# 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:** 4
**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, 5:51pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/61 "2015-07-01T17:51:40Z")
Thanks for that “Greek crisis … in 2 minutes”. It’s not like we haven’t been engaged with it since at least the Spring of 2012. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 1, 2015, 6:05pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/62 "2015-07-01T18:05:40Z")
> [@Measure\_for\_Measure](#): > > Over at [Vox.com](http://Vox.com), Matt Yglassias has a good primer on Greece: [11 things about the Greek crisis you need to know | Vox](http://www.vox.com/2015/6/30/8868363/greece-crisis-default-austerity) > > He has lots to say. Here’s my takeaway. Rich states like Massachusetts, New York and California routinely transfer lots of funds to poorer states like Kentucky and South Carolina. Poor states in the US don’t get lectured on structural reform: they simply are taxed less per capita and receive more federal government payments per capita. > > Germany isn’t so keen on having a similar arrangement with Portugal and Greece. That they transfer funds to East Germany is enough for them. That’s ok. But it suggests that Germany and Portugal shouldn’t share a common currency, like Connecticut and Florida do. There’s a way of handling local declines in economic activity: you devalue your currency. Greece can’t do that… yet. > > The second thing is that the Greek economy is small. So don’t worry about this unless you vacation in Greece. If you do, click the link above. Or you can worry about contagion. See Fuzzy\_wuzzy’s point. Vacationers in Italy shouldn’t care, as Italy won’t leave the Euro this year. Thank you for the link. I feel smarter already. 🙂 ---
**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, 6:47pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/63 "2015-07-01T18:47:44Z")
> [@up\_the\_junction](#): > > Thanks for that “Greek crisis … in 2 minutes”. > > It’s not like we haven’t been engaged with it since at least the Spring of 2012. Didn’t click the link, I take it. 😛 But, as always, you are welcome…glad I could help. 😉 ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 1, 2015, 7:12pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/64 "2015-07-01T19:12:14Z")
> [@septimus](#): > > After the horrors of W.W. I and W.W. II, themselves sequels to earlier wars, the main goal, I think, was to bond France and Germany together so firmly that there wouldn’t ever be another war. Economic effectrs were, rightly or wrongly, viewed as secondary. > > But that explains only Franco-German currency union. To let countries like Greece in on the Euro could be seen as an act of generosity; similar to West Germany letting East Germany in on the Deutschemark, or the advanced U.S. letting Mississippi and Kentucky in on the Dollar. > > Greece did defraud Euro countries and bankers, but the task is to find a way forward from here. Perhaps nurturing Greece rather than punishing it, would be the best way to eventually get some of that debt paid. In any event, for the Euro countries to betray Greece at this juncture reminds of how vested interests betrayed the 1994 Mandela government in So. Africa, or how the U.S. betrayed Detroit. I’m not sure what you mean by “defraud”. In American terms, or Anglo-American terms, it means _at the time you signed the contract_ you intended not to perform. If at the time you took out a loan, you _intended_ to pay it back, you haven’t defrauded anybody, in legal terms. For example, Trump has declared bankruptcy I don’t know how may times - which means he didn’t pay back his creditors. But he didn’t defraud anybody, unless he intended _not to pay them back_ when he took out the loan. Failing to pay back creditors, in and of itself, is not a crime. It’s a civil matter. I didn’t know the bit about Franco-German relations, so thanks for that info. ---
**Author:** ![Fuzzy\_wuzzy](https://avatars.discourse-cdn.com/v4/letter/f/a8b319/32.png) [@Fuzzy\_wuzzy](https://boards.straightdope.com/u/Fuzzy_wuzzy)\ **Post date:** [July 1, 2015, 7:26pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/65 "2015-07-01T19:26:22Z")
> [@LinusK](#): > > I’m not sure what you mean by “defraud”. In American terms, or Anglo-American terms, it means _at the time you signed the contract_ you intended not to perform. If at the time you took out a loan, you _intended_ to pay it back, you haven’t defrauded anybody, in legal terms. > > For example, Trump has declared bankruptcy I don’t know how may times - which means he didn’t pay back his creditors. But he didn’t defraud anybody, unless he intended _not to pay them back_ when he took out the loan. > > Failing to pay back creditors, in and of itself, is not a crime. It’s a civil matter. > > I didn’t know the bit about Franco-German relations, so thanks for that info. It is a crime if the Greek government cooked its books. From what I understand the Greek Govt did hide the full extent of it’s financial woes when it borrowed much of this money. Depending upon the extent of this sleight of hand a crime may have been committed. ---
**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, 7:26pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/66 "2015-07-01T19:26:52Z")
[QUOTE=LinusK] I’m not sure what you mean by “defraud”. In American terms, or Anglo-American terms, it means at the time you signed the contract you intended not to perform. If at the time you took out a loan, you intended to pay it back, you haven’t defrauded anybody, in legal terms. [/QUOTE] Well, that’s the rub though, isn’t it? I mean, why didn’t the Greek governments (it wasn’t just one) know they couldn’t pay back the debt? I mean, they knew they were borrowing a LOT of money…much more than their economy could possibly ever pay back (and they kind of knew this was a bad thing, which is why they took pains to hide it and to cook their books so folks wouldn’t see what was going on). And they knew they were spending it on basically popular programs to make folks happy and content, not things designed to hyperdrive their economy. You aren’t going to get your economy into high gear by offering more and more generous pensions at lower and lower ages after all…at least not in the real world. So, I think ‘defraud’ is EXACTLY the right term to use in this case. The Greek governments in the past knew that eventually the jig would be up and someone would have to face the music…they just figured it would be someone else and not them and that if they just kept kicking the can down the road it would be someone other than them that had to deal with the mess. > [@](#): > > For example, Trump has declared bankruptcy I don’t know how may times - which means he didn’t pay back his creditors. But he didn’t defraud anybody, unless he intended not to pay them back when he took out the loan. I don’t think this is a perfect analogy, since I think Trump THOUGHT he’d be able to pay back his debts easily. He kept getting new loans because the folks who were loaning him the money thought they’d get it back as well. In the case of the Greeks, they got more loans because there was an expectation that the EU (and, not to put to fine a point on it, Germany) would stand behind the Greeks and assure their loans…which they did until this mess all exploded. > [@](#): > > Failing to pay back creditors, in and of itself, is not a crime. It’s a civil matter. I believe it IS a crime to defraud people, but yeah…no one is going to lock up the Greek nation (or even former or current government officials) for doing what they did. It’s certainly a ‘civil matter’. I’m sure that makes it all better. Good luck having them get a loan in the future (unlike Trump :p). But then, according to you, they don’t need any stinking loans from those greedy investors or Germans or whatever…salvation is at hand! All they have to do is dump their debt, create their own currency and next thing you know they will be in baklava and ouzo! The promised land is at hand for the Greek people, no doubt about it. ---
**Author:** ![LinusK](https://avatars.discourse-cdn.com/v4/letter/l/258eb7/32.png) [@LinusK](https://boards.straightdope.com/u/LinusK)\ **Post date:** [July 1, 2015, 9:56pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/67 "2015-07-01T21:56:03Z")
> [@Shodan](#): > > 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. > 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 I’d also recommend reading some history. The US, for example, increased the monetary base (also sometimes called “high-powered” money") over the last several years by about [$3 trillion dollars](https://research.stlouisfed.org/fred2/graph/?id=BOGMBASEW,). It went from a little over $800 billion to about $4 trillion, an increase of 500%. The result was a decrease in unemployment, from 10% to about 5.5%, combined with historically low inflation. Most recently, the [annual inflation rate](http://www.usinflationcalculator.com/inflation/current-inflation-rates/) was 0%. Of course, Greece is a different country. The overall unemployment rate there is 25%. Not 10%, or 5.5%. Unemployment there is a much bigger problem. Employing people creates goods and services. Since inflation is a function of supply and demand, increasing both the amount of stuff for sale, and the purchasing power of people, does not necessarily lead to inflation. However, even if it did, that’s not necessarily a bad thing. If people are in debt, for example, reducing the burden of that debt is good for them, and it’s good for the economy as a whole: if people have less debt, it means they can spend less money servicing that debt, which means they can spend more money buying goods and services. Since purchasing goods and services creates a demand for goods and services, it means employing more people. Since a nation’s wealth is a function of the productivity of its people, and the number of people working, employing more people leads to more (overall) wealth. Now some people will not necessarily be better off. If someone’s income is derived from interest paid by others, and the real value of those interest payments decrease, they’ll be worse off. But Greece should pursue policies that help Greece as a whole, not policies that help the small minority who make a living off the debt of others. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [July 1, 2015, 10:03pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/68 "2015-07-01T22:03:52Z")
It is way past time for Greece to send grown-ups to deal with their fiscal crises. The current “Give us more money or we’ll hold our breaths and die - THEN you’ll be sorry!” children are incapable of honest and honorable conduct. If they want to run a country where rhe rich pay no taxes, the middle class pays no taxes, and the poor pay no taxes, while generation after generation cycle through “work for 10 years, then retire at full benefits” (or whatever the hell game they play), fine - but don’t expect the rest of Europe to pay the bills. And yes, the PM (infant-in-charge) did run off to Moscow to be photographed with Putin when the nasty Troika refused to pay his bills. I noticed that there was no news release about Russia being ready to pay Greece’s bills. Maybe he could hit up the North Koreans? ---
**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, 10:18pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/69 "2015-07-01T22:18:06Z")
> [@usedtobe](#): > > I noticed that there was no news release about Russia being ready to pay Greece’s bills. LOL, if there is ONE thing that will finally get people in Russia up in arms against Putin, it would be him giving Russian money to Greece to support their average $1,000/month pensions while in Russia they average $150/month. ---
**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, 11:00pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/70 "2015-07-01T23:00:33Z")
> [@usedtobe](#): > > If they want to run a country where rhe rich pay no taxes, the middle class pays no taxes, and the poor pay no taxes, while generation after generation cycle through “work for 10 years, then retire at full benefits” (or whatever the hell game they play), fine - but don’t expect the rest of Europe to pay the bills Except that description has precisely no bearing on the actual situation. Seriously, which tabloid did you pick that up from? ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [July 1, 2015, 11:40pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/71 "2015-07-01T23:40:14Z")
> [@Gary\_Kumquat](#): > > Except that description has precisely no bearing on the actual situation. > > Seriously, which tabloid did you pick that up from? I thought the whole deal was that Greeks try to avoid paying taxes, and they are hence welching on their very large debt. 😕 ---
**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 2, 2015, 12:22am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/72 "2015-07-02T00:22:04Z")
The starting point is lenders kept lending when the risk became too great. Why would lenders behave irrationally? ---
**Author:** ![carnivorousplant](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/carnivorousplant/32/3563_2.png) [@carnivorousplant](https://boards.straightdope.com/u/carnivorousplant)\ **Post date:** [July 2, 2015, 1:14am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/73 "2015-07-02T01:14:56Z")
> [@up\_the\_junction](#): > > The starting point is lenders kept lending when the risk became too great. Why would lenders behave irrationally? They want to make money, and think that Greece staying afloat is worth someone bailing them out. ---
**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 2, 2015, 1:57am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/74 "2015-07-02T01:57:28Z")
> [@up\_the\_junction](#): > > The starting point is lenders kept lending when the risk became too great. Why would lenders behave irrationally? Should have watched that video I linked too. Short answer is that Greece was in the EZ, giving them the backing of all of Europe (and Germany in particular). They gained a better credit score, so to speak, simply by being in the club. It didn’t hurt that they cooked the books as well to make them look better (both before they joined the EZ/EU and after). The lenders weren’t behaving irrationally at all. You simply have to be able to see how the situation was before 2008 when it all came apart. Seriously, watch the [video](https://www.youtube.com/watch?v=C8xAXJx9WJ8)…it’s basically the European Debt Crisis Visualized and worth the 12 minutes IMHO. I’m sure it’s not definitive and I’m sure some of the more economics oriented 'dopers could find lots wrong with it, but it’s still a good basic video on how the mess happened and how Europe got where they are. ---
**Author:** ![usedtobe](https://avatars.discourse-cdn.com/v4/letter/u/ec9cab/32.png) [@usedtobe](https://boards.straightdope.com/u/usedtobe)\ **Post date:** [July 2, 2015, 2:35am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/75 "2015-07-02T02:35:51Z")
Here is the CIA (yes, that one) Factbook on Greece: [click “Economy”](https://www.cia.gov/library/publications/the-world-factbook/geos/gr.html) for a brief summary of who, what, when, and how much. No “Why” beyond the obvious of cooking books to get more money. ---
**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 2, 2015, 4:50am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/76 "2015-07-02T04:50:41Z")
> [@carnivorousplant](#): > > I thought the whole deal was that Greeks try to avoid paying taxes, and they are hence welching on their very large debt. 😕 There’s some kind of big tax exemption on shipping income, and I think VATs are low or non-existent on some of the remote islands, and the rich engage in tax avoidance as in much of Europe. But I think the inability to collect tax has been exaggerated. ---
**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 2, 2015, 5:52am UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/77 "2015-07-02T05:52:27Z")
Greece has even been running surpluses for several years now. The problem is that they have so much debt, and such obnoxious creditors (that want to dictate austerity policies rather than progressive taxation), not that they can’t raise tax. ---
**Author:** ![Shodan](https://avatars.discourse-cdn.com/v4/letter/s/9f8e36/32.png) [@Shodan](https://boards.straightdope.com/u/Shodan)\ **Post date:** [July 2, 2015, 1:05pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/78 "2015-07-02T13:05:43Z")
> [@LinusK](#): > > I’d also recommend reading some history. The US, for example, increased the monetary base (also sometimes called “high-powered” money") over the last several years by about [$3 trillion dollars](https://research.stlouisfed.org/fred2/graph/?id=BOGMBASEW,). It went from a little over $800 billion to about $4 trillion, an increase of 500%. > > The result was a decrease in unemployment, from 10% to about 5.5%, combined with historically low inflation. Most recently, the [annual inflation rate](http://www.usinflationcalculator.com/inflation/current-inflation-rates/) was 0%. I have no confidence in my ability to explain economics to you. Thus I will only point out that the suggestion was to inflate the currency to eliminate debt, and that the US national debt more than doubled during the period you mention. So increasing the money supply did not do for the US what you think it would do for Greece. > [@](#): > > Of course, Greece is a different country. It is indeed, and that’s why your previous example is other than illustrative. > [@](#): > > Since inflation is a function of supply and demand, increasing both the amount of stuff for sale, and the purchasing power of people, does not necessarily lead to inflation. However, even if it did, that’s not necessarily a bad thing. Inflation reduces purchasing power. Do you at least understand that? And inflating the currency does not increase the amount of stuff for sale. At least tell us that you understand _that._ > [@](#): > > If people are in debt, for example, reducing the burden of that debt is good for them, and it’s good for the economy as a whole: if people have less debt, it means they can spend less money servicing that debt, which means they can spend more money buying goods and services. Apparently not. Inflating the currency does not free up purchasing power; it reduces it. I will take a shot at explaining this to you, and if/when it doesn’t help, leave it to someone else if they feel moved to help. I owe you a debt. I am obligated to pay you $100 a month to service that debt. My monthly income is $200. So I spend $100 a month on debt payments, and $100 a month on food and rent. But I can’t afford to spend half my income on debt. So I rub my Magic Economics Genie Lamp, and he grants me a wish. Now we inflate the currency, so that $1 buys as much as $100 used to do. I now pay you $100 a month to service the debt. (It’s only worth a dollar, but that doesn’t matter to me.) Great - now I have the same $100 a month left over to buy food and rent. Unfortunately, my leftover $100 is only worth a dollar, so I can only buy a dollar’s worth of food and rent, and that does matter to me. So I have to rub the Magic Genie Lamp again, and get another wish. So everyone’s salary is increased by a hundred times (in nominal dollars). Great - now the debt is still only a dollar a month in constant dollars, so I can cover that with a nominal payment of $100 (worth one constant dollar) and still have all that money left over. Unfortunately, everyone else who uses the currency is in the same boat. They can’t afford to sell for less than the value of their goods and service in constant dollars. So they jack prices up 100 times to get to the same value as they did before the inflation. And everyone is pretty much back in the same position as before, except for the person to whom I owed the debt. He is bankrupt, since all his debts were repaid in nominal terms that lost almost all their real value. That’s what happened in Weimar Germany, which is why I posted the link. Purchasing power is a function of constant currency, not inflated currency. Making a currency worthless to avoid paying a debt makes the currency worthless for purposes other than paying debts as well. As mentioned, your grasp of economics seems to be one with Ninevah and Tyre, so if this doesn’t sink in, I won’t worry about it too much. But in the interest of fighting ignorance, at least I threw a few punches before seeing that I was beating my fists against a brick wall. Regards, Shodan ---
**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 2, 2015, 4:07pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/79 "2015-07-02T16:07:29Z")
> [@foolsguinea](#): > > Greece has even been running surpluses for several years now. The problem is that they have so much debt, and such obnoxious creditors (that want to dictate austerity policies rather than progressive taxation), not that they can’t raise tax. Do you have a cite for this? My understanding is that they are running a ‘surplus’ if you don’t count payments on debt interest, local government and social security fund budgets. ---
**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 2, 2015, 4:14pm UTC](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811/80 "2015-07-02T16:14:37Z")
So, [this](http://money.cnn.com/2015/06/30/news/economy/greece-imf-default/) seems to be the latest: > [@](#): > > In a dramatic but widely expected step, Greece formally defaulted on a $1.7 billion payment to the International Monetary Fund early Wednesday in Athens. > > Greece became the first developed country to default to the IMF, an organization of 188 nations that tries to keep the world economy stable. > > Greece will now be cut off from access to IMF resources until the payment is made. > > The move came hours after the country made a desperate attempt Tuesday to halt its plunge into economic chaos by requesting a new European bailout. > > Greece asked for a two-year bailout from Europe, its third in six years. The bankrupt country is reported to be asking for 29 billion euros ($32 billion). > > Finance ministers discussed the request by phone and agreed to hold another call Wednesday, when Greece is expected to provide more details. > > Jeroen Dijsselbloem, who chaired the meeting, said any new rescue may require tougher conditions than those Greece has already rejected because of the rapid deterioration in the country’s finances. > > “So this is not an easy road to go down,” he told CNN’s Richard Quest. > [@](#): > > Greece is fast running out of money. It rejected the conditions Europe and the IMF set for releasing the remaining billions from its existing bailout at the weekend. That bailout expired Tuesday. > > “The last chance to get a solid extension of the old program has gone by,” Dijsselbloem said. “We are now in a difficult situation.” > > Greece is now on its own financially, and can’t pay all its bills. And, the government still seems to be pushing for a ‘no’ vote, which will mean no bail out from the ECB either (which is on hold until the July 5th referendum vote). Greece seems to be teetering on the edge of the abyss to me and may have already started it’s death spiral. I guess at this point their only hope is if enough of them come to their senses and vote ‘yes’ (which will also have the beneficial effect of causing the current government to resign), at least that’s how it seems to me. Even if people think it would be a good idea for Greece to leave the Euro and go back to their own currency it doesn’t look like they have enough capital to bridge the gap…the Greek people are in a serious capital crunch already, with very stringent limits being places on their ability to withdraw their own money from their own accounts. And it looks to only get worse, to me at least. ETA: [BBC’s](http://www.bbc.com/news/world-europe-33363295) take on a ‘no’ vote: > [@](#): > > A “No” vote in the Greek referendum on bailout terms would not provide Greece with an easy way out of its economic crisis, the head of the grouping of eurozone finance ministers has said. > > Jeroen Dijsselbloem’s comments came after Greek Prime Minister Alexis Tsipras told Greeks a “No” vote would lead to a “better agreement”. > > But Mr Dijsselbloem insisted that suggestion was “simply wrong”. > > Long queues of pensioners have formed outside Greek banks for a second day. > Mr Dijsselbloem, who is also the Dutch finance minister, told a parliamentary committee in the Netherlands that a rejection of the current bailout terms by Greek voters in Sunday’s hastily arranged referendum would make it hard for the two sides to bridge “fundamental differences”. > > It would place both Greece and Europe in a “very difficult position”, he said. > > “The Greek government is rejecting everything with the suggestion that if you vote ‘No’ you will get a better or less tough, or more friendly package. That suggestion is simply wrong,” he added. > [@](#): > > Greece’s banks have now been closed to all but pensioners for four days, and Athenians have settled into a crisis routine. > > At the stroke of midnight, queues form at cash machines as locals scramble to obtain their daily €60 ration. > > Neighbours confer over which ATMs are still dispensing €20 bills - those with other denominations can only pay out €50 per day. > > But despite the posters that adorn every tree and lamppost calling for “everyone to take to the streets”, the large protests of the past few days have largely died down. > > In the radical left Exarcheia neighbourhood, exhausted young anarchists lounge outside bars and cafes, and let the banners hanging across the central square speak for them. > > “No to EU and IMF terrorism,” reads one. > > “€ + Germany = oppression,” reads another. [Previous page](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811.md?page=3) [Next page](https://boards.straightdope.com/t/greek-default-seems-to-be-inevitable-whats-the-fallout/723811.md?page=5)