At o1:00 a.m Greece default to its debts to the International Monetary Fund.
According to the procedure, the IMF called Bank of Greece at o01:01 am to ask whether there was some mistake that the €1.6billion was not at the Fund’s account.
BoG answered: “it is not a mistake!”
Some said, the BoG told the IMF “yes, money is in the bank. banks are closed. bye!”
Earlier rumors claimed that Greece was to give Christine Lagarde a debit card. According to calculations the IMF would need 73,000 years to withdraw its money on a daily 60-euro modus due to capital controls.
Congrats, only 1 month left to go and then Greece will be ONE YEAR without ‘outsiders’ money!
With stopping to pay loans and with yet circulating 45-50 billion rescued from banks it’s a bit easier, in case of emergency print Euros and show the 1st world that a new world order will be anti-imperialist, cheap oil one can get from Iran or Kurdistan and Kurdistan needs tanks.
Referendum and neighbourhood assemblies are born from the same but now the lying enemy will attack more fiercely on tourism to scare friends away!
Incorrect. A default to the ECB on July the 20th is the real deadline. Although I expect the Greek government is readying to introduce parallel currency at first, and start preparations for the whole new currency instead of unworkable euro.
Greek banking sector is deeply insolvent, and thus it needs to be recapitalised. There are two options: either the eurozone open their wallets and will pour the euros in, or – more likely – the banks get nationalised and get recapialised with the new Greek currency.
I congratulate Greek government in advance of being steady. This is a bold, but necessary, step towards a better tomorrow. I’ve seen this same thing happening in my country of birth: Finland was the first one to cut the shackles of euro’s father: the ECU back in September 1992.
good point
You can print money, but you cannot print new capital.
I am honestly concerned how medical supplies, fuel, food and machinery can be secured for a new economical start under a new currency.
I have not seen any plans about that yet.
@Henri I agree quitting the euro is a much more intellectually consistent position for the Greek government than promising the end of austerity and staying within the euro. However, it is not clear reverting to the drachma (or whatever the new currency is called) will help Greece get out of the standard of living slump in the medium or even the long term.
There seems to be an agreement that in the short term there will be a lot of pain for Greeks if the government switches to the new currency (much more than if they stay in the euro zone). For example, if the pensioners start getting paid in drachma, which will devalue precipitously after its introduction, their standard of living will adjust down accordingly given that Greece has a large volume of imports (anything from medicines to food).
Then there is the medium-term. A good reference is Argentina. After life got worse for a couple of years, Argentina’s economy started moving up thanks to the lower costs (e.g., salaries of the workers). However, Argentina, however, was helped by increase in global commodity prices in that time frame. Greece might not have a similar benefit. The industries Greece is strong in (tourism and shipping) are unlikely to bring much more revenue because of global economy cycles. So Greek competitiveness might be helped by cheaper labor costs, but the Greek people will not get the benefit of higher prices. Moreover, Greece might loose some market share in tourism because of the disruptions caused by the economic crisis (some tourists will decide to go elsewhere if they get scared that they will not be able to withdraw cash from the ATM machines or they will not be able to get adequate imported food and drink choices at their hotel).
In the long term, switching to the drachma will allow the Greek economy to become more competitive and stabilize faster. However, it might stabilize at a lower level of the Greek economy size (and Greek standard of living) than if Greece stays in the euro zone.
News services are reporting that the Greek government is backing down and ready to accept the last offer from the creditors (including EKAS phase out) with _some modifications_. Let’s wait and see what those modifications are and whether the creditors accept them.
Yes, I agree with the short-term and long-term consequences. That is why no politician would dare to exit the fixed-exchange regime (such as euro without fiscal union) because the short-term drawbacks are imminent and thus prevents getting re-elected. And more: the political opponent will have the free fruit of long-term benefit.
But do we think mr. Varoufakis is expecting a top EU official position or even get re-elected, or even looking for elections at all?
It is true also that new currency would devalue, but this is the only “fair” cure, because it concerns everyone more evenly. Other devaluation possibility is to slash and cut wages. And if labour markets are not flexible (they usually are not) it will lead into lay-offs because of uncompetitive companies. Someone will keep the job and there is no loss of living standards, while someone who gets sacked can lead into a catastrophe. Therefore, internal devaluation is much worse option compared to external (currency) devaluation. Inernal devaluation is slower, less effective, more unfair. It will also diminish tax revenues and government’s ability to serve the debt.
Exit from Grexit, with no money system no debts are leftöver, also it makes no sense at all being totally broke and then to continue to the unjust by nature money system; freedom works only without.
Although a Grexit might be better for Greece, I don’t see this properly executed.
The current Government is good in taking no-action, stalling, delaying, but I haven’t seen any decisive actions.
Greece can print a trillion Euros and more, it’s may be “illegal” but who cares, very fast the number of countries with Euro will be 25 or even more: United States Of Balkans gonna dance
“Greece can print a trillion Euros and more”
It’s called counterfeiting… Do you really think Greece as a country can go into that business?
Who is calling Greeks “Mafia”, “cheaters” and “gamblers” all the time? You’d just get what you want, punk!
Just wondering that none of this smear-spinners never had the brilliant idea that all elections are fraud as corruption is everywhere.
Love the jokes! 🙂
A healthy sense of humor is the only way to keep a level of sanity in troubling times. Wishing all Greeks more smiles.. despite the sad course of events around Greece.