Looks like Greece may be out of the Eurozone

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**Kilkrazy**

Personally I think Greece is fairly fethed if it stays in the Euro and works to pay off the debt, but much worse fethed to go out of the Euro and repudiate the debt. It is also much better for the rest of the Eurozone to keep Greece in, otherwise there is a strong chance of the rot spreading to Italy and Spain as well as the creditors getting nothing of their money back.

Therefore there will be some kind of fudge worked out. The deadline will be postponed for this to happen.

**Pistols at Dawn**

Iron_Captain wrote:

Alternatively, Greek debts should either be forgotten or put off until the country is strong again. First priority is getting the Greek economy back on track and giving people jobs and reasonable salaries again. Stopping the suffering of the Greek people comes first, debts can wait. Even if the Greeks caused this all by themselves (which I doubt) they are EU and so we are all in this together.
In either case, Greece needs a strong, powerful leader.

There was already a 50% write off of debts (aka 'Haircut') in 2012.

Also, Greece doesn't 'need' a "strong, powerful leader' it needs wholesale reform to end the decades of clientalism, tax-dodging and corruption that caused this mess in the first place.

**obsidianaura**

It's hard to say what is right really, I see the news coming out about Tsipras insisting on a referendum and wonder why it wasn't done earlier, and complaining that the creditiors aren't coming up with enough plans to allow growth, which I kind of feel is his job to do.

Greece has been given loans and with that money they made cuts, then undid those cuts. They still haven't got to the heart of why they're insolvent, and I personally wouldn't lend money to someone like that, but I'm sure that's a huge oversimplification.

I somewhat sympathise with their government as they are an anti-austerity government voted in for that reason, if they commit to austerity then they're going against their own mandate, so I can see why they'd want a referendum. They should have done it before the deadline though.

The euro will take damage from a Greece default, and they don't want to throw good money after bad but isn't the known consequences of propping up Greece's economy better than the unknown of letting it slide.

The main problem with the EU is it dithers over what to do. It takes so long to get a decision out of it. The Russian annexation of Crimea and invasion of Ukraine is another example of its so reaction.

I do feel like the damage has been done to Greece already. The long time of uncertainty has damaged the Greek banks. They have high debt, they're just servicing it in an endless loop. Skilled people have moved abroad (brain drain) and now it's not a tempting prospect for a business to set up in.

If a country goes bankrupt is their debt written off forever?
It seems tempting but Greece doesn't make enough money to pay for itself from year to year it's not going to well with no access to credit, plus that'll mean businesses wont be able to get it either and wont set up there.

I don't know what the solution is really. Is there an equivalent of a country moving back to its parents and paying off its debts that way?

**Kilkrazy**

Various countries have defaulted over the decades or at least had a serious problem. There is a list on Wikipedia.

https://en.m.wikipedia.org/wiki/List_of_sovereign_debt_crises

**PhantomViper**

Kilkrazy wrote:
It is also much better for the rest of the Eurozone to keep Greece in, otherwise there is a strong chance of the rot spreading to Italy and Spain as well as the creditors getting nothing of their money back.

Why? The "rot" in Greece is a mix of decades of corruption, tax evasion, public over-spending and no real export industry to speak of (and little of it that exists is apparently tax-exempt

).

No other country in the Euro suffers from all of those problems combined, so why would any "rot" from Greece spread anywhere?

There is a reason why Greece had to forge their public accounts in order to be eligible to enter the Euro, it was because their economy was nowhere near ready to allow them to do so (and still isn't). As soon as it was discovered that they had forged those numbers they should have left the Eurozone because then they would have a whole other set of financial mechanisms available that are only an option to a country with their own currency.

**Kilkrazy**

The real risk for the eurozone, though, is that Greek default and euro departure go relatively well, and after a year or so Greece is beginning a vigorous recovery on the back of a weak drachma. In that case, the people of Italy, Spain and Portugal would ask: “if Greece can do it that way then why can’t we?” And there wouldn’t be a good answer.

Forbes magazine, Jan 2015.

**PhantomViper**

obsidianaura wrote:

The euro will take damage from a Greece default, and they don't want to throw good money after bad but isn't the known consequences of propping up Greece's economy better than the unknown of letting it slide.

You seem to suffer from the misconception that money just shows up from thin air. Do you realize that after the "haircut" of 2012 that a large amount of the money that Greece borrowed comes from the taxes of all other citizens of the Eurozone?

Are you advocating that the citizens from Latvia, Portugal, Spain, Lithuania, Slovakia, Slovenia, etc, should keep paying their taxes to subsidize a country that refuses to make the reforms that all of them had to make?

**Orlanth**

Kilkrazy wrote:
The real risk for the eurozone, though, is that Greek default and euro departure go relatively well, and after a year or so Greece is beginning a vigorous recovery on the back of a weak drachma. In that case, the people of Italy, Spain and Portugal would ask: “if Greece can do it that way then why can’t we?” And there wouldn’t be a good answer.

Forbes magazine, Jan 2015.

That would worry the Eurozone how?

Germany and France want the 'club med' economies out of the shared currency.

To Germany this outcome would be a golden path, and would quickly wish someone would roll out red carpets to Spain and Portugal at least. Italy is a tougher one, its half a modern industrialised state and half, not.

**PhantomViper**

Kilkrazy wrote:
The real risk for the eurozone, though, is that Greek default and euro departure go relatively well, and after a year or so Greece is beginning a vigorous recovery on the back of a weak drachma. In that case, the people of Italy, Spain and Portugal would ask: “if Greece can do it that way then why can’t we?” And there wouldn’t be a good answer.

Forbes magazine, Jan 2015.

How does a Greek default and a euro departure goes "relatively well"? Have you passed through a non-euro default on your country by any chance? Because I have and its infinitely worse than whatever adjustments we had to make this time around.

My country went on default in 1984, taxes sky-rocketed, there was an immediate 30% devaluation of the currency and almost all lending private and public stopped.

This had the result that private companies couldn't pay their employees and went bankrupt so unemployment soared and there were people actually dying from starvation. The country only started recovering in the early nineties when we joined the EE.

And we are talking about a time when countries where relatively self sufficient. A currency devaluation coupled with a country that has to import the majority of its basic goods and foodstuffs? We have an example of one of those, its called Venezuela.

**Orlanth**

PhantomViper wrote:

How does a Greek default and a euro departure goes "relatively well"? Have you passed through a non-euro default on your country by any chance? Because I have and its infinitely worse than whatever adjustments we had to make this time around.

You have a point, this is unlikely to end well, which is why I think Greece is being used as an object lesson on the need for continued austerity.

However on the off chance it does end well it would still not problem the Eurozone as its principle players want to downsize to core stronger economies.

**obsidianaura**

PhantomViper wrote:
obsidianaura wrote:

The euro will take damage from a Greece default, and they don't want to throw good money after bad but isn't the known consequences of propping up Greece's economy better than the unknown of letting it slide.

You seem to suffer from the misconception that money just shows up from thin air. Do you realize that after the "haircut" of 2012 that a large amount of the money that Greece borrowed comes from the taxes of all other citizens of the Eurozone?

Are you advocating that the citizens from Latvia, Portugal, Spain, Lithuania, Slovakia, Slovenia, etc, should keep paying their taxes to subsidize a country that refuses to make the reforms that all of them had to make?

I'm not advocating anything really, I'm just asking the question. I'm not defending Greece or wanting to make light of what countries are going through

They've effectively wasted an entire year of money from what I've read.

What I mean is, the countries you list, if their banks are exposed to the sudden shock that there will not longer be money coming from Greece's repayments. If that makes another countries economy shaky there might be a domino effect and it starts happening somewhere else. Maybe propping up Greece until an effective buffer is in place is better.

We cant force Greece to stop acting recklessly with its budgets any other way that withholding money. Which means either Greece fails or it keeps spending other countries money. Entirely unfair yes, but who knows what will happen exactly otherwise.

**Frazzled**

Relapse wrote:
This is very scary. What kind of further chaos does this open Greece up to? I find myself wondering if some degree of civil war is in it's future.

Doubtful. It will roil the markets but frankly Greece is not up to maintaining the standards of the EU. Unless you have a common central bank setting policy, the slower economies need different economic policies than the stronger ones. Else it locks in the disparity.

What the EU could do is allow Greek currency and policy to float, while maintaining the common weights/measures/standards. Thats what you should have done in the first place.

**obsidianaura**

Frazzled wrote:
Relapse wrote:
This is very scary. What kind of further chaos does this open Greece up to? I find myself wondering if some degree of civil war is in it's future.

Doubtful. It will roil the markets but frankly Greece is not up to maintaining the standards of the EU. Unless you have a common central bank setting policy, the slower economies need different economic policies than the stronger ones. Else it locks in the disparity.

What the EU could do is allow Greek currency and policy to float, while maintaining the common weights/measures/standards. Thats what you should have done in the first place.

That's the weird thing about the EU and the Eurozone.

Lots of different countries with different economies trying to work to the same set of rules. And the richest countries tend to have the most control.

It's not really very fair imo.

At least the UK isn't using the euro so was able to drop interest rates and manage things.

**Shieldwolf Miniatures**

PhantomViper wrote:
obsidianaura wrote:

The euro will take damage from a Greece default, and they don't want to throw good money after bad but isn't the known consequences of propping up Greece's economy better than the unknown of letting it slide.

You seem to suffer from the misconception that money just shows up from thin air. Do you realize that after the "haircut" of 2012 that a large amount of the money that Greece borrowed comes from the taxes of all other citizens of the Eurozone?

Are you advocating that the citizens from Latvia, Portugal, Spain, Lithuania, Slovakia, Slovenia, etc, should keep paying their taxes to subsidize a country that refuses to make the reforms that all of them had to make?

Wow, I'm sorry to say this but you are quite misinformed. I suspect that comes from the fact any "intelligence" or "facts" you may have gathered comes exclusively from the media. That's sad.

For your better information now, not only have the tax payers from other countries not given a single cent, there is also a very very long list of how much money each EU country has made on the backs of the countries in trouble (Portugal being one of these countries in trouble)
Naturally Portugal being a much weaker country (do not take this offensively, no intention for that, simply without the natural resources/wealth nor other positive criteria Greece has in contrast), does not interest as much.
Germany profits more than everyone else, do not take this wrong, I have nothing against German people, heck not only are they n.2 most supportive clients of Shieldwolf (after the UK market), I have a brother in law from Leipzig and know quite a few Germans personally, I think they are great people.

But this has to stop, the economy is in ruins and austerity simply helps no one else but the banks maintaining their profit.
The Greek people have suffered enough I think, I don't think there's a single person among the 11 million Greeks today that witnessed a downfall today of the world markets and gave a damn about what the banks are going through in the stock markets. The general belief here is "they didn't care about us all these years, why should we care back? We have been drowning and they just watched, so let's make sure we drown together!"
(Not smart IMO, but stating how things feel ATM..,)

And that to my humble opinion is not what a "union" should be like. This is a financial war, and there are no just wars nor victors in them. There is only a new black page in Human history.

PS. As far as the "haircut" is concerned, I'm afraid that was only to make sure the Greek government got re-elected by people thinking something is finally being done to bring this to an end and to continue the ill-doing of the loan keepers.

**PhantomViper**

obsidianaura wrote:

What I mean is, the countries you list, if their banks are exposed to the sudden shock that there will not longer be money coming from Greece's repayments. If that makes another countries economy shaky there might be a domino effect and it starts happening somewhere else. Maybe propping up Greece until an effective buffer is in place is better.

But that is what has been happening since 2012.

Prior to 2012, most of the Greek debt was held by private banks and institutions. If Greece had defaulted back then, then this debt coupled with the lingering effects of the banking crisis could cause a significant percentage of those banks to collapse with all the unpredictable effects that that may have had in their respective countries national economies.

But since the second bailout of 2012, now most of Greeks debt is held directly by national governments and the BCE, combine that with the BCE's current plan to buy back national debts and that will further shield all remaining countries from a Greek default (hopefully).

**Pistols at Dawn**

Shieldwolf Miniatures wrote:

But this has to stop, the economy is in ruins and austerity simply helps no one else but the banks maintaining their profit.

edit: ok, maybe best not go down this route

**obsidianaura**

Pistols at Dawn wrote:
Shieldwolf Miniatures wrote:

But this has to stop, the economy is in ruins and austerity simply helps no one else but the banks maintaining their profit.

edit: ok, maybe best not go down this route.

Have to agree, these firms aren't making money from Greece ,they would have if Greece had paid back more than they'd borrowed but that's not the case.
Greece has had debt written off, and the money Greece has used to pay their repayments is also borrowed. And now they're not going to pay it by the looks of things.

I'm not sure how you can say people are making money. If I lend you £1000 , and you go broke before you pay back even £100 it just cant add up I make a substantial loss.

Sorry if I'm misunderstanding you but how ha made a profit here?

I'm not wanting to be adversarial but I am curious to know.

P.S Here's an interesting visualisation of Greece's debt and who it owes.

http://demonocracy.info/infographics/eu/debt_greek/debt_greek.html

**Shieldwolf Miniatures**

@Pistols at Dawn

Do you believe that by cutting down e.g. salaries in the UK would benefit the economy of your nation?
(I'm not being sarcastic, I honestly fail to see what you mean)

**Kilkrazy**

PhantomViper wrote:
Kilkrazy wrote:
The real risk for the eurozone, though, is that Greek default and euro departure go relatively well, and after a year or so Greece is beginning a vigorous recovery on the back of a weak drachma. In that case, the people of Italy, Spain and Portugal would ask: “if Greece can do it that way then why can’t we?” And there wouldn’t be a good answer.

Forbes magazine, Jan 2015.

How does a Greek default and a euro departure goes "relatively well"? Have you passed through a non-euro default on your country by any chance? Because I have and its infinitely worse than whatever adjustments we had to make this time around.

...

That is a writer for Forbes, not my opinion. I think the Greeks would do very badly by defaulting. However someone queried why the rot might spread to the rest of the Eurozone and the Forbes quotation gives a possible explanation. Another danger though is that the loss of money in a Greek default would seriously affect the so-called Club Med countries due to contagion, since these countries are already in difficulties of their own and don't want the Euro structure to be shaken.

**PhantomViper**

Shieldwolf Miniatures wrote:

Wow, I'm sorry to say this but you are quite misinformed. I suspect that comes from the fact any "intelligence" or "facts" you may have gathered comes exclusively from the media. That's sad.

For your better information now, not only have the tax payers from other countries not given a single cent, there is also a very very long list of how much money each EU country has made on the backs of the countries in trouble (Portugal being one of these countries in trouble)
Naturally Portugal being a much weaker country (do not take this offensively, no intention for that, simply without the natural resources/wealth nor other positive criteria Greece has in contrast), does not interest as much.
Germany profits more than everyone else, do not take this wrong, I have nothing against German people, heck not only are they n.2 most supportive clients of Shieldwolf (after the UK market), I have a brother in law from Leipzig and know quite a few Germans personally, I think they are great people.

But this has to stop, the economy is in ruins and austerity simply helps no one else but the banks maintaining their profit.
The Greek people have suffered enough I think, I don't think there's a single person among the 11 million Greeks today that witnessed a downfall today of the world markets and gave a damn about what the banks are going through in the stock markets. The general belief here is "they didn't care about us all these years, why should we care back? We have been drowning and they just watched, so let's make sure we drown together!"
(Not smart IMO, but stating how things feel ATM..,)

And that to my humble opinion is not what a "union" should be like. This is a financial war, and there are no just wars nor victors in them. There is only a new black page in Human history.

PS. As far as the "haircut" is concerned, I'm afraid that was only to make sure the Greek government got re-elected by people thinking something is finally being done to bring this to an end and to continue the ill-doing of the loan keepers.

I'm sorry but it is you who seem to be woefully misinformed:

http://www.bloombergbriefs.com/content/uploads/sites/2/2015/01/MS_Greece_WhoHurts.pdf

A default would have to be absorbed
instead by official creditors, holding
the remaining 83 percent of outstanding
loans and bonds. These include euro-area
governments (62 percent)

My country alone has 1.2 billion Euros tied up in Greek debt. That is about 0,5% of our GDP and we had to have a whole lot of pension fund cuts and pay cuts in our public and private sectors to cut our deficit by an extra 0,5%.

Speaking of which, I read the latest proposal that was "unacceptable" and an "insult to Greece" and guess what? The vast majority of those measures have been in effect in my country since 2011!

And lastly: "ill-doing of the loan keepers"? Really? After everyone that held Greek debt in 2012 suffered a 50% loss of their money but still loaned Greece and extra 109 billion? Pro-tip: people only profit from loans if those loans are paid, if they are defaulted on, then people lose their money.

And if you don't wan't to be at the mercy of those "ill-doing of the loan keepers": stop borrowing money.

**Shieldwolf Miniatures**

(Missed the part about the banks)

Fair enough, allow me to explain then.
According to my knowledge and follow up on the matter, facts are:

Greece owed 180 billion € at the start of this mess.
Greece borrows a total of 220 billion € in an arc of 5 years.
Greece has repaid Germany alone over 80 billion € in the same timeline. (I do not know the total for the other countries but the lists are out there and as sure as light I can dig them up for you).
Greece has had a haircut of 50% in the surplus of the debt, equal to something around 90 billion €.
Greece currently owes more than 400 billion €.

I've explained it to the best of my abilities. Now please allow me to ask you to explain to me how banks do NOT profit from this...
:-/

Automatically Appended Next Post:
One last question: if the banks (that according to me are making money) do not profit from this, and if Greece always owes more money... then WHO is cashing in from all this?

**PhantomViper**

Shieldwolf Miniatures wrote:
(Missed the part about the banks)

Fair enough, allow me to explain then.
According to my knowledge and follow up on the matter, facts are:

Greece owed 180 billion € at the start of this mess.
Greece borrows a total of 220 billion € in an arc of 5 years.
Greece has repaid Germany alone over 80 billion € in the same timeline. (I do not know the total for the other countries but the lists are out there and as sure as light I can dig them up for you).
Greece has had a haircut of 50% in the surplus of the debt, equal to something around 90 billion €.
Greece currently owes more than 400 billion €.

I've explained it to the best of my abilities. Now please allow me to ask you to explain to me how banks do NOT profit from this...
:-/

Automatically Appended Next Post:
One last question: if the banks (that according to me are making money) do not profit from this, and if Greece always owes more money... then WHO is cashing in from all this?

It was explained to you already: they don't profit unless Greece pays back their loans. If they default on those loans then they loose the money that they have invested.

If I loan you 100 € and you pay me 10 € in interest and then default on the loan, I didn't profit 10 €, I just lost 90 €.

**Talizvar**

Iron_Captain wrote:
I think Greece is now at the point it just has to reject capitalism, burn down the banks, kill the parasites (bankers are pure 100% evil), take all their wealth and use it to fuel a huge industrialisation of the country and give everyone a job. <snip>

So you are saying they need to go visit Cuba and see how it is done?

Automatically Appended Next Post:

Shieldwolf Miniatures wrote:
PS. As far as the "haircut" is concerned, I'm afraid that was only to make sure the Greek government got re-elected by people thinking something is finally being done to bring this to an end and to continue the ill-doing of the loan keepers.

I think the difficulty in all this is still the Greek government has badly done a disservice to it's people.

I have to think of them as "adults" and to place blame squarely on the banks is foolish: of course they are not your friend, you want to go into debt to the point of slavery? sure!

I am not going back into the history of that link I had but it was a long good read.
They needed to decrease spending and improve efficiencies long ago and get a better handle on tax collection.
Privatization of government owned businesses and systems to combat corruption in government were also part of the "austerity" packages, many of the steps outlined were hard but showed significant improvement if followed.

My problem is if the Greek government had the chance to do it all differently, I do not think any lessons learned were made that they would do anything different.
Entertaining and painful article here: http://www.vanityfair.com/news/2010/10/greeks-bearing-bonds-201010 Back in 2010!

**Spetulhu**

Shieldwolf Miniatures wrote:

One last question: if the banks (that according to me are making money) do not profit from this, and if Greece always owes more money... then WHO is cashing in from all this?

IIRC the banks have mostly gotten out by now, if not with profit then at least with smaller losses than if taxpayers (ECB) and IMF hadn't bailed them out by giving Greece more cash. That's how it works - the "too big to fail" banks that play with risky loans and capital speculations have once again managed to make ordinary taxpayers pay for their clumsiness.

**lord_blackfang**

This is no longer about debt, it hasn't been since Siriza came to power.

It's about toppling a (democratically elected) government by any means necessary to show Spain and everyone else that the financial markets run the show, the last vestiges of national sovereignity in the EU are an illusion and absolutely no dissent against neoliberal ideology will be tolerated.

**obsidianaura**

Spetulhu wrote:
Shieldwolf Miniatures wrote:

One last question: if the banks (that according to me are making money) do not profit from this, and if Greece always owes more money... then WHO is cashing in from all this?

IIRC the banks have mostly gotten out by now, if not with profit then at least with smaller losses than if taxpayers (ECB) and IMF hadn't bailed them out by giving Greece more cash. That's how it works - the "too big to fail" banks that play with risky loans and capital speculations have once again managed to make ordinary taxpayers pay for their clumsiness.

I heard it was Goldman Sachs helped the Greek government pretend it had more money than did so it could borrow more. It was down hill from there.

**kronk**

Greece debt talks: EU chief feels 'betrayed'

Damn. My wife and I were seriously talking about going to Greece this summer (tomorrow, in fact), but we decided on the US Virgin Islands instead. Soooo glad we did!
Things like "Greek cash machines were shut on Monday morning" would have been unpleasant. I hope they get their gak sorted out. I can't imagine how crappy that must be.

The European Commission chief, Jean-Claude Juncker, has said he feels "betrayed" by the "egotism" shown by Greece in failed debt talks.

He told a news conference that Greek proposals were "delayed" or "deliberately altered" and the Greek people "should be told the truth", but the door was still open to talks.

Greece has called a surprise referendum and Greek banks are closed for a week.

European stock markets saw big falls on Monday after the weekend's events.

The negotiations were not "a game of liar's poker", Mr Juncker said. "Either all win or all lose".

He said the talks were broken "unilaterally" by the announcement from the Greek Prime Minister Alexis Tsipras that he was calling a referendum for 5 July.

The Greek government responded to Mr Juncker's comments by saying: "An essential element in indicating good faith and reliability in negotiations is sincerity."

Mr Juncker said that he still believed a Greek exit from the euro was not an option and insisted that the creditors' latest proposal meant more social fairness.

German Chancellor Angela Merkel echoed those comments on Monday, saying Greece had received a "generous offer" but adding she would not be opposed to further talks with Greece after Sunday's vote.

Is Grexit nearer?

European press sees Greece on verge of exit

Existential threat to euro from Greek exit
Referendum question

The question which will be put to voters on Sunday will not be as simple as whether they want to stay in the euro or not - instead it asks Greeks to approve or reject the specific terms laid out by Greece's creditors:

"Should the agreement plan submitted by the European Commission, European Central Bank and the International Monetary Fund to the June 25 eurogroup and consisting of two parts, which form their single proposal, be accepted? The first document is titled "Reforms for the completion of the Current Program and Beyond" and the second "Preliminary Debt sustainability Analysis."

Not approved/NO

Approved/YES"
Analysis by the BBC's Chris Morris

It's hard to remember the last time a president of the European Commission used such blunt, undiplomatic and sometimes angry language about the government of a member state.

Jean-Claude Juncker said he felt betrayed, and suggested that Alexis Tsipras was lying to his people about cuts in wages and pensions.

There was no hint of a last minute deal before Greece's current bailout programme expires Tuesday evening.

Instead Mr Juncker appealed directly to the Greek people ahead of the proposed referendum this weekend.

And the message was clear - vote "yes" to our proposals and we'll support you. Vote "no" and you'll probably get kicked out of the euro.

Mr Juncker also said any criticism aimed at him or other senior politicians in the creditor institutions was unjustified.

It was an emotional appeal from the heart.

But it also felt like a pre-emptive effort to make his side of the story public in case this all goes very wrong.

On Saturday, the European Central Bank (ECB) decided not to extend emergency finance to the Greek banks, after the breakdown of talks on giving heavily indebted Greece the last payment of its international bailout.

Following the ECB announcement, Greece said its banks would remain shut until 6 July. Cash machines are now reopening, but customers can withdraw only limited amounts.

Transport Minister Christos Spirtzis announced that public transport will be free in the Athens area for a week while banks are closed.

Greece crisis - live coverage
Greek cash machines were shut on Monday morning

A critical deadline looms on Tuesday, when Greece is due to pay back €1.6bn to the International Monetary Fund - the same day the bailout expires. There are fears of a default and a possible exit from euro.

The French cabinet met on Monday in an emergency session. President Francois Hollande said afterwards that a deal was still possible if the Greeks wanted it.

"There are a few hours before the negotiation is definitively closed, in particular for the prolongation of the Greek aid programme."
'Resorting to barter system'
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Media caption Greeks in Athens gave the BBC their views on bank closures and the government

Athens resident Ilia Iatrou says the situation is "unbearable".

"My mother-in-law queued up for over an hour at the cash point just to be able to withdraw a small amount of money.

"I haven't tried to go to the cash machine myself, as we don't have much money left.

"My neighbours and I have now resorted to a sort of barter system among ourselves because we have no money left.

"We can't take any more of this, so we have to keep saying no to the EU masters.

"The EU can't afford to let us fail so we should continue to say no and they will blink and give us a better deal."

In its decree bringing in the bank restrictions, the Greek government cited the "extremely urgent" need to protect the financial system due to the lack of liquidity.

The main points are:

Banks closed till 6 July
Cash withdrawals limited to €60 (£42; $66) a day for this period
Cash machine withdrawals with foreign bank cards permitted
Pension payments not part of capital controls
Banking transactions within Greece allowed

In reaction to the crisis, the London, Paris, Frankfurt and Milan stock markets fell sharply in early trading on Monday, following similar falls in Asia.

The euro lost 2% of its value against the the US dollar. Government borrowing costs in Italy and Spain, two of the eurozone's weaker economies, have also risen.

The Athens stock exchange is also closed as part of the measures.
Days of turmoil

Friday evening: Greek prime minister calls referendum on terms of new bailout deal, asks for extension of existing bailout
Saturday afternoon: Eurozone finance ministers refuse to extend existing bailout beyond Tuesday
Saturday evening: Greek parliament backs referendum for 5 July
Sunday afternoon: ECB says it is not increasing emergency assistance to Greece
Sunday evening: Greek government says banks to be closed for the week and cash withdrawals restricted to €60

Eurozone finance ministers also blamed Greece for breaking off the talks, and the European Commission took the unusual step on Sunday of publishing proposals by European creditors that it said were on the table at the time.

But Greece described creditors' terms as "not viable".

The current ceiling for the ECB's emergency funding - Emergency Liquidity Assistance (ELA) - is €89bn (£63bn). It is thought that virtually all that money has been disbursed.

**Spetulhu**

obsidianaura wrote:
I heard it was Goldman Sachs helped the Greek government pretend it had more money than did so it could borrow more. It was down hill from there.

Aye, that was part of it. The bank got paid extremely well to help Greece shuffle numbers around - some technicalities with what kind of money countes as "debt" that should be reported. It worked for years and now it's all fallen on the ordinary people. Not just the Greek either, it'll cost us all in some way. And G/S and other big banks continue playing with risky money that doesn't exist, paying huge bonuses to their top chiefs while demanding central bank bailouts.

**Talizvar**

Reading this now, found the actual details of the IMF reforms "agreed to" with the Greek government.
I perform company system audits myself and it appears the focus on dealing with systems seems about right (a few pages in mind you...) will read further:
http://im.ft-static.com/content/images/55b27a7e-d87c-11e4-ba53-00144feab7de.pdf Interesting to see the real details.
http://www.reuters.com/article/2015/04/01/us-eurozone-greece-reforms-idUSKBN0MS3CE20150401 The document was pointed to by this article.

Okay, read the document.
Reasonable.
Just looking for eliminating waste and ensuring taxes are paid by EVERYONE not just the working stiffs who work for companies and have income reported.
Broad outline how to run a government or there is no hope of revenue to remain viable.

Now looking at 2012 austerity terms:
https://en.wikipedia.org/wiki/Fifth_austerity_package_(Greece)

Terms:
- 22% cut in minimum wage from the current €750 per month.
- Holiday wage bonuses (one extra months of full wage being paid each year) are permanently cancelled.
- 150,000 jobs cut from state sector by 2015, of which 15,000 shall be cut by the end of 2012.
Odd though - public sector employment per capita was not as big a deal as I figured (2011 stats here)

- Pension cuts worth €300 million in 2012.
- Changes to laws to make it easier to lay off workers.
- Health and defence spending cuts.
- Industry sectors are given the right to negotiate lower wages depending on economic development.
- Opening up closed professions to allow for more competition, particularly in the health, tourism, and real estate sectors.
- Privatizations worth €15 billion by 2015, including Greek gas companies DEPA and DESFA. In the medium term, the goal remains at €50 billion.

"...they were still likely to exceed the 120% debt level in 2020"

What drives it all home is for every working adult in Greece a quarter million is owed.
So everyone has to give up a very nice house... each. Yikes!

**PhantomViper**

Spetulhu wrote:
Shieldwolf Miniatures wrote:

One last question: if the banks (that according to me are making money) do not profit from this, and if Greece always owes more money... then WHO is cashing in from all this?

IIRC the banks have mostly gotten out by now, if not with profit then at least with smaller losses than if taxpayers (ECB) and IMF hadn't bailed them out by giving Greece more cash. That's how it works - the "too big to fail" banks that play with risky loans and capital speculations have once again managed to make ordinary taxpayers pay for their clumsiness.

Yes, they only had 50% losses instead of 100% if Greece didn't receive the 2nd bailout in 2012...

Automatically Appended Next Post:

lord_blackfang wrote:
This is no longer about debt, it hasn't been since Siriza came to power.

It's about toppling a (democratically elected) government by any means necessary to show Spain and everyone else that the financial markets run the show, the last vestiges of national sovereignity in the EU are an illusion and absolutely no dissent against neoliberal ideology will be tolerated.

That is a load of bull.

If Europe really wanted to topple the Syriza government all it needed to do was to refuse to make the first deadline extension back in February / March or simply prevent the the ECB from raising the debt limit to the Greek banks the first time that they reached it.