Greece on the verge of a default.

Yitzhak Rabin

http://www.smh.com.au/business/world-business/germany-signals-possible-greek-default-20110912-1k4n6.html

German Finance Minister Wolfgang Schaeuble also doubts Greece can avoid bankruptcy and is preparing for a scenario where the debt-stricken nation becomes insolvent, Der Spiegel magazine reports in its Monday issue.
Der Spiegel said finance ministry officials were contemplating two scenarios should Greece become bankrupt: one where the country stays in the eurozone, and another where it re-introduces its former currency, the drachma.
The finance ministry was not immediately available to comment on the report.

So what does it mean for the rest of Europe if Greece defaults. How would Greece re-entering the drachma affect their own economy, and the rest of the eurozone?

V_Moth

If I was a Greek at the moment, then this would be apt...

Debtocracy

yekahS wrote: »

How would Greece re-entering the drachma affect their own economy ....

They would be poorer but happier as the new expanding drachma money supply breathes life into their now crippled society.

thebman

The keyword is "orderly" default, thought they were already doing this though at least for their banks.

French and German banks pushing out repayments (can't remember if it was the Greek government or Greek banks) which is essentially a default to most people I believe.

At least there was enough people calling it that at the time. Seems like Greece is defaulting once a month at the moment though.

johnnyskeleton

Debtocracy wrote: »

yekahS wrote: »

How would Greece re-entering the drachma affect their own economy ....

They would be poorer but happier as the new expanding drachma money supply breathes life into their now crippled society.

how's does being poorer make thr economy better?

thebman

johnnyskeleton wrote: »

how's does being poorer make thr economy better?

I think it is in the same logic as us being one of the fastest growing EU economies, it ignores the massive drop that preceded it.

It leaves a lot of potential to come back up but without the debt if you default. Unfortunately, there is that horrible time during which you are defaulting which seems to get skimmed over sometimes.

Basically two ways to deal with a massive debt crisis. The Japanese way or the Icelandic way. We appear to be choosing the Japanese model. Greece wants the Icelandic way though people obviously fear the knock on consequences of that for the rest of the Eurozone.

Finnbar01

Tax collectors on strike.

Union opposition to the Greek government’s austerity program intensified Monday as tax collectors went on strike, and power workers vowed to sabotage a new emergency property tax aimed at plugging a budget gap spotted by international creditors.
Tax and customs workers walked off the job for two days to protest cuts in their bonus pay while the power company union said it would “not allow the company to be used as a tax-collecting mechanism” for the property levy, which will be included on household electricity bills and is expected, together with fresh public sector cuts, to reap €2 billion ($2.7 billion) this year.

I'd say they'll be a military coup before this is over and done with.

http://www.washingtonpost.com/business/markets/european-commission-estimates-greeces-deficits-for-2011-and-2012-will-exceed-targets/2011/09/12/gIQAIokcMK_story.html

KindOfIrish

very informative article in spiegel
http://www.spiegel.de/international/europe/0,1518,785690,00.html

anyway Greeks will be ok. They have sunshine, Mediterranean sea and siesta from 11am to 4pm

jimmycrackcorm

Finnbar01 wrote: »

Tax collectors on strike.



I'd say they'll be a military coup before this is over and done with.

http://www.washingtonpost.com/business/markets/european-commission-estimates-greeces-deficits-for-2011-and-2012-will-exceed-targets/2011/09/12/gIQAIokcMK_story.html

A default and return to the Dracula will teach them that they cannot go round like spolit children when the parents take their toys off them. They'll have no choice but to accept reality.

hinault

Finnbar01 wrote: »

Tax collectors on strike.

I'd say they'll be a military coup before this is over and done with.

http://www.washingtonpost.com/business/markets/european-commission-estimates-greeces-deficits-for-2011-and-2012-will-exceed-targets/2011/09/12/gIQAIokcMK_story.html

Greek Tax collectors go on strike.
That'll go down well with the EU/IMF.

As regards your point about the military, Greece has the 6th biggest army on the planet as far as I know.
That means they've a lot of people who need paying!

View

thebman wrote: »

I think it is in the same logic as us being one of the fastest growing EU economies, it ignores the massive drop that preceded it.

It leaves a lot of potential to come back up but without the debt if you default. Unfortunately, there is that horrible time during which you are defaulting which seems to get skimmed over sometimes.

Well, in the case of Argentina, I have seen figures that showed estimates that close to 60% of the population fell below the poverty line and around 25% of the population didn't get enough food to eat every day (i.e. literally went hungry at the end of the day) in the aftermath of their default.

Figures like that might indicate why people try to avoid defaults where possible.

patnor1011

View wrote: »

Well, in the case of Argentina, I have seen figures that showed estimates that close to 60% of the population fell below the poverty line and around 25% of the population didn't get enough food to eat every day (i.e. literally went hungry at the end of the day) in the aftermath of their default.

Figures like that might indicate why people try to avoid defaults where possible.

How long did they suffer?
I guess Greeks and Irish will suffer many times longer with all that expensive borrowed bailout money which in fact bailed out bond holders and not people. There is not that much sunshine over here but good conditions for farming. Sadly there is not really any industry in Ireland we can talk about so we may need to focus that farming and agriculture may be the answer.

HellFireClub

Apparently Greece is now heading down the same road as Argentina, and freezing payments. Constantin Gurdgiev just tweeted that the next stage in the crisis is freezing of bank deposits...

http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_29035_12/09/2011_406016

RichardAnd

There is an announcement due from Merkel her diminutive pal:

http://www.rte.ie/news/2011/0913/economy.html

I think it could be interesting.

sponge_bob

View wrote: »

Well, in the case of Argentina, I have seen figures that showed estimates that close to 60% of the population fell below the poverty line and around 25% of the population didn't get enough food to eat every day (i.e. literally went hungry at the end of the day) in the aftermath of their default.

Figures like that might indicate why people try to avoid defaults where possible.

how many people went hungary in iceland over the last few years?

Triangla

Not surprised Greece on verge of default. They should never have been allowed entry in the first place.

http://news.bbc.co.uk/2/hi/business/4012869.stm

http://www.telegraph.co.uk/news/worldnews/europe/greece/7646320/Greece-why-did-its-economy-fall-so-hard.html

Here's hoping anything they do doesn't bring us down, chancers!!

Scofflaw

sponge_bob wrote: »

how many people went hungary in iceland over the last few years?

http://www.businesspundit.com/iceland-collapse-riots-suicide-and-soup-kitchens-in-churches/

http://news.bbc.co.uk/2/hi/programmes/crossing_continents/7734190.stm

http://www.npr.org/templates/story/story.php?storyId=122777063

Mind you, I don't know how many have gone to Hungary.

cordially,
Scofflaw

hardCopy

Scofflaw wrote: »

http://www.businesspundit.com/iceland-collapse-riots-suicide-and-soup-kitchens-in-churches/

http://news.bbc.co.uk/2/hi/programmes/crossing_continents/7734190.stm

http://www.npr.org/templates/story/story.php?storyId=122777063

Mind you, I don't know how many have gone to Hungary.

cordially,
Scofflaw

No direct flights anyway

HellFireClub

Lol!!!

http://www.breakingnews.ie/world/greece-introduces-more-austerity-measures-amid-default-fears-520412.html

hmmm

Personally I think the markets are over-estimating the risk that Germany will not assist Greece. The FDP (Merkel's coalition partners) are probably one of the most financially right wing groups in parliament (a PD equivalent say) and are the ones making most of the noise about Greek defaults. The main opposition, the SDP, are strongly pro-Europe and may even have to be used by Merkel if she can't convince her own coalition to support her. Merkel's own party are pro-Europe in general.

youtube!

they were only talking about iceland on newstalk about a month ago, since they defaulted they have seen the biggest job growth per head of capita in the whole of the eurozone and something like the 3rd fastest in the world.

thebman

youtube! wrote: »

they were only talking about iceland on newstalk about a month ago, since they defaulted they have seen the biggest job growth per head of capita in the whole of the eurozone and something like the 3rd fastest in the world.

How much did they drop during the default...

It is easy to have high growth rates after you take a massive hit.

Scofflaw

thebman wrote: »

How much did they drop during the default...

It is easy to have high growth rates after you take a massive hit.

If they're growing fast, it's pretty recent - more recent than this graph of their unemployment rate:



And the July update:

The average unemployment rate in Iceland in the second quarter stood at 8.5 percent, slightly lower than the same period of last year, Statistics Iceland said on Wednesday.

With a population of 320,000, about 15,800 people were unemployed in the second quarter this year, or 8.5 percent of the total labor force, Statistics Iceland said in a statement.

The number of unemployed decreased by 400 than that of the second quarter of 2010.

The unemployment rate was 9.5 percent for men and 7.4 percent for women, while youth unemployment rate recorded the highest of 18.16 percent among the group of aged 16-24 years old, according to the agency.

Something that seems to be lost on people is that 8.5% is huge compared to their previous unemployment rate - something I think the graph shows quite well.

cordially,
Scofflaw

youtube!

thebman wrote: »

How much did they drop during the default...

It is easy to have high growth rates after you take a massive hit.

fair point and i am probably getting the story arseways but the general gist was that their return to growth was staggering and that they have very little unemployment now ever since they defaulted.

hmmm

youtube! wrote: »

fair point and i am probably getting the story arseways but the general gist was that their return to growth was staggering and that they have very little unemployment now ever since they defaulted.

Their CSO equivalent shows unemployment peaked at 9.1% in Q2 2009, and was 8.5% in Q2 2011
http://www.statice.is/?PageID=1191&src=/temp_en/Dialog/varval.asp?ma=VIN01001%26ti=Activity+rate%2C+unemployment+and+labour+force+by+quarters+2003-2011+++%26path=../Database/vinnumarkadur/rannsoknir/%26lang=1%26units=Numbe/percent

National Income has fallen to 1999 levels
http://www.statice.is/?PageID=1267&src=/temp_en/Dialog/varval.asp?ma=THJ01000%26ti=Overview+of+Gross+Domestic+Product+and+Gross+National+Product+1945-2010%26path=../Database/thjodhagsreikningar/landsframleidsla/%26lang=1%26units=Index/percent/number

amacachi

youtube! wrote: »

fair point and i am probably getting the story arseways but the general gist was that their return to growth was staggering and that they have very little unemployment now ever since they defaulted.

Growing from zero is pretty damn easy.

View

patnor1011 wrote: »

How long did they suffer?

The figures - which I saw a while back - showed that (almost?) 10 years later, they still had something like 1 in 3 of the population below the poverty line.

hmmm

View wrote: »

The figures - which I saw a while back - showed that (almost?) 10 years later, they still had something like 1 in 3 of the population below the poverty line.

One of the most striking aspects about Buenos Aires is Los Cartoneros. This large group of people scrounge for cardboard on the streets as a way of making a small pittance, and after nightfall in BA you will see them everywhere. This group didn't exist pre the default, and you'll notice that many of them seem to be relatively middle class people.

https://www.youtube.com/watch?v=a1lbjkyHT5A

touts

RichardAnd wrote: »

There is an announcement due from Merkel her diminutive pal:

http://www.rte.ie/news/2011/0913/economy.html

I think it could be interesting.

Not even the Co-Augusti can help greece at this point (even if they had the powers of the original Augusti).

Once Greece goes down the two week clock will reset and then Ireland or Portugal will go. Then two weeks later the other. Then two weeks later Italy and IF the whole Euro has not collapsed by that stage another two weeks and Spain will finish it off.

If you have not already done so it's time to get your money out of Euros.

Voodoo_rasher

the Fall of Greece (economic sense) could be as historically important to the rest of Europe as the Fall of Byzantium was. The latter ushered in the Ottoman Turks near total conquest of Europe (empire lasting over 400 years). Today's Ottomans are the oil-rich Arab Gulf states waiting for an economic conquest..

Its already started.

http://www.independent.co.uk/news/business/news/qatar-swoops-for-greek-assets-as-europe-looks-abroad-for-help-2364850.html

meditraitor

Voodoo_rasher wrote: »

the Fall of Greece (economic sense) could be as historically important to the rest of Europe as the Fall of Byzantium was. The latter ushered in the Ottoman Turks near total conquest of Europe (empire lasting over 400 years). Today's Ottomans are the oil-rich Arab Gulf states waiting for an economic conquest..

Its already started.

http://www.independent.co.uk/news/business/news/qatar-swoops-for-greek-assets-as-europe-looks-abroad-for-help-2364850.html

haha, brilliant, the middle eastern oil countries are going to take over Europe.... just brilliant.

Anyway back on planet earth, does the fact that greece will only reduce the 2011 deficit to 8.5% rather than 7.4% really mean anything.... They will have reduced it from 10.5% from 2010 which considering the slow down in the economy is quite good.

Atilathehun

So the Germans, according to this, have plan B ready to roll. http://hat4uk.wordpress.com/2011/10/03/crash-2-analysis-germany-could-leave-euro-before-greece-sources/

noxqs

I find it hard to believe Germany would ever pull out of the Euro currency project.

But it is interesting - they should have these plans drawn up - just like the US army always have scenarios ready, however unlikely.

But Merkel is losing favor in Germany and I have had a hard time trying to find the public sentiment through current news stories - how is the opposition parties and opinion aligned ? Greece - should it default - or become more of money pit for years would certainly wear down the Germans patience and the scenario may just become more likely then.

Considering the events of just the last 70 years - this wouldn't be unprecedented.

dissed doc

noxqs wrote: »

I find it hard to believe Germany would ever pull out of the Euro currency project.

.

And 15 years ago you might say the opposite. The european union is an experiment of political ideas - some may last longer or work better (for who?) than others, so just as easily as it became configured, couldn't the also be just as likely to come about?

jank

Interesting.... I normally watch the business news every morning here in Australia. They go on about the markets, economy, commodities, currencies the usual kinda boring stuff that may send some to sleep but for others its interesting.... Anyway, they were talking and it was the first time I heard anyone on TV say it (well outside of VB anyway!:pac:). The presenter asked an economist "When Greece defaults..." nobody batted an eyelid. it was like a "did I just hear that"? They have always talked about "If Greece defaults" Its going to happen, probably days away from it but most certainly before the end of the year.

All depends on if the markets have this priced in and what the contagion will be. Pretty soon we will forget about Greece and be talking about Spain and Italy.

books4sale

Voodoo_rasher wrote: »

the Fall of Greece (economic sense) could be as historically important to the rest of Europe as the Fall of Byzantium was. The latter ushered in the Ottoman Turks near total conquest of Europe (empire lasting over 400 years). Today's Ottomans are the oil-rich Arab Gulf states waiting for an economic conquest..

Its already started.

http://www.independent.co.uk/news/business/news/qatar-swoops-for-greek-assets-as-europe-looks-abroad-for-help-2364850.html

Keep on dreaming there will ya.

Europe just spent the last 6 months backing rebels in Libya. We don't need no oil from the middle east.

Arabs might have the oil but Europe got the smarts.

jackiebaron

yekahS wrote: »

http://www.smh.com.au/business/world-business/germany-signals-possible-greek-default-20110912-1k4n6.html



So what does it mean for the rest of Europe if Greece defaults. How would Greece re-entering the drachma affect their own economy, and the rest of the eurozone?

It means the Euro will tank against all major currencies and the Eurozone itself will eventually break up. When the mortgage backed securities scam was uncovered in the US and the Lehman and Bear Sterns went balls to the wall you probably heard the word "contagion" being bandied about. Well get used to that word again because once Greece default (sometime this my would be my guess) then the contagion will be impossible to stop from spreading to other PIGS countries.

jackiebaron

books4sale wrote: »

Keep on dreaming there will ya.

Europe just spent the last 6 months backing rebels in Libya. We don't need no oil from the middle east.

Arabs might have the oil but Europe got the smarts.

"We don't need no oil from the middle east" :pac::pac:

Yeah, like Europe is so oil independent. Whenever the Russians turn the tap off, the continent is plunged into darkness.

45% of EU oil imports comes from the Middle East. 40% of EU's gas comes from Russia, 30% from Algeria and 25% from Norway.
By 2030, 90% of the EU's oil needs will have to be covered by imports.

To put it bluntly, you haven't a clue what you're talking about.

thebman

jackiebaron wrote: »

It means the Euro will tank against all major currencies and the Eurozone itself will eventually break up. When the mortgage backed securities scam was uncovered in the US and the Lehman and Bear Sterns went balls to the wall you probably heard the word "contagion" being bandied about. Well get used to that word again because once Greece default (sometime this my would be my guess) then the contagion will be impossible to stop from spreading to other PIGS countries.

Not just the PIGS or EU though, the US is heavily exposed to Greek debt. Oddly Ireland, on any figures I've seen, has very little investment in Greece. I think Ireland won't actually be too heavily effected unless there is hidden investments somewhere.

Either that or I'm looking in the wrong place :P

jackiebaron

thebman wrote: »

Not just the PIGS or EU though, the US is heavily exposed to Greek debt. Oddly Ireland, on any figures I've seen, has very little investment in Greece. I think Ireland won't actually be too heavily effected unless there is hidden investments somewhere.

Either that or I'm looking in the wrong place :P

Nah, Ireland is dead for at least another 20 years so don't fall prey to wishful thinking. That's the sap's way out. Start selling your old underwear on Ebay and get used to beans on toast for the next decade at least.

books4sale

jackiebaron wrote: »

"We don't need no oil from the middle east" :pac::pac:

Yeah, like Europe is so oil independent. Whenever the Russians turn the tap off, the continent is plunged into darkness.

45% of EU oil imports comes from the Middle East. 40% of EU's gas comes from Russia, 30% from Algeria and 25% from Norway.
By 2030, 90% of the EU's oil needs will have to be covered by imports.

To put it bluntly, you haven't a clue what you're talking about.

Ya see........ I know that you know jack. Why? Cause ya just went and googled it and pulled them up from the first website you found.

That's a whole lot of lazy research ya did there a bit like the research from all these 'Euro sceptics threads' we keep seeing week in week out.

Anyway, ya may as well have pulled your stats from your ar*e cause I live in the real world not in a fictious cyberspace where everything I see on here is for real.

If the stats were true, 45% is less than half, that dosen't equal depandant in my book. Thanks

Russia, Algeria and Norway are not in the MIddle East. Thanks

:cool: