Reply to: Giving up control

[BlasterBates]

Greece couldn't afford to pay a cent, so instead of defaulting, they deferred. That was a political decision. It was a default by any other name...

Yes but it wasn't a default so they can access the markets for debt. When a country defaults it can't.

If you agree to defer with your creditors it isn't a default. That applies to any company and bond holders, this isn't specific to Greece.

[Mordac]

UK WWII debt was around 230% of GDP



Greece national debt is 180%, and will drop over the years.

Fine, you cling to that, but it won't drop. It will increase. The debt interest over the next 19 years will make sure it does.

[Mordac]

Last time Greece default was in 1932... not sure if that was what you meant by 'defaulting again'...

Greece couldn't afford to pay a cent, so instead of defaulting, they deferred. That was a political decision. It was a default by any other name...

[BlasterBates]

We paid the WWII debt off within the last 10 years (meaning it took us nearly 70 years), and it wasn't anything like the % debt to GDP that Greece has now. In 2032 they'll have to start defaulting again (simply due to the size of the debt) and what happens then? The Greeks would have to discover oil, gold or diamonds in mahoosive quantities to make their debt "not much of a burden". Interest is still accruing, and most of it is being rolled into the debt.
Greece may not be the one which brings down the Eurozone (I think that will ultimately be Italy) but it will cause so much pain that the Germans finally pull the plug.

UK WWII debt was around 230% of GDP



Greece national debt is 180%, and will drop over the years.

[CryingSheep]

We paid the WWII debt off within the last 10 years (meaning it took us nearly 70 years), and it wasn't anything like the % debt to GDP that Greece has now. In 2032 they'll have to start defaulting again (simply due to the size of the debt) and what happens then? The Greeks would have to discover oil, gold or diamonds in mahoosive quantities to make their debt "not much of a burden". Interest is still accruing, and most of it is being rolled into the debt.
Greece may not be the one which brings down the Eurozone (I think that will ultimately be Italy) but it will cause so much pain that the Germans finally pull the plug.

Last time Greece default was in 1932... not sure if that was what you meant by 'defaulting again'...

[Mordac]

By the time 2032 comes along the debt will not be much of a burden, the Greek economy is growing. I don't hear anyone complaining about the huge burden of WWII debt.

We paid the WWII debt off within the last 10 years (meaning it took us nearly 70 years), and it wasn't anything like the % debt to GDP that Greece has now. In 2032 they'll have to start defaulting again (simply due to the size of the debt) and what happens then? The Greeks would have to discover oil, gold or diamonds in mahoosive quantities to make their debt "not much of a burden". Interest is still accruing, and most of it is being rolled into the debt.
Greece may not be the one which brings down the Eurozone (I think that will ultimately be Italy) but it will cause so much pain that the Germans finally pull the plug.

[BlasterBates]

Only because the bulk of their EU debt is deferred to 2032. At some point you have to admit they haven't got over it, and they won't be over it for the best part of never...

By the time 2032 comes along the debt will not be much of a burden, the Greek economy is growing. I don't hear anyone complaining about the huge burden of WWII debt.

[Mordac]

Greece runs a budget surplus. In other words their outgoings which includes interest payments on their debt is lower than their income, and they're growing, their unemployment is coming down sharply.

At some point you have to admit whatever happened in 2008 they've got over it.

Only because the bulk of their EU debt is deferred to 2032. At some point you have to admit they haven't got over it, and they won't be over it for the best part of never...

[CryingSheep]

Greece runs a budget surplus. In other words their outgoings which includes interest payments on their debt is lower than their income, and they're growing, their unemployment is coming down sharply.

At some point you have to admit whatever happened in 2008 they've got over it.

Exactly!!!

At least Ireland, Portugal and Spain already overcome most of their economical problems. Greece is also getting on track... Italy is a slightly different situation due to political instability. People can't keep using this argument forever!

[BlasterBates]

With 30% unemployment, house prices are somewhat irrelevant. Greece should never have been allowed anywhere near the Eurozone, and while they might be turning a slight corner, their debt is approaching half a trillion Euros, and they were only bailed out for political reasons, not economic ones. Greece can't be allowed to fail, so Germany digs deep. They'll need very deep pockets if Italy, Spain and Portugal fall down the holes they seem to be digging...

Greece runs a budget surplus. In other words their outgoings which includes interest payments on their debt is lower than their income, and they're growing, their unemployment is coming down sharply.

At some point you have to admit whatever happened in 2008 they've got over it.

[Mordac]

Why? Greek house prices crashed. The almost halved in value.

How is this bad for the poor ?

With 30% unemployment, house prices are somewhat irrelevant. Greece should never have been allowed anywhere near the Eurozone, and while they might be turning a slight corner, their debt is approaching half a trillion Euros, and they were only bailed out for political reasons, not economic ones. Greece can't be allowed to fail, so Germany digs deep. They'll need very deep pockets if Italy, Spain and Portugal fall down the holes they seem to be digging...

[BrilloPad]

Remind me again, how much do they owe Germany?

Enough to keep them in servitude forever. Thank God the UK is going!

[Mordac]

Quite fascinating in 2009 all the Eurosceptics were predicting Greece would collapse and it was impossible to recover whilst they stayed in the Euro. Unemployment has fallen significantly and the stock market is soaring.

Remind me again, how much do they owe Germany?

[BrilloPad]

I gave up the control the day I got married. Twice.....

[BlasterBates]

That is a good effect!

Sadly it is nothing the only one. Just one example Greek debt crisis: 'I wasn't paid for two years' - BBC News

Entrepreneurs with employees are not poor people. As you know if you own your business your salary is a "nice to have". His business survived.

Tough but temporary.