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Old 04-02-2015, 22:07   #1
Sdiver
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Greece draws up drachma plans, prepares to miss IMF payment

Looks as if the dike has started cracking.
Better get ready to head to higher ground.




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Greece is drawing up drastic plans to nationalise the country's banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands.

Sources close to the ruling Syriza party said the government is determined to keep public services running and pay pensions as funds run critically low. It may be forced to take the unprecedented step of missing a payment to the International Monetary Fund next week.

Greece no longer has enough money to pay the IMF €458m on April 9 and also to cover payments for salaries and social security on April 14, unless the eurozone agrees to disburse the next tranche of its interim bail-out deal in time.

“We are a Left-wing government. If we have to choose between a default to the IMF or a default to our own people, it is a no-brainer,” said a senior official.

“We may have to go into a silent arrears process with the IMF. This will cause a furore in the markets and means that the clock will start to tick much faster,” the source told The Telegraph.

Syriza’s radical-Left government would prefer to confine its dispute to EU creditors but the first payments to come due are owed to the IMF. While the party does not wish to trigger a formal IMF default, it increasingly views a slide into pre-default arrears as a necessary escalation in its showdown with Brussels and Frankfurt.

The view in Athens is that the EU creditor powers have yet to grasp that the political landscape has changed dramatically since the election of Syriza in January and that they will have to make real concessions if they wish to prevent a disastrous rupture of monetary union, an outcome they have ruled out repeatedly as unthinkable.

“They want to put us through the ritual of humiliation and force us into sequestration. They are trying to put us in a position where we either have to default to our own people or sign up to a deal that is politically toxic for us. If that is their objective, they will have to do it without us,” the source said.

Going into arrears at the IMF – even for a few days – is an extremely risky strategy. No developed country has ever defaulted to the Bretton Woods institutions. While there would be a grace period of six weeks before the IMF board declared Greece to be in technical default, the process could spin out of control at various stages.

Syriza sources say are they fully aware that a tough line with creditors risks setting off an unstoppable chain-reaction. They insist that they are willing to contemplate the worst rather than abandon their electoral pledges to the Greek people. An emergency fall-back plan is already in the works.

“We will shut down the banks and nationalise them, and then issue IOUs if we have to, and we all know what this means. What we will not do is become a protectorate of the EU,” said one source. It is well understood in Athens such action is tantamount to a return to the drachma, even though Syriza would rather reach an amicable accord within EMU.

Eurozone creditors may be willing to release enough funds to cover Greece’s government costs on April 14, but only if Syriza pays the IMF first. However, trust has already collapsed to the point where key ministers in Greece no longer believe the assurances from Brussels, fearing they may be lured into a trap. The mood has become poisonous.

“They want us to impose capital controls and cause a credit crunch, until the government becomes so unpopular that it falls," said one official.

"They want make an example of us, and demonstrate that no government in the eurozone has a right to have mind of its own. They don’t believe that we will walk away, or that the Greek people will back us, and they are wrong on both counts,” he said.

Syriza is still hoping that German Chancellor Angela Merkel can defuse the crisis, deeming her a “real ally”, but fear that she will be confronted with a fait accompli beyond even her control.

Bank of America warned that a “critical sequence of events could unfold” once Greece misses a payment to the IMF. It would trigger a parallel default to the eurozone bail-out fund (EFSF) under the legal master agreement, and might force the EFSF to cancel its loan packages and demand immediate repayment. This in turn would trigger a default on Greek government bonds issued under the bail-out accord.

The situation is now critical. Even if Greece manages to cobble together enough money to cover the April deadline, it owes the IMF a further €200m on May 1 and €763m on May 12. A Greek official told EMU counterparts at a teleconference on Wednesday that the country has run out of money. "There is no way we can go beyond April 9," the official reportedly said.

The drama comes after the creditors refused to rubber stamp Athens' latest bid to unlock funds, raising objections over Syriza plans to boost union powers in collective bargaining and boost pensions for lower income groups.

Brussels continues to insist on more concrete pledges, despite receiving a 26-page list of reforms on Wednesday. Athens hopes to raise €6.1bn in 2015 by clamping down on fuel smuggling and tax evasion, introducing new levies on luxury goods, and reforming public procurement. It estimated funding needs at €19bn over the coming year, meaning that there will inevitably be fresh tensions over the summer even if there a deal on interim funds until June.

Former European Commission head Jose Manuel Barroso warned Greece that they have a moral obligation to other states, describing the demands for more time and money as "completely unacceptable".

“We should remember that there are poorer countries that are lending money to Greece, so to propose a cut to their debt would be certain to receive a no from their partners," he said.

Greece's April

April 8 - Alexis Tsipras meets Putin
Greek PM is due in Russia to visit his counterpart, Vladimir Putin. Greece has been making overtures towards its eastern giant, claiming it opposes economic sanctions on the country

April 9 - IMF payment due
Greece is due to make a crucial €448m payment to the International Monetary Fun

April 10-13 - Easter weekend
Greece celebrates Orthodox Easter weekend

April 14 - Bond roll over
Government faces €1.4 billion in refunding 6-month T-bills

April 17 - Bond roll over
Government faces €1bn in refunding of 3-month T-bills

May 1 - Labour Day Bank Holiday

http://www.telegraph.co.uk/finance/e...F-payment.html
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Old 04-03-2015, 05:10   #2
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"nationalize the country's banking system"

Stalin/Mao would be proud.

Hard to believe the "Spartans" were actually from Greece.

Can't wait to see what the next six months holds for the left wing socialist Greece. Maybe we can send FEMA over there....
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Old 04-03-2015, 14:36   #3
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"nationalize the country's banking system"

Stalin/Mao would be proud.

Hard to believe the "Spartans" were actually from Greece.

Can't wait to see what the next six months holds for the left wing socialist Greece. Maybe we can send FEMA over there....
What would you have them do? Start paying their taxes? Not gonna happen.

They're bankrupt. The current government is facing the same choices the executor of a bankrupt firm would face.

The mistake for Greece was joining the Euro, not leaving it. They'll leave, reinstate the drachma, become a cheap tourist destination once again, and survive.
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Old 05-05-2015, 09:37   #4
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In all these cases of mega-bankruptcy by a nation, the creditors truly share much of the gilt... why repeatedly dump zillions of $ into a sinkhole, with no effective ways of checking if measures are taken by the debtor to pay back someday? The debt goes up exponentially because for political reasons nobody wants harsh measures, based on reality, at the right moments.

Try going into your friendly neighbour bank and tell them to lend you some more money (make it a huge amount) after you repeatedly failed to pay your debts and have no realistic plan to balance your finances
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Old 05-05-2015, 09:49   #5
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I like what the Greeks have done, join the EU, drain them dry and then quit (the EU).

Sounds like a well executed socialist/communist plan to me!

Good luck on securing your next "loan" Greece!
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Old 05-05-2015, 10:40   #6
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Venezuela only quicker? Greece really has very few resources, tourism, some agriculture? With strikes, demonstrations and disrepair tourism has suffered already.
Team Sergent our current Administration will be happy to place American taxpayers on the hook for loans. Any bets?
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Old 05-05-2015, 10:56   #7
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"Greece is drawing up drastic plans to nationalise the country's banking system and introduce a parallel currency to pay bills unless the eurozone takes steps to defuse the simmering crisis and soften its demands. "

That'll make it better.
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Old 06-28-2015, 13:12   #8
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Let's see how the Market(s) reacts to this on Monday.

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Greek debt crisis: Banks to stay shut, capital controls imposed

Greek banks are to remain closed and capital controls will be imposed, Prime Minister Alexis Tsipras says.

Speaking after the European Central Bank (ECB) said it was not increasing emergency funding to Greek banks, Mr Tsipras said Greek deposits were safe.

Greece is due to make a €1.6bn (£1.1bn) payment to the International Monetary Fund (IMF) on Tuesday - the same day that its current bailout expires.

Greece risks default and moving closer to a possible exit from the eurozone.

Greeks have been queuing to withdraw money from cash machines over the weekend.

Mr Tsipras did not give details of how long banks would stay shut, or exactly what controls on capital would be imposed.

Greece and its creditors had been locked in talks over fresh bailout money on Friday when the Greek government called a surprise referendum for 5 July over the terms it was being offered.

'Unprecedented act'

Eurozone finance ministers blamed Greece for breaking off the talks, and the European Commission took the unusual step on Sunday of publishing proposals by European creditors that it said were on the table at the time.

But Greece described creditors' terms as "not viable", and asked for an extension of its current deal until after the vote was completed.

"[Rejection] of the Greek government's request for a short extension of the programme was an unprecedented act by European standards, questioning the right of a sovereign people to decide," Mr Tsipras on Sunday said in a televised address.

"This decision led the ECB today to limit the liquidity available to Greek banks and forced the Greek central bank to suggest a bank holiday and restrictions on bank withdrawals."

The Greek prime minister said he had sent a new request for an extension to the bailout.

"I am awaiting their immediate response to a fundamental request of democracy," he said.

The announcement comes after a particularly turbulent few days for Greece

http://www.bbc.com/news/world-europe-33305019
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Old 06-28-2015, 17:44   #9
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Ah Socialism !!!! Works just fine until you run out of "other" peoples money. (The Iron Lady)

I do like how the current Greek administration is making themselves sound like "victims" and the major EU players sound like evil overlords.

I'm surprised mark zuckerberg didn't jump into the fray and help his socialist buddies by making their next payment!
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Old 06-29-2015, 06:35   #10
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"nationalize the country's banking system"

Stalin/Mao would be proud.

Hard to believe the "Spartans" were actually from Greece.

Can't wait to see what the next six months holds for the left wing socialist Greece. Maybe we can send FEMA over there....
Give it three years and you can live it here.
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Old 06-29-2015, 09:18   #11
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Give it three years and you can live it here.
No kidding......

I "invest" in guns and ammo and I smile when I see the rich invest in gold and silver.....
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Old 06-29-2015, 10:19   #12
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No kidding......

I "invest" in guns and ammo and I smile when I see the rich invest in gold and silver.....
Yep. I told a neighbor who is investing in gold that he can spend $10,000 on gold and I'll spend $10,000 on ammo. If the SHTF, I can have $10,000 worth of gold and $9,999.50 worth of ammo.

Pat
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Old 06-30-2015, 08:46   #13
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Yep. I told a neighbor who is investing in gold that he can spend $10,000 on gold and I'll spend $10,000 on ammo. If the SHTF, I can have $10,000 worth of gold and $9,999.50 worth of ammo.

Pat
Why not both?
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Old 07-01-2015, 01:00   #14
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Why not both?
Assuming that I only have $10,000 to invest, I do get both with a 50 cent investment.

Pat
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Old 07-09-2015, 18:31   #15
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And Germany blinks

Germany blinks.

So Greece runs up so much debt they can't pay it back so they huff and puff and say it's Europe's fault not theirs.

So it's not a "hair cut" but Germany says it's a restructuring if Greece mends it's ways.

So how many years until this plays out again?

US banks buying Greek debt should not get a bail out.
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