Greece Vs EU

[Stanley Road]

I think we are at the point where some compromise has to be found, I hope the greeks don't bottle it but both sides are playing a high risk game.

If EU soften its stance then that will open the floodgates for others, if the greeks soften their stance then the rest of the anti austerity parties will lose momentum.

If Greece drop out then everybody will feel the pain.

I'm hoping the greeks can say feck you to the EU and get money somewhere else.

 

[peterstorey]

I thought the troika would at least give the Greeks some breathing space to continue the discussion until say mid/end March.

From the Telegraph....

'Even though canny market operators still suppose that a messy deal between Greece and the eurozone will be cobbled together, wise heads tell us to be prepared for a Greek exit from the euro, commonly referred to as “Grexit”.

But preparation first requires understanding. The framework for thinking about Grexit was set out in Capital Economics’ winning entry for the Wolfson Economics Prize in 2012.

On the key issues, nothing has happened since then to weaken that analysis, even though some of the details of the situation have changed a bit.

So, here are the seven key issues at play.

1. People say that Grexit would be accompanied by a default.

The Greek government would try to re-denominate its debt into the new national currency – let’s call it the drachma – which would constitute an implicit default. Over and above this, there would probably be an explicit default as well.

But so what? Greece is going to default anyway. Its debt position is unsustainable.

The key questions are: when will it default; and what will the default be called? This being Europe, the land of fantasies, the second question is, of course, particularly important.

Previous answers have been “restructuring” and “rescheduling”.

More recently, the term “debt forgiveness” has been in vogue. But this is going to sound much too generous to the man on the Berlin omnibus.

My own favoured solution is to claim that there hasn’t been a default but to swap Greece’s debt into a perpetual (that is, never to be redeemed) non-interest bearing bond. (Think about it. Indeed, why don’t you try to convert your mortgage into one of these – and see how your mortgage lender reacts.)

2. How would Greece manage without printed (and minted) versions of the new drachma?

Most transactions in a modern economy are electronic anyway – including payments by credit and debit cards. For the small proportion of transactions (by value) carried out with notes and coins, the simplest thing would be to use the existing euro versions.

Over-printing these with some Greek national symbol to indicate that they were now drachma would be both unnecessary and ineffectual. Over-printing would not alter their value and acceptability elsewhere in the eurozone.

If you had a €100 note, why would you surrender this for over-printing, and if you received an over-printed one why would you accept this as now being worth 100 drachma – or whatever – rather than €100?

3. Wouldn’t a new Greek currency fall dramatically on the exchanges?

That should be the hope, not the fear. The idea is to lower the cost of Greek output and hence exports in terms of other currencies (including the euro) at a stroke.

This is the same thing as what the policy of domestic deflation is meant to achieve but with a devaluation it happens instantly as opposed to the long, laborious and painful process involved in domestic deflation.

4. Wouldn’t Greek wages and prices shoot up so far as to offset the effect of the devaluation?

It would be largely up to the Greek government to ensure that this didn’t happen. If it did happen then the devaluation would be nullified.

If not, there would be a boost to aggregate demand as Greeks substituted domestically produced goods and services for foreign ones, and foreigners were encouraged to buy Greek goods and services (including holidays) over their equivalents produced elsewhere.

It is now widely acknowledged – even within the eurozone – that forming the euro was a serious mistake

5. Wouldn’t the banks and financial markets have to be closed for a transition period?

It all depends. If departure were carried out over a weekend, then it might not be necessary to close the banks, but special arrangements would need to be made with regard to cash machines.

If the process of making all the necessary arrangements takes longer than two days, then the banks would have to be closed for a period. But that would be a minor, short-term hiccup rather than a major problem.

6. Wouldn’t Grexit threaten an economic and financial disaster?

Our Chancellor has been warning about the dangers. Yet it is not as though the status quo is exactly trouble-free. Finance ministers have an in-built conservatism that even extends to the preservation of misery. Given where Greece starts from, a bit of instability would be a jolly good thing.

It is now widely acknowledged – even within the eurozone – that forming the euro was a serious mistake, particularly with the likes of Greece included (as some people warned at the time).

Still, many people say, leaving or breaking the euro would be a disaster. Sometimes it can be right to press on with something that, given your time again, you would never start in the first place.

But often such inertia just reflects fear of the unknown. As Hilaire Belloc said: “Always keep a hold of nurse, for fear of finding something worse.”

7. When is the best time for Grexit to happen?

It is too early at present. No one wants it and even though this looks like a case of the irresistible force (Syriza) meeting the immovable object (Angela Merkel), it will be necessary to try every option for compromise. Only when these are exhausted would Grexit be upon us.

At that point, every weekend would be particularly dangerous – but the rest of the week could not be ruled out, not least because Grexit could be forced, or even be the accidental outcome of a stalemate, rather than a deliberate, calculated decision.

 

[Jippy]

I like Capital Economics, but Roger Bootle has been banging the same North/South European split drum for several years now. Even a broken clock's right twice a day etc...Kind of sounding that way. He is a Telegraph columnist, so of course they are going with his generally negative view.

 

[Don't Kill Bill]

I like Capital Economics, but Roger Bootle has been banging the same North/South European split drum for several years now. Even a broken clock's right twice a day etc...Kind of sounding that way. He is a Telegraph columnist, so of course they are going with his generally negative view.

If they manage to cobble some sort of deal together, why won't the exact same thing happen again? It is not like Greece will start to be as productive as Germany so we wind up back where we are eventually as the Greeks can't be expected to just keep deflating their economy the hard way by however much Germany out performs them?

 

[Jippy]

If they manage to cobble some sort of deal together, why won't the exact same thing happen again? It is not like Greece will start to be as productive as Germany so we wind up back where we are eventually as the Greeks can't be expected to just keep deflating their economy the hard way by however much Germany out performs them?

Yeah it's going to be a long-term recovery/debt reduction plan. Ideally, Greece pays what it can without crippling itself and the extensions keep getting pushed out, so ultimately a massive chunk of the debt gets eroded away by inflation and everyone saves face with Greece seen to have not walked away from its debts.

 

[Revan]

I think we are at the point where some compromise has to be found, I hope the greeks don't bottle it but both sides are playing a high risk game.

If EU soften its stance then that will open the floodgates for others, if the greeks soften their stance then the rest of the anti austerity parties will lose momentum.

If Greece drop out then everybody will feel the pain.

I'm hoping the greeks can say feck you to the EU and get money somewhere else.

Yeah, because the non-EU countries are waiting on line to give money to Greece.

Seriously, why are people blaming Germany for this? It was the mismanagement of Greece itself, by almost half a century which put them to this place, not Germany and Angela Merkel.

 

[Don't Kill Bill]

Yeah it's going to be a long-term recovery/debt reduction plan. Ideally, Greece pays what it can without crippling itself and the extensions keep getting pushed out, so ultimately a massive chunk of the debt gets eroded away by inflation and everyone saves face with Greece seen to have not walked away from its debts.

That isn't what I call a fighting motto that everyone can be inspired by.

Print the new currency, take the hit and never be in this position again is what I would do.

 

[Don't Kill Bill]

Yeah, because the non-EU countries are waiting on line to give money to Greece.

Seriously, why are people blaming Germany for this? It was the mismanagement of Greece itself, by almost half a century which put them to this place, not Germany and Angela Merkel.

Probably because the stability pact which would have stopped this from happening was shredded at German insistence when it suited them and the Euro was a Franco/German political invention pushed through despite these questions being asked by the likes of the UK only to be told to shut up because we are not good Europeans.

 

[Revan]

Probably because the stability pact which would have stopped this from happening was shredded at German insistence when it suited them and the Euro was a Franco/German political invention pushed through despite these questions being asked by the likes of the UK only to be told to shut up because we are not good Europeans.

What would have changed if they didn't had euro. The debt had still to be paid, and their entire economy was based on debt. Which soon became unmanageable.

 

[Silva]

Well, they probably wouldn't have been able to borrow as much as they did. And if had, they would have gone bankrupt a few years ago saving everyone this situation where there won't be many winners.

 

[PedroMendez]

Probably because the stability pact which would have stopped this from happening was shredded at German insistence when it suited them and the Euro was a Franco/German political invention pushed through despite these questions being asked by the likes of the UK only to be told to shut up because we are not good Europeans.

Violating the stability pact was certainly wrong and Germany should have been punished, but we hardly "shredded" it. Germany was one of the few countries that actually had a meaningful reform agenda afterwards. Germany also didn't need other countries to pay their debts.
The Euro also wasnt a "franco/german" invention. Germany actually wasn't in favour at all and just accepted the European/French initiative for several political reasons under the condition, that the ECB would have a similar structure like the "Deutsche Bundesbank". Germany wouldnt have joined the EURO without this condition.
Btw: The German Federal Reserve is getting outvoted in the ECB on almost any decision for years. Merkel is also no "immovable object" but accepted several compromises during the last 5 years. If she crosses another one of her self declared "red-lines" (she already did that 3-4 times), her party will lose the next election and Euro-skeptic parties will rise in germany. That would be the end of the Euro and it would have significant consequences for the EU.

 

[Stanley Road]

Yeah, because the non-EU countries are waiting on line to give money to Greece.

Seriously, why are people blaming Germany for this? It was the mismanagement of Greece itself, by almost half a century which put them to this place, not Germany and Angela Merkel.

Because they seem to be calling the shots?
Because their push on austerity has yielded nothing after 5 years?
Because, despite greek reckless spending, Germans were happy with reckless lending?
Because they don't seem to want to freeze greek tax money tied up in other EU countries?
Because they are not prepared to compromise?
Because they don't see economic growth as a solution??????????????????????????????????????


One thing I feel for sure, the average homeless greek at the foodbank is not responsible for any of this mess but so long as we can keep the banks afloat.....

The EU is as mismanaged as Greece is / was

 

[Don't Kill Bill]

What would have changed if they didn't had euro. The debt had still to be paid, and their entire economy was based on debt. Which soon became unmanageable.

They would have been able to do what the UK and US did. Given the contraction in their economy QE (print money) would have been the way forward but instead Germany broke them by forcing austerity which was the exact opposite of what Greece needed . The Greek currency would have dropped and balanced out their trade deficit. There would have been huge problems but manageable ones instead of financial suicide.

Is there any economist or financial expert who now believes it was ever a good idea to have Germany and Greece share a currency?

 

[Don't Kill Bill]

Violating the stability pact was certainly wrong and Germany should have been punished, but we hardly "shredded" it. Germany was one of the few countries that actually had a meaningful reform agenda afterwards. Germany also didn't need other countries to pay their debts.
The Euro also wasnt a "franco/german" invention. Germany actually wasn't in favour at all and just accepted the European/French initiative for several political reasons under the condition, that the ECB would have a similar structure like the "Deutsche Bundesbank". Germany wouldnt have joined the EURO without this condition.
Btw: The German Federal Reserve is getting outvoted in the ECB on almost any decision for years. Merkel is also no "immovable object" but accepted several compromises during the last 5 years. If she crosses another one of her self declared "red-lines" (she already did that 3-4 times), her party will lose the next election and Euro-skeptic parties will rise in germany. That would be the end of the Euro and it would have significant consequences for the EU.

1) Germany insisted on having the stability pack and set the rules of it. Then for internal political reasons decided it didn't apply to them. What was the message that sent to all the other countries struggling to meet the criterion. Shredding it is exactly what Germany did and we are where we are now because of that act.

2)If Germany didn't want the Euro then the Euro would not have happened. There were countries like the UK which were asking for support in not going ahead with the project until all these questions were resolved. The German position was the key to green lighting it or not. Germany has benefited massively from the Euro, what would the mark be trading at now if it was a separate currency versus the de-Germanised Euro and what would that have done to German exports?

 

[PedroMendez]

The euro happened because Mitterand desperately wanted it. It was a concession to France for their approval of the German reunification. Its true that Germany insisted on the stability pact. The euro is constructed in the way that germany wanted it to be (like the "Deutsche Mark"). Otherwise Germany would have never ever singed it and everybody knew what they were getting into.

Its a myth that Germany benefited "massively" from the euro. In the early 00s Germany was struggling (while countries like spain were booming because of the cheap money), because labour was too expansive (relatively speaking). It resulted in a massive labour marked reform and a decade without increasing wages for normal working people. This had a massive economic, political and social impact and many people forget that.

The exporting industry certainly benefits and during the last years the German government benefited from the low interest rates. Thats why my incompetent government is accepting this nonsense: They are the big winners. They can waste so much more money and they look like real champions. Obviously they are short-sighted morons. The only reason why Merkel cant accept further concessions is, because it would devastate her party (CDU+CSU) the same way the "Agenda 2010" (labour market+welfare system reform) devastated the SPD 10 years ago.

Other parts of the society sufferer massively. Since the low-interest policy of the ECB started after the crises (~2010), german saver/depositors are losing €70bn(!!) each year (+adding inflation makes it even worse). This means, that Germany´s wealth-net-loss is about €39bn each year. So regardless of all the talk the Euro is already a transfer union. Its also important to point out who is paying for this: primarily middle-class people who are saving money for their retirement. You just have to take a single look at the german age pyramid to understand, that Germany will have a major demographic problem in 20 years. We already know whats going to happen with pension funds: just look at Japan. Its a disaster waiting to happen.
Obviously this problem doesn't affect only Germany: it affects middle-class people everywhere in the Eurozone. They get dispossessed (often without even knowing about it) to pay for the current policy, which is completely misguided and terrible on so many different levels.
The answer certainly isnt to waste more money or to extend the wealth transfers. If Greece cant pay their debts and isnt able to come up with creative solutions, they have to leave the euro. There has to be an exit option for countries. Other countries (e.g. France and Italy) have to have a national conversation about this topic and their future. Are they willing and able to implement meaningful economic reforms (some people confuse that with the reduction of social services, which is something completely different)? If not, the Euro is living on borrowed time anyway.

 

[Will Absolute]

what would the mark be trading at now if it was a separate currency versus the de-Germanised Euro

Hard to say.

I have a vague memory of the old pre-Euro days when a powerhouse West Germany managed to keep its currency artificially low for years. Despite huge trade surpluses, the Bundesbank sold the currency cheap, and then soaked up the new deutschmarks before they could cause excess demand in the domestic market by selling lots of low interest bonds, which investors were happy to buy because of their confidence in the mark. It was called 'sterilization', I think.

Result: the deutschmark stayed undervalued;German trade surpluses were as predictable as the tides; German inflation remained low; Germany's trading partners sputtered impotently but continued to take it up the kazoo.

 

[PedroMendez]

The European monetary system was in place between 79 and the late 90s. It was a system, where each currency could be revaluated by +-2,25% each year. Soon the DM established itself as strongest currency and was raised in value almost every year, while currencies like the Lira (italy) were devaluated each year. It was flawed, because 2,25% of adjustment just werent enough, so after a short period of time, the DM was undervalued, while other currencies were rather overvalued. The national federal banks had to make sure, that their own currency isnt falling out of this corridor. In this context the german federal reserve did a lot of "sterilization" (e.g. buying foreign bonds while selling domestic ones)

In the 90s the system was so broken, that the rules were changed (+-15% were allowed each year). The UK joined for two years, but left soon after, because the system was clearly not working. Italy also left as well in 92.
A system, where the market could have set the exchange rates, would have been much better, but politicians always have to tinker with stuff.

When the EURO was introduced this very obvious problem was just ignored. Instead of a major adjustment (2,25%/15% each year) no adjustment was possible anymore. I have absolutely no idea why anyone thought, that this was a good idea. Its really mind-boggling.

here a DM/Lira chart for the time:

Spoiler: Lira/DM

In the end its hard to answer the question of "where would the deutsche Mark" be today. Eventually somewhere around the value of the CHF, while the Euro would be worth a lot less. Germany would export less, while everybody else in germany would benefit from a strong currency. Its a myth, that a strong currency is a bad thing. Its spread by short-sighted politicians who dont understand the bigger picture. Undervaluing the currency is fairly popular, because it leads to visible short term gains, while the costs are hidden and diffuse.

 

[Jippy]

The European monetary system was in place between 79 and the late 90s. It was a system, where each currency could be revaluated by +-2,25% each year. Soon the DM established itself as strongest currency and was raised in value almost every year, while currencies like the Lira (italy) were devaluated each year. It was flawed, because 2,25% of adjustment just werent enough, so after a short period of time, the DM was undervalued, while other currencies were rather overvalued. The national federal banks had to make sure, that their own currency isnt falling out of this corridor. In this context the german federal reserve did a lot of "sterilization" (e.g. buying foreign bonds while selling domestic ones)

In the 90s the system was so broken, that the rules were changed (+-15% were allowed each year). The UK joined for two years, but left soon after, because the system was clearly not working. Italy also left as well in 92.
A system, where the market could have set the exchange rates, would have been much better, but politicians always have to tinker with stuff.

When the EURO was introduced this very obvious problem was just ignored. Instead of a major adjustment (2,25%/15% each year) no adjustment was possible anymore. I have absolutely no idea why anyone thought, that this was a good idea. Its really mind-boggling.

here a DM/Lira chart for the time:

Spoiler: Lira/DM

In the end its hard to answer the question of "where would the deutsche Mark" be today. Eventually somewhere around the value of the CHF, while the Euro would be worth a lot less. Germany would export less, while everybody else in germany would benefit from a strong currency. Its a myth, that a strong currency is a bad thing. Its spread by short-sighted politicians who dont understand the bigger picture. Undervaluing the currency is fairly popular, because it leads to visible short term gains, while the costs are hidden and diffuse.

You were nicely understated about the UK's ERM experience there!
Competitive currency devaluations are certainly mainstream policy at the mo'.

 

[PedroMendez]

You were nicely understated about the UK's ERM experience there!
Competitive currency devaluations are certainly mainstream policy at the mo'.

yes, because its not really essential to my argument.
The second statement is certainly true and the german did this as well. Sadly. Still its not a good policy and the idea, that it has just advantages for the country is wrong.

 

[Desert Eagle]

http://www.telegraph.co.uk/finance/...tical-damage-if-Greece-forced-to-default.html

"Germany's leaders can't let Greece leave the euro, and the Greeks know it. They will die in a ditch to defend the euro. This is our Eastern Front, our Battle of Kursk, and I'm afraid to say that it will end in unconditional surrender by Germany," he said.

 

[Stanley Road]

This is what it think but then again it depends who blinks first, idiots like schauble and dijsselbloem have so far said "Stick by the plan or it's the end".

How mental is that attitude, they pretend they have a plan if Greece drops out but do they really? They are in a bit of a hole the EU because any leeway Greece get, the others will want too.

I reckon they will give in but put on a front that greeks blinked first.

 

[AngeloHenriquez]

Silly question, but how can Germany be responsible for lending too much? That's crazy to me, if you take more than you can afford, surely that is your fault solely, if you eat too much and die, you don't blame the food company for making it so addictive, it seems part of our society now where we are too easy on people. Surely if a country has taken beyond it's means, it's not the country who was kind enough (smart enough) to lend them it.

Please correct me if I am wrong as I don't know a lot about the subject but am open, hoping someone with knowledge can help. I try to compare it to high street lenders like money shop, I kno people that have borrowed too much and they also view it as partly Money Shops fault, but if you are an adult, you should be responsible for your actions, spending beyond your means is only your fault IMO

Unless obviously, there are a lot of unknown (to me) reasons that forced Greece to borrow it?

 

[Stanley Road]

Germans didn't lend they invested, a poor investment too

Don't you think banks world wide have lent( invested )a lot of money in people that cant pay back?

If I say to the Lender "can I have 2 million euro's, I work as a part time janitor" he should refuse but.......

In the good ol times he will agree with excessive interest rates and he eventually make a large sum.

Stupid lending with no foresight

 

[Jippy]

Silly question, but how can Germany be responsible for lending too much? That's crazy to me, if you take more than you can afford, surely that is your fault solely, if you eat too much and die, you don't blame the food company for making it so addictive, it seems part of our society now where we are too easy on people. Surely if a country has taken beyond it's means, it's not the country who was kind enough (smart enough) to lend them it.

Please correct me if I am wrong as I don't know a lot about the subject but am open, hoping someone with knowledge can help. I try to compare it to high street lenders like money shop, I kno people that have borrowed too much and they also view it as partly Money Shops fault, but if you are an adult, you should be responsible for your actions, spending beyond your means is only your fault IMO

Unless obviously, there are a lot of unknown (to me) reasons that forced Greece to borrow it?

Some would argue that Greece should have been allowed to default and everyone else suffer. It's an emotive debate that generally comes down to whether people are left or right, regardless of the actual economics of the situation.

 

[peterstorey]

Fantastic piece by Varoufakis (long and complex)... http://www.theguardian.com/news/2015/feb/18/yanis-varoufakis-how-i-became-an-erratic-marxist

 

[Don't Kill Bill]

" Its a myth, that a strong currency is a bad thing"

A currency is as strong as the economy which underpins it. So yes having a strong currency is a good thing because it means your economy is strong. If you can wangle the advantage of having a currency which is undervalued then you get better growth and a bigger economy long term. China would be an example of this as it is holding down the value of its currency.

The worst position is to be stuck in a currency which is over valued compared to your economy because you get into the opposite spiral, which is where Greece is at.

 

[Pogue Mahone]

So Germany's told Greece to get fecked with their request for a bridging loan. Shit's gonna get real.

 

[Stanley Road]

Poor move by the germans I feel

 

[Jippy]

" Its a myth, that a strong currency is a bad thing"

A currency is as strong as the economy which underpins it. So yes having a strong currency is a good thing because it means your economy is strong. If you can wangle the advantage of having a currency which is undervalued then you get better growth and a bigger economy long term. China would be an example of this as it is holding down the value of its currency.

The worst position is to be stuck in a currency which is over valued compared to your economy because you get into the opposite spiral, which is where Greece is at.

What about Japan then? Sluggish growth, barely scraping out of deflation yet the yen is still as a safe haven currency despite the fact it has by far the largest debt to GDP ratio in the modern world and appalling demographics.

 

[Don't Kill Bill]

What about Japan then? Sluggish growth, barely scraping out of deflation yet the yen is still as a safe haven currency despite the fact it has by far the largest debt to GDP ratio in the modern world and appalling demographics.

Hence the sluggish growth, the yen is over valued compared to its productivity.

 

[Jippy]

Hence the sluggish growth, the yen is over valued compared to its productivity.

Over-simplistic. That glosses over a lot of structural problems including working culture, difficulty in getting migrant workers in, demographics, impact of last April's consumption tax etc...

 

[Don't Kill Bill]

Perhaps, but I'm not trying to explain why an economy is weak or strong, just that if that strength or weakness isn't properly reflected in the value of its currency, then you get a large benefit or detriment to that economy.

 

[Jippy]

Yeah, we're going off on a tangent here. Either way you look at it, the Greek economy is fecked. The euro's hardly a strong currency I'd argue though- it's taken a beating against most major currencies over the last couple of years.

 

[sun_tzu]

So Germany's told Greece to get fecked with their request for a bridging loan. Shit's gonna get real.

They still have plenty of time to thrash out a deal
Yes if it's done today they can probably enshrine it in law before the current deal runs out and stop the markets getting too jittery.
But if they make a deal next week and it's just a case of ratifying it I think the markets will be fairly calm
Greece won't actually run out of money for a few weeks / even a couple of months so although that level of brinkmanship may see some fairly jittery markets it does show there is time to find agreement.

 

[Stanley Road]

I can imagine that if the greeks appear to 'win' it will boost all the other anti euro parties across Europe, this scares the EU but I don't get why?

If the people of Europe democratically vote anti euro parties then whats wrong with that? Are the EU chiefs simply playing politics with Greece?

 

[Crackers]

I can imagine that if the greeks appear to 'win' it will boost all the other anti euro parties across Europe, this scares the EU but I don't get why?

If the people of Europe democratically vote anti euro parties then whats wrong with that? Are the EU chiefs simply playing politics with Greece?

Absolutely nothing wrong it, in fact I'd hope it happens. I wouldn't consider myself leaning left that much at all, but the EU has become an undemocratic monster. The EU should be scared of Greece, if they win it'll turn the tide.

 

[Stanley Road]

The only problem for Greece and it's people is they have said they want to stay in the EU, that's a shame, would be an easy decision otherwise.

 

[peterstorey]

I can imagine that if the greeks appear to 'win' it will boost all the other anti euro parties across Europe, this scares the EU but I don't get why?

If the people of Europe democratically vote anti euro parties then whats wrong with that? Are the EU chiefs simply playing politics with Greece?

Because the EU is a neo-liberal capitalist entity.

 

[Stanley Road]

I read somewhere today that for every Euro the Greeks saved though austerity, it added E1.20 to the debt.

As simplified as that may be, it cant make sense to anyone

 

[UweBein]

The greek so called government fecked it up big time. But it wasn't the current one. Greece has been probably mis-governed for the last 30 years. They had a boom whent they joined the Eurozone because they could get very cheap loans then.

The first big mistake was that Greece was allowed to join the Eurozone. They were helped a lot by Goldman Sachs - experts in fraud - who helped them rewrite their numbers so the EU fell for it.

The second big mistake was that Germany broke the stability pact, so bend the rules basically which itself was a signal for the other members that they shouldn't adhere strictly to them.

Now it's all fecked up. I think that for the first time in decades Greece has actually people with brains who rule the country, but at the same time they have no scope left. Structurally Greece won't survive this because there is an elite in Greece that has lived and prospered the way things were going and they'll probably show few intentions to radically change things. The new government would have to implement new reforms and new structures very quickly, but I don't think that's doable in terms of time and obstacles. The poor will suffer in Greece greatly.