From today’s Guardian:
“IMF says Greece needs extra €50bn in funds and debt relief”
Is Greece about to win their game of chicken?
Funny how cancelling half their debt and giving them more money didn’t create a breathing space for Greece previously, or spur them to economic reform.
A 20 year grace period is not much different than a default.
Regards,
Shodan
Looks to me as if they are offering a carrot prior to the vote to encourage the Greek people to vote ‘yes’ and stay in the EZ and on the Euro.
This is a really long video produced by the BBC, but I’m finding it pretty interesting. The guy doing the video really thinks the Greeks would be better off going with the Drachma, but it’s interesting that most of the Greeks he’s interviewing don’t agree with him…and interesting WHY they don’t agree and think that Greece should stay on the Euro.
I’m not necessarily advocating it, but I suspect that something like this is going to be what happens. Europe won’t want Greece to exit the Euro but they also don’t want the precedent of allowing a member to default, so they’ll end up doing something like default that they can call “not a default”.
Well, too late for the default part…it was official yesterday that Greece had indeed defaulted. The only way they could have prevented that was by agreeing to the provisions to get an emergency loan from the special ECB fund for that, and they screwed that up with their own governments refusal to accept the provisions and their rhetoric and, of course, the referendum vote that the government is still calling for a ‘no’ vote on. This seems to be a carrot to get the Greeks to consider that if they stay in the Euro that some provisions will be made to help them out through the short and medium term…it’s all still contingent on a ‘yes’ vote on the 5th though to even start talking again.
You may well be correct, although as XT points out, technically it is too late and they have already defaulted.
I wonder what terms the Greeks will get on the further money they want. Are they going to pretend they will pay that back, or say the EU will have to wait twenty years on that too? Will they even bother to pretend they are going to reform?
At some point, it will be clear that this is the cost of keeping Portugal and Spain and Ireland in the EU, because none of those are going to accept any deal that isn’t at least as good as what Greece got. And sooner or later, Great Britain at least will say “fuck this noise” if the price of being in the EU is endless subsidies to the PIIGS in return for - what, exactly?
It reminds me in some ways of the lead-up to WWI. Countries sticking together and doing really stupid and counterproductive things leading to disaster, because they signed treaties that were meant to avoid disaster by sticking together.
I saw a cartoon from pre-WWI. All the nations of Europe are in a lifeboat, and there is a leak in it. And the nations in the front of the boat are saying, “That’s a bad leak! Good thing it isn’t in our end of the boat.”
I don’t think WWIII will break out, but a Great Depression, at least in Greece and Portugal and Spain is possible.
Regards,
Shodan
A Great Depression for Greece is well under way and has been going on for a few years.
I am sure if we all work together, we can make that worse, and include other countries in it.
Regards,
Shodan
Can creditors seize greek assets in their countries? Say a Greek ship in a German port-could a sheriff board the ship and attach it? Why don’t the Greeks sell off some of their assets (resort islands, ancient temples, statues, etc.)? Otherwise, what prevents greece from getting deeper into debt?
You’re conflating the EU (which Britain is part of) with the Eurozone (which it isn’t).
Greece’s debtors are:
60% Eurozone
10% IMF
6% ECB
3% Greek Banks
1% Foreign Banks
15% Other bonds
3% Other loans
Britain’s main exposure is because the Eurozone block is one of it’s biggest trading partners, so if the Euro plummets following a greek exit exports from Britain will be adversely effected.
I doubt that the ship belongs to the Greek government.
Even better - why don’t they sell their babies into slavery?
[QUOTE=Terr]
Even better - why don’t they sell their babies into slavery?
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[QUOTE=ralph124c]
Why don’t the Greeks sell off some of their assets (resort islands, ancient temples, statues, etc.)?
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They actually have been doing this already.
Finally! After bleeding the country dry for years, fragments of truth from the IMF.
Fuck em anyway.
A major industry is tourism, so I’m not sure selling off temples, statues and resorts is the most intelligent long term way to pay off debts. Plenty of less touristy assets to sell off I’m sure. Someone mentioned in another thread that they unbelievably lack a land registry, which a linked article noted was a stumbling block for selling off many government assets.
Call it anything but, owners of capital don’t want to concede a sovereign default in Europe.
They are selling off things like airports and shipyards, but the basic premise is the same.
What do you think a surplus is? Yes, they are still in debt. But they are not running an account deficit.
So now that they are in default and not paying back creditors, Greece will have no trouble maintaining infrastructure and paying pensioners?
Well, but they are, if we are counting 2015. Certainly it looks like they did better in 2014 (it was up and down, but I think it averaged in the positive). I have no idea what it means, to be honest, one way or the other…I had to Google the term and it seems the US has the highest ‘account deficit’ in the world and has for years, so I’m unsure what this really means in real world terms.
I suspect the vote will go your way this Sunday. And Greece will continue to suffer from contractionary fiscal policy combined with contractionary monetary policy. I don’t see the austarians even pretending that this will end well.
I say vote No. Capital controls are in place to stem massive capital flight. Float the currency and that problem goes away (to be replaced by other problems). I admit I’m not overly familiar with the Greek situation: I’m basically extrapolating from Argentina’s experience. I’m guessing that the capital crunch can be addressed with a loosening of monetary policy. Double digit inflation may very well play a role as well. It won’t be fun. But it will be better than continued depression level unemployment.
Kevin Drum notes that Germany has won the propaganda war. Though frankly some of their piss-poor lending decisions in the 2000s are arguably worse than the bread , circuses and cartoonish bookkeeping sponsored by the Greek government during the time. But Germany’s errors are complex while Greece’s are the stuff of morality plays.
It’s all strategic.
Yee-haw! 
But neither economics nor reality is a morality play. This currency union was nuts from the get-go. It is still nuts. The problems will go away and come back until they are fixed. Germany can either fiscally integrate with Greece (ha!) or Greece can take back control of their monetary policy. Though admittedly, I have no idea what happens to all those Euro deposits in Greek banks when the Greek government announces that Wonkabars are now legal tender.