Originally Posted by goboatingnow
I don't believe Greece
will default or leave the Eurozone. If it did the resulting fallout would take out the Eurozone and Germany
with it, not to mention the US ad well. There's a reason the US Treasury Secretary was here yesterday.
Beleive me if this doomsday comes to pass the last thing on your mind will be buying
and selling boats , more likely whether you should be armed doing the shopping
"default", not as bad as it sounds (everyone gets there moneyback - just a question of when
), but not painless either (plenty of knock on effects, lots of vested interests will hurt ($$$ wise), might even lose a bank or 2 (but that probably a good thing)..... but nothing that will break the Euro / EU.............Greece will still need EU cash flow funding
for the next 5 years whilst they fix their economy, but that has an end date and
is quantifiable! (and is the tool to make sure the Greeks actually do what they promised - and sign up to some form of Eurozone wide financial standards and
monitoring......and everyone (Greeks & Market) are made clear that if Greece does not play ball (and carries on spending money
regardless) then they do
get cut off financially from the EU (apart from humanitarian Aid), that the Greek Debts have SFA to do with the EU - and Greece can go proper broke (IMF) and it can do that in whatever currency it wants to.
There will be a lot of whinging and whining from "the market", but they have a very short attention span
and if a few more banks go broke, then f#ck 'em - Liquidation instead of bail out.
Greece will never
leave the Euro (just in case the EU money gets switched off). IMO more likely that the northern European countries will leave the Euro............As the Dutch Finance Minister said to the US Treasury Secretary "if you think you can solve a debt crisis by borrowing even more - then you are a complete f#cking idiot"
And the Greek "rescue" Model is something that can be rolled out accross the Eurozone, markets like certainty.
In any event the Eurozone has not yet pressed the QE (Printing press) button, unlike the US and UK. A few Trillion of free Euros would solve a few problems
.....but IMO simply not neccessary.
Going forward the EU does need to look at the rules and regulations
under which the bank / financial institutions operate (I would favour a 5 year 10% "bail out tax"
Finally, one BIG difference between the US and the European:-
a) the last time the US economy ran out of money / collapsed they got The Depression.
b) but the Europeans also got Hitler. and half of them then got Stalin and his successors for 40 odd years. and even on the "free" side, Portugal
and Greece got murderous Fascist Dictatorships (supported of course by the usual peace loving democratic suspects
The Europeans (especially Germany
) are very
well aware of how things could go (Europeans are brilliant at killing people
- especially each other
.....cable TV and microwave ovens don't change that fundamental, they just mean we don't)..........The EU / Eurozone can never move quickly (indeed, that is part of it's success) - but will get there in the end, and in 5 years time will be all the stronger for it (certainly the rules & regs will be! - the Germans will make damned sure