Financial Crisis in Greece

[Prolet]

US rewards Greece's destruction of the Euro

Friday, 19 March 2010

The Department of Homeland Security (DHS) has announced that Greece is now a member of the Visa Waiver Program (VWP). As a result Greek citizens will now be permitted to travel to the United States for up to 90 days without obtaining a visa.

With this announcement, Greece joins the 35 nations already participating in VWP which allows travellers to simply apply for an Electronic System Travel Authorization (ESTA). Greek citizens will be able to visit the United States without visas in early April.

Since Greece has announced its massive debt, and because its economy is linked to the Euro, the European currency has lost 20% of its value to the US Dollar.

http://macedoniaonline.eu/content/view/13234/52/

[fyrOM]

Merkel: We need to be provided to and from the EU
March 19

http://www.vest.com.mk/?ItemID=631EE139DD43D349B503396F708FF080

BERLIN, March 19 (Reuters) - European rules must be changed, thus there is a possibility that countries consistently violate the rules of the economic bloc to be expelled from the eurozone, said German Chancellor Angela Merkel.
The comments, part of speech to the Bundestag, the first explicit call from the European leader for such a change, although Finance Minister Wolfgang Shojbler busted earlier this month taboo and asked similar steps.
"In the future we need a rule to deal with what is possible - as a last option - a country be excluded from the euro area, where she continually does not meet the conditions for a longer period," said Merkel.
She added that the Greek crisis contributed to the biggest challenge of the euro so far, but a quick resolution of the problem from the other members of the euro area is not the proper strategy.

[fyrOM]

Looks like its getting to be a bit of a pet topic…but…ehh. Its kind of fun.

The Daily Reckoning 19 Mar 2010

The European monetary family is in crisis. It meets on March 25th and 26th to discuss whether to kick Greece off the island (survivor style) or to intervene and save the prodigal son. The problem, from a German perspective, is that Europe is full of prodigal children. To save Greece means to save the rest of the economies troubled by rising public debt-to-GDP ratios. Where will it stop? With the trashing of the euro.

--But is doing nothing an option? The Greeks have already said they will meet with the IMF on April 2nd if Europe resolves nothing by the end of March. And in the meantime, bond yields on Greek debt are left twisting in the wind. Rising bond yields wipe out the benefits of austerity measures and deficit reduction.

--According to Bloomberg, "The yield on Greece's 10-year government bond rose 12 basis points to 6.21 percent. The euro fell for a second day against the dollar, slipping as much as 0.7 percent to $1.3648. Credit-default swaps on Greek sovereign debt rose 7 basis points to 295, the highest in a week, according to CMA DataVision prices."

--It's hard to imagine the Northern European powers hanging Greece out to dry. Families are supposed to look out for each other. You do more for your family when the chips are down than you do for most people in the world. But maybe Greece will spare Germany the hand-wringing and default on its own....just throw up its hands and shrug.

Yeah...

[fyrOM]

If there is one can the smilies be updated with one with ‘fingers crossed’.hehehe

[Soldier of Macedon]

Keep it coming OziMak, let's have their fall documented as much as we can, lest they try to lie and manipulate this incident also.

[fyrOM]

One third of Europeans want Greece to be excluded from the euro area
23.03.2010

http://www.vest.com.mk/?ItemID=14AB92113112854E99E0C39B931D1FC0

One third of EU citizens believe that Greece should be excluded from evrzonata because of its debt crisis, and most of them protivaat the proposals for providing financial assistance to the country whose domestic debt is greater than the opportunities it has for repayment, Financial Times writes, quoting one of his research.
Especially angry at the Greeks and their economic crisis which threatens to hit the euro area, the Germans do not agree their country, but other EU to save Greece from its debts.
That, according to the newspaper, the impact statement of German Chancellor Angela Merkel said earlier that financial markets should not be lifted by a false hope in a package of measures that the countries of the euro area would save Greece.
People in other EU countries, including the British in the lower percentage opposed to the idea to help the Greek economy, mostly because of fear that its eventual collapse could cause a fall and the euro.
Germans uchestvuvle survey of Financial Times, but now they are not satisfied any of the common currency of the EU, though so far have been among the strongest defenders of the euro. In this research only 40 percent of people in Germany believe that the economy in this country would be better and would have better results if it is not part of the eurozone. Such skepticism toward the euro is not seen at other major members of the euro area, such as France, Italy and Spain.
Investigation of the London newspaper comes before an EU summit dedicated to the situation in the economy and the measures to be taken to save the Greek economy from the crisis of debt.
Financial Times believes that the euro area should continue to be so hideous to the idea of the IMF to help the recovery of Greece, as the International Monetary Fund and the way it deals with the fiscal crisis of the countries and the EU cost one-third of the members the Fund so that it can affect not ignore the views of the eurozone.

[julie]

Athens is abuzz with a rumor: Greece might leave the euro zone

http://money.cnn.com/2010/03/23/news/international/greece_euro_currency.fortune/index.htm

Will Greece turn from euros to gyros?
By Dody Tsiantar, contributorMarch 23, 2010: 2:52 PM ET


(Fortune) -- Athens is abuzz with a rumor: Greece might leave the euro zone and adopt a new currency -- a Greek euro, so to speak, something of a cross between a drachma and a euro to be used only internally. Some hungry economists have jokingly given the new money a nickname: the "Gyro."

If only the solution to Greece's problems could be rolled up as neatly as a gyro sandwich. A bailout from the European Union or its partner countries is growing increasingly unlikely -- German Chancellor Angela Merkel just put a kibosh on discussing the topic at the upcoming EU Summit. While the International Monetary Fund sits in the wings ready to swoop in, it is unlikely the EU would allow its aid, and stigma, to affect the other Euro nations.



As a member of a currency union, Greece is "stuck in a Euro-zone straightjacket," writes economist Desmond Lachman of the American Enterprise Institute. Its options to dispose of its debt are limited: a default is not politically viable, a restructuring is unworkable, and currency devaluation to make the mess go away -- a tactic Argentina used in 2001 -- is impossible. To remain in the EU, Greece must accept its rules in good times, and in bad.

If Greece thinks it's trapped in a bad marriage, it could choose to leave the eurozone, but that would be a shocking development, one that prime minister George Papandreou insists is not on the table.

Fears of a Greek bank run
Yet the country may have no choice -- Greece might even be asked to go. As the crisis deepens, Greece's "leaving the Euro area, though still a low probability scenario, can no longer be ruled out," says Uri Dadush, the director of Carnegie International Economics Program. "It's a painful route, but a lot less painful than others."

Greeks are starting to wonder what a euro-less future might look like. One possible roadmap: copying California's 2009 debt solution of issuing warrants later redeemable for dollars.

The proposal by London School of Economics' Charles Goodhart and Oxford Said Business School's Dimitrios Tsomocos, would introduce a new way to pay debts inside Greece (or any of the other ailing "Club Med" countries -- Spain, Portugal, and possibly Italy), while leaving the euro in place for international transactions.


0:00 /:59EU to help debt-stricken Greece
Countries would print scrip that would act and look like a new currency domestically but not be legal tender overseas. There would be an exchange rate that would allow citizens to convert scrip to euros when necessary, but also allow the countries to devalue their economies while not affecting the euro's strength in other eurozone countries.

Or, perhaps, a two-euro European Union
Other economists like Michael Arghyrou of the Cardill Business School and John Tsoukalas, a lecturer at the Nottingham School of Economics, have proposed a grander version of this idea, where a two-euro European Union would be formed. One euro will serve the union's weaker economies like Greece and Portugal, and another would circulate in the rest. In their plan, both currencies would be overseen by the European Central Bank. "We can't deny that at the moment in Europe we have a two-speed European economy," explains Arghyrou. "This is not such a big mental leap."

Arghyrou believes the plan would calm international markets because it would provide a credible outcome to the guessing game that's happening now. But the political debate likely to follow such an arrangement will be anything but serene. Whatever countries get the cheaper Euro aren't much going to like the stigma of using the weaker currency, Club Med or not.

Countries assigned to a junior currency might protest, but can their sovereign pride get in the way of hard facts? "The euro as it is now is not sustainable," says Arghyrou. "We'll be talking about 27 currencies ten years from now, not two, if the present trend continues."

"The euro was set up with a handicap," says Italian economist Mario Nuti. "It's a currency without a federal state, without a fiscal authority and without a budget." In the end, the fact that the EU is a currency union without a political foundation may turn out to be its death knell.

How this plays out for the European Union rests in Greece's hands. The task ahead is Herculean: The government must cut budget expenses by about 25%. "That's a heavy lift. If they do, it would be a miracle," says Charles Calomiris of Columbia University's business school. "But then again they said the same thing about the 2004 Olympics. No one thought Greece would pull it off, but it did." One could say it takes a Greek to figure out how to make and eat a gyro, all without spilling a drop.

[Soldier of Macedon]

"But then again they said the same thing about the 2004 Olympics. No one thought Greece would pull it off, but it did." One could say it takes a Greek to figure out how to make and eat a gyro, all without spilling a drop.

Using examples of Olympics and Gyros, these irrelevant parallels, isn't going to get Greece out of its problems. Dark days ahead for Greece, and with the ongoing poor and racist leadership, there is no light to be had at the end of the tunnel.

[osiris]

the money spent on the olympics was the final straw that broke the greek camels back, it was done purely as a propaganda exercise and a ego boost for the wannabees. most of the newly built facilities are not being used and are costing half a billion euros a year just to maintain.

greece is a nation of self obsessed deluded egomaniacs their problems have only started

[Prolet]

Osiris, 2 million Athenians went on a holiday for the olympics, alot of the events have very little spectators, they spent billions just on security.

[osiris]

thats right prolet and it was all done on other people money so why its touted as a success is beyond me

[Soldier of Macedon]

the money spent on the olympics was the final straw that broke the greek camels back, it was done purely as a propaganda exercise and a ego boost for the wannabees. most of the newly built facilities are not being used and are costing half a billion euros a year just to maintain.

greece is a nation of self obsessed deluded egomaniacs their problems have only started

A Greek I know said that at some of the arenas they still have the signage from the Olympics up, I guess they missed the payment for cleaning and janitorial, lol.

[osiris]

a bbc report said that there was no planning involved for what would happen after the Olympic.

[Pelister]

I just wonder how many hundreds and hundreds of millions (possibly billions) of dollars have bankrolled Greece's propoganda enterprise against Macedonians over the last 20-30 years?? These are the sorts of questions Europeans tax payers should be asking.

[makedonche]

I just wonder how many hundreds and hundreds of millions (possibly billions) of dollars have bankrolled Greece's propoganda enterprise against Macedonians over the last 20-30 years?? These are the sorts of questions Europeans tax payers should be asking.

Yep! I'd love to hear the explanations given to the EU!