# Greek default seems to be inevitable...what's the fallout? **URL:** \ **Category:** Great Debates\ **Created:** [June 29, 2015, 8:24pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811 "2015-06-29T20:24:18Z")\ **Posts on this page:** 20\ **Page:** 3
**Author:** ![Rune](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@Rune](https://boards.straightdope.com/u/Rune)\ **Post date:** [July 1, 2015, 7:52am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/41 "2015-07-01T07:52:47Z")
> [@XT](#): > > I’d definitely worry about my vacation in Greece this summer. There is a lot of unrest that is boiling up there, and a ton of uncertainty. Whether the Greeks vote on Monday yes or no there is going to be a lot of contention over it, and if no and depending on how they negotiate leaving the EZ (and maybe the EU) it’s going to be pretty grim. I think Italy, however, would be fine to visit (as would Spain or Portugal…I’m actually planning to go to Spain at the end of the year). Don’t worry about vacationing in Greece. Especialy if you go the islands (Athens suck anyway). Italy/Spain/Portugal would be fine too of course (I’m in Sevilla now), but Greeks know not to screw with their tourists (figuratively speaking! I’m sure a lot of literal screwing of American tourists are going on - US tourist girls do have a reputation in Europe they work hard to maintain). ---
**Author:** ![Gary\_Kumquat](https://avatars.discourse-cdn.com/v4/letter/g/4491bb/32.png) [@Gary\_Kumquat](https://boards.straightdope.com/u/Gary_Kumquat)\ **Post date:** [July 1, 2015, 8:27am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/42 "2015-07-01T08:27:32Z")
> [@Measure\_for\_Measure](#): > > I am dubious. Greece is simply too small to affect exchange rates in that way. And today the Euro is only about 10% undervalued against the dollar vis a vis purchasing power parity anyway. It was over-valued for most of the 2000s. > > Greece has 11 million people. The EU has 507 million people. That flea on the tail doesn’t wag the dog. Except he didn’t just say Greece. He said “the south European countries cheapen the value of the currency” Add up the respective populations of the poorer southern countries and you’re looking at a reasonable proportion of the entire EU, certainly enough to affect the price of the Euro. , and as a major exporter Germany will benefit from that. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 1, 2015, 8:45am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/43 "2015-07-01T08:45:33Z")
> [@Gary\_Kumquat](#): > > Except he didn’t just say Greece. He said “the south European countries cheapen the value of the currency” > > Add up the respective populations of the poorer southern countries and you’re looking at a reasonable proportion of the entire EU, certainly enough to affect the price of the Euro. , and as a major exporter Germany will benefit from that. How else would you explain close to full employment and record exports for a decade while most of Europe - inc. France - suffered. FFS, until 2010 the value of German exports was greater than the USA, on 1/4 of the population. At the same time Spain’s unemployment had hit 20% and was rising fast. In the euro zone. This is not remotely controversial. Aside from control of the European economies it is the most significant reason for the entire German/Euro project. [http://www.geohive.com/charts/ec\_exim1.aspx](http://www.geohive.com/charts/ec_exim1.aspx) > **[Spain unemployment rate hits 20%](https://www.bbc.co.uk/news/10093123)** > > Spain's unemployment rate breaches 20% for the first time in nearly 13 years, official figures show. ---
**Author:** ![foolsguinea](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/foolsguinea/32/14751_2.png) [@foolsguinea](https://boards.straightdope.com/u/foolsguinea)\ **Post date:** [July 1, 2015, 9:10am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/44 "2015-07-01T09:10:30Z")
> [@Rune](#): > > What the heck is producerist fantasy? It’s sheer fantasy. I don’t remember the statistics, but I seem to recall reading that Greeks worked longer hours than Germans pre-crash. It’s also vaguely [producerist,](https://en.wikipedia.org/wiki/Producerism) if on false premises. And it’s kind of racist, but the last time I said that on this board the racial essentialists were confused because they think white people can’t be racist against white people. ---
**Author:** ![Rune](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@Rune](https://boards.straightdope.com/u/Rune)\ **Post date:** [July 1, 2015, 9:26am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/45 "2015-07-01T09:26:09Z")
> [@up\_the\_junction](#): > > How else would you explain close to full employment and record exports for a decade while most of Europe - inc. France - suffered. > > FFS, until 2010 the value of German exports was greater than the USA, on 1/4 of the population. At the same time Spain’s unemployment had hit 20% and was rising fast. In the euro zone. > > This is not remotely controversial. Aside from control of the European economies it is the most significant reason for the entire German/Euro project. That’s just silly. The Euro is not some devious Teutonic plan to enslave Europe to a German export regime. It isn’t and never was a German construct. Mainly it was invented by France as a means to try to keep some control over a reunified Germany and reluctantly accepted by Germany to get French ok to the reunification. Germany was actually doing pretty badly during the 90s, sometimes at the time referred to as the sick man of Europe. It was only with a number of fairly harsh labour reforms in the early 2000’s that they started to get into shape (although regions of Germany are still doing very bad). Germany’s success as an export nation isn’t dependent on the Euro, and the problem with putting strings on the German export machine for the benefit of France/Spain/Italy is that Germany is on the global market competing against the likes of USA and China. Denmark/Belgium/The Netherlands and other of Germany’s neighbors are all benefiting immensely as subcontractors from German industrial exports to the global market. France/Spain/Italy should be able to do the same. It’s not the Euro which stands in their way of realising their economic potential, it’s business, labour and tax reforms. The same goes for Greece which is still beat by the likes of Belarus and Botswana in the World Bank Ease of Doing Business index. When you’re doing worse than a wannabe communist dictatorship then it’s a pretty good indicator that there are still plenty of low hanging fruit to be plucked. ---
**Author:** ![Rune](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@Rune](https://boards.straightdope.com/u/Rune)\ **Post date:** [July 1, 2015, 9:31am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/46 "2015-07-01T09:31:17Z")
> [@foolsguinea](#): > > It’s sheer fantasy. I don’t remember the statistics, but I seem to recall reading that Greeks worked longer hours than Germans pre-crash. > > It’s also vaguely [producerist,](https://en.wikipedia.org/wiki/Producerism) if on false premises. > > And it’s kind of racist, but the last time I said that on this board the racial essentialists were confused because they think white people can’t be racist against white people. That’s a lot of ideology. Which aren’t going to help Greece any. The facts are that they don’t export very much, and what they do export are mainly tourism and Russian/Chinese transits – meanwhile they are extremely reliant on imports. Whether facts are fantasy, producerists or racist, they remain facts. ---
**Author:** ![Stanislaus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/stanislaus/32/3391_2.png) [@Stanislaus](https://boards.straightdope.com/u/Stanislaus)\ **Post date:** [July 1, 2015, 9:51am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/47 "2015-07-01T09:51:05Z")
[The FT are reporting](http://www.ft.com/fastft/353421) that Greece is now prepared to accept almost all the creditors’ conditions in return for the new bailout they’ve proposed: > [@FT](#): > > Mr Tsipras’ letter says Athens will accept all the reforms of his country’s value-added tax system with one change: a special 30 per cent discount for Greek islands, many of which are in remote and difficult-to-supply regions, be maintained. > > On the contentious issue of pension reform, Mr Tsipras requests that changes to move the retirement age to 67 by 2022 begin in October, rather than immediately. He also requests that a special “solidarity grant” awarded to poorer pensioners, which he agrees to phase out by December 2019, be phased out more slowly than creditors request. > > “The Hellenic Republic is prepared to accept this staff-level agreement subject to the following amendments, additions or clarifications, as part of an extension of the expiring [bailout] program and the new [third] loan agreement for which a request was submitted today, Tuesday June 30th 2015,” Mr Tsipras wrote. He added: > > As you will note, our amendments are concrete and they fully respect the robustness and credibility of the design of the overall program. Will it be enough to get a new bailout? If so, what will the referendum actually be on? ---
**Author:** ![davida03801](https://avatars.discourse-cdn.com/v4/letter/d/b5e925/32.png) [@davida03801](https://boards.straightdope.com/u/davida03801)\ **Post date:** [July 1, 2015, 10:19am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/48 "2015-07-01T10:19:51Z")
Do you think any politician will learn a lesson from this ? Doubt it. ---
**Author:** ![Rune](https://avatars.discourse-cdn.com/v4/letter/r/e68b1a/32.png) [@Rune](https://boards.straightdope.com/u/Rune)\ **Post date:** [July 1, 2015, 10:29am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/49 "2015-07-01T10:29:19Z")
> [@davida03801](#): > > Do you think any politician will learn a lesson from this ? > > Doubt it. The politicians didn’t create the mess. The people voting for the politicians did. ---
**Author:** ![Gary\_Kumquat](https://avatars.discourse-cdn.com/v4/letter/g/4491bb/32.png) [@Gary\_Kumquat](https://boards.straightdope.com/u/Gary_Kumquat)\ **Post date:** [July 1, 2015, 11:35am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/50 "2015-07-01T11:35:04Z")
> [@Rune](#): > > Germany’s success as an export nation isn’t dependent on the Euro It’s success will certainly be influenced by the Euro exchange rate. You can sell a lot more Mercedes when they’re 20% cheaper due to a slide against the dollar. ---
**Author:** ![Darth\_Panda](https://avatars.discourse-cdn.com/v4/letter/d/ee7513/32.png) [@Darth\_Panda](https://boards.straightdope.com/u/Darth_Panda)\ **Post date:** [July 1, 2015, 11:59am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/51 "2015-07-01T11:59:17Z")
> [@Diceman](#): > > At the very least, the rest of the so-called “PIIGS” (Portugal, Ireland, Italy, and Spain) might find themselves under the microscope. If they they decide to leave, then the EU is effectively done. It will become impossible to ignore that the EU is really mostly the German Economic Union. Also, they’ll have to change their name to PIIS, which is pretty funny. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [July 1, 2015, 12:21pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/52 "2015-07-01T12:21:57Z")
> [@LinusK](#): > > That’s the point of leaving the euro and creating a sovereign national currency: you don’t need to borrow from other countries. > > A country with its own currency (like the US, for example) can create whatever amount of money it needs. Well, they can print the paper. The trouble is getting someone else to accept it. I recommend some reading of [history](http://www.historylearningsite.co.uk/modern-world-history-1918-to-1980/weimar-germany/hyperinflation-and-weimar-germany/) for an understanding of the drawbacks of simply printing up money to pay foreign debts, or read what **Rune** has posted. It they were to inflate their currency, that amounts to a cut to all wages, pensions, and the value of all debt held in that currency. > [@](#): > > As for the creditors, I’d just say that creditors lend, not out of generosity, but out of greed. If creditors make a mistake by lending too much, that’s a risk the creditor was paid to take (in the form of interest) and one it voluntarily took on in the first place. Without the incentive of the possibility of default, there’s no reason for creditors to learn to wise risks, rather than stupid ones. IOW the creditors should learn their lesson, write off current Greek debt, and not loan them another Euro. Or perhaps they should have learned their lesson back when the Greeks defaulted on about half the loans last time. Regards, Shodan ---
**Author:** ![Jackmannii](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/jackmannii/32/311_2.png) [@Jackmannii](https://boards.straightdope.com/u/Jackmannii)\ **Post date:** [July 1, 2015, 12:29pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/53 "2015-07-01T12:29:00Z")
A country can print all the money it wants. It provides good exercise for the citizenry (as in 1930s Germany, where you needed to cart your money around [in a wheelbarrow](http://blackquillandink.com/wp-content/uploads/2011/11/hyperinflaatin.jpg) to have enough to buy a few basic goods). ---
**Author:** ![Capt.Ridley\_s\_Shooting\_Party](https://avatars.discourse-cdn.com/v4/letter/c/cc9497/32.png) [@Capt.Ridley\_s\_Shooting\_Party](https://boards.straightdope.com/u/Capt.Ridley_s_Shooting_Party)\ **Post date:** [July 1, 2015, 1:44pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/54 "2015-07-01T13:44:14Z")
> [@Stanislaus](#): > > [The FT are reporting](http://www.ft.com/fastft/353421) that Greece is now prepared to accept almost all the creditors’ conditions in return for the new bailout they’ve proposed: > > Will it be enough to get a new bailout? If so, what will the referendum actually be on? [Apparently denied by Tsipras](http://www.maltatoday.com.mt/news/europe_2015/54653/tsipras_offers_creditors_new_bailout_concessions#.VZPO8vntmko). ---
**Author:** ![Steken](https://avatars.discourse-cdn.com/v4/letter/s/e274bd/32.png) [@Steken](https://boards.straightdope.com/u/Steken)\ **Post date:** [July 1, 2015, 2:21pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/55 "2015-07-01T14:21:59Z")
Well this is confusing. [Looks like the Greeks just capitulated.](http://money.cnn.com/2015/07/01/news/economy/greece-bailout-concessions/index.html) ---
**Author:** ![Stanislaus](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/stanislaus/32/3391_2.png) [@Stanislaus](https://boards.straightdope.com/u/Stanislaus)\ **Post date:** [July 1, 2015, 2:39pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/56 "2015-07-01T14:39:15Z")
Tsipras is making a speech now: The referendum is still on. It’s not a vote on the Euro. It’s seeking a popular mandate to strengthen the government’s hand in negotiations. He’s calling for a No vote. Greece is still at the negotiating table. [(Link to Guardian live updates)](http://www.theguardian.com/business/live/2015/jul/01/greek-debt-crisis-creditors-consider-next-moves-after-imf-default-live) ---
**Author:** ![Terr](https://avatars.discourse-cdn.com/v4/letter/t/839c29/32.png) [@Terr](https://boards.straightdope.com/u/Terr)\ **Post date:** [July 1, 2015, 2:44pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/57 "2015-07-01T14:44:24Z")
Tsipras seems to be desperately flailing about. That certainly doesn’t increase confidence in Greece’s government. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 1, 2015, 4:35pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/58 "2015-07-01T16:35:23Z")
> [@Terr](#): > > Tsipras seems to be desperately flailing about. That certainly doesn’t increase confidence in Greece’s government. This is naive. It’s a move-by-move plan. Many are concerned about the unknown and god only knows the corporate media is intent on scaring them, of course he has to be seen to be trying everything possible. They just have to stand firm, together. Fuck the Germans. ---
**Author:** ![up\_the\_junction](https://avatars.discourse-cdn.com/v4/letter/u/f1d935/32.png) [@up\_the\_junction](https://boards.straightdope.com/u/up_the_junction)\ **Post date:** [July 1, 2015, 4:39pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/59 "2015-07-01T16:39:36Z")
> [@davida03801](#): > > Do you think any politician will learn a lesson from this ? > > Doubt it. Lets hope the owners of capital/lenders finally get to learn the lesson that they are not indemnified from all risk by taxpayers. Pretty much the point of interest is risk vs. return. It’s a business judgement, not a socialist back stop bail out scheme as Goldman Sachs conveniently believe. ---
**Author:** ![XT](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/xt/32/456_2.png) [@XT](https://boards.straightdope.com/u/XT)\ **Post date:** [July 1, 2015, 5:23pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/60 "2015-07-01T17:23:12Z")
> [@up\_the\_junction](#): > > This is naive. > > It’s a move-by-move plan. Many are concerned about the unknown and god only knows the corporate media is intent on scaring them, of course he has to be seen to be trying everything possible. > > They just have to stand firm, together. Fuck the Germans. Oh, I’m sure it’s part of a grand plan. 😛 So, he first qualitatively accepted (most) of the terms, then [took two firm steps back](http://money.cnn.com/2015/07/01/news/economy/greece-bailout-concessions/index.html) by calling for a no vote which would negate them. Genius! I’m sure this will work out well for the Greeks…fuck those Germans! > [@](#): > > The Greek tragedy risks turning into a farce. > > Hours after telling Europe he could accept most of the conditions of a bailout he previously rejected, Prime Minister Alexis Tsipras urged Greeks to vote against it. > > Confused? You’re not alone. Markets in Europe swung wildly Wednesday in response to the conflicting signals coming from Athens. > > Tsipras said a referendum planned for July 5 would go ahead, and Greeks should vote “No” to strengthen his hand in future negotiations on a new rescue. > [@](#): > > But European leaders have made it clear they believe a “No” vote would set Greece firmly on the path to leaving the eurozone. > > The Greek crisis…in 2 minutes > > The remarkable series of events bring Greece no closer to fixing a crisis that spells disaster for its economy and people. > > Tsipras wrote to European leaders and the International Monetary Fund late Tuesday, accepting most of the conditions they had attached to releasing more cash. > > “[Greece] is prepared to accept this staff level agreement subject to the following amendments, additions or clarifications,” Tsipras wrote, according to a copy of the letter obtained by CNN. > > The first change he listed – and the most significant – is for Greece to continue levying a lower rate of sales tax on its many islands. Creditors wanted the discount eliminated. > > Otherwise, the changes mainly concern slight delays to pension reforms and tax increases that the creditors had demanded [Previous page](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811.md?page=2) [Next page](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811.md?page=4)