Is Grexit inevitable?

[RandBlade]

Greek exit of the euro seems more and more inevitable. Syriza seem to be as inflexible as they claimed they would be. The rest of the eurozone is running out of patience. While time is running out, Greece today has had to tap into reserves to avoid a default: http://www.bbc.co.uk/news/business-32701278

Agreement needs to be reached by the end of June, or Grexit becomes inevitable. I don't think anyone has the willpower any longer to realistically make a permanent deal that is workable or Syriza either the willingness or ability to fold and implement sensible economics.

The can could be kicked down the road, but I'm failing to see the point of prolonging the inevitable. If Syriza don't fold completely their bluff should be called and Greece should be shown to be bust. Let them pick up the pieces on their own.

[Hazir]

Grexit isn't inevitable, but it seems more and more likely. The problem isn't just the present Greek government, but all Greek governments this century (and God only knows how far it really goes back). They cheated their way into the euro, they have lied consistently about the figures and they are not doing anything to enhance the competitiveness of the country. A whole slew of EU/eurozone countries have gone through the type of reforms Greece needs and are doing relatively well at the moment. It is only Greek intransigence that causes the country to sink deeper and deeper.

And for our American friends; I'm not talking about Greece not taking austerity not serious enough; I'm talking about the Greek governments not taking anything serious enough that isn't about handing out perks to their closest friends.

I personally would rather see them go. Like the Germans say, 'Besser ein Ende mit Schrecken als ein Schrecken ohne Ende'

[Loki]

It would take mental gymnastics of the highest caliber to publicly claim that the two sides' positions can be reconciled. Unfortunately, the Greek leaders don't seem to have any intelligence or diplomatic acumen at all. I don't think there's any agreement that would come close to being remotely acceptable to both sides.

[RandBlade]

There are major deadline in June. Do you think we're reaching the end or will the can be kicked down the road again?

I suspect a kick down the road, but think its a mistake if they do (unless the Greek leaders do the most shocking turnaround ever).

[Loki]

They'll kick it down the road as long as they can. Not sure if there's a concrete deadline where everyone will have to play their cards.

[Hazir]

They'll kick it down the road as long as they can. Not sure if there's a concrete deadline where everyone will have to play their cards.

The distances are getting smaller and most of the actual kicking is done by the ECB at the moment under the guise of ELA. The arm twisting can be intensified a bit more by reducing the ability of Greek banks to keep providing money for their state and I guess at some point capital controls will have to be introduced to avoid the collapse of said banks.

In the end it's clear that Greece will have to give for the simple mandate that the negotiators on behalve of the rest of the eurozone know they'll have a revolt on their hands in their homelands if Greece is not held to its obligation of implementing reforms. The alternative would be funding Greece indefinitely.

I think the most important consideration right now is that nobody wants to be found holding the smoking gun once Greece tips over.

[Hazir]

Seems like Varoufakis dropped the ball last night by saying on TV that leaving the euro would throw back Greece to the stone age.

[RandBlade]

Maybe he's not entirely delusional that leaving the euro would be easy. Sounds like the sanest thing he's said before.

[agamemnus]

I think it is inevitable. Greece needs a mechanism to spend as much as it wants as a consequence of elections. (That means a currency that's going to just keep going down in value, but this is what the Greeks voted for). In fact, I think it is not just inevitable but that we will see a political break-up of Greece into smaller regions, each with their own currency.

[Loki]

Why would that possibly happen? There are no strong regional identities in Greece. There's certainly no groups calling for regional autonomy, let alone independence.

[RandBlade]

Agreed, Greece has a strong national identity and a strong national government. There's no [modern] history of Greece breaking up and no regional nationalists seeking independence. Greece breaking up is a non-starter.

[Hazir]

Agreed, Greece has a strong national identity and a strong national government. There's no [modern] history of Greece breaking up and no regional nationalists seeking independence. Greece breaking up is a non-starter.

If Greece defaults, then I think nothing can be predicted wrt to the future of the country.

[Loki]

Countries default all the time. You need huge pre-existing faultlines for these countries to break up.

[Hazir]

Countries default all the time. You need huge pre-existing faultlines for these countries to break up.

Real loyalties in countries like Greece are to the clan, not to the state.

[Loki]

Clans in Greece? Don't think so. Unless you mean the extended family, which I suppose might be true, but that's not exactly a basis for wanting independence.

[Hazir]

Clans in Greece? Don't think so. Unless you mean the extended family, which I suppose might be true, but that's not exactly a basis for wanting independence.

Greece is held together much more by fear of the 'other' than by love for eachother. Let's wait and see if Cretans are quite happy to pay for Athenians if things fall apart.

[Loki]

Just because people in different parts of the country might disagree with each other doesn't mean they'll ask for independence. As I mentioned, you need some strong pre-existing regional identities and a strong sense of grievance. This isn't something that suddenly appears because of hard times.

[agamemnus]

At the heart of it is that virtually all governments create money out of thin air to pay for spending. I suppose there could be some way to do that -- to allow each region to spend what would be equivalent to fiat money -- without breaking up the country. Perhaps local government bonds, with a certain percent of the interest paid by the European Union?

[RandBlade]

Actually very rarely do governments create money out of thin air to pay for spending. That sort of thing hasn't officially happened very often in the last few decades.

[Loki]

Excluding the multi-ethnic empires/states that broke up after the Cold War, where are all the examples of countries breaking up after financial hardships? Argentina? Thailand? Mexico? Zimbabwe? Iceland?

[agamemnus]

Actually very rarely do governments create money out of thin air to pay for spending. That sort of thing hasn't officially happened very often in the last few decades.

Well, federal reserve systems do it, but it is essentially one big system.

Excluding the multi-ethnic empires/states that broke up after the Cold War, where are all the examples of countries breaking up after financial hardships? Argentina? Thailand? Mexico? Zimbabwe? Iceland?

I didn't say that was common or anything. In any case, all of these countries except Iceland are still dumps.

[RandBlade]

Nationalism leads to break up, not financial hardships. The SNP have existed for nearly a century, Basque nationalism has existed for centuries.

Which major nationalist independence movements exist in Greece?

[Loki]

I didn't say that was common or anything. In any case, all of these countries except Iceland are still dumps.

If by not common you mean no chance of it happening, then you're right.

Nationalism leads to break up, not financial hardships. The SNP have existed for nearly a century, Basque nationalism has existed for centuries.

Which major nationalist independence movements exist in Greece?

Well, financial hardship can be the last straw, but the nationalism is a necessary condition.

[RandBlade]

Agreed that nationalism is necessary but if anything unless pushed to extremes, hardship can make it harder to get through as people feel more insecure and afraid while in a hard situation.

[agamemnus]

I don't think most people understand economics. Hence, Greece.

[earthJoker]

At least we have you.

[agamemnus]

[RandBlade]

So apparently Greece can't afford to repay the IMF (there's a shock). This is going to end so well ... http://www.bbc.co.uk/news/business-32864068

[Hazir]

So apparently Greece can't afford to repay the IMF (there's a shock). This is going to end so well ... http://www.bbc.co.uk/news/business-32864068

I think it's more likely that Varoufakis soon will be out of a job.

[Loki]

This is Voutsis, an even bigger idiot.