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Greece
Jun 28, 2015 13:54:54 GMT
Post by purvis on Jun 28, 2015 13:54:54 GMT
I was just wondering how safe it will be to travel to Greece this coming fall considering the state of finances the Greeks find themselves in especially if they are not given further financial help from the euro countries and the IMF. I see on TV this morning that if one does go to Greece as a tourist you are cautioned to take cash with you as it may become difficult to get money from an ATM or use your credit card. Purvis
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Greece
Jun 29, 2015 5:06:38 GMT
Post by plane2catch on Jun 29, 2015 5:06:38 GMT
I was just wondering how safe it will be to travel to Greece this coming fall considering the state of finances the Greeks find themselves in especially if they are not given further financial help from the euro countries and the IMF. I see on TV this morning that if one does go to Greece as a tourist you are cautioned to take cash with you as it may become difficult to get money from an ATM or use your credit card. Purvis Yes, Purvis, your correct Cash seems to be King for the moment in Greece. Hopefully, things will get better by September. The weather is so pleasant in September and water as well in September.
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Post by Oz-T on Jun 29, 2015 7:06:34 GMT
Yes, Purvis, I have been advising a few people today that anybody travelling to Greece should be especially cautious re money security. Taking the regular ATM card won't be helpful because the queues will be too long, or the ATMs will be inactive or limiting withdrawals. That means carrying more cash than we would normally do.
I expect the banks to be closed for at least a week and this could well be the trigger for the calamity that I've been predicting. Greece cannot repay the debt that matures on Tuesday and it's almost inevitable that it will finally default on its loans this week. That will set in train several events that will probably (but not necessarily) lead to Greece leaving the Eurozone at some stage. That's why there's panic at the banks. The foolish Greek government has yet again thumbed its nose at creditor countries by holding a referendum on whether Greece accepts the creditors' terms (and has recommended a 'no' vote). It's financial reckless and will result in Greece suffering an incredible penalty.
I'm in the process of preparing a summary of what's happening which I'll post in the next day or so.
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Greece
Jun 29, 2015 11:28:59 GMT
Post by chech on Jun 29, 2015 11:28:59 GMT
I was just wondering what your thoughts on it were. I have a friend who has been there a month and is going to be there another month. She has an escape plan in place (ferry to Italy). The bigger question is how this inevitable default may affect the rest of us.
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Greece
Jun 29, 2015 11:57:15 GMT
Post by tiffany on Jun 29, 2015 11:57:15 GMT
I’ve been wondering the same thing, as I am going there in the fall. I plan on bringing cash with me though, and will only use my credit card to book optionals through the tour company. That being said, I hope things will be a little more stable by the time I go. At least by then I’ll know if I need Euros or another currency (not sure what Greek currency is called).
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Post by Oz-T on Jun 29, 2015 12:17:15 GMT
I don't think there's going to be chaotic scenes in the streets causing tourists to flee for their lives. But it can be pretty unpleasant being unable to withdraw money from an ATM or have your credit card accepted in a restaurant or hotel. That's a better reason to not be in Greece at the moment.
There's a slight chance that creditors might extend terms for another month but that would be stalling the inevitable: Greece is bankrupt and the technical default will some day turn into a real default. That day might be Wednesday. The creditors have had enough of Greece and the smug arrogance of the current Greek finance minister and his prime minister must surely have pushed things so far that the IMF and ECB have had enough of these idiots. Greece continues to pay pensions they cannot afford to retired public servants, and they keep borrowing money to do this. Greece stubbornly refuses to change the rules that pay pensions when a person reaches 63. That doesn't go well with the hard working Germans who can't retire until 67, but are being asked to prop up what they think are lazy Greeks.
So here's what I think will happen. Greece will ultimately formally default. Their government will have to introduce capital controls to try to stem a run on the banks. There's no way this can be as successful as it was with the island nation of Cyprus. There will be financial panic. Sooner or later the government will collapse, blamed for bringing this to a head. Default means that Greece will be cut off from financial markets - nobody will lend money to a nation that is no longer propped up by creditors, the IMF and the ECB. Without money flowing in, the Greek government won't be able to pay wages to public servants or pensions. Tensions will rise, and civil disturbance will occur. It might not be a nice place for tourists for a while.
But down the track, the solution is to exit the Eurozone and for Greece to have its own currency, presumably the Drachma. It'll immediately be devalued to a fraction of the Euro and there will be some awful stories of the financial ruin it'll cause. Inflation will soar, but this will cause people to choose cheaper Greek goods and services wherever possible. In time, a devalued currency can lead to Greece becoming a much cheaper country in currency terms, including tourism. Then the long, hard slog begins where it can slowly rebuild its finances over a generation or two. That is, provided the Greeks elect sensible governments that act in the long term. Past history suggests that the Greeks aren't likely to do this.
Will this all happen? Too many times Greece has come to the brink, only to be rescued at the last moment by a Europe too scared to allow the inevitable fall. Today, a much larger proportion of Greek debt is held by government instead of corporations. That makes it easier. If Europe thinks it can cut Greece free without creating precedents for Spain and Portugal, maybe this is the time. We shall see in the next day or two.
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Post by purvis on Jun 29, 2015 17:04:16 GMT
Thanks OZ for your answers. My eldest son and daughter-in-law are planning on a 12day vacation to Greece in Sept. They will first be staying in London for a few days so if Greece is a problem will just go somewhere else from Heathrow. The chap that rented them his home for 12days did not want a pre-vacation cheque but cash on arrival. It appears he didn't want a money trail which could cost him taxes. That seems to be Greece's biggest problem; tax evasion by it's people along with the fact that they tend to be a wee bit lazy. I once heard that the Germans don't buy on credit something that the rest of the world should think about. The PIGS have lived off the toil of other countries long enough and should start to pay their own way by living within their means . Purvis
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Post by Oz-T on Jun 29, 2015 22:35:27 GMT
Tax evasion has been a fairly common practice in Greece for decades, Purvis. It's mainly the businesses that get away with it and it is indeed one of the many reasons why the country constantly ran budget deficits. Public servants often retired in their early 50s because the pensions were so generous - why work if the government will happily pay you a guaranteed 80% of your salary to loaf around in early retirement? And when the last government bumped the pension age up to 63 there were protests in the streets by these deluded people.
In my opinion, there is never a good time to elect a socialist government, but the Greeks chose the worst time in their history last January. They then acted with a brazen, cocky attitude, telling Europe that they'd had enough of austerity and weren't going to comply. Just picture the average German taxpayer reading that in the news. You couldn't blame them for asking "Why am I working hard through to the age of 67 to get a smaller pension than those Greeks, and having my taxes propping up these lazy, ignorant people?".
And to cap it off, this arrogant government has resorted to playing political games, refusing to negotiate with creditors and holding a referendum to ensure the Greek public endorses their intransigence. They seem to think that Europe is too scared to cut Greece loose. Well, you can only dare your bankers so many times before something finally cracks, and maybe this is the time. If not, it is inevitable that it has to happen at some stage. The Greeks will learn the hard way that as much as they disliked austerity, it's nothing compared to a large scale financial meltdown.
We still have Greece on our list of destinations for travel, but not in the foreseeable future. It's not that we fear being physically hurt - the Greeks are stupid, but not dumb enough to target innocent tourists. It's more that these foolish people will harm themselves by endorsing mass strikes and disruption. I don't want my holiday ruined because the streets are choked with angry protesters blaming everybody but themselves. I don't want to be unable to get to my destination due to a strike by airline staff, ferry operators etc. I don't want to have unreliable ATMs. Probably the only industry Greece has that brings in hard currency is tourism and if history is any guide, Greece will make itself an unpleasant destination for the tourist dollar. Yes, they are that stupid. In time, reality will finally hit Greece with an almighty crunch and it'll be a decent place to visit after their attitudes change.
For anybody committed to travel there in the near future, I'd recommend taking cash and appropriate security measures to protect it. And I'd be prepared to be flexible with travel plans - some services could easily become unavailable without much notice.
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Greece
Jun 30, 2015 0:43:01 GMT
Post by bet on Jun 30, 2015 0:43:01 GMT
Im curious to see how it all plays out in the coming months, as Im reconsidering my Aegean Cruise next year. Having cash on hand is ok but don't want uncertainity or a ruined holiday with strikes and other disruptions.
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Greece
Jun 30, 2015 2:51:57 GMT
Post by plane2catch on Jun 30, 2015 2:51:57 GMT
Oz-T makes a lot of good points. The Greeks always have seemed too willing to protest with frequent Strikes. That would spoil a vacation to the Islands for me. I have been to Greece on four separate occasions and the Islands are beautiful but the government is non functional. I know my Greek Grandpa was so happy to get his citizenship after serving with the US Navy back in WW1. He wasn't anxious to return back to Greece. There is still a lot of corruption in the country and the citizens that are paying their fair share of taxes are in too much fear of turning in those that aren't. At least the families Olive Orchards have stayed in the family name and not been claimed by the local municipality. I hate to say it but I certainly wouldn't be planning a trip there in the next few years.
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Greece
Jun 30, 2015 3:28:17 GMT
Post by purvis on Jun 30, 2015 3:28:17 GMT
It's so sad that the bed of Democracy is now a Socialist country whose government is in talks with Putin. I think the west is more concerned with Putin's intervention than Greece not paying it's upcoming loans. Purvis
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Post by Oz-T on Jun 30, 2015 4:01:40 GMT
There's some validity to that, Purvis, but I still don't think that the Greeks will eventually turn to the Putin kleptocracy for salvation - that's a step down the road to oblivion.
What I do think will happen is that the capital controls will stay in place for longer than a week. Billions of euros have been transferred out of the country for safekeeping over the past few years, mainly by businesses and wealthy individuals. More recently, average people have been trying to do the same and the government is now trying to close the gate after most of the horses have already fled.
And as we always discover, world markets panic a bit and head toward the usual safe havens. That means the US dollar (and sometimes gold bullion). Smaller currencies usually get caught in the crossfire, so it would not be a surprise to see the A$, NZ$ and perhaps the C$ fall a bit against the greenback in the short term.
At some stage, assuming a Greek exit from the Eurozone, Greece would need to start printing its own currency, presumably Greek Euros or Drachmas and let them run parallel to the euro. Of course, people will prefer to hold euros because they know it'll appreciate by a huge margin over any new currency. This effect can be delayed for some time by fixing the drachma exchange rate (i.e. pegging it to the euro). In time, consumers and businesses won't be able to use euros within Greece, ensuring the new currency is entrenched before it's floated.
Printing their own banknotes is probably the only way for the Greek government to pay wages and pensions because once they default and lose their funding, there won't be any euros advanced to them any more. Increasing the money supply like this has its problems, primarily inflation. That will hurt Greeks and it will need decent economic management to steer the country clear of the rocks. Don't expect it from the two Marxist children who are currently messing things up: prime minister Alexis Tsipras and finance minister, Yanis Varoufakis. Their smug game of playing chicken with the big vehicles on the freeway during rush hour appears to have resulted in a major catastrophe.
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Greece
Jun 30, 2015 11:44:55 GMT
Post by tiffany on Jun 30, 2015 11:44:55 GMT
I spoke to my travel agent yesterday, and according to Trafalgar, my tour is still going ahead, and Greece is still a safe place to go. I really don’t want to have to cancel my trip, so I hope things settle down a bit before the end of September. I don’t want my trip to be ruined by protestors in the streets blocking the way to tourist destinations. I guess I’ll just have to wait and see.
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Greece
Jun 30, 2015 11:49:29 GMT
Post by chech on Jun 30, 2015 11:49:29 GMT
I doubt you'd be hassled by protestors. The tours there are so well organized that there could be protests on the go and you'd never see them. And you'd be outside of Athens for the majority of your tour and life in rural Greece and the islands wouldn't be affected. And you have three months to go - a lot can happen in that time. Do you have a Plan B if something cancels the tours?
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Post by californian on Jun 30, 2015 15:12:42 GMT
I spoke to my travel agent yesterday, and according to Trafalgar, my tour is still going ahead, and Greece is still a safe place to go. I really don’t want to have to cancel my trip, so I hope things settle down a bit before the end of September. I don’t want my trip to be ruined by protestors in the streets blocking the way to tourist destinations. I guess I’ll just have to wait and see. Tiffany, I know what you mean, we were in the same boat last year about Russia, being from the US, we kept checking the State Department and the almost daily reports. Thought it again when it was time to spend money to get the visa, but we went ahead anyway. We were received in Russia by the grateful guides and hotel personnel, tourism was down of course, and they kept telling us to spread the world and tell everyone it was safe and to come for a visit. Different reasons now, more a local crisis rather than a political international one, but I am sure the tourist industry and particularly the TD would do everything to avoid a bad experience, they will need the money more than ever. And there probably be fewer tourists as well, a plus. In my humble opinion, you should keep planning and enjoying it...the money situation will be resolved by then, I'm sure.
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Greece
Jun 30, 2015 16:53:39 GMT
Post by tiffany on Jun 30, 2015 16:53:39 GMT
I doubt you'd be hassled by protestors. The tours there are so well organized that there could be protests on the go and you'd never see them. And you'd be outside of Athens for the majority of your tour and life in rural Greece and the islands wouldn't be affected. And you have three months to go - a lot can happen in that time. Do you have a Plan B if something cancels the tours? No plan B yet. That’s what I wanted to talk to my travel agent about, but she told me not to worry. My friend and I are flying into London early, so our plan B might be a tour of Scotland if the dates match up. I’ve been to the UK and Ireland before, and have always wanted to go back to Scotland. I’d really like to go to Greece though, so I hope I won’t have to come up with a plan B.
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Post by chech on Jun 30, 2015 17:34:45 GMT
Talking to my travel agent this morning and she says the same thing. No worries at this point. She's had no cancellations or even any calls.
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Greece
Jun 30, 2015 22:38:50 GMT
Post by Oz-T on Jun 30, 2015 22:38:50 GMT
There's not enough in this for me to cancel a trip if I was headed to Greece, but I'd certainly be thinking through a few strategies, including those already mentioned (i.e. taking extra cash to not rely on ATMs, increased personal security and a flexible travel plan).
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Greece
Jun 30, 2015 23:02:20 GMT
Post by purvis on Jun 30, 2015 23:02:20 GMT
I was just wondering about tourists who plan on renting a car since there might very well be a gasoline shortage . Taxi,buses and airplanes run on fuel also. One just has to look at the news the past few days of Greeks lining up at filling stations to see that they believe there could be a shortage. Purvis
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Greece
Jun 30, 2015 23:04:37 GMT
Post by purvis on Jun 30, 2015 23:04:37 GMT
It seems that the current Greek government is playing "Russian Roulette" with the countries economics.
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Post by Oz-T on Jun 30, 2015 23:57:02 GMT
You make a fair point, Purvis. When shortages occur, there’s no reason why fuel wouldn’t be similarly affected. (Not that I would consider driving a rental car in Athens!)
I’d raise another aspect of this that deserves a mention. For years, Greek businesses and rich individuals have been shifting billions of euros out of the country and with one motive in mind: they think that Greece will someday dump the euro and adopt their own currency. This makes sense because a devalued drachma will cause a sudden plunge in the value of those savings, most likely more than half. And they’ve done this with considerable thought, setting up bank accounts in other countries to store it.
So here’s the problem: average Greek households have also worked this out, but lacked the time or capacity to do it the same way. Wherever possible, they’ve hoarded euro banknotes and hidden them inside their homes, or buried in their yards. This questionable method of asset protection is widespread knowledge in Greece, and that represents a pot of gold for thieves. You can bet that there will be a rise in burglaries as a consequence and the victims will be those who can least afford it.
From a tourism perspective, I’d recommend that anybody visiting Greece be cautious about leaving cash in their hotel room – we all know how easy it is for a person to gain entry whilst housekeepers are attending to the rooms, but now there’s a greater likelihood that there’s something extra to attract them.
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Greece
Jul 1, 2015 2:09:28 GMT
Post by Oz-T on Jul 1, 2015 2:09:28 GMT
Update: Greece Defaults on Loan Payments
So now it's official, Greece has finally defaulted on paying it's €1.6 billion interest payment to the IMF by midnight Tuesday.
And it gets worse: Greece also needs to pay €2 billion on 10 July to Treasury bill holders, and another €454 million to the IMF on 13 July. And there's a looming €3.5 billion payment to the European Central Bank (ECB) in a few weeks.
The consequences of defaulting on loan agreements is that Greece loses access to emergency funding. This means that Europe will have to turn off the financial security measures that had been protecting Greece from insolvency. Now the Greeks will learn the implications of what its government has done.
There is still a referendum on the weekend to allow voters to decide whether they wish to accept or reject the terms set by the creditors. The Marxist government has recommended a 'No' vote and if that succeeds, Greece is basically voting for economic collapse and an exit from the euro. If they vote 'Yes' they will signal that they do want to act responsibly, but that'll presumably mean the Syriza government would have to resign (it favours spending beyond its means and having fights with creditors).
In breaking news, Germany has demanded that Greece's prime minister and finance minister resign before they will enter bailout negotiations with Greece. These two clowns have done enough damage and obviously cannot be part of any solution.
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Greece
Jul 1, 2015 2:59:14 GMT
Post by purvis on Jul 1, 2015 2:59:14 GMT
Oz: Thanks for validating my theories of the Greek situation. At 80yrs one starts to wonder if you have the ability to judge situations with some credibility. Purvis
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Post by Oz-T on Jul 1, 2015 3:08:31 GMT
Never underestimate experience, Purvis. It more than makes up for losing our youth.
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Greece
Jul 5, 2015 23:31:27 GMT
Post by purvis on Jul 5, 2015 23:31:27 GMT
Today the news says that the Greeks voted overwhelming for "No". I can't understand why the people are dancing in the streets of Greece as what they have actually voted for is "National Economic Suicide" If their government thinks it can negotiate a better bailout now they are living in a dream world and will undoubtedly take the country to disastrous economic ruin. Do the Greeks really think the rest of Europe will finance a county which has only a 20% recoup on taxes owed and has a population of 50% living on government assistance. Talk about living beyond ones means. Purvis
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Greece
Jul 5, 2015 23:35:56 GMT
Post by Oz-T on Jul 5, 2015 23:35:56 GMT
UPDATE: Greece votes "NO" ... and in doing so, the Greeks have probably (and unwittingly) destroyed the best chance they had of avoiding a chaotic meltdown of their finances.
The referendum question put to the voters was itself deceitful. It basically asked the question "Do you want to suffer austerity for the rest of your lives?". Ask a question like that and you're definitely going to confuse voters into voting no. It'd be a different story altogether if the question was honest, such as "Do you want to continue with austerity programs as a consequence of accessing bailout funds, and therefore avoiding sudden financial collapse, an exit from the Eurozone and hyperinflation?". From what I've heard, the Greek socialist government did all it could to avoid properly explaining the consequences of the vote, preferring to paint it as a choice between accepting humiliation or not.
But the damage is now done. The creditor nations such as Germany will accept the democratic principles of a country that has said no to accepting bailout terms. They already have said that they cannot work with Greece's prime minister and finance minister in framing any bailout and for good reason: these two amateurs are clowns who have no idea what they are doing. This high-wire brinkmanship game they've been playing has been dangerous and now the entire Greek population will suffer the fall that's about to happen.
To start things off, there will be an immediate liquidity crisis. There's no way the banks can reopen on Tuesday as promised by the government and the reason for that is that they are almost out of cash. It's estimated that only €500 million cash is left in the banking system and that won't last long. Forget the €60 ATM withdrawal fee - that's now dropped to €50 because they've run out of €20 banknotes. Just do the arithmetic: 10 million adults all in a panic, trying to withdraw €50 from an ATM will make Greece's banks insolvent in just a few hours. The only way banks can open on Tuesday is for some benefactor to physically inject billions of euro banknotes into the system. And with no benefactor in sight, thanks to the hamfisted recklessness of the government, the bank doors will remain locked for some time.
That will cause even more chaos. Without cash, Greece will grind to a halt. Thousands of small businesses have closed already after last week's crisis. Nobody wants to provide credit terms. Shops can't buy trading stock because their suppliers demand cash payment up front. The shops don't have the cash because the customers have stopped spending - so they're closing down. Pretty soon, this will turn from an inconvenience to a humanitarian disaster if people cannot buy food.
Meanwhile, the Greek PM (a Stalinist) and its finance minister (a Marxist) gloat that they've become geniuses, forcing the rest of Europe into filling their begging bowl for the next few decades. I don't think so. The European Central Bank (ECB) now has its hands tied and cannot lend emergency money to a country that can't even pay the interest on its loans, much less any of the principal. And now Greek voters have said that they refuse to comply with tough measures in exchange for bailout funds. Who would ever want to throw more money at these hopeless people?
The chances of economic calamity, financial ruin and an exit from the Eurozone have increased markedly. Some say there's now a 75% chance of a Grexit. Germany has said on many occasions that it will do all it can to preserve Europe and the Euro, and many people interpret this as keeping Greece in the Eurozone at all costs. I interpret it differently: Angela Merkel is a shrewd and smart leader and I suspect that her thinking might actually be that letting Greece commit financial suicide and leaving the euro might be the best way to safeguard the Eurozone. If so, it'll require a lot of careful management to avoid Greece's stupidity contaminating its neighbours.
Quite a few people have been asking me what this means for anybody travelling to Greece. Firstly, I'd cancel a trip unless I was already committed - it's not going to be a nice place when the consequences hit Greece like a ton of bricks. The misery, shortages, strikes and demonstrations won't make Greece a nice place to visit in the short term. If you're already committed, take enough euro cash to last your trip and ensure your security of it is adequate. Check your own government's travel advisory warnings as well as your travel agent, hotel, tour operator, transport etc. And have a backup plan - the crisis might not have anything to do with you but you can still get caught in it. For example, how do you get around Athens if there's a general strike? Will your hotel honour your booking?
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Greece
Jul 5, 2015 23:53:23 GMT
Post by chech on Jul 5, 2015 23:53:23 GMT
Perhaps letting Greece go this route will play into the Eurozone's and Germany's hands....they get rid of Greece and scare the other PIIGS countries from following in Greece's footsteps.
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Greece
Jul 6, 2015 0:41:08 GMT
Post by Oz-T on Jul 6, 2015 0:41:08 GMT
This would be a difficult path to take, but theoretically a possible one. Europe cannot allow Greece to create signals and precedents that it's OK to default. That's why I suspect that Greece will be left to suffer the damage they created for themselves, so everyone sees the pain and avoids emulating the experience.
Having said that, Europe won't want a major humanitarian crisis within the family. Remember, leaving the Eurozone doesn't mean leaving the EU. Greeks will continue to have the right to head to other EU countries to get jobs or start businesses.
But despite Grexit's immediate, punishing shock to the system, it's probably the only long-term solution. Greece is uncompetitive and unproductive and that can only be fixed by a heap of commitment and a different currency that's massively devalued.
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Greece
Jul 6, 2015 0:41:22 GMT
Post by bet on Jul 6, 2015 0:41:22 GMT
Voting No was sheer stupidity, things will only get worse, a lot worse than any of the austerity measures they voted against and they only have themselves to blame.
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Post by Oz-T on Jul 6, 2015 6:16:23 GMT
Update: Greek Finance Minister resigns
Yanis Varoufakis, Greece's finance minister has just resigned, which might be a step away from the financial cliff Greece is teetering on.
Varoufakis was a difficult person who preferred to have fights with the European creditors and it was clear that any bailouts could not proceed with him in the chair. There is still the problem of the Greek prime minister who has also irritated the bankers with his stunts and backflips.
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