Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#1
Until Greece quits the Euro.
A matter of weeks according to John Greenwood who is the Chief Economist at Invesco Perpetual, who supplie one of the best regular economic briefings I get.
He says the only thing that can prevent that is a 'rapid move to full fiscal and monetary union in the Eurozone'. That means the creation of a full federated single country for the Eurozone and after the conference that has just ended that looks less and less likely (that's me saying the latter)
He believes that even after just a few months of Greece being outside the Eurozone, Ireland and Portugal may want to leave followed by Spain and Italy.
There would very likely be a run on banks in these countries and large scale defaults on debt. The impact will be massive and the markets will be chaotic for a while.
I have said it before.
It is time for the Eurozone to face the facts and to plan the break up of the Euro so we have a managed decoupling so the worst of the chaos can be avoided. Sadly I am not confident that this will be the case based on their track record so far.
Guest 725- Registered: 7 Oct 2011
- Posts: 1,418
#2
Be very, very careful what you wish for Barry. I predicted all this ages ago and you suggested I was going over the top. If Greece leaves we will witness a worldwide market crash and a global depression. There is no other scenario.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#3
The poor, poor markets, but hey, it's only money.
All of this will again be somebody else's fault and all those promises 'we' have made to loan money we do not have to help with this problem can now be written off, or is it 'written-down'?
Not to mention that we too will get our war-machinery back, or will the liquidators hang on to it and hold a garage sale? Perhaps Al Qaeda or some land-locked oil-rich state can start it's own navy?
Dave then can go into the next election saying of our poor, "Let them eat Humus!"
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
howard mcsweeney1- Location: Dover
- Registered: 12 Mar 2008
- Posts: 62,352
#4
i find it difficult to believe that greece leaving the euro could cause world wide deoression, might be different if they simply defaulted on their debt.
Keith Sansum1
- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#5
tom
you do make me cry lol
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#6
'The poor, poor markets' you talk as if they are a thing apart. We are talking about people's pensions and savings, ordinary people, not just the rich. Maybe your included.
Howard - Greece alone would not cause too much problems. It is the knock-on impact of other countries following suit that is the big problems. Spain and Italy are big economies.
Philip - I have been saying for a long time that the Euro will not survive, that a break up is inevitable and that some 'limited default' is likely. A world-wide depression need not be the result and, indeed, as I have said many times a break up of the Euro is more likely to spark an economic recovery in the weaker countries that quit. But - a chaotic break-up and wide-scale defaults combined with runs on banks could well have a serious impact on the world economy. At the end of the day we cannot go on as at present and a federal Eurozone is not a likely outcome if only because it would mean Germany paying for the debts of all the weaker countries while those countries will find themselves under effective German control and will have lost a democratic mandate.
A managed break-up is needed to limit the downside problems.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#7
wot we do have here is posters wishing to withdraw from the E.U. giving the same scare stories as those who wish to remain within the E.U.
What we don't have is any of the main two political parties wanting out of the E..U
ALL POSTS ARE MY OWN PERSONAL VIEWS
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#8
In or out is not for this thread - this is the Eurozone problems and their impact with the likely exit of Greece and the contagion that may spread from that. Not pro or anti EU, this is about the economy.
Guest 699- Registered: 3 Jun 2010
- Posts: 292
#9
soon be greek shop owners arriving in kent , to go with dovers cafes and charity shops
Guest 641- Registered: 12 Mar 2008
- Posts: 2,335
#10
John Travolta and Olivia Newton-John have a lot to answer for, I knew they would get their comeuppance eventually, Oops! Wrong Grease!
If Greece leave the euro I'm sure that it will affect the economies worldwide
It would take years to recover as well as that the price of Moussaka and stuffed vine leaves would crash, thus potato famine would set in and we couldn't afford to buy a bottle of wine to wash away our worries
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#11
Ah but Barry W-S, Greek exports would become competitive and holidays there will be really cheap.... Greek exports up, holidays cheap - a recipe for a Greek recovery!!! I do love my ouzo........
The big problem is not Greece or even their defaults, they are too small, it is contagion that results in other countries defaulting on debt and runs on banks. An orderly managed break-up of the Euro can alleviate the problems.
Guest 710- Registered: 28 Feb 2011
- Posts: 6,950
#12
Barry...more of this?...
[URL][/URL]
Ignorance is bliss, bliss is happiness, I am happy...to draw your attention to the possible connectivity in the foregoing.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#13
The only alternative to Greece quitting the eurozone is the emission of eurobonds.
These would make one pile of all eurozone debts on a common denominator, and relieve Greece and the other southern EU states from their present bailout situation.
Germany is opposed to eurobonds, for obvious reasons. The country would go into a nosedive towards bankruptcy if they accepted. Adding to that, it would be against the German constitution.
One argument used in favour of eurobonds is that it would be the basis for a federal Europe (Eurozone countries), similar to when the United States joined the debt of all individual states into one federal debt towards the end of the 18th century.
As Germany refuses this idea, it is clear that the euro is in for something.
However, in my opinion, should Greece quit the euro, and also any other country that is on bailout status, the euro would become stronger, as only strong economies would be left using euros.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#14
Brazil and Argentina have both defaulted on sovereign debt within recent memory. Both economies are larger than Greece but their defaults did not cause financial Armageddon.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#15
You are quite right Peter. But Spain and Italy are a new ball game and that is what is so unsettling. We must not forget the high likelihood of a run on the banks in those countries that decouple or is thought may decouple simply because people do not want their money left in a devaluing currency. The potential bank run will be the first problem that needs to be dealt with.
Guest 696- Registered: 31 Mar 2010
- Posts: 8,115
#16
The run on the banks is going on for some time in Greece, since the last election the other week.
Sky reports that hundreds of millions of euros are flowing into German institutions as a result.
The game is already over. Whatever happens, egoistic mentality will dry the country of financial resources. So there might be legislation there to prevent people exchanging dracmae or transferring them out of the country, once they've introduced them.
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#17
True Alexander but Greece is not the main problem as I have said - the contagion risk to other countries is and that is where a planned decoupling is needed.
Guest 698- Registered: 28 May 2010
- Posts: 8,664
#18
Also, a cornerstone of the EU is freedom of movement of capital. Hard to remain in the EU with exchange controls in place.
I'm an optimist. But I'm an optimist who takes my raincoat - Harold Wilson
Guest 655- Registered: 13 Mar 2008
- Posts: 10,247
#19
Temporary emergency measures may be needed during the decoupling and initial devaluation stage to prevent bank runs, hence the need for this to be managed properly. Once a 'new' currency has devalued then the risk of capital flight will diminish if not disappear.
Keith Sansum1- Location: london
- Registered: 25 Aug 2010
- Posts: 23,948
#20
interesting on brazil
might have let the cat out of the bag there peter
so maybe won't be so unstabling?
ALL POSTS ARE MY OWN PERSONAL VIEWS