Greece - the wider risks explained

Can they bear to see their assets bared?

Perhaps the Greeks should start selling some of the family silver - an Aegean Island or two or perhaps one of their ruins like the Parthenon.

They'll be wanting the Elgin Marbles back next !

Stan

How about the Elgin Marbles..........

The question which is on our minds at the moment is - what are the chances of the euro being revalued ? or is this too drastic a course of action to contemplate for the Germans ....

Ah a wonderfully concise and clear explanation of what the Greek crisis has been all about lately.

Well done and very well written (and not in that boring overly technical way that many traditional industry sources can do so either)!!

x

But what is the equivalent for a whole country of 'having to sleep on the streets' ?

Ditch the Euro, reinstate their old currency Drachma, devalue it immediately.

'Everyone' flocks to Greece for their holidays as it is now half the cost of countries in € Eurozone. All tourist related industries generating huge amounts of cash and the country's exports now competitive.

Sorted in no time at all!

It means the government stops paying all benefits including pensions and starts collecting what is due---that would bring matters to a head very rapidly and point out to the deluded citizens that they've reached the end of the wad!!

Why should the Greeks have it cushy on our money?

Greece should be allowed to go to the wall, no support. Why should those who take care of their finances pay for those who won,t. Time for a reality check please.

If this was Nigeria or Zimbabwe, we would not be rolling out the billions.

Greece has flouted all credability, throw them out - then the EU will be stronger for it.

Greece is not our son.

"...........a total change in lifestyle..." don't think these PIIGS will fly. Too late now, the kids are entirely dependent having been brought up in such a feckless family - welcome to the Two Thirds World where to eat is a privilege.

Continuing the 'Bank of Mum & Dad' analogy, we would give the money to the children with very clear conditions for repayment together with an agreed method of monitoring over time. Also a plan for changes in their financial management should be a requirement.

Greece has defaulted for 95 years out of 200 so is it really any huge surprise!?!

Should we be glad that we were not pushed and dragged into the Eurozone or would we be in the same or worse than these other members or can we set our eyes on what harm will the 2012 year do to the UK following the result to Greece.

I say give us in Scotland our freedom and let us get out of this stramash that embroils these cash empoverished regions

morton.

Once again looking at a list of Debt To GDP albeit from February.

http://www.economicshelp.org/blog/economics/list-of-national-debt-by-country/

Doesn't make the UK look that rosey!

Greece may be 8th on the list and the UK 22nd, but Spain was placed 32nd! With the rate of cash burn this government is going through, it won't be long before it's us hocking the family silver. We have no idea either how honest anyone is being about their debt levels. Can we even trust these figures. I would suspect most countries are painting a rosey picture of their finances, whilst like the banks, there are more skeletons in the closets than gold bars!

its nice to have an article written in laymans terms and not have to read the normal financial drib drab.

Chris, if this was the only measure of financial stability then according to your 2009 list we should put everything into Equatorial Guinea.....

You first please!

It appears that the same fundamentals that put San Diego in the "hock" are happening in Greece -Great sensible explanation and could be classed as dummy proof

Chucking Greece out of the Eurozone is the equivalent of the old English custom of disinheriting your profligate heir. Whilst Daddy Germany publicly disavows this draconian course, his delay seems to indicate he is down at the family solicitors drawing up the deeds of disinheritance.

To pursue the analogy, we all have friends who have spendthrift children. One couple we know, hardworking and thrifty, have a son in his thirties who is in constant need of financial support; he appears completely incapable of reigning in the cause of his debt. So they, despite solemn warnings that the last loan was "the last loan", lend again, in the sure and certain knowledge that a) this is not in truth a loan but a gift and b) it will be spent and the son will return with the begging bowl. Is Greece any different? suppose it accept the loan but subsequently renege on the conditions set by Europe and the IMF if the country appears about to descend into civil war.

Finally what happens if the "loan" is made to Greece and the other Pigg countries ask for similar help? Is there enough money in the kitty to bail them all out, and, if not, what happens then?

In a way this whole scenario is reminiscent of the way in which the bankers persuaded themselves that they had invented a new kind of arithmetic when the invented the synthetic CDO's etc etc. Margaret Thatcher, and indeed any person of common sense, would have seen through it in a second.

Could you please take me off your mailing list as I am sickened with the comments of your ''readers'' about Greece and definetely I do not want to be part of such company. And before I forget it, not only return the Parthenon Marbles but also all other Egyptian, Indian, Chinese works ''taken'' over the years to the people and places they belong.

Yes going back to the Drachma and devaluing would sure boost the Greek holiday income . But of course then Spain and Portugal might suffer as a result .

Just like with our own deficit , we are not sure quite how Greece has gotten in such a mess . We know it is a national sport not to pay their taxes , and if public employees like postmen do indeed get 3500 euros a month (42,000 euros a year) , then this sort of idiocy sure doesn't help . So rather like with our own problem a large dose of realism is needed .

After all every penny the governments spend comes from us in the private sector . We really have been pretty slack in not controlling their spendthrift ways .

I'm afraid governments are going to have to be more accountable in future with proper audit of their spending

Not all, but most of the above are silly small minded answers. We are all in a mess and I despair of those who wont admit it. They are like the child always finding weak excuses for their way of life

And it is a much bigger mess than many realise. If we in the West carry on like this, our national assets will be worth little and the Chinese and others will come in and buy all we have of value. And with our money which they have been accumulating for years as we keep buying their cheap products and they buy little back

I recall someone had the bright idea they should sell a few islands!

I'm sure the Turks and Germans would gladly help!!!

Small minded! I like that. When a postman in Greece gets more pension than a senior Civil Servant in the UK they have a problem, not us. And 14 pension payments pa. They are living on another planet and not one we should be helping to keep spinning. Still, this is not exactly a surprise. All the savvy pundits were saying that if the Eurozone was extended some 10 years ago to let in the Med Zone countries it was only a matter of time before everything went wrong. After all it was clear they were running deficits and experiencing inflation far above those the Euro rules allowed. But Brussels wants the big project to be a success. Their mania has possibly helped ensure that the project will ultimately fail. I never thought I would hear myself say, "Well done Gordon Brown", but the fact that he kept us out of the Euro may ironically be the best and lasting reminder of his "greatness".

It's been at least 2 years since the phrase "the PIGS" was coined. Strange it's only now that the intellectuals are commenting, sorry did I say intellectuals, change that to monkeys.

Shit is hitting the fan, no doubt on the 10th some cobbled bull shit will be uttered and we might even see the euro rise, the probably Greece will try with the full support of the EU to reschedule it's debt, this being taken up by the rest of the Euro zone. Simple put the Euro zone will take a 120 + billion right down followed by the same thing for the other naughty children.

How will the money markets react?

It is well over due, what? a devaluation of the euro against almost everything, every country in euro-land is bust or going to be with the up coming demographics problem.

We need to start actual producing and selling if we still know how.

Do the Greeks have any vacancies for postal workers?

Better make it quick, I don't think the good times can last.

I'd expect a journalist to know how to spell "their". See second to last paragraph.

If Cameron gets in and has the sense to give John Redwood the chancellor job the UK can kinda power out of the mess, albeit with 70 the retirement age, capped pensions, and higher income tax for three years (I would like to see it called the Brown tax to emphasize its roots...) and the pound should recover on the back of it. If we had had a proper government for the past thirteen years there would have been money in the bank to survive the bad times and sterling would have been a safe haven currency... would have been. How exactly would the market devalue the euro by forty percent to take into account their mess when it would make the German industrial base hyper active on external exports whilst doing little to reform the bad countries...

Blair/Brown spends billions creating a fake economy to keep on winning elections and it would be a disaster if the same thing happened again after five years of reform from the Conservatives...

I rather think you are over-reacting to what has been written here. These views naturally reflect opinions clarified by a perhaps over-simplified (if slight) version of the Eurozone economic status quo.

Always remember the culprits - the US and their fraudulently marketed sub-prime mortgages - and there they stand, the 1st to emerge from recession, apparently unscathed and unrepentent (vis-a-vis Goldman Sachs).

Two points regarding your comments about archeological museum collections. The Parthenon 'marbles' were collected, and paid for, at a time when Greece was governed by the Ottoman Turks. As anyone who has studied the classical Greek legacy in Asia Minor will know ,Turkey has only very recently started taking an interest in this legacy, and only in the context of how it can use 'it' to attract tourists. They have little or no interest in the subject themselves. And very little understanding - see the Euromos Temple. The Germans took the Pergamon 'Marbles' to Berlin (with the Ottoman's permission, as with the Elgin collection). The Turks have not asked for them back.

It is likely that had they remained in situ they would have suffered damage - either deliberately or from neglect.

Egypt has not asked for the return of its 'treasures' - certainly not from the Turin Museum which undoubtedly houses the finest collection of ancient Egyptian statuary etc outside of Cairo.

At last I can watch to see if all that Economic Chaos theory about how capitalism must at some point implode on itself I learnt during my degree was actually true or just socialist rubbish. Keep watching this is, if nothing, fascinating.

Who exactly are you expecting to pay back the debt?

The country does not have the productive capacity to generate enough surplus to pay it off, and with interest rates matching the risk the problem can only get worse.

Furthermore, fiscal solutions won't work - you cannot make "savings" at the levels required and expect to avoid a revolution.

The problem is that you are expecting the Greek people to bear the burden. Well morally, maybe...but maybe not as Iceland didn't accept that.

The reality is that creditors will share the burden, a "haircut" is in order. Either the Greeks default, or you manage a debt restructuring including acceptance of say 50c in the Euro.

So yet another reason as to why Merkel won't want to transfer German money to the Greek government, to see it devalued in six months time as crisis turns to catastrophe.

So realistically, the only solution lies in Greece negotiating a default, maybe from outside the Euro. But this realisation will take another 6 months to sink in.

What's so terrible about countries defaulting on their debt? In the days before the Euro, countries in trouble simply devalued their currency. The EC needs to devise a system for doing just that, without having to devalue the Euro (which wouldn't be a bad thoing for European trade, anyway). Bailing out economically inefficient countries is a waste of time - they'll only do it again.

What happens to a loan if the Greek government falls?