Greece - where to go from here?

esh_gaMay 15, 2012

What the heck?

Greece will hold a new election after politicians failed to form a government on Tuesday, nine days following an inconclusive vote, prolonging a political crisis that pushes it closer to bankruptcy and exit from the euro.

After a third day of failed talks with political leaders, a spokesman for President Karolos Papoulias said the process of seeking a compromise had been declared a failure and a new vote must be held.

He did not immediately give the date for the new vote, but elections rules suggest it will be in mid June. A caretaker government would be formed on Wednesday, the spokesman said.

http://www.huffingtonpost.com/2012/05/15/greece-election-2012_n_1517553.html

And this opinion reminds me of demi and her "personal responsibility" mantra:

Greece may have given us the word democracy and many of the principles of civil society. But now it is "the sick man of Europe," and the people of other European democracies are asking whether it's worth saving with billions more dollars of their money. Put crudely, their argument is this: So what if Greece slides ignominiously out of the eurozone?

"Any announcement of Greece's departure would wreck havoc in the markets. If Greeks elected someone who wanted to pursue this path, it would be impossible to get back in at a later date," Barbieri told CNN.

In addition, he says, there is no guarantee that excising Greece from the eurozone will relieve pressure on other members. It might simply refocus anxiety on the next most vulnerable state.

Is there a way to muddle through? Maybe. But it will require a tilt from "austerity" toward "growth" to persuade the Greeks that their suffering will not be endless.

The basic choice may remain bailout or bankruptcy, but the bailout can be sweetened, as a spokesman for EU Economics Commissioner Olli Rehn hinted Tuesday.

"We can do lots to assist Greece, and we are doing so. Our member states, our taxpayers in other European member states of the euro area, are providing this solidarity," he said.

Concrete action must follow, says Barbieri.

"Europe needs to show the Greeks that they have reason to hope by staying the course, that it won't just be pain and more pain. There have to be measures to help growth, such as European investment projects in infrastructure and help for small and medium businesses starved for funding, which can be achieved through the European Investment Bank. The ECB should continue to help Greek banks, so as to start lending again."

Should Greece be cut from the pack like a dying member so the rest of them can move on?

Here is a link that might be useful: source for second quote

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Roughseas

the solution seems simple.
For Greeks with billions , use those billions to pay off the debt.

if that doesn't cover it, use the money from Greeks with millions.

work on down the line till all the Greeks are in the same status.

    Bookmark   May 15, 2012 at 10:41AM
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david52_gw

I think its the personal responsibility of the younger Greeks, now unemployed, to pay off the debt accumulated by their grossly negligent government, tax dodging parents, and fat pension-sucking grandparents.

    Bookmark   May 15, 2012 at 10:49AM
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lionheart_gw

We might be witnessing the collapse of the eurozone. And Greece may very well be ejected.

In a couple of years the eurozone may look very different from the way it looks today, assuming it still exists. It's in big economic trouble. I wouldn't be buying Euros right now.

The problem with austerity is that it only really works if it's accompanied by an increase in Nominal GDP (although some economists disagree with this). One way is to increase productivity (Real GDP); another way is to increase NGDP through some inflation.

The Germans HATE inflation. Unfortunately for countries like Greece, the Germans are calling the shots here. So Greece will probably not get any of the inflation that may help. And, Germany is certainly not going to transfer its wealth to Greece.

Unless they (the Germans) resign themselves to eating some inflation, more than one country might be leaving the eurozone, either by force or by choice.

    Bookmark   May 15, 2012 at 12:29PM
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