Question on Greek Financial Crisis

[BD1]

snapper, forgive me if i´m wrong, but you work in a political position? i mean political appointment or civil servant?

[Doktor]

Italian GDP is 2.100bn, while Greek is 330bn.
Hardly

Italian economy is Greece x aprox 25-30

;)

[snapper]

x debts of 122% of GNP...

[Doktor]

Snapper, you confuse me. It can't be 3000% of the GDP or I get something wrong?

[snapper]

Italian GDP is 2,100bn ok... then x that by 122 (their debts) and thats a decent bail out, no banks need saving and all is tickety boo. Otherwise someone takes losses somewhere along the line; whether a. debts are written off -> banks bailed out -> France loses AAA rating, or b. more 'austerity measures' -> decrease in GNP -> the Greek scenariao again. Thus the newly agreed 440bln EFSF fund is nowehere near big enough to deal with Italy and/or Spain. With Greece they are doing piecemeal bailouts (8bln for Christmas etc). It is very unlikely that this approach will work with a far larger basket case - or that the Germans, Slovaks et al will pay for it. If Italian bonds hit above 6.5% then they MUST implement further austerity packages and we walk down a Greek re-run; the economy shrinks and it becomes ever harder to make the savings needed as less tax is coming in.

I note that the House of Commons here will debate a referendum on Europe next Monday. The Conservative Party will implement a 3 line whip saying in effect 'thou shalt not vote a referendum'. The other Party in coalition (Liberals), who as late as last May wanted a referendum, have now changed their mind and will vote no and the Labour Opposition say 'not a good time right now' or words to that effect. Polls suggest that around 60% of British people want a referendum... It is highly unlikely that our 'representatives' will represent the majority of the people at this point. I have emailed my MP as follows:

"Dear Laura,

I do hope that you will ignore any whip orders next Monday on the EU referendum debate and voice the rights of the people to a say in this for the first time since 1974... when I was not born and it was only a 'common market' anyway. With fiscal union they are they threatening 2/3 rds of Europe with 'troika dictatorship'... this will end with nationalist rebellions and wars. The EU have defrauded voters time and again already... a 'no' is never a NO! The process is by passed or repeated.

I know that Mondays vote is not binding on the Government but unless our Party stands up for our country we may as well give up now. I shall be watching carefuly.

Regards

SD"

Plenty of unemployed people living on Ŗ60 p.w, I bet they know how to manage money and listen to others better than the current lot. Perhaps we should sack the politicians and beaurocrats and give their victims the job for an extra Ŗ40 p.w? Would cerainly help with deficit.

[cyppok]

I have emailed my MP as follows:

"Dear Laura,

I do hope that you will ignore any whip orders next Monday on the EU referendum debate and voice the rights of the people to a say in this for the first time since 1974... when I was not born and it was only a 'common market' anyway. With fiscal union they are they threatening 2/3 rds of Europe with 'troika dictatorship'... this will end with nationalist rebellions and wars. The EU have defrauded voters time and again already... a 'no' is never a NO! The process is by passed or repeated.
EU referendum vote: No 10 may table amendment | World news | guardian.co.uk

I know that Mondays vote is not binding on the Government but unless our Party stands up for our country we may as well give up now. I shall be watching carefuly.

Regards

SD"

Plenty of unemployed people living on Ŗ60 p.w, I bet they know how to manage money and listen to others better than the current lot. Perhaps we should sack the politicians and beaurocrats and give their victims the job for an extra Ŗ40 p.w? Would cerainly help with deficit.

I remember mailing the House of Representatives (Representative of my district) when the bailouts were discussed asking not to give the bailout with valid reasons etc... My letter was most likely used as paper mische along with most of the other people whom mailed or called in.

EU referendum vote: No 10 may table amendment | World news | guardian.co.uk
I think this is what you mean by referendum, on membership in Eu well this clears things up.

It has been suggested that the public should have three options in a referendum: keeping the status quo, leaving the European Union, or reforming the terms of the UK’s EU membership.

[crooks]

It's a sop the Tories hard-right wing that are cranky about being in coalition with the Lib Dems and nothing more. Cameron says he's against it so the inevitable horsy Tory rebellion will do damage to him but not pass (best of both worlds for the Labour opposition).

Basically the UK Tories have a wing that hates and has always hated Europe and will do anything to disentangle themselves from the mainland (and dream of ehmpire!). There's no real principle involved here, just blind, inbred hatred (but fun to watch).

[snapper]

It will end up as 'exit Cameron stage left' if he persists with the whips; I am informed that 50+ Conservatives have already signed the motion.

[crooks]

Cameron's in no danger, his cabinet (which contains some unreconstructed europhobes) seem unanimous around him and as said this is just the ein volk ein reich types getting a bit of kick out of making trouble on an issue close to their hearts. If he doesn't whip it'll lead to a dissolution followed by an election in which the Tories (and LDs) might get a serious kicking. They've more sense than that and one imagines they'll elbow to keep the rebels as low as possible - there could be lots of them but provided the motion is defeated ain't no thang. It's damaging to Cameron and the Conservative party in general but it's not a gamechanger imo.

A nice distraction from the debt crisis perhaps .

[cyppok]

The cost of EU to UK is sort of growing daily, and the supra-national bureaucracy needs more funds so regulation(fees/taxes etc...) grow exponentially.
Could have been slowed if the agricultural concessions UK had were not given up by Tony Blair.

However one thing people completely ignore is the business interest coalescing behind the scenes. Be they tory, labor, or other party their goals to reduce burdens in times of stress create a single focal point of agrement, ergo re-negotiation of EU overhead. Mid to Large-size businesses that are UK based or have operations there would benefit from lower EU overhead while maintaining the trade participation. My guess is if the issue is not presented under a single party they will re-Brand it and it might get a backing of several where the whole argument over EU is focused on the money issue for the populous (and large/mid businesses).

In the end this will be successful I can totally see commercials with the following theme/meme.
"Your bread 1.50 pound + .50(Eu regulation)"
"Your car 15000 pounds + 5000(Eu regulation)"
"Your real estate tax 5000 pounds +1000(Eu bureaucrat salary)"
...and a nice exponential graph line with costs growing since joining Eu.

Also cartoons with the parasite theme on UK's back growing so large that the host is splatted on the ground and is dying.

[snapper]

Update of the weekend:

1 thing decided: 100bn Euros for banks, most likely to go to Greek banks and other PIIGS banks. Of course this means they can pay less to the Governments that will need supporting, but doesn't cut the bill. If the banks fall so does the Government and vice versa: The net bill remains the same; prop up the banks or the Government is only short term 'can down the road' solution if money is still being lost.

The German/French arguement was about the ECB: The French wished to turn this into a printing press to create Euros when needed. The Germans said nein. The Germans won this argument:

"On the bailout fund, one potentially dangerous choice has been made. Germany has persuaded the rest that the resources of the European Central Bank should not be deployed alongside those of the EFSF." BBC News - Will propping up Italy weaken France?

This potentialy means that the Germans and French are going to subsidise all the others ad infinitum... I wonder what the democratic cost will be?

How they will enlarge the EFSF and what percentage of Greek debts will be written off is to be announced on Wednesday.

UK House of Commons debate and vote on EU referendum: 111 MPs voted in favour of the referendum, Laura will have a glass of wine over her later.

[cyppok]

The most interesting story I saw thus far is this.
EU banks irked by Hungary move - Hurriyet Daily News
In a sense Hungary is threatening to simply convert foreign denominated mortgage debt, and later on the story says some municipal debt as well into forints to ease burden on those paying. They could make administrative & tax barriers act as incentives without actual direct intervention. Time will tell though.

That plan aims to convert foreign currency mortgages - which are worth 20 percent of gross domestic product (GDP) - into forint debt to relieve pressure on households whose payments have sky-rocketed due to the Swiss franc’s surge.

“The task facing the Hungarian economy will be entirely different if 10 percent (of FX loan holders) take advantage of it (repayment) than if 60 percent do,” Orban has said.

Analysts said possible further measures brewing up may include making forint refinancing loans mandatory or capping interest rates, and one analyst even mentioned a forced conversion of foreign currency loans into forint-based loans.

Orban said local governments indebted in Swiss francs should also get help to get out of the debt trap.

Sooner or later some country somewhere simply does the ultimatum followed up by forced lawful change. I am sure there will be economic blow back but still see it happening. The ratcheting effect of higher and higher burdens due to higher and higher debt loads and forex pressures in some cases simply make it more likely to happen.

[cyppok]

Papandreou calls referendum on EU deal | euronews, world news

Those haricuts are worthless. At this point in order for banks to get "refinanced" by EFSF the Greeks have to take the deal. I am sure it will get reshaped to skirt this in the near future but anyways. A referendum on the deal which has a guaranteed no attached due to popular opinion is in essence a default 'attempt' by Greece, and this is not a 50% haircut default in the making I think, but a full write down to either 0 or close to it.

The Greek Prime Minister George Papandreou has called a referendum on a new EU aid package to ask voters whether they want it or not.

A “no” vote could throw the question of the country’s solvency up in the air again, raising more serious questions for the euro zone.

The prime minister said a referendum was the “highest form of democracy” and would allow the people to decide.

He also said a vote of no-confidence would be held, but ruled out elections. No date was set but the referendum should take place in the next few weeks.

MPs applauded but euro zone leaders may be less approving. Last week they agreed to a second bailout rescue loan of 130 billion euros for Greece as well as a 50 per cent write-down on its debt.

But as protest after protest has shown, many people vociferously oppose more austerity.

An opinion poll suggests nearly 60 per cent of Greeks disapprove of the agreement at last week’s EU summit, with many fearing a total loss of sovereignty.

[Doktor]

Yesterday the bankers (ironically the native bank is National Bank of Greece) came to a friends home to confiscate the car (worth eur 20k) as he is not in condition to pay the rates anymore. The friend told them to write off 10k and he, the wife and the kids will vote at home if to accept the 50% write off or will ask for a 100% one.

In the meanwhile the bank is not allowed to confiscate anything else as the friends feel they are interfering their freedoms.

[snapper]

MPs reply and continuing dialogue:

As mentioned above I wrote to my MP before the recent Commons debate on a EU referendum urging her to vote for the referendum (seeing as 67% of British people want a referendum). Here is the reply and my follow up:

"Dear S-

I have always been committed to a referendum if there was any prospect of Europe taking any further powers away from Britain. I have also been committed to repatriation of powers from Europe through negotiations.

However, while I support the parliamentary motion’s intentions to have a referendum, I do not agree with the motion’s substance or its timing.

The motion puts forward three options for a referendum – in / out / renegotiate. This is not workable. Having 3 options creates an impossible outcome when the referendum could be won by one of the options attracting only 34% of the vote. I don’t think that we should stay in or get out of Europe on the basis of 34% of the vote. If the result was “renegotiate” which I would suspect would be the outcome – “renegotiate what?” Everyone would have different views. Renegotiation could mean anything from a Norwegian style relationship with Europe through to repatriating a few pieces of employment laws.

In relation to Europe the timing of this motion would not give us the greatest leverage possible. Firstly we need to be clear about what we want to renegotiate and start those discussions. Then once they are explicit we should then start preparing for a referendum – in or out – as part of the leverage that we can use in the renegotiations. This then offers us a two pronged attack – give us what we want in term of renegotiation or we press the “referendum” button.

If we have a referendum now we will play our nuclear option before we are in a position to get as much from Europe as we might need. And we will need a lot from negotiations with Europe if we leave the EU; coming to a new set of trading relations, border freedoms, arrangements on working in different countries, company ownerships and many other agreements around extraction.

The fallacy about getting out of Europe is that we can’t just walk away. We will have to negotiate with them whether we are in or out so let’s do it with the greatest leverage possible. In my view that means being clear about what we want from a relationship with Europe first and having a referendum hanging over those negotiations at the right time.

Also I don’t think that we would win an out vote. Business would come out heavily against an out vote and that would sway most people because of job security and the fear of the unknown. When we have re-balanced our economy with as much focus on emerging economies as our old trading partners, and when we are in a stronger financial and trading position, then I think that there is an opportunity to win the referendum for those who want out. Until that point I believe that the vote will be lost if the timing is not planned very carefully.

I know that these positions will not be wildly popular but I have been thinking about this very carefully. This motion doesn’t really serve anyone at this time. A referendum is needed but we need to be in a position where it will carry the most weight – in terms of domestic outcome and negotiating fire-power.

With my best wishes,

L-"

Harrumphh! Not a happy camper I replied as follows:

"Dear L-

There is no need to justify your position to me: While I may disagree with those who hold a contrary opinion to my own I respect their right to that opinion. Sadly you seem less respectful of the opinions of an estimated 67% of the population, including myself. I take it we are still living in 'representative democracy' and you chose to represent 33% of the population and probably far less a percentage of OUR Party. If this is the democracy you represent I cannot personaly support it.

I would also like to point out some flaws to your logic: "Having 3 options creates an impossible outcome when the referendum could be won by one of the options attracting only 34% of the vote." I have no idea of your reasoning for this; a 33.3% vote for each option in the event of a referendum is a minisculey small probability. Almost certainly a 50%+ vote would result in a renogiation, landing you and the Government with the mandate to set about your stated ambition of a stronger position with which to reclaim powers. I see no reason why business would not support this as they would very much like to be rid of the Working Times Directive.

In my humble opinion your arguements do not make sense, you have failed to grasp the meaning of 'representative democracy' (or ignored it) and done the Party a great disservice.

Yours, in hope of your redemption

S"

Now to get her de-selected.

Italian 10-year bonds now upto 6.18%... meltdown is nigh.