Greece about to default

[mrmt]

Assuming France can take over the heavy lifting, will they?

No, they can't, and they won't either. If France were to do the heavy lifting outside the EU umbrella Greece would suddenly become France's problem, and not EU's problem. It would also become politically unsustainable for Greece, because Greece would become almost a vassal state of France. After a couple of quarters we would see Varoufakis complaining about the French imperialistic attitude and Schauble telling the french "told you so".

I think they should go to a non-cash full electronic currency when they drop out of Euro. That will help with tax collection and tracking fraud, also the logistics may be simpler than introducing a new paper currency.

For this Greece would need a kind of IT infrastructure that simply is not there, and also there would be issues regarding payment systems and legal issues. It wouldn't be an easy feat. They will be better actually planning for a Grexit with a paper currency instead of trying something that fancy.

 

[senseamp]

If you mean a cryptocurrency, most people aren't ready for that. You normally have to pick a password to access your wallet and the vast majority really suck at that sort of thing. Plus, depending on which system you use, once your money is gone, it's really gone. Getting it back can be virtually impossible.

There are systems like Vodafone's m-pesa that could work though. But that requires infrastructure and a base currency. So you still need something to stand in for cash.

The easiest and fastest route is start printing IOUs. Even then though there is the question of how they will be denominated. If in Euros, then there will need to be some sort of agreement with the EU for them to have any value. If in Drachma, then how are you going to establish an exchange rate? All salaries, contracts, etc are currently denominated in euros so it would be an unholy mess to say the least.

I meant more like debit cards. And Square type readers for cellphones as infrastructure. I just think it would help address some issues they have with corruption and tax collection, and logistically could be simpler than paper currency. It seems like something worth considering since the technology is here. Also could put them ahead in the payments field.

 

[Darwin333]

LOL - Probably because he/she is the type of person who believes that they can walk into any negotiation where they have ZERO leverage or where he/she has blown all of their leverage and still cling to the false belief that they have the ability to dictate the terms of said negotiations to the opposing party.

I'm not sure who you are talking about but right now the Greeks have far more leverage than anyone else at the table. That's why the EZ is trying so hard to prevent Greece from defaulting. If they had no leverage no one would give a fuck and they damn sure wouldn't be making deals to loan them more money.

 

[Jhhnn]

And yet the far left is still insisting the only solution is for bankers to loan Greece even more money. It's only when it is time to repay the loans that the banker hate pops back up.

Quote somebody on that, OK?

The only real answer is most of Greek debt being written off, one way or another.

The ECB can buy up all Greek debt at a steep haircut using Euro bonds as payment, raise fees on member banks to pay off the bonds down the road. They could then throw Greek paper in the trash & forbid Greek borrowing for the term of the bonds. Greeks would probably be in OK shape if they weren't paying so much vigorish.

Not a chance, because they'd be admitting that Euro banks are as culpable as Greeks.

 

[Zorkorist]

When you admit that Euro Government is fucked up, then you can admit American Government is fucked up.

-John

 

[senseamp]

I read that Schauble wants Grexit as precondition of debt relief, saying that a writedown can't be done within the Euro, and within Euro, Greece can only get more debt and only of it puts up $50B of collateral. Of that's true, then Greece should get out of the Euro ASAP.

 

[Greenman]

I meant more like debit cards. And Square type readers for cellphones as infrastructure. I just think it would help address some issues they have with corruption and tax collection, and logistically could be simpler than paper currency. It seems like something worth considering since the technology is here. Also could put them ahead in the payments field.

It sounds like an easy, workable answer. I'd be willing to bet the Greek people would hate it.

 

[Zorkorist]

Thay are so fucked.

Government, has fucked them.

-John

 

[Zorkorist]

Where is the improvement Government promises?

So far we see Global Warming,
Africa and Europe going to shit,
Race wars in America,
Chickens sent to China and back,
Never mind 18 trillian dollars (and counting!) in debt.

-John

 

[mrmt]

It sounds like an easy, workable answer. I'd be willing to bet the Greek people would hate it.

It would disrupt the entire Greek institutional corruption framework.

 

[cabri]

I think they should go to a non-cash full electronic currency when they drop out of Euro. That will help with tax collection and tracking fraud, also the logistics may be simpler than introducing a new paper currency.

The country does not have the technology to support it.

 

[Zorkorist]

Yeah, it's not like they are part of some union.

-John

 

[senseamp]

The country does not have the technology to support it.

They don't have cell phone service?

 

[Greenman]

They don't have cell phone service?

I was just going to say the exact same thing.
I would add that I'm speaking from pure ignorance, as the entire credit/debt card network is little different than sorcery to me. I'll just go ahead and guess that there is a lot more involved than a cell phone connection.

 

[Ns1]

They don't have cell phone service?

I would think the requirements of setting up an e-currency for 11 million people extends beyond "cell phone service"

 

[Fred B]

Wonder if Greece ever become a more reformed and developed country where open market is a real player. They got a lot of money and time from EU to reform ,but what do the do is not good , the build a very expensive Rio–Antirrio bridge that very little people use .They build a very expensive railroad that coast 13 billion to build and $3.8 million per day to run, nobody on the train but conductors . When leaving monetary EU it can become victim of Russian investors , and Greece being a part of NATO this is not wanted in the region .

Other side is Greece is very nice place and Greece people can be very friendly .

 

[PingviN]

They don't have cell phone service?

You think that companies and the entire government will just have to install an app on their phones and all of a sudden they're up and running? Why are you posting in this thread again?

 

[werepossum]

You think that companies and the entire government will just have to install an app on their phones and all of a sudden they're up and running? Why are you posting in this thread again?

Yes, because they have a surplus of clearing houses, computers, pretty much everything.

In fact, most people don't know this (mostly because I just made it up) but the word "Greece" is actually Greek for "People running a surplus". This goes all the way back to when they had to build the Coliseum to store surpluses. Eventually so many things had been invented that all the surpluses covered Greece and crowded out the people, and thus the Greek Empire contracted while they attempted to simplify their lives. So there.

 

[senseamp]

Companies and govt already have electronic payment services. App+card reader would be for the small businesses who now accept only cash. Banks are already set up to do credit card transactions.

 

[Charmonium]

Greek credibility is at an all time low with the EU. No one believes that they're serious about their sudden 180 turn on austerity measures and in order to be believed, they're going to have to pass a variety of changes into law.

What cracks me up is the idea that passing something into law actually means anything in Greece. Laws are irrelevant if not enforced and I don't get the impression that Greece would ever enforce any laws that had effectively been rammed down their throat.

Several officials made clear that the Greek government needed to go beyond a reform proposal it submitted last week, and commit to more changes to pensions, taxes and other areas. And it needs to provide proof those measures will happen.
"We've come a long way but big issues still are open, so we're going to put those to the government leaders and it's up to them," said Jeroen Dijsselbloem, who chaired the meeting of finance officials.
Finland's finance minster, Alex Stubb, said Greece was being asked to pass into law a series of far-reaching conditions by July 15.
Trust in Greece's commitment to reform was shattered by January's election of a prime minister fiercely opposed to austerity, and a series of government U-turns in the last two weeks -- including calling a referendum to reject reforms it then signed up to days later.
The weekend of meetings follows an ultimatum Europe gave Tsipras earlier this week: Show us you're serious about putting Greek finances in order, or you're out of the eurozone.

http://money.cnn.com/2015/07/12/news/economy/greece-bailout-europe-conditions/index.html

 

[AtenRa]

This goes all the way back to when they had to build the Coliseum to store surpluses. Eventually so many things had been invented that all the surpluses covered Greece and crowded out the people, and thus the Greek Empire contracted while they attempted to simplify their lives. So there.

I believe you are mistaken the Roman empire with the Greek city states.

 

[glenn1]

Companies and govt already have electronic payment services. App+card reader would be for the small businesses who now accept only cash. Banks are already set up to do credit card transactions.

Because planning and executing complicated plans is obviously the Greek's strong point, and this plan is obviously so much easier than just following through on government and pension reform. Or you could admit the obvious, that it doesn't matter if they use the Euro, an e-currency, or barter in seashells; without fundamental reform and yes austerity that resets spending to realistic levels, the Greeks are doomed to fail.

 

[senseamp]

Do the creditors believe that even if what they are demanding got implemented, mainly the 3.5% of GDP surplus in the middle of a Great Depression, they would get their money back?

 

[Jhhnn]

Do the creditors believe that even if what they are demanding got implemented, mainly the 3.5% of GDP surplus in the middle of a Great Depression, they would get their money back?

That's an interesting way to put it. One needs to understand that all the money loaned to Greeks was created out of the thin air of fractional reserve banking, non-existent until it was loaned out. One also needs to understand that the transactional fees charged up front were often enormous, reaching a quarter of the total loan value. So, a bank gets to create $1B of debt out of perhaps $100M in assets, collect $250B of that to put in the pockets of the principals & execs. Greeks get $750M but start paying interest on $1B before the ink is dry.

Greeks use the money in large part to help keep Germany's export economy humming, creating jobs & profit for the elite financiers who set up the deals in the first place.

Looks like they might do well to just admit that they've already made lots of money relative to the money they actually had in the first place.

They won't squeeze much blood out of that turnip, but they can mash the shit out of it for not having any. If they don't, then others they have strung out might get ideas about not paying, themselves. It's like loansharking at the international level.

 

[LegendKiller]

That's an interesting way to put it. One needs to understand that all the money loaned to Greeks was created out of the thin air of fractional reserve banking, non-existent until it was loaned out. One also needs to understand that the transactional fees charged up front were often enormous, reaching a quarter of the total loan value. So, a bank gets to create $1B of debt out of perhaps $100M in assets, collect $250B of that to put in the pockets of the principals & execs. Greeks get $750M but start paying interest on $1B before the ink is dry.

Greeks use the money in large part to help keep Germany's export economy humming, creating jobs & profit for the elite financiers who set up the deals in the first place.

Looks like they might do well to just admit that they've already made lots of money relative to the money they actually had in the first place.

They won't squeeze much blood out of that turnip, but they can mash the shit out of it for not having any. If they don't, then others they have strung out might get ideas about not paying, themselves. It's like loansharking at the international level.

I once talked to a few Germans about the Greeks. They were pissed off the Greeks retired earlier, had better pensions, and were deadbeat tax payers. All true. However, when I asked them why they kept lending them money they had varied answers. When I pointed out that because they kept lending the Greeks money the Greeks bought German goods that employed Germans, so they were enabling a co-dependency.

The Germans didn't like me pointing that out.