Posted on 02/11/2012 3:51:04 PM PST by Clintonfatigued
Debt-stricken Greece does not have the money to cover a (euro) 14.5 billion bond repayment on March 20, and must reach a vital debt-relief deal with private bond investors before then.
Papademos said the bailout and the deal with private creditors would return Greece to growth next year, and deliver a 4.5 percent primary surplus in 2012 -- better than an earlier official prediction of 1.1 percent of gross domestic product.
"A disorderly default would cast our country into a catastrophic adventure. It would create conditions of uncontrollable economic chaos and social explosion," he warned.
"Greeks' standard of living in the event of a disorderly default would collapse, and the country would be swept into a deep vortex of recession, instability, unemployment and penury. These developments would lead, sooner or later, to exit from the euro."
He also warned that, "Either we will achieve an agreement that will set the country on a new course, or, if we backtrack, in yet another historic display of cowardice, we will head for collapse. I want to be clear. These are not just crucial moments, they are dramatic for the country."
(Excerpt) Read more at theeagle.com ...
Keep shoveling money at us or there will be chaos.
So the current rioting and firebombings are something other than chaos?
Is the nation of Greece willing to take the necssary steps? I feel some sympathy for the young there, who are reaping the consequences of previsous generations of politicians. I just wonder if the great philosophers they once produced have any stories or statements which cover the financial problems they are currently facing?
So greece start selling some antiquities, or some islands. you have plenty of treasure. Give it up.
Just boot the Greeks out of the EU,it’s way past time.They lied to join,cut the losses and let them go.
Just boot the Greeks out of the EU,it’s way past time.They lied to join,cut the losses and let them go.
“the bailout and the deal with private creditors would return Greece to growth next year, and deliver a 4.5 percent primary surplus in 2012’
Pretty good satire, right?
Sell your islands. Sell some of your golden treasures in your museums. Give free vacations to tourists who can then spend money in your country. Sell gyros on street corners throughout the world. Dance for dimes on any street you can find. OR...become fiscally prudent, stop spending, lower entitlements, work more, live with less for a while, stop retiring at age 50, stop sitting all day in cafes drinking coffee. You know...the usual conservative stuff that your society apparently abhors.
If they can prove a bailout will lead to growth and a surplus and the ability to pay back the bailouts...then give it to them. But if not, kick ‘em to the curb.
The only way is for Greece to let the bankers Eat Dirt, Cut spending to Income, and Start over.
“Keep shoveling money at us or there will be chaos.”
Isn’t that North Korea’s deal with the US, South Korea, and China?
Gee I guess the 2500 year search for an honest man
or at least an honest Greek politican is still going on.
Just do what the kenyan is doing. Have Kinkos print up a few billion euros. See, problem solved.
'We're too big to fail so shut up and pay us or else!'
“The only way is for Greece to let the bankers Eat Dirt, Cut spending to Income, and Start over.”
Yes, chaos for who? The bankers...
I see a great polarity here. On one side is chaos, and on the other side is anarchy. If they continue to do what Europe demands, Greece becomes increasingly chaotic. If they default and go it alone, out of the Eurozone, Greece becomes increasingly anarchic.
The difference between the two is that chaos results in disaster, what was described, yet anarchy results in reorganization, transcending the failed systems of the past, which is followed shortly thereafter with recovery.
Oddly enough, Greece seems to be in much the same predicament as was Weimar Germany. In their case, their currency, the “Papiermark”, was hyperinflating to ridiculous extremes, much like Zimbabwe’s currency is doing right now.
Weimar Germany needed to get an orderly currency, but it was known at the time that if they just introduced a new currency, it would suffer from the same problems as the Papiermark.
Importantly, the Papiermark was a “fiat currency”, the government free to print as much as it wanted, to pay off its war debt.
So what was done was to create an *intermediate* currency, called the “Rentenmark”, backed by gold, and thus extremely stable, which was only to be used by banks and other financial institutions.
In short order, this had a tremendously stabilizing effect on currency, so a new, third currency, the “Reichsmark” could be introduced. Also backed by gold. And it was also very stable, and remained so even when the Nazis took power and for the duration of the war.
So what should Greece and the EU do?
Follow much the same model. First create a temporary currency, called say, the “Greco”, strictly for the use of banks, financial institutions, and Greece’s creditors. Once this is established and stable, then Greece temporarily leaves the Euro, and recreates its own national currency, the Drachma.
Euros and Drachma only being convertible *through* the Greco.
The value of the Greco would be set by the European Central Bank (ECB), as would the prices of things bought or sold with Grecos.
Thus, *anything* that Greece produced for export would be sold in Europe at fixed, high prices, with the real value going to the Greeks, and the remainder used to pay off some of the Greek debt.
Conversely, Greece would only be able to import the *excess* commodities of Europe, at an artificially low price.
The Drachma would be an internal currency only, to keep local government and markets functional. Its value would be in parity with the Greco, which means that Europe would be in charge of printing Drachmas, and Greece could only have the number Europe was willing to print.
The important observation is that the average Greek after enjoying a standard of living made possible by two generations of deficit spending, is not so willing to accept austerity or a spartan lifestyle. Chaos may very well come and the Greek government may fall. But Greece is merely a sideshow. The real test of the EU will come when the austerity measures are mandatory for Italy, Spain and France.Over 130 million people are facing a decline in their standard of living. They are no more likely to accept their new status any more than the Greeks. Germany and the US simply do not have the resources to preserve the status quo.Two generations of deficit spending has squandered huge amounts of capital.The EU may be doomed. Meanwhile here in the US we have a grinning President who announces a Federal budget with a 1.3 trillion dollar built in deficit. The same President who borrows, prints and taxes every dollar he can, and absolutely refuses to cooperate with Congress to cut spending.
Amen.
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