Greek Government Collapses - Snap General Election Called

Markcheese · 01-02-2015 12:02pm

A lot of journalists pointing out how much Greek debt as a proportion of GDP has increased since the troika came along - a lot of the debt has been written off but Greece's GDP has collapsed , also the interest paid to troika to roll over debt is way lower than if it was refinanced on the market - yes the troika (who've taken on much of the Greek debt) want their money back but I don't think they're out to get Greece .
Most states never really repay their bonds they just service the debt cost and rely on inflation to reduce their debt which since the Greeks are back in primary surplace and hopefully able to start growing their economy was probably the plan - a lack of stability won't help - and a jam for all government has probably set their economies prospects way back - (not to say syriza's taxing wealth policy in Greece wouldn't be a good idea )
I just haven't seen what syriza's plan for Greece to rescue Greece is - lots of give us debt forgiveness and then lend us more to pay ourselves though -

dlouth15 · 01-02-2015 12:07pm

frankbrett wrote: »

It's a good article. I'd slightly quibble with the Greek exit = collapse of Euro currency being a fait accompli based on the assumption that it opens the door for Spain, Italy to leave. Firstly Greece is a somewhat unique basket case and secondly a Greece exit that led to spectacular upheaval and unrest in the short-term would strengthen the resolve of other indebted countries to find solution within the Eurozone.

However read the quote from Mario Draghi in that same article.

…if there are parts of the euro area that are worse off inside the Union, doubts may grow about whether they might ultimately have to leave. And if one country can potentially leave the monetary union, then this creates a replicable precedent for all countries. This in turn would undermine the fungibility of money, as bank deposits and other financial contracts in any country would bear a redenomination risk…..
…So it should be clear that the success of monetary union anywheredepends on its success everywhere. The euro is – and has to be – irrevocable in all its member states, not just because the Treaties say so, but because without this there cannot be a truly single money.

If Draghi is to be believed then a Greek exit is something they fear.

Sand · 01-02-2015 2:15pm

dlouth15 wrote: »

However read the quote from Mario Draghi in that same article.
…if there are parts of the euro area that are worse off inside the Union, doubts may grow about whether they might ultimately have to leave. And if one country can potentially leave the monetary union, then this creates a replicable precedent for all countries. This in turn would undermine the fungibility of money, as bank deposits and other financial contracts in any country would bear a redenomination risk…..
…So it should be clear that the success of monetary union anywheredepends on its success everywhere. The euro is – and has to be – irrevocable in all its member states, not just because the Treaties say so, but because without this there cannot be a truly single money.
If Draghi is to be believed then a Greek exit is something they fear.

They ought to be worried. A Grexit would mean any smart investor will have to go back to pricing in national exit risks. Maybe they will be low, but they will be real - after all, it will no longer be unthinkable for someone to leave the Euro. It will lead to a resumption of capital flight from Euro-Lite members of the Eurozone to Deutsche-Euros that was last seen in the crisis of 2011-2012.

People who are relaxed about a Grexit haven't thought through the implications fully.

Reading that article, its remarkable how the Syriza position is actually sound and sensible. Greece is insolvent, Europe for its own political reasons ignored reality and treated it as being illiquid, this has made the problem much worse, the actual problem needs to be faced and dealt with. Not the raving lunatics the EU propaganda would have you believe.

smcgiff · 01-02-2015 2:20pm

Sand wrote: »

They ought to be worried. A Grexit would mean any smart investor will have to go back to pricing in national exit risks. Maybe they will be low, but they will be real - after all, it will no longer be unthinkable for someone to leave the Euro. It will lead to a resumption of capital flight from Euro-Lite members of the Eurozone to Deutsche-Euros that was last seen in the crisis of 2011-2012.

People who are relaxed about a Grexit haven't thought through the implications fully.

But it has never been unthinkable for a country to leave the Euro. We ARE currently thinking/expecting a country to leave the euro, therefore it already exists.

Sand · 01-02-2015 2:24pm

dlouth15 wrote: »

The ECB can no more follow through on this threat than it could when it threatened to do the same to the Irish banks in 2010. But Varoufakis is not Enda Kenny. The ECB may well find its bluff called this time.

Bit unfair on Enda Kenny here as he wasn't in power when Ireland Ireland was threatened.

It does underline the actual perception of Ireland abroad though - compliant, meek, not worth actually recalling who was who when.

Sand · 01-02-2015 2:29pm

smcgiff wrote: »

But it has never been unthinkable for a country to leave the Euro. We ARE currently thinking/expecting a country to leave the euro, therefore it already exists.

Yes, and so much thought has been put into it that there is no defined mechanism for exiting the Euro, and certainly no mechanism that allows the member state to remain in the EU with the other non-Euro members.

I think its fair to say "unthinkable" was the best description of the idea when the treaties give absolutely no credibility to the idea that anyone would ever leave.

ezra_pound · 01-02-2015 2:32pm

Sand wrote: »

Yes, and so much thought has been put into it that there is no defined mechanism for exiting the Euro, and certainly no mechanism that allows the member state to remain in the Euro with the other non-Euro members.

I think its fair to say "unthinkable" was the best description of the idea when the treaties give absolutely no credibility to the idea that anyone would ever leave.

Regardless of the actual way a grexit will play out, and the extent of its repercussions, the fallout would be much less extreme than if it happened a few years ago.

View · 01-02-2015 2:49pm

dlouth15 wrote: »

However read the quote from Mario Draghi in that same article.
…if there are parts of the euro area that are worse off inside the Union, doubts may grow about whether they might ultimately have to leave. And if one country can potentially leave the monetary union, then this creates a replicable precedent for all countries. This in turn would undermine the fungibility of money, as bank deposits and other financial contracts in any country would bear a redenomination risk…..
…So it should be clear that the success of monetary union anywheredepends on its success everywhere. The euro is – and has to be – irrevocable in all its member states, not just because the Treaties say so, but because without this there cannot be a truly single money.
If Draghi is to be believed then a Greek exit is something they fear.

Fundamentally, either all member states honour the commitments they have freely entered into or any member state doing so is extraordinarily foolish.

The other member states would be worse off in the Union if Greece or any other member state deliberately flouts the commitments it has entered into and is able to get away with it because once that happens once, every other member state has a major incentive to seek to avail of comparable measures.

Thus, the other member states are unlikely to aceed to a blunt ultimatum from Greece.

smcgiff · 01-02-2015 2:55pm

ezra_pound wrote: »

Regardless of the actual way a grexit will play out, and the extent of its repercussions, the fallout would be much less extreme than if it happened a few years ago.

And who said kicking the can down the road was not a viable strategy

It's a bit like any black mailer you bring it to a head as soon as possible.

The Grexit will involve some pain, but continuing to give Greece money while they reverse sensible measures and cancel recently provided debt is insane. It would also spell the end for the governments of Spain, Italy Portugal and Ireland and eventually other countries trying to manage their economies sensibly.

dlouth15 · 01-02-2015 3:34pm

The clever thing is that Greece haven't blackmailed anyone. They have not officially threatened to leave the Euro or renague on their debts. The only actual threat I can point to is the one made by the ECB.

gerry_seinfeld · 01-02-2015 3:55pm

ezra_pound wrote: »

Regardless of the actual way a grexit will play out, and the extent of its repercussions, the fallout would be much less extreme than if it happened a few years ago.

three years ago , the euro was worth over 1.35 dollars , today its worth around 1.11

i realise monetary policy has been loosened since then but a greek exit would probably drive the euro under parity with the dollar within weeks

a greek exist would still be a major event and a sign to the markets that the eurozone was a leaky ship

gerry_seinfeld · 01-02-2015 3:57pm

dlouth15 wrote: »

The clever thing is that Greece haven't blackmailed anyone. They have not officially threatened to leave the Euro or renague on their debts. The only actual threat I can point to is the one made by the ECB.

waddles like a duck , quacks like a duck etc etc etc

they are playing a clever game but the best they can do is make everyone else a little poorer by sabotaging the entire eurozone project ( maybe is was always doomed anyway ) , they cannot come out of this is a prosperous state no matter what happens

dlouth15 · 01-02-2015 3:59pm

gerry_seinfeld wrote: »

waddles like a duck , quacks like a duck etc etc etc

they are playing a clever game but the best they can do is make everyone else a little poorer by sabotaging the entire eurozone project ( maybe is was always doomed anyway ) , they cannot come out of this is a prosperous state no matter what happens

In what way are they sabotaging the eurozone project?

gerry_seinfeld · 01-02-2015 4:09pm

dlouth15 wrote: »

In what way are they sabotaging the eurozone project?

they are ( in a subtle manner ) threatening to go nuclear

its probably their only realistic option at this stage but in the end , their situation is not going to improve , it may however even up with the rest of the eurozone by way of the theory that a chain is only as strong as its weakest link

greece is a delinquent child , it is not a victim of anyone else , why is greece more entitled to favourable treatment than countless other basket case countries the world over , the IMF deal with countries whos economies are in far worse shape than greece

dlouth15 · 01-02-2015 4:55pm

gerry_seinfeld wrote: »

they are ( in a subtle manner ) threatening to go nuclear

Except that when you think about it, they're not really. Refinancing is coming up at the end of the month and if they can't raise the money (and they can't on the open market) then a default happens. But this was always going to be the case regardless of who won the election or what promises were made.

gerry_seinfeld · 01-02-2015 6:15pm

dlouth15 wrote: »

Except that when you think about it, they're not really. Refinancing is coming up at the end of the month and if they can't raise the money (and they can't on the open market) then a default happens. But this was always going to be the case regardless of who won the election or what promises were made.

well if they default , they will experience argentina circa 2001 style conditions

Good loser · 01-02-2015 9:42pm

Sand wrote: »

They ought to be worried. A Grexit would mean any smart investor will have to go back to pricing in national exit risks. Maybe they will be low, but they will be real - after all, it will no longer be unthinkable for someone to leave the Euro. It will lead to a resumption of capital flight from Euro-Lite members of the Eurozone to Deutsche-Euros that was last seen in the crisis of 2011-2012.

People who are relaxed about a Grexit haven't thought through the implications fully.

Reading that article, its remarkable how the Syriza position is actually sound and sensible. Greece is insolvent, Europe for its own political reasons ignored reality and treated it as being illiquid, this has made the problem much worse, the actual problem needs to be faced and dealt with. Not the raving lunatics the EU propaganda would have you believe.

As pointed out it's already thinkable that a State can/could leave the Euro.

National risks are already priced into bonds - otherwise all bond yields would be the same.

Probarly best if Greece left sooner rather than dragging things out for 6/12 months. This would stop the gallop to power by the extreme leftists in Span and Portugal.

Syriza's proposals for debt relief are absurd and will in any case not give them the relief sought as their interest payments only come to 2.5% of GDP.
Think of an Irish Govt saying to all the mortgage holders we'll extend your mortgages to 50/100 years and reduce the interest rate to 1% with all interest payments suspended for 10 years (the Govt picks up the tab).

hatrickpatrick · 02-02-2015 12:02am

Sand wrote: »

It does underline the actual perception of Ireland abroad though - compliant, meek, not worth actually recalling who was who when.

It truly saddens me to agree with the above statement. However, I would like to think that opinion poll trends and the water demonstrations may mark the beginning of a trend away from snivelling. We'll have to wait and see.

dlouth15 · 02-02-2015 12:17pm

gerry_seinfeld wrote: »

well if they default , they will experience argentina circa 2001 style conditions

They don't intend to default.

dlouth15 · 02-02-2015 5:52pm

Article from Business Insider:

What the ECB is doing to Greek banks is outrageous

The central bank's actions toward Greece occur less than two months after secret letters revealed that the ECB threatened to pull emergency funding from Irish banks if the state did not apply for a bailout, in what many saw as an overreach into the sovereign affairs of the country. The ECB later pretended that Ireland had applied for its bailout voluntarily. The letters revealed that in fact the ECB had required the Irish government to apply.

It is one thing for the ECB to require individual banks to follow certain technical rules to maintain their liquidity. It is quite another for the ECB to pressure a government by threatening an entire nation's banks with a sudden default by yanking their liquidity en masse.

That's what is going on now with Greece.

The new Greek government, led by the left-wing Syriza party, is attempting to renegotiate the terms of its bailout deal with the so-called Troika. The Troika consists of the ECB, the European Commission, and the International Monetary Fund (IMF).

Syriza wants a shift in the focus of "structural reforms" toward increasing tax collection and government efficiency and away from crude budget cuts; a "European debt conference" to renegotiate the repayment terms on the country's debt (including linking interest payments to growth and writing down some of the debt); and a reduction in the government budget surplus the country is required to run.

Good loser · 05-02-2015 1:20am

hatrickpatrick wrote: »

It truly saddens me to agree with the above statement. However, I would like to think that opinion poll trends and the water demonstrations may mark the beginning of a trend away from snivelling. We'll have to wait and see.

Truly absurd remarks - not unusually.

Let's wait and see how Greece plays out?

hatrickpatrick · 05-02-2015 2:10am

Good loser wrote: »

Truly absurd remarks - not unusually.

Let's wait and see how Greece plays out?

Surely we must indeed wait and see before my remarks can be regarded as "absurd"?

Which part did you find absurd, as a matter of interest? That I agreed with the quoted post, that it saddened me to agree, or that recent election and opinion results might mark a trend away from snivelling?

Which part of the above is "absurd"?

Good loser · 06-02-2015 2:42am

hatrickpatrick wrote: »

Surely we must indeed wait and see before my remarks can be regarded as "absurd"?

Which part did you find absurd, as a matter of interest? That I agreed with the quoted post, that it saddened me to agree, or that recent election and opinion results might mark a trend away from snivelling?

Which part of the above is "absurd"?

To characterise as snivellers those who

(a) consider charging for water a blindingly obvious way to improve the running of a utility, and

(b) believe that support for Independents/Sinn Fein with their fatuous, self contradictory rantings will not get us anywhere

is to turn logic on its head.

By the way will SF return the water charges to those that pay? Another red line issue perhaps?

Godge · 06-02-2015 11:27am

hatrickpatrick wrote: »

Surely we must indeed wait and see before my remarks can be regarded as "absurd"?

Which part did you find absurd, as a matter of interest? That I agreed with the quoted post, that it saddened me to agree, or that recent election and opinion results might mark a trend away from snivelling?

Which part of the above is "absurd"?

To be honest, the recent opinion polls seeing a shift back to FG and Labour do represent a trend away from snivelling and crying over how the Germans or the ECB ruined the country and it was someone else' fault towards the realistic assessment that we brought it all on ourselves but that we can also work it through and sort it out ourselves.

It is good to see the snivellers in SF and the AAA losing ground in recent polls and I congratulate your foresight in spotting this trend.

dlouth15 · 07-02-2015 1:39am

I think it will be interesting to see what happens in the next few weeks. My feeling is that no deal will be reached by the member states of the Eurozone with regard to a "bridging loan" to tide Greece over for more comprehensive negotiations. However I think the ECB will not have the balls to pull the plug at the end of the month on the Greek banks forcing a grexit since their remit is eurozone stability. The ECB have already shot their load, so to speak, with the removal of ordinary support for the banks leaving only ELA. The next step: vetoing ELA, if they took it, would force Greece out of the Euro. This actually strengthens Greece's hand.

gesler · 07-02-2015 3:31pm

Good loser wrote: »

To characterise as snivellers those who

(a) consider charging for water a blindingly obvious way to improve the running of a utility, and

(b) believe that support for Independents/Sinn Fein with their fatuous, self contradictory rantings will not get us anywhere

is to turn logic on its head.

By the way will SF return the water charges to those that pay? Another red line issue perhaps?

(a) anyone who thinks that paying for a service twice is a snivelling looser

(b) fair enough

hatrickpatrick · 07-02-2015 9:52pm

Good loser wrote: »

To characterise as snivellers those who

(a) consider charging for water a blindingly obvious way to improve the running of a utility, and

What has this got to do with Greece? I'm talking about snivellers to Germany, the European establishment and the ECB, not the Irish government.

(b) believe that support for Independents/Sinn Fein with their fatuous, self contradictory rantings will not get us anywhere

Again how is this relevant?

I think you misunderstood what I was getting at with my post. This isn't about national issues at all - I see the Greek election result as the start of a tide turn against the European establishment and its bullying of member states.

hatrickpatrick · 07-02-2015 9:55pm

Godge wrote: »

To be honest, the recent opinion polls seeing a shift back to FG and Labour do represent a trend away from snivelling and crying over how the Germans or the ECB ruined the country and it was someone else' fault towards the realistic assessment that we brought it all on ourselves but that we can also work it through and sort it out ourselves.

The only way we could have "brought it all on ourselves" would be if we'd had full control of monetary policy and followed as moronic a path as the ECB has.

I fear you're confusing separate issues here. I'm not referring to the Celtic Tiger or the subsequent crash at all, I'm referring to the worldwide banking crisis with particular emphasis on how that was handled in Europe.

It is good to see the snivellers in SF and the AAA losing ground in recent polls and I congratulate your foresight in spotting this trend.

I'll conceded that recent results are disappointing, but Independents are still the biggest slice of the pie in opinion polls so I won't be getting too upset just yet. I do find it ironic however that you're willing to jump on this recent poll result while you found way to dismiss and rationalise every previous one which indicated voters demanding change. :rolleyes:

Good loser · 08-02-2015 11:33pm

hatrickpatrick wrote: »

What has this got to do with Greece? I'm talking about snivellers to Germany, the European establishment and the ECB, not the Irish government.

Again how is this relevant?

I think you misunderstood what I was getting at with my post. This isn't about national issues at all - I see the Greek election result as the start of a tide turn against the European establishment and its bullying of member states.

I suggest then you re-read your own post 119.

You're ever hopeful - the Greek election shows a deluded, desperate electorate clutching at straws. I expect the place to sink along with those straws.

That country is in a hopeless state - almost a Mafia State; I don't really know how it will get out except by knuckling down to hard work and honesty.

Syriza seems to be engaged in the process of 'taking the fool further'. FFS abolishing the Property Tax to get votes in the North Athens suburbs - probably the only tax these people coudn't avoid.

Good loser · 09-02-2015 1:17am

gesler wrote: »

(a) anyone who thinks that paying for a service twice is a snivelling looser

(b) fair enough

I know money for water came from LPT and Motor Tax recently but that won't be necessary next year when the Charges are collected (from the law abiding).

hatrickpatrick · 09-02-2015 2:13am

Good loser wrote: »

I suggest then you re-read your own post 119.

I suggested that I hoped the water protests marked a trend away from snivelling. I didn't mean to domestic politicians, I meant to the Troika, ECB, etc.

You're ever hopeful - the Greek election shows a deluded, desperate electorate clutching at straws. I expect the place to sink along with those straws.

We'll see.

That country is in a hopeless state - almost a Mafia State; I don't really know how it will get out except by knuckling down to hard work and honesty.

Syriza seems to be engaged in the process of 'taking the fool further'. FFS abolishing the Property Tax to get votes in the North Athens suburbs - probably the only tax these people coudn't avoid.

It's in a hopeless state indeed. Imposing punitive measures which serve no purpose other than to teach people a lesson is not going to make the situation any less hopeless.

Even some pro-austerity economists have acknowledged in recent years that the bailout conditions imposed on EU states were only partially comprised of necessary structural reforms, with other measures being imposed as punitive measures. This is fundamentally wrong on absolutely every level. These are the lives of actual human beings like you and me which are being played with by people who will never know what it's like to be in their position.

On a separate note, we have two separate threads running about the current situation in Greece and the wider Eurozone. Not one pro-establishment poster has so far even attempted to justify either the ECB's rules prohibiting monetary financing, a basic tool of a central bank, or the fact that we have allowed Germany to assume a role within the EU which places its leaders above those of other countries.

Anyone care to take a stab at it?

dlouth15 · 09-02-2015 11:24am

Good loser wrote: »

I suggest then you re-read your own post 119.

You're ever hopeful - the Greek election shows a deluded, desperate electorate clutching at straws. I expect the place to sink along with those straws.

That country is in a hopeless state - almost a Mafia State; I don't really know how it will get out except by knuckling down to hard work and honesty.

Syriza seems to be engaged in the process of 'taking the fool further'. FFS abolishing the Property Tax to get votes in the North Athens suburbs - probably the only tax these people coudn't avoid.

Whilst I don't agree with everything Greece are doing, I think the idea of "knuckling down to hard work" is also delusion. Have a look at their debt to gdp ratio:

greece-government-debt-to-gdp.png?s=grcdebt2gdp

greece-government-debt-to-gdp.png?s=grcdebt2gdp

Look at the precipitous rise. No country has ever managed this level of debt without some sort of serious restructuring. The Troika have no solutions either but to offer extensions of bailout and further increase debt.

dlouth15 · 10-02-2015 1:40pm

Business Insider article: The vast majority of Greeks are backing Prime Minister Alexis Tsipras in his showdown with Europe

But Tsipras has the support of his country, according to a poll out Sunday. Seventy-two percent of Greek voters are backing his confrontation with the so-called troika (the European Commission, the European Central Bank, and the International Monetary Fund), according to the survey, conducted by the University of Macedonia for the Greek TV channel Skai (responses were collected before Tsipras' speech).

Significantly, that is not just the supporters of Tsipras' Syriza party. More than 90% of those who voted for the radical left-wingers agree with the showdown, but so do 43% of the people who voted for New Democracy, the centre-right and pro-bailout party.

micosoft · 10-02-2015 2:24pm

dlouth15 wrote: »

Business Insider article: The vast majority of Greeks are backing Prime Minister Alexis Tsipras in his showdown with Europe
But Tsipras has the support of his country, according to a poll out Sunday. Seventy-two percent of Greek voters are backing his confrontation with the so-called troika (the European Commission, the European Central Bank, and the International Monetary Fund), according to the survey, conducted by the University of Macedonia for the Greek TV channel Skai (responses were collected before Tsipras' speech).

Significantly, that is not just the supporters of Tsipras' Syriza party. More than 90% of those who voted for the radical left-wingers agree with the showdown, but so do 43% of the people who voted for New Democracy, the centre-right and pro-bailout party.

Fantastic. When Greece collapses into anarchy we know the vast vast majority of Greeks decided to commit economic suicide. No question of blaming elites/Germans/(insert bogeyman here)

hatrickpatrick · 10-02-2015 3:40pm

micosoft wrote: »

Fantastic. When Greece collapses into anarchy we know the vast vast majority of Greeks decided to commit economic suicide. No question of blaming elites/Germans/(insert bogeyman here)

Apparently the principle of cause and effect is unknown to you?

Sand · 12-02-2015 10:04pm

dlouth15 wrote: »

Whilst I don't agree with everything Greece are doing, I think the idea of "knuckling down to hard work" is also delusion. Have a look at their debt to gdp ratio:

Look at the precipitous rise. No country has ever managed this level of debt without some sort of serious restructuring. The Troika have no solutions either but to offer extensions of bailout and further increase debt.

Thats a key point - the Greeks are castigated for objecting to a plan which is failing on practically every measure: debt up, economic activity down, catastrophic unemployment, the fracturing of social contracts, the rise of dangerous radical political forces....apparently the smart thing for Greece to do is to double down on failure.

The Troika has failed. Recognising that seems to be heresy. Who are the extremists?

Markcheese · 13-02-2015 9:33am

How much of the troika's plan was " little bites ". Greece agrees to fix its economy ( start collecting taxes, cut it's spending) - in return about a third of it's debt is scrapped-
So that's where we are - if Greece were playing ball and getting their state apparatus up to norms but still unable to develop because of their debt burden they'd be offered new terms -
If Greece doesn't sort it's house out , then why would the ECB (who took on most Greek debt ) bother to give them more of a debt cut -

Markcheese · 13-02-2015 9:41am

Sand wrote: »

Thats a key point - the Greeks are castigated for objecting to a plan which is failing on practically every measure: debt up, economic activity down, catastrophic unemployment, the fracturing of social contracts, the rise of dangerous radical political forces....apparently the smart thing for Greece to do is to double down on failure.
The Troika has failed. Recognising that seems to be heresy. Who are the extremists?

Ok if the troika plan has failed , who's next in line to rescue Greece ? ... Anyone , anyone ?

dlouth15 · 13-02-2015 10:29am

Markcheese wrote: »

How much of the troika's plan was " little bites ". Greece agrees to fix its economy ( start collecting taxes, cut it's spending) - in return about a third of it's debt is scrapped-
So that's where we are - if Greece were playing ball and getting their state apparatus up to norms but still unable to develop because of their debt burden they'd be offered new terms -
If Greece doesn't sort it's house out , then why would the ECB (who took on most Greek debt ) bother to give them more of a debt cut -

That's never been the plan and isn't on offer by the Troika now. The Troika plan has always been to lend more to Greece in return for cuts. Debts were written off in 2012 but this was a voluntary arrangement between Greece and private sector creditors, it was not Troika debt.

Markcheese · 13-02-2015 10:37am

dlouth15 wrote: »

That's never been the plan and isn't on offer by the Troika now. The Troika plan has always been to lend more to Greece in return for cuts. Debts were written off in 2012 but this was a voluntary arrangement between Greece and private sector creditors, it was not Troika debt.

Debts were written off in 2012 - private lenders agreed to take a haircut.... and
the ECB underwrote the remainder - so now the ECB is lending greece the money to pay back their bonds and not default-
Proportionately the debt to GDP ratio has gone up - because the Greek GDP has tanked - because their economy was largely based on spending borrowed money .... (As ours has been since 08)

dlouth15 · 13-02-2015 10:48am

Markcheese wrote: »

Debts were written off in 2012 - private lenders agreed to take a haircut.... and
the ECB underwrote the remainder - so now the ECB is lending greece the money to pay back their bonds and not default-
Proportionately the debt to GDP ratio has gone up - because the Greek GDP has tanked - because their economy was largely based on spending borrowed money .... (As ours has been since 08)

But you thought earlier that the Troika were writing off Greek debt and that further write-offs by the EU in return for reforms were what was on offer. Your point was why should further debt be written off if Greece won't agree to reforms. None of that is the case.

What is the on offer (in fact Greece are under pressure to accept it) is that the Troika will lend to Greece in return for reforms in order for Greece to service existing debt and not default. However regardless of what reforms Greece carries out, this is not sustainable. It is merely putting off the inevitable.

If it doesn't make financial sense why is it being done then? I think primarily because continued lending to an insolvent entity is politically more acceptable than a debt deal even though it creates a greater need for a debt deal over time. While there's no default, countries can pretend to their electorates that the money will eventually be paid.

Godge · 13-02-2015 11:56am

http://www.irishtimes.com/news/world/europe/greek-pm-yields-to-eu-pressure-and-agrees-to-talks-with-lenders-1.2102024

Does anyone know where this is going? Greece are going into talks with the Troika while simultaneously proclaiming that the Troika is gone.

View · 13-02-2015 12:48pm

Godge wrote: »

http://www.irishtimes.com/news/world/europe/greek-pm-yields-to-eu-pressure-and-agrees-to-talks-with-lenders-1.2102024

Does anyone know where this is going? Greece are going into talks with the Troika while simultaneously proclaiming that the Troika is gone.

The King is dead; long live the King! :-)

Godge · 13-02-2015 1:17pm

View wrote: »

The King is dead; long live the King! :-)

What was interesting was the quote from Tspiras who acknowledged that existing contracts must be honoured.

Essentially, this was the dilemma faced by the FG/Labour government. When they came in there was a contract entered into by the previous government - the bank guarantee - that meant certain bondholders had to be paid. This went against some of what was said by Labour in the election campaign but at the end of the day, there was nothing they could do on this issue.

They did go on and secure concessions on elements that were not subject to the bank guarantee or existing contracts. Is Greece now following that FG/Labour roadmap in the concessions it is now seeking?

Fr Tod Umptious · 13-02-2015 3:12pm

Godge wrote: »

What was interesting was the quote from Tspiras who acknowledged that existing contracts must be honoured.

Essentially, this was the dilemma faced by the FG/Labour government. When they came in there was a contract entered into by the previous government - the bank guarantee - that meant certain bondholders had to be paid. This went against some of what was said by Labour in the election campaign but at the end of the day, there was nothing they could do on this issue.

They did go on and secure concessions on elements that were not subject to the bank guarantee or existing contracts. Is Greece now following that FG/Labour roadmap in the concessions it is now seeking?

Ha ha.
That would annoy some of the anti austerity/anti establishment/hard left crowd.
Their poster boys actually doing it the way Ireland has been for 4 years

Markcheese · 13-02-2015 3:14pm

dlouth15 wrote: »

But you thought earlier that the Troika were writing off Greek debt and that further write-offs by the EU in return for reforms were what was on offer. Your point was why should further debt be written off if Greece won't agree to reforms. None of that is the case.

What is the on offer (in fact Greece are under pressure to accept it) is that the Troika will lend to Greece in return for reforms in order for Greece to service existing debt and not default. However regardless of what reforms Greece carries out, this is not sustainable. It is merely putting off the inevitable.

If it doesn't make financial sense why is it being done then? I think primarily because continued lending to an insolvent entity is politically more acceptable than a debt deal even though it creates a greater need for a debt deal over time. While there's no default, countries can pretend to their electorates that the money will eventually be paid.

I thought before (and still think) that the ECB (as part of the troika) agreed to underwrite greece's sovereign debt and that greeces debtors take a hair cut - so the ECB took on responsibility for debt (that they must of known was never going to get fully repaid) . Know one really knows what a properly functioning Greek economy really is and what levels of their debt can be repaid - i agree that their current levels are unsustainable but how much are other European tax-payers (cos it's their money ) prepared to accept being written off in one go - if Greece doesn't reform it's economy -
And yes a lot of it is about optics - and yes the ones who are really suffering are the poorer Greek people ( they're the ones who probably didn't gain as much from greece's previous borrow,spend don't worry about tax economy ...

Sierra Oscar · 14-02-2015 5:41pm

Godge wrote: »

http://www.irishtimes.com/news/world/europe/greek-pm-yields-to-eu-pressure-and-agrees-to-talks-with-lenders-1.2102024

Does anyone know where this is going? Greece are going into talks with the Troika while simultaneously proclaiming that the Troika is gone.

Syriza is negotiation with the European Commission, European Central Bank and the International Monetary Fund - i.e. the troika.

They just don't want to refer to them as the troika any more as they said they would never deal with them again. Its all about optics at this stage as they prepare a spectacular climbdown.

Sand · 16-02-2015 8:59pm

Sounds like the Troika seriously overreached in the negotiations today. The Greeks were never going to sign off on that.

I see our snivelling leadership in Ireland have on the one hand come out against any sort of negotiation for Greece, but have on the other hand demanded Ireland receive the benefit of any deal Greece secures for itself. Pathetic.

Eugene Norman · 16-02-2015 9:13pm

Sand wrote: »

Sounds like the Troika seriously overreached in the negotiations today. The Greeks were never going to sign off on that.

I see our snivelling leadership in Ireland have on the one hand come out against any sort of negotiation for Greece, but have on the other hand demanded Ireland receive the benefit of any deal Greece secures for itself. Pathetic.

Watching the Greeks actually represent their own country, and sticking to a manifesto strikes me how uncommon and revolutionary an act that is.

Icepick · 16-02-2015 9:57pm

Hope they default quick enough to sober up people cheering for money tree socialists.... and to snap a bargain in the summer. Greek Islands are fabulous.

Greek Government Collapses - Snap General Election Called

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