Wednesday , December 13 2017
Home / News / Economy / Tsipras warns Greek exit would trigger EZ collapse, as markets will attack next country

Tsipras warns Greek exit would trigger EZ collapse, as markets will attack next country

Greece leaving the eurozone, dubbed the ‘Grexit’, would be a major blow for the European Union, as it would trigger a domino effect and eat deeply into taxpayers’ pockets, said the Greek Prime Minister Alexis Tsipras

“I think it’s obvious. It would be the beginning of the end of the eurozone. If the European political leadership cannot handle a problem like that of Greece, which accounts for 2 percent of its economy, what would the reaction of the markets be to countries facing much larger problems, such as Spain or Italy which has two trillion of public debt?,” Greek Prime Minister Alexis Tsipras told Corriere Della Sera Tuesday.

A ‘Grexit’ would be disastrous for the eurozone, as it would lay a heavy burden on European taxpayers, Tsipras added. (full interview in English via RT.com)

And he is right. Because it is the markets ‘regulating” the eurozone, not the politicians. Not even Germany.

Check Also

EU Commission proposes creation of European Monetary Fund by 2019

The European Commission unveiled its vision of a rebooted eurozone, including the creation of a …

42 comments

  1. You are just trying to convince yourself that Greece doesn’t need to change, Europe does. Both Europe and Greece needs to change, but Greece should live up to reality.
    Pensions must fall for them to be sustainable.
    My personal idea is for all pensions above 1000 Euros to be cut. 1000 euros a month is enough for people to live on.
    By the way, even if the debt in Greece was zero today, the economy would still fail because of the serious issues the economy has. The only way is to reform, either in the Euro or out of the Euro.

  2. cyril mcdonnell

    ah sure the greeks do not have to worry the russians are standing by this type of statement is not helping matters smacks of a big big hint of desperation!!

  3. keeptalkinggreece

    thanks

  4. Who are we kidding? Can Tsipras even count to 5?

  5. A ridiculous attempt to take the Eurozone hostage and blackmail it.

    Meanwhile the whole world is regarding this government as an immature bunch of radical hooligans – incompetent, double-faced and amateurish.

    What an embarassment and shame for Greece.

  6. I suggest that Europe should deal with reality. Greece is never going to repay this debt, so it has to be addressed in various ways.

    As for reforms– let’s see some intelligent ideas from the Troika. The only intelligent ones so far have come from Varoufakis, and these are rejected. Why? Because they are no austere enough for the Germans — not because they are inadequate as reforms for economic recovery.

    Name one major reform that would assist economic recovery and has been rejected by Greece. You will find none.

  7. keeptalkinggreece

    LOMGOL!!! syriza takes hostage the eurozone!oh oh oh I storngly advice you move to Australia or China or chile

  8. Giaourti Giaourtaki

    Because of planned measures against hooligans Greek football was threatened to get thrown out of UEFA.

  9. Hm.
    What could “ridiculous attempt” mean?

    Wait and see, how the Eurozone is calling the shots now and embarass the Syriza megalomaniacs to death. – Will be an epic tragedy!

    Then we will see, whether rather creditors or debitors will “dance the Sirtaki”, as bigmouth Tsipras announced.

  10. @Xenos Let’s test one structural reform idea that seem to be liked by most everyone (KTG approves as well): Increase in the retirement age.

    Let’s take USA as an example. In this country able-bodied people cannot get any Social Security payments before age of 62. The “normal” retirement age is over 66 years for those retiring now, and is going to 67 for those born in 1960 and later. Retiring earlier than that cuts the monthly pension significantly (for example, retiring at 62 reduces the payments by 30%). Retiring later increases it up to the age of 70 (retiring at 70 increases the payments by 24%). Those who are permanently disabled or poor (criteria apply) are helped from different funds.

    Why not implement something like that in Greece, say, in 3 weeks (as of July 1)? Forget the creditors; such a reform will help the Greek state immediately. Clearly, many Greeks in their fifties and early sixties will be unhappy. However, they will also make meaningful sacrifice and direct contribution to the common good and future of the Greek people. Such policy will also be an important departure from the past when Greek voters were bribed by politicians by borrowing and spending unproductively (hence the current state of affairs).

    Can the Greek government (and most everyone in Greece) agree with such “common sense” policies being introduced now (rather than 3 years from now)?

  11. Giaourti Giaourtaki

    And here the English version of yesterdays Tagesspiegel interview with Varoufakis, 2 following links at the bottom:
    http://www.tagesspiegel.de/weltspiegel/in-english/yanis-varoufakis-interview-we-crossed-a-lot-of-our-red-lines/11890142.html

  12. Plamen, Yes, Greek government and people need “common sense”. I do not understand why what it is normal in USA (retirement at 66-67 years old) is a “sacrifice” in Greece (retirement at 50-52 years old). In addition to this, Greek “reform” plan want to increase the pensions….:)

  13. keeptalkinggreece

    there is a wrong perception concerning the pensions system in Greece. retirement age for full pension is 65 or 67 for self-employed. Early retirement has a penalty – i.e. pension reduction – depending on the years of retiring earlier. What Greek gov’t can to is to stop early retirement after 25 years for the public servants (mothers with minors, armed forces, police etc) but in fact anyone who is public servant – utility companies incl.

  14. Giaourti Giaourtaki

    Any law regarding stuff like this must be approved by the troika-institutions and so they block also measures against corruption:
    http://www.tagesspiegel.de/weltspiegel/in-english/yanis-varoufakis-interview-we-crossed-a-lot-of-our-red-lines/11890142.html
    How can voters be bribed if 35% don’t vote at all?

  15. OK, but in USA you cannot 1 $ from Social Security until 63 years old, but I saw articles (one I posted) with example of people retired at 51 years old in Greece. By the way, the pension in US is in many cases under 30%-40% of your salary (in Greece 80%) – see also comparison Greece with Germany)
    http://www.businessinsider.com/greece-germany-pensions-2010-4

    Wake up guys and stop complaining!

  16. There certainly is a wrong perception generally in Europe concerning the Pension system in Greece. As KTG explained Retirement age for full pension is 65-67, as in other European countries.
    Civil Servants are the people who are inclined to take early retirement and I agree that this should be brought up to the standard 65-67 with no early retirement accepted, except in certain circumstances eg proven illness etc.

  17. dear oh dear oh dear. Do you really think, in your wildest dreams, that you have any fucking idea of what is happening in reality? Let me assure you that you do not.

    Greece is one of the countries that traditionally often had NO RETIREMENT AGE for self-employed people working in agriculture. It was for this reason that the participation rate was not calculated as a ratio of the working age population (16-65)as in the USA and UK but of the population 16+. Some sectors with employees (as in all countries, including and especially the UK and USA) had retirement well before 65 – eg the military. Other sectors allowed early retirement with reduced pensions (as in the UK and USA).

    Now, the Greek retirement age is typically 65. Many carry on working long after that, as they do not have enough insurance credits to get a decent pension.

    So, let me ask you: why are you so deluded that you think you know anything at all? Where did you get the sheer brazenness from, to spout off about how lazy Greeks are, in comparison with other countries? We already know the answer: from the Troika propaganda.

    As a footnote, I will concede that some privileged employees (mainly civil servants) were in the past able to retire earlier with good pensions. That situation was remedied a long time ago, and no reform of any sort is needed.

  18. See my comment below, also addressed to you. And you are wrong: the US military retire very young, well before 62. You don’t know what you are talking about.

  19. Have you had a recent lobotomy?

  20. I strongly recommend North Korea, for fascist types like this.

  21. What you have written is pure garbage. There are issues with the pension systems, but there are in all EU countries for the same reason of demographic shift. That problem is much worsened by destroying the economy through austerity.

  22. Giaourti Giaourtaki

    “Source”: Antihellenistic Über-liar for hire “Bild” from 2010

  23. Yes, Tsipras is partly right (For once).

    It will be a huge blow for the EZ, but that’s just fine.
    However, I believe the EZ will recover much faster then Greece.

    Unfortunately Greece will end up as a humanitarian disaster, but will of course recover in this thing called the future.

  24. keeptalkinggreece

    in Sweden too. probably military retires early everywhere in the world as there cannot be 300K-500K 5-star generals in every country.

  25. keeptalkinggreece

    it’s not the EZ that matters, think of the other countries like Portgual. An Irish told me today they’re thinking Ireland would be the next markets’ victim.

  26. Giaourti Giaourtaki

    That comes from the Rigani of Lidl, pure medicine, some smart folks smoke it like leftover crack

  27. Not sure why you are talking about military/self-employed retirement which is almost similar in all countries.

    Is Businesses Insider an anti-Hellenistic website?
    http://www.businessinsider.com/ I didn’t know this.

    Or everyone in the world is anti-Hellenistic, Nazis, etc. because have the courage to say that the current Greek government has no “common sense”. I saw that even Cyprus do not support Greece….

  28. @KTG You are probably right on your last point.

    A couple of comments:

    – Maybe the disincentive / penalty for early retirement is not strong enough. I have read somewhere that as part of the current negotiations the Greek government proposed to have 5% reduction of retirement benefits for retirement before age of 62. Compare that with the U.S. Social Security program which does not allow any benefits to be paid before age of 62 (with very small exceptions), and 30% reduction of benefits at age of 62 compared to the “normal” retirement at age 67. Keep in mind also that the U.S. Social Security program was last reformed in the 1980s. Due to the retirement of the baby-boom generation, it cannot work in its current form beyond 2033 (will run out of money), and will have to be reformed before that (a combination of increasing further the retirement age, reducing benefits and/or increasing the contributions of the current workers).

    – The fact that so many workers are considered public servants is a symptom of the large role the public sector plays in the Greek economy. I know U.S. is way on the other end of the spectrum in that regard (with healthcare, military contractors, and large portion if not most of college-level education being private). However, I know that even in Europe much of what used to be public sector (e.g., electric utilities) has been privatized. That does absolutely require, of course, strict regulation of the “natural monopolies” (e.g., electric power distribution). Still, it makes it a more difficult for politicians to bribe workers in state-owned enterprises.

    I know SYRIZA is ideologically against privatization, but it will have to be done — honestly and smartly — to make the Greek economy sustainable and break the tradition of clientelism (apart from the crucial benefit of using privatization revenue to pay down the state debt).

  29. There was a report by the previous government half a year ago, which I read about. Can you comment on its accuracy? Here are some quotes:

    Three out of four public sector and Social Security Fund (IKA) pensioners in Greece are opting for early retirement. This situation has caused the country’s pension system to become unsustainable.

    On Wednesday, Greek Labor Minister Yiannis Vroutsis presented data to the parliament, explaining that almost 75% of Greek pensioners are trying to secure their early retirement through legal provisions that allow them to stop working before the age of 61.

    “In the public sector, 7.91% of pensioners retire between the ages of 26 and 50, 23.64% between 51 and 55, and 43.53% between 56 and 61. In IKA, 4.44% of pensioners retire between the ages of 26 and 50, 12.83% retire between 51 and 55, and 58.61% retire between 56 and 61. Meanwhile, in the so-called healthy funds, 91.6% of people retire before the national retirement age limit,” Vroutsis said.

    See more at: http://greece.greekreporter.com/2014/12/04/75-of-greek-pensioners-enjoy-early-retirement/#sthash.hTYkbfvp.dpuf

  30. I am not interested in crappy business journalism. If that’s where you’re getting your information, I suggest you stop until you learn how to do research.

    And I don’t care what politicians say, either: only idiots listen to them.

  31. The reason that people are opting for early retirement (as they can in all countries) is that they don’t want to carry on working in a hostile environment and are also convinced that their future pensions will be low or even zero. They are making the rational choice of quitting work, with a reduced pension, because the situation is so bad.

    That can happen in any country, and happens in Greece because the Troika have fucked the country. It is a very different thing from what what people were claiming here, that the normal retirement age is less than 65. This is the difference between early retirement and normal retirement ages: is this concept beyond all of your wits?

  32. The USA has the worst welfare and pension system in the civilised world. I would believe anything about how bad it is. That does not mean that Greece, whose main social security schemes are directly copied from the German model, should copy the USA.

    If that’s your idea of reform — reducing the state to nothing, reducing workers’ rights, pay and pensions — then it is called neoliberal propaganda. No thanks, it doesn’t work: we already know that.

  33. I don’t know the average retirement age, but in the UK most high ranking military are retired by early 50s. As for the lower ranks, I cannot see what they could do physically after 45 or so, either — in comparison with 18-30 group.

    I believe it is the same for the USA.

  34. If the eurozone collapses, it is certain that the EU collapses (especially with this stupid UK referendum as well). If the EU collapses, there will be economic, legal and political mayhem. We may even start to prepare for the next Great War.

  35. @Xenos, @KTG Earlier I wrote about the U.S. Social Security program. This program is financed by social security tax paid by the vast majority of the employees and contribution of their employers.

    You are absolutely correct regarding the military retirement. US military personnel can retire after 20 years of service with pension equal to 40-50% of their salary, and after 40 years of service with pension equal to their salary. See for example here:

    http://militarypay.defense.gov/retirement/

    Of course, service in the U.S. military often involves going to a real war zone.

  36. All other European countries (including Portugal, Ireland, etc.) solved/solve their problems without “noise”, drama, and begging EU money …It is clear that EU cannot do anything in the current situation. If they accept to delete Greek debt, all other countries will ask for this same favor and EU will be in chaos (“no rules” land). So, logically there are only 2 solutions: 1) Greece follow the reforms to became a real EU country and stay in EU, 2) Grexit

  37. Is the Greek government ready to make this change now?

  38. but it will have to be done

    Why will it have to be done? Why is it deemed impossible to have state-run, state owned services that can function? And why is it that most of those services that are a target for “privatization” are basic, vital services such as sater supply, energy, transport? It seems very clear that the real purpose of privatization is to consolidate the power of those who control finance and has absolutely nothing to do with “better service”. It is a simple fact that privatized dompanies will look at the bottom line of profit above everything else, including social need. And the net result of that is stuff like abolishing “non-profitable” bus routes, extortionate prices for bad water, and of course bypassing of even the most basic health and safety rules in the name of profit…
    What “has to be done” is to recognize that some services are vital, needed and that their main aim is not to make a profit but to provide a service. They will by the nature of things be loss making but still need to be provided. These include basics like school transport to and from remote areas to free medical services for those who can pay the extortionate prices charges in the private sectors. A society must be judged by how it treats its least well off, not by how it manages to make more profit.

  39. keeptalkinggreece

    here is also some 45-50, not sure though. they could be relocated to other state services.

  40. keeptalkinggreece

    1. Greece had also the toughest austerity program. 2.you write it yourself here right now: the issue is political & has nothing to do with economics & money

  41. Of course, service in the U.S. military often involves going to a real war zone.

    and who creates the vast bulk of these real war zones….?