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Greece calls new elections after talks collapse

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stupid greeks. u voted for a communist alexis.

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“We shouldn’t have reached this point,” said Socialist leader Evangelos Venizelos, who personally negotiated the rescue package from the European Union and IMF which the hard left says has imposed too harsh an austerity regime. “For God’s sake, let’s move toward something better and not something worse.”

Anything that removes or reduces what is really not that severe of an austerity package, will push them out of the EU, and into bankruptcy. That is far, far worse then austerity. Foolish, very, very foolish. And America under Obama is heading down that same path.

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If Ireland votes NO to the stability package Europe as a whole can say good bye to the Austerity Program as Spain and Italy will follow in the downfall . Japan's pledge of the 60 billion $ deal will not go through. We all loose as there will not be a market to buy or sell to for a number of years .

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Molenir, they are already bankrupt. Staying in the Euro is foolish for them, and they longer they put off biting the bullet, the more painful it will be for them in the future.

Let them have their drachma back, one devalued such that they are no longer able to afford imports. Incomes will plummet, but so will unemployment. Let them direct their anger at the inefficiencies in their political economy: the tax evasion, the corruption. Let them clean up their mess and rebuild their economy, with the promise of readmission to the Euro in a decade or two as carrot.

America under Obama is heading down that same path.

Pray tell, how so?

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over fifty percent of the police force in greece want the greek nazi party (golden dawn) to take power. that is something to remember when blindness and envy drives europeans to label grassroots movements in America as 'nazi' .

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Staying in the Euro is foolish for them, and they longer they put off biting the bullet, the more painful it will be for them in the future.

I don't believe so. If Greece were to leave the Euro things would be far far worse for the Greeks for much longer. Any Euro's originating in Greece would have no value in the rest of Europe, all greek savings (what little there is) would be reduced to nothing, import prices would skyrocket (and considering how many necesary products like food, water, and building materials the Greeks import that in itself would be catastrophic), and it could take up to a year for Greece to get it's own currency fully deployed. And considering a new, theoretical, drachma would only be worth 20-30 cents any debt they take on in the future would cost almost 4 times as much.

Unemployment will not plummet as Greek industries wont have access to the raw materials they need to make any viable exports not to mention the fact they'd have to close their boarders for a couple months just to get a temporary currency off the ground to prevent Greek citizens from fleeing the country to dump their worthless Euro's in other countries.

Not to mention the fact that Greek origin Euro's throughout the rest of Europe would be worthless causing millions of people to suddenly have to readjust the value of their savings down to reflect the fact that 2% (Greece's rough contribution to the Euro's buying power) just suddenly vanished.

Nobody wins by having Greece in the Euro, in fact everybody is slightly annoyed and uncomfortable with the idea. But if they leave everybody loses, especially the Greeks.

And with all the damage such an exit would cause I don't think Europe would ever let Greece back into the Eurozone considering how many billions of hard fought bailout just evaporated into thin air.

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"Any Euro's originating in Greece would have no value in the rest of Europe"

Is that right?

It's a single currency, apart from the fairly worthless coins that have a country of origin, aren't all the notes all the same right up to the blingy 500€'s.....?

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"The bailout worth $166 billion"

Down the drain, apparently. What a disaster.

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TheQuestion - you're right to a point, but there are some serious flaws in your argument. All Euros issued are still legal tender, so savings held in that currency are valid. As they would no longer be issued to Greece, the drachma would have to be phased in, but the remaining paper currency would give a short buffer zone.

As for the rest, I fully agree, and that is the whole point: import prices would soar to the point that Greeks would be able to afford only what they produce themselves. The shock would no doubt close down industry for a few months as imports of raw materials would be halted, but once Greece has established itself as a low-cost alternative to the Euro zone, capital would once again flow in.

Again, I agree with you that a departure of Greece from the Euro zone would be unprecedented and consequently very messy, but its continued forced inclusion would in all probability be much worse. It's a bit like death: the ultimate outcome is bearable; it is the transition that is tough.

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The shock would no doubt close down industry for a few months as imports of raw materials would be halted, but once Greece has established itself as a low-cost alternative to the Euro zone, capital would once again flow in.

This would take several years to occur, as the situation on the ground would need to stabilize first. Something else that you guys failed to mention. The reason for the austerity, is that greece is still running at a structural deficit. Going into default would relieve them of the interest payments, but would leave them with no source of cash to cover the remainder of the deficit, leading to massive layoffs in the public sector, at a time, when the private sector is being destroyed by the banking and fiscal crisis. This is what I mean when I say austerity, is actually a good thing. Certainly better then the alternative.

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TheQuestion, so Greece wants even more money while slandering the Germans. Another bailout is just more money down the rabbit hole, the best way to handle this is to let them default and ride out the storm. The rest of the EU needs to isolate themselves from systemic shock. No amount of money is going to save Greece.

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The shock would no doubt close down industry for a few months as imports of raw materials would be halted, but once Greece has established itself as a low-cost alternative to the Euro zone, capital would once again flow in.

Which would be fine if Greece had the industrial capacity, raw materials, or infrastructure to mount that kind of recovery. We're talking about mass nationalizations of several key industries just to keep them afloat and injecting massive ammounts of government subsidy into any that aren't nationalized outright. The kind of government investment required would be a deathstroke for investors for years if not decades.

Again, I agree with you that a departure of Greece from the Euro zone would be unprecedented and consequently very messy, but its continued forced inclusion would in all probability be much worse. It's a bit like death: the ultimate outcome is bearable; it is the transition that is tough.

Oh I know their continued membership is going to suck, gonna suck bad. But if they depart all bets are off. Anything from total economic collapse to violent revolutions. The Greek economy is so heavily relient on external drivers I honestly don't think they could restart even if they had the will to do it. Men die but countries...countries burn.

All Euros issued are still legal tender, so savings held in that currency are valid. As they would no longer be issued to Greece, the drachma would have to be phased in, but the remaining paper currency would give a short buffer zone.

It's a single currency, apart from the fairly worthless coins that have a country of origin, aren't all the notes all the same right up to the blingy 500€'s.....?

I think I could make a fair argument for this being the case. If Greece did leave the Euro there would still be the equipment necessary to create the currency inside the country. Greek currency would represent a significant risk to the security of the Euro's value. I can easily see a rogue Greek government using mints to create Euro's in the face of a destroyed curency situation and dumping them in neighboring countries for desperatly needed supplies.

Devaluing all Euro's produced in Greece would be a painful but effective way of preventing a widespread currency from snowballing into an existential threat to the Euro as a whole. Just my take on it.

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" If Greece did leave the Euro there would still be the equipment necessary to create the currency inside the country. "

Like I said, the only money making equipment the Greeks possess is to produce coins, the maximum being 2€.

The paper money is controlled by the ECB in Frankfurt.

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Like I said, the only money making equipment the Greeks possess is to produce coins, the maximum being 2€.

Currency is currency. Even if its a large volume of relative low value money its still an ugly risk to leave stumbling around.

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I usually agree with a lot of your economic ideas, but I really don't feel threatened by armies of Greeks pushing barrow-loads of coins!

Surely if they leave the euro the borders will be closed on the periphery of the country anyway...

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I usually agree with a lot of your economic ideas, but I really don't feel threatened by armies of Greeks pushing barrow-loads of coins!

I'm just calling a threat where I see one. Pervasive small threats mount up over time into big ugly ones. Just trying to get ahead of the game.

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Hope for the best and plan for the worst is a good philosophy.

European leaders could do with giving it a go right now instead of making promises they can't keep.

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