Let the games begin

[Suff]

Syriza is in the lead and looking like taking 150 seats in the Greek parliament which is 50%. If they take 150 seats, then they only need one seat for a majority so they could coalition with the party most closely aligned to their goals....

I was reading about the election exit polls (when it asks for a subscription just say no and it will continue), when I came across something which no English speaking media outlet covered on the day of the ECB QE announcement. I'm sure the press in Greece ran it in full and I'm sure that it is what is driving the votes for Syriza today.

That statement was this:

During last Thursday's press conference, Mario Draghi said: "There are obviously some conditions before we can buy Greek bonds."

Greek bonds will be excluded from the new program until at least July, Draghi explained, because the bank already owns so much Greek debt that it exceeds ownership limits. Draghi implied however that once Greece pays back the bonds due in July, the country's debt will become eligible for the program.

I'm sure that the anti austerity press in Greece tore this one apart. Basically what Draghi said was. "We're putting in place a scheme to kickstart the economies of the Eurozone. You won't be allowed to participate until you have repaid the existing loans by July and then you will only be allowed to refresh your existing loans with this scheme. Greece will get no benefit from the "Euro economic assistance" being put in place by the ECB".

I'm sure this convinced a lot of Greeks who think that the Euro is a good thing, that they are being hung out to dry and that there are things worse in life than exiting back to the Drachma. Also it was interesting to see that in this article, now that it is clear everyone will be dealing with a Syriza government, that options are being discussed.

It's as though there was a vow of Omerta in the press and that they were all going to make out Tsipras as a liar. Now they have to make a deal, Tsipras is being proved right. There are options which the lenders refused to countenance until their hand was completely forced. So who is lying to whom exactly????

As WM often says, almost every developed economy is in hoc to more than 50% of it's GDP, many for more than that and quite a few for almost 100% or more.

The Euro had already started to climb again after the QE announcement on Thursday, as investors ignored the statements that this was a move to permanently lower the value of the Euro until the economy and inflation recovered. Protecting their wealth despite the statement of the ECB that they can't and it won't let them.

There is only really one way out of this mess. Massive growth on a world wide scale. But there are only a few options for that and mainly one really. The 3rd world. But they can't afford it. The only way we'll get them to bail us out is to lend them the money in the first place. Well it's either that or a global war and nobody really wants that do they? Although some might think an Islamic war against the rest of the world might do......

I'm going to go away and watch as this unfolds. All I can say is it's going to be another pay cut month.....

[Suff]

Just checking. Thursday extended my monthly loss to £550 on my average monthly pay. Today extended it to £600. By Tuesday I confidently expect that to be somewhere around £800 - £1000. At which point I'm going to consider taking a job paid in £ at a lower rate than I would normally.....

It's like 2008 in reverse. At least I was getting paid in euro then. Supposedly all this was to be over with the Euro. I've suffered £ to DM losses, and also to Dutch Guilders, Belgian Franks and the Swiss Frank. Now I'm going to do it in Euro's. The 90's all over again...

[Suff]

Syriza have extended their gain from 36.8 to 39.5 with 75% counted. Going to be close.

[pederito1]

A fairly predictable result I think and to quote Dryden "Tomorrow do thy worst for I have lived today". So it is back to the Drachma and possible bankruptcy,
afraid though it will give a boost to our loony left.

[Suff]

Their choice of coalition partner is very telling. They have chosen a partner with enough votes to overcome all resistance who will not stop at any measure up to and including leaving the EU. This tells me more about their strategy than anything else.

They are not going to back down to EU threats.

Interesting times ahead.

[Workingman]

I see round one of the horse trading has been completed and Greece has a coalition government of the right and left.

Round two will be interesting. Syriza's leader, Alexis Tsipras, promised to write off half of Greece's €240bn debt, but also said he was ready to negotiate a viable solution. He also wants the country to stay in the Eurozone. The two seem incompatible given what is coming out from the Eurozone's finance ministers. I suppose that one sort of "solution" would be for Greece to 'park' half the debt for an indefinite period and to renegotiate terms for the remaining half. As things stand Greece has no chance of ever clearing its debts.

I know that I am probably in a minority with regards to the EU, but the Eurozone is another matter. I like the idea of the Euro as a currency usable in many countries, but I could never get my head round how it could work under the present rules. Trying to shoehorn many differently performing economies with their individual fiscal policies into one 'converged' unit is like trying to make apples, oranges and bananas all taste the same. For me the Euro will only work if there are unified income and business tax systems across the board, and a proper ECB. I do not see that happening any time soon.

[Suff]

I note the pundits are coming out of the woodwork and telling everyone who might be able to hear that parking half of Greek debt for 50 years might cost less than letting Greece exit. I think the biggest fear is that if Greece does exit and then it's economy is revitalised and people start to prosper, then other countries may decide it would benefit them to do the same.

Spain has an election this year. The Euroland will want to keep the lid on things at least until that election is over. However they are being inordinately dense if they think that Italy will keep the same government if the politicians sniff a chance to break the Austerity circle and free the country from the grip of Brussels. The coalition would fall in a month.

Like you WM I think that the idea of the EU is a very, very good one. What I don't think is a good idea is the UK in it. We are different, we have led the world in so many things, for so long, that we can only loose, time and time again. That and the fact that the smallest country in the EU has more power than the UK unless the UK wields its Veto or the fact that the UK is and always has been a net contributor to the EU slush fund. So, no, I don't believe the UK belongs in a political union with the rest of the EU.

As for the Euro? It was born of the minds of politicians and implemented in a political way. What else could we expect but a complete and utter mess held together with lies and chewing gum???

The entire bailout and austerity story has been a masterclass in political intervention, EU propaganda and fear to the population followed by massive crushing threats and heavy action once the election was won. But had the EU, ECB and IMF taken a step back and thought about it, they might have realised that it's a one shot deal. Fear of that type only works once. Now there are 60% of young Greeks who already know that what they feared has already come, they voted for it. They know that they will not work again in their lifetimes. They see the grass on this side of the fence getting shorter and browner as every month goes by. So what if that nice lush green field over there has a minefield and a desert in-between. Surely hope is better than despair?

They have used fear and the people know a bigger fear. Generations of the same. Now they begin to know hope. Something the EU can't allow. It is going to be in interesting journey, one I'd rather weather working in the UK....

[KateLMead]

From your posts Suff, you are better off out,!

[Suff]

Whilst I have some sympathy with this point of view, the author does not take into account true Euro area debt and the impact it may have on the whole situation.

Whilst Greece, Portugal and Ireland,are a drop in the ocean, Spain and Italy are not. They represent, between them, more debt than Germany's GDP. A default on this magnitude would rock even the US economy which may be bigger than the Eurozone economy but is not bigger than the EU economy.

He does make some salient points though and also one which I have on the other thread. Germany, who have had a particularly easy ride, since WWII, in terms of debt and costs, are being overly harsh on those who have paid their own way since being devastated by WWII.

Apparently you can't just change your government and drop your debts. What people like to forget is that the Nazi's were a government as well as a regime. OK the people didn't have much say, but then the people only had two chances to have a say during the decade of Greek borrowing and that particular point was never an issue in those elections.

There has been a lot said over the years about "third ways" to avoid Anglo Saxon economies. We'll they'd better start working hard on third, fourth and fifth ways. Or, as the saying goes, A Trillion here, a Trillion there and pretty soon we're talking "Real Money".....