Greek Tragedy Update

[onenikos]

The latest is that Greek PM will make an announcement of the financial package that is structured for Greece by the IMF and EU. The "package" is expected to be massive (150BN Euro!) over the next 3 years. My personal opinion is that this will have a short lived upward effect on the eurodollar as the bears will dominate soon after. There are few reasons for this. One is the measures demanded by the lenders will be heavily opposed by unions and public in much publicized and televised news, starting with next Wednesday's General Strike, to be followed by others with escalating force. The other is the shifting of focus to other EU states with possible domino effect (Portugal-Spain as a start).

 

[Pharaoh]

That does sound like a possibility.

Overall, I think the ECB made a mistake when they set up the requirements to join the Eurozone. They did try to standardize banking regulations, but failed to impose standards in other ways.

Part of the reason for Greece's debt is that their social system is more generous than that of many other Eurozone countries. I've read that the Germans aren't exactly happy at the thought of paying higher taxes to bail out Greece, since Greek workers get to start collecting their retirement at a significantly younger age than German workers.

 

[onenikos]

That does sound like a possibility.

1. Overall, I think the ECB made a mistake when they set up the requirements to join the Eurozone. They did try to standardize banking regulations, but failed to impose standards in other ways.

2. Part of the reason for Greece's debt is that their social system is more generous than that of many other Eurozone countries.

U R right on 1. EU did not foresee a lot of things on start-up. The major shortcoming is EU's inability to reach decisions on a centralized basis. This crisis if nothing else showed to us that EU is NOT a federation! Those who stayed out of the Euro-zone were apparently wiser.

On 2 things are not exactly like this. Yes, under certain circumstances one can go into early retirement at say 55, with a fraction of the pension he/she would get at 65. In addition the average pension in Greece is of the order of 800 to 900 Euro., far from being generous. So what is the problem? Inefficiency of the social system. There is not one state social security (there are more than 50 main pension organizations that are very poorly managed.)

 

[Forexwatchman]

Well it's offically here coming in at around predicted estimates: 110 billion euro's is coming Greece's way (80 bln from eurozone and 30 bln from IMF). I think the results are already "baked into the cake" so to speak and we wont see a huge rally as a result of the deal, although the IMF's role is quite a lot smaller than it could have been and that is a very good sign for the currency all things considered.

 

[Eric Alyea]

Riot’s at the Acropolis

Riot’s at the Acropolis in Athens.
Rumors of Spain’s loan???
China holding back on lending and in country production???
Enjoy the slide!!!oh:

https://www.forexpeacearmy.com/fore...hat-fun-roller-coaster-today-2.html#post35228
https://www.forexpeacearmy.com/fore...rap-up-form-forex-nation-com-4.html#post35224

 

[Arjuna]

Greek (Debt) Tragedy

Very nice summary of the Greek Tragedy by the earlier analysts posting on this topic.
To those analyses might be added the question of financial health that Greece was experiencing before the EU was established. If we retrace the time-line back to the past before the EU was implemented, how much of a debt load was Greece carrying at that time? This question echoes the issue of lenient banking provisions that may have been in place which may have allowed financially challenged European countries, whose economic and financial health were virtually ignored at the time, entry into the EU.

 

[Ricex]

Let's not forget the European Economic Community was a very different beast back in 1981 when Greece joined the club, the politics was very different. The ease, and speed with which Greece was allowed to join at the time was motivated primarily by a 'democratisation' crusade.

The move to finally allow Greece into the Euro was again a strongly political transfer, I agree with Arjuna that the countrys economic position at the time was not as healthy as it could have been, but they were not alone, Italy and Belgium were not within the rules either when they joined.

I think Greeces imaturity as a democratic country, and the see no evil hear no evil policy of the Eurocrates has lead us all to this point in time. Anyone remember the 2004 Greek Olympics with it's massive spending, that's all part of it too.

Polititians as usual have messed it all up with their big vote seeking ideas.