You simply reveal that you do not know how the EU economy works. Greece receives massive amounts of funding through EU, basically free money, this is completely separate from the bailouts. While every EU member receives funding, Greece is the largest recipient. So with Grexit, there will be a much harder hit on the country than you or most Greeks realize. I'm not saying it's a bad idea, I'm saying you don't understand how deeply Greece is tied to the EU money tube. For many countries, leaving the EU would make sense (Denmark, Sweden, Finland) as they are net contributors to the EU budget, not so for Greece.
I think it was an editorial, which is nothing more than the man's opinion. People are entitled to their opinions, even if most think it's bizarre. Some people in the states still push for slavery reparation too. I don't necessarily post those articles because I believe or subscribe to every word. But sometimes it is important to understand the ebbs and flows of opinion out there so you know where the dialog is going. As crazy as the comparison in the article is, you should know that there are some staunch Greek supporters outside Greece that are pushing that.
Even Greenspan Sees It: Greek Exit From Euro Just A Matter Of Time by Anthony B. Sanders • February 8, 2015 The Greek Treasury is running out of money. In fact, they may have only a few weeks of cash left. So, we know have what is know as the Athenian Chicken Dance. Who will flinch first? Greece or Germany (and the ECB)? (Bloomberg) — Greece’s exit from the euro is just a matter of time because no one wants to risk lending money to the country any more, according to Alan Greenspan. Hours before Prime Minister Alexis Tsipras was due to set out plans on how to keep his government paying its bills, the former Federal Reserve chairman said the nation’s crisis can’t be resolved as long as it remains in the single currency. “I don’t see that it helps them to be in the euro and I certainly don’t see that it helps the rest of the euro zone,” Greenspan said in a radio interview with the BBC on Sunday. “I think it’s just a matter of time before everyone recognizes that parting is the best strategy.” German banks have rather a large exposure to Greek debt .. and default. The Greek 5 year credit default swap is in dangerous waters. The spread between the Greek sovereign yield curve and the German sovereign yield curve sums it up nicely. Greece’s debt to GDP ratio is at 175 percent compared to Germany’s 77 percent. The Greek banking system and Greek deposits are like a week-old gyro.
In my opinion, for Europe net subsidies that where channeled to Greece for years was not even such a bad thing, and most every European net payer accepted such and faithfully paid into it. The idea was to equate living standards, infrastructure, and over a long period of time harmonize economic power, at least to some extent. The worst for Europe and generally for any union worldwide is when you have individual members who just reject to play by the rules. How come Spain could so far play by the rule, they made mistakes but they swallowed the bitter pill and I am pretty certain that they will be able to manage and cope. Same with Portugal but the austerity success story that really stands out is Ireland. The worst is a mentality such as in Greece where there is a deep rooted belief of entitlement as if it was a privilege for Europe to have Greece as partner and as if the rest of Europe owed it anything. A union is held together through mutual respect and the belief that deals and agreement do not even have to be enforced because they are respected and adhered to. Greece has destroyed that and has sown mistrust. That in my opinion is the worst that Greece is confronting Europe with. I think Europe will cope incredibly well with a writeoff of significant chunks of debt and Greece leaving the union but we had to painfully learn that there are players even inside the European union who have had no scruple to lie, cheat, betray, and trample on everyone's trust.
Oh, I'm thinking the clock is ticking on Spain, Portugal and Italy, even France before they curb any "austerity" (it's a laugh to call it that) and follow the Greek way of pulling out (assuming it gets that far before debt is renegotiated). Ireland is a different story altogether - they never had the lifestyle the southerners had. But can anyone here truly look themselves in the mirror and say they believe Italy or Spain doesn't have to face huge reforms and tackle massive corruption, etc, or have massive double digit youth unemployment? These issues aren't going away. A lot will depend on Greece, but I think Spain is the next to fall. It just has some time yet. Podemos is growing in popularity just like Syriza did. If they win, well let's just say we could see more "austerity" canceled.
After Greece Warns It May Get Funds From Russia Or China, Europe Said To Propose 6 Month Extension Did Europe just fold? Moments ago Bloomberg blasted a headline which has to be validated by other members of the European Commission as well as Merkel and the other Germans (and may well be refuted, considering this is Europe), which said that: COMMISSION TO PROPOSE 6 MONTH EXTENSION FOR GREECE - SOURCES. So did Greece just win the first round of its stand off with Brussels? It remains to be confirmed, but congratulations to Greece if indeed it caused Merkel and the ECB to fold. But what caused it? Well, it wasn't the laying out of the Greek "ask", which as we noted earlier, was the following: Greece will seek about 10 billion euros ($11.3 billion) in short-term financing as it tries to stave off a funding crunch while buying time to push its creditors to ease austerity demands. Greece’s Finance Minister Yanis Varoufakis will present a proposal at a Wednesday meeting of euro area finance ministers in Brussels that will ask for an 8 billion-euro increase in the stock of Treasury Bills the country is allowed, said a government official who asked not to be named as the negotiations are confidential. It will also seek the disbursement of 1.9 billion euros of profits that euro area central banks made on their Greek bonds holdings. No, that's not it. What emerged as the biggest point of leverage overnight was the following threat reported hours ago by Reuters, citing the Greek defense minister Kammenos, who essentially threatened to go to Russia and/or China if Europe decline to cooperate. Per Reuters: Greek Defence Minister Panos Kammenos said that if Greece failed to get a new debt agreement with the euro zone, it could always look elsewhere for help. "What we want is a deal. But if there is no deal - hopefully (there will be) - and if we see that Germany remains rigid and wants to blow apart Europe, then we have the obligation to go to Plan B. Plan B is to get funding from another source," he told Greek television show that ran in to early Tuesday. "It could the United States at best, it could be Russia, it could be China or other countries," he said. Of course, it clearly wouldn't be the US which would never act against the interest of its European "allies", so the real threat was very clear: converting Greece from a member of the Eurozone to an expansion of the Eurasian economic zone and a landing pad for both Russia and China into Europe. This is also a possible outcome we hinted at two weeks ago in "Putin's Unexpected Victory: Europe Furious That Greece Is Now A Russian Sanctions Veto." More: Kammenos is the leader of Independent Greeks, a nationalist anti-bailout party that is the junior coalition partner of Prime Minister Alexis Tsipras' radical left Syriza party. Greece is seeking a new debt agreement with the euro zone that will allow it to shake off much of the austerity that has been imposed by a European Union/International Monetary Fund bailout since 2010. The euro zone, particularly Germany, has shown no willingness to ease its requirement that Greece make deep budget cuts and economic reforms. As noted above, this is after all Europe, which means Eurozone ministers always float trial balloons headlines ahead of major meetings like the one tomorrow, gauge the market reaction, then quickly retract them. Well, the market test has been conducted... U.S. STOCK INDEX FUTURES HIT SESSION HIGHS ON REPORT ON PROPOSAL FOR SIX-MONTH EXTENSION FOR GREECE ... with the EURUSD jumping 50 pips, and US equity futures surging by nearly 1%. And now, we await the denial of the "trial balloon" because when it comes to the way Europe operates, some things never change. * * * Update: Not even an hour later, the trial balloon has just been popped, courtesy of Reuters: EUROPEAN COMMISSION SAYS THERE IS NO FORMAL PROPOSAL FOR GREECE BUT TALKS ARE INTENSIVE But at least the Eurogroup knows that for the algos, Greece staying in the Eurozone is a EUR positive. * * * Update 2: More attempts to pop the trial balloon, this time from Italy: ITALY'S PADOAN SAYS HASN'T SEEN ANY PLAN YET FOR GREECE By now it doesn't matter: the momentum has been ignitied and risk is trading well above where it would had Europe not "trial ballooned" first thing this morning.
Brussels officials 'infuriated' by 'wildly misleading' Greek claims that Juncker and U.S. Treasury are backing Syriza-led plan to alleviate debt; EU official says Greeks are 'digging their own graves' The carefully orchestrated dance between the new Greek government and its European creditors appeared to crack Tuesday, with top Brussels officials infuriated by what they see as wildly misleading claims coming from Athens. Apparent claims from Athens officials to other governments suggesting that the U.S. Treasury supports a plan by the Syriza-led government to alleviate Greece’s debt, and that the European Commission president Jean-Claude Juncker either backed the plan or had an alternative himself, have enraged senior economy officials in Brussels. A senior European official, who spoke on condition of anonymity, described the situation as “berserk” and said, “there is no plan.” He added that the European Commission and U.S. Treasury were both perturbed at the way they had apparently been represented externally by Greek officials. A team from the U.S. Treasury led by Daleep Singh, deputy assistant secretary for Europe & Eurasia, was in Athens late last week. “The Greeks are digging their own graves,” the EU official said. At the start of the Tuesday, Greece floated its latest funding plan via press leaks, including to the Kathimerini newspaper, proposing a bridge financing programme that would lead to a “new deal” with creditors from September onwards. There were reportedly four parts to the new deal: 30% of the existing memorandum with the Troika will be cancelled and replaced with 10 new reforms agreed with the OECD; Greece’s primary surplus target would be cut from 3% of GDP this year to 1.49%; Greek debt would be reduced via an already announced swap plan; and the “humanitarian crisis” would be alleviated via policies announced by Prime Minister Alexis Tsipras Sunday. Putting aside frustrations about communications from Athens, initial reactions from Eurozone capitals to the ideas in the plan have not been positive. The first official described the plan as “hopeless” and added “how can you have a plan when you make no payment obligation till the autumn and then you probably scrap that.” An exchange between the new Greek finance minister Yanis Varoufakis and Europe’s representatives, Thomas Wieser and Declan Costello, on Sunday was not successful, according to a source with knowledge of the encounter. The source said the Greek side gave the impression that if the Eurogroup did not agree with its stance, then the creditors could “go to hell.” Also Sunday, Tsipras warned that he would not back down from his pre-election promise to seek a new deal with the country’s international creditors. Discussions in Brussels on Wednesday and Thursday, when leaders from the EU arrive in the Belgian capital, are now expected to be fraught. “The leaders don’t want to discuss this,” the senior source said, “How can they?” Euro area officials had hoped to have a formal plan in place on how to solve the standoff between Greece and its creditors by the end of the Eurogroup meeting on February 16 following a meeting of EU leaders this week. If discussions irrevocably break down, some form of Greek default this year appears possible, although the European official stressed that Athens could probably “scrape together” enough money to meet an IMF payment due in March. Many of the new Greek government’s proposals still stand at odds with agreements made by the previous executive in Athens and questions over reform commitments in Greece are still being raised. Greece already committed to five main reforms suggested by the OECD in its “Going for Growth” report on reforms last year. These include enhancing the efficiency of labour markets, reducing barriers to competition, improving the efficiency of the education system and doing the same in public administration and taxation. But Eurozone officials question how far those have been implemented. And the EU is unlikely to support the OECD taking over responsibility for reform efforts in Greece even though the continued presence of the Troika of international lenders, and particularly that of the International Monetary Fund, is politically sensitive in Athens. “The OECD would be a very small watchdog without teeth,” said another well placed EU official, stressing the lack of resources within the OECD currently providing surveillance over Greece. “I don’t think it would be able to provide anything.” The official stressed that the new administration, dominated by academics and with a civil service appointed by political opponents, needs proper technical help, and the expertise lies in the IMF and EU Task Force for Greece. Such views are widely backed by member states such as Germany, Finland, the Netherlands and Portugal. Others such as France and Italy, who have appeared more malleable towards Athens, would still not back total eradication of the IMF in Athens due to its rigour. On plans presented by Greek finance minister Varoufakis to swap Greek debt for GDP-linked bonds, the official stressed that interest rates for Greece are already ultra low and what Greece needs is liquidity, and it won’t get that by reducing rates on loan repayments, whether via a haircut (swaps) or reducing rates directly. “This has not been tested very much and has lots of technical issues around it,” said a third EU source, adding that issues such as deducing “the threshold after which investors would start to catch a windfall” was one of many complex issues for policymakers to sort out. The lower primary surplus is possible, he said, but dependent on the debt sustainability analysis upon which both IMF and EU funding are contingent. “You can’t cheat these numbers,” the official said. “You could lower the surplus in exchange for a credible plan for higher GDP growth but they would need to change their growth model drastically for that.” Indeed, the position of many in Brussels towards the proposals coming out of Athens is one of skepticism. Many simply don’t buy the argument that Greece cannot sustain its 4% of GDP primary surplus target and still alleviate pressure on society. “The new Greek government’s argument that this is an unreasonable target fails to withstand scrutiny,” Daniel Gros, director of the Brussels-based European Policy Studies, wrote in an opinion article Tuesday. “After all, when faced with excessively high debt, other European Union member states – including Belgium (from 1995), Ireland (from 1991), and Norway (from 1999) – maintained similar surpluses for at least ten years each, typically in the aftermath of a financial crisis.” Asked about the chances that Greece would be able to reduce its primary surplus, the source said that he “hasn’t seen any reasonable argument why that would be necessarily impossible.” “But everything comes easier if you’ve shown a couple of years that you have implemented the agreement you have already made,” the source said, expressing doubt that there would be widespread support for giving Greece too much leeway on the issue of reducing its primary budget surplus to as low as 1.49% of GDP. The recent noises from Tsipras suggest he is hoping for some higher consumption from redistribution, but the creditors want Greece to achieve growth through public and private investments and competitiveness. “If they go for consumption-driven growth I think all the programs are over,” the second source said. In terms of the financing for Greece’s planned bridge programme, Greek newspaper eKathimerini reported that Greece wants to secure the €1.9bn of profits from Greek bonds held as part of the ECB’s Securities Markets Programme to increase T-bill issuance above the current €15bn cap. It is also claimed that Greece would like to increase the current Emergency Liquidity Assistance limit (€59.5bn), to potentially draw down a portion of the delayed €7.2bn tranche from the current bailout programme and possibly make recourse to the €11bn remaining from the country’s bank recapitalisation fund to assist Greek lenders. The second official said however that the Eurgroup would be unlikely to sanction any of that without an agreed programme for after Feb 28. “For the Eurogroup to just agree new liquidity puts an awful lot of faith in a new government, without knowing what’s planned,” he said. “The ECB has stopped support, the EFSF and ESM need programmes and bilateral loans would be hard to pass domestically.” Meanwhile, the only advisor to the new Greek government, the investment bank Lazard, is not seen as playing a positive role by the EU side to date. One EU official described the Lazard bankers as “incompetent” and “counterproductive.” Speaking on France Inter radio Lazard debt adviser Matthieu Pigasse said cancelling €100bn of Greece’s debt would enable the country to cut the load in line with targets set by the international authorities that bailed out the nation.
yes, it wasnt a bailout for greeks, but a bailout for german and french banks, who would had huge writeoffs, maybe bankruptcies if greece had gone bust.