Greek crisis

Discussion in 'Motorhome Chat' started by Loujess, Feb 16, 2012.

  1. Loujess

    Loujess Read Only Funster

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    Just a small thought. If Greece goes bankrupt/ejected by the EU in the near future, will that have implications for those of us in Spain? Would Spain quickly follow? Would there be an interruption to the fuel supply? :Eeek:

    Ivy
     
  2. CHRI$

    CHRI$ Funster

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    i dont think spain would quickly follow,but will follow.i think greece needs to default quick and save there own country from the monster that is the EU,they recon a third of the country will be unemployed:Sad:
    i know they made there own bed and all that, but it will be the working or non working classes that it will hit hardest.:Sad:
     
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  3. ShiftZZ

    ShiftZZ Funster Life Member

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    So that's all of them then?
     
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  4. JeanLuc

    JeanLuc Funster

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    I think the question is not "if" Greece defaults and has to leave the Euro, but "when". Even if they persuade the Eurozone/IMF/ECB to bail them out this time (again), and they put in place all the further austerity and restructuring measures they are promising, Greece's public debt will still be 120% of GDP by 2020. That level is unsustainable, and may not be achieved if the results of austerity lead to further falls in Greece's GDP.
    Whether Greece leaves now or later in 2012, I think the next patient will be Portugal rather than Spain. The Eurozone has spent the best part of the last year trying to engineer sufficient security to enable it to withstand a default by one or more of the so-called peripheral economies. Of these, Portugal is in the worst shape (after Greece) whilst Ireland has started to make some progress, as indicated by its ability to borrow much more cheaply now than a year ago.
    The immediate effect of withdrawal from the Euro by any country, would be a freeze on capital flows (i.e. no movement of money out of the country) and probable nationalisation of the financial industry in order to control money. There would undoubtedly be severe disruption to many of the normal aspects of living, and since fuel (oil) is traded in US dollars, and there would be a delay until new money (drachmas etc.) was in circulation, I guess fuel might be in short supply. And when it became available again, it would be very expensive since the defaulting country would then have to buy all its imports with a severely devalued currency. As an example, I believe the measures Greece has put / is putting in place amount to an effective internal devaluation of 30%, so if an external devaluation (exit from the Euro to be replaced by Drachmae) were to be forced on them, their currency would fall by an equivalent amount.

    I would not keep any significant amounts in Euros right now if I were you: only enough to live on. However, there is a view that if the weaker economies were to leave the Euro, it would appreciate in value as it would then be backed by stronger economies. But there would be a period of huge disruption and potential loss of value before a stronger settled state came about.
     
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  5. acting_strange

    acting_strange

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    Let's face it....Our German allies and the IMF are not interested in saving Greece (as their policies prove) they are merely interested in saving the almighty Euro....
     
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  6. JJ

    JJ Funster

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    What will be will be...

    Nothing I can do about it so I am not going to worry...

    Stress and worry would do far more harm to me than losing a few quid...

    I don't save euros... I hoard PIES...

    JJ :Cool:
     
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  7. JeanLuc

    JeanLuc Funster

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    I would imagine Fray Bentos will become hard currency JJ - and I'm not just referring to the tin or over-baked pastry! As they may come to say in Athens: "you don't get many of those to the drachma".
     
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  8. Jaws

    Jaws Funster Life Member

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    Only if you take the lid off and leave em for a week:Doh::BigGrin:
     
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  9. slobadoberbob

    slobadoberbob Read Only Funster

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    Spain economy shrank by 0.3%

    I see Spain's economy has shrank by 0.3% in the 3 months to December.. with 1 in 4 out of work it does not look good in Spain these days. .. that is 5.3 million out of work at the end of December... looks as if Spain is heading in to a recession.

    I think Greece needs to pull out and get this mess over and done with.. 120% GDP is crazy.


    Bob
     
  10. olley

    olley Funster

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    If Greece were to exit and the drachma fell by 30% or so, wouldn't that make the country much cheaper for tourist's and so benefit the tourist trade? Likewise all the other industries would benefit from this devaluation making it much more competitive, which would get it out of recession.

    I read an article the other day saying how Germany had benefited from the Euro as other countries which 20 years ago had significantly cheaper labour rates, now had rates approaching Germany's. One reason why Germany would like to keep all the countries in the Euro.

    Ian
     
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  11. beachcaster

    beachcaster Read Only Funster

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    I knew it.....I just knew it !!!!
    Sooner or later Fray Bentos pies will become the new european currency !
    JJ you are ahead of the game !

    barry:Smile:
     
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  12. Jaws

    Jaws Funster Life Member

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    When we started going to Corfu in 1987 it was 360 Dracmas to the pound.. that dropped to about 290 the year before they entered the eu
    The first time we went back after they joined was also the last year we went..
    Where at one time it was a shangrila for the not so wealthy tourist, it had become a place for those a little better heeled.
    All the locals were no longer smiling, everything cost an arm and a leg, and small business's were closing left right and centre.. I gave back my part of a bar to the greek owner in the hope it would help to keep him afloat.. He managed another couple of years and folded.. Tourist visitors down by almost 60% ( and this was in Ipsos..a popular destination )

    If Greece leaves the EU I believe it would make a whole raft of folk very happy.. And I know we would be going back there as visitors once again, along with many others who have given it a miss since 2001
     
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  13. beachcaster

    beachcaster Read Only Funster

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    I agree with JeanLuc........it seems an almost obvious outcome ...the maths doesnt add up..The writing is on the wall in very big letters!

    How come the Euro politicians are still throwing money at the situation
    when the eventual collapse is almost inevitable.

    As for people who may well be "trapped" in the sunshine in Portugal or Spain
    at least you will be warm. Keep the larder topped up ( you know my preference) and buy a push bike....then get fit. It will be a long ride home :Smile:

    barry
     
  14. Loujess

    Loujess Read Only Funster

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    Even longer with Sandy sitting on the handlebars since he doesn't have his own bike. I couldn't really leave him there .................... could I? :Rofl1:

    Ivy
     
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  15. Reallyretired

    Reallyretired Funster

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    JJ is making a sound investment by hoarding pies, the only worthwhile thing to invest in these days is commodities, whether gold or pies, the value will at least keep up with inflation which is more than savings in equities or shares.:Smile:
     
  16. Ralph-n-Bev

    Ralph-n-Bev Funster

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    We havnt stopped going to Greece , but your right it gets more expensive each year:Sad: We were married in Aghia Gallini , Southern Crete , 18 years ago .
    We love the Greek food and the the welcome we get from the locals. We only go for a week , or two . But Ralph and the kids love the whole flying experience. So at least 1 holiday has to be flown. Its getting hard to find apartment / Villas now as a lot of companies are pushing all inclusive. Something we do not like.
    We normally do quiet locations , visiting local areas etc , but the next school holidays we are going to Northern Corfu Sidari. The kids are 15 , 15 and 17 so we thought we would go a little livelier. :Laughing: Ralph and I will probably need a holiday when we come back:Blush:
    We haven't bought any Euros yet , and i dont know what to do .:Eek!:
    The holidays already payed for , well before everything kicked off over there. So unless Thomas Cook go bust , looks like we will still be going.
    Do we buy now or wait till the death ? No idea.
     
  17. Jaws

    Jaws Funster Life Member

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    Sidari, lively ?
    Blimey that must have changed a lot !

    On the occasions we never booked anything we used to grab a car and go up is Arilas as there was always an empty villa or two available.. but always shopped in Sidari as Arilas really was a one horse town :Smile:

    I will always remember the first year we went ther.. I wanted to hire a motorbike so shot down to the hire place first hing in the morning to ensure got one..

    Sorry, it has already been rented out for the day.

    Note the IT.. yep, one bike for hire in the whole place ! :Rofl1:
     
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  18. JeanLuc

    JeanLuc Funster

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    I think the main players in the Eurozone are 'kicking the can down the road' until they are confident that the Greek problem can be managed. Although UK exposure to Greek debt is only about €11 Bn many other countries have much greater exposure. It's not just exposure to sovereign debt, but also lending to Greek banks that would probably collapse if Greece left the Euro in a disorderly fashion. The risk for the UK is if a Greek default sparked a general collapse in other peripheral € countries, particularly Ireland, where UK exposure is much greater. So, the Eurozone is trying to delay Greek default until its banks have unloaded as much Greek debt as possible. Then, they will have 'cauterised' the Greek problem and may not want to pour any more 'good money after bad'.

    Picking up on a couple of earlier comments.

    The latest forecast is that if Greece retains the Euro and achieves all of its austerity programme and GDP doesn't fall through the floor, they will end up with a public debt of 129% of GDP by 2020. That compares with a forecast of 198% this year! (I'm getting an image of pigs with wings.)

    Germany (and France to a degree) has benefitted greatly from the presence of weaker economies within the Euro zone. If Germany had retained the D-Mark, it would surely have appreciated over recent years in response to Germany's strong economy. That would have made their exports more expensive and constrained growth. The converse of that is that weaker Euro countries have benefitted from a stronger currency than they deserve, allowing them to buy more German exports. You will no doubt be aware of the furore on Capitol Hill where the US Congress accuses China of artificially keeping its currency under-valued in order to boost exports. Well, one could say that the Euro has done exactly the same for Germany.

    Regarding the purchase of Euros for holiday spending: in the great scheme of things, this is hardly worth agonising over. Buy them at the time you need them. You are, after all, not trying to make money on currency trades, given the amounts involved. If you have euros and Greece stays in - no problems; if Greece falls out in an uncontrolled fashion, the issue will be whether you happen to be there, or are about to go, at the time it happens, and therefore what general disruption to Greek life and services is likely to ensue.

    One final thought to keep us all upbeat on this fine morning. According to Treasury sources reported in the financial media, they have done extensive modelling of the likely impacts of a messy Greek default and there is no good solution - it all hurts the UK. And, some pundits are saying that a Greek meltdown would cause financial shockwaves and international economic contraction at least equal to that which followed the collapse of Lehman Bros in late 2008. That's why the rest of the Euro countries keep kicking that can!

    Life's too short to worry - keep travelling and smiling :BigGrin::Laughing::Cool:
     
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  19. jenny and mitch

    jenny and mitch Funster

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    I am a bit slow financially ,, but if Greece does opt out of the Euro and devalues its currency
    by 30 % ish,, That would indeed make fuel etc expensive TO THE GREEKS but surely (don't call me that) We , with our stronger Euros or whatever, would find it cheaper to buy fuel etc, wouldn't we ? ? Please correct me if wrong Jean Luc,, it IS a genuine question..
    However, from what I hear about the poor Greeks having to hand their children over to the local services because they can't support them and old folk dying,, I am not sure I would feel comfortable in a motohome,, which to them must seem a real symbol of wealth... I would
    feel decidedly Uncomfortable,, or am I too sensitive ? ? ? The Germans and Americans have been doing it for years I guess.. Mitch..
     
  20. JeanLuc

    JeanLuc Funster

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    In theory you are correct. Whilst it would cost a lot more Drachmae to buy a litre of fuel in Greece than the equivalent € price today, you would get a lot more Drachmae for your GB pound, balancing out the difference. In practice it might be rather more complicated; oil is traded in US$ and over the last 6-9 months, the £ has been weakening against the $ but strengthening against the €. The last two or three weeks have seen a reversal of the $/£ ratio but who knows whether that will continue - not me. It is anyone's guess what the relative trading ratios between $ and Drachma might be compared with $/£. Just to add to the potential confusion, Greece imports a lot of its oil from Iran (relatively more than northern European countries) so that might make supply, and price, even more problematic.

    I think your point about not flaunting wealth in countries, like Greece, undergoing hardship, is well-made particularly if, like us, you have a German motorhome!
     
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