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?
Message posted by rosy on 29 June 2011 at 9:50am - IP Logged
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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 29 June 2011 at 9:59am - IP Logged
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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 GB£s you will get a lot less. I am guessing that I would get about half as much for my house in Corfu in GB£s 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
Message posted by Bill on 29 June 2011 at 11:19am - IP Logged
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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 29 June 2011 at 11:39am - IP Logged
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daveyh
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 29 June 2011 at 11:50am - IP Logged
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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?
Message posted by SusieH on 29 June 2011 at 1:31pm - IP Logged
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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
Message posted by LESK on 29 June 2011 at 2:10pm - IP Logged
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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.
Message posted by Bill on 29 June 2011 at 2:20pm - IP Logged
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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.
Message posted by SusieH on 29 June 2011 at 2:57pm - IP Logged
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Maybe I should have said in modern times in Europe
But you are right, Greece could, and I think, should rebuild, within an environment which they have full control
At the moment their main earner, tourism, is becoming less and less valuable to their economy. That situation could change very quickly if they defaulted and devalued
Message posted by StevenM on 29 June 2011 at 3:02pm - IP Logged
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Quote: Originally posted by LESK on 29 June 2011
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.
While I agree with some of the comments I think it’s naive at best or irresponsible at worst to let Greece and other countries like Italy, Portugal and Spain default. The social and economic consequences will be devastating for everyone globally. The credit crunch of 2008 will be nothing compared to the fallout of this scenario...maybe I’m missing the point here but do we really want to see this happen?
Message posted by Sid Ari on 29 June 2011 at 3:04pm - IP Logged
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Nice idea about rebuilding but with what and from what. Germany was rebuilt by American and international investment and was basically divided up between the allies and the soviets after the war. Who will invest in a bankrupt country that still wants to control it's own fianances and it's politicians line their own pockets. I can't see BMW, Microsoft, Toyota etc flocking to Greece to invest and create jobs and wealth if they default. If this was the case they would have been first in line after Greece joined the EU. People also seem to forget that Greece was on the verge of fianacial collapse when they joined the EU. That's why they had to cook the books to be accepted.
Message posted by Bill on 29 June 2011 at 3:06pm - IP Logged
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However, looking at what has happened to the countries that have devalued their currency and become bankrupt it does seem to have, in the longer run at least, done them more good than harm. Maybe this is different, with the whole stability of the EU and euro at stake, but I guess only time will tell.
Message posted by LESK on 29 June 2011 at 4:43pm - IP Logged
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Its really a case of accepting that it is likely to happen, deciding that the world will quickly learn to live with it, and then getting onto the next big problem which for me is... feeding the chickens...
The sky won't fall in... I promise
Corfu wull still be there and will still go on doing what it does best, look after tourists and earning/spending foreign money.
Message posted by Mrs Mushypea on 29 June 2011 at 5:04pm - IP Logged
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Whatever the outcome with this crisis the future is very uncertain for the Greek economy whichever way...
Seems as though they are damned if they do and damned if they don't.
If the do decide to default on the loans then the question is would Greece recover??? Well they have been through hard times before and have come out the other side OK with a few casualties along the way but they have survived and I am sure they can do it again, they are a proud and very resilient nation.
Message posted by StevenM on 29 June 2011 at 6:50pm - IP Logged
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Quote: Originally posted by LESK on 29 June 2011
StevenM
More to the point - do you think you can stop it?
Its really a case of accepting that it is likely to happen, deciding that the world will quickly learn to live with it, and then getting onto the next big problem which for me is.... feeding the chickens...
The sky won't fall in.... I promise
Corfu wull still be there and will still go on doing what it does best, look after tourists and earning/spending foreign money.
Of course I cannot stop it ... but I cannot just accept what may happen, not worry and look at it with ‘rose tinted spectacles’ This is a worrying time for a lot of people in the UK as well as our fellow Greek friends.
I’m a recent victim of the 2008 credit crunch as myself and a few hundred of my work colleagues have just recently lost our jobs in IT with a well known part nationalised bank and a further credit crunch resulting in on the banking system will make my job hunt even more difficult.
Apologies I don’t post stuff like this, but a raw nerve has been touched.
Message posted by entrus10 on 29 June 2011 at 7:19pm - IP Logged
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You are not alone I lost two retail shops to the credit crunch and my pension went too so, forgive me if I don't feel sorry about the banks even though I truly sympathise with your loss of a job.
The reason we lost the shops (and £80k of investment) was because, although profitable, we knew we would need the support of the banks by maintaining (not adding) our overdraft facilities. They refused and we closed the businesses overnight rather than struggle through 5 years of hardship.
Two years on and I am in again in business, making a life for myself and positive enough about my future and that of Greece to prepare to move there in September.
The point of this post is not to make you feel bad, bitter angry or anything else, but just to point out that the end of the world will not come if Greece defaults on its debt, or if the other PIGS members default on theirs.
Yes, there will be hardships but, tell me there won't be for all of us over the next 5 years anyway and then I will say you are looking through rose-tinted glasses.
The EU has to learn a lesson here and it is that not all countries run at the same speed, have the same grip on their economies or even have the same objectives as those in the centre. Neither do they want to be further integrated into a system that draws the power and the money to its centre.
The cost of the EU is going to soar over the next 20 years. If you don't want to be part of that - now is the time to make the break. (just an opinion)
Message posted by jrk on 29 June 2011 at 7:58pm - IP Logged
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I reckon what you seeing is an attempt to restructure Greek finance and even society. Some aspects may be over due but it is going to be very tough. Tourist trade will take an even bigger hit than currently. It will be even more problematic after olive oil is made in other countries (such as China) by new technologies. And if Crete secedes from Greece next year then agricultural produce and revenue will be lost to Greece.
I can't imagine how Greece can extricate itself from its current fiscal crisis.
Message posted by SusieH on 29 June 2011 at 8:29pm - IP Logged
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The vote may have gone through and Greece may get its bail out but will they be able to deliver on the old measures, let alone the new ones. I somehow doubt it
There is too much opposition now from the ordinary people, the debts will be in monopoly money numbers, they my stagger to the next default point but I wonder if they will even get that far.
Greece should claw back control and that means forgetting the Euro on my opinion
Message posted by Jackie F on 29 June 2011 at 9:06pm - IP Logged
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LESK is spot on. Greece cannot repay those loans already made, how is she going to repay any more. Biting the bullet is something most have to put up with. My small business which I am still running though well past retirement age (supplementing my pension), makes less nett profit than 15 years ago due to turnover down yet overheads rising each year. Makes me mad when people go on strike because they only get 2% annual increase or their public funded pensions may be reduced..try being self employed..but that's another story.
Message posted by LESK on 29 June 2011 at 10:09pm - IP Logged
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Does anyone know what the actual 'New Austerity Measures' that were voted on today actually entail
All we can gather from UK news is the sell off of some Publicly owned assets and tax increases and I did see 1 comment from the protests outside the Greek Parliament about how were they supposed to survive on 300 euro a month?
It would help us all understand the situation if someone could list what was agreed to today
Yes I understand that the people may not accept the package and it may fail to get fully implemented, but it may help put things into perspective
Message posted by Viv D on 29 June 2011 at 10:48pm - IP Logged
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Greece should never have joined the Greedy Euro club and would do well to get out as soon as possible and return to their own currency, the UK would do well to heed what is happening in Greece and should also leave the EU even more so that these unelected faceless people are requesting even more money.
Yes leaving the Euro and the EU will be painful but better to leave now than keep having the goalposts moved everytime the IMF and Europe request it in order to receive more money that the Greek parliament know full well they cannot pay back and will eventually have to default on its loan payments.
The Euro was never a good idea and only the likes of Germany and France were ever going to benefit from it.
Message posted by Jackie F on 30 June 2011 at 11:10am - IP Logged
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Quote: Originally posted by SusieH on 30 June 2011
The actual austerity measures voted on today are listed on the BBC news website
http://www.bbc.co.uk/news/business-13940431
Thanks for the link
That scenario does look pretty horrific for anyone living and/or working in Greece and the excise duty rises of 33% on fuel, cigarettes and alcohol will have an impact on tourism with prices pushed up as business owners simply won't be able to absorb those, as well as the other proposed tax rises.
It's no wonder there are mass protests going on
Message posted by SusieH on 30 June 2011 at 1:00pm - IP Logged
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I think that although they passed the legislation today they start debating and approving each individual component no doubt trying to get the details changed.
So the arguments, as far as I can see, are far from over
Message posted by rosy on 30 June 2011 at 2:03pm - IP Logged
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I kept my UK bank account open for some direct debits for insurances. You could try researching whether you can open a bank online with the big banks Alikki but from what I have seen there is a lot more to opening a bank account in the UK than there used to be with them requiring utility bills and other forms of identification.
Rosy
Message posted by jrk on 30 June 2011 at 2:21pm - IP Logged
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Alpha Bank has branches in London but there is not much international reciprocation- think banks are bound by the rules of the country in which they are operating, not their home one.
Message posted by SusieH on 30 June 2011 at 3:34pm - IP Logged
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They are but all I was saying was HSBC are unlikely to collapse, the other wings of the bank will prop them up, they are international and did not ask for or raise loans in the banking crisis in the UK
Message posted by LESK on 30 June 2011 at 4:58pm - IP Logged
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In his blog, Matt Barrett floats an idea to retire the debt:
"...if I was Prime Minister I could solve Greece's financial woes overnight. I would nationalize the Greek Church. The church always says that in Greece there is no separation of church and state. Oh, Really? That is good news because the assets of the Greek church could pay off the debt tomorrow. Then you could house a million homeless immigrants and Greeks in the derelict property the church owns all over Athens and get them out of the center of the city."
I don't mean to joke about a very serious situation and I'm sure Matt doesn't either--he loves Greece. But he raises a valid point, considering their central role in Greek society, the church has kept a rather low profile in all of this.
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