Athens ablaze tonight

[beorhthelm]

I feel sorry for the innocent greek people who are being strangled by their own government and by the international financial institutions who care more about ‘debt’ and ‘money’ that doesnt even exist than the lives of real people.

i dont think people grasp the mechanics of how the state runs and is funded. the Greek state spends a great deal to pay for public services and pensions, costing more than they receive in taxes. so they have to borrow. if they dont pay back the loans, they default and their credit rating is zero. no credit means no borrowing, so state expediture beyond revenues can not longer be sustained.

no matter how bad it seems, default would be worse. basically everyone but the police, army, hospitals and a few other key services would go unpaid, and/or pensions to hundreds of thosands would be drastically cut or stop. 20% unemployed becomes 30%, 40% maybe more overnight.

 

[beorhthelm]

...They are being forced into this to prevent banks taking the hit for lending money that they never should have in the first place.

The banks are taking a hit of 40-50% last time i read. As for "lending they never should have", some countries require their banks and pension fund to hold sovereign debt by law.

 

[Hatterlovesbrighton]

i dont think people grasp the mechanics of how the state runs and is funded. the Greek state spends a great deal to pay for public services and pensions, costing more than they receive in taxes. so they have to borrow. if they dont pay back the loans, they default and their credit rating is zero. no credit means no borrowing, so state expediture beyond revenues can not longer be sustained.

no matter how bad it seems, default would be worse. basically everyone but the police, army, hospitals and a few other key services would go unpaid, and/or pensions to hundreds of thosands would be drastically cut or stop. 20% unemployed becomes 30%, 40% maybe more overnight.

This. Default also makes it much more likely that international business will leave the country, reducing invesetment further. Likely result is a massive brain drain of all talented people leaving the country and no opportunties for the young. Would probably set back the country 30 years or more and unlikely to catch up anytime soon.

 

[The Merry Prankster]

what you need to understand is this:

a bailout is money for the banks so they can loan AT INTEREST to the people.....(to pay it back).

BUT, the people pay for it twice as they pay for it again in austerity measures to get the bailout in the first place. its a mafia elite scam, and most are too asleep to realise.

I have to say that this pretty much hits the nail on the head for me.

 

[Lady Whistledown]

David Cameron wants Turkey to become part of the EU later on? I just cannot see this working and I feel most people will leave Turkey for places like Germany and the UK to find work which just adds to our own unemployment issues, but please correct me if I am wrong. I just don't feel Turkey has a strong enough economy to join it.

You do know Athens is in Greece, right?

 

[Chicken Runner61]

i dont think people grasp the mechanics of how the state runs and is funded. the Greek state spends a great deal to pay for public services and pensions, costing more than they receive in taxes. so they have to borrow. if they dont pay back the loans, they default and their credit rating is zero. no credit means no borrowing, so state expediture beyond revenues can not longer be sustained.

no matter how bad it seems, default would be worse. basically everyone but the police, army, hospitals and a few other key services would go unpaid, and/or pensions to hundreds of thosands would be drastically cut or stop. 20% unemployed becomes 30%, 40% maybe more overnight.

You can give them the loan but this just means they are going to default next time (actually they still might default this time) - all you are doing is putting off the inevitable.

Greece has to leave the Euro and devalue its currency - Europe and the UK will take a large hit when our banks get taken out as the Spanish Italy France and Uk banks go bust.

People here will suffer as all their savings get wiped out by inflation as the BOE prints more money devaluing our currency a la the greeks

 

[beorhthelm]

You can give them the loan but this just means they are going to default next time (actually they still might default this time) - all you are doing is putting off the inevitable.

yep probably. it would have been kinder in the long run to let them default. but politicians think of the short term, and the implications for some banks in the Eurozone to a default are worrisome (a few large bank bailouts required). so they've danced around and led the Greeks and the rest of the Eurozone on this merry trip.

 

[arkan]

i dont think people grasp the mechanics of how the state runs and is funded. the Greek state spends a great deal to pay for public services and pensions, costing more than they receive in taxes. so they have to borrow. if they dont pay back the loans, they default and their credit rating is zero. no credit means no borrowing, so state expediture beyond revenues can not longer be sustained.

no matter how bad it seems, default would be worse. basically everyone but the police, army, hospitals and a few other key services would go unpaid, and/or pensions to hundreds of thosands would be drastically cut or stop. 20% unemployed becomes 30%, 40% maybe more overnight.

its more the fact a previous government pretty much lied to get into the euro in the first place. Obviously they didnt know then what they know now but if the werent in the euro maybe they wouldnt be in the mess they are in now

 

[sten_super]

yep probably. it would have been kinder in the long run to let them default. but politicians think of the short term, and the implications for some banks in the Eurozone to a default are worrisome (a few large bank bailouts required). so they've danced around and led the Greeks and the rest of the Eurozone on this merry trip.

I'm not sure about this - they continue to run large budget deficits, even after the austerity. Default requires an immediate balanced budget, as no-one will lend you anything. While in the long run this 'solves' the problem, it's short to medium term impacts would be catastrophic.

It's hard to know which is the least worst option - neither of them are in any way appealing.

 

[Chicken Runner61]

yep probably. it would have been kinder in the long run to let them default. but politicians think of the short term, and the implications for some banks in the Eurozone to a default are worrisome (a few large bank bailouts required). so they've danced around and led the Greeks and the rest of the Eurozone on this merry trip.

Another little snag is that if Greece gets to pay a little less back it opens the door for the Irish to say they should not pay as much back.

I really would not underestimate the fallout from this. Its could make Lehmans look like a credit card payment being missed!

 

[Chicken Runner61]

I'm not sure about this - they continue to run large budget deficits, even after the austerity. Default requires an immediate balanced budget, as no-one will lend you anything. While in the long run this 'solves' the problem, it's short to medium term impacts would be catastrophic.

It's hard to know which is the least worst option - neither of them are in any way appealing.

Default is unavoidable unless the loans are written off - Writing off is a kinder way of default - Either the Euro and other lenders currencies get devalued or the New Drachma.

Just feel for the poor who have not stuffed savings from Greece into German Banks ready to convert to the New Drachma and do very nicely buying up assets on the cheap. Its a perfect scam the Germans lend money to the greeks who use the loans to buy German cars and goods making Germany stronger and then buy the real assets of a country out of the economic turmoil it created. And don't think it doesn't go on here too on a personal level.

 

[sten_super]

Default is unavoidable unless the loans are written off - Writing off is a kinder way of default - Either the Euro and other lenders currencies get devalued or the New Drachma.

A couple of weeks ago I was listening to an interview with an economic historian who was proposing a unilateral global debt write off. At the time I thought he was barking, now I don't. I certainly think that the only way that this crisis will be decisively ended is if those in charge agree to a substantial change in the status quo and the current way of doing things.

 

[The Merry Prankster]

its more the fact a previous government pretty much lied to get into the euro in the first place.

To be fair they lied to a Germany and France who were saying "Please lie to us, we will know you are but we'll all go along with the idea that you're not"

 

[Simster]

What I don't get is that the Eurozone comes together to think about a plan for propping up Greece, and that plan is ALWAYS to lend them more money in return for austerity measures. It blatently isn't working.

I remember being pro Euro when we were originally left out. Thank f*** we were. I really don't think it is a flawed idea at all, it's just that the Germans and French have used the currency formation very selfishly and as a political weapon. The idea of simply ignoring the Greeks and others failing to comply to the terms of entry instead of booting them out is looking utter folly now, and the Euro zone countries are now going to have to pay.

The fault lies squarely with the French and German banks and governments in my opinion. The French and German citizens must be getting very pissed off that they are going to have to prop up foreign countries financially.

 

[Chicken Runner61]

A couple of weeks ago I was listening to an interview with an economic historian who was proposing a unilateral global debt write off. At the time I thought he was barking, now I don't. I certainly think that the only way that this crisis will be decisively ended is if those in charge agree to a substantial change in the status quo and the current way of doing things.

There are too many elections happening across the globe for that to happen. If you take Europe the UK blames the EC for its woes, The EC blames the PIIGS and the PIIGS blame the bankers - With Elections coming up no one wants to take the blame and its important for them to blame some one else.

So you get Sarcozy and Merkle (and Cameron) trying to trick their peoples into who will pay for the defaults. The Uk says Europe will pay, The french say its the Germans and the Germans say its the French - In fact its all of us because slowly in the background the real leaders of the world (the bankers and corporate directors) are carrying out currency swaps and QE to swamp the world with leveraged debt to enslave people in order to protect their personal power and wealth.

Only when Uk banks have gone bust and people are personally affected will people here realise that. People here think that if a bank goes bust the FSA will protect them, what they don't realise is that the BOE can only protect them by printing the money back into the system which in turn devalues their savings to zilch in 16 or so years.

Debt is slavery unless you are the lender

 

[kano]

I feel very sorry for the greek people. Its basically the equivalent of europe coming in and saying im sorry Britain but Mr Cameron is no longer your leader here is this fellow from Brussels who is going to take charge now, no hes never been elected in his life, but dont worry about that hes a good bloke and hell do what we want him to. You've been very naughty you know, forget about the fact that the nature of a single currency created these problems by all the wealth flowing nicely to the biggest economies, its all your fault.

We have just passed a bill in parliament that the NHS is too dear so its finished, also your minimum wage is goin down to £3. All your MPs who voted against this have been fired.

Too right you'd be on the streets rioting, its a disgrace.

 

[pseudonym]

The Germans looted the Bank of Greece of all it's gold and cash during the nazi occupation and have never paid any compo for it, it's estimated that they owe the Greek's an estimated 60 billion euro in today's equivalent money.

Greek people detest Germans and they now have them same people running their country, you can see why they have taken to the streets.

 

[Chicken Runner61]

The Germans looted the Bank of Greece of all it's gold and cash during the nazi occupation and have never paid any compo for it, it's estimated that they owe the Greek's an estimated 60 billion euro in today's equivalent money.

Greek people detest Germans and they now have them same people running their country, you can see why they have taken to the streets.

Yes but be fair - No one knows where that gold is now! - It got moved to Fort Knox during the cold war just in case the Ruskies invaded and got hold of it - trouble is now they are having a problem finding it and the rumour is there is a fraction of all the gold there should be in F Knox!

 

[pseudonym]

Yes but be fair - No one knows where that gold is now! - It got moved to Fort Knox during the cold war just in case the Ruskies invaded and got hold of it - trouble is now they are having a problem finding it and the rumour is there is a fraction of all the gold there should be in F Knox!

Yes and that's very convenient, the Germans stole it so they should pay Greece compo regardless of how much of the gold is left.

 

[beorhthelm]

A couple of weeks ago I was listening to an interview with an economic historian who was proposing a unilateral global debt write off. At the time I thought he was barking, now I don't. I certainly think that the only way that this crisis will be decisively ended is if those in charge agree to a substantial change in the status quo and the current way of doing things.

mulitlateral shirley? not sure if its the same thing, but there was an analysis a few months back that if banks could write off the debts to other banks that hold their debt, the economic fear would pretty much evaporate, the net borrowing between the big banks being pretty small. of course, this wouldnt help the sovereigns much in itself, they just have debt and nothing to offer but payments, but it would mean the balance sheets of the banks could then support these sovereign bailout. one of the technically interesting points from all this is that countries are still legislating to enforce holding sovereign debts, whilst changing other legislation to tell the banks they must hold less assests/more cash/safer bonds.

Too right you'd be on the streets rioting, its a disgrace.

i lose sympathy when i consider that no one objected to the spending for the past decade. a bit like Chesterfield or Portsmouth, everyone kept quiet and enjoyed the good times despite knowing full well there was a fat elephant in the stands.