OneGuyFromBarlick

On the other hand it might be a bit like the `Millenium Bug' fear that went the rounds in the late 1990s. We were all doomed. Or the possible collapse of the banks in 2007/8. The sky was going to fall in. I wouldn't be surprised if Greece left the Euro and EU and all we had was a few months of turbulence. Who knows? Let's be honest, no-one knows. One view is that the `markets' have already `factored in' the Greek exit. One thing we do know for sure, the Masters of the Universe will be making money out of all this whatever happens. Shares have been up and down, day after day and as we know well, they can make as much money out of falling prices as out of rising prices. They'll be laughing all the way to the bank...OK, so they're already in the bank, they'll be laughing all the way to the champagne bar.

You could be right Tiz but I think it's a bit more serious this time. The US secretary for labour was on World Service this morning giving what is no doubt the US government view. He said that if there is a Greek default there will be global consequences. His line was that the US view is that it would be cheaper for the EU to give the concessions to Greece than carry on with this game of chicken. Harsh words but I think true. I note that 'the final deadline' has advanced again, it should have been today but is now 'a fortnight away'. This is classic brinkmanship and I reckon that the Greeks have the EU by the short and curlies and even if it is dressed up as an EU triumph, the EU will give enough concessions to stave off the worst effects. There is of course the position of the Greek electorate to consider. Even though on the whole they favour staying in the Euro mechanism they are dead against any further cuts in pensions and welfare.
However, the elephant in the room remains even if this crisis is averted. The core position is that Greece is, in effect, bankrupt and can never repay the debt they carry. The dilemma is that if the EU were to finance cancellation of enough of the debt to enable Greece to be viable again they would lay themselves open to demands from other hard pressed countries for the same treatment. This domino effect is worst case for the EU.
And then there is the position of the German voters who are bankrolling whatever happens. What happens internally in the next elections?
You are right about the bond holders and markets. If the amount of money that has been sucked out of Greece in interest and penalties was totted up I have an idea it would dwarf the amount that Greece owes or the EU could lose.
The UK government is between a rock and a hard place due to them being a semi-detached member of the EU project. They have no voice in what is happening. Ireland is still a basket case and there are strong financial links between the UK and what happens there......
Finally, let's not forget that the root cause of all of this is political mistakes made many years ago by men and governments who were certain they were right.......
See THIS for the latest news on the long delayed Chilcot report. The delaying tactics by those likely to be criticised has reached ridiculous proportions and pressure is growing to get the report out in the public domain. I will believe this when I see it......

Stanley wrote:He said that if there is a Greek default there will be global consequences.

The global consequences would be a delayed effect of the credit crunch. It would have been better if we'd got all this out of our system 6 or 7 years ago but instead there's been ages of humming and hawing. Greece is like an ill patient whose doctors haven't been able to make a decision on how to operate and have left the patient wasting away instead of going ahead and getting it all over with early on.

I'm really pissed off, just posted a reply and been kicked out of the site, logged in again and lost what I wrote. Not funny!
See THIS for a report on the well deserved rebuke delivered by the President of the EU parliament accusing unnamed politicians of using false statistics and hatred in the debate over migrants. He is perfectly right, it's disgraceful that tactics like this should be used in what should be a rational debate.
The Senate of the EU is to meet on Monday to 'decide what to do about about Greece' . The root of the whole 2009 debacle was the banks allowing unrestricted credit in order to make more money. The present 'recovery' is based on even more phantom money (remember QE?). Leaving aside the political ramifications, all they can do is bail Greece out with yet more phantom money. A bit like giving an alcoholic a stiff drink to cure the shakes. As Bob Smith once said in a meeting "We've plaited sawdust for too long and now all of us pigeons have come home to roost". The pigeons always come home to roost eventually and I'm afraid that this is what we are looking at now.

Most of the English rightwing papers are expressing the view that Greece must sign up to the IMF troika conditions because there is no alternative. Austerity being the name of the game. Obviously there is an alternative but we don't want to go down that road because its contrary to Osborne's plan for the UK economy. How much of the reporting on the Greek disaster is really a smokescreen to frighten the English electorate into thinking this is the only way out is anyone's guess. Machiavelli strikes again.

P, I think that's a very accurate summation of the propaganda that is being fed not only to us but the the people in Greece and the EU as well. I note that Osborne was giving Greece the same message yesterday. This is the typical response of politicians thinking in the short term about a long term problem. I'm sure you noted that the ECB has injected enough money into the Greek banks to keep them going until Monday evening after the senate meeting. If the Greeks blink first and accept further austerity enough cash will be injected to stop a default but it will only be a sticking plaster on a gaping wound, if it happens. This will protect the Euro and keep the markets onside but totally ignores the long term fundamental problem. As long as Greece is saddled with the debt this problem will keep coming back with the added problem of growing political instability in Greece which would be just as big a problem.
What's going to happen? On recent form, the EU will find yet another way of kicking the can down the road again. I have no idea how this will be done but the favourite involves Phantom Money. One thing is certain, disquiet is growing in the EU and the markets as they see all this procrastination. In the end this might be the real end game. I have always said that the Train Wreck of the EU is still happening. I see no reason why I should alter that opinion or my fear as to how it will affect the UK economy. The really shocking thing is that I am sure that very highly placed politicians and officials see this danger as well but are going with the flow to 'keep the band in the nick'. We need some political courage and hard truths but that would need a real statesman. I'm not sure we have one of those....

I read in the Daily Mail today that Europe is giving Greece another £2billion to prevent their banks closing. This is to keep them going in the hope the government can make a £1.15 billion payment to the EMF at the end of June, and unlock an extra £5.15 billion bail out.

Hang on: 2 billion - 1.15 billion + 5.15 billion = 6 billion.

What planet are these politicians on? Do any of them have the faintest idea of economics? Can I get in on this gravy train?

I don't claim to understand it but it looks crazy to me.

The Austerity March in London yesterday seems to bear out my theory on growing unrest.... But we couldn't stop the Iraq incursion with a march..... Just think of the global total of interest being paid on all debt and note where the money is going..... We need the equivalent of the original Jubilee..... Fat chance! I am not holding my breath.

I heard a Greek spokesman on the radio yesterday and he backed up my point about interest. He said that well over 85% of the bail out money never reached Greece, it went straight to the bankers.
The pigeons come home to roost in Europe today. The Senate Meeting has to decide whether to ignore voters who are fed up of bailing Greece out or to abandon the project and trigger a default. I'm glad I don't have the problem. Whatever they do, short of a basic reappraisal of the basis of the Euro, will inevitably fail and in their hearts they know this.
It's just possible that this affair could be the catalyst for such a reappraisal, if so some good will come out of it but at an enormous cost, not least for the Greeks who are in for a rough ride whichever way it goes.
Make no mistake, this concerns us in the UK and the US as well. That is why everyone is urging the Greeks to accept further austerity. It will fail eventually..... 'Events Dear Boy'.

I see the Daily Express front page headline today is about all those poor British people whose holidays in Greece this week face disruption due to the financial crisis. Did they really think it was a good time to go to Greece? Did the holiday companies really think it was OK to sell them holidays in Greece when they could see what was happening? Does the Express think that a few British holidays are more important than the welfare of the Greek population and the stability of Europe?

I know that when we went last year, part of the reason for revisiting an area we like very much was to help their economy which in the sleepy bit of Zakynthos we like, relies heavily on the tourist trade during the summer months. Winter time the village businesses close down apart from the mini markets for food and essentials. The bars and restaurants use the Winter months for maintenance, repair and furthering building developments. The village used to have thriving salt flats but that industry went in the 1980's so locally the trade is mainly tourism based.

I can understand you going to Greece a year ago, Ian. I suppose some people might go this week for the sheer hell of it, an adventure holiday! Still better than Syria I suppose.

The PM has been making a speech today about a number of issues including floating what we might expect on benefit cuts. In the Q&A he was asked about his plans for mental health services, which in response he wittered on about addiction being a real issue. This really is incredibly odd. Why on earth would a perfectly reasonable question about mental health services prompt a load of babble about addiction as an answer? It has been mischeviously suggested that in the PM’s social circle, being treated for mental health problems in a clinic and addiction are very much linked. That’s very cheeky.

No, I think this is an attempt to link in the public’s mind mental health problems with addiction. That is, the people who are unable to work through poor mental health are ‘addicts’. After all, the PM and his party have done a brilliant job in hoodwinking huge numbers of voters into thinking all the benefits bill goes on fraudsters, dossers, scroungers and immigrants when as we know such recipients are a tiny proportion of the bill. He’s also conned people into believing that the unemployed can get more income than those in work (he said it again today), which to be honest isn’t a con, it’s a lie – no unemployed person can get more income than someone in minimum wage work. So those with mental health problems will get a kicking and not much help, but it doesn’t matter ‘cos they’re all a bunch of addicts.

I do long for the time when we didn’t have third-rate PR-types running the show…..

Richard Broughton

I agree of course Richard. Bit like a conjurer using distraction to divert attention while he does his deception.
The source of the £12billion annual cuts is gradually being revealed. Tax credits and wage top ups. Cameron makes all the right points about the stupidity of subsidising industry and employment by topping up low wages but avoids the obvious point that a proper living wage should be enforced because that would increase unemployment and drop the expense of low productivity back in the government's court. The elephant in the room is that all the evidence points to the fact that uncompensated low wage economies and inequality lead to low productivity. I say uncompensated because the UK has historically run a low wage economy but compensated for this by keeping domestic costs low by making cheap food, housing, transport and energy available. Those days have gone as these subsidies have melted away under privatisation and relaxing of the government hold on the commanding heights of the economy. The only certainty is that the poorest will pay the piper as things stand now. Osborne's July budget is going to be a shocker......
Greece. As predicted more smoke and mirrors and procrastination as new proposals are discussed. The can has been kicked down the road, but not far.....

If, like me, you get intellectual pleasure from trying to interpret the runes that pass for political news these days it is a very interesting time. I start from the premise that what we are told is only a version of the truth designed to have the maximum beneficial effect on the economic climate. I can't help thinking that the markets in particular are not thinking in quite that much depth. Of course they have an interest in preserving confidence as well and that will play a large part.
I say this because of the news that on the announcement of a large sticking plaster being applied to the gaping wound that is the Greek economy, all the markets rose! This seems to me to be a totally false situation. Christine Lagarde especially is a smart woman but makes optimistic announcements on behalf of the IMF when she must know the brutal truth, the only 'cure' for Greece that will prevent a default and exit from the Euro is to cancel a large part of the debt. This would work but would be a political disaster for the EU. My assessment is that all parties are ignoring the elephant and buying time, but time to do what?
Many years ago I heard some 'futurologists' saying that one of the biggest threats to international security was that mass migrations would put pressure on the fault lines between the rich and the poor countries. I think they may have had a point! The increasing tide of refugees has reached Calais now and drastic remedies are being considered. This at a time when Cameron is trying to get more controls on movement. It may make his task easier.....

The markets rose because the moneymakers made it do so. They'll soon ensure it goes down again, completing another cycle of their `have your cake and eat it' business. The money makers are like a tidal power generator, they make it when the level goes up and when it goes down. And, like a wave power generator, they can make more money in a stormy sea than in a calm sea,. They'll keep it going up and down forever...and laugh all the way to the bank!

And they own the bank......
The 'further talks' with the Troika aren't going well. Yet again they have collectively rejected the Greek proposals, mainly because they want real cuts rather than promises to pay based on raised taxes (which Greece is very bad at collecting anyway). Greece protests that these are harsher conditions than those placed on other failed economies. No matter what she believes, Merkel has to support the hard line because any other course would infuriate the German taxpayers. Greece stews in the indecision and the end of the month looms larger.
Angela Merkel is the most powerful politician in Europe at the moment. From her previous actions she is a smart cookie and understands the value of giving measured concessions in negotiation, look at the way she has marginally agreed with Cameron every time a serious disagreement loomed. If the denouement of this affair is that enough concessions are made to keep Greece on the monetary union her voters will almost certainly rebel and throw her out. If that leads to Germany taking a harder line on budgetary control and federalisation it will lead to what they all fear most, powerful schisms inside the EU which could rip it apart. The terrible thing is that if the concessions aren't given and Greece defaults the consequences for Europe and by extension the global economy will eventually have the same effect. They are damned if they do and damned if they don't and remember that all this goes back to the original ghastly mistake of going ahead with Monetary Union before the political and budgetary controls had been installed. The apple is rotten at the core and privately they know this.
So this explains why this process is being extended to a ridiculous extent. In effect anyone who pulls the trigger on default or makes concessions will get the blame for whatever the consequences to the EU Project are. It's a Gordian Knot and we all know what the cure for them is!

It started as a problem, it became an issue, then it was a crisis. It has now descended beyond ridiculous into a farce and you don't even need a clue as to what I am talking about.
Meanwhile, in Brussels, Cameron makes optimistic noises about re-negotiation of our relationship with the EU even though he admits there is no chance of any treaty changes before the referendum in 2017 or even vague promises. In other words he is doing a snow job on all of us and will be asking for a yes/no vote even though we won't know what we are voting for. If ever there was a futile exercise it is this. Typical of this lousy administration.

The question of immigration into the UK keeps popping up at regular intervals. My solution is to take the best brains in the government who are experts on immigration and poverty, David Cameron and Iain Duncan Smith spring to mind, lock them up in a room and don't let them out until they reach a solution that would pass a free vote in parliament. That should see the back of them for a good number of years.

My solution to the problem is to do away with English and make the official language here Welsh. Apart from the Welsh, hardly anyone speaks Welsh anywhere. English is spoken by far too many making the UK a major draw for all these Europeans who have English as a second language by default. I know some folk say people don’t migrate to Poland and the like as they’re pre-industrial, post-Communist sinks, but the reality is it’s because hardly anyone speaks Polish or Slovakian and the like........................

Rather cheekily, a ‘senior EU bureaucrat’ has described the PM’s intervention in the early hours as a ‘commercial break’. To whit, quote: ‘We had a very serious discussion on the Greek crisis and migration. Then David Cameron gave us a commercial break’. Ouch!

Richard Broughton

It may have been cheeky but from an EU point of view perfectly accurate. Add refusal to participate in any scheme to cope with migrants and you have a picture of a cynical administration which has no intention of stopping being at least semi-detached.
I see that Greece has said they will have a referendum on the proposed austerity measures on July 6th. Does that kick the can down the road again?
See THIS for what I see as good news and common sense. The barrister who has been reviewing the CPS decision not to prosecute Lord Janner has decided otherwise. Good......

Alexis Tsipras had no difficulty getting the Greek Parliament to pass the bill calling for a referendum on the bail out terms on July 5th, after the plug is pulled by the IMF on June 30th. He has recommended a No vote ..(LINK). This seems to indicate two things, first that the Greeks have given up on getting a subsidy from the ECB to pay off the £1.7billion debt due to the IMF and secondly that politically at least, the Greeks have reached the end of their tether. The proposed further cuts are a bridge too far. It remains to be seen whether this statement of intent will trigger a last minute cave-in by the EU or a default followed by the dreaded Grexit. It doesn't really matter which because either course will signal melt down politically in the EU. This is not wholly the fault of the Greeks, let alone the ordinary Greek voter who is entirely innocent. It is a product of lazy Greek politicians taking the easy way out and accepting money instead of tackling the structural problems in their tax gathering systems and management of the economy during the fat years. It is equally the fault of the ECB and the EU politicians who took the easiest way to paper the cracks in the Euro caused by the fundamental mistake of introducing a common currency before proper political and budgetary reform had been accomplished in the EU.
In terms of the UK economy, our 'economic miracle' will now face its greatest test and I'm afraid that the flaws in the Tory Project will give way and we shall see that the Emperor has no clothes.... This is a dire prediction but all the evidence points towards it. Nobody will be more relieved than I if it proves to be wrong but I fear the worst. There is only one way out of this mess, borrow money, re-invigorate the domestic economy, stop the cuts and austerity and get the tax flow moving upwards again. Pure Keynesian economics.... Will it happen? I fear not, the Tories are so imprisoned by their DNA that they will blunder on, spinning as they go and talking nonsense about Sound Money.... I have banged on about the Train Wreck for years and see no evidence that I have been wrong. Tin hats on Lads!

We are constantly being told that the banks and financial institutions are draining the best brains out of the universities to devise more complex algorithms to make bigger than ever profits. Part of these complex calculations must by definition be risk management, to the ordinary punter it goes under the heading "what if". What is becoming increasing obvious is that the politicians of the likes of Cameron and Osborne just go along with the flow and do as they are told. Stanley has pointed out that Greece has been doing this for the past five years and is now approaching third world status. The UK is following the same road map with another five years to go. Never mind the 'Tin Hats' its out with the begging bowl. Along we will go to Mr Bumble and ask" Please Sir can I have a bit more..".

Here it is...
Announced on the Radio 4 BH programme at 09.15 this morning, read out from an internal memo written by Robert Peston which had just been received and which he had asked them to publish on the programme immediately:
"The European Central Bank's governing council is expected to turn off Emergency Liquidity Assistance (ELA) for Greek banks at its meeting later today, according to well-placed sources. So unless Greek savers miraculously decide to cease withdrawing cash from their accounts, Greek banks would find themselves in serious straits as soon as Monday - because the banks have become dependent on ELA, approved by the ECB but supplied by the Bank of Greece, to provide the cash to depositors who want their money back. "We think the Greek government will have no choice but to announce a bank holiday on Monday, pending the introduction of capital controls," said a source."

It's now in a Peston report on the BBC web site LINK

Further down the report...
"So, with Greece no longer participating in a formal rescue programme, it is seen as impossible for the European Central Bank to continue extending credit to Greek banks - because the solvency of the Greek state would be in doubt, and the solvency of banks is so intimately linked to the solvency of the state.

"The prospect of banks being forced to close tomorrow, or, if they're not, of a devastating run on them, represents the most painful episode in Greece's financial and economic crisis, since it blew up in 2009. It is also the greatest perceived threat to the integrity of the eurozone since it was created in 1999. If the Greek government refuses to shut the banks, the European Central Bank - as regulator of eurozone banks - could recommend that all branches of Greek banks outside Greece be closed to preserve cash. But since Greek banks could get their hands on cash in branches outside the Greek mainland, closing overseas branches but not Greek branches would be seen as favouring Greek residents over customers in the rest of the world."