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Thread: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

  1. #21
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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by MildSteel View Post
    I hear what you are saying, but it appears to me that EU membership is doing Greece more harm than good. It's hard for me to understand how staying in the EU benefits Greece at this point. I'm open to hearing the case.
    Greece entered into to the Eu under false pretenses and continued to misrepresent their Financial position until 2008.

    They also violated the Maastricht treatys limits on deficit spending, a Treaty the signed.

    They were corrupt and as they grew their public sector and marginalized their private sector they borrrowed to make up for their budget shortfalls disdistributing worthless bonds throughout European banks.

    The Russians ( or anyone else ) would be fools to loan that Government a dime, especially now.

    The one Nation ( Germany ) that tried to help them was accused of 70 year old war crimes by the new Greek PM.

    Because they concentrated on growing their Public Sector at the expense of their private sector for so long they have a long hard road ahead of them and its 100 percent their fault.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by donsutherland1 View Post
    A number of reasons:

    1. Greece's access to major export markets (Italy and Germany are its 2nd and 3rd biggest export markets): https://www.cia.gov/library/publicat...s/2050.html#gr
    2. Its banks have access to the ECB and that access has averted destructive runs on the Greek financial system despite Greece's prolonged debt-driven economic contraction
    3. Were Greece to exit the EU, it would have no access to international financial markets. Given its large trade deficit and inability to meet debt obligations without assistance, Greece would wind up in a much more severe economic crisis than is the case today.
    1. I don't think a Greek exit from the EU would lock it out of markets in Italy. Germany, perhaps, but again not likely.
    2. & 3. If Greece were to obtain financial backing from Russia such that it did not default on its debt, I don't think that bank runs would be likely and they would continue to have access to financial markets.

    That said, if they had actually done this back in 2008, they would be over the worst of it and would be on the road to recovery now, even without funding from Russia.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by Fenton View Post
    Greece entered into to the Eu under false pretenses and continued to misrepresent their Financial position until 2008.

    They also violated the Maastricht treatys limits on deficit spending, a Treaty the signed.

    They were corrupt and as they grew their public sector and marginalized their private sector they borrrowed to make up for their budget shortfalls disdistributing worthless bonds throughout European banks.

    The Russians ( or anyone else ) would be fools to loan that Government a dime, especially now.

    The one Nation ( Germany ) that tried to help them was accused of 70 year old war crimes by the new Greek PM.

    Because they concentrated on growing their Public Sector at the expense of their private sector for so long they have a long hard road ahead of them and its 100 percent their fault.
    Actually the Russians have some significant geo political interests that would make loaning Greece money rather attractive, particularly if they could station a naval base there. That is not likely though.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by MildSteel View Post
    I don't think a Chinese naval base in Greece would mean a whole lot. A Russian base would have quite substantial meaning as it would allow them to offset NATO power in Turkey which currently contains Russian power to the Caspian sea area.
    That is true. A second Mediterranean naval base would certainly be more important atm than the Chinese one.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Greece made good its €448m payment to the IMF today. Vladimir Putin offered Greece no financial aid Wednesday but Russia is considering advancing Greece funds based on future profits it could earn from shipping Russian gas to Europe as part of a pipeline extension. Eurozone deputy finance ministers have given Greece six days to provide a more comprehensive package of reform measures. A meeting on April 24 will determine whether any additional bailout funds will be forthcoming.


    Do not believe anything until the Kremlin denies it™

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by Simpleχity View Post
    Greece made good its €448m payment to the IMF today. Vladimir Putin offered Greece no financial aid Wednesday but Russia is considering advancing Greece funds based on future profits it could earn from shipping Russian gas to Europe as part of a pipeline extension. Eurozone deputy finance ministers have given Greece six days to provide a more comprehensive package of reform measures. A meeting on April 24 will determine whether any additional bailout funds will be forthcoming.
    Russia also offered modest relief in the form of some easing of its ban on importing Western food products.

    Greek PM gets support, not money from Putin | Reuters

    Now that the outcome of the visit is clear, Greece can't even pretend to have options that would give it added leverage. It needs to work with the EU in a framework where it has very little leverage and at a time when the EU knows that Greece lacks leverage.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by MildSteel View Post
    1. I don't think a Greek exit from the EU would lock it out of markets in Italy. Germany, perhaps, but again not likely.
    2. & 3. If Greece were to obtain financial backing from Russia such that it did not default on its debt, I don't think that bank runs would be likely and they would continue to have access to financial markets.

    That said, if they had actually done this back in 2008, they would be over the worst of it and would be on the road to recovery now, even without funding from Russia.
    I'm not sure about that. A situation akin to that faced by Argentina would be at least as plausible. Indeed, if Greece had easy solutions, I believe that Greece would have pursued them as a course of rational policy.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by joG View Post
    That is true. A second Mediterranean naval base would certainly be more important atm than the Chinese one.
    I don't think they still have to one in Syria. I could be mistaken.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by donsutherland1 View Post
    I'm not sure about that. A situation akin to that faced by Argentina would be at least as plausible. Indeed, if Greece had easy solutions, I believe that Greece would have pursued them as a course of rational policy.
    Argentina was able to cope with the situation in a reasonable fashion. I think there is an issue however with a funds manager.

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    Re: Putin Meets With Alexis Tsipras of Greece Amid E.U. Strains

    Quote Originally Posted by MildSteel View Post
    Argentina was able to cope with the situation in a reasonable fashion. I think there is an issue however with a funds manager.
    Argentina had a limited default (it continued to honor obligations with multilateral lenders e.g., the IMF) and worked out an agreed debt restructuring. The line of credit remained open with teh IMF. Nevertheless, it has remained locked out of global capital markets (which are separate from multilateral lenders), though in recent years, that outcome has been the result of two hedge funds. Unlike with corporate bankruptcies, there is no mechanism to compel those two funds to accept the terms that were accepted by the vast majority of Argentina's creditors. Under a corporate bankruptcy, there would have been sufficient creditor support to do so. Prior to its settlement with creditors, Argentina also faced a long-duration economic slump.

    Unless I'm mistaken, a larger share of Greece's debt is held by multilateral lenders than was the case with Argentina. Moreover, unlike with Argentina's simply abandoning its fixed exchange rate, Greece does not have a sovereign currency. The transition from the Euro to a Greek currency would entail risks of its own. Moreover, a Greek default would cut it off from IMF funding and its banks from ECB access. Those two factors would put Greece in a situation that was more challenging than what Argentina faced.

    So, while an Argentina-type outcome would be at least as plausible as the more benign outcome you sketched, a materially worse outcome would also be a distinct possibility, especially if the IMF and ECB cut off their financial support. Were the EU to strip Greece of access to the preferential trade terms of the Common Market, that would further exacerbate Greece's difficulties.

    Therefore, I'm not surprised that Greece has not pursued the default route. The rhetoric of the current Greek government is shrill, but its actions fall far short of that rhetoric. Even the current government, which is buoyed by public anger, is hesitant to take the kind of steps that could turn a bad situation into a potentially catastrophic one.

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