Should Greece remain in the euro-zone after they default?

So, they want more jobs and better wages and ease-offs in some taxes while hoping to cut the debt burden... my question is, with what money and economic situation are Syriza going to do this?

Doing what Italy does, I guess. Borrow more cheaply, pay off the expensive debt with that to ease the load of the interest, then inject tons of money into the economy like a good little lefty government, and wait for the money to multiply.

If your country doesn't implode mid-way through this, your corruption levels aren't too high and you actually enforce your tax laws, this will work.
Invest enough in infrastructure, and the wealth will spread. I'm just not convinced Greece has the corruption-free base to keep track of such streams of cash flow.

Art Morte wrote:So, they want more jobs and better wages and ease-offs in some taxes while hoping to cut the debt burden... my question is, with what money and economic situation are Syriza going to do this?

Debt forgiveness/restructuring of the debt. Which they should get anyways otherwise they will default.

How did the German banks convince the IMF, European governments and ECB to absorb all the Greek debt they had? Now if Greece defaults it will be the German taxpayers and European institutions suffering the losses rather than the bankers that made risky investments (and should pay for it).

basically what BC said .

Current deal is a catastrophe and it clearly failed . Apparently , many masks are falling these days.. you used to hear our debt to GDP wasn't viable and all at 120% .. but now , near 180% , it is ?? How exactly our problem got 60% worse and why ? There's no hoping and no guessing , it failed and we're not going to continue this madness any longer .The current shit here will stop , i don't care how we are going to pay a debt , we were always paying our debt and we will always going to be paying our debt , we won't continue to destroy the country for the banks and bankers mistakes , especially for a deal which actually made things much worse for us. The current austerity is going to be over very soon regardless of what people elsewhere yell about .

Again , media around Europe are making this a really complicated issue . Our media of course run their own propaganda , no denying that.. in any case , they draw Syriza and Chepras as if they are going to stop the reforms that everyone wants from Greece and lead us back to the past , when it's exactly the opposite that's happening really. Previous government never did any reforms and such things , were they going to deal with taux fraud on themselves and their friends? Were they going to punish themselves and destroy their public-army which sustained them there ? Do these media even use journalism ? I am completely sure they do not. Most if not all of state corruption was them , and they are gone. The other serious part are the banks and oligarchy , which Syriza wants to fight badly , years before the crisis begun. Yet media are talking like Syriza will actually destroy everything.. It's infuriating even . When it's them they actually begun reforms already , sorting out public issues and restructuring the body of the government , cabinets , logistics and so much more that will follow , it's only a few days and they're doing things that didn't happen in decades Previous c**nts cut pensions from old gradnmas who barely survived with 500e pre-crisis , to 350e or so ... and themselves moved around with 500.000e BMW cars which they bought from Germany who were bailing us out On one hand we were in deep shit , on the other they kept buying weaponry for the army , never cut from the government which was always a grand issue , didn't touch the rich , over taxed the poor and middle class , made even more shady business and did everything for their friends in the banks , to the detriment of millions . Syriza was never part of all this and it's actually working to deal with it all. The most progressive government we ever had tbh and people talk against them ? Do you want things to stay the same , so we know who's who at least? Because certain EU officials pretty clearly revealed themselves.

People elsewhere don't really understand what it is to have your wages cut to shreds within 4 years , paying severe taxes and bills , making huge sacrifices for years just to get by and then one day , there comes yet another unconstitutional bill which basically says , "hey citizen , u have to pay 1300e mostly for the banks" "that's only for 2014 , see you next year " .

GTFO .

But what can you do now , the media all these years draw a common perception of the Greeks , the Greeks this and the Greeks that . Yes there are flaws like pretty much everywhere else , but work ethic and commitment was never an issue which defines the majority , certainly and by no means not like it's being portrayed .. majority was never rich and had to work their ass off to make a living and it was always like that. If anything , we've worked for more hours and with less money for years now and what we saw , is a little 0.7% growth and the debt sky-rocketing , everything negative getting worse and everything positive dissapearing..and the economy dead . Fkn bless . We will have no more 'saving' now thank you.

We either agree to sort this out based on common logic and actually have Greece paying back the help we received and actually having an ally in Greece instead of a corpse and EU actually proving the ideals it was based upon solidarity and unity , or shit will seriously get real . And if in a worst case scenario we left the eurozone and were being economicaly fought after that? It would just be the EU showing their true faces really , which frankly i still refuse to believe the EU would ever do that.. but yeah , this whole situation must end at some point ,we are all sick and tired of it. You can't say on one hand we are all in for solidarity and unity and shove it down at our throats when we have a problem . Tomorrow it will be a different country , will they do the same to everyone ? Again , the new deal must be made with common logic and actually allowing Greece to help back . Not everything is just about a fkn debt , anyone who preffers a corpse over an ally is an idiot , plain and simple . There's no way Greece will abide to our doom , whatever that means , whatever it takes. Even a 40% cut of the debt and a new deal that would allow the nation to stand up to its feet , will result in everyone getting most of their money back . If they don't even want most of it back and a strong ally at their side , well then , it can't be us that is the problem surely ? You pay the banks and the bankers mistakes then , see how it feels .

http://money.cnn.com/2015/04/07/news/economy/greece-germany-war-damages/index.html

Greece's government is making a fool of itself with these war reparation claims. This all really has felt for a while now like only delaying the inevitable Euro exit by Greece.

They should get a large part of their debt annulled though, it's not like they can dig themselves out of this one, and if you look at the big picture, it's really peanuts.

BUMP

So, Greece have decided to hold a referendum on 5 July on basically whether to stay in the euro or not. On their most recent bailout deal terms.

It's been reported that a deal should have been reached by 30 June, when Greece needs to make a payment to the IMF. I don't know how that works now with the referendum only on 5 July.

Also, I didn't notice in the reports that is the referendum binding the Greek parliament or just something for the politicians to consider?

Anyway, even if Greece and her creditors reach a deal now, I wonder whether it's going to last and will we be in this same situation again in a year's time or so. But we should know soon whether Greece defaults or not.

I am not sure if it binds the Greek parliament , i think it doesn't actually , because Tsipras said , ' i vow to respect whatever the decision of the people is ' . No need to say such a thing if the decision is binding the parliament .

I think it's quite sad and worrying they couldn't find an agreement all this time to be honest here. You would expect everyone to concede and meet each other in the middle and try and work it all out for the good fortune of both sides. But no. Also , it's being said they will retire their terms and it isn't yet certain if they will agree to extending the current deal for a little while longer , just so we can have the referendum. Either of this happens and there will be no need for referendum really. Would be quite the nasty move , but yeah . Both sides have shown their true faces by now anyway.
Europe talking about unity and Tsipras about democracy

I don't know what will happen , but when they offer you an ultimatum , and the parliament decides on a referendum , i think it's pretty safe to say whatever happens we're as fkd as it gets

Is there even a way for Greece to leave the eurozone without leaving the EU? My current understanding is that this is not possible. I would argue for the benefits of your own currency greatly exceed another 5 years of depression, but I'm not sure if this is true if you need to renegotiate all trade agreements with the EU.

As most of you know, I side with Greece in this issue. I think the troika has been reprehensibly irresponsible and hypocritical when it comes to Greece. Germany aught to be reminded what happened after WWII when most of its debt were forgiven, and about what happens when the 'winners' put excessively punitive conditions on the 'losers'.

Btw Dante if you have any savings I would try to get them out of the bank and put them under your mattress as cash. At least until the future clears up a bit.

Agreed . But , as far as i know , there's no rule or law or anything about any country that leaves the euro being obligated to leave the EU . As far as i know , noone can cast us out of the EU but ourselves . Unless they force us out in time with other means like you imply , with the trade agreements and such things .. then no , we can , theoriticaly at least , leave the euro and remain in EU . And really , the vast majority of Greece wants to remain in the EU , nobody feels we should leave the EU , everybody agrees Greece is part of Europe , if anything. The euro is another thing though. We shouldn't even have been part of the Euro to begin with.

Tsipras obviously doesn't want to keep the euro under those terms , but wants Greece to be part of the EU and has clarified this a thousand times by now , let alone the damage he would suffer if we do.. His political career will be effectively over if we leave the EU and his goverment will fall in a matter of hours if this happens.

So if Greece leaves the EU it will be either because they wanted so , or most likely , because they will have eventually oppressed us so hard that we will have to. Time will tell , but anyway , let's see what happens first . Things are up in the air right now , anything is possible .

As for me , well my savings are almost all gone by now , i have precious little to lose . You don't survive all this time around here since 2009 with no consequences sadly . I mean , i still have something left but.. yeah , i won't lose my sleep over it. I am not afraid really , like the terds here who run all day to draw their money out (trust me , ITS HAPPENING I SEE IT ) . Let it come , i don't give a shit. Damn me if i lose any sleep because of them all , let the creditors lose their billions and Greece be doomed . Greece gotta Greece afterall .

In any case , i am still young , i will make more money whatever happens and whatever currency we have . Personally i still remember the drachma , it was around untill i was 10 , 11 or so . Things were much , much better then . I'd be willing to survive even 10 years of the same if things are going to be like it used to be back then , life was seriously easier . You didn't need all of your money to see out the month , although it didn't mean you were rich either. Being middle class was actually ok , now there's pretty much no middle class anymore . If the drachma fixes that , i am all for it .

Anyway , let's see what happens . I still have doubts if we are really leaving the Euro , despite what it seems right now.. But. The drachma is , perhaps for the first time ever , a very realistic possibility . At least the closest it ever got to a return .

I suppose the short-term effect of going back to the drachma would be really bad, as the drachma would be very weak compared to the main currencies. Imports would become very expensive and quality of life would fall drastically. But the long-term effect is probably exactly what Greece needs, an independent currency makes it possible to shape your economy to fit the global markets. You can, in theory, pick and choose the areas of business where it's feasible to buy or produce goods and services in drachmas, in comparison to other currencies. As long as Greece are in the euro, they will have to try and be competitive with the rest of the Eurozone - and it's looking like Greece's economy cannot do that.


The breaking news tonight are that the EU finance ministers have rejected continuing the bailout programme. This was probably expected after the referendum announcement.

This one's for the history books.

For what it's worth, if I were a Greek citizen I would appreciate the ability to choose the direction of my country going forward rather than have the politicians decide it. Especially for such a monumental decision.

EU finance ministers are making a colossal mistake not reaching a deal before it got to this. Once Greece leaves the euro, the euro goes from being a permanent commitment to optional for everyone. It really can't get any worse for Greece, so I can't see how the drachma would fail.

Short-term it can get worse. Imagine majority of imports ceasing to come to the country, because the people cannot afford to buy them in much-weaker drachma. Exiting the euro would be really painful at first, but long-term it would be good, I believe.

No more pricey clothes , iphones and Porsche Cayen around  

what is the greek pleb going to do now

Some links:

The Greek Analyst (best english language resource): https://twitter.com/greekanalyst

https://pbs.twimg.com/media/CIheaY-WwAIsv4p.jpg

Krugman: http://krugman.blogs.nytimes.com/2015/06/27/europes-moment-of-truth/

Matt Yglesias on why Greece is ****ed: http://www.vox.com/2015/6/27/8856297/greece-referendum-euro

Lars Christensen on the inevitability of it all: http://marketmonetarist.com/2015/06/27/the-end-game-or-a-new-beginning-for-greece-we-have-seen-all-this-before/

"With more than 30% of votes counted, results from the Greek referendum suggest voters have rejected the terms of an international bailout."


Looool Massive FU to EU that.

Interesting times ahead in Europe.

While I think Greece would be better off without the euro, I'm not sure this no vote is what they needed. It's a very populist move by the government to call a referendum on a matter the majority of people won't truly understand, who will vote with passion rather than sense.

However, if this leads to a Grexit, it will probably be better in the long-term.

And how can Greece to reborn with the return to dracma ?.

It's incredible how much Greece depends on imports. Basically Greece imports everything , even the foodstuffs.
While at same time Greece exports nothing. Maybe yogurt, feta and some  sheep.....
If dracma will be back , it will be with a devaluation around 50 %  , basically a purchasing power  extremely limited outside Greece and it is further awful for a country exactly so depending on imports as Greece.
Just thiking to Gas, from Russia.
Greek ppl might not even permitt to have heating of private homes this winter.

Οὐτόπος .

Robespierre wrote:And how can Greece to reborn with the return to dracma ?.

It's incredible how much Greece depends on imports. Basically Greece imports everything , even the foodstuffs.
While at same time Greece exports nothing. Maybe yogurt, feta and some  sheep.....
If dracma will be back , it will be with a devaluation around 50 %  , basically a purchasing power  extremely limited outside Greece and it is further awful for a country exactly so depending on imports as Greece.
Just thiking to Gas, from Russia.
Greek ppl might not even permitt to have heating of private homes this winter.

Οὐτόπος .

Does it even get cold in Greece?

Robespierre wrote:And how can Greece to reborn with the return to dracma ?.

It's incredible how much Greece depends on imports. Basically Greece imports everything , even the foodstuffs.
While at same time Greece exports nothing. Maybe yogurt, feta and some  sheep.....
If dracma will be back , it will be with a devaluation around 50 %  , basically a purchasing power  extremely limited outside Greece and it is further awful for a country exactly so depending on imports as Greece.
Just thiking to Gas, from Russia.
Greek ppl might not even permitt to have heating of private homes this winter.

Οὐτόπος .

Yes they will be hurt by imports, but deflation will be gone, they will be able to print money and get NGDP growing again. When this happens consumption will pick up again, creating demand for local jobs. Greece has a GDP output gap of about 10% (basically, Greece right now is 10% lower than where it should be and can get there with minimal effort).  After an initial period of total chaos, they will grow at high rates for the next few years they will continue to grow at a fast rate.

The problems are medium term. Greece will need to get access to the capital markets. In order to do this they will need to pay off their debts (in euros). If the eurozone is not willing to lighten their debt load when the euro is at stake, I doubt they would be willing in a few years... and if Greece can't get a deal, then they will turn to inflation to finance new projects. Which generates all sorts of issues.

At least that's what happened when Argentina went through a similar process.

They can very well turn into another Venezuela though

talking of Argentina/Greece ... I feel that if the Greek public debt was in the hands of  many individual investors (as Argentina 2001) more than in the hands of French and German banks, they would not have labored to keep alive Greece

Tbf ECB are one of the biggest reason for this mess. They can't even deny the greek banks liquidity

If Greece were to leave the euro, I'm sure there would then be significant debt forgiveness.



As you can see, it's other Eurozone countries and institutions that are owed a lion's share of Greece's debt. While Greece use the euro, I imagine there would be opposition from the rest of the euro nations to give them debt relief. "They are in the euro, like us, so why do they get to play by different rules?" But if Greece went back to the drachma, I think the general opinion would move towards: "Well, they're in the drachma now, not one of us any more, let's forgive them some of their debt, because they're on their own road now and they won't be able to pay back all their euro loans in the weaker drachmas anyway".


If Greece relies heavily on imports, that is a big problem. On the other hand, hopefully it would mean that moving to the drachma would see Greece start producing more in their own country, creating jobs and lessening the need of imports.

Drachma would also mean a big boom for Greece's tourism as people from the euro countries would find it cheap in Greece.


Move to the drachma, give Greece debt relief, start producing more domestically, get an economy that can work in a healthy, natural manner, instead of this life-support that is just continuously fighting the tide.

The big economies in the euro (Germany, France) are desperate to keep Greece in the euro, because it benefits them to have as many nations as possible in the euro. Merkel et al. are probably frightened that if Greece leaves, others might leave in the future. But enough is enough, you shouldn't force hugely different economies to operate under the same currency.

AFAIK Greece joined the Euro under false pretenses in the first place. So now accusing the rest of Europe being the only guilty ones for their problems is a bit daring. Of course one could say the people who checked Greece's numbers and didn't consider them fishy have a part guilt of allowing them into the Eurozone, but obviously Greece thought it was a good idea to join the Euro at that time despiting having a sufficiently stable economy.

Anyway, before Greece actually address their inherent problems like widespread tax evasion and the "fakelaki" culture (i.e. bribes are pretty much necessary for everything), it will be really tricky for them to get anything going.

By the way, a really big problem in that respect is the Greek health system at the moment where patients often have to wait for months for necessary treatments unless they can offer the doctors some "small envelopes" with big money. Tsipras did promise to clean this up as one of his promises to get elected, but right now the state of the health system has become even worse. (And that's not the only thing he promised and didn't deliver, of course).