They are also, from what I’ve been reading, very reliant on imported goods and services, so that’s going to make this much harder on them. One thing I’ve seen some write about is a possible economic trade alliance between Greece and Russia, with Russia buying many of their agricultural goods and possible some other goods and services the Greeks can provide and Russia possibly giving them some hard currency that will allow them to leverage at least some other trade while they try and get their house in order. I don’t know how realistic that is, but seemed at least vaguely plausible to me, except that Russia isn’t in a particularly strong economic position right now either.
As for the domino effect (i.e. Greece falls, and that causes Italy who is on the edge to fall, which causes Portugal to fall, causing Spain and Ireland to fall, causing everyone else to fall including the US and we all give up and re-learn the joys of hunter gathering societies), I’ve seen it go both ways in the various discussions, with some saying that the ECB has put firewalls in place while others say this could be MUCH worse than the 2008 financial crisis kicked off by the US, which I guess the point the Greek government is playing chicken over.
You’re conflating things that I’m not. Before the vote, the Telegraph and others talked of ‘Argageddon’ if thee was a no vote etc in headlines. That was nonsense, scaremongering propaganda.
Has it slowed down a little now? I have as much idea as all but a handful of bankers. But I’m wary of the same nonsense because it serves the doomsday narrative, and I’m not going to be convinced by “quoted people” quoting unnamed sources.
Yes. That’s why Greece needs either a real bailout program - one, for example funded by the ECB - or it needs to take back control of its own currency.
The Telegraph isn’t my favorite, but the ‘Argageddon’ headline was fairly summarizing what some influential people, quoted in the article, were saying:
Yes or no could not change the economic fundamentals pointing towards more Greek sovereign default and, apparently, exit from the Euro. The most probable economic effect of the no vote is that what was going to happen anyway will happen a bit faster.
A bigger effect of the vote may have been internal to Greek politics:
There could also be a short-term effect on world stock and currency markets.
Sorry for the misunderstanding. Thanks for the links.
Greece seems to import more than it exports. It’s possible (I don’t know) that tourism makes up anywhere from a small to a substantial part of the difference.
If it’s relying on imports for energy, that’s really bad news if they leave the EU.
If they stay, they need a sustainable way to pay back their debts. They need to be able to cut unemployment. You can’t cut off a man’s legs and tell him to run.
They’ve always printed their own euros; every country has a national central bank that prints their own.
But how would anyone know which euros were the “counterfeits”, without going to the trouble of checking each serial number? And how would it affect the value of existing Greek issued euros?
Greek-issued Euros have a Y in the serial number. If they start printing Euros without authorization, all Y-numbered Euro banknotes will become invalid, I presume. In addition to poisoning the financial atmosphere and attitudes toward Greece beyond repair for decades, at least.
Here’s what the US does when North Korea prints dollars:
How about kicking them out of the Schengen area? How about trying to keep people from going to Greece as tourists?
There are lots of ways the EU could punish Greece without violence. So I don’t think the Greek government would dare something that looked like counterfeiting.
Card 4: [INDENT]…looking backward, the key source of acute deficit problems in 2010 was the very weak economies in Portugal, Ireland, Italy, and Spain — not irresponsible budget practices. And the key source of those problems was the flawed design of the Eurozone itself. [/INDENT] (Note they left out Greece from that list.) Even better is card 5 which notes that Spain and Ireland benefited from bubblicious capital inflows during the 2000s - but unlike the Asian Crisis during the 1990s didn’t have devaluation soften the blow when international capital dried up.
But if they decide to go back to Drachmas, what happens to the existing Greek issued Euros? They must be all over Europe. Will it affect the exchange rate? How could they become invalid if they were printed with ECB authorization?
The existing Y-Euros are just as valid as any others. I am saying that IF (note the IF - an extremely unlikely IF that someone brought up) Greeks decide to print Euros without EU’s authorization, then all Y-Euros will probably be considered invalid, at least ones after a certain date. Of course, Greeks can also conceivably (stuff of wild imagination here) start printing Euros with different serial numbers and different dates. But that’s about as likely as France dropping a nuke on Greece.
Well, it’s moot. They’ll have to survive on their own money from now on. No one but a financial idiot is going to lend them any more. They obviously are not inclined to live to a level of austerity that represents actual productivity. It’s been too easy to borrow.
But now they can skate from their crippling $400B debt. It will be kind of interesting to see if they thrive, or just dig another hole.
Really. They will be floating government bonds within a year, and there will be takers at a premium interest rate. Furthermore, I’ll predict that the rate on short term Greek debt will dip below 10% some time during the next 5 years. Hope springs eternal among international financiers.