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[Funky Papa]

Oops.

Expected.

 

[Aureon]

I still like everyone going BUT IT'S THEIR FAULT after they've suffered over five years in a situation worse than a sovereign default, for... nothing?

Nope, Greece is pretty much responsible for it's own situation, even post 2008. You can't expect the troika to just give you money and then for Greece to change what they want themselves. Because that would never work. Greece proved that they can't run their own country to save their lives, their GPD debt in 2008 was astonishing, 113%, compare this to some other EU countries (UK 52%, Spain 40%, Portugal 71%, Germany 67%, France 68%.) Almost double the debt to many EU countries at the time.

Even post 2008 with austerity, Portugal, Ireland, were gven similar bailouts from the troika and they all managed to exit the bailout program last year, successfully managing to implement the program.

None is arguing that the austerity program was the best idea, but Greece utterly failed to implement anything. I mean it's been 7 years since 2008 and they are still having major problem collecting tax from normal people, something most countries have been doing successfully for decades and decades.

I mean just look at this past 5 months. Complete and utter shambles from Greece, they don't have any idea or plan on what they are going to do. They have been talking for 5 months and there is no plan anywhere. No plan A or B. Even if they exit the EU, what's the plan? Where is the 10 year plan, that shows the road ahead. What's happening now is, lets default and see what happens.

By all measures, Greece is the one that reformed harder and implemented austerity with more convinction.

Which can be reasonably be argued is a good part of the reason they're in the sinkhole they're in.

Just a little question. Is there something Greece did wrong in the past 15 years? Or was and is everything a result of foreign forces and whatever small elite?

Not in particular. There's the usual fuckery common to more than half the governments of the world in various degrees, such as corruption, tax evasion, underinvestment in infrastructure and whatnot, but there's nothing particularly outrageous.

 

[My words exactly!]

It would be naive to expect to see a NO ad from our media (see my previous post). Panic and fear flows from their propaganda like pud. Old and temporarily money deprived are the first to succumb.

If yes comes to pass, i hope they enjoy their 240€ pensions and seeing their grandchildren slaved for less than 2.4€/hour while being treaded like colonists on their own land.

 

[QuicheFontaine]

AP: BREAKING: Council of Europe: Conditions of Greek referendum fall short of international standards.

Oops.

For what reason? I thought it went through Greek parliament (as per their constitution) and was all kosher?

 

[mnz]

It would be naive to expect to see a NO ad from our media (see above). Panic and fear flows from their propaganda like pud. Old and temporarily money deprived are the first to succumb.

If yes comes to pass, i hope they enjoy their 240€ pensions and seeing their grandchildren slaved for less than 2.4€/hour while being treaded like colonists on their own land.

And what do you think the wages will be like after a No vote and whatever happens after that? Maybe with a new currency?

 

[Deleted member 231381]

http://ukpollingreport.co.uk/ has an interesting break-down of Greek polling. Some key excerpts:

A Kapa Research poll conducted between Wednesday and Friday actually asked how people would vote in a then hypothetical referendum, with 47% saying they would vote yes, 33% that they would vote no. Of course the poll was conducted prior to the referendum announcement so may not reflect current Greek opinion at all – people taking it as a sign Greece is about to vote yes should probably hold on a sec. Respondents may have been imagining a referendum on a deal that had the support of the Greek government, rather than a referendum where the government are opposed and backing a No vote. The rest of the Kapa poll found 72% of Greeks wanted the country to remain within the EU and 68% wanted them to keep the Euro. There was a pretty even split over the government’s strategy – 49% had a positive opinion, 50% a negative opinion.

A second poll by Alco found negative opinions about the proposals on the table, but continuing goodwill towards Syriza. People didn’t think the proposals met their pre-election promises, but by 53% to 34% thought this was because Syriza hadn’t realised how difficult it would be rather than an attempt to mislead the people. By 61% to 33% respondents rejected the idea that the last Greek government would have done any better. Syriza continue to hold a robust lead in voting intention. Again, this is sometimes being reported as showing Greeks will vote Yes, but I’d be wary. It found people would, in principle, prefer a deal to default… but that’s not the same as saying they will vote YES in a referendum on a specific offer that the Greek government doesn’t support.

 

[helloresolven]

For what reason? I thought it went through Greek parliament (as per their constitution) and was all kosher?

Limited time and information to make an informed electorate? What exactly is the referendum for? What proposal? What happens when they vote YES/NO?

 

[Coriolanus]

Greeks voting Yes after the EU already told the third bailout proposal to get fucked, even when that already had ample capitulation would be.... troublesome.

Limited time and information to make an informed electorate? What exactly is the referendum for? What proposal? What happens when they vote YES/NO?

Which is kinda why i held off on reposting that tweet. We don't know yet, but will very soon.

here we go, per AP via guardian as usual:



Here’s the full Associated Press story on the Council of Europe’s comments on the Greek referendum:

The head of the Council of Europe, Europe’s top human rights institution, says Greece’s referendum would fall short of international standards if held as planned on Sunday.

Council of Europe Secretary General Thorbjorn Jagland told The Associated Press that international standards recommend that a referendum be held with at least two weeks’ notice to allow sufficient time for discussion, with a clear question put to the people and with international observers monitoring the vote.

Greece’s referendum on whether to accept creditor demands in return for bailout funds was called Saturday, and there has been confusion as to whether the result of a “no” vote as the government recommends would lead the country out of the 19-nation eurozone.

The vote “has been called on such a short notice, that this in itself is a major problem,” Jagland said Wednesday by phone from Lisbon, Portugal. “And also the fact that the questions that are put to the people ... are not very clear.”

 

[My words exactly!]

And what do you think the wages will be like after a No vote and whatever happens after that? Maybe with a new currency?

If we have our own currency? Even lower at first but at least you will have social insurance that is worth a damn (for the elderly that should be their #1 priority).

Look it is simple:

either vote yes for austerity to continue and have more measures taken after a few months and then more and more. Meanwhile all greek wealth-producing sources are sold for pocket change and debt that grows by the day. Newsflash: despite undergoing one of the harshest austerity programs in history, greek debt has grown from 120% (in 2010) to 180% today. WTF?

Or vote no, man up and start building your country again from within, like we did before the junta and change of policy.

 

[Frankfurter]

It still matters, though, because that initial rate will define how many Drachma's a person has in their bank account that was, hitherto, stuffed with Euros. Whilst goods and even wages can fluctuate as (and as a contributor to) finding "the real" exchange rate, bank account balances can't.

No, it doesn't. There is 0 difference between an exchange rate of, say, 1:1 and 10:1. In one case you'll get 1 drachma for 1€, in the other 10 for 1. It's the same. If your wage were 2000€ before the new currency, it'd be either 2000 drachmas or 20000, zero difference.

Since the value of a floating (non-pegged) currency is entirely psychological, it totally matters what the inital rate is. If it's set 1:1, many people will correctly say "it's not worth the same as a Euro" and inflation will start/be much more rapid. If it's 2:1 and people think "it's worth about half as much" it could be much more slow.

I'm also curious what the mechanism of switchover would be. Since everyone's bank account is currently in Euros, do the account balances switch to a new currency overnight? Or is the balance kept in Euros, then only converted at withdrawl time (maybe allowing you to take out Euros but only in tiny amounts)?

Could they peg the value initially for say a month to avoid immediate inflation, and then switch to floating / currency exchange afterward? This would help to get some price stability going.

I think there are a lot of ways they could be careful about the roll-out of a potential new currency so that it wouldn't be so destructive.

The only point that makes sense about 1:1 or 10:1 is the psychological thing. But than again, going by that why is the Swiss Franc worth "less" than the Euro? It doesn't work that way. I agree that Greece probably wouldn't set the Drachma at 1:1 to the Euro, but it really doesn't matter. It'll depreciate from whatever level they set, because the "nominal" rate they set doesn't matter (that's exactly the necessary step for Greece to get more competitive by having its own currency again).

1:1 exchange rate:
- 2000€ wage -> 2000 Drachmas wage
- 65€ oil prices -> 65 Drachmas
- 200000€ house -> 200000 drachmas house

10:1 exchange rate:
- 2000€ wage -> 20000 drachmas wage
- 65€ oil price -> 650 drachmas
- 200000€ house -> 2 million drachmas house

Case b sounds different, but nothing has changed. Real values haven't changed at all (you had 200000€ on your bank account, which means that in both cases you can buy that house and all your money is gone)! Greece will only start getting more competitive, having higher import prices etc. once the drachma depreciates (that house now costs 300000 drachmas in case a, 3 million in case b); from whatever level it is initially set.

If we have our own currency? Even lower at first but at least you will have social insurance that is worth a damn (for the elderly that should be their #1 priority).

Real wages and real social security payments will be much lower than before, there is no way around that, considering that Greece's currency will depreciate significantly.

 

[QuicheFontaine]

Limited time and information to make an informed electorate? What exactly is the referendum for? What proposal? What happens when they vote YES/NO?

Ah, I think I read that Tweet as them saying it wasn't legal.

I agree entirely that it's too short of a time frame (and it looks like the international standard is two weeks minimum).

Edit:

^^ I don't think you've thought that through Frankfurter. It does matter, since if you set the initial exchange rate far from what it 'should' be (i.e. what the market determines it's worth) then you get problems during that adjustment. If the initial exchange rate is twice what it should be, the drachma will quickly halve in value and so people's savings will be worth half as much. While wages and the price of things will adjust accordingly, people's savings don't! That's what Cyclops is saying.

 

[Kill Your Masters]

If you live way beyond your standards for years, of course any measures will look frightening, its just a snap back to reality though.

 

[Coriolanus]

If you live way beyond your standards for years, of course any measures will look frightening, its just a snap back to reality though.

Could you, like, at least pretend to try to comprehend the situation before shitposting?

 

[Ted Striker]

Here’s the full Associated Press story on the Council of Europe’s comments on the Greek referendum:

Syriza's opposition will have a field day with this.

 

[Coriolanus]

Syriza's opposition will have a field day with this.

They've been calling it inconstitutional before it was even approved, so not like it changes anything. Same thing as saying that syriza will have a field day with it because it facilitates "us vs. them" rethoric.

 

[FlyingSaucer]

Just a little question. Is there something Greece did wrong in the past 15 years? Or was and is everything a result of foreign forces and whatever small elite?

Nobody is to blame, really - save the conceptors of the Euro.

Charles Gave, a French entrepreneur, said in 2002 that the Euro would bring "too many houses in Spain, too many public workers in France and too many factories in Germany". Living with the Deutchmark when you dont have the productivity of Germany is confortable at first, but its a form of slow suicide for your economy.

 

[My words exactly!]

Real wages and real social security payments will be much lower than before, there is no way around that, considering that Greece's currency will depreciate significantly.

Of course but i am talking about quality of services, not sum in money. Currently, the majority of greek public healthcare is at a breaking point due to extreme budget cuts and shortages. What good will your euro pension do to you when you can't even buy your treatment?

 

[mnz]

Nobody is to blame, really - save the conceptors of the Euro.

Charles Gave, a French entrepreneur, said in 2002 that the Euro would bring "too many houses in Spain, too many public workers in France and too many factories in Germany". Living with the Deutchmark when you dont have the productivity of Germany is confortable at first, but its a form of slow suicide for your economy.

Pretty funny, since Germans sometimes talk about the Euro like it's the Lira.

 

[Arksy]

Nobody is to blame, really - save the conceptors of the Euro.

Charles Gave, a French entrepreneur, said in 2002 that the Euro would bring "too many houses in Spain, too many public workers in France and too many factories in Germany". Living with the Deutchmark when you dont have the productivity of Germany is confortable at first, but its a form of slow suicide for your economy.

He knew.

 

[Theonik]

The exchange to the old Drachma was 1:341 you are not looking at anything less than that for an initial peg.

 

[Deleted member 231381]

The exchange to the old Drachma was 1:341 you are not looking at anything less than that for an initial peg.

That's not how it works. If there are different initial quantities of new drachmas compared to old drachmas [and there will be], the peg will be entirely different.

 

[QuicheFontaine]

The exchange to the old Drachma was 1:341 you are not looking at anything less than that for an initial peg.

Misread that as pi at first.

Could you set the exchange rate at pi?

 

[Theonik]

That's not how it works. If there are different initial quantities of new drachmas compared to old drachmas [and there will be], the peg will be entirely different.

What I'm saying is that I see it unlikely they'd go with something like 1:10 but say something like 1:400 is more likely.

 

[Nikodemos]

Nobody is to blame, really - save the conceptors of the Euro.

Charles Gave, a French entrepreneur, said in 2002 that the Euro would bring "too many houses in Spain, too many public workers in France and too many factories in Germany". Living with the Deutchmark when you dont have the productivity of Germany is confortable at first, but its a form of slow suicide for your economy.

Damn time travelers.

 

[Coriolanus]

What I'm saying is that I see it unlikely they'd go with something like 1:10 but say something like 1:400 is more likely.

There's about as much reason to believe that it'll go 1:400 as to believe that it'll go 1:10

 

[My words exactly!]

last year's video but timely:
https://www.youtube.com/watch?v=ndHa877sKmo

 

[Deleted member 231381]

What I'm saying is that I see it unlikely they'd go with something like 1:10 but say something like 1:400 is more likely.

The amount it gets pegged at will depend on the amount of new drachmas they create. Hell, they could set it at 2:1 Euros:drachma if there are a lot less new drachmas created than there are Euros presently in Greece (although that introduces the problem that there won't be enough drachmas in circulation for people to spend easily).

 

[norinrad]

If we have our own currency? Even lower at first but at least you will have social insurance that is worth a damn (for the elderly that should be their #1 priority).

Look it is simple:

either vote yes for austerity to continue and have more measures taken after a few months and then more and more. Meanwhile all greek wealth-producing sources are sold for pocket change and debt that grows by the day. Newsflash: despite undergoing one of the harshest austerity programs in history, greek debt has grown from 120% (in 2010) to 180% today. WTF?

Or vote no, man up and start building your country again from within, like we did before the junta and change of policy.

If i was a Greek citizen, i'll vote no, then start over again, also tax all who hold Greek passports but live outside the country. A healthy tax system can do wonders for a country.

The whole situation is tragic, I'm all for cutting Greece some slack, we will never see half of the money anyway, so let it go and give them a chance to implement the proper measures for the next generation.

 

[Negotiator]

The exchange to the old Drachma was 1:341 you are not looking at anything less than that for an initial peg.

Sorry, but that doesn't make any sense.

All new currencies are pegged at 1:1. The New Turkish Lira was established the same way. Now it's at 3:1 with the euro.

It doesn't make any sense to have redundant zeroes, does it?

ps: The old drachma does not exist anymore. It's not a legal tender and it will never be again. We're talking about the new drachma here. The old 340.75 drachmas exchange rate is irrelevant and not practical.

 

[Theonik]

There's about as much reason to believe that it'll go 1:400 as to believe that it'll go 1:10

The amount it gets pegged at will depend on the amount of new drachmas they create. Hell, they could set it at 2:1 Euros:drachma if there are a lot less new drachmas created than there are Euros presently in Greece (although that introduces the problem that there won't be enough drachmas in circulation for people to spend easily).

Right. The amount is entirely arbitrary, but if the intent is to devalue their own currency it makes sense to produce more rather than produce less.

 

[norinrad]

Nobody is to blame, really - save the conceptors of the Euro.

Charles Gave, a French entrepreneur, said in 2002 that the Euro would bring "too many houses in Spain, too many public workers in France and too many factories in Germany". Living with the Deutchmark when you dont have the productivity of Germany is confortable at first, but its a form of slow suicide for your economy.

This goes for all the northern countries and Austria. Everyone who wanted to join the Euro badly has been thrown to the sharks and they will eat you up.

 

[Deleted member 231381]

Right. The amount is entirely arbitrary, but if the intent is to devalue their own currency it makes sense to produce more rather than produce less.

Merely switching from the Euro to the drachma is the act of devaluation. You could set it such that a drachma exchanged for 300 Euros and it would still be a devaluation if Greek workers got paid less than a three-hundredth of what they currently are being paid in Euros. Currencies are relative to one another, not absolute. I mean, you wouldn't make it so that a drachma exchanged for 300 Euros because then there would be very few drachmas, which means that commercial exchange is difficult because everyone has less of the token you need to make exchanges; but that's not the same issue as the value of the currency.

I imagine that Greece would just set a straight Euro 1:2 drachma rate for ease of conversion and try to produce the amount of drachmas which keeps that stable. They could even set it at 1:1, but I think they'll want more drachmas in circulation rather than less.

 

[nature boy]

I just saw an ad on TV about voting yes.Fucking disgusting.

Well there's a no vote banner on a greek ministry building.

https://twitter.com/stratosathens/status/616233423301160960

 

[Hammer24]

ps: The old drachma does not exist anymore. It's not a legal tender and it will never be again. We're talking about the new drachma here. The old 340.75 drachmas exchange rate is irrelevant and not practical.

Another problem, as Giesecke&Devrient pointed out, is that it takes around 6 months from designing a new currency to actual delivery of printed bills.

 

[Theonik]

Well there's a no vote banner on a greek ministry building.

https://twitter.com/stratosathens/status/616233423301160960

Time for bumper stickers.

 

[Negotiator]

Another problem, as Giesecke&Devrient pointed out, is that it takes around 6 months from designing a new currency to actual delivery of printed bills.

I wouldn't be surprised if Greece adopted the new drachma by 1/1/2016.

We're exactly 6 months away from that date...

 

[LJ11]

According to the Guardian debt to GDP will have fallen to to 118% by 2030 even if all terms and reforms are met.

WSJ published the Debt Sustainability report, or what the WSJ is calling the debt sustainability report, yesterday. Numbers are a bit different. Not sure what is what at this point, but anywhere from 85% to 118% by 2030.

Love the no transfer union talk this AM. We don't transfer money to countries, just banks, oh and depositors get bailed in as well!

Edit: 3rd scenario is the IMF scenario, now it makes sense. So 118% according to IMF, best case under scenario A is 85%

 

[Nilaul]

http://en.protothema.gr/6-leaked-imf-documents-show-austerity-cant-save-greece/

"German newspaper Suddeutsche Zeitung leaked a set of documents showing IMF estimates for Greece by 2030. The data shows that, even in the best-case scenarios, Greece would still face an unsustainable debt even if it agreed to the crippling measures that include tax hikes and spending cuts proposed by the European Commission, European Central Bank and the IMF in exchange for 15.5 billion euros in loans from creditors."

 

[operon]

We're not seriously believing that a new Drachma would be anywhere near the euro in worth, if it is there won't be nearly enough notes in circulation to be uselful to the Greek public

 

[Deleted member 231381]

Another problem, as Giesecke&Devrient pointed out, is that it takes around 6 months from designing a new currency to actual delivery of printed bills.

That's not necessarily an issue. As long as there are Euros in Greece and there are strict capital controls preventing Euros leaving Greece, Greece can continue to use Euros as currency at the rate they intend the drachma to be used at until the drachma can be phased in properly.

 

[Chipotle]

Been hearing that Tsipras is about to make a statement. Will this be broadcast with an English translation anywhere?

 

[Hammer24]

That's not necessarily an issue. As long as there are Euros in Greece and there are strict capital controls preventing Euros leaving Greece, Greece can continue to use Euros as currency at the rate they intend the drachma to be used at until the drachma can be phased in properly.

Right, other countries did that before, simply rubber stamping other bills.
But in Greece its exactly the problem, that not enough actual printed bills are in officials hands.

 

[Negotiator]

That's not necessarily an issue. As long as there are Euros in Greece and there are strict capital controls preventing Euros leaving Greece, Greece can continue to use Euros as currency at the rate they intend the drachma to be used at until the drachma can be phased in properly.

There are currently 45 billion euros stuffed in mattresses in Greece. More than any other Eurozone country, AFAIK.

That's a lot of money to prop up the new drachma, BUT...

...what if the ECB decided to print totally new Euro banknotes and the old ones stopped being legal tender? Greece would be fucked beyond repair.

 

[Coriolanus]

...what if the ECB decided to print totally new Euro banknotes and the old ones stopped being legal tender? Greece would be fucked beyond repair.

That'd make less than zero sense.

 

[Negotiator]

That'd make less than zero sense.

If they wanted to punish Greece, they would do it.

 

[oti]

...what if the ECB decided to print totally new Euro banknotes and the old ones stopped being legal tender? Greece would be fucked beyond repair.

That... what?

 

[Deleted member 231381]

Right, other countries did that before, simply rubber stamping other bills.
But in Greece its exactly the problem, that not enough actual printed bills are in officials hands.

I don't mean using those Euros at their present value. In effect, Euros presently in Greece would be pegged to the future value the Greek government intends the drachma to be at (so, acting as drachmas) until a drachma could be rolled out properly. This is absolutely not ideal because it would require Greece to forego any Euros exiting the Greek economy or the whole system would fall apart (people in Greece would buy goods using Greeks euros and get more than they would if they spend Greek euros in Greece), but it would only last as long as it took to print the new currency. Greek Euros would become "Greek Euros" and not Euros that happened to be Greek - they'd be using the coins as stand-ins for the drachma.

 

[chadskin]

Been hearing that Tsipras is about to make a statement. Will this be broadcast with an English translation anywhere?

It's not known at this point when he will address the nation today. CNN is likely going to broadcast it with an English translation.

 

[Theonik]

That... what?

Newros

 

[Coriolanus]

If they wanted to punish Greece, they would do it.

What you're suggesting is "what if they invaded greece" levels of silly.