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If Greece says NO in the referendum as the first results show they will, then watch out Germany and then the world. DEUTSCHE Bank has more than $75 trillion in derivatives in their book which will make them implode.
Well the EU is really just a common currency union. No matter how they vote nothing of the problem of growing debt is solved. Its said 52% depend on government pensions which shows the extent of problem. Private sector cannot support at that level. Too many cannot be dependent on too few in the end,.
Because if it returns to using the drachma, it will only be with the purpose of a ridiculous devaluation by printing drachma to pay off its debts. It won't be German or Zimbabwean hyperinflation, but it will be bad enough that the EU won't want it going on in a member state. Plus if Greece drops the Euro it is in its best interest to mKe a break with the EU as that makes it much more likely Russia will swoop in as Greece's white knight to fund a favorable restructuring or elimination of Greece's debt.
Realistically the best thing Greece could do is sell some islands (Erdogan would have gladly paid through the teeth for the rest of Cyprus, and he was in a position to do that for most of Greece's troubles) in order to bring their debt back to something manageable. They weren't and aren't willing to do that, and so now the only options left are even more ridiculous.
Realistically the best thing Greece could do is sell some islands (Erdogan would have gladly paid through the teeth for the rest of Cyprus, and he was in a position to do that for most of Greece's troubles) in order to bring their debt back to something manageable. They weren't and aren't willing to do that, and so now the only options left are even more ridiculous.
to what end? It makes a few wealthy people happy to own islands... It doesn't help Greece in the long run because they aren't changing their government "programs" so once that money runs out, they will be back where they are now.
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the economic condition of Greece it is not comparable to third world countries or former soviet countries.
Maybe not 3rd world yet... but how much longer before it becomes more like them than a 1st world?
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Even if Greece returns to its own currency, it will most likely need at least a year, maybe two, of humanitarian assistance in terms of food, fuel and medicine to avoid violent conflict.
I'm curious how this play out, looks like the vote was a NO? at least the newspapers in the US are calling it a NO today.
If they don't want to change anything, at the same time, have no access to "money", then what? Does the EU just keep pumping money in for humanitarian aid anyways? If they are going to be on humanitarian aid anyways, why not let them do it on a currency that they can control to help them get off it? This entire thing about how Greece would be on life support if they switched away from the euro doesn't make sense, they would be in no better shape while being on the euro if they don't make any changes. If Greece stays on the euro and it still cost 10 euro for a bread, or 40 drachma, does it matter if they can't afford it with either currency?
Because if it returns to using the drachma, it will only be with the purpose of a ridiculous devaluation by printing drachma to pay off its debts. It won't be German or Zimbabwean hyperinflation, but it will be bad enough that the EU won't want it going on in a member state. Plus if Greece drops the Euro it is in its best interest to mKe a break with the EU as that makes it much more likely Russia will swoop in as Greece's white knight to fund a favorable restructuring or elimination of Greece's debt.
The only problem is that Russia doesn't have the muscles to do that. After all, it's in an economic crisis and debt problems itself as well.
The Greek debt is €342 billion, and Russia's economy is the same size as Canada's.
If they don't want to change anything, at the same time, have no access to "money", then what? Does the EU just keep pumping money in for humanitarian aid anyways? If they are going to be on humanitarian aid anyways, why not let them do it on a currency that they can control to help them get off it? This entire thing about how Greece would be on life support if they switched away from the euro doesn't make sense, they would be in no better shape while being on the euro if they don't make any changes. If Greece stays on the euro and it still cost 10 euro for a bread, or 40 drachma, does it matter if they can't afford it with either currency?
Again, the question, in economic terms, is not what currency Greece uses, the question is if somebody can, and who, manages the economy and the money supply/debt more or less efficiently.
The Greeks got the theoretical part right, let's see how it works out in practice.
The meaning of the OXI vote, if it stands, is that the Greeks have expressed confidence in the current government's ability either to negotiate a better deal to stay in the euro or manage a transition, abrupt or not, to a new (old) currency.
That's a big risk to take.
Assuming the OXI vote stands, we have to see the eurozone officials' response now: either
i) allow easier bail-out terms (e.g. some amount of debt forgiveness and longer payback terms, as well as modest primary surplus, no pension cuts, differentiated VAT, and continuing farm subsidies); or
ii) help plan and transition to a new currency (e.g. ECB liquidity for six months or year or so, then off completely at least for a number of years); or
iii) simply and abruptly tell them GFYS and just see how an abrupt transition works out.
Which path do you think is most likely?
We'll have a better idea within the next 48 hours, including what the ECB does tomorrow.
Of those, Poland is the most likely to join soon, but for reasons most similar to those of Finland and the Baltic countries.
And what are the reasons?
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