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Exiting from the Euro would not make Greece a 3rd world nation in the sense of Africa or something- but it would go back to what it was - a poorer Balkan state not much better off than its neighbors.
If Greece exits than the status of Romania and Bulgaria is also in question - they have not performed particularly well in the Euro either and have received bailouts too, just not as large or as continuously as Greece has.
Not looking good for Greece. The demand that Greece hand over 50 billion Euro worth of government assets to the EZ authorities for possible sale over time may be the deal buster.
And turn over public administration to Brussels. So basically Greece has two options as Germany sees it. Become a vassal state of the EU/Brussels, or GTFO out.
The demonstrators are already gathering in Athens to protest more austerity and the riot police have been brought out just in case things get really out of hand. Tsipras really is between a rock and a hard place.
Not looking good for Greece. The demand that Greece hand over 50 billion Euro worth of government assets to the EZ authorities for possible sale over time may be the deal buster.
In particular, Cochrane asserts the following thought experiment, which I find interesting:
I didn't read the article but reading your quoted section I have to disagree with him. Seems to me like there is a huge difference between a sovereign nation and a US state. Giving up full control like that would be a major step towards giving up sovereignty. You could argue they already have taken that step by adopting the Euro and losing control of their monetary policy but that is easily reversible so long as you have the banks.
Quote:
Originally Posted by Major Barbara
Ducking the point that unfettered free-market capitalism is one of the worst of all possible economic systems. All that ever has worked or is ever likely to is managed capitalism -- what some quite misguidedly and mistakenly group with socialism.
Some just feel abused by having to stop at a red light.
I have never argued for unfettered free-market capitalism. Everything needs laws and consequences for violating them. There is a point where too weak a government allows capitalism to run amok, as shown in the late 1800s and early 1900s. We passed some good reforms and some bad ones, handed the government more power and experienced a great period of economic boom. Gradually the power hungry government has taken control of more and more aspects of everything. The pendulum has swung too far in that direction and we are now seeing the consequences, things will get much worse before they get better. The governments predictable reaction so far has been to increase control, this won't change anytime soon.
Quote:
Originally Posted by Major Barbara
LESS debt is the answer, which is why it should be forgiven or at the least rescheduled into the distant future. The amounts involved are insignificant. But let's not pretend that this is actually about Greece anymore. It is about precedent re the much larger liabilities of Italy and Spain. German banks can easily afford to resolve the problems of Greece, but they would be swamped if these larger economies were to follow suit. Even though they are clearly a separate case, no one will step up today to do for Greece anything that they would not also be willing to do in the future for Italy and Spain. The EU has simply painted itself into a corner.
Yes, I have stated this many times. Its why I laugh when people post nonsense about this whole Greek fiasco not mattering because they have such a small economy. Its not about Greece, its about other southern EU countries facing the same situation who have large enough economies to really matter.
Quote:
Originally Posted by Mircea
No doubt, some of you are ignorant about the Treaty on Stability, Coordination and Governance (TSCG).
By 2020, all EU member-States must adopt the Euro, provided they meet the Maastricht criteria: budget deficit <3% and public debt <60% of GDP.
Only two States have derogations, Britain and Denmark.
Internationally...
Mircea
I fail to see how this has any bearing on the current situation unless your implying because of this treaty Greece cannot stay in the EU with the Drachma. They can.
Quote:
Originally Posted by BobNJ1960
Deadbeats hate pledging collateral.
This is an automatic deal breaker because they don't have that much collateral to post. Regardless if they want to or not, its a non-issue. Its like a bank saying sure we will give you a loan for that as soon as you put down 50 million dollars in collateral. Neither of us has that, the bank knows this, so it really doesn't matter now does it. All we know is that the bank doesn't want to give us the loan.
This is an automatic deal breaker because they don't have that much collateral to post. Regardless if they want to or not, its a non-issue. Its like a bank saying sure we will give you a loan for that as soon as you put down 50 million dollars in collateral. Neither of us has that, the bank knows this, so it really doesn't matter now does it. All we know is that the bank doesn't want to give us the loan.
One who intends to repay will pledge every penny of assets they have. Greece isn't doing it, as they do not intend to repay their debts.
I agree EU should kill any offer until 100% of assets are given as collateral.
Looks like they are on the fifth draft of the discussions. It appears that the temporary exit of Greece won't be in this draft. Maybe they have decided that they have slapped them around enough and got their attention and now a deal can be done. We'll see.
Exiting from the Euro would not make Greece a 3rd world nation in the sense of Africa or something- but it would go back to what it was - a poorer Balkan state not much better off than its neighbors.
If Greece exits than the status of Romania and Bulgaria is also in question - they have not performed particularly well in the Euro either and have received bailouts too, just not as large or as continuously as Greece has.
Huge difference between being in the EU and being in the Eurozone. Bulgaria and Romania have their own national currencies.
The hardline that Germany and the rest of the EU has taken against Greece was necessary. The Syriza government's strategy of brinksmanship was needlessly antagonistic and gave the Greeks the impression that they had undue leverage in the negotiations.
just read that places that give out free food to homeless are running out of food. You know what that means. Sounds like there might be some starvation coming. Hunger for sure.
I fail to see how this has any bearing on the current situation unless your implying because of this treaty Greece cannot stay in the EU with the Drachma. They can.
Read the Treaty.
T/SCG/en 8
Quote:
NOTING that the Kingdom of Belgium, the Federal Republic of Germany, the Republic of Estonia, Ireland, the Hellenic Republic, the Kingdom of Spain, the French Republic, the Italian Republic, the Republic of Cyprus, the Grand Duchy of Luxembourg, Malta, the Kingdom of the Netherlands, the Republic of Austria, the Portuguese Republic, the Republic of Slovenia, the Slovak Republic and the Republic of Finland are Contracting Parties whose currency is the euro and that, as such, they will be bound by this Treaty from the first day of the month following the deposit of their instrument of ratification if the Treaty is in force at that date;
Here are the derogations and exemptions:
Quote:
NOTING ALSO that the Republic of Bulgaria, the Kingdom of Denmark, the Republic of Latvia, the Republic of Lithuania, Hungary, the Republic of Poland, Romania and the Kingdom of Sweden are Contracting Parties which, as Member States of the European Union, have, at the date of signature of this Treaty, a derogation or an exemption from participation in the single currency and may be bound, as long as such derogation or exemption is not abrogated, only by those provisions of Titles III and IV of this Treaty by which they declare, on depositing their instrument of ratification or at a later date, that they intend to be bound;
Denmark is the only State with a derogration (other than the UK which is not even a party to this Treaty). The other States have exemptions. There is a legal difference between a derogration and an exemption.
States with exemptions are allowed to use their own currency until they comply with the Maastricht requirements.
Signatories to the Treaty must not take "...any measure which could jeopardise the attainment of the Union’s objectives."
The Union's objectives are political and monetary union.
Reviewing...
Mircea
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