Greece Will Shut Banks in Fallout From Debt Crisis. Likely to be pushed out of E.U

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Greece Will Shut Banks in Fallout From Debt Crisis

By JIM YARDLEYJUNE 28, 2015



ATHENS — Prime Minister Alexis Tsipras announced Sunday night that Greece’s banks would be closed as of Monday, as the fallout from ruptured debt negotiations with the nation’s creditors began inflicting pain on ordinary people while raising alarm in Washington, Brussels and Berlin.

The emergency measures escalated the confused and unpredictable state of a crisis that some analysts say could ripple through global financial markets and undercut European unity. Most Asian markets opened lower on Monday.

With so much at stake, leaders in other capitals encouraged a continued search for a way to prevent Greece from being forced out of Europe’s currency union. Greece owes a large debt payment by the end of Tuesday, and has scheduled a referendum for next Sunday on whether to accept the terms of an offer from its creditors to release bailout aid it needs to meet its financial obligations.


Mr. Tsipras announced the emergency banking shutdown, which will also close the stock exchange, and imposed capital controls several hours after the European Central Bank said it would not expand an emergency loan program that had been propping up Greek banks for weeks. The banking system had neared insolvency after panicked account holders withdrew billions of euros, a pattern that continued over the weekend.


Timeline: Greek Debt Crisis

• December 2009 Credit ratings agencies downgrade Greece on fears that it could default on its debt.
• May 2010 Europe and Greece reach a $146 billion rescue package, conditional on austerity measures. Some economists say the required cuts could kill the patient.
• October 2011 Banks agree to take a 50 percent loss on the face value of their Greek debt.
• January 2015 Greek voters choose an anti-austerity party. Alexis Tsipras becomes prime minister.
• May 2015 Greece quells fears of an imminent default, authorizing a big loan payment to the I.M.F.
• June 2015 Greece defers a series of debt payments until the end of the month.

http://www.nytimes.com/2015/06/29/w....html?partner=socialflow&smid=tw-nytimes&_r=0

 

[vgane]

 

[krish44]

The crisis of greek default has not been factored in by most countries india included.

It seems countries like italy ,portugal may get badly affected.

The melt down is taking place in financial markets all over the world.

Indian share market crashed over 600 points and then recovered.

since india has huge foreign exchange reserves it might be affected less.

but they say huge capital outflows might take place.

shares of IT,financial companies may get hurt.

I do not know to what extent indian rupee will tumble .

 

[sarang]

Interesting theories are in circulation:
1. Greece had a left government and got a step motherly treatment from the union.
2. Greece was often humiliated for its policies and economics.
3. Common currency is not a good solution and prohibition of greece from printing its own currency led to this.
4. Even the giant USA will slide towards a similar fate if it is not allowed to print and manage its currency. It too has high debts.

 

[krish44]

There is hardly any sympathy for either greece or the european union.

This union is of highly unequal nations in terms of economics..

Unless rich countries like germany and france stop extracting their pound of flesh for every euro lent to greece anfd other poor nations in EU, world will face only

uncertainties.

An economically unstable EU is as dangerous as the fundamentalist countries of the gulf and middle east.

world is a dangerous place with these dispensation.

any developing country can go downhill because of them.

to what extent india gets affected will only be known slowly. many can brave talk that india will escape with minor bruises.some say it might fare better than china in

facing the EU crisis.

 

[vgane]

 

[krish44]

It is easy for countries like germany or france to advocate austerity for greece.

Greeks are undergoing a lot of suffering due to conditions imposed.

their retirement age is increased to 67 yrs.

their GDP has crashed to half . Growth is down. they cannot undergo any more suffering,.

It may be recalled England and France imposed such condions on Germany after world war One leading to.

the raise of Hitler

Greeks are being treated as poor cousins.

Greeks can drop out of EU and chart their own path . They will have a better future.

Even in india richer states grumble when more money is transferred to poor states but a strong centre enables it.

Referendum will enable hopefully greece to pull out of EU.This can make their own future without the EU.

They are an old civilisation who have survived. They will do so now also

 

[sangom]

It is easy for countries like germany or france to advocate austerity for greece.

Greeks are undergoing a lot of suffering due to conditions imposed.

their retirement age is increased to 67 yrs.

their GDP has crashed to half . Growth is down. they cannot undergo any more suffering,.

It may be recalled England and France imposed such condions on Germany after world war One leading to.

the raise of Hitler

Greeks are being treated as poor cousins.

Greeks can drop out of EU and chart their own path . They will have a better future.

Even in india richer states grumble when more money is transferred to poor states but a strong centre enables it.

Referendum will enable hopefully greece to pull out of EU.This can make their own future without the EU.

They are an old civilisation who have survived. They will do so now also

When there is nobody to lend you money (as is Greece's position today) the only way out is austerity and austerity will mean a lot of suffering for a country such as Greece who were enjoying life without making sure that their country is financially sound and that they are not living as prodigals.

 

[krish44]

The basic mistake that greece made was joining the Euro union.

Organisations like IMF , euro bank give prescriptions for economy that keeps the country receiving loans permanently indebted.

they are no better than rural money lender in india.

germany ,france give policy prescriptions that they did not adopt after world war 2.

Crippling the country paralysing their growth thru austerity measures when they should be spending with stimulus to promote growth is not wise.

countries like US kept on stimulating their economy after 2008 crash by pumping money and keeping interest rate near zero. the only way is spend your way out of

trouble keeping inflation incheck.

greeks should pull out and have their own currency and make policies to suit their interests and make their economy a state controlled one.

leftists are therein power. Our west bengal under marxist rule gave a decent standard of living to the poor with a low cost economy and the poor were far happier

there as compared to rest of india. even now Wbengal is a better place to live for the poor and lower middle class, They may not have luxury living. They are not

starving either. Greece can do the same.They can look after their national interests and have their own policies and programs ensuring a decent life for their people

 

[vgane]

Greek Finance Minister Accuses Creditors of 'Terrorism'

Madrid | Jul 04, 2015

Greek Finance Minister Yanis Varoufakis accused Athens' creditors of "terrorism" in an interview published today, a day before Greeks vote in a high- stakes referendum on their bailout.

"Why did they force us to close the banks? To instill fear in people. And spreading fear is called terrorism," he said, referring to the IMF, European Central Bank and European Union.

After failing to reach a deal with its creditors last weekend on an extension of its bailout programme Greece's radical leftist government closed the country's banks and imposed capital controls until July 6.

Varoufakis said that whatever the result of tomorrow's vote, in which the government is calling for a 'no' vote, the banks would reopen and Athens would end up reaching an accord with its creditors.

"Europe needs an agreement, Greece needs an agreement, meaning we will reach an agreement," he said, reiterating a pledge to resign if the 'yes' vote carried the day.

The flamboyant economist, who has become one of Europe's most recognisable politicians in the few short months since he took office, also repeated that the "troika" of creditors wanted to "humiliate Greeks" and make them an example of what not to do for other countries, like Spain, where radical left-wing parties are on the march.

Referring to Syriza's Spanish ally Podemos, he said: "I think that in Europe there is a need for parties like Syriza and Podemos, which are both critical of the system and pro- European and democratic. Those who hate us want to cast us as anti-European but it's not true, we are not.


http://www.outlookindia.com/news/ar...inister-accuses-creditors-of-terrorism/905278

 

[vgane]

In 2008 post the Lehman collapse had USA been prevented from printing its own currency it would have been in same boat as current day Greece!

 

[vgane]

[h=1]EU warns of Armageddon if Greek voters reject terms today[/h]

July 05, 2015

---

Greece risks a collapse of the medical system, power black-outs, and an import blockade, if the Greek people reject creditor demands in a make-or-break referendum tomorrow, the EU's highest elected official has warned. Martin Schulz, the president of the European Parliament, said the EU authorities may have to prepare emergency loans to keep basic public services functioning and to prevent the debt-stricken country spinning out of control next week.

http://news.rediff.com/commentary/2...reject-terms/64a9e6620ea0f4e413b49d333b6a9745

 

[krish44]

The greek referendum results are out . The outcome is a resounding 'No'.

It is a lesson for india. Opening out indiscriminately to foreign capital .

China moved immediately to protect its market by huge intervention by domestic funds.

Let us see how india copes .

Markets open only after another half hour .

It would be interesting to watch.

 

[sarang]

EU is like the traditional 'Etikaran', give unsecured loans and then threaten. Former suicide in india too is related to unreturnable loans from loan sharks.

Let greece chart its own path an economically independent nation free from the grips of germany and france.

 

[krish44]

Indian market after initial downslide of 300 points in bse slowly recovering.

Euro weakened against dollar.

crude prices reduced to 59 dollars per. barrel down 2 dollars giving unexpected benefit to refiners.

metals went down ,gold went up.

equities in IT ,pharma with exposure to EU weakened , banks , consumer stocks did ok.

what happens to india would get decided by what happens to euro and china over time.

what happens to capital inflows -no one can predict?will foreign funds find better places to park capital -no one knows.

how the monsoon would behave, what happens to gst, land bills will decide indias fate in addition to euro and china factor.

indian citizen can keep wondering what happens to him with interplay of all these forces pulling indian economy in different directions.

He might even do well if he is smart and plays his cards well to capitalise on oppurtunities that present itself

 

[vgane]

I think our foreign exchange reserves will help us buffer against any after shocks...Greece is just 2% of Euro....Nothing to worry as per my assessment..In case Interests rates firm up in EU there could be a flight of capital from India...Re may go down!

 

[krish44]

India has got an excellent RBI governor.

But he has been talking about depression under certain circumstances.

World decides what happens to india.

somehow we miss every oppurtunity that presents itself in any scenario.

 

[vgane]

Traders were greeted with a sea of red on Monday after 61% of Greeks voted 'No' in a referendum asking them to accept an international creditor proposal that would have included more austerity reforms. A couple of emergency meetings are now in the works, including an ECB gathering to discuss emergency liquidity assistance and a meeting between Angela Merkel and Francois Hollande that will review the eurozone's response to the vote. Meanwhile, Finance Minister Yanis Varoufakis has indicated that he is stepping down from his post due to heavy pressure from Greece's European partners. Euro -0.8% to $1.1027.
[FONT=&quot]

[/FONT]
[FONT=&quot]Asian stocks also took a beating following Greece's vote against austerity, while Shanghai bucked the trend due to a salvo of fresh support measures. Over the weekend, China's biggest brokerage firms unveiled a government-endorsed plan to buy at least 120B yuan ($19.3B) of shares, while Beijing suspended IPOs until further notice. About $2.7T in market value has evaporated since the Chinese stock market peaked on June 12. That is six times Greece's entire foreign debt, or 11 years of Greek economic output. [/FONT]

Source: Wall Street

 

[sarang]

As long as our domestic production and agriculture are strong, and foreign investment is just crème, we will survive any global catastrophe including that of USA.

 

[krish44]

I read a very unusual article in The HT middle page today[ 6th july].

It states that for capitalism to survive it must be allowed to fail!Inefficiency of compassion should be allowed to intervene in greece for its working labour class for it.

to

continue to work for them.Both capital and labour require each other. It is not wise to drive labour into a corner that it rebels and drops out.

For if labour drops out , it would be the end of capitalism , as it will not get cheap labour which can be purchased by liquid capital

 

[krish44]

Greek foreign minister Yanis Varoufakis has made a huge contribution to their country by taking on the rich EU countries.

he is a an academic economist who has worked in univ of greece,britain,australia and the US

He is a trenchant critic of euro zone policy based on budget rigour and encouraging market friendly economic reform

he is an anti austerity blogger.

He has a taste for colourful shirts,vivid turn of phrase.

He loves riding his Mobike to travelling in chauffer driven limo[are our ministers reading this].

he is author of several books including America,Europe and and the Future of the global economy

Courtesy Mail Today ,july7th 2015

 

[tbs]

Greek foreign minister Yanis Varoufakis has made a huge contribution to their country by taking on the rich EU countries.

he is a an academic economist who has worked in univ of greece,britain,australia and the US

He is a trenchant critic of euro zone policy based on budget rigour and encouraging market friendly economic reform

he is an anti austerity blogger.

He has a taste for colourful shirts,vivid turn of phrase.

He loves riding his Mobike to travelling in chauffer driven limo[are our ministers reading this].

he is author of several books including America,Europe and and the Future of the global economy

Courtesy Mail Today ,july7th 2015

hi

i think...he resigned today.....

 

[krish44]

Yes. TBSji

He resigned to facilitate discussions of greek leaders with europeans for further course of action.

No one likes a confrontationist

 

[vgane]

Greece and the eurozone will make one last, desperate attempt to make progress towards an urgently needed bailout deal on Tuesday.


Leaders, and finance ministers, will both hold crucial meetings in Brussels, after Sunday’s referendum result raised the risks of Grexit to new heights. It’s a final chance for Greece to propose a new reform plan that could start the ball rolling towards a new aid package, but the journey looks perilous.


The leaders of France and Germany are scrambling to reach a consensus tonight in Paris, at a top-level meeting about Greece.


Greece’s prime minister has held telephone calls with the heads of the International Monetary Fund and also the European Central Bank. Alexis Tsipras told Mario Draghi that the capital controls in Greece need to be lifted, but was told by Christine Lagarde that the IMF cannot released more funds now Athens is in arrears.

Source: The Guardian

 

[vgane]