Greece 2012

[ag]

If something like that happens then the first thing I'll do next day is to go to the bank and withdraw my deposits.

Actually I might do it even earlier, before the election. I'll avoid the stampede.

You should do it before. There may will be a general run on the banks within hours.

[ag]

That's called a coup. And, probably, under the circumstances, it would be the ideal pre-text for kicking Greece out of the EU in the nastiest manner imaginable. I am pretty sure, the Germans will take the opportunity to do it.

[ag]

Merkel looks sane enough to me. In particular, it does begin to seem she realizes, that, short of incorporating Greece into Bavaria () ), there aren't many ways to keep Greece in the Eurozone of which Germany would want to be a part. The excuse that Greece is no longer a democracy would be appropriate enough to cut the line.

[ag]

Never expected you to sound so apocalyptic )

Let's agree on something, at least. Either Syriza (or the like), eventually, form an anti-austerity government or Greece ceases to be a democracy. In the former case Greece will be kicked out of the euro. In the latter case it will be kicked out of both euro and Europe. Merkel, whatever you say of her, is a good politician, who can count that far.

And, no, what's a democracy and what's not is, usually, fairly straightforward - straightforward enough for the (foreign) media not being able to define it.

[ag]

Greece, probably, can't be kicked out of the euro: but, once it starts acting unilaterally, the euro will soon become so hot for it, that it will run kicking and screaming to the exit itself, all completely voluntarily. The general capital controls will be introduced by the Greeks themselves, in a desperate attempt to keep their own banking system from collapsing (it is not unlikely, that the banks will be nationalized, anyway). Also, most likely, they will quickly be forced to start paying its domestic obligations in IOUs: there would simply not be enough cash. Whether those IOUs or money in Greek bank accounts at that point is still technically denominated in euros or not won't matter much: it all will trade at a steep discount to euro either in the open, or in the black market, if doing it in the open is prohibited. That's all.

[ag]

This nonsense can of course be stopped in ten minutes if the EU:
1) announces that it will equip itself with a real central bank (a lender of last resort) that takes all risk of sovereign default off the table — with conviction and overwhelming force, with no ifs and buts, and no ambushes from the Bundesbank.
2) announces EMU debt-pooling, fiscal union, a joint EMU budget and tax system, and an EMU government as a counterpart for the enhanced the ECB.

Funny, how they put it. I guess, what they mean by 10 minutes is several years for negotiating a new European treaty and then ratifying it by every single of the 27 or 28 states that form EU. Achieving, in the process, a radical leap towards full integration: so radical, in fact, that it is comparable to all that has been done over decades during the entire process of European integration.

Quite 10minutes )
 

[ag]

The ECB can very well print money and act as lender of last resort, there is no need for a law to do that. The only obstacle is Germany's psychotic fear of inflation.

If the ECB starts doing this at a scale that's going to make a difference for Greece, within a few years euro will be a currency of Greece and Greece alone )

[ag]

The relevant poll is on BBC. Over Monday and Tuesday Greek banks had 1.2 bln euro withdrawn (0.75% of deposits). There may well be a bank run within days (actually, this IS an early stage of the bank run, the question is if it is contained). If that happens, the political situaion is going to be changed fairly radically: god knows how, though.

[ag]

I've already started withdrawing my money and sending them to Cyprus.

Better send it to UK.

[ag]

Residence? For the moment you are still in EU, aren't you? So, even if they ask for it, establishing residence shouldn't be hard.

Anyway, I still have some cash in a Spanish account - I should use it to buy stuff ASAP.

[ag]

And what happens if these elections fail to produce a government?

New Elections.

European non-government practices are fairly diverse, aren't they?

[ag]

OK, I won't respond to any more post which contain "why should we pay". Now I'm sick of this mind-numbed rhetoric.

It's not rhetoric: it's the essence of things. And you'd better understand that.

[ag]

Even if we suppose that Greece deserves all the punishment it gets, why are the Germans imposing the same punishment on countries like Ireland and Spain which were examples of fiscal prudence until 2008?

Germany is not imposing a punishment on anyone - not even on Greece. The issue is not punishment - the issue is, Greece cannot stay in euro (unless of course, everybody else leaves). If you really need a hate figure, it should not be Merkel, but Papademos - wasn't it him, who engineered Greek joining the euro back in the day?

[ag]

This is not what I'm saying. What I'm saying is that there are two options : either we accept the idea of a common currency, with everything it entails (including eurobonds), or we definitely settle on the old-fashioned selfish nationalist logic with everything it entails (ie abandoning Euro). Both these choices are absolutely legitimate (even though I think the second would be an economic suicide). All what I want is some consistency in reasoning.

The idea of the common european currency entails not merely eurobonds, but a european government responsible to a european parliament that has direct taxation authority over the european population. Unless you are willing to share you real president with the German voters, you aren't accepting what a common currency entails.

[ag]

You are absolutely right, I couldn't agree more. All this is what should come next. But you can't do everything at once. The next step is Eurobonds, then something else, etc. until we have a complete European Federation.

Fine - if you can persuade the other Europeans But the common currency will naturally come after you have all that - not before. That's the problem: they put the cart ahead of the horse, so the whole things is imploding.

[ag]

Four new polls out today. Two of them show SYRIZA ahead and the other two ND. PASOK is on the rise too, the smaller parties fade. This is going to be a polarizing election.

Good. This, actually, might give Greece a government.

[ag]

So what would be the process by which Greece was kicked out of the Eurozone? Which European bodies would make the decision? Would it even be legal to do so? At this point I kinda want to see SYRIZA win just to see the frantic activity that would result.

Greece defaults. There is a run on the Greek banks. ECB announces that it is up to the Greeks to resolve it. Target 2 is blocked: interbank settlements are to be conducted on the bank-to-bank basis, within the limits of funds in appropriate correspondence accounts. Greek CB is reminded about the limits on the ammount of cash euros it is allowed to issue and warned that exceeding those limits (as it has been doing recently) will result in those euros extra (identified by serial numbers) no longer being accepted as legal tender in other member states (as they are, obviously, fakes).

Greek government announces a banking holiday. International bank transfers are blocked. When, after a week or so, banks reopen, they "temporarily" issue their customers not with euro cash, but with Greek government or Central Bank bonds (possibly still denominated in euors). The same bonds are used to pay public sector sallaries, etc. These new Greek euros trade at a discount: say, three Greek euros per actual cash euro.

That's the transition - and the beauty is, nobody needs to make any political decisions whatsoever.

[ag]

It is technically impossible to force a country to leave the eurozone.

What is your definition of technical? It is not that difficult to make a country drop out "voluntarily" - for lack of realistic alternatives. The only thing that's "technically" impossible is to stop that country from calling euro its currency - but, in practice, the currency then would be a "national euro", with its own exchange rate into actual euros (black market rate, if legal transactions other than at 1-to-1 are banned).

[ag]

If you press on the map, there are already some results shown - but nothing on the national table. Why is it? Just delay in tabulating?

[ag]

From the scattered precincts it looks that, aside from those anyway below the threshold, the big looser will be KKE.

[ag]

Well, yeah, SYRYZA is doing better - as does ND. And most of the improved performance is the consolidation of the previously splintered vote: the KKE fall is definitely part of the same story.

[ag]

ND is ahead in Athens A  (w/ almost 25% reporting nationwide).

[ag]

ND is ahead in Athens A .

I think you are talking about A' Athens.  

Most definitely. Since that's exactly what I said )