Great read I thought I’d share
Tiny Greece’s Threat to Currency Credibility Is Why It Matters - Bloomberg Business
I would say that Greece is as close to an exit this weekend as it has been this past 5 years.
The reality is that is most other EZ countries, especially those that have had to endure austerity are reluctant to give more money, indeed even countries such as Brazil are questioning the IMF.
Here in EZ there are many investors who take the view that this situation is a hindrance to investment, and the long term outlook will improve with a Grexit.
Read here back four years ago - read again the last paragraph, especially the reference to interest rates and entry motivation.
Debt-laden Greece mired in anger and humiliation - BBC News
Then, the same news site, exactly 4 years later, the last 3 paragraphs are the perhaps some of the thoughts in many investors’ minds:
Greek debt crisis: How did Greece get in this mess? - BBC News
Bloomberg is wrong in guessing that the Troika are focussed on a deal based on pressure from the EU, that pressure supposedly reflected in Draghi’s “whatever it takes” - the reality is that there are many heads of Govt in EZ who are taking a hard line, their voters are their main concern.
Le Pen is to the right in Euro politics, UKIP likewise want to see a breakup of the EZ and the EU, most right in Europe agree with that sentiment, so no shock value there for investors.
I should add to the above, there is a quote back in 2011 as follows:
[B]“Default looms. Maybe not this year, but almost certainly in 2015. For European officials the hope is that by then the banks will be more resilient to take a hit. Certainly well-respected German economists don’t expect to get their money back.”[/B]
The good news is that banks have indeed taken the pragmatic view that Greek economics may not improve, hence their exposure to default very much more limited, I wouldn’t sell bank stocks on any news of a lack of agreement.
I am still have no idea in this news about Greece, so what do you mean about Greece leaving Europe? do you mean greece will separate from europe, became the city of another country? i am really confused about this,
And there you go - plan B has been finalized, the locomotive is well in motion, as they say - never say never.
Btw, plan B is not something new, it was first mentioned about a week ago, the possibility of a referendum was in the minds of many of the governments, there was a precedent in the form of Iceland.
How is it likely to play out? my guess is that plan B, of which there will likely be some talk, will be needed - but it is only a guess.
And finally, lol seem to be talking to myself, Greece asked for a short extension of a few days of the bailout to reach the far side of their referendum.
Eurogroup president Jeroen Dijsselbloem (he is from Holland and has specific memories of the Icelandic referendum) has responded, in light of the Greek referendum announcement:
“Given that situation, I think we might conclude that however regretful, the programme will expire Tuesday night,”
After giving their statement the Eurogroup finance ministers continued their discussions (plan B) without the Greek delegation.
The Greek government is tonight still continuing to play the ‘damage to the EZ as a democracy’ card, not unlike the sentiment expressed in the Bloomberg article.
Hmmm… wonder has the market moved on already.
Very risky game the Greeks have been playing, looks like ECB calling their bluff
And my last word on the entire scenario, Young linked to Bloomberg, who mentioned Draghi’s “whatever it takes” speech, many analysts have also referred to this same view from the ECB, it seems that maybe too some more inexperienced Greek politicians have believed that this sentiment will prevail.
I quote here the latest news report from within an EZ country (Today, 20.42 gmt), note the wording:
[B]"Finance ministers of the other 18 countries sharing the euro met for the first time without Greece and flatly rejected its pleas to extend an expiring bailout until after the referendum on 5 July and setting the stage for Athens to default on a crucial IMF payment on Tuesday.
The 18 pledged to do whatever it takes to stabilize the common currency area and said they were in much better shape to do so than at the height of the eurozone crisis a few years ago. In a formal statement, they also implicitly urged Greece to impose capital controls to stabilize its banking system."
[/B]
There are of course 19 members of EZ including Greece.
They have chosen those words in the second paragraph deliberately, they are now finished their work for the night.
Banks closed on Monday, likely capital controls will be put in place, such controls are of course contrary to EZ rules - so would such a move be the first step to re-introduction of Drachma, uncharted waters but could well be.
the way i see it, banks closer, withdrawals limited to 60 euros, referendum majority NO outcome, europeen country are turning against greece, this is not a stable nor an easing environment for greece.
We can just wait and watch what happens, the outcome is not certainand the odds are not in the favor of greece.