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Greece imposes capital controls, banks to remain shut

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By ELENA BECATOROS and DEMETRIS NELLAS

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@wtfjapan

too late and useless to whine. the money has been lent, and the creditors won't ever see it again... its gone...

coming soon to Japan

-3 ( +0 / -3 )

The Greek debt wasn't solely caused by them. The Greek debt should be reduced by 25% and if that fails 25% again and 25% again and 25% again. The rich EU countries can suck it up. great idea just cry poor man and make the rich pay for it, so what happens when Spain, Italy have a similar problem!? can they use this excuse also to get out of repayment. sets a dangerous precident. eventually nobody will trust your continued lies and not lend to you at all! Greece is asking for 1/3 of it debt to be written off about $100billion!!! If you cant afford to pay back your debts dont borrow the F money in the first place!!

0 ( +1 / -1 )

@Lizzy Heat, there are more Brits on continental Europe collecting welfare than there are 'immigrants' collecting welfare in the UK. Go figure.

0 ( +0 / -0 )

Hi WilliB, France's Francois Hollande, Spain's Mariano Rajoy, have purposed a more formal system be adopted at a specially convened summit, involving amongst other measures, 'fiscal transfers' and Euro-bonds.

But frankly, any of these proposals will require a formal level of political integration and that is in all honesty turning out to be rather 'Alice in Wonderland' wishful thinking as events in Greece are turning sour, other EU members are anything but enamored in such a proposal.

I would be very surprised if the UK electorate chose to leave the EU, however having said that it is not beyond the realms of possibility. It is imperative that the opportunity for open and honest debate about the advantages of the single market , one aspect very high on my list for UK continue membership, is explained fully. The issues surrounding immigration and provision of benefits I believe will be negotiated before the referendum.

All the net contributing countries are key to the EU future, it is patent nonsense to suggest the EU will be able to carry on business as usual if one choose to leave.

0 ( +0 / -0 )

I receive an SSDI check for having Cerebral Palsy. The Congressional Budget Office states a Greek-style catastrophe will happen by the early 2030s at the latest. I've been buying what I can afford in terms of gold and silver since 2008. I just hope I'm prepared for such a scenario.

-2 ( +0 / -2 )

UK is the founding member of EU. It has no obligation to adopt the Euro as currency. Edited.

If I am the government of UK, I will call the referendum for exiting from EU because of unfair immigration policy of EU. It will reduce the high debt and burden of UK.

The UK is not a founding member of the EU.

There will be a referendum in the nest year or so and the government, in line with almost all political parties, will be pressing for the UK to stay in the EU. You have a very narrow view of the EU and a low opinion of British voters. Current polls show a constant majority want to remain. There is more to EU membership than worrying about immigration.

-2 ( +0 / -2 )

rocknroll:

" To combine trade integration, to merge economic cycles financials - capital and labour mobility and comprehensive structure for fiscal transfers to compensate/offset differential level of performance. "

So they plan to institutionalize the transfer payments that they all said are illegal in the Maastricht treaty. Makes one proud of our democratically elected politicians.

0 ( +0 / -0 )

Hi, Elizabeth Heath UK9393, certainly Britain obtained a clear opt-out from joining EMU/EURO for a signature to the Maastricht Treaty, in 1991. Setting aside Sweden, Demark, Bulgaria, and Poland.

However I have had conversations with a number of MEP's, who caution that certain sections and protocols associated to the Lisbon Treaty are subject to 'legal' interpretation.

The treaty refers to a deadline for transient to EMU stage 3, Protocol 24/25 makes the special status of Britain and Denmark opt out appear indefinite, however de facto, 'temporary' if ever closer union is to become mandatory.

The French President Hollande, German Chancellor Merkel, EU Commission President Jean-Claude Juncker, Donald Tusk President of the European Council, are convening a specially summit to deliver staged political union for a Single European State.

To combine trade integration, to merge economic cycles financials - capital and labour mobility and comprehensive structure for fiscal transfers to compensate/offset differential level of performance. It is in this area that a deadline of 2020 has been proposed so that a framework for full political and economic integration where all members states agree a date for full implementation of the proposals.

David Cameron certainly has his work cut out.

0 ( +0 / -0 )

@heynong

UK is the founding member of EU.

That's certainly not true.

1 ( +2 / -1 )

Elizabeth Heath

As for the UK , it isn't the Euro that's scares the Eurosceptics, it's immigration.

UK is the founding member of EU. It has no obligation to adopt the Euro as currency. However it has to share the burden of high level of low skilled immigrants from eastern Europe. It is making resentment from British residents and British national foreign expatriates who have contributed British economy. For example British national with foreign spouse will be struggle to move back to UK unless they are rich.

Being as Professor in eastern Europe is less attractive than being as cleaner in UK due to pay and working condition.

Low skilled British have to compete with flood of EU immigrants. Although UK debt is not high enough as Greece, it is no longer sustainable for hosting economic migrants from EU and desperate asylum seekers from other part of the world. UK debt has increased due to bad immigration policy.

If I am the government of UK, I will call the referendum for exiting from EU because of unfair immigration policy of EU. It will reduce the high debt and burden of UK.

0 ( +1 / -1 )

hameln:

" If Greece would become functional banana republic, it would be enough. It could sell gold, gas and oil to Europe and pay its debts. "

Or it could sell olives, goat cheese, and vacations at cheap Drachma prices and have an economy as it did before. Who in his right mind wants to vacation in an overpriced Euro country. Go back to Drachma and see a tourism boom.

About the debts, dream on. They are gone. As all the Euro critics have been saying from day one.

0 ( +0 / -0 )

Hi Elizabeth Heath, You are correct of course one the EU is a group of European countries functioning and operating as one economic unit the other Euro is the EU official unit of currency, however inextricably linked through the Lisbon Treaty, can't have one without the other, theoretically UK will have to join one day.............That notion gives a few UK residents the collywobbles......

You are wrong. The UK, Sweden, Denmark have no obligation to join the EU. New countries joining the EU do have to commit to the Euro, but countries that were already in the Union when the Euro was implemented do not. You can have one without the other.

As for the UK , it isn't the Euro that's scares the Eurosceptics, it's immigration.

0 ( +0 / -0 )

Greece should become like Switzerland as lone eagle which will be energetic, innovative and get ahead with strong banking and manufacturing sectors.

No need for that. If Greece would become functional banana republic, it would be enough. It could sell gold, gas and oil to Europe and pay its debts. The problem is that even banana republic needs functional government. Energy and mining sectors are very long time investments and nobody is fool enough to invest in Greece. Of course it would be better if Greece would become the capital of finance, but right now it is just the opposite.

http://www.forbes.com/sites/christophercoats/2013/12/12/how-real-is-greeces-oil-and-gas-future/

-1 ( +0 / -1 )

Raymond Chuang:

" Greece brought the problem upon themselves because they tried to live WAY beyond their means--and that was when they were on the drachma. "

When they were on the Drachma, the could (and did) devalue regularly and get on with their lives. Without the need of bailouts from other nations. The current problems are the result of shackling Greece into the Euro system.

You can look at the disastrous Argentinian experience of dollarization for an identical experiment and result.

0 ( +0 / -0 )

@itsonlyrocknroll

Actually I'm not Greek but I know quite a few people living there. It really is a human tragedy that sometimes gets lost in the numbers. There is definetly enough blame to go around but in my opinion, the creditors need to bear the losses for their part in reckless lending. As you point out it's hundreds of billions, and it didn't just appear out of nowhere. Some people also don't realise that the Greece is actually running a primary budget surplus now. The demand that every penny of the surplus should be turned over to the creditors while the people continue to live with even more austerity is just politically untenable unless you want more riots in the streets. The reforms are necessary but I think this crisis needs to be resolved over a decade or more, not months or a few years.

0 ( +0 / -0 )

@Nathaw, but Switzerland does have a fairly active agricultural industry (they've pretty strong in ranching) and definitely a pretty strong industrial sector (they make a lot of precision instruments besides watches). And it helps Switzerland that their banking system is very strong and trusted by everyone in Europe (for the most part).

Greece brought the problem upon themselves because they tried to live WAY beyond their means--and that was when they were on the drachma. Maybe the Greeks need to completely redo their economy so its emphasis is on agriculture and tourism.

1 ( +1 / -0 )

@Itsonly: Read up on the UK's opt out clauses, not legally bound to join Euro.

2 ( +2 / -0 )

We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors – including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries’ banking systems. The IMF and the other “official” creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

But, again, it’s not about the money. It’s about using “deadlines” to force Greece to knuckle under, and to accept the unacceptable – not only austerity measures, but other regressive and punitive policies.

3 ( +4 / -1 )

Hi M3M3M3, If I understand correctly your are a Greek resident, if so, sincerely the best of luck to you, I have to say the broadcasts paint a pretty grim picture. Wish you and your family well.

2 ( +3 / -1 )

lubracasi:

" The rest of Europe can afford Greece's debt. Pay it and shut up. Better a devaluation of the Euro than a masive crisis for no real reason. "

It is not "the rest of Europe", it is basically Germany and a couple of small other northern payer states. For the money that Germany by now has used for Greek bailouts, Germany could simply have put the entire Greek nation, from babies to seniors, collectively on German welfare for the last 15 years. Arguably, that would have been more honest and more helpful than the current system of sending the money to the big lender banks.

Now do you seriously think that is a system that should be institutionalized and expanded? How many other countries should be on German welfare? And how long can the party last?

-3 ( +1 / -4 )

Hi Elizabeth Heath, You are correct of course one the EU is a group of European countries functioning and operating as one economic unit the other Euro is the EU official unit of currency, however inextricably linked through the Lisbon Treaty, can't have one without the other, theoretically UK will have to join one day.............That notion gives a few UK residents the collywobbles......

0 ( +1 / -1 )

The rest of Europe can afford Greece's debt. Pay it and shut up. Better a devaluation of the Euro than a masive crisis for no real reason.

1 ( +3 / -2 )

Hi M3M3M3 the total sovereign default value is 430 billion Euro I have just received emergency OECD note call, you have basically answered you own question (1.3% of European GDP) hint - so question? how did Greece run up a debt position, the GDP is barely the size of Detroit, it is a question of stability of periphery, have to leave Kochi and report to Paris office soon, Merkel feels Germany is bullet proof. It is huge default all the same.

Hi WilliB Merkel is adamant, the ECB bond program is $66.3 billion per month, a long futures call €100,000 nominal value notional euro-denominated Spanish Government Bond with 6% coupon, I can live with that

0 ( +1 / -1 )

Too many posters here think the EU and the Euro are the same thing.

0 ( +2 / -2 )

itsonlyrocknroll:

" Sorry no English language subs....But interestingly Merkel confirms there is no legal basis to continue to provide emergency liquidity "

There was no legal basis for any bailout! Bailouts of other countries are forbidden according to the Maastricht treaty that Merkel et al signed. So are is the purchase of government bonds by the ECB, which has become routine by now.

I find it extremely ironic to hear these serial law breakers talk about "legal basis". Since when does Angela care about a legal basis?

-3 ( +1 / -4 )

The financial media are blowing this out of all proportion in many was. There is no new crisis here. The real crisis has been the 25% employment rate which has been with us for years now. The issues being discussed now seem to be more about preserving the credibility and unquestionable authority of the Troika institutions rather than truly helping Greece. Greece is a tiny economy (1.3% of European GDP) so the Troika could go on paying all of Greece's bills indefinitely without much trouble if they wanted to. The real reason the Troika are taking a hard line is that they don't want any concession or compromise to become part of the standard blueprint for any future crisis. It's an understandable position but it means that Greece is just a pawn in a larger game.

0 ( +3 / -3 )

Sorry no English language subs....But interestingly Merkel confirms there is no legal basis to continue to provide emergency liquidity plus confirmed that Germany can withstand a Grrek default. ....

0 ( +0 / -0 )

Sangetsu:

" Returning to the Drachma will not solve Greece's problems, Greece defaulted on it's debts prior to joining the EU. "

I did not say that returning to the Drachma will automatically solve all of Greeks problems. I said it is a necessary precondition. NOT returning to the Drachma, on the other hand, will automatically make it impossible to solve any of Greeks problems.

As for defaults, the last time Greek defaulted on foreign debts was when it left the Lating Cuirrency Union.... another common currency experiment which combined incompatible economies. Surprise!

Since WW2 and before the Euro, Greece never needed to default. They could devalue and inflate themselves out of tight squeezes. That option was taken away with the Euro system.

-3 ( +1 / -4 )

First, the Greek crisis has nothing to do with socialism. There is not now nor ever has been socialism in Greece, unless you consider the ancient communalism that existed prior to the city state. The whole mess has been caused by capitalism.

Utter nonsense. Greece's problems have everything to do with socialism, and Greece is the poster child of what happens you run out of other people's money to spend. Much of Greek industry is nationalized, more than half of Greeks are/were employed by the government. The curremt Syzira government is in fact a socialist government, Mr Tsipras has been a socialist since he joined the "Communist Youth of Greece" as a student. Of all the countries in Europe, none has less capitalism than Greece.

Returning to the Drachma is one basic precondition for solving Greeks problems If that does not happen, it does not matter what else the politicos do... things can only get worse.

Returning to the Drachma will not solve Greece's problems, Greece defaulted on it's debts prior to joining the EU. Greece has long believed that the public sector should be the foundation of the nation's economy. So long as they continue to believe this, their economy will continue to fail.

-1 ( +3 / -4 )

sangetsu03:

" Printing Euros, or Yen, or Zimbabwean dollars cannot solve these countries' economic problems. "

That is only half true. No, printing money alone will never solve all problems (nod to Abenomics), but being in control of its own currency is a prerequisite for an independent country. Being forced into a currency union with other economies with completely different levels of productivity is a recipe for disasters.

Returning to the Drachma is one basic precondition for solving Greeks problems If that does not happen, it does not matter what else the politicos do... things can only get worse.

-1 ( +2 / -3 )

Greece’s public debt (OECD) is 172% of its GDP. Italy and Portugal 139% and 131% respectively, if Greece sovereign defaults, clearly Greece in not a independent member of the single currency, it is a financial house of cards, on conference calls it utter desperation and panic as the ECB is powerless other than to prop up the periphery debt positions temporarily. At 136 forex Euro/Yen Pip values per lot and futures, there is money from misery...

1 ( +1 / -0 )

Raymond Chuang

The longer Greece prolong the sky rocketing debt, the higher interest rate of bill will be added over new debt. Greece may have no vibrant agricultural sector. However their wine and extra olive oil are one of the high quality premium products. Imagine Greece is not EU member, they can lower the currency value for lifting export. Another way is they can lower the labor wages for increasing competitiveness. Being the EU member makes Greece has been restricted for necessary reforms.

Switzerland is poorer in natural resources comparing with Greece. However it is highly independent and confident as Eagle. It even does not bother to join UN or NATO. The problem of Greece is over dependent on others. As a member of EU, it has enjoyed low interest loans. Now that toxic loans are biting the Greece banks and government.

Greece should become like Switzerland as lone eagle which will be energetic, innovative and get ahead with strong banking and manufacturing sectors. The choice of Greece is stand still and left behind. Reform and move forward. Default is not dirty word for Greece even for US which has more than 18 trillions of foreign debt.

-3 ( +0 / -3 )

not sure about this but the scots were shot down with their indepence vote once it wlooked like they might win.Then all the finacial people came out with the big guns saying how bad it would be.Was that to stop the catalans ,basques etc going for independence,Now the greeks are getting it.Im irish but the whole EU has become over bearing.If you dont agree with it they dont like it,Are we protecting greman and french banks here? and of course non of those on the EU gravy train are in the slightest bit worried about their pensions etc.They are proably making so much on expenses for these vital meetings. As they are trying to save money..how much will it cost to have greece go back to the drachma just in basic costs like changing ATMs parking meters and all the rest.seems like lunacy

-1 ( +0 / -1 )

EC president Jean-Claude Juncker:: 'A no vote would be "saying 'no' to Europe", Greeks must "speak up and shape their own destiny".....

Juncker is incapable to even see past the irrelevance, and foolishness of that statement . His ludicrous jabbering as. Spanish, Italian and Portuguese share positions fell by a average of 3.2%. Germany’s DAX Index lost 3.6 %. The FTSE 100 is down 1.92% European voters and pensioners are being hammered.

0 ( +1 / -1 )

First, the Greek crisis has nothing to do with socialism. There is not now nor ever has been socialism in Greece, unless you consider the ancient communalism that existed prior to the city state. The whole mess has been caused by capitalism. Admit it.

Greece, whatever its faults, is more sinned against than sinning. I am not thinking of King Lear but Madame Bovary, who committed suicide not because of adultery but debt. Naive and vain, she was easy prey to shysters.

Whether or not the EU are shysters or short sighted fools is secondary. The fact is that the EU had a hand in Greece's problems. It is up to the EU to help find a way out of the Greek mess.

Here is what has not worked.

Demanding Greece repay its debt. This like trying to drain blood out of a turnip. Greece is broke. Get it? Broke. Let me repeat it. Greece is broke. Flat broke.

Austerity. That has created poverty and suicides but it has not done anything of substance regarding the debt That fact is under your nose.

In an alternate universe the EU, led by Germany, could turn itself into the mean old debt collector and put the entire nation of Greece into debtors' prison. If that were possible it would be more humane than anything the EU has done so far. As least in a debtors' prison you are given nourishment, shelter and medical care.

To return to this universe, the least harmful thing would be to relieve Greece of its debt. Debt forgiveness can be more economical in the long run. Then the EU, not led by Germany, could consider a sensible bailout to get Greece working again.

Bailout after all this?

Remember the depression of 2008? The automobile companies and others were going broke. The U.S. voted for bailouts. The American public was enraged. It was the first time in living memory (if ever) that the U.S. government was immediately frightened of the American people. The government tossed the public a pacifier by increasing federal insurance on bank accounts from $100,000 to $250,000. Then they started the bailouts and they worked well for the common good, even though some of the money went into the pockets of people who helped bring the depression of 2008 about.

This is not an altogether perfect analogy. But what is most important for the common good of Europe and probably all of us in some way is to get Greece back on its feet. Without that nothing will work.

0 ( +2 / -2 )

@heynong, but what eventually got Argentina back on its feet was the fact they have a vibrant agricultural sector (the country is a major wheat exporter and their grass-fed beef is highly-desired around the world). Greece, on the other hand, is very dependent on the tourist trade (they don't have a big enough agricultural or industrial sector to produce their way out of an economic crisis) and this financial crisis may end up scaring away a lot of tourists, which will make the situation in Greece even worse.

3 ( +3 / -0 )

terrible situation.Dont know if the leftist govt are been taught a lesson or is it that the other countries are fed up with their antics.I know slovakia for one were saying why did they have to pay for the Greeks when they had no money themselves. will this now lead to chaos in europe with migrants swamping Greece,ISIS terrorists sneaking in, and general chaos. But yeah a good lesson to Japan for the future, and if the markets turn against you not much you can do. Bet you a lot of traders are revelling in this while the average greek is wracked with worry.I just care about the people!!

2 ( +2 / -0 )

It might go completely against the spirit of capitalism but isn't it time for the EU to think about simply writing off Greece's debts?

Absolutely not, because of the EU writes off Greece's debts, countries like Spain and Portugal are likely to reconsider repaying their debts. Other countries in Europe will spend less responsibly because they may believe that any debts they incur will not be called into account.

That is the problem with "debt relief". People and countries behave responsibly when there are consequences for behaving irresponsibly. If we remove those consequences, then why bother to act responsibly?

If you are a European, part of the money loaned to Greece was payed for with your taxes, you yourself are one of Greece's creditors. If Greece does not repay what it owes you, then you will have to pay even more when those funds are not repaid, because the money loaned to Greece could not be spent on programs in your own country, and the shortfall must be made up for.

It is the weakness of Greece for lacking fiscal disciplines for more votes.

Unfortunately, this happens in every democracy, it is a fundamental weakness of the democratic system. All of the massive debts incurred by developed countries are the result of politicians buying votes, and this is why all developed counties have fiscal discipline problems.

0 ( +2 / -2 )

Argentina has defaulted back in 2003. The world has not ended. Unlike Argentina, Greece has been bailed out by EU mostly from German Tax payers. From the bottom of her heart, Anglela Markel knew that Greece will be not able to pay back the huge debt. However she has been keep bailing out Greece with high expectation for it will swallow the bitter medicine of Austerity. If she has told her truth earlier, she is no longer in the highest office of Germany. It is messier than before.

In the reality, it has been counter productive for keep loaning the nation which is the birth place of democracy. In the democracy, populist government will promise the electorates with sugar coated solution which is default. It is the weakness of Greece for lacking fiscal disciplines for more votes. Even Greece could go away with default, EU will lose the investors confidence. Rest of the world will be impacted by capital flight.

If Greece has left EU earlier, that world has been in better place. Financial markets will not be turmoiled.

0 ( +1 / -1 )

Hi Droll.

Apologies for my late answer. I had to work (ironically).

Socialism is "From each according to ability, to each according to need."

It's perfect. It's the way Jesus would have it. Not that I expect you to follow my Christian views....

2 ( +2 / -0 )

Is this the beginning of the end for the EU?

No, because the Euro and the EU are two different things.

It may be the end of the Euro, an admirable experiment that was doomed the moment they allowed Greece and it's already chaotic economy to join. Greece cannot expect others to bail it out indefinitely and rather that just whine and blame other countries and accuse organisations of bullying, they need to accept responsibility for their dire situation. A country whose tax collection is nominal, where not paying your taxes is seen as the norm.

If Tsipras wants to sell Greece's soul to Putin let him. Why should the rest of Europe care about Greece, when Greece only respects Europe when it's giving them money.

2 ( +3 / -1 )

Both Italian and Spanish 10 year yields are up, manageable but positions are open, there is this a faint chance of a five loaves and two fishes , a conversion of Paul the Apostle, along the road to Damascus, burning bush last minute deal. This is just day one..

zichi, 'If it wasn’t for having to pay the interest on its debts, it would no longer be living beyond its means'....... that is a compromise that could work to achieve a short term consensus a interest holiday.

0 ( +0 / -0 )

@F&C, but you are still missing the point that allowed it all to come to this, when those other EU members let Greece in when they knew full well Greece didn't meet the criteria to join the Euro. The creditors also need to have the humility to recognise that their austerity programme has failed. None of the hardship has made Greek debt more sustainable, yet still they demand more and if they let Greece go, it's no longer a common currency, just a loose exchange rate mechanism, it'll make Lehman Brothers and the subsequent consequences look like a happy love in at Woodstock.

2 ( +3 / -1 )

Funny how many people are talking about how "unfair" the rest of the EU and the IMF are being towards Greece. On the other hand, why do you think ALL of the other Eurozone states voted this weekend against further extending emergency assistance to Greece, with only Varoufakis voting in favour? (hint: not because everyone has it in for Greece and is indifferent towards the suffering of the poor Greeks)

Greece has never been prepared to reform - their idea of a concession in the negotiations was to offer to raise the taxes of people who have made tax dodging a national sport - and even when stared in the face with the reality of default, the Syriza government have threatened to try and blow up the whole of the Euro project. However ill-conceived you may think the Euro is, throwing good money after bad and setting a very dangerous precedent for other debtors nations is never going to be allowed.

The Greeks say they want Eurozone and EU membership, but they have never really been prepared to accept the sacrifices & fiscal discipline required to be part of it. Now they literally can't pay for anything they might realise the folly of their previous decisions.

Moral of this story: the longer you avoid facing up to a problem (be it debt or anything else) the harder it usually gets to resolve.

0 ( +4 / -4 )

@Droll, socialism works --notably-- when capitalism fails, like it did in 2008... and what came along and funded the disaster so it could claw its way into the ICU? Socialism. When govt, i.e. The People's money saved the system, the banking system was nationailzed to save it.

Privatise costs, socialise loss.

@Zichi, there was no banking collapse a such, liquidity froze (collapsed) the only financial institution that collapsed was the Lehman Brothers. Fannie Mae, not a financial institution per se, also fell but was saved by... tax payers money.

0 ( +3 / -3 )

It could certainly herald the beginning of the end of the Euro, this dogmatic morality on the part of the Germans, where debt is literally seen as a sin, is nothing short of lunacy, this combined with the other creditors inflexibility, the IMF, has pushed Greece --which shouldn't have been allowed join the Euro in the first place-- to this "break point", once Greece leaves the Euro it is no longer a "common currency" but a loose exchange rate mechanism, exposed as weak and vulnerable... next then, Italy, Spain and so the dominoes will fall. This is what happens when politics trumps economics.

It is NOT entirely the Greeks fault, the creditors have to shoulder blame as well.

2 ( +3 / -1 )

Back in the Bush era and the collapse of the banks causing $800 billion bailout in 2008,wiped out many people including the pension trust of my parents who lost 50% of its value.

The Greek debt is about €317bn. Most of the bailouts given pour out of the country again once they are given for debt repayments and interest to its creditors who were mostly banks and hedge funds in other eurozone countries and now the Troika.

The “troika” of the European Central Bank, the International Monetary Fund and the European commission has simply replaced the banks and the hedge funds as Greece’s paymasters. The country’s overall debt burden has actually increased in the almost five years since it was first “rescued”, and of the amount still outstanding, 78% is now owed to public sector institutions, primarily the EU.

If it wasn’t for having to pay the interest on its debts, it would no longer be living beyond its means.

The Oxford economist Simon Wren-Lewis. “In reality, reducing the debt burden in Greece (and probably elsewhere) would do the eurozone a lot of collective good.”

1 ( +2 / -1 )

Why should the German, French, Italians and other European citizens pay for the Greek irresponsability? Greek vote for Tsipras knowing what was coming their way, proof is that his first official visit as Prime Minister was to Brazil, where he asked for financial "advices" to leftist Presidents Lula and Rousseff, both who are about to be prosecuted as the brains behind the multi-billion dollars fraud that plagued the once mighty Petrobras - the federal company in charge of searching and distributing petroil. Rousseff very likely will face an impeachment process in the coming months, and both she and Lula supports the likes of Venenuela's Chavez and Maduro. Tsipras was fool enough to publicly say that Greece should follow Brazil as a financial model. Greeks have dug their own grave, they should find a - responsible - solution by themselves as well.

0 ( +2 / -2 )

@ lucabrasi

tell me how socialism is supposed to work, please. I would like to hear your take on it.

-5 ( +4 / -9 )

Comprehensive debt mutualisation/consolidation can only be achieved through a system of full political union. Now is Europe prepared for this huge leap of faith, with all the cultural hurdles to face, and the political challenges to overcome.

The United States of Europe. For me there is only one United States and is on the other side of Atlantic Ocean. It a pipe dream to believe Europe will genuinely unite, but that does not mean that it should remain that way.

1 ( +2 / -1 )

@Droll

That's not how socialism works. It's how economic liberals, usually right-wingers, try to portray it in order to make it look bad to their workers and keep them onside with the system as it is.

-2 ( +3 / -5 )

The Greek debt wasn't solely caused by them. The Greek debt should be reduced by 25% and if that fails 25% again and 25% again and 25% again. The rich EU countries can suck it up.

Zichi your posts are usually well thought out with common sense, but in this case you are wrong. Greece got in its current state by finical irresponsibility and strict adherence to bedrock socialism. The whole tax and retirement system in Greece is a ponzi scheme. Cut the debt by 25%? Wipe it completely? It would only be temporary, they are unwilling pay their taxes, unwilling to reform the retirement system, etc. etc. I am aghast at your statement that the rich EU countries can suck it up. The free ride mentality is becoming a mindset for those unwilling to support themselves. Why should I work when my neighbor has a high paying job? He goes to work at six in the morning and comes home well after the sun goes down, I sit here all day watching the tele and chatting my friends on face book. I demand he give me some of his money, not one deserves to make that much. How dare he?

-3 ( +4 / -7 )

Writing off the debt would be OK if it wasn't just another short term "solution". But Greece needs to demonstrate that it can take care of itself before people will be willing to throw more money at them.

Can-kicking can't go on forever.

2 ( +2 / -0 )

If Europe to avert a economic catastrophe and conserve the single market, (the only logical reason for the UK to remain a member of the EU), its institutions will have to refrain from further self-destructive behavior and fully embrace the Unions founding principles, human dignity, liberty, democracy, equality, the rule of law and respect for human rights.

Where Greek people are concerned these institutions have fundamentally embarked on fragrant acts of betrayal. The ECB/EU/IMF actively created the economic travesty in Greece, by continuing to finance debt that was utterly illogical, totally unsustainable, irreversible, and arithmetically impossible for the people of Greece to service.

Angela Merkel will have to bite the bullet and except full debt consolidation, but how to persuade the Greek Government that they will have to embark on a root and branch restructuring of every aspect of state institutions is going to be Europe's biggest challenge, along with most of Southern Europe.

The ECB needs to up its sovereign bonds purchases, significantly. Angela Merkel German government needs to step back , leave France and Italy to relax the pace of their fiscal cuts, both must at the same time demonstrate a commitment to structural reforms. The most immediate danger is a messy Greek default and enforced exit from the Euro, if debt burdens were to increase in Italy, Spain, etc investors will run for cover with the real danger of the euro's collapse.

South Europe and especially the UK underlining weakness, is heavy debt, appalling levels of poor productivity, a race to the bottom in pay, an inflexible, low skill/untrained labour market, losing any means or ability to adapt, but worst of all, the glaring policy mistakes committed by European Governments. It time to wake up and smell the coffee instead of lying back and taking a sip and putting your feet up.

0 ( +1 / -1 )

Soon coming in Japan...

-3 ( +3 / -6 )

@YuriOtani "Well I hope things work out for Greece but its situation is very different than Japan. Japan can make more yen if required but Greece is tied to the Euro and is not able to "print" Euros."

You are right, Japan is so special. Perhaps you got the idea of just making more yen from Zimbabwe?

3 ( +4 / -1 )

The Greek debt wasn't solely caused by them. The Greek debt should be reduced by 25% and if that fails 25% again and 25% again and 25% again. The rich EU countries can suck it up.

0 ( +5 / -5 )

It might go completely against the spirit of capitalism but isn't it time for the EU to think about simply writing off Greece's debts?

I'm sure buiness leaders will howl their protests, but the alternative could be absolutely disastrous for the entire region. The greek military have never been shy about interfering in politics, Putin's sniffing around and we already have one humanitarian crisis with the refugees from North Africa.

This is how wars start....

-1 ( +1 / -2 )

Yannis Stournaras, governor of the Bank of Greece, said the bank would “take all measures necessary to ensure financial stability for Greek citizens in these difficult circumstances.”

Just wait until one of those measures is grab the depositors cash and disperse it "for the greater good"........

-1 ( +2 / -3 )

Remember, Greece historically has defaulted financially even when they were using the drachma. As such, Greece defaulting now surprises a grand total of zero people.

The sad part is that unlike Spain or Italy, Greece doesn't have a strong enough agricultural or industrial base to produce their way out of a economic crisis. As such, if Greece defaults, things could go bad enough we could see a diaspora of Greeks out of the country in a blink of an eye, with many emigrating to the USA, Australia and possibly South America.

5 ( +5 / -0 )

Short term solutions are great, until you run out of them.

I fear that there will be deaths on the streets in Athens before too long. Hopefully the government hurries this up, reintroduces their new currency, take a big depreciation, and then learn to live within their means, rather than on other people's finite money. The sooner Greece gets there the better it will be for it's people.

with both sides accusing each other of being responsible.

That was supposed to be "irresponsible", I guess?

2 ( +3 / -1 )

Just a matter of time before the Riots begin. Burning cars, looting.....maybe even banks being broken into. If I could not withdraw my money from the bank I would not be happy either.

2 ( +3 / -1 )

Well I hope things work out for Greece but its situation is very different than Japan. Japan can make more yen if required but Greece is tied to the Euro and is not able to "print" Euros. This is a tough situation for all concerned and I wish them well.

Printing Euros, or Yen, or Zimbabwean dollars cannot solve these countries' economic problems. The economic problems we are facing are not the result of there being a shortage of cash, but a lack of consumption. The lack of consumption is caused by a lack of demand, the lack of demand is generally caused by an ever-higher cost of living. As more and more of our pay is absorbed by the public sector in the form of taxes, we have less to spend on things, and when we spend less on things, the people who make those these make fewer of them, so they buy fewer materials, hire fewer workers, and pay them less, which results in even less consumption. "Printing" more currency results in cost-push inflation, which reduces the value of people's money, which means that their money cannot buy as much as it did before, which further drives up cost of living, which further decreases consumption, and makes thinks even worse.

The situation Greece is in now is the same situation other countries will find themselves in if they don't get their acts together and realise that people and industry are the sources of jobs, income and prosperity, and not an ever larger government. The government needs to apply the same financial regulations to itself that it applies to the rest of us. You and I cannot spend more than we earn. The government should be held to the same standard.

1 ( +4 / -3 )

Well I hope things work out for Greece but its situation is very different than Japan. Japan can make more yen if required but Greece is tied to the Euro and is not able to "print" Euros. This is a tough situation for all concerned and I wish them well.

-2 ( +2 / -4 )

Does anyone remember the Cypriot "Bail-in" experiment? Like in Greek Cyprus, the well-connected wealthy depositors got their money out BEFORE the capital controls went(predictably) into effect.

Generally-speaking, well-connected wealthy depositors acquired their wealth by doing business. They know enough about economics and business to put their money in or take it out at the right time. If I were a Greek, I would have stopped saving my money in a Greek bank two years ago, or, at the very latest, when Tsipras and his party were elected. The rich are not stupid, or they would not be rich for very long.

Greece wouldn't be playing hardball and suicide unless they've received assurances they will an alternative line of credit.

They've squeezed Europe for billions, and gotten it. They cannot pay it back. They can play hardball because losing is the less-bad option, they can walk away with bad feelings, but with a clean slate. Russia and China will not be as generous with Greece as Europe was, they will not give credit or money unless they are 100% certain they will get it back. They will loan money to Greece, but with far stricter guarantees than Europe demanded.

2 ( +3 / -1 )

The S&P/ASX 200 has just taken a half day hit of some $34 billion. The EU/ECB/IMF and the hapless Greek Government would be wise to find a compromise, instead of falling back on rhetorical politicking. The ECB better be on its toes to counter the speculative selling in Italy, Spain and Portugal, the vultures are circling.

http://www.marketindex.com.au/asx200

0 ( +0 / -0 )

Does anyone remember the Cypriot "Bail-in" experiment? Like in Greek Cyprus, the well-connected wealthy depositors got their money out BEFORE the capital controls went(predictably) into effect.

Greece entered the EU as a millstone around the productive economies' necks.

1 ( +2 / -1 )

I understand there is to be a daily 60 euro cap on ATM withdrawals as of Tuesday...Eyes front on European sovereign bond spreads and key euro/dollar rates/ prices

1 ( +1 / -0 )

That would be horrific if such a think happened in Japan and I could not withdraw my money. Even ordinary citizens could be provoked to rebel.

5 ( +5 / -0 )

Jeeze. It seems like with Greece when you win you lose, and when you lose you lose.

1 ( +2 / -1 )

Just received this note ...... IMF Managing Director Christine Lagarde is calling for 'debt sustainability' measures....

http://www.imf.org/external/np/sec/pr/2015/pr15302.htm

1 ( +1 / -0 )

Greece wouldn't be playing hardball and suicide unless they've received assurances they will an alternative line of credit. 100-1 that Russia & China swoop in like a white knight and offer a loan package to bail them out. Let the country crash and burn and dissolve the EU. It was a bad experiment from the beginning.

-10 ( +2 / -12 )

US Treasury secretary Jack Lew, has been reported 'urging' in a series of phone calls that in 'no uncertain terms' the Eurozone to assume debt mutualisation for Greece..The capital controls were imposed as the result of the Greek 'central' bank overruling there elected government. Politically?... the free movement of capital is one of the founding fundamental rights of the European Union and the cornerstone of currency union..

-1 ( +0 / -1 )

Is this the beginning of the end for the EU?

That would be wishful thinking, but it will be a new beginning for Greece. We will get to see a living example of what a somewhat industrialized country does after fiscal irresponsibility causes a total economic collapse. I hope Japan is taking careful notes.

4 ( +10 / -6 )

Is this the beginning of the end for the EU?

-7 ( +5 / -12 )

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