Dr. Pepper wrote "Americans will riot when their social security, medicare, food stamps, unemployment, etc. benefits get cut and their taxes go up just like the Greek people are doing. " I wonder if our unions will be the instigators, just like they are in Greece?
Yes, we do. And it only took about 72 hrs before the Feds started confiscating firearms from the homes of law abiding citizens in New Orleans after the floods of Katrina. Did they have the Constitutional authority to do so? Nope. Did they have superior firepower? You betcha. Did the national press report it? Nope, but some local news photogs did film some of it And thus begins another conspiracy theory. Why they did it, and how they got away with it, is, apparently, beyond my pitiful comprehension. But,it did happen.
achilles, I am 99% sure that the other EU countries are in no way guarantors on Greece's debt. I'm not saying there might not be a small issue that a number of sovereign states used as a communal credit facility but I think we'll find that like most sovereign debt it is "full faith and credit" of the issuer for whatever that is worth. My partner knew a guy years ago in Zurich in the 70's who did forfait financing -- a specialized form of trade finance -- for Yugoslavia and North Korea. His relationships in forfait led him to structure some fair sized sovereign loans (nothing to do with trade finance) and my partner was shocked at how thin the file was -- literally a three page loan agreement. As Geoffrey told him: "None of this paper has even a matchstick of collateral behind it. When one of these deals go South there is nothing to attach. Why spend a ton on legal when once they stiff you it is a negotiation in which the only ammunition the lenders have is that if the country is not nice they will never lend to them again." The "haircut" here could be large.
Exactamundo. In 1990 Thatcher introduced the poll tax. A few minor street riots later, she was out of office and the tax fell stillborn from the statue books. Anyone think the Greeks are less prone to rioting and civil disturbances than the Brits circa 1990?
i don't know... i do know that people are very reluctant to part with their benefits if they have enjoyed them for many years. for some reason the explanations like "it is the only way out of this mess" or "people in other countries don't have benefits like that" fall on dead ears.
Like TZ said, it just doesn't feel right. I have no doubt their intention is to preserve the Euro And everyone remain in it. But, if it such a done deal, why.. have they fixed this problem 5 times already?