Greece Watch...

[Lord Beria3]

Yup you could argue that Greece owes so much that the rest of Europe can't afford to let Greece go bankrupt. In a funny way Greece still has some leverage to play with.

[UndercoverElephant]

Yup you could argue that Greece owes so much that the rest of Europe can't afford to let Greece go bankrupt. In a funny way Greece still has some leverage to play with.

Yes.

Deal with reality, or it will deal with you...

[Little John]

Yup you could argue that Greece owes so much that the rest of Europe can't afford to let Greece go bankrupt. In a funny way Greece still has some leverage to play with.

Reminds me of an old maxim my Dad used to tell me.

If you owe the bank a thousand, you will get a nasty letter and a knock on the door by the bailiff.

If you owe the bank a million you will get a cup of tea and VIP treatment when you pay them a visit

[woodburner]

There is also the saying (yet another silly saying, but no worse than those just quoted) about not throwing good money after bad. The collapse will be all the more severe if this "we can spend our way out of debt" approach continues. Sometime the party has to end.

[emordnilap]

The collapse will be all the more severe if this "we can spend our way out of debt" approach continues. Sometime the party has to end.

+100%

The economy runs on debt. Sorry, has run on debt up to recently. The game is up.

These are very interesting times, set to get fascinating.

[UndercoverElephant]

http://www.bbc.co.uk/news/world-europe-17986065

The leader of Greece's left-wing Syriza bloc has said he will try to form a coalition based on tearing up the terms of the EU/IMF bailout deal.

Alexis Tsipras, whose bloc came second in Sunday's vote, said Greek voters had "clearly nullified the loan agreement".

He has three days to reach a coalition deal and has told the two major parties to end their support for the austerity terms if they want to take part.

The European Commission and Germany say countries must stick to budget cuts.

European Commission President Jose Manuel Barroso said on Tuesday: "What member states have to do is be consistent, implementing the policies that they have agreed."

Note the total disregard for the democratic rights of the Greek people. This was the first chance they had to vote on the matter.



Comparing this to UK politics...

The Communists are the Communists, Syriza and the Democratic Left are people who have abandoned Labour, and the greens, Pasok is what's left of Labour, New Democracy is what's left of the Tories, the Independent Greeks are UKIP, and the Golden Dawn is the BNP.

The problem is this: there is no grouping which can get a majority. There is an anti-austerity majority, but it is split between the far right and the far left. So...either one of the two old main parties chooses to change its policy on the austerity package that they agreed, and an anti-austerity government can be formed (either left or right, left much more likely) OR there will have to be another election. If there's another election, it is highly likely that both the far right and the far left will pick up even more votes, but not enough to get a majority, making the situation even harder to resolve. And at the same time, we have an unpredictable political situation in France and Spain is in very serious solvency trouble.

[Little John]

http://www.bbc.co.uk/news/world-europe-17986065

The leader of Greece's left-wing Syriza bloc has said he will try to form a coalition based on tearing up the terms of the EU/IMF bailout deal.

Alexis Tsipras, whose bloc came second in Sunday's vote, said Greek voters had "clearly nullified the loan agreement".

He has three days to reach a coalition deal and has told the two major parties to end their support for the austerity terms if they want to take part.

The European Commission and Germany say countries must stick to budget cuts.

European Commission President Jose Manuel Barroso said on Tuesday: "What member states have to do is be consistent, implementing the policies that they have agreed."

Note the total disregard for the democratic rights of the Greek people. This was the first chance they had to vote on the matter.



Comparing this to UK politics...

The Communists are the Communists, Syriza and the Democratic Left are people who have abandoned Labour, and the greens, Pasok is what's left of Labour, New Democracy is what's left of the Tories, the Independent Greeks are UKIP, and the Golden Dawn is the BNP.

The problem is this: there is no grouping which can get a majority. There is an anti-austerity majority, but it is split between the far right and the far left. So...either one of the two old main parties chooses to change its policy on the austerity package that they agreed, and an anti-austerity government can be formed (either left or right, left much more likely) OR there will have to be another election. If there's another election, it is highly likely that both the far right and the far left will pick up even more votes, but not enough to get a majority, making the situation even harder to resolve. And at the same time, we have an unpredictable political situation in France and Spain is in very serious solvency trouble.

The main parties have basically refused to be straight with the Greek people and give them the hard choice of refusal of the bitter EU pill and face the consequences, or take the pill and face the consequences. Instead, they have tried to impose the pill on them and all they have achieved with this deeply undemocratic strategy is to suffer wholesale rejection by the electorate and to leave the door wide open to the loonies at either end of the political spectrum.

Coming to a country near you.....

[emordnilap]

Precisely, Steve. It's there:

"What member states have to do is be consistent, implementing the policies that they have agreed."

That who have agreed?

[UndercoverElephant]

Precisely, Steve. It's there:

"What member states have to do is be consistent, implementing the policies that they have agreed."

That who have agreed?

Lucas Papademos, former Vice President of the European Central Bank, "on behalf of the Greek people", who didn't elect him as their President in the first place.

[UndercoverElephant]

http://www.bbc.co.uk/news/world-europe-18001715

Greek media said Mr Tsipras had enlisted the support of a smaller left-wing party, Democratic Left, but failed to persuade the communist KKE to back him. He is likely to talk to all the party leaders, except the ultra-nationalist Golden Dawn.

That means its impossible. There's 300 seats, the Golden Dawn and the Communists won't end up in any coalitions (47 seats), and New Democracy have already failed (108 seats). Finally, the leader of Pasok (41 seats) has said he won't be part of a coalition with a slim majority. The maths is pretty simple - nobody is going to be able to form a government in Greece.

Maybe there will be a military coup. Maybe there will be another election. If so, one wonders whether the Greek politicians will get any closer to telling their people the truth - that their choice is between signing up to the austerity or leaving the EU. If so, the result of the election would likely be rather different.

[emordnilap]

Precisely, Steve. It's there:

"What member states have to do is be consistent, implementing the policies that they have agreed."

That who have agreed?

Lucas Papademos, former Vice President of the European Central Bank, "on behalf of the Greek people", who didn't elect him as their President in the first place.

Exactly. He qualifications as a democratic leader are not in evidence in Wikipedia:

He has served as Senior Economist at the Federal Reserve Bank of Boston in 1980. He joined the Bank of Greece in 1985 as Chief Economist, rising to Deputy Governor in 1993 and Governor in 1994. During his time as Governor of the national bank, Papademos was involved in Greece's transition from the drachma to the euro as its national currency.
After leaving the Bank of Greece in 2002, Papademos became the Vice President to Wim Duisenberg (and then Jean-Claude Trichet) at the European Central Bank from 2002 to 2010. In 2010 he left that position to serve as an advisor to Prime Minister George Papandreou. He has been a member of the Trilateral Commission since 1998. He is a member of the Academy of Athens.

[stumuzz]

Remember, Greece has defaulted many,many times. What you see in Greece today first happened in the 4th century BC. Greece has not repaid bonds and gone bust five times in modern financial history.

What is surprising is that a lot of Germans and French thought they were a modern industrial country which could be relied upon to pay its debts.

Most of what you are seeing on the news is Greece being weened off the financial tit of Northern Europe. Harsh but necessary.

[UndercoverElephant]

http://www.dailymail.co.uk/news/article ... z1uPmEaveu

Greece teeters on the brink: Country faces SECOND general election after politicians again fail to break deadlock and form coalition government

Euro falls against pound and dollar as unease for single currency

Stock markets across the world go into meltdown

Left wing leader Alexis Tsipras fails in attempts to form coalition and break political deadlock

German politician: 'We should make Greece the offer to leave the eurozone in an orderly fashion'

Looks like the Greeks are going to unintentionally call the Germans' bluff...or maybe it isn't a bluff. The political deadlock in Greece is likely to remain even after another general election and another government of technocrats would have no democratic mandate. So it comes down to a choice for the ECB/Germany/IMF - do they continue to send money to Greece when there is no hope is sight of Greece being able to elect a government? Germany is now stuck between the devil and the deep blue sea. Continuing to send money kills off the realism of threat of with-holding future payments and makes a mockery of the rest of the eurozone austerity program, but allowing Greece to exit the eurozone triggers economic chaos on a scale not seen yet during this crisis.

I'm betting on the former, at least until the Spanish situation reaches breaking point.

[Little John]

http://www.dailymail.co.uk/news/article ... z1uPmEaveu

Greece teeters on the brink: Country faces SECOND general election after politicians again fail to break deadlock and form coalition government

Euro falls against pound and dollar as unease for single currency

Stock markets across the world go into meltdown

Left wing leader Alexis Tsipras fails in attempts to form coalition and break political deadlock

German politician: 'We should make Greece the offer to leave the eurozone in an orderly fashion'

Looks like the Greeks are going to unintentionally call the Germans' bluff...or maybe it isn't a bluff. The political deadlock in Greece is likely to remain even after another general election and another government of technocrats would have no democratic mandate. So it comes down to a choice for the ECB/Germany/IMF - do they continue to send money to Greece when there is no hope is sight of Greece being able to elect a government? Germany is now stuck between the devil and the deep blue sea. Continuing to send money kills off the realism of threat of with-holding future payments and makes a mockery of the rest of the eurozone austerity program, but allowing Greece to exit the eurozone triggers economic chaos on a scale not seen yet during this crisis.

I'm betting on the former, at least until the Spanish situation reaches breaking point.

Nicely summed up UE and I agree with your analysis.

[Aurora]

Nicely summed up UE and I agree with your analysis.

+1.

Eurozone governments kept Greece afloat on Wednesday after agreeing to authorise a payment of 5.2 billion euros from the region's bailout fund, despite opposition from some member states following the Greek election results.

Read more: http://www.smh.com.au/business/world-bu ... z1uRTBgblk

Also:

BBC News - 10/05/12

Pasok leader Evangelos Venizelos will make a third effort to form a coalition government in Greece amid political turmoil following Sunday's elections.

See: http://www.bbc.co.uk/news/world-europe-18015441