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Breaking News - Greece Threatens To Leave The Euro


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Original: http://www.spiegel.de/wirtschaft/soziales/0,1518,761136,00.html

Translation: http://translate.google.com/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=de&tl=en&u=http%3A%2F%2Fwww.spiegel.de%2Fwirtschaft%2Fsoziales%2F0%2C1518%2C761136%2C00.html

Who'd have thunk it? No doubt the Germans will all now sing this song and enjoy their hangover from 'Greek Wine':

Edited by Cinnamon
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A break up of the euro is inevitable; it was a barking mad idea from the start.

The meeting will also include a discussion of a restructuring of the country's debt, in the short, rather than long term.

Jean-Claude Juncker, president of the European council,...

Maybe they'll issue some Juncker bonds. :lol:

Edited by CrashConnoisseur
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Just posturing, won't happen.

I would not say that for certain as they are in a real mess. Austerity will not work for them.

Do not forget the Greeks have stuffed the ECB with their government debt so it is as good a time as any for them to default and leave the Euro. They need a cheap currency to attract tourists because at present the tourists are goint to Turkey, Bulgaria and Egypt becuase they are a fraction of the price.

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Much as I'd love to see this happen, I suspect this is no more than a friday afternoon FX rumour, spread in order to trigger stop losses in a thin market.

Perhaps someone at Deutsche Bank greased a friend who works at Der Spiegel on line?

Edited by Greener Pastures
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I would not say that for certain as they are in a real mess. Austerity will not work for them.

Do not forget the Greeks have stuffed the ECB with their government debt so it is as good a time as any for them to default and leave the Euro. They need a cheap currency to attract tourists because at present the tourists are goint to Turkey, Bulgaria and Egypt becuase they are a fraction of the price.

Amazing isn't it.. and it's all psychological.

They could just lower their prices 50%, but instead they scream for currency debasement which is exactly the same thing.

Like here with our houses.. we could just allow assets and wages to fall to stable levels, but instead we choose a weaker currency and price inflation.

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This is a very good idea in principal, getting the Greek economy back to growth should be the priority. Would you take a holiday in Greece if it was 75% cheaper than now? Major disadvantage however:

How do they plan to leave exactly? The new drachma would immediately become toilet paper, all their debt is denominated in € if they changed Greek law to force it in to new drachmas the contagion would be enormous. Who would be next, Portugal, Ireland, Spain? the run on these countries would start immediately. Massive financial collapse would follow.

They would need massive capital controls for a month or longer and support from Germany, France and I can't see it happening.

More likely, Greece threatens to leave and default so Germany decides to leave instead. The DM is reissued and the ECB is reformed, huge QE programs takes place the old € crashes, has the same effect as the new drachma without the financial collapse.

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Greece’s economic problems are massive, with protests against the government being held almost daily. Now Prime Minister George Papandreou apparently feels he has no other option: SPIEGEL ONLINE has obtained information from German government sources knowledgeable of the situation in Athens indicating that Papandreou’s government is considering abandoning the euro and reintroducing its own currency. Alarmed by the attempt, the European Commission has called together a crisis meeting in Luxembourg on Friday night. In addition to Greece’s possible exit from the currency union, a speedy restructuring of the country’s debt also features on the agenda.

http://ftalphaville.ft.com/blog/2011/05/06/562286/greek-out-culminates-in-talk-of-eurozone-exit/

Papa....might be trying to strengthen his hand over the restructuring. He's got to at least threaten the f*ckers.

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...just a thought, silly or not....but what is stopping the euro having different internal exchange rates? ;)

It would be a setback in the elites plan for world government.

I say , good for Greece.They need tighter border controls which they can certainly get by leaving the EUSSR.Leaving the UN would also be a good step.

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The Euro was always going to end in disaster.

The only question was, how long would it last.

And to any Euro-philes that might be reading

The longer it lasts the worse the very predictable consequences will be when it fails.

IMHO.

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I wonder at what point the Germans will decide they've had enough?

The Germans are the biggest beneficiaries of the project (they deserve it, mind). Hence their panic that Greece (and possibly others) could exit and devalue straight away. A reinstated German Mark would rise too fast, too quickly, and so threaten their exports. Also, all those loans they've given out at nice interest rates suddenly become unpayable.

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