Greece about to default

[AtenRa]

Wasn't there going to be a vote on more bailout money a day or two back? I don't see anything about it in the news.

The roadmap required that Greece pass legislation enacting the reforms promised by Wednesday. I have seen nothing either way on that, so I suppose that was a bit more, um, flexible than represented. Which isn't necessarily a bad thing I suppose; legislation fundamentally reforming one's socioeconomic system, even if it is just enacting the reforms promised over the last five years, is probably not best done in two days.

There was a legislation in Wednesday night that was passed and a 7.16Bn will be given on Monday for ECB loan repayments. Also 900M+ were given in order for the opening (with restrictions) of the banks on Monday.

 

[werepossum]

There was a legislation in Wednesday night that was passed and a 7.16Bn will be given on Monday for ECB loan repayments. Also 900M+ were given in order for the opening (with restrictions) of the banks on Monday.

Were any actual reforms passed, or is this simply give us back seven billion and we'll give you thirty billion?

Also, I thought part of this deal was Greece getting some breathing room on making loan payments?

 

[Greenman]

There was a legislation in Wednesday night that was passed and a 7.16Bn will be given on Monday for ECB loan repayments. Also 900M+ were given in order for the opening (with restrictions) of the banks on Monday.

Getting the banks opened must be a huge relief.

 

[Greenman]

The roadmap required that Greece pass legislation enacting the reforms promised by Wednesday. I have seen nothing either way on that, so I suppose that was a bit more, um, flexible than represented. Which isn't necessarily a bad thing I suppose; legislation fundamentally reforming one's socioeconomic system, even if it is just enacting the reforms promised over the last five years, is probably not best done in two days.

I didn't understand all of the conditions involved. I agree that they should take some time to do it right, rushing those changes just to get their hands on some short term relief will end up biting them on the ass yet again.

 

[werepossum]

I didn't understand all of the conditions involved. I agree that they should take some time to do it right, rushing those changes just to get their hands on some short term relief will end up biting them on the ass yet again.

Agreed. Plus, from the creditors' side Greek courts already overturned some of the pension reforms once. Trying to slap something together in a few days just increases the chances of that happening again.

 

[Greenman]

Agreed. Plus, from the creditors' side Greek courts already overturned some of the pension reforms once. Trying to slap something together in a few days just increases the chances of that happening again.

Think about that a bit. They put the whole package together, make the necessary changes to their government, get their first check, and some bonehead judge comes along and sinks their entire economy by deciding it isn't legal. That has to be a major concern for everyone involved.

 

[norseamd]

Well it seems America might have just as much fault in this Greek economic collapse as Germany although the Greek society and government themselves also have lots of fault for how they run themselves.

https://www.youtube.com/watch?v=ZRgpWyi_jt0

 

[AtenRa]

Were any actual reforms passed, or is this simply give us back seven billion and we'll give you thirty billion?

Pensions and VAT reforms were passed.

Also, I thought part of this deal was Greece getting some breathing room on making loan payments?

The talks for the new program will take more than 4-5 weeks.

 

[DucatiMonster696]

Well it seems America might have just as much fault in this Greek economic collapse as Germany although the Greek society and government themselves also have lots of fault for how they run themselves.

https://www.youtube.com/watch?v=ZRgpWyi_jt0

Ummmmm....you are blaming the US for reducing its military spending and military aid toward nations like Greece thus not propping up Greece's military (a EU member) after the Cold War? This is how the US is repsonsible? WTF...LOL

It's like a kid blaming his parents for HIS/HER college loan debt that they took out on their own as an ADULT. Even though mom and dad used to front the bill on everything else while they were growing up somehow mom and dad not paying for college (which they may not of had the reasonable ability to do so) makes that kid think it's their fault.

 

[norseamd]

Ummmmm....you are blaming the US for reducing its military spending and military aid toward nations like Greece thus not propping up Greece's military (a EU member) after the Cold War? This is how the US is responsible? WTF...LOL

It's like a kid blaming his parents for HIS/HER college loan debt that they took out on their own as an ADULT. Even though mom and dad used to front the bill on everything else while they were growing up somehow mom and dad not paying for college (which they may not of had the reasonable ability to do so) makes that kid think it's their fault.

No that was my bad use of words in describing the situation. What I meant was that America had been playing a hand in this as well. They did not have to keep sending military aid just to prop up the Greek government. However if America was responsible then they would have dropped the aid in a 12 step program and also started working with the Greek government to start new revenues and industries to cover the shortfall that would inevitably start resulting from the end of American military aid.

 

[senseamp]

Germany seems to think that sovereign debt defaults happen because someone hasn't banned them sternly enough.

 

[werepossum]

Pensions and VAT reforms were passed.



The talks for the new program will take more than 4-5 weeks.

But you'll still be given enough cash to not strangle your economy while they continue, right?

 

[OverVolt]

Think about that a bit. They put the whole package together, make the necessary changes to their government, get their first check, and some bonehead judge comes along and sinks their entire economy by deciding it isn't legal. That has to be a major concern for everyone involved.

Iceland sunk their entire economy and then recovered. Its a process.

Always being perpetually in unpayable debt is likely worse in the long run than just biting the bullet, defaulting and starting over.

 

[senseamp]

Iceland sunk their entire economy and then recovered. Its a process.

Iceland never defaulted on sovereign debt as far as I am aware. It was smart enough to resist the pressure to move bank losses on the whole country's balance sheet. They simply wound down the bad banks and only covered insured losses, which is what a country should do. But they were ostracized in Europe for doing the right thing, unlike say Ireland which guaranteed all bank debts and hosed their citizens to pay for it.

Always being perpetually in unpayable debt is likely worse in the long run than just biting the bullet, defaulting and starting over.

Almost certainly. Once you default and restructure, you remove a sword hanging over the economy, and new investors and businesses know those debts aren't their problem. Who wants to invest in Greece with such huge uncertainty still unresolved, knowing that their economy can be destroyed by EU bureaucrats at any point? Gamblers and loan sharks, maybe.

 

[Jhhnn]

But you'll still be given enough cash to not strangle your economy while they continue, right?

That's kinda like strangling a person just enough so that they slip in & out of consciousness. If you overdo it, give 'em CPR so that you can do it some more. Such fun!

 

[Greenman]

That's kinda like strangling a person just enough so that they slip in & out of consciousness. If you overdo it, give 'em CPR so that you can do it some more. Such fun!

I would view it as giving someone CPR until the ambulance arrives.

 

[werepossum]

I would view it as giving someone CPR until the ambulance arrives.

lol +1

Screw ambulances, he won't be happy until you take a new car from someone and gift it to the unconscious person.

It's worth pointing out that most of the new money kicked in so far goes to debt servicing, basically rolling existing loans. For example, Greece is no longer in arrears with the IMF. Greece has apparently done what was requested in reinstating the old reforms which were promised but not done. Now they have a few weeks to negotiate the new reforms and loan terms. Hopefully both sides act honestly and intelligently, Greece making the reforms necessary to bring its public sector spending under control and the EU/IMF agreeing to defer payment a few years so that the surplus goes into repairing the Greek economy rather than eternal debt servicing, while also doing the necessary work to protect the taxpayers who provide the money that is loaned by ensuring that this time the surplus is real.

 

[Charmonium]

Here's a great article on the nature of Eurozone debt

http://www.businessinsider.com/europe-trying-to-hide-giant-pile-of-debt-2015-7

Basically, Germany's export economy (exports are nearly 1/2 of German GDP) is causing huge amounts of debt on the part of the peripheral countries. That's creating increasing imbalances that can't be sustained. The author predicts the ultimate dissolution or at least restructuring of the euro.

 

[JEDI]

Greece is still in the Eurozone?!

Germany just gave the go ahead for other careless countries (Portugal, Spain, and especially Italy) that you don't have to try hard to be financially responsible.

promise everything they want to hear then go back to business as usual w/check in hand.

 

[mrmt]

Nice article showing just the tip of the iceberg in terms of corruption in the Greek state, and from someone very, very critical of the Troika's mandate.

http://www.nakedcapitalism.com/2015/07/lies-damned-lies-and-greek-statistics.html

 

[werepossum]

Greece is still in the Eurozone?!

Germany just gave the go ahead for other careless countries (Portugal, Spain, and especially Italy) that you don't have to try hard to be financially responsible.

promise everything they want to hear then go back to business as usual w/check in hand.

I dunno. Seems to me that Germany et al has been pretty thorough in saying no more money until Greece does the things that Portugal, Spain, Ireland and Italy have already done.