What happens when Greece defaults?

OffTheBackAdam
OffTheBackAdam Posts: 1,869
edited May 2011 in The bottom bracket
http://www.zerohedge.com/article/here-w ... e-defaults
Let's hope the pit props hold until we've had our holiday there in September!
Remember that you are an Englishman and thus have won first prize in the lottery of life.

Comments

  • redrobbo
    redrobbo Posts: 727
    Where are you going next year?
  • Cressers
    Cressers Posts: 1,329
    The Euro splinters, if it survives at all. markets fall back to 2008 levels, the banks risk bankruptcy again and appeal for yet another bail-out and continuation of quantaitative easing, and the govt announce some eye-watering spending cuts..
  • Gazzaputt
    Gazzaputt Posts: 3,227
    Err does it mean my Greek holiday next year will be cheaper?
  • TheStone
    TheStone Posts: 2,291
    Euro has to split.

    Germans won't print money (due to some historical issues). Greece, Portugal, Ireland, Spain and Italy need a weaker currency and some printing.

    Some level of default for Greece and Ireland is necessary.
    exercise.png
  • rick_chasey
    rick_chasey Posts: 75,661
    I think the will to keep the euro and EU together will overpower any German and French domestic reservations about propping up the PIGS.
    _
  • fidbod
    fidbod Posts: 317
    Rick Chasey wrote:
    I think the will to keep the euro and EU together will overpower any German and French domestic reservations about propping up the PIGS.

    Maybe....

    It seems to me that the will to save the Euro is concentrated in a subset of the political and technocrat class. I am not sure it is there to such a degree in the electorate. I do a reasonable amount of business in the northern european countries and regardless of countries there doesn't seems to be a lot of tolerance for further support to the PIIGS.

    I think there is real first mover advantage in being the first PIIG to default. If I was the Irish PM I would declare default tomorrow....
  • TheStone
    TheStone Posts: 2,291
    Germany would do everything they can to hold the euro and the union together. Despite the fact that they've put the most into it, they've also benefited the most from trade. A breakup would not suit them.

    Agree, Ireland should default and do it first. Why should the people be on the hook to european banks for mistakes banks nominally based in the same country made? All bondholders get a premium for associated 'risk', so in this case would take a hit.
    exercise.png
  • beverick
    beverick Posts: 3,461
    I think the chances of Greece being allowed to go under is pretty remote - the impact on the other EU countries would just be too great. The debt will be restructured to allow Greece's economy sufficient time to recover sufficiently to allow the remaining debt to be repaid over what may be a very long time.

    The same applies for the three other little piggies!

    Bob
  • Cressers
    Cressers Posts: 1,329
    That has already been tried and it obviously hasn't worked or can ever work. Though much effort and money has been invested in the euro project, eventually unavoidable financial realities are going to prevail.

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