a way just how fragile some of these monetary systems are. Money in the bank can mean nothing if it's not accepted as payment for anything. And money in the bank for Greeks means nothing if they can't access it.

If Greece votes no and the Troika refuse to lend money via ELA they have 3 options as far as I can see.

1. Exit the Eurozone and return to the Drachma.

1. Issue Drachma and run it as a parallel currency.

1. Issue a digital currency based on the blockchain.

My preference is for 3 as it is actually based on something other than blind trust, and is actually owned by the individual holding it, rather than by the banks as it is at present. It also does away with the central bank as it's a distributed system, making it democratic and honest.

If they go back to the Drachma, then they will have left the Eurozone by definition.

Draghi and co have been busking it since 2008 and 'Whatever it takes'. If they think the best solution is to rewrite the rules, invent new ones or just bend reality that is doubtless what they will try. Given that the best solution is probably managed Grexit but this is politically and ideologically unthinkable the nonsense idea of a 'temporary exit' from the EZ, while remaining legally part of it (whatever that means) sounds like it might actually be a way forward.

Thanks for this thread, it's illuminating reading.

Might anyone be able to copy and paste the John Humphries article from the Times at the weekend: it's called 'Let me slay that big fat Greek myth'. I'd be interested to read it.

Obviously the UK is in the EU but not in the Eurozone, so when the crash happened, Sterling fell from around $2.11 to $1.37, it allowed a by then decimated UK Export market to be more competitive, within a flat market.

Greece staying in the EU without the Euro, will allow them flexibility to compete with a devalued Drachma and being so reliant on Tourism, should mean EVERY hotel room and deckchair will be booked - as holidays will be so cheaper than the Eurozone destinations i.e. Spain, Portugal and Italy.

To peg the Drachma to the Euro would be a nonsense, as it would take away the advantages of a devalued domestic currency of a nation having problems.

The question of staying within the EU should depend on what that means for Greece's over Euro 300 bil of loans - if staying in sees little change in Lender terms, and if leaving, it means that they can tell the EU they are defaulting and don't intend to pay it back - surely it would be better to leave as won't have ECB support and third world level interest rates, in the meantime.

Clearly if Greece remains in the EU, the Eurozone/ECB still has some powers of monitoring/guiding various aspects of Greece's economy.

P.S. Why don't we let the Greeks use Sterling, so that we can wind up the SNP?

It'll be expensive.

But worth every penny. lol

The Greek open-necked-shirt Finance Minister, within a Greek government with no respect for any well flagged Lender deadlines, has accused the EU of “terrorism” today for allowing THEIR banks to run out of cash.

I suspect that he and all those that appealed to Greek savers patriotism to NOT take their money out of Greek banks and send it offshore, will be called a few names in the near future, with “thieves” and "con artists" being some of the nicer ones.

”Greek banks prepare plan to raid deposits to avert collapse”
www.cnbc.com/id/102809081

”Greek banks are preparing contingency plans for a possible "bail-in" of depositors amid fears the country is heading for financial collapse, bankers and businesspeople with knowledge of the measures said on Friday.”

”The plans, which call for a "haircut" of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.”

For Greece to go back to the Drachma without ANY current plans in place, the following link analysing similar introductions of a new currency makes for an interesting read, as it does not bode well for the citizens of Greece.

”Printing the Drachma:The Messy Future of a Post-Euro Greece”
www.bloomberg.com/news/articles/2015-07-04/printing-the-drachma-the-messy-future-of-a-post-euro-greece

” Introducing a new currency is no small feat. Recent cases - East Germany’s adoption of the deutsche mark, the Czech-Slovak divorce of 1993, and the creation of the euro itself - benefited from years of careful planning and broad popular support. If Greece were to abandon the euro, it would have neither.”

Would Greek euros become drachma or would they have to produce new drachma coins?

There are no 'greek' euros. The notes are the same across all countries, the coins can differ but are legal exchange in all countries.

I was just wondering what they would use for currency. Thinking about it for 2 seconds not Greek euros - but what else?

Thinking about it for 2 seconds not Greek euros - but what else?

Probably scrip (IOUs, effectively) issued by the government and deemed to be legal tender.

Or (whisper it, as nutters will appear over the horizon), BitCoin.

caroldecker ... I believe one can tell The Euro country of issue, according to the Daily Mail, but you know what liars they are. lol

"A little-known trick is to look at the serial number and check the letter at the start. Simon Watkins explains how to find out whether your German X may trump a Greek Y."

Read more: www.thisismoney.co.uk/money/news/article-1693427/How-to-find-out-where-a-euro-note-is-from.html#ixzz3ex00v3Pu
Follow us: @MailOnline on Twitter | DailyMail on Facebook

www.thisismoney.co.uk/money/news/article-1693427/How-to-find-out-where-a-euro-note-is-from.html

How to find out where your euro note is from

"Behind the apparent uniformity of the euro currency it is possible to tell the country of origin. Coins are clearly marked. Notes are seemingly identical, but each serial number contains a prefix showing which country issued it."

"The serial number also contains a secret clue to the country which issued the note. The clue lies in what is known as the digital root of the serial number. This can be calculated by adding together the digits, then taking the result and adding its digits together again and so on until a single digit is left."

"Here's an example. On a note the code reads X50446027856. The X immediately indicates that the note is German, but a second test is to add the digits. So (5+0+4+4+6+0+2+7+8+5+6) gives 47. Add these digits (4+7) gives 11. Finally add these digits (1+1) gives 2, the code number for Germany. Some countries share a code number."

Where do my euros come from? The code breaker

"The 11 digit serial number on every note begins with a prefix which identifies which country issued it."

^"German notes begin with an X, Greek notes start with a Y, Spain's have a V, France a U, Ireland T, Portugal M and Italy S.
Belgium is Z, Cyprus G, Luxembourg 1, Malta F, Netherlands P, Austria N, Slovenia H, Slovakia E and Finland L."^

"........But in the event of a country falling or being pushed out of the club it will not be long before Europe's shopkeepers and consumers start looking rather more closely at their banknotes."

But in the event of a country falling or being pushed out of the club it will not be long before Europe's shopkeepers and consumers start looking rather more closely at their banknotes.

They can, but they'd be wasting their time. Euros printed in Greece (if such things exist) would still be valid in France after a Grexit.

This thread reminds me of last year, when the SNP proposed to run a state without a viable currency.

The Great (failed) UK Mcexit eh?

Gemauve ... on that subject, it wasn't that long ago some shopkeepers would decline Scottish Pounds etc if looked different.

So valid or not, with some EU shopkeepers, if they decline, what can the consumer do, other than tell them to poke their goods where there is no Greek (or any other) sunshine?

it wasn't that long ago some shopkeepers would decline Scottish Pounds etc if looked different

If you're not familiar with notes, it's hard to detect forgeries, however, and Scottish notes were historically really, really easy to copy well enough to pass "over the bar" muster. That doesn't apply to Euros, which all have the same physical security measures.

And of course, Scottish notes aren't legal tender anyway

So valid or not, with some EU shopkeepers, if they decline, what can the consumer do

Nothing. Small shop owners are welcome to turn away business on spurious grounds any time they like, thus losing business. It's a free-ish country.

I found this link really helpful:

(Stephen Paton Greek debt crisis explained in 8 minutes)

I am also amazed that I got to watch it in only three

I don't think Greece can even afford to print drachmas at the moment.

A good link here discussing how the IMF's policy on Greece has contributed to Greece's problems, written by a former IMF bailout chief and Princeton economics professor.

yes, v gd.

That article says what economists say: that austerity + massive debt will not cause the economy to grow, it will shrink it. Just as it has done. As I wrote previously the IMF is staffed and headed by bankers and lawyers and work in the vested interests of the banks. The Greek finance minister is a highly regarded economist and he is the one who should be listened to as he at least knows what he's doing.

yes

even I, without the university diploma vested in dear Cote, can understand such simplicity.