Greece Set To Default On €1.5bn Repayment

[Nahraf]

I think its a new loophole that will be exploited by the Indians who want to migrate to Europe.

Come on!! Give some credit to Indians. They are not so foolish to end up in a bankrupt state

India is doing well economically compared to other countries in the region but in 1.4 billion people there are thousands who would like to migrate to Europe or North America.There are always people from other countries who wants to settle in European Union. Many in Pakistan, India, Iran and Middle East that pay thousands of dollars to smugglers to transport them to Europe.

 

[Indian Patriot]

India is doing well economically compared to other countries in the region but in 1.4 billion people there are thousands who would like to migrate to Europe or North America.There are always people from other countries who wants to settle in European Union. Many in Pakistan, India, Iran and Middle East that pay thousands of dollars to smugglers to transport them to Europe.

Read my post carefully. That is exactly what I said. What you did not understand is that I said Indians would prefer countries like US, Canada, Australia over a bankrupt state like Greece.

 

[xenon54 out]

@As is - where is how likely is a Grexit?

 

[As is - where is]

@As is - where is how likely is a Grexit?

In the case of a YES vote it's probably around 20%. In the case of a NO vote it's more than 85%.

Tsipras said yesterday that if Greeks decide to accept the bailout terms, he will resign. Then we will most likely have a Unity Government of centrist parties either from within the current parliament or through elections.
Greece will then negotiate a deal with the country's creditors. The terms of such a deal will necessarily be much worse than the proposal currently on the table, given that the Greek economy and tourism revenues will be down significantly by then due to the capital controls, the political uncertainty and the bankruptcy of the country.

If the Greeks decide to reject the bailout terms, we will probably head towards a Grexit. The government won't have enough funds to pay the pensioners and the civil servants and as thus it'll have to give them IOUs or some form of parallel currency. This won't last for long since the government will continue to only accept taxes in euros and as thus a currency that is not even accepted by the government that issues it will soon be worthless. Greece will default on its debt to the IMF, will exit the bailout program, will vote NO in the referendum and will default on its debt to the ECB. That means that the ECB won't accept Greek bonds held by Greek banks as collateral (or at the very least it will raise the haircuts with which it currently accepts such collateral). Very soon this will lead the ECB to the decision that the Greek banks are insolvent and as such it will shut down emergency liquidity assistance (ELA) to them. The banks will face bankruptcy and Greece will have to recapitalize or resolve them. Since it doesn't have the funds to do any of these, it will have to issue its own currency. At that point it will have de facto exited the Eurozone.

The effects that a Grexit will have on Greece are beyond those of any austerity package could ever have. This new currency will face huge devaluation. There will be double-digit inflation and capital controls will have to stay in Greek banks for many years to come. Due to the devaluation imports will come to a halt. Greece imports pretty much everything. As such there will be huge shortages and the only way to avoid a humanitarian disaster will be to introduce rationing for everything, from fuel to food and medicine. The economy as a whole will come to a halt and there will be a huge drop in GDP. It will take multiple decades for the country to recover to its pre-crisis status.

 

[ACE OF THE AIR]

In the case of a YES vote it's probably around 20%. In the case of a NO vote it's more than 85%.

Tsipras said yesterday that if Greeks decide to accept the bailout terms, he will resign. Then we will most likely have a Unity Government of centrist parties either from within the current parliament or through elections.
Greece will then negotiate a deal with the country's creditors. The terms of such a deal will necessarily be much worse than the proposal currently on the table, given that the Greek economy and tourism revenues will be down significantly by then due to the capital controls, the political uncertainty and the bankruptcy of the country.

If the Greeks decide to reject the bailout terms, we will probably head towards a Grexit. The government won't have enough funds to pay the pensioners and the civil servants and as thus it'll have to give them IOUs or some form of parallel currency. This won't last for long since the government will continue to only accept taxes in euros and as thus a currency that is not even accepted by the government that issues it will soon be worthless. Greece will default on its debt to the IMF, will exit the bailout program, will vote NO in the referendum and will default on its debt to the ECB. That means that the ECB won't accept Greek bonds held by Greek banks as collateral (or at the very least it will raise the haircuts with which it currently accepts such collateral). Very soon this will lead the ECB to the decision that the Greek banks are insolvent and as such it will shut down emergency liquidity assistance (ELA) to them. The banks will face bankruptcy and Greece will have to recapitalize or resolve them. Since it doesn't have the funds to do any of these, it will have to issue its own currency. At that point it will have de facto exited the Eurozone.

The effects that a Grexit will have on Greece are beyond those of any austerity package could ever have. This new currency will face huge devaluation. There will be double-digit inflation and capital controls will have to stay in Greek banks for many years to come. Due to the devaluation imports will come to a halt. Greece imports pretty much everything. As such there will be huge shortages and the only way to avoid a humanitarian disaster will be to introduce rationing for everything, from fuel to food and medicine. The economy as a whole will come to a halt and there will be a huge drop in GDP. It will take multiple decades for the country to recover to its pre-crisis status.

What is the Budget like For 2015-2016? That is going to give an idea what is going to happen... Will the Unity Government able to sustain or they would require to amend the budget my introducing mini budgets...

It is clear that the banks are not giving out too much funds... There is also no defence cuts because NATO and Russia have their horns locked...So one can not foresee if the Government is willing to sell some other assets so that it can repay some of the loans or even change the existing labor laws that are also causing less foreign investments...

There was hope once Greece bid for Olympics and invested much more than what they could afford...Now that has caused them to default as the number of tourist did not continue to come after the games ended.

 

[ArsalanKhan21]

In the case of a YES vote it's probably around 20%. In the case of a NO vote it's more than 85%

It is better to cut some expenses including defense budget and stay in Euro. The Grexit will cause more miseries for Greeks. The Drachma will eventually boost exports and tourism giving Greece a lifeline.

 

[Echo_419]

good news. give the middle finger to the ECB,IMF, Zionists bankers.

default and get a$20 billion loan from China and Russia

start fresh. debt is shackles.

Exactly let them leave eurozone they are a insult to every hardworker on this whole planet

 

[ACE OF THE AIR]

It is better to cut some expenses including defense budget and stay in Euro. The Grexit will cause more miseries for Greeks. The Drachma will eventually boost exports and tourism giving Greece a lifeline.

Not really...
They can not cut Defence Budget because of NATO requirement.
There can be out of the Single Currency (Euro) but they can still use all the other privileges by signing agreement with the EU on Freedom of Goods and persons...Single Visa .... etc.

 

[As is - where is]

What is the Budget like For 2015-2016? That is going to give an idea what is going to happen... Will the Unity Government able to sustain or they would require to amend the budget my introducing mini budgets...

Well the fiscal target for 2015 is set at 1% of GDP for the primary surplus. With our current budget we'll probably have a primary deficit. For 2016 the target is 2%. It's certain that there must be some serious change of course from this year's budget. It's certain that fiscal measures will have to be taken for both years.

It is clear that the banks are not giving out too much funds... There is also no defence cuts because NATO and Russia have their horns locked...So one can not foresee if the Government is willing to sell some other assets so that it can repay some of the loans or even change the existing labor laws that are also causing less foreign investments...

Labor laws have changed to a degree in the past few years but more change is needed. And privatizations must go forward at a much faster pace. Defence cuts between 200 and 400 million euros have being proposed by SYRIZA and the institutiosn respectively but there are literally so many other ways to make savings that military cuts should really be the last option.

There was hope once Greece bid for Olympics and invested much more than what they could afford...Now that has caused them to default as the number of tourist did not continue to come after the games ended.

Well the Olympics are often cited as one of the causes of the crisis due to the billions that were spent there (about 10 billion euros) but compared to the Greek debt of 320+ billion euros as well as the huge amount of money that has being spent on wages of unproductive public employees and huge pensions the past 35 years it's really not that important.

The reason military cuts are not very likely to go down any further is because of the instability in the wider region (ISIS, political instability in FYROM and Turkey, disputes with Albania and Turkey etc) as well as the fact that there have alread been huge cuts in the budget of the armed forces (it's down by 58% from the start of the crisis).

 

[xenon54 out]

In the case of a YES vote it's probably around 20%. In the case of a NO vote it's more than 85%.

Tsipras said yesterday that if Greeks decide to accept the bailout terms, he will resign. Then we will most likely have a Unity Government of centrist parties either from within the current parliament or through elections.
Greece will then negotiate a deal with the country's creditors. The terms of such a deal will necessarily be much worse than the proposal currently on the table, given that the Greek economy and tourism revenues will be down significantly by then due to the capital controls, the political uncertainty and the bankruptcy of the country.

If the Greeks decide to reject the bailout terms, we will probably head towards a Grexit. The government won't have enough funds to pay the pensioners and the civil servants and as thus it'll have to give them IOUs or some form of parallel currency. This won't last for long since the government will continue to only accept taxes in euros and as thus a currency that is not even accepted by the government that issues it will soon be worthless. Greece will default on its debt to the IMF, will exit the bailout program, will vote NO in the referendum and will default on its debt to the ECB. That means that the ECB won't accept Greek bonds held by Greek banks as collateral (or at the very least it will raise the haircuts with which it currently accepts such collateral). Very soon this will lead the ECB to the decision that the Greek banks are insolvent and as such it will shut down emergency liquidity assistance (ELA) to them. The banks will face bankruptcy and Greece will have to recapitalize or resolve them. Since it doesn't have the funds to do any of these, it will have to issue its own currency. At that point it will have de facto exited the Eurozone.

The effects that a Grexit will have on Greece are beyond those of any austerity package could ever have. This new currency will face huge devaluation. There will be double-digit inflation and capital controls will have to stay in Greek banks for many years to come. Due to the devaluation imports will come to a halt. Greece imports pretty much everything. As such there will be huge shortages and the only way to avoid a humanitarian disaster will be to introduce rationing for everything, from fuel to food and medicine. The economy as a whole will come to a halt and there will be a huge drop in GDP. It will take multiple decades for the country to recover to its pre-crisis status.

So in short, Grexit is a no-go.

Another question, do you look optimistic into the future?

 

[ACE OF THE AIR]

Well the fiscal target for 2015 is set at 1% of GDP for the primary surplus. With our current budget we'll probably have a primary deficit. For 2016 the target is 2%. It's certain that there must be some serious change of course from this year's budget. It's certain that fiscal measures will have to be taken for both years.

It is highly unlikely Greece will be able to achieve this... There are some possibilities though but that would require selling many things to China and Russia...

Britain and Germany are not going to invest in these things. The Airline which was the main earner has been lost and those who are currently the owners are still unable to make it as profitable as it could have been if it was not broken down and re-branded.

Labor laws have changed to a degree in the past few years but more change is needed. And privatizations must go forward at a much faster pace. Defence cuts between 200 and 400 million euros have being proposed by SYRIZA and the institutiosn respectively but there are literally so many other ways to make savings that military cuts should really be the last option.

Privatization of Shipping industry could be one of the things in the mind of the Government but unfortunately this is not going to achieve the required amount that is expected. There is a silver lining though in case Greece leaves EU then it can allow cheap goods to be dumped by China which could tend to revive the economy.

Well the Olympics are often cited as one of the causes of the crisis due to the billions that were spent there (about 10 billion euros) but compared to the Greek debt of 320+ billion euros as well as the huge amount of money that has being spent on wages of unproductive public employees and huge pensions the past 35 years it's really not that important.

The reason military cuts are not very likely to go down any further is because of the instability in the wider region (ISIS, political instability in FYROM and Turkey, disputes with Albania and Turkey etc) as well as the fact that there have alread been huge cuts in the budget of the armed forces (it's down by 58% from the start of the crisis).

320+ Billion Euro debt is a lot. How did the Government not realize earlier.

Olympics though did not take enough loan but they failed to address the issue of older loans. There was a lot of publicity that if these games are hosted in Athens Greece would earn a lot for which they dug up the entire city. Though the work that was done in regards to the infrastructure was much needed however the construction of new Airport was not required. The old Airport could have been upgraded in far less recovering the cost earlier.

Military cuts are a necessity... Greece can do a contract with the EU to provide Military in case there is an attack. So can NATO. Though limited numbers of Military (mostly special services) can be enough for defence purpose, something like Luxembourg. Selling of some of your military equipment could generate enough case to maintain the remainder. The Navel Submarines sales to other countries could also give future resources to induct newer systems.

 

[As is - where is]

So in short, Grexit is a no-go.

Another question, do you look optimistic into the future?

Well I do think that the YES camp will win and that we'll reach a deal. It'll be painful and will require major sacrifice but when has progress not demanded sacrifices?

It is highly unlikely Greece will be able to achieve this... There are some possibilities though but that would require selling many things to China and Russia...

Britain and Germany are not going to invest in these things. The Airline which was the main earner has been lost and those who are currently the owners are still unable to make it as profitable as it could have been if it was not broken down and re-branded.

I'm hopeful that we will. We must approve and move forward an ambitious program privatization. We must gather 1.5 billion euros in 2015, 3.5 billion euros in 2016 and 1 billion euros in 2017 just from privatizations.

Our last governments created a special fund called TAIPED which is given various state-owned buildings and organizations and is obligated to sell them. Now TAIPED must sell whatever has being given to it. We need to sell 14 regional airports, we need to sell the former Ellinikon International Airport, the Athens International Airport, state-owned stocks in the Hellenic Telecommunications Organization (OTE), the ports of Piraeus' and Thessaloniki's as well as the Hellenic Railways Organization (OSE) and the Independent Power Transmission Operator (ADMIE).

Olympic Airlines was not a viable company. It had a debt of two billion euros that could've never been paid back. There was no other option but to privatize it. It now acts as a subsidiary of Aegean Airlines which is the largest Greek airline and a very profitable airline. Aegean Airlines along with its subsidiary had more than 10 million passengers last year.

320+ Billion Euro debt is a lot. How did the Government not realize earlier.

Olympics though did not take enough loan but they failed to address the issue of older loans. There was a lot of publicity that if these games are hosted in Athens Greece would earn a lot for which they dug up the entire city. Though the work that was done in regards to the infrastructure was much needed however the construction of new Airport was not required. The old Airport could have been upgraded in far less recovering the cost earlier.

Military cuts are a necessity... Greece can do a contract with the EU to provide Military in case there is an attack. So can NATO. Though limited numbers of Military (mostly special services) can be enough for defence purpose, something like Luxembourg. Selling of some of your military equipment could generate enough case to maintain the remainder. The Navel Submarines sales to other countries could also give future resources to induct newer systems.

There was waste in the Olympics. The main waste is that many buildings that were built in that period are not being used today and are simply kept by the government for no reason.

The EU is not a military union. NATO wouldn't agree to that either, on the contrary it's pushing its member-states to increase military spending to 2% of GDP. Having excluded both of these options, simply having a few thousand soldiers would not be nearly enough for defending a country with the size, the population and the security risks that Greece faces.

 

[ACE OF THE AIR]

Well I do think that the YES camp will win and that we'll reach a deal. It'll be painful and will require major sacrifice but when has progress not demanded sacrifices?




I'm hopeful that we will. We must approve and move forward an ambitious program privatization. We must gather 1.5 billion euros in 2015, 3.5 billion euros in 2016 and 1 billion euros in 2017 just from privatizations.

Our last governments created a special fund called TAIPED which is given various state-owned buildings and organizations and is obligated to sell them. Now TAIPED must sell whatever has being given to it. We need to sell 14 regional airports, we need to sell the former Ellinikon International Airport, the Athens International Airport, state-owned stocks in the Hellenic Telecommunications Organization (OTE), the ports of Piraeus' and Thessaloniki's as well as the Hellenic Railways Organization (OSE) and the Independent Power Transmission Operator (ADMIE).

Olympic Airlines was not a viable company. It had a debt of two billion euros that could've never been paid back. There was no other option but to privatize it. It now acts as a subsidiary of Aegean Airlines which is the largest Greek airline and a very profitable airline. Aegean Airlines along with its subsidiary had more than 10 million passengers last year.




There was waste in the Olympics. The main waste is that many buildings that were built in that period are not being used today and are simply kept by the government for no reason.

The EU is not a military union. NATO wouldn't agree to that either, on the contrary it's pushing its member-states to increase military spending to 2% of GDP. Having excluded both of these options, simply having a few thousand soldiers would not be nearly enough for defending a country with the size, the population and the security risks that Greece faces.

Time has passed for the payments... So far it is in a Default State...
CNN & BBC reporting that the letters sent by the Greek PM have been received and discussed on telephone but they have not found any creditable answers to what Greece would be doing hence No more time is going to be given.

1.7 Bill USD default IMF payments. As far as what you have said the total amount that would be available would be not more than USD $6-10 Billion. This is not enough... What is going to happen is now on the people of Greece to decide.

We can only hope for the best & pray for some thing positive to arise...

 

[As is - where is]

Greece asked for an extension of the current bailout program but all its requests were turned down. Then it asked for a new program but that request got turned down as well. We didn't have the money to pay the IMF and as thus we didn't pay it. In the short-term that means that the IMF can't lend us anymore money. In the long-term (after two years pass) we could even be kicked out from the IMF.

I know that 6 billion euros are not enough for the next 2.5 years but that's just from privatizations. We can easily raise 1.3 billion euros every year from simplifying the VAT and abolishing VAT exemptions. By integrating all supplementary pension funds in the Unified Supplementary Insurance Fund (ETEA) and by stopping the funding of ETEA by state funds we could save another 0.5 billion euros yearly.

There's a billion things we can do. I'd choose austerity over drachma any day of the week.

 

[ACE OF THE AIR]

The worst thing is Direct foreign investments would not be available...