Tuesday, November 1, 2011

Let the People Decide

Greece's Papandreou in crisis talks over bailout revolt

In brief: "Last week, eurozone leaders agreed on a 100bn-euro loan (£86bn; $140bn) to Athens and a 50% debt write-off. In return, Greece must make deep cuts in public spending, slashing pensions and wages and making thousands of civil servants redundant". "Meanwhile, Mr Venizelos was taken to hospital on Tuesday morning, suffering from stomach pains. His office said he was likely to be released by the evening". (Is he throwing a sickie?)

Posted by alan @ 06:23 PM (2665 views)
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20 thoughts on “Let the People Decide

  • Seems he’s also sacked all its defence chiefs for no clear reason, this for reference includes the National Defence Force, the Army and the Air Force, was sommething in the offing to oust the government?

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  • “Let the People Decide” or “Let the markets decide”

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  • @Jack C @2 – personally I’d rather the markets f$ck$Ed off.

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  • Latest update:
    Rainer Bruederle, one of the leading politicians of the governing parties in the Bundestag said: “This sounds to me like someone trying to wriggle out of what was agreed – a strange thing to do.” He was economics minister until recently and said it was now necessary to prepare for Greece to go insolvent! He said if Greece didn’t fulfil its agreement “Europe would have to consider turning off the flow of money which was keeping Greece afloat”.

    Jack c
    for what its worth, I think it is right for the Greek people to have a say in their future. They will take the consequences ~ can’t blame anyone but themselves whichever way the referendum goes. The Greek people must have known for some time that their situation was becoming unsustainable ~ is been on the news for the last year….. ! The Italians are watching the game closely, don’t be mistaken!

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  • If the Greek people decide to take the default route, then there will be some short term pain. In five or six 6 years time they will be looking back at everyone else who will be paying interest on large chunks of debt.

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  • little professor says:

    @1 yeah, strong rumours that preparations for a military coup were being made amongst the top brass of the military. With key political figures from his own party calling the PM “mad” and “insane”, it doesn’t seem that far-fetched to be honest.

    Here’s the Forbes article advocating a military ‘solution’

    Forbes: The Real Greek Solution – A Military Coup

    Only half in jest is it sometimes said that a better use for Germany’s money than pouring it down the drain of further bail-outs would be to sponsor a Greek military coup and solve the problem that way.
    The reason being that a military dictatorship cannot be in the European Union. Thus, if there was such a military coup Greece would immediately have to leave the EU and thus whatever happened to its economy would simply be someone else’s problem.

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  • mark wadsworth says:

    Fair play to Mr P, he was given the crummiest hand of all time when he became PM (two years ago, after his PASOK party won the election – it was the other lot who were in charge when Greece got into the mess it is), it must be quite clear that he will not exactly go out in a blaze of glory (I’m surprised he’s managed to hold on as long as he has) but at least he will go out with a blaze!

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  • general congreve says:

    @6 – Actually I think Germany and France need Greece in the EU, or their banks get it, a military coup is the last thing they want, as is a referendum, they need the debts to be paid and not officially defaulted on.

    As far as Greece is concerned, for all the hand wringing from foreign nations about how a default is terrible news for Greece, I can’t see how it is worse than endless debt servitude to their EU masters. Their choices are either:

    a) Painful cutbacks, a return to economic sovereignty and living within their means, using the Drachma, who’s lower value will boost tourism, trade and jobs.

    b) A greater degree of cutbacks, no economic sovereignty, living within even tighter means, keeping the Euro and having a stagnating economy unable to compete with the industrious core of Europe on the same currency terms, and continuing debt servitude weighing the economy down.

    Sure, their government was irresponsible and ran up the debt (we can talk), but the EU should have done due diligence before letting them in, as should the creditors before lending to them.

    I’m very hopeful this is the torpedo we have been waiting for that will make 2012 the one to remember.

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  • Aroundabout now everybody realises all the pension funds have been spent.

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  • mark wadsworth says:

    GC: “I think Germany and France need Greece in the EU, or their banks get it”

    Where on earth do you get that notion? I looked this up last week, from memory I think that F & G banks own rather less than one tenth of Greek govt debt i.e. about EUR 35 bn (or less) if they write that down by half that’s a loss of EUR 18 billion which is about 0.25% of their total balance sheet values or something.

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  • @10 It is not so much the EUR 35 bn in bonds but the EUR ??? in derivatives and CDSs that would be triggered off as a result of a default. I don’t quite get it myself as I thought CDSs were a hedge against default.

    Either we are being lied to and a default is no big deal (EUR 35 bn is no big deal in the context of things), or there is more to this that we are not being told.

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  • general congreve says:

    @10 – You’re approaching the problem from the view point that French and German banks are adequately capitalised (like they should be), it is obvious they are not from:

    a) The recent collapse of Dexia, a bank that had not long before passed the latest round of, now obviously bulls1t, stress tests.
    b) The fact that this will not be a 50% write down, but a full writedown.
    c) A writedown that the countries of Portugal, Ireland, Spain and Italy will likely follow, as why should they pay if Greece doesn’t (that’s putting aside the fact that ultimately they aren’t capable of servicing these debts anyway). If Greece alone isn;t enough to bring them down, the domino effect of the rest sure is.
    d) Why on earth it has been necessary for the ECB to go on a bond buying marathon in recent months to keep rates lower, why they keep needing to expand and leverage the EFSF and offer to backstop banks at risk of Greek default. There obviously is a risk if they have to offer backstop guarantees against losses!

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  • I don’t necessarily agree that countries which default have a sort of ‘get out of jail free’ status after a few years;
    or that there is an isolation of other nations from the fall-out.
    However, at least there is more visibility as to their finances in that way so that there are no fresh surprises for anyone who does business with them.
    It’s trouble for everyone either way but it’s the question of visibility is important.

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  • general congreve says:

    @12 – As I understand it, it doesn’t take long for the dust to settle after a country defaults and for lenders to be falling over themselves to lend, typically because they know the country is debt free and consequently also able to service debts at the more usurious rates demanded because the country has recently defaulted in the past. So, the country is free to rack up more debt and the early new lenders are safe in the knowledge they’re likely to get a good return with little capital risk. If they misjudge it and the debtor defaults again, well, that is capitalism and the lender has to take their losses, except for the fact we have crony capitalism, so the taxpayer foots the bill instead, hurrah!

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  • mark wadsworth says:

    I haven’t posted a drawing here for ages:

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  • general congreve says:

    @14 – What a hero. I think he may end up being the gold bug poster boy. Great news from the pre-G20 meet tonight, the BBC say the referendum is on!

    BTW – is that actually one of yours MW? Just noticed what looks like a MW on the collar, but I am not aware of your artistic talents thus far.

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  • MW,

    Before you get too much sympathy for uncle George, remember that when he was elected, it was on a mandate of increasing public spending, not reining it in.

    He may be personable, but he’s as bad as any of them..

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  • mark wadsworth says:

    GC, yes of course, I didn’t use to sign them (considering this an act of vanity) until somebody told me I should start doing so.

    UT, they’re all politicians and as untrustworthy as each other, that’s not the question here, the question is, is he doing the best for teh people in his own country? See also: Iceland.

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  • general congreve says:

    @18 – Of course, he’s a completely corrupt slime ball, like the rest, but this week he’s been a very likeable slime ball.

    @19 – If I save the image and zoom in, will I see it’s not actually a pencil sketch, but a skilfully crafted mosiac of thousands of the letters, L, V & T? 😉

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