Eurozone will collapse...

[Ignitionnet]

The Greek media oligarchs have full propaganda mode running I see.

I read a nice ironic point; the Netherlands have taken as firm a line on Greece as anyone, which is pretty funny given their country is used by lots of Greek, and other nations', companies to avoid paying tax in the nation they are making the profit.

[Osem]

I'd have thought anyone who's been getting paid in cash in the last year or so is hardly likely to be declaring, let alone banking, all of it and that the already unfit for purpose tax system is even more so now. Seatbelts on for a very rocky ride in coming weeks I reckon.

[tweetiepooh]

So Greece can return to a situation where if they need foreign money, they devalue their currency, get lots of tourists bringing lots of nice mullah. Most transactions in cash so the people keep the money, spend it locally and eventually it all works it's way out.

Being in the Euro prevented them doing that so as a Mediterranean nation with a very different outlook and economy to countries in the North they got really stuck.

[Osem]

What about the taxes required to pay the wages and pensions? There'll be even less receipts surely.

Originally Posted by tweetiepooh

So Greece can return to a situation where if they need foreign money, they devalue their currency, get lots of tourists bringing lots of nice mullah. Most transactions in cash so the people keep the money, spend it locally and eventually it all works it's way out.

Being in the Euro prevented them doing that so as a Mediterranean nation with a very different outlook and economy to countries in the North they got really stuck.

True, but it's not as simple as that. Greece imports a lot of stuff, notably pharmaceuticals, and while they spend years slogging away to rebuild their economy, all of those things, valued as they are in Euros, Dollars or Pounds, will become horrendously expensive.

I think exiting the Euro is the way to go, but it will by no means be easy or painless.

Originally Posted by Osem

What about the taxes required to pay the wages and pensions? There'll be even less receipts surely.

Most salaries and all pensions are deposited to the bank, taxed at source. Friday was the end of the month and a pay day, that's the reason of the queues on the ATMs. They had a daily withdrawal limit set by themselves for Fri, Sat and Sunday. Each person had to queue 3 times.

Today this limit has been reduced to 60 Euros. The ATMs are now open...

People with credit cards issued by a bank in Greece (even foreign ones) are stranded abroad. Citibank, Societe General, Deutsche Bank credit cards issued at Greek branch are blocked, when used here or in Europe or Asia etc--- they might work in Greece....

You wonder how long the Greeks will give a pass to the Government really. They lied about what they could achieve, they've given a false sense of security that has only now been shattered and they're trying to dodge any responsibility or leadership by holding a referendum with two awful choices.

[nomadking]

Apparently if the Greek Government had done what has been asked of them for the past five years, then they would be in a much better state and perhaps seeing improvements. Instead they have been pig headed and wanting to get away with as much as possible. Ireland and Spain did what was needed to be done and are now in a better position as a result.

[Osem]

Originally Posted by Carlos Carboni

Most salaries and all pensions are deposited to the bank, taxed at source.

I was only referring to all those who've been choosing to take cash only in payment e.g. restaurateurs, tradesmen etc. The more people/businesses choosing to do this, the less tax is going to wind up in the govt's coffers. Yes they'll have money that money to spend but are likely to stick as much as they can under their mattresses for a rainy day I'd have thought so it's a double whammy.

---------- Post added at 14:54 ---------- Previous post was at 14:52 ----------

Originally Posted by nomadking

Apparently if the Greek Government had done what has been asked of them for the past five years, then they would be in a much better state and perhaps seeing improvements. Instead they have been pig headed and wanting to get away with as much as possible. Ireland and Spain did what was needed to be done and are now in a better position as a result.

It seems they've become well used to getting away with being lax about borrowing, paying tax, overly generous pensions etc. for many years and now the chickens are coming home to roost in a major way.

---------- Post added at 15:03 ---------- Previous post was at 14:54 ----------

The European Commission chief, Jean-Claude Juncker, has said he feels "betrayed" by the "egotism" shown by Greece in failed debt talks.

He told a news conference that Greek proposals were "delayed" or "deliberately altered" and the Greek people "should be told the truth", but the door was still open to talks.

http://www.bbc.co.uk/news/world-europe-33311240

It's all looking like the run up to a very messy divorce.

[Kursk]

Originally Posted by nomadking

Ireland and Spain did what was needed to be done and are now in a better position as a result.

Talking of which, what has happened since the UK bailed out Ireland to the tune of several £bns?

Originally Posted by Kursk

Talking of which, what has happened since the UK bailed out Ireland to the tune of several £bns?

Ireland are doing pretty well? Let's be clear anyway that was self-interest because of the exposure British Banks had in Ireland.

[Osem]

Are they going to pay us back one day?

[heero_yuy]

When is a default not a default?

IMF officials are clear that it would be considered the equivalent of a default. They just would not call it that.

So it's perfectly all right then.

Can gets kicked down the road a little further.

Greece will also be unable to pay back the European Central Bank, which it owes €3.5 billion on July 20.

A missed payment to the IMF, of course, isn't good. But given that the bank is an independent consortium of world finance, you could see it either as Greece missing a payment owed to most of the developed world, or as Greece missing a payment to nobody in particular.

If Greece were to miss a payment owed to the ECB, Greece is more directly and clearly missing payments owed to other members of the euro. This will be more politically toxic for the leaders of other euro members.

And again, Greece is considered "in arrears" to the IMF with a missed payment, and as the FT's Peter Spiegel notes, missing a payment to the ECB also will not be considered a default by S&P.

Linky

Even more semantics.

As I see it there's really only two ways out:

Either cancel most of the debts, but that would give carte blanche to any other struggling Euro member to just let spending rip in the sure knowledge that the ECB would bail them out.

Or Get printing those Drachma's.

[Osem]

Pride comes before a fall or so they say.

I wonder if that translates into German...

[Ignitionnet]

Originally Posted by nomadking

Apparently if the Greek Government had done what has been asked of them for the past five years, then they would be in a much better state and perhaps seeing improvements. Instead they have been pig headed and wanting to get away with as much as possible. Ireland and Spain did what was needed to be done and are now in a better position as a result.

Ya. Spain and Ireland.