Comments

You have commented 339 times on Rantburg.

Your Name

Your e-mail (optional)

Website (optional)

	My Original Nic Pic-a-Nic Sorry. Comments have been closed on this article.
Foto

Submit your comments on this article

Europe

Specter Rises of Greece Being Kicked Out of Euro

2011-09-09

[An Nahar]

The prospect of throwing Greece out of the Eurozone moved cener-stage Thursday, after the Dutch called for the "ultimate sanction" and Germany warned a second bailout deal may need re-negotiation.

Under a proposed new regime that would place economies in deep trouble under the wardenship of Eurozone partners, Netherlands finance minister Jan Kees de Jager threatened expulsion as an "ultimate sanction".

"If a country doesn't want to fulfill its obligations, well, there's no other option than that it leaves (the Eurozone," de Jager told a presser in The Hague, stressing that this would only be "the last resort".

German finance minister Wolfgang Schaeuble meanwhile also pushed for a tougher approach, telling his parliament he will fight for "the necessary treaty changes so that we can act sooner and more effectively when things go wrong."

And ratcheting up the pressure on Athens, Schaeuble said it was "very premature" to talk about a second bailout package for Greece before it had implemented the reforms required to receive its first full disbursement.

"At the end of the day, it is up to Greece itself to decide whether it is ready to take the necessary measures to reduce its deficit and its too-high debt," added Schaeuble.

The Greek government is currently scrambling to come up with new financial planning to prevent a debt burden of more than 350 billion Euros spinning "out of control," as a national body recently admitted.

On Thursday Greece announced that its economy shrank 7.3 percent in the second quarter on a 12-month comparison, a greater fall than expected.

The Greek government warned the economy could shrink by about 5.0 percent this year instead of the previously estimated 3.5 percent, underlining the problems for the economy.

International auditors from the European Union
...the successor to the Holy Roman Empire, only without the Hapsburgs and the nifty uniforms and the dancing...
and the International Monetary Fund cut short an inspection visit to Athens last week, aimed at establishing if conditions had been met that would allow the release of the next eight-billion-euro tranche of loans under last year's initial bailout.

Posted by:Fred

#7 Pre-Euro the clubmed countries used to run chronic deficits and essentially inflated their debt away through a constantly depreciating currency.

The Euro stopped this.

If Greece gets kicked out they will redenominate their Euro debts in Drachma and go back to a constantly depreciating currency.

The issue is what will this do the banks holding the debt and will it force Spain and Portugal out.

Posted by: phil_b 2011-09-09 19:05

#6 bank of course

Posted by: European Conservative 2011-09-09 18:08

#5 Greece can't be pushed out legally. And it won't be.

If Greece leaves the Euro (which would have to happen by surprise on a weekend), Portugal would collapse immediately, probably also Italy, Spain and ireland because nobody with an IQ above room temperature would keep his money in a bvanl of said countries.

Thgat's why Greece will be kept in and "saved" until kingdom comes or Germany leaves.

Posted by: European Conservative 2011-09-09 18:07

#4 The irony is that if it were pushed out, the biggest beneficiary would be Greece.

Imagine if Queen Elizabeth finally had enough of Prince Charles antics, stripped him of his title, and kicked him out on the street and told him to fend for himself. In say, Japan. Assuming the Japanese were repulsed by him.

He would have a rotten month, but then he would learn to dress himself, prepare his own meals, maybe make some scratch giving English lessons. After a year or two he would make some friends, and for the first time in his miserable life learn what it means to be a free man. Or he would steal a knife and cut his own throat.

Since Greece doesn't really have a knife option, unless they put some Pol Pot in charge, they would have no choice but to get their sierra together.

In brief, this begins with the axiom: "Those who work not shall not eat". The Drachma would be worthless until it had a reason to be worth something, so those who had a lot of Euros would still get by.

A lot of people would work solely for room and board. But in the short term, that is enough.

Recovery would not be based on other countries, but it would be faster the more isolated Greece was from them. Getting aid would be like giving a recovering junkie more smack.

Posted by: Anonymoose 2011-09-09 11:02

#3 "At the end of the day, it is up to Greece itself to decide whether it is ready to take the necessary measures to reduce its deficit and its too-high debt," added Schaeuble.

That tells me the Germans will keep them in. Because at the end of the day, it is up to Germany itself to decide whether it is ready to cut off the bailouts. Because, as the US is proving, a debtor will borrow as long as a creditor will lend in the hope they'll write it off.

Posted by: Nimble Spemble 2011-09-09 07:21

#2 So is it better or worse for the rest of us if the Euros push the Greeks out of the EU?

And just to be polite, would it be harder or easier that way on the individual Greek working man?

Please keep it simple, for us engineers!

Posted by: Bobby 2011-09-09 07:15

#1 On Thursday Greece announced that its economy shrank 7.3 percent in the second quarter on a 12-month comparison, a greater fall than expected.

Man, that 'unexpectedly' thing sure gets around.

Mike

Posted by: Mike Kozlowski 2011-09-09 05:51

00:00