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Will Greece Default? Will it Matter?
No default in 2011
Greek default in 2012
Greek default & Ezone Exit
Eurozone split
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This thread was started in response to the Poll:

Will Greece Default? Will it Matter?

The word "default" has become the latest popular "d" word after deleveraging and deflation were in the limelight last year. It seems that a Greece default is becoming inevitable. Will it happen this year, or the next? Will it mean the end of the euro? Or, will markets adapt to a new reality as they have done after Lehman's downfall and AIG's near collapse.
Hannover, Germany
Posts: 24
8 years ago
Jan 4, 2012 8:25
Euro-Chef Junkers in todays radio interview at 8:25am

On NRD-Info in north Germany, there was a few minutes phone interview with Eurogruppen-Chef Jean-Claude Juncker, the interview was live, here are some statements as I can remember it.

- Greece will not default and will not return to the Drachme
- No Euro member will default in 2012, bailout packages are prepared
- Private sector haircut: greece and delegated banks representations are working
on this, he cannot talk about this in this interview
- Will greece get the next 100+ Billion financing, it is prepared, they are working with Greece on it.
- He is in daily contacts with the greece government
- The last 18 month, Euro decisions have been quickly and and more powerful compared to the history, it was not fast enough but there is a strong consense
- Will the Euro with its members stay as it is - the end of 2012: he answered "Tod gesagte leben lnger" which means: There's life left in the old dog yet

Gruss Helmut
Viktor Urobaer
Singapore, Singapore
Posted Anonymously
8 years ago
Jan 4, 2012 7:27
VOTE:Eurozone split

Greece's military will not allow politicians to mess up further. They are probably printing Drachma now inviting wealthy Greeks back into the country under the promise of freedom from the rapacious Eurozone.

Once the recession hits Germany and their exports to Eurozone members (40% of their exports go to Euro-victim countries...) are hit, the pain will be felt by all, not just Greece & Portugal, more than one member may see an exit from the non-democratically imposed euro-nightmare as a painful in the short term but ultimately more affordable option.

Individual currencies can devalue themselves to competitiveness and structural changes can be made through transitions and at a pace more acceptable to people there. Europe will be more competitive if the citizens are given a vision of what competition will be like in the coming years, schools can empower future generations for the realities that they will face. As it stands now, you cannot expect southern europe ancient labor markets to compete with northern european ones.
athens, Greece
Posted Anonymously
8 years ago
Dec 30, 2011 13:40
Hannover, Germany
Posts: 24
8 years ago
Dec 23, 2011 20:05
VOTE: No Greek default in 2012/2013, no return to the Drachma

The following bonds are due in 2012 and 2013. This is a total of 50 Billion Euro. This is what I was able to find, I believe there is additional dept which I don't know about.

17-Feb-2012 22 Billion
18-May-2012 7 Billion
20-Aug-2012 8 Billion

20-May-2013 8 Billion
20-May-2013 1,14 Billion
20-Aug-2013 1,7 Billion
25-Jun-2013 1,5 Billion

My understanding is the the Eurozone ESFS and the IMF will re-finance the dept for the next couple of years. Many existing bank creditors agreed on an voluntary haircut of 50%. This haircut has already been verbal agreed and will be fixed within the next months. Private bond investors (like me) will be payed back to 100% unless there is an uncontrolled default.

Greece will not leave the Eurozone because all the private and government dept is based in Euro and there is no agreement to throw out a country from the Euro currency. Returning to the Drachma would also mean that all imports cars, etc. get way more expensive. There is a greece government and citizen understanding there they keep the Euro and there is no legal enforcement to change this.

No uncontrolled default in 2012/2013 because the Eurozone cannot afford to let one country to default which would start a knock-on effect on several European countries, nobody would be willing to invest into European government bonds anymore, no banks would borrow anymore, this would end up in a disaster for all European governments as well for word-wide businesses. Also the CDS would be due in case of an Greece default. All the rescue packages are build to avoid this.

For long term I don't know how Greece will get back on track, however for the next years there will be no default.

BTW: Investing a smaller amount of money into a greece Bond due 20-May-2012 is likely to be payed back at 100%, todays price about 37%. Greece cannot force private investors to agree on an haircut, only governments force the bank to do so.
Athens, Greece
Posts: 2
8 years ago
Dec 23, 2011 11:08
VOTE:Greek default in 2012

It's simple. Right now, the EU cannot kick Greece out of the euro zone because the French and German banks will lose billions. Around March the Greek parliament will sign part 2 of the IMF deal which will also give guarantees to the new and past loans. Greece will be unable to erase any debt from this point. Even if Greece goes back to the Drachma, Greeks will have to pay back their debt on drachmas and if they fail to do so, national property will be transferred to the debtors. That is the plan and it will take shape after March 2012. So Greece will default after the parliament signs IMF part 2.
Vienna, Austria
Posts: 3
8 years ago
Dec 19, 2011 5:10
If Greece wants to stay in the Euro, it needs to devalue salaries like Latvia did in 2009. Salaries must go down to the level of the most competitive Central-European countries like Estonia. Greece work costs at 16 Euros per hours, Estonia 8, Germany 29. Means 50% decrease in salaries for Greece. But Greek government (and Greek people) do not co-operate and the GDP will continue to fall till the salary decrease is realized.

More and more Greeks will vote for the easy solution: Greece defaults and goes out of the Eurozone. In this case Greece will denominate its bonds in Drachme to the original FX rate of 2001 in a week-end because bonds are under Greek law. Then the Drachme will drop sharply and Greece will get rid of at least half of its debt. Private Greek companies will have problems because of their Euro debt under English law. Greek banks will be saved by the EU, other companies not. Like Argentina in 2001 Greece will suffer for 2 years. A global crisis will be avoided, because Greece GDP is not that relevant. Most Greek bonds will be in the hands of the ECB then. Greece and especially Greek tourism will strongly rebound with the cheap Drachme.
Posted Anonymously
8 years ago
Dec 14, 2011 13:54
VOTE:Eurozone split

The Eurozone has proven once again that it has a huge appetite for discussion without substance. It will rip itself to pieces as soon as it has to eat from the austerity menu rather than simply discussing who is going to be in the kitchen and reviling other peoples' cooking. The reason? Because this group of 26 who have zero recent track record of any substantive mutual assistance do not posess the strength to withstand the huge social tensions which even now are starting to show through.

Sarkozy's hypocritical snub of Cameron (remember PPDA who was fired because he did not "recognise" Sarko?) simply demonstrates the shallowness of this intitiative, as borne out by the immediate commitment to renegotiate from Hollande, and the idiot refusal to consult the various electorates by all participants, so quick to jump on Cameron who could not have avoided such a referendum had he agreed. It is also why Cameron is rising in popularity whilst the aptly Balls and Miliband are falling - Cameron is reflecting the wishes of his electorate.

To consider the larger Europe sentiment which Merkozy bang on about, one only has to look at healthcare arrangements in France. They simply follow the money, in other words, as long as there is a commitment to pick up the tab by the country of origin, or a foreigner is working and paying French contributions there is no problem. The minute it stops you are very literally on your own. This is not a terrible thing in itself, just that the sharing caring Europe of which these peacocks preach is shown in this and countless other ways to be no more than pink smoke. For that reason, it is naive to expect that anyone is going to pick up the tab in Euroland unoess they think they can turn a profit in reasonably short order.

What is required is a balance sheet reset, and nothing less will be demanded now or very soon by the poor sods who are being set up unasked to pay the bills for the continuing party of the generation in power.

N.Cornwall, UK
Posts: 5733
8 years ago
Nov 22, 2011 20:55
and your working rules and pensions are outrageous, comon now, uncompetitive in every possible way.
N.Cornwall, UK
Posts: 5733
8 years ago
Nov 22, 2011 20:53
@gus, when the people gonna start paying their taxes? Massive tax evasion over the yrs is part of the problem. Your guys are pouring secret cash into London property mkt etc etc etc.
Athens, Greece
Posted Anonymously
8 years ago
Nov 22, 2011 8:13
VOTE:No default in 2011

I don't actually know wheather there will be a default in the future but what I do know is that nobody actully helps Greece. Everyone is taking advantage of the Greece problem (which has been caused by the governments last couple of decades) because they there is wealth (everyone knows there's unexploited oil, mine, gas..... that greek government doesn't invest on it). The interest of EU doesn't match with one of Greece, does it?