Bailout Extention Requests Before Possibly Leaving the — Greece News Today

“Whenever you see any kind of bank line, there is in the back of investors” mind the thought: “What if it spreads?” This may apply to us as individuals, but not to countries. First, the Greeks can never repay all their debts, not even in the rosiest economic scenarios. The picture to the left is from the 1950s. However, a Greek government source said that talks would resume today “to allow finance ministers to examine the proposals of the Greek government”.

“Greece should get rid of the clutches of the euro and embrace the drachma”. Greece has been instructed to extend policies that have so far achieved only ruin.

Mr Fuchs said Europe was also prepared for Grexit.

In a recent interview to an Italian newspaper, French economist Jean-Paul Fitoussi argued that Greek’s debt should be cancelled in the same way as the Allies cancelled the German (and Italian) debt at the end of World War II. Unemployment has soared. In exchange for assistance, Greece committed to various austerity and reform measures.

Since coming to office earlier this year on the basis of popular hostility to the austerity demands of the European banks, Syriza has sought repeatedly to reach an agreement that preserves the framework of the bailouts.

Widespread dissatisfaction in Greece led to the rise of Syriza, what had been a relatively fringe left-wing socialist party.

But the greatest mistake, which led to the election of Syriza in January this year, is the fault of the EU.

And if Greece votes “no”, the ball is in the eurozone’s court.

Germany rejected a compromise offer from Alexis Tsipras, the Greek prime minister, after a furious debate in the Bundestag yesterday. The reality is much more complicated. That referendum was canceled, and that government collapsed.

Tsipras in effect offered the European Union a means of short-circuiting this process.

The precise wording of the referendum is still being hammered out.

Greek citizens are actually asked to vote on the technical document submitted by creditors and this does not seem like material for a referendum. Resisting the prevailing economic common sense of our time (it will be claimed) is demonstrably futile and self-defeating. A no vote would be to resist the creditors demands.

The public spectacle of Greece’s suffering has had some perverse benefits, too, in destroying the “magical thinking” that has accompanied the euro.

Yanis Varoufakis, the finance minister of Greece. S&P estimates that this currency might initially decline by about 37%, but this would settle at 30%. The rest of Europe wants to paint it as a referendum on whether or not to leave the euro.

Similar capital controls are now in place in Greece. How long will it last? This strategy, which reflects the interests of sections of the Greek bourgeoisie and petty-bourgeoisie, is continued in the call for a referendum. The ELA was primarily a way to offset the flight of deposits out of the Greek banking system. The same should apply to Greece: greedy banks, acting in the short-term interest, which lent money, setting aside risk for the sake of profit. Withdrawals from ATMs are strictly limited. Stocks around the world mostly rose Wednesday. Within hours he was calling the creditors “blackmailers” and “sirens of destruction” and appealing for a resounding No vote on Sunday to reject the proposal that he had so recently appeared willing to accept.

REUTERS/Yannis BehrakisParliament employees raise a mast after they replaced a torn-off Greek flag with a new one atop the parliament in Athens Syntagma (Constitution) square April 18, 2012. Under the IMF’s procedures, a missed payment is regarded as falling into arrears. It has a chunky payment (~3bln+ euros) to the European Central Bank a week later.

How did Greece pile up so much debt? If Greece doesn’t pay, then all these gamblers and derivative players are going to lose their bets.

Within the European Union, the concept got a different name, convergence, because it also involved aligning laws and standards. The European Central Bank is already engaged in quantitative easing (QE) under which it is buying sovereign bonds. The ultimate decision about Greece’s future was always going to be political and made by politicians in Athens and other European capitals. Monetary union would no longer be irreversible.

Markets are calm despite the elevated risk from the Greek debt crisis.

What are the implications for the euro? It could end up a pariah in the global markets for years like Argentina in 2002.

Only in a small number of areas, such as social policy regulations, is there an obvious good case for repatriation of powers. Uncertainty has triggered an ongoing flight into safe dollar assets.

Detractors of the Euro gleefully proclaim that the Greek predicament is proof positive that the Euro is a flawed concept with no hope of success. The euro recorded a 12-year low in mid-March near $1.0460. The 100-day moving average comes in near $1.1050.