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View Full Version : Economics Greece giving up on the Euro??


talastan
06-01-2010, 03:26 PM
http://business.timesonline.co.uk/tol/business/economics/article7140270.ece

Greece urged to give up euro
Robert Watts

THE Greek government has been advised by British economists to leave the euro and default on its €300 billion (£255 billion) debt to save its economy.

The Centre for Economics and Business Research (CEBR), a London-based consultancy, has warned Greek ministers they will be unable to escape their debt trap without devaluing their own currency to boost exports. The only way this can happen is if Greece returns to its own currency.

Greek politicians have played down the prospect of abandoning the euro, which could lead to the break-up of the single currency.

Speaking from Athens yesterday, Doug McWilliams, chief executive of the CEBR, said: “Leaving the euro would mean the new currency will fall by a minimum of 15%. But as the national debt is valued in euros, this would raise the debt from its current level of 120% of GDP to 140% overnight.

“So part of the package of leaving the euro must be to convert the debt into the new domestic currency unilaterally.”

Greece’s departure from the euro would prove disastrous for German and French banks, to which it owes billions of euros.

McWilliams called the move “virtually inevitable” and said other members may follow.

“The only question is the timing,” he said. “The other issue is the extent of contagion. Spain would probably be forced to follow suit, and probably Portugal and Italy, though the Italian debt position is less serious.

“Could this be the last weekend of the single currency? Quite possibly, yes.”

BucEyedPea
06-01-2010, 03:58 PM
Greece’s departure from the euro would prove disastrous for German and French banks, to which it owes billions of euros.
Heh! Heh! Tough!

McWilliams called the move “virtually inevitable” and said other members may follow.


“Could this be the last weekend of the single currency? Quite possibly, yes.”

This could de-rail political union as well. Good News! Say bye bye New World Order and/or to those who were hoping for regional unions on their way to some sort of global federalism and eventual World Govt.

Taco John
06-01-2010, 04:02 PM
My goodness. A year ago, The Euro was gloating in the weakness of the dollar and was positioning itself as a new standard for reserve. Now it's a total mess.

AustinChief
06-01-2010, 04:20 PM
http://online.wsj.com/article/SB10001424052748704875604575280452365548866.html?mod=WSJ_hpp_RIGHTTopCarousel

Euro isn't going anywhere... they are pot committed...

Stewie
06-01-2010, 04:30 PM
It's a race to the bottom. Greece defaults... UK defaults... California defaults...

ChiefaRoo
06-01-2010, 05:00 PM
http://online.wsj.com/article/SB10001424052748704875604575280452365548866.html?mod=WSJ_hpp_RIGHTTopCarousel

Euro isn't going anywhere... they are pot committed...

What if they lose the pot?

BucEyedPea
06-01-2010, 06:37 PM
http://online.wsj.com/article/SB10001424052748704875604575280452365548866.html?mod=WSJ_hpp_RIGHTTopCarousel

Euro isn't going anywhere... they are pot committed...

I'll wait it out judging from the record of politicians.

AustinChief
06-01-2010, 06:44 PM
It's a race to the bottom. Greece defaults... UK defaults... California defaults...

Greece defaulting would force Spain to default which would take out France and Germany THEN the rest (Italy, UK, etc).. compared to Europe, we are sitting pretty. that's how much worse they are off.

KC native
06-01-2010, 06:46 PM
Greece defaulting would force Spain to default which would take out France and Germany THEN the rest (Italy, UK, etc).. compared to Europe, we are sitting pretty. that's how much worse they are off.

Yup, although I'll quibble with the order. I think if Greece defaults then you'll see (in order) Spain, Portugal, and then Italy. Germany and UK won't default.

And that's a big if. It will be interesting to watch it play out.

BucEyedPea
06-01-2010, 06:54 PM
Greece defaulting would force Spain to default which would take out France and Germany THEN the rest (Italy, UK, etc).. compared to Europe, we are sitting pretty. that's how much worse they are off.

Yet, China is better off than us. See all the gold they've been buying.

AustinChief
06-01-2010, 07:09 PM
Yup, although I'll quibble with the order. I think if Greece defaults then you'll see (in order) Spain, Portugal, and then Italy. Germany and UK won't default.

And that's a big if. It will be interesting to watch it play out.

No one is gonna default.. but IF they did.. your order is correct EXCEPT that as Greece and Spain default... they take out France and Germany because that's where all their loans came from... Portugal MAY slip in the mix ahead of them.. but France and Germany CAN NOT allow Greece and Spain to fall or they go down with them... Your order is correct in terms of debt/health issues though.. but you have to consider how leveraged the big guys are now...

AustinChief
06-01-2010, 07:10 PM
Yet, China is better off than us. See all the gold they've been buying.

China is a slave state that is artificially propped up.. I don't have anywhere near the faith in them that you do. I have to run but will get into the China issue more later.

googlegoogle
06-01-2010, 07:38 PM
It's actually governments that force banks to loan to Greece. If you don't think politicians have these banks by the leash then you're kidding yourself.

BucEyedPea
06-01-2010, 09:34 PM
China is a slave state that is artificially propped up.. I don't have anywhere near the faith in them that you do. I have to run but will get into the China issue more later.

Yeah, but they still practice more capitalism than we do despite a lack of political rights. And their govt is making the right move in buying gold. What does that tell ya'?

BucEyedPea
06-01-2010, 09:37 PM
... but you have to consider how leveraged the big guys are now...

The BIG guys? Like their central bank. Marc Faber says Europe's banks are gone and are only being kept alive by European Central Bank and government aid programs