i live in one of the other countries in the EUzone (one of the PIGS) and the sentiment here is entirely different from what is brewing in greece. vast majority of people want to keep the EUR and is willing to make sacrifices in order to keep it, while in greece the population has been very active in demonstrating their opposition to the EUR. again, greece is in economic depression for the last 5 years with 40% unemployment (mostly fueled by the EUR monetary policy) while in the rest of PIGS, there's a mild recession and unemployment is much less than in greece. i believe the rest of the PIGS might end up solving their economic problems one way or another, while in greece i don't any other alternative than withdrawal.
The bottom line issue if you are another PIIG..is that if Greece defaults...or, at this point even if they hold this farce togther with a deep haircut for privates and concessions from the ECB and pretend that it was not a default, and even if they can tought out the citizen revolt in the streets...the bottom line is, What private investment source will want to buy your paper going forward?..at what price? This whole sorry no growth opera demonstrates that there is no way to pay this debt, and even worse, there is no credible way to insure against sovereign default...it has to be dramatically downgraded. The IMF and the ECB will be the only buyers of PIIG paper...or they will have to funnel ever increasing LTRO money into the domestic banks on BS collateral and pretend there is some demand for the paper. It does not end with Greece leaving...there is a gaping hole in the EU sovereign debt market and even with Greece gone you have to figure out how to patch that hole to attract private investment in weaker EU sovereing debt.
As the Argentines have shown, everyone will come running to invest. Capitalism is based on greed, if there is money to be made rest assured a new set if investors will line up to buy newly issued debt. Unless the Greeks fail to overhaul their miserable socialist system where road sweepers make as much as pharmacists, rest assured there will be investors.
Yea, that's fine, you have to have the collapse first. You notice this has all been about not having the collapse. Iceland has credit now...just got upgraded I think...but they didn't get back to that position without a default and a collapse...neighther did Argentina. The issue of the credit worthiness is important only to those countries that are not expecting to default first. So, if you are Spain, Portugal, Italy...no worries...look at Argentina.
Every country should default on their debts, teaching some countries on lessons of giving out credits too easily. What they are going to do, invading those deadbeat countries?
I just caught this, and I love how the finance minister stated "it is not fair" when discussing the matter. It is a typical behavior for a kraut to become defensive when caught in a lie. The Greeks will have more unrest until they break free from the EU. It was a grand plan just like all the other times. People who say Uber Alles better be in orbit or they will be construed as arrogant. Check out the stament at 1:00 into the video: http://edition.cnn.com/2012/02/10/business/germany-portugal-bailout/index.html?hpt=hp_bn1 Alles klar? Akuma