Should the Greeks pack up and leave the Euro?

[youngmafbog]

A second deal for the Greeks has been bashed out, but with new austerity measures and effectively a cutting of soveignty will the Greek people actually buy it. On top of this with the private bond holders taking a 55% 'haircut' it is extremely unlikely the Greeks will be able to get Credit outside the EU. They also have to pay back the debt into an Escrow account before spending on hospitals etc.

It smacks to me like this was struck to protect the Euro not for the benefits of the Greeks. I personally cannot see that lasting.

[d9f1c7]

They just kicked the can down the street a bit further. The Euro may well collapse in it's current form and the Greeks will probably start the process. The basic problem here is that the currency was used as a political device to push forward the federalisation of Europe, unfortunately the fiscal effects and details where ignored. In the end the Germans will tire of supporting the lame ducks and act by probably going back to some form of the mark. I work in a major world bank and we have been preparing for anything between Greek withdrawal and complete collapse. I suspect others on here who work in banks will report similar activity in their work. if the banks are spending millions preparing then they must think there is a serious risk of collapse.

[DC_FC]

What affect would it have if greece were given more and more money ?
Would it not be better for greece to leve rather than keep asking for more money ?

[Brenden]

Then Spain, then Ireland, Then Portugal and Italy - all in trouble financially.

[owdhamer]

I love the greek people ,but they are a bit iffy as regards paying taxes etc, the day of reckoning is close ,. when the nation could go unders

[DTCwordfan]

they avoid paying taxes, all sorts of scams at both industry and private level - just look at any Greek villa and outside are the ubiquious cement-mixer, sand and cement bags, or building breeze-blocks. Finish your house and you become "exposed" to full property taxes.

The worry going forward is that the growth envisaged to drive the divisor and bring down the debt ratio to <120% stalls or is non-existent. If their economic approach doesn't alter then yes, the bilges here they go and a risk of bringing down the whole EU "canoodle".....

[DTCwordfan]

Then what is the alternative - who is going to finance them with Drachmas?

[bibblebub]

Greece is cattle trucked whatever happens and if they want to be spiteful they should quit and say to the rest of the Eurozone "with all the market turmoil that's about to happen because of us quitting, lets see how you like dishing out this sort of medicine onto your own people".

Most of billions involved in the latest deal is not for the benefit of the Greek people, it's going straight back to the banks.

None of this excuses past Greek profligacy but they should not have been welcomed into the Euro with open arms until they got their economy in order.

[jomifl]

When Greece had the drachma the government could tax the non tax paying population by the back door(by printing currency with which to pay the enormous civil service). This just devalued the currency and so penalised the whole population. As soon as they went into the euro this option was not open to them so they had to borrow, hence their current mess. The Greek population will on the whole, now have to pay the taxes that they avoided over the last decade.

[whiskeryron]

I suspect that contrary to what some folks think, once you are in the Euro Zone it is very difficult to get out. If the Greeks decided to go back to using the drachma how would they do it bearing in mind that the debts they owe are in Euro s, also as there are now no border controls how would you stop people taking their saved Euro s out of the country to put into other countries bank accounts etc.?

[New Judge]

Exactly, ron, which just goes to demonstrate the utter folly of the Single Currency project.

Most annoyingly, these "worst case" scenarios were amply illustrated to the follish politicians who went ahead with this ill-fated scheme which has blighted the lives of millions of people. The warnings were brushed aside.

[Gromit]

Why would the Greeks pack up and leave the Euro? They have just been thrown a lifeline and they are going to get out of the sh it with other people paying the bill (for now). Euro Lottery winners tend not to join gamblers anonymous.

[andy-hughes]

The concept of the Euro is similar to the concept of the EU - it is the design of people who live in a specific world, which is not inhabited by the rest of us.

Anyone living a normal lifef accepts that cultural differencces between countries are a good thing, to be explored and appreciated.

Ministers and bankers who do not live in this world, think that it's possible to homoginise entire nations and make them 'one' because it suits their business and financial practices - making them seriously rich inthe process.

That is why 'multi-culturalism' - which in effect causes the opposite of its title, along with the medling of European nations by a single currency was always a dodgy idea, and the sooner they start looking at ways todismantle the concepts, the better for everyone concerned.

[Gromit]

I agree with andy-hughes. The sooner Scotland, Wales, NI and England are release from this homoginised Westminster Government the better. Trying to make these nations one has been a complete disaster? Forcing the single currency (the pound) when the Scots preferred the Merk was asking for trouble.

[Old_Geezer]

Coping with the pressures tend to be less of a problem in a nation sized area with one government. It tends to be a potential disaster for a continent sized area where each member has its own sovereignty to protect.

I think the Greek people will do as their leaders tell them. Pretty much what happens most places.

[New Judge]

I would not be so sure, OG.

The Greek people are reaching the end of the road. Many of them now have no income having lost their jobs and exhausted their entitlement to benefits. Thousands of small businesses have bitten the dust. They have a General Election planned for March or April. They then have the opportunity to get rid of their EU-appointed Prime Minister although the EU has had the temerity to suggest that these elections be postponed for a year (and then what – another year?).

This latest “rescue package” is nothing of the sort. All it does is postpones the inevitable because Greece’s economy has been ruined by using a currency that they cannot afford and is more designed to save politicians’ faces than to help the Greeks.

The EU now wants a permanent presence in Athens to ensure the planned austerity measures are maintained. I don’t think the Greek people will do as they are told for much longer. At least one of the parties has said they will dump the austerity measures and since they will almost certainly need further funds this will lead to a default.

[rojash]

"just look at any Greek villa and outside are the ubiquious cement-mixer, sand and cement bags, or building breeze-blocks. Finish your house and you become "exposed" to full property taxes."

Totally untrue. Especially as property taxes didn't exist until this year. They were introduced as part of the austerity package.

If you want electricity you can't avoid them, as they are added to the electricity bill.

[jno]

that's interesting, rojash, as I was told the same thing (by Greeks) about the many unfinished houses, many years ago. Has it never been true?

[rojash]

Sort of, jno. First it wasn't the property tax they were avoiding but all the costs that have to be paid when a property is built. Believe it or not, even if you build your own house, you have to pay the equivalent of the National Insurance contributions for the number of workers that might have been required to build it.

There are also lots of other charges that become due when the property is completed.

Years ago, the property was classed as complete when the roof was installed, which is why you used to see so many properties with flat tops and reinforcing rods sticking out.

I don't know exactly when that loophole was plugged, but it was more than 10 years ago. You cannot get an electricity supply until the property is declared complete, and all relevant charges have been paid.

[rov1100]

When the last Greek person has left the country as they surely will how do they think the enormous debt will be paid? With free movement of Labour around Europe would you sit tight knowing the debt could never be repaid and see your standard of living diminish each year? First it was the Poles but now wait for an influx from Greece.

[rojash]

"First it was the Poles but now wait for an influx from Greece."
Though there's quite a significant difference - a great number of young Greeks speak excellent English, and have degrees from UK and US universities. In fact I know quite a few who have already left and have pretty good jobs in IT in the UK.