Greece - Will it default on its Sovereign Debt?

[Swedesy]

I'd like to see it allowed to default.

Anyone else have a view?

Do you have any links? I'm ashamed to admit this story has passed me by somewhat .

If you believe in the free market, it should default. And the current model in the EU is one of the free market. Greece has never been economically stable, but the euromodel let it run up massive, unsustainable debt.

If it does default, it'll be the people who will suffer in terms of unemployment, higher costs etc. which will disproportionately hit the poor and vulnerable. Isn't capitalism great?

Queen - Apparently the ordinary Greeks are suffering already. And have been for some time. Private sector income tax intake in Greece is almost negligible. The under 40s are suffering the most.

Why are the under 40s suffering the most? Is it like Spain and Italy where they have lots of youth unemployment and people earning 1000 euros a month (there's a word for that, I just can't remember it).

Have to say, I don't know a huge amount about Greek politics.

If I understand it correctly a default would have pretty negative implications for the Euro.

The latest I read is that the EU is basically now dictating to the Greek government how to cut down on their debt.

Out of interest, why do you think a default would be a good idea?

The Greeks have just started bombing their banks. This will get very interesting!

Bomb Explodes At JP Morgan Branch In Athens, Greece
(AP) Police in the Greek capital say a bomb has exploded at the offices of American financial services firm JPMorgan Chase & Co., causing no injuries.

www.businessinsider.com/breaking-bomb-explodes-at-jp-morgan-branch-in-athens-gre ece-2010-2?utmsource=feedburner&utmmedium=feed&utm_campaign=Feed%3A+clusterstock+%28ClusterStock%2 9

The solution to the problem is worse than the problem itself, IMO.

If Greece is going to be bailed out, get ready to write the cheque for at least three other nations.

Dubai>Greece>Portugal>Spain>UK-->US.

Greece should be kicked out of the EU. Let them go back to the Drachma, devalue, default.

Save our money, save our deficit.

This is not a case that many had feared of a private debt crisis turning into a sovereign debt crisis. This is a sovereign debt crisis threatening to become a banking crisis.

Who owns Greek bonds? According to the BIS as of the end of Q3 09, European banks had a little more than $250 billion of Greek exposure and more than $2 trillion to Greece, Spain, Ireland and Portugal (and of course there are significant differences within this group).

Even though the data may not capture the full extent of the interconnectedness, it does suggest that French and Swiss banks have more exposure than German banks to Greece. Greece reported last week that not only did its economy contract by 0.8% in Q4, but growth for the first three quarters of 2009 were revised lower -- the recession is much deeper than thought.

It's not only Greece that is in trouble - it is most of the developed economies. In addition to Spain and Italy, it's Japan, England, and the U.S.

Apparently Greece is having issues getting its data together for the EU. It is not because of esoteric financial instruments put together by evil investment banks but rather a... 4-day strike at the Greece financial commission.

You couldn't make this stuff up........

I think the ECB are now planning to bail the Greeks out as the implications for the Euro if they don't are quite severe. It'll be the other PIIGS countries that will be in trouble before we are.

The other European countries aren't doing brilliantly either - France has just taken out an humungous loan as has Belgium.

It isn't the very best idea to launch an unfounded attack on your own creditors! (the stolen Greek gold story).

The Germans can wait.

I don't think the Greeks will default because then they won't be able to pay teachers, doctors, pensions etc and the voters will vote for someone more practical. Apparently the markets are sanguine; it costs Brazil, India and Mexico more to borrow money atm.

The Germans want the euro to fall because they export.

It might be best that Greece leave the euro and go back to the drachma, which would be low and therefore Greece could export.

The Greeks are going to have to work longer whether they like it or not (and so are we).
This deputy prime minister is playing to his voters.

Interesting times.

The plot thickens.....

news.bbc.co.uk/2/hi/business/8537676.stm

If Wall Street Firms have done this, am willing to bet firms in other countries have also...

Economically speaking, Greece would be far better to leave the Euro and reschedule or partially default on its debt in an orderly manner . If it does not then it will have massive unemployment and its real economy collapse in chaos.

The Goldman Sachs thing only makes 1% difference acc to R4.

Goldman Sachs did try a sleight of hand that was less than ethical and open. To whom much is given, from then much is expected.

Agree with AbetaDad.
Leaving the euro would be good for Greece and bad for Germany, although it will save G some of the loan, and it would stabilise the eurozone.

To its logical conclusion, you would end up with very few countries left in the euro.

Credit to GB, who resisted strong pressure from TB to join the euro! The euro has been to Europe what the Gold Standard was to us in the 1920s.

On the bright side,
If Greece leaves the euro, we can have cheaper holidays in Greece.

If Greece stays, the euro will fall - cheaper holidays in France

It will be a loss of face for the Euro Project. This might cause them to vaccillate for a year, by which time Portugal and Spain might be coming begging.

It depends on the conditions that the Germans impose on the Greeks....

The comfortable solution, here in Britain, is for everybody to delay retirement, and that includes people retiring now, and next year.

From the Economist:

''The path out of the crisis is unclear. Greek bonds remain under pressure. Arguments rage over which chain reaction would be more damaging: serial bail-outs or serial defaults. A legal opinion by Bundestag experts argues that help for Greece might be allowed by European treaties if the crisis can be blamed on outside forces, like speculators or the global recession.''

Any thoughts on the current situation?

What is the solution, in your opinion?

Not that i expect much action on this 'serious' thread on a spring Friday night!

Well the markets think it will.

It's just been downgraded from BBB+ to BBB-

Britain nex?

Current plans are for other Eurozone members to provide the help bilaterally, so no loans from the UK.

Could lead to a massive redrawing of the Eurozone rules if member states really had any more appetite for further Treaty change after the Constitution/Lisbon Treaty exercises that sapped everyone. And any British govt would have to decide how far it wanted to push for much stricter macroeconomic/fiscal surveillance within the Eurozone without being part of it. All kinds of major political and economic judgements in the balance.