Greece: Timeline of Debt Crisis
Greece crisis live: borrowing costs soar as Athens looks to Moscow - Greece will have to pay €1.6bn to the IMF and €1.5bn in pensions and wages by the end of the month
Comments:
- Screen shot from article. Best to view in the article itself
- Lesson: Delaying addressing debt magnifies the crisis downstream
- Chinese proverb: Question: "When is the best time to plant a tree?" Answer "20 years ago!"
- Same goes for debt. Whether it is personal debt, corporate debt or government debt.
- I personally think that GREXIT will happen, that it will be better for the EURO. A generation of Greeks will suffer from mistakes made today and a generation ago.
Economist Holger Schmieding at Berenberg Bank in London predicts a period of "disorientation" while investors figure out what the impact will be. The first word of an impending departure would likely roil markets, especially in Europe. Stocks and the euro might fall. And borrowing costs for other eurozone governments with shaky public finances, such as Italy and Portugal, might rise, at least temporarily. Yet Schmieding foresees no serious long-term damage and dismisses talk of a comparison to Lehman's collapse. The risk for Europe as a whole, he says, "is very, very small — virtually zero."
Multiple generations of Greeks will suffer no matter what; it is a question of austerity today or long term bad credit, which is going to kill capital formation there. Yikes.
ReplyDeleteMy big fat Greek default — when will Athens realize there’s no free lunch?:
ReplyDeleteThe most powerful arguments in favor of both default and Grexit relate to political economy and electoral psychology. Greece’s debt burden is too big. It can never be repaid. The sooner everybody accepts this, the better. Just as importantly, however, most Greek voters seem to agree with the current government’s ideology: They want, by and large, to remain in the euro but don’t want to have to abide by its broadly orthodox rules on taxes, spending and markets.
France Sees Time Limit on Greek Debt Accord - Finance Minister says eurozone exit would be worst of catastrophes for Greece:
ReplyDeleteFrench Finance Minister Michel Sapin Sunday said an agreement on Greece debt to keep the country in the eurozone is impossible after the end of June, adding pressure on Greek Prime Minister Alexis Tsipras, who took a defiant stance in a speech in his country’s parliament on Friday.
“From here to the end of June there is an agreement between Greece and its European partners, beyond the end of June, there is no agreement,” Mr. Sapin said in a radio interview on Sunday evening.
The Greek government and its partners are well aware that a Grexit—a Greek exit from the eurozone--“would be for Greece the worst of catastrophes,”