What would be the ramifications for Greece should they default on the loans?
Which appears very likely from what I am reading.
Nationalised banks etc?
Also, what are the knock on effects likely to be for other countries?
If everybody cleared out their bank accounts then there really WOULD be a serious problem. Please Don't!!!
To answer the question, I think that people earning/bringing money from outside will actually be better off. Anyone here with miniscule wages and soaring costs will suffer the most. Fat Cats with stashed cash and huge houses/yachts, etc will be fine, as usual.
Message posted by Graham T-A on 29áJuneá2011 at 9:59am - IP Logged
Rosy, I already did, leaving just enough to pay my direct debits. I know this dosn't help but as a pensioner I cannot afford to lose money if the bank fails. The other big problem for anyone who owns a house is that although many house prices have been reduced by around a third, if Greece comes out of the Euro then devalues it's own money then if you sell up and transfere money back to GBús you will get a lot less. I am guessing that I would get about half as much for my house in Corfu in GBús as I would have got a couple of years ago.
It will however make prices cheaper for anyone who gets their money paid in Sterling so should help foreigners in the future but will do little or nothing to help the Greek people. I have several Greek friends who have opened German and Dutch bank accounts and have sent their money abroad
Gotta say I agree Graham. I know removing my hard earned from the bank won't help the economy, but leaving it in there (such as it is, not that there is very much) might mean I can't feed my kids next month, and when it comes to choices like that I have to look after number one (and two and three) first. I suspect many other people will feel likewise.
Meanwhile, I understand it is now law that Greek salaries have to be paid into a bank account. Will this flow of income in and out help bolster the banks, or will it make no difference?
Message posted by daveyh on 29áJuneá2011 at 11:39am - IP Logged
I'm sure many would feel safer having their money in a UK bank account and just transferring enough to pay the bills from time to time even if it does incur additional charges. Difficult times call for difficult decisions. At the end of the day you are helping the economy by spending your money in Greece.
Message posted by Dextercat on 29áJuneá2011 at 11:50am - IP Logged
It would appear that although we are happy to talk about supporting Greece in the real world it's look after number one.
The Greeks have a certain dignity and will, I am sure survive although in years to come the whole of the European Community could become a third world ecomomy with the likes of Asia being dominant perhaps with the help of the US.
What a terrible thought.
Maybe the Greeks are better out of it?
I have heard that a lot of ordinary Greeks are withdrawing their cash from their banks and investing in gold. If Greece defaults the Greek banks will be the first to fail
The logic is if they default Greece will be the first country ever to go bankrupt. At that point the debt will be wiped out but they will not be able to secure loans anywhere. A hit will be taken by everyone who has lent them money, including the UK to a lesser extent
Greece will have to start again but with a severely devalued currency, whatever they decide to call it. They will no longer be able to afford to buy from outside Greece as imports will be very expensive, as they were in pre Euro days
That of course will mean that their main currency earner, tourism, will become cheaper for those visiting
I believe that whatever happens Greece will survive but maybe on a very different level, maybe a real step back in time but they are a resilient people and have survived worse and maybe this could be a good thing for them
Even if they do agree the new austerity measures today in parliament I cannot see them being able to implement them given the level of opposition from the people themselves, the very people already on low incomes who are being asked to foot the bill
I am no expert on national fiscal policies but I am sure of one thing, piling more and more money in to prop up Greece at the expense of the ordinary man in Greece, is not in their interest and far more about protecting other countries within the EU
I do not believe a country going bankrupt in this climate is going to do lasting damage, quite the opposite I think it will benefit them enormously although the transition might prove initially 'precarious' or 'volatile' the resilience of the country will be as said, people Greeking for cheap holidays and the desire for Greek goods abroad.
I have said before that Greece should be Greek and not European. Its not for them as the big boys France & Germany will eat them alive... as is being seen in the news.
Sure, Brussels will attempt to woo and keep them onboard because they want control of more countries but, in the end its Brussels, not Greece that will win out if Greece stays in the EU.
If Greece pulled out and forefeited on its debt with France & Germany I would say - well done and lets get on with it. I should point out I have been anti-EU since I was knee high to a grasshopper
I'm keen to see Italy, Portugal and Spain default as well even allowing for the massive fallout globally I think it will put the moneymen out of play and allow governments to regain control of their countries.
Yep! very contentious and possible naive to some thinkers out there but radical action is needed and being afraid to pull the plug is no reason to keep things as they are.
I do agree with Susanna's sentiments. Personally I'm beginning to feel that Greece's only chance of survival at any realistic level is to default, and rebuild.
However, (if my mini research is to be believed) just one point isn't entirely accurate "The logic is if they default Greece will be the first country ever to go bankrupt." In fact there is some precedence - Argentina experienced it in 2001 and Russia three years earlier. And strangely enough, Germany, so keen to bail Greece out once more for perhaps rather more self serving reasons than they would have us believe, has gone bankrupt twice in its more recent history, once in 1923 and the second time after 1945.
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