Greek Austerity Measures...

[Doggy Styles]

My question is how bad could it really be for Greek if they were to default? Iceland seemed to have recovered better than people expected. It seems the only people who would lose out from the Greek's defaulting would really be the Germans.

Iceland aren't in the euro. They could devalue.

[fullyautomatix]

Socialism never works. The well off dont want to pay their share of taxes because the socialists are pissing that money up the wall. These governments even including Labour are only interested in one thing. Remain in power. To achieve that they target the poor in the country who form a major vote bank and who are easy to manipulate.

If the rich dont pay taxes where does the money come from to bribe these vote banks ? Borrow. For some reason these fecking politicians think if they borrow billions today they will not have to repay for a few decades and come repayment time the inflation would erode the debt. False. Investors are far more savvy these days.

The solution is simple and this applies to the UK too. Spend what you collect in taxes. If what you collect in taxes is very less then either cut the public sector or cut the public sector salary and pensions. Secondly borrow money only for spending on infrastructure projects and other things which are considered assets. Not to feck it up the wall on pensions and bonuses. Thirdly, try to get the economic deficit under control. Dont export a billion worth of goods and import 20 billion.

[Old Hack]

Yes, it was YPF which was the Argentine subsidiary, but it does make up a considerable part of Repsol. However, that wasn't the point I was making, it was more that Argentina isn't in the best of economic health so using it as an example for Greece wasn't the best idea.

Sorry Equalizer, it wasn't part of Repsol at all, or a subsidiary YPF was an Argentinian company, which was privatised, and Repsol bought into it, creating a new Argentiniian company YPF-Repsol. All the Argies have done, is say, that 51%, well, it's ours now, feck off. Now they're trying to resolve some competition. Sorry for being pedantic, but they couldn't have done to Repsol what they've done to YPF.

Argentina is in fair good fettle, as far as I can remember, and from a visit there, can tell you, that it looks very modern and in good nick, not a 3rd world tulip tip. I genuinely expect a year of wtf, until the dust settles and they can start again.

If you think of bankruptcy, it's more or less the same. No credit for a while until people are prepared to lend to you. Rates high to start, before people build up confidence.

To be frank, all this bail out money, is going straight to their debts anyway, so they're not getting any money to help them, per se, just the creditors still being fed. So they're effectively where they would be in a default. I'd shut the banks tonight, then default tomorrow. Start again.

[Old Hack]

Iceland aren't in the euro. They could devalue.

I think the thing being said, is they defaulted, they're ok.

Greece could default, leave the euro, reintroduce the drachma, then do the same.

[BlasterBates]

I don't think that a Greek default is comparable with Iceland, and no it won't all be a damp squib that nobody notices, and not the UK either.

UK 'May Never Fully Recover' If Greece Exits Euro

The truth is pulling the Euro apart, would be a messy process which just might trigger the credit crunch that up until now has been avoided. Argentina was more or less isolated as was Iceland, mere pin pricks on a global scale.

The fact is the UK depends on the City, so it's right of the centre of things. A break up of the Euro even if it is just the Greeks and a Greek default would trigger all sorts horrible banky things like the mass pay out on Credit Default Swaps. etc etc. If you want to break up the Euro, then you wait until everything has calmed down, not do it when most of the Western world is working through a financial crisis.

If there's a barrel of oil in the burning building that you want to get rid of it's not a good idea to empty it until you've put the fire out.

[Old Hack]

I think we'd all notice, I am not too sure it was suggested otherwise.

I think it would be better for the Greeks.

As for the city, well, lets just say I expect for every CDS swap, some other financial instrument has been invented to pass the money loss to someone else.

I think it would be better, all round, if the euro experiment was dropped. Might hurt a little to start, but it makes sense not to have it. You simply cannot have so many diffeent nations having the same currency, as the market conditions all over are different, workplace cultuire is different, as is the state in most of the these countries.

Madness from the get go

[BrilloPad]

WGAS say the Greeks:
Greeks embrace some new myths about life with the euro | Reuters

Good article.

Is it possible for the greeks to default but keep the Euro?

[The_Equalizer]

Sorry Equalizer, it wasn't part of Repsol at all, or a subsidiary YPF was an Argentinian company, which was privatised, and Repsol bought into it, creating a new Argentiniian company YPF-Repsol. All the Argies have done, is say, that 51%, well, it's ours now, feck off. Now they're trying to resolve some competition. Sorry for being pedantic, but they couldn't have done to Repsol what they've done to YPF.

Argentina is in fair good fettle, as far as I can remember, and from a visit there, can tell you, that it looks very modern and in good nick, not a 3rd world tulip tip. I genuinely expect a year of wtf, until the dust settles and they can start again.

If you think of bankruptcy, it's more or less the same. No credit for a while until people are prepared to lend to you. Rates high to start, before people build up confidence.

To be frank, all this bail out money, is going straight to their debts anyway, so they're not getting any money to help them, per se, just the creditors still being fed. So they're effectively where they would be in a default. I'd shut the banks tonight, then default tomorrow. Start again.

I thought owning a controlling stake in a firm makes it a subsidiary? In this case Repsol bought 51% of YPF shares. Also, just because a place looks nice and shiny doesn't mean it's in the best of health, just that there's a lot of money been spent. Ireland for example. They've got cracking brand new motorways, apartment blocks and office buildings, but bugger all money.

Argentina has a problem with inflation, has scared off foreign investment and is being pursued for debts outstanding. It also destroyed the middle class during its crisis. Greece has a very hard choice and to say look, it'll be fine, didn't Argentina do okay isn't a good example. As an extreme example, Germany bounced back after WW2, but I wouldn't have fancied living in Berlin in 1945.

[Old Hack]

I thought owning a controlling stake in a firm makes it a subsidiary? In this case Repsol bought 51% of YPF shares. Also, just because a place looks nice and shiny doesn't mean it's in the best of health, just that there's a lot of money been spent. Ireland for example. They've got cracking brand new motorways, apartment blocks and office buildings, but bugger all money.

Argentina has a problem with inflation, has scared off foreign investment and is being pursued for debts outstanding. It also destroyed the middle class during its crisis. Greece has a very hard choice and to say look, it'll be fine, didn't Argentina do okay isn't a good example. As an extreme example, Germany bounced back after WW2, but I wouldn't have fancied living in Berlin in 1945.

The country doesn't seem in the tulip, far from it, thats all I was inferring. The pedantic comment was just that; Repsol doesn't/didn't own the company, they were in partnership, something to do with the original privatisation of it.

It didn't destroy the middle class, but certainly shafted them. I am not too sure they're being persued for money either, but I genuinely don't know, I just assumed if you defaulted, you defaulted and that was that.

I think it is a fair example of what will happen, and I'd live there, Argentina. Quite enjoyed it. I don't think Germany counts either. Whilst I understand 'extreme example' I don't think being bombed to **** by Americans/Russians/British, then being shaved apart by the allies, then being in the middle of a giant experiment in large scale communism is the same. I lived in Berlin in the late 60's/early 70's and it was ace.

[BlasterBates]

It's been about 10 years since Argentina's default. So however Greece goes forward, stays in the Euro or leaves, regardless it will loook better in 10 years. If it stays in the Euro the devaluation of 25% will continue.

The staying in/leaving the Euro is overdone. The problem is Greece doesn't have a competitive economy, it needs good government. Staying in the Euro is more likely to force the Greeks to start managing their country better, rather than a quick cheap fix. I don't recall Harold Wilson's devaluation in the UK working particularly well.