Greece referendum results - Overwhelming 'No' vote to latest IMF Bailout offer

[JohnS]

And so Greece has rejected the latest European union bailout offer with the referendum on Sunday indicating the 'No' vote has won.

http://www.bbc.com/news/world-europe-33403665

After defaulting on their IMF loan last month I can't see how the European Union will allow Greece to stay in.

http://www.bbc.com/news/business-33404011

Sadly, I feel very much for my family and friends who will most likely see the value of their currency halve if Greece returns to the drachma, which is the most likely outcome.

We await the European Union meeting on Tuesday. In the meantime, a trip to Greece will be cheaper over the next coming months I would say.

[Ubergosupro69]

I'd love to hear some opinions from people more in tune to the political climate in Europe and Greece.

I'd say my own thoughts are uninformed enough to be worse than worthless.

[Blace]

Will the EU let Greece slip out of the Euro? I think their poorer economic performance (along with Spain/Italy) helps devalue the Euro and allows the big export nations like Germany to benefit from selling their goods internationally at a better price.

If this is the case, no way Merkel lets Greece slip out of the Euro, unless it costs her too many German votes to fight for them to stay in the union.

[Fuzz]

Morons. Hiding your head in the sand will not fix the problem. Saying no will not strengthen Greece's hand at the negotiating table.

[JohnS]

I think Germany are 'stuck in a rock and a hard place'...or perhaps you'd say they are' damned if they go one way and damned if they go the other'.

Yes, the German people would not support crediting Greece further I would reckon.

[JohnS]

Morons. Hiding your head in the sand will not fix the problem. Saying no will not strengthen Greece's hand at the negotiating table.

The reality is that this is correct, no matter how one feels emotionally about it.

[kuma]

ok let another country take Greeces place in the pecking order of Euro countries. I'm sure German, France and even

England would not mind. These countries have the power to change the by-laws at any time. They (euro counties)

don't even follow their own rules. Look at the border situation. All countries that wanted to be part of a unified front

(euro zone) had to swear that they would keep their borders open. So what country would I like to see

take greeces place how about Singapore or Vietnam. They both are doing much better than most of

the southern rim Euro countries!

[El Presidente]

Morons. Hiding your head in the sand will not fix the problem. Saying no will not strengthen Greece's hand at the negotiating table.

I like the way they played this one

Having so many Greeks on the deck (regularly : Artie/Stan/Anthony/Phil) The Greek situation is a constant topic of discussion.

As I see it from a long way away:

Greece could never pay the debt. Seeking a significant write-off and a "start again".

Referendum was in poker play .....an "All in"

Now it is up to the rest of the EU to "fold" or "call".

[JohnS]

Fair enough Rob...good point. I'm concerned that the European Union will 'call' Greece's bluff and as a result Greece will be worse off in the long term.

[Fuzz]

If I were the Eurozone, I'd wait a few weeks before coming back to the table. By that time, the Greek banks will be out of money. Then we will see how well the No party feels about their decision.

[Fuzz]

I hear that the Greek government's photocopiers have been running all night printing Drachmas!

[El Presidente]

Fair enough Rob...good point. I'm concerned that the European Union will 'call' Greece's bluff and as a result Greece will be worse off in the long term.

Not sure how Greece could be "worse off" long term. Short term almost certainly.

In many ways it is the old story that if you owe 1million Euro... you have a problem. If you owe 300 Billion Euro then the lenders have the problem.

It is a basketcase situation either way they go. They appear incapable of putting together a 20-30 year structural plan which is what I think everyone agrees is needed. A structural plan however that builds Greece over time and get's them to a sustainable budgetary position.

The Greek Govt can't do it. EU/IMF will need to work with them to get them there. Every country is unique in its cultural circumstance. Greece is never going to be Germany but maybe take a model like Ireland post bust. Incremental improvement.

If the voting population can not see a way out then in a democratic system you will only see more of what has just occurred. That is the greatest fear (Spain/Portugal etal going down the same track).

[Ken Gargett]

i am a bit like our friend above who is interested but doesn't know enough about it to make worthwhile comments.

that said, it seems that they are stuffed but that they have brought a lot of this on themselves. and now expect others to bail them out. so we now have the welfare planet.

they have had govts running on absurd policies - those pension schemes and retirement ages and so on were always insane. but people would vote for the pot of gold and any politician not making these crazy unfulfillible promises had no chance. and little seems to have changed.

fortunately, the rest of the world will see this and politicians will stop making dimwitted promises and all will be well.

as for borders, well the greeks might find out that if they are not part of the EU, they are not as welcome throughout the rest of europe.

[Fuzz]

Read over the weekend that even if the public voted yes, the PM said he wouldn't agree to the bailout anyway.

[soutso]

This is the great flaw of the European Union. You have pitted a currency to represent rich nations along with poorer ones.

When the poorer nations fail, the rich ones will be reluctant to fund their recovery.

A welfare system within a country is accepted. In Australia we give ample welfare to the poor and do so as they are our fellow Australians. (Trying to avoid a debate on welfare here, just pointing out the thoery behind it) A portion of our GST collected is theoretically allocated to each State, not based on per capita but on what is deemed needed for that particular state. In essence and as an example, I am happy if my tax dollers are spent helping Qld (I'm from NSW) if the people of Qld need certain infrastructure. (Though not during the State of Origin Series LOL) I am happy to know that my tax dollars are used on fellow Australians, wherever they reside in Australia.

I would not be happy to fund a revival for an economy that is foreign to Australia unless we are talking about a catastrophe etc

When the USA experienced economic problems they printed more money to kickstart the econmy - Greece cannot do that. Hence the problem with the Euro. The folk who decided to stick with the British Pound currency are .... geniuses!

They will do everything they can to keep Greece in the EU. If Greece leave, this will open the door for Portugal, Ireland and Spain's exit.

[Ken Gargett]

. In essence and as an example, I am happy if my tax dollers are spent helping Qld (I'm from NSW) if the people of Qld need certain infrastructure. (Though not during the State of Origin Series LOL) I am happy to know that my tax dollars are used on fellow Australians, wherever they reside in Australia.

may i just say that it is nice you think you help us. we (and allow me to include WA), in return, are happy that our decades of providing mineral richness to the rest of the country are finally apparently bringing its reward.

as for the origin period, i won't touch a nsw wine or let a car with nsw plates take right of way, so i understand the sentiment.

[Dimmers]

Lets see what happens with Eurozone negotiations overnight. Greek banks reportedly have less than 50 euros / person in cash, so they'll run dry within the first hour if Greece is indeed cut off.

[paulF]

Already talks of printing counterfeit euros... If that happens, i definitely wouldn't want to be holding any Euros!

[Ken Gargett]

Already talks of printing counterfeit euros... If that happens, i definitely wouldn't want to be holding any Euros!

i'm a bit confused re this - apols. do you mean general crims, greek citizens or the greek govt?

if the former, always a risk for every country. can't see it as anything more or less than usual.

the citizens - this would simply make them crims and how many have the expertise and equipment in place to do this?

if the govt, that would be pretty close to an act of war. it would be the sort of act from which there was no coming back, at least in the short term. i can't believe that they would consider it. mind you, been wrong many times before.

or is there something i am missing?

[GasGuy82]

As the child of Greek immigrants and also an avowed capitalist, we have had many discussions in our house about the Greek situation. While Greece and it's socialist policies of the 70's and 80's have contributed much to the current plight of the Country, if Greece defaults, banks fail and medicine is taken resulting in true changes, they are just doing what the U.S. should have done 7 years ago. A tenet of Capitalism is risk, risk inherently carries reward and failure. If you have both, people will make smarter, more conservative decisions. The flow of capital will be directed where it is most appropriate, not where you can reap the greatest reward with government guarantee that you won't lose your ass. By Government guarantee I am referring to French and German banks with massive exposure to Greek debt. The lack of M2M accounting I. Germany is hiding a massive problem in Germany that I believe Merkel realizes. Below are some interesting articles on the situation:

1) http://blacksummitfg.com/3091

2) How I Would Vote in the Greek Referendum

By Joseph Stiglitz, Guardian UK - 30 June 15

Neither alternative approval or rejection of the troikas terms will be easy, and both carry huge risks

<rsn-T.jpg>he rising crescendo of bickering and acrimony within Europe might seem to outsiders to be the inevitable result of the bitter endgame playing out between Greece and its creditors. In fact, European leaders are finally beginning to reveal the true nature of the ongoing debt dispute, and the answer is not pleasant: it is about power and democracy much more than money and economics.

Of course, the economics behind the programme that the troika (the European Commission, the European Central Bank, and the International Monetary Fund) foisted on Greece five years ago has been abysmal, resulting in a 25% decline in the countrys GDP. I can think of no depression, ever, that has been so deliberate and had such catastrophic consequences: Greeces rate of youth unemployment, for example, now exceeds 60%.

It is startling that the troika has refused to accept responsibility for any of this or admit how bad its forecasts and models have been. But what is even more surprising is that Europes leaders have not even learned. The troika is still demanding that Greece achieve a primary budget surplus (excluding interest payments) of 3.5% of GDP by 2018.

Economists around the world have condemned that target as punitive, because aiming for it will inevitably result in a deeper downturn. Indeed, even if Greeces debt is restructured beyond anything imaginable, the country will remain in depression if voters there commit to the troikas target in the snap referendum to be held this weekend.

In terms of transforming a large primary deficit into a surplus, few countries have accomplished anything like what the Greeks have achieved in the last five years. And, though the cost in terms of human suffering has been extremely high, the Greek governments recent proposals went a long way toward meeting its creditors demands.

We should be clear: almost none of the huge amount of money loaned to Greece has actually gone there. It has gone to pay out private-sector creditors including German and French banks. Greece has gotten but a pittance, but it has paid a high price to preserve these countries banking systems. The IMF and the other official creditors do not need the money that is being demanded. Under a business-as-usual scenario, the money received would most likely just be lent out again to Greece.

But, again, its not about the money. Its about using deadlines to force Greece to knuckle under, and to accept the unacceptable not only austerity measures, but other regressive and punitive policies.

But why would Europe do this? Why are European Union leaders resisting the referendum and refusing even to extend by a few days the June 30 deadline for Greeces next payment to the IMF? Isnt Europe all about democracy?

In January, Greeces citizens voted for a government committed to ending austerity. If the government were simply fulfilling its campaign promises, it would already have rejected the proposal. But it wanted to give Greeks a chance to weigh in on this issue, so critical for their countrys future wellbeing.

That concern for popular legitimacy is incompatible with the politics of the eurozone, which was never a very democratic project. Most of its members governments did not seek their peoples approval to turn over their monetary sovereignty to the ECB. When Swedens did, Swedes said no. They understood that unemployment would rise if the countrys monetary policy were set by a central bank that focused single-mindedly on inflation (and also that there would be insufficient attention to financial stability). The economy would suffer, because the economic model underlying the eurozone was predicated on power relationships that disadvantaged workers.

And, sure enough, what we are seeing now, 16 years after the eurozone institutionalised those relationships, is the antithesis of democracy: many European leaders want to see the end of prime minister Alexis Tsipras leftist government. After all, it is extremely inconvenient to have in Greece a government that is so opposed to the types of policies that have done so much to increase inequality in so many advanced countries, and that is so committed to curbing the unbridled power of wealth. They seem to believe that they can eventually bring down the Greek government by bullying it into accepting an agreement that contravenes its mandate.

It is hard to advise Greeks how to vote on 5 July. Neither alternative approval or rejection of the troikas terms will be easy, and both carry huge risks. A yes vote would mean depression almost without end. Perhaps a depleted country one that has sold off all of its assets, and whose bright young people have emigrated might finally get debt forgiveness; perhaps, having shrivelled into a middle-income economy, Greece might finally be able to get assistance from the World Bank. All of this might happen in the next decade, or perhaps in the decade after that.

By contrast, a no vote would at least open the possibility that Greece, with its strong democratic tradition, might grasp its destiny in its own hands. Greeks might gain the opportunity to shape a future that, though perhaps not as prosperous as the past, is far more hopeful than the unconscionable torture of the present.

3).

By Paul Krugman

Op-Ed Columnist

The New York Times

Greece Over the Bring

It has been obvious for some time that the creation of the euro was a terrible mistake. Europe never had the preconditions for a successful single currency above all, the kind of fiscal and banking union that, for example, ensures that when a housing bubble in Florida bursts, Washington automatically protects seniors against any threat to their medical care or their bank deposits.

Leaving a currency union is, however, a much harder and more frightening decision than never entering in the first place, and until now even the Continents most troubled economies have repeatedly stepped back from the brink. Again and again, governments have submitted to creditors demands for harsh austerity, while the European Central Bank has managed to contain market panic.

But the situation in Greece has now reached what looks like a point of no return. Banks are temporarily closed and the government has imposed capital controls limits on the movement of funds out of the country. It seems highly likely that the government will soon have to start payingpensions and wages in scrip, in effect creating a parallel currency. And next week the country will hold a referendum on whether to accept the demands of the troika the institutions representing creditor interests for yet more austerity.

Greece should vote no, and the Greek government should be ready, if necessary, to leave the euro.

To understand why I say this, you need to realize that most not all, but most of what youve heard about Greek profligacy and irresponsibility is false. Yes, the Greek government was spending beyond its means in the late 2000s. But since then it has repeatedly slashed spending and raised taxes.Government employmenthas fallen more than 25 percent, and pensions (which were indeed much too generous) have been cut sharply. If you add up all the austerity measures, they have been more than enough to eliminate the original deficit and turn it into a large surplus.

So why didnt this happen? Because the Greek economy collapsed, largely as a result of those very austerity measures, dragging revenues down with it.

And this collapse, in turn, had a lot to do with the euro, which trapped Greece in an economic straitjacket. Cases of successful austerity, in which countries rein in deficits without bringing on a depression, typically involve large currency devaluations that make their exports more competitive. This is what happened, for example, inCanada in the 1990s, and to an important extent its what happened in Icelandmore recently. But Greece, without its own currency, didnt have that option.

So have I just made the case for Grexit Greek exit from the euro? Not necessarily. The problem with Grexit has always been the risk of financial chaos, of a banking system disrupted by panicked withdrawals and of business hobbled both by banking troubles and by uncertainty over the legal status of debts. Thats why successive Greek governments have acceded to austerity demands, and why even Syriza, the ruling leftist coalition, was willing to accept the austerity that has already been imposed. All it asked for was, in effect, a standstill on further austerity.

But the troika was having none of it. Its easy to get lost in the details, but the essential point now is that Greece has been presented with a take-it-or-leave-it offer that is effectively indistinguishable from the policies of the past five years.

This is, and presumably was intended to be, an offer Alexis Tsipras, the Greek prime minister, cant accept, because it would destroy his political reason for being. The purpose must therefore be to drive him from office, which will probably happen if Greek voters fear confrontation with the troika enough to vote yes next week.

But they shouldnt, for three reasons. First, we now know that ever-harsher austerity is a dead end: after five years Greece is in worse shape than ever. Second, much and perhaps most of the feared chaos from Grexit has already happened. With banks closed and capital controls imposed, theres not that much more damage to be done.

Finally, acceding to the troikas ultimatum would represent the final abandonment of any pretense of Greek independence. Dont be taken in by claims that troika officials are just technocrats explaining to the ignorant Greeks what must be done. These supposed technocrats are in fact fantasists who have disregarded everything we know about macroeconomics, and have been wrong every step of the way. This isnt about analysis, its about power the power of the creditors to pull the plug on the Greek economy, which persists as long as euro exit is considered unthinkable.

So its time to put an end to this unthinkability. Otherwise Greece will face endless austerity, and a depression with no hint of an end.

[paulF]

i'm a bit confused re this - apols. do you mean general crims, greek citizens or the greek govt?

if the former, always a risk for every country. can't see it as anything more or less than usual.

the citizens - this would simply make them crims and how many have the expertise and equipment in place to do this?

if the govt, that would be pretty close to an act of war. it would be the sort of act from which there was no coming back, at least in the short term. i can't believe that they would consider it. mind you, been wrong many times before.

or is there something i am missing?

Not missing anything Ken and it is getting a bit crazy... The suggestion came from the finance minister Varoufakis himself as per link below:

http://www.telegraph.co.uk/finance/economics/11719688/Defiant-Greeks-reject-EU-demands-as-Syriza-readies-IOU-currency.html

[Ken Gargett]

Not missing anything Ken and it is getting a bit crazy... The suggestion came from the finance minister Varoufakis himself as per link below:

http://www.telegraph.co.uk/finance/economics/11719688/Defiant-Greeks-reject-EU-demands-as-Syriza-readies-IOU-currency.html

wow. thanks for that. amazing. people are voting no because they are sick of economic depression. so they are blaming everyone but themselves - they are the bernard tomic of europe.

temporary coupons is one thing but then i saw that they might print E20 notes. i can't imagine where this might all lead if that happens but it will be much, much uglier than what we have now.

[LordAnubis]

Apparently participation levels were in the range of 65%. That seems a bit low doesn't it? I wonder what participation levels are normally like, for say the recent irish referendum or for australian voting etc?

I wonder what the IMF terms were, and what the referendum question was.

[GasGuy82]

A bigger issue the EU may want to consider is the old saying "never let a crisis go to waste", do we really want a chaotic Greece to become the front door into Europe for some of the violence ongoing nearby?

[Ken Gargett]

Apparently participation levels were in the range of 65%. That seems a bit low doesn't it? I wonder what participation levels are normally like, for say the recent irish referendum or for australian voting etc?

I wonder what the IMF terms were, and what the referendum question was.

compulsory in australia.

which i find outrageous but there it is.