Why Greece should default on its debts and leave the Euro


8:50 am - November 2nd 2011

by Sunny Hundal    


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Last night the Greek cabinet backed PM George Papandreou’s proposal for a referendum on the bailout deal. Regardless of what bailout deal is eventually offered – the latest one hasn’t even been finalised yet – the public will very likely reject it.

No wonder the markets are in panic: they hate the uncertainty of public opinion and democracy.

It’s much easier for them to deal with stitch-ups negotiated by governments and IMF officials, forcing austerity on people than face the prospect of bank losses. Worse, the Greek problem isn’t even the worst calamity the Eurozone has to deal with.

That problem is Italy.

But briefly, here is the case for Greece to leave the Eurozone.

As Frances Coppola has already pointed out, the Eurozone pursued monetary policies that was biased in favour of larger, richer nations such as France and Germany, while smaller countries like Greece suffered.

The bailout is essentially a plan to save German and French banks, which hold a bulk of Greek debt. If it had been held by local banks, Greece could have defaulted ages ago, nationalised those banks and wiped its debts.

We’re being sold this bogus line that Greece needs austerity because it spent far too much during the good years. Yes, Greece did run an unsustainable deficit, but that can only be dealt now by growing the economy – not imposing the kind of severe austerity that shrinks the economy at a horrifying rate.

Even correspondents at the Telegraph now recognise this:

Greece has been subjected to the greatest fiscal squeeze ever attempted in a modern industrial state, without any offsetting monetary stimulus or devaluation. The economy has so far collapsed by 14pc to 16pc since the peak – depending who you ask – and is spiralling downwards at a vertiginous pace.

The debt has exploded under the EU-IMF Troika programme. It is heading for 180pc of GDP by next year. Even under the haircut deal, Greek debt will be 120pc of GDP in 2020 after nine years of depression. That is not cure, it is a punitive sentence

Greece should leave the Eurozone for its own sake, and I hope Greeks will trigger that by rejecting the bailout plan.

Here’s the bigger problem: the failure of European politicians to accept this inevitable outcome illustrates the sort of political paralysis that can only make things worse.

And that problem is Italy. Greece is peanuts compared to Italy – which has €1.9 trillion in public debt and nearly €3.5 trillion in total debt.

Think of financial crash following 2008 and multiply it by ten times, possibly more. We really are staring into an abyss.

The attempt to preserve Greece within the Eurozone is now a distraction from the much bigger problem of Italy. And if they can’t even solve the first problem, which has been dragging on for months, we really are in deep shit.

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About the author
Sunny Hundal is editor of LC. Also: on Twitter, at Pickled Politics and Guardian CIF.
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Reader comments


The problem with Italy is compounded by other factors – when the debt has to be repaid and/or rolled over (soon for rather a lot of it), and the sclerotic nature of the current Government, with “Duce” Berlusconi little more than a figure of fun.

Berlusconi should do his country a favour and go.

2. So Much For Subtlety

We’re being sold this bogus line that Greece needs austerity because it spent far too much during the good years. Yes, Greece did run an unsustainable deficit, but that can only be dealt now by growing the economy – not imposing the kind of severe austerity that shrinks the economy at a horrifying rate.

But how to grow the economy? Too many people are on civil service pay rolls. Too many regulations preserve markets for political cronies. Too many laws make it impossible for businesses to grow.

Greece needs austerity because nothing else can promise sustainable growth in the longer term.

The debt has exploded under the EU-IMF Troika programme. It is heading for 180pc of GDP by next year.

Some austerity! It is an interesting definition of austerity that sees Greek debt grow and grow and grow.

Whikst I agree with Sunny for the most part (shocker), most greek debt is actually held by greek pension funds and banks, with european banks second biggest. A defaulkt would do massive damage to the greek pension system.

It would also be the end of the euro, alnost inevitably, as other countries move off the peg to regain competativeness and have external currency devaluations rather than the more painful internal devaluations through austerity.

Either way will involve pain for people though, as the root problem – too high spending and unsustainable debt and deficit levels – will remain.

4. ManonClaphamOmnibus

Roll on the breakup of the Euro. The European Union is and never has been a common economic area. Its purpose was to intensify European capitalism and as such was always destined to intensify the divisions between rich and poor pretty much in the same way as the north and south in the UK. Diverse economies should always have the opportunity to regulate their affairs through exchange rate mechanisms.Otherwise this is what you get.

Sunny,

An article I generally agree with.

Tim Fenton re comment 1:

Berlusconi isn’t the problem.
It might appear a nice idea to rid Italy of ‘Mr Bunga Bunga’ and his coalition with a technocrat, but that might well return us to the revolving doors style of leadership Italy used to suffer so badly from.
That’s uncertainty akin to throwing petrol on the fire.

I agree that Greece should default. I suspect the Greek people will be bullied and bludgeoned into voting yes

SMFS: “Some austerity! It is an interesting definition of austerity that sees Greek debt grow and grow and grow.”

If you throw hundreds of thousands of people out of work, they can’t pay tax. They claim benefits. If you abolish benefits, they will steal in order to eat, transferring costs to the economy by a different route.

As the past few months have shown, austerity which smashes the economy to bits is not a viable method of reducing either the deficit or the debt. Governments get their income from the economy.

8. So Much For Subtlety

7. jungle

If you throw hundreds of thousands of people out of work, they can’t pay tax. They claim benefits. If you abolish benefits, they will steal in order to eat, transferring costs to the economy by a different route.

People who steal belong in jail. People on benefits need to work. If all that is keeping them from stealing is benefits, I suggest their abolition so we can spot the psychopaths among us and jail them indefinitely.

As for the rest, well yes and no. But it misses the point. What austerity? If you cut taxes, businesses will grow. If you pay off the debt, interest rates will drop which means businesses will grow. If you want Greece to grow out of this mess, you need to reduce the regulatory burden, the corruption and the taxes. Simple. There is no other viable alternative.

As the past few months have shown, austerity which smashes the economy to bits is not a viable method of reducing either the deficit or the debt. Governments get their income from the economy.

On the contrary. Austerity works. Increasing the debt does not. We know this. Greece does not have an economy to smash. What is dying is the bubble caused by European lending which made the Greeks about twice as rich as they really are. Now they are returning to reality. The only way to have a viable economy is to keep the debt and the deficit down to a manageable level. Zero would be nice.

As I have said before this is Not a sovereign debt crises. This is a banking debt crises. The global elites and their puppet politicians don’t like the idea that nations can refuse to pay back loans. Our very own nupty chancellor is as usual acting for his bank mates and elites in pushing austerity.

The elites have for years used dodgy loans to control nations and people in the knowledge that if it goes tits up they can impose austerity on the people. It is a classic heads i win tails you lose global elite fixed casino.

But if Greece defaults the credit default swaps will kick in, and the fake insuranse sold by the criminal banking corporations will not be able to pay out, and the banks go bust. Global elites can never allow this to happen. Crony capitalism must be defended by the elites and the political puppets.

8 “people who steal belong in jail”

Well you better put most management and traders of most investment banks in jail then.

“Greece is peanuts compared to Italy – which has €1.9 trillion in public debt and nearly €3.5 trillion in total debt.”

Usng nominal terms is a misleading way of expressing national debt. As you know full well, its size is more accurately and truthfully expressed in terms of a percentage of natinal income. You’re one of the first to call foul when Labour’s debt is expressed in money terms. Double standards.

“No wonder the markets are in panic: they hate the uncertainty of public opinion and democracy.

It’s much easier for them to deal with stitch-ups negotiated by governments and IMF officials, forcing austerity on people than face the prospect of bank losses. ”

Dear Lord Sunny, how to get things the wrong way around.

Yes, of course Greece should default yes of course they should leave the euro. Should never have joined in hte first place.

Now, with that out of the way, can I just remind you that it has been the markets, all along, that have been insisting that this is the way out?

As in, every time the politicians announce some grand new plan it’s been the markets that say, umm, guys, you know that won’t work?

Every single time the governments, the IMF, the ECB, EFSF etc have announced a “deal” it’s been the markets that point out the Emperor is wearing no clothes.

It’s the markets we have to thank for pointing this out.

BTW, it’s not actually the French banks who are the major foreign holders of Greek debt. It’s public sector bodies now. The ECB, EFSF, IMF and all that. Which is actually what hte problem is with hte currently proposed deal.

Only the private sector holders take a haircut of 50%. The public sector holders take a haircut of 0%. Which means that the total reduction in Greek debt is around 20%. Which simply isn’t enough. Which is why the markets are still marking down Greek debt etc, because it’s the markets pointing out that this deal just won’t work, whatever the damn polticians say.

The commentator above summed up the truth when he or she said: “What is dying is the bubble caused by European lending which made the Greeks about twice as rich as they really are. Now they are returning to reality.”

The creation of the Euro has facilitated the biggest national credit binge in history with countries like Greece, Italy and Portugal going on a vast spending spree using Germany’s credit card. And, as always when recession strikes, the chickens are coming home to roost.

Te Greeks are like a bunch of brattish teenagers who have been told that all these fancy clothes they bought at the Armani store have to go back. Temper tantrums cut no ice, Mr Greek – it’s not your f***ing money – and it never was!

@11 “Usng nominal terms is a misleading way of expressing national debt.”

Not when you’re talking about the impact on the global markets of haircuts/default.

“People who steal belong in jail.”

and how are you going to pay for these jails?

It’s cheaper to pay benefits to someone than keep them in jail.

@ 9 sally

This is very much a soveriegn debt crisis. Governments have too much debt, unsustaiably so, and are running large deficits. Sure, a governemt canrefuse to pay back loans, but then who do you suppose is going to lend them the money to cover their deficits?

I won’t even go into the nonsense you are spouting about CDS and trading though. If you ban CDS, which is really a very small market in comparison to govt bond markets themselves you are essentially banning insurance – and you would make the problem worse as the biggest buyers of CDS tend to be the biggeest holders of the underlying bonds. They would have to dump the bonds if the CDS was banned or worthlessN compounding the problem.

Being a trader myself, it is extremeley hard to do anything illegal even if I wanted to. All my phones lines are recorded, and all my emails and bloomberg msgs saved. I then have two layers of backoffice as well as management and compliance. It’s simply amazing things like the UBS and SOCGEN issues can even happen these days. Its hardly an easy game either – spreads are incredibly tight and we can lose money as well as making it.

But I suppose that is where youur hypocrisy comes to the fore. If we make money you complain saying we steal from people, but then if we klose money (which is unfortunate but not illegal) its somehow a crime as well.

“Sure, a governemt canrefuse to pay back loans, but then who do you suppose is going to lend them the money to cover their deficits?”

If a government runs a balanced budget or even a surplus, and has no intention or need of borrowing in the forseeable future, then isn’t default a particularly attractive option if it would immediately free up significant amounts of cash being used to service debts?

18. Luis Enrique

all the options are bad and perhaps disorderly default and Euro exit is the least bad, although anybody who thinks their ability to foresee which option is best is any better than their ability to predict the score in the next Man U v Man City match, is deluding themselves.

I’m not sure rejecting bailouts is a way to avoid austerity – the bailouts involve the Greek government continuing to borrow, I think. If Greece defaults, won’t austerity be forced upon it by the inability to finance a deficit?

Are you sure that lots of Greek government debt is not held by local banks and local investors (pension funds)? Or has the ECB, IMF and others been buying it off them? .

I don’t see how a disorderly default by Greece and Euro exit is going to help things with Italy.

Jungle @ 7:

“If you throw hundreds of thousands of people out of work, they can’t pay tax. They claim benefits.”

People on the government payroll will pay their taxes back with money they got from the government in the first place. They cannot gain money for the exchequer, only take slightly less from it. Moving them onto benefits is unlikely to be more expensive unless they receive more in benefits than they did in post-tax income, which as benefits are usually set at quite a low level is unlikely.

Some austerity! It is an interesting definition of austerity that sees Greek debt grow and grow and grow.

Greek debt is growing relative to GDP because the Greek economy is collapsing. It doesn’t matter how quickly you slash spending if that results in even faster economic contraction. This is the flip side of the fiscal multiplier.

16 “being a trader myself”

Well you better throw yourself in jail then.

22. Paul Newman

A post I more or less entirely agree with. It is a bit sick having Sunny Hundal state the bleeding obvious though.Greece has been full of Hundals telling Public Sector sinecure holders they are vital and should be better paid and more numerous , applauding increased borrowing at every stage, and fostering a fantasy in which spending is investment, efficiency counter productive and jobs are the same as employment .

Going to be a strange referendum that’s for sure. Its being reported the French have threatened the Greeks with EU expulsion if the people vote the wrong way. Its the EU against democracy, not even you lot can deny it anymore.

Time for you to say sorry?

@21

You really are a vile little fascist aren’t you dear?

If Greece defaults, won’t austerity be forced upon it by the inability to finance a deficit?

As I understand it, Greece is on course for a primary surplus some time next year. That does of course include all the austerity measures taken so far.

Is there any reason — other than that the Germans and the French wouldn’t allow it — why Greece couldn’t default on its debts and stay in the Euro?

@26.

Two entirely different answers. Staying in hte euro doesn’t solve the basic competitiveness problem. So they should leave.

On the other hand, legally, there’s no mechanism to throw anyone out of the euro. So if they decide to default and stay there’s not much anyone can do about it.

Greece seems to have lost out all round by joining the Euro – as someone said the Euro’s beneficiaries have been just Germany and France.
In recent years, for example, Greece has gone from an exporter of agricultural produce to an importer, as a result of EU policies, and their industry has been ‘plundered and swamped’ by large German firms.
Greece would be best to default on it’s debt as this will prove marginally better than having it’s democracy passed to the Troika, Countries in South America recovered under their own efforts when they declined loans, and rule, from the IMF – these economies are now among the fastest growing in the world.

@ 17 planeshift

You’re quite right, but greece runs a primary deficit at the moment – without interest payments it still runs a deficit. It also doesn’t solve the problem of greek pension funds who are roughly 50% invested in greek debt. It was mostly european banks who offloaded their greek bonds onto the efsf and ecb.

Italy however runs a primary surplus…..

@18 luis

Again you are right. If greece defaults it will still have austerity forced on it. It would probably be shorter and less painful though, and allow the country to regain economic competativeness much quicker.

One way or another though there is still going to be pain somewhere, as the greeks spent and borrowed too much. Simply put, the pain is unavoidable somewhere, and greece will have to spend and borrow less going forward.

@ sally

You really are a horrible small minded little trot aren’t you. Go and read animal farm for a good explanation of your favourite breed of politics.

30. Leon Wolfson

Greece ALSO runs a trade deficit, in critical areas – food, industrial parts and oil.

This is also overlooking the catastrophic damage caused to some austerity-brittled economies by a default. Like the UK. A hard recession is inevitable if Greece goes.

It’s also risking further collapses and bringing down the EU. Which I’m sure the right on here and SMFS would cheer.

Perhaps it wouldn’t be so bad if all the basket case eurozone countries bowed to the inevitable, exited the euro, defaulted and started again on the basis of managing their own economies in their own interests. It would sink the euro and further political and economic integration in the EU though. The question is, why should Greek people (and Italian people, and Spanish people etc) be expected to care more about the EU project than about their own well-being?

The euro has all the hallmarks of being considered something that is “too big to fail”. Perhaps that is the wrong way of characterising it and other things, like banks, that governments have spent billions frantically trying to save. They might better be considered to be things which are “too big to succeed”.

23 tory troll ” time for you to say sorry”

Who took us into the Eu? Who signed the European single act? Who signed the Maastricht treaty? No one has given away more sovereignty the the tory party, and never once have they given the people a referendum. So get on your knees and apologise before you lecture others.

33. Leon Wolfson

@23 – Given the way the EU is structured, it’s considerably more representative in democratic terms than the UK government.

Want to admit you have a nice tyranny going here? That it’s not enough and you’re STILL fixing the vote for next time?

I couldn’t agree more with Sunny, who departs from the usual Lib/Prog europhilia (Nick Clegg is still lagging behind).
In a similar vein, read what BBC’s Europe editor wrote today (http://www.bbc.co.uk/news/world-europe-15553685):
“In the end, the vote will come down to choice. The Greek people must decide whether membership of the eurozone is more important than retaining control of their future. Many will see it as a healthy debate.”
But:
“Europe’s leaders often fear the people. They do not like the messiness of democracy intruding on their project. “Referendum” is a dirty word in Brussels. French President Nicolas Sarkozy has said “giving people a voice is always legitimate but the solidarity of all eurozone countries is not possible unless each one agrees to measures deemed necessary”. In other words, the needs of the eurozone trump democracy.”

In the coming hours, days and weeks, the Greeks will be served with an “Irish coffee”. I mean will be blackmailed by the EU and threatened to sop receiving aid unless they vote the “right” way. It’s about saving the euro, and the faces of eurocrats, and bankers’ big pockets at ALL COSTS. Whatever the price. This has hardly anything to do with democracy, and certainly not with political liberalism.

The proof of the EU pudding: the EU is far from being a democracy and will certainly never be capable of being an union.

PS: That said, I’m afraid this referendum comes too slow too late. Greece is anyway caught between the EU/financial markets devil and the deep blue sea of a return to its former currency and… financial markets’ pressure.

“The creation of the Euro has facilitated the biggest national credit binge in history with countries like Greece, Italy and Portugal going on a vast spending spree using Germany’s credit card.”

Exactly.

Greece spent money that it didn’t have. The Greek government lied about the extent of its deficit. Effectively the lifestyle of the Greek people was being funded by the rest of Europe. Now that has to stop, and yet somehow this is the fault of anyone but the Greeks themselves.

The Greeks may well decide to default. But if anyone thinks that will spell anything but further ruin for them they are delusional. They won’t have any money and they won’t be able to get anyone to lend to them. Banks and governments would be mad to.

By all means argue for alternative strategies but what is being argued above is effectively for Greeks to burn down their own house, with themselves in it, in order to stop the repossession of goods they haven’t paid for. I’m sure it will harm their creditors but it will be far more damaging to the Greeks themselves.

37. Frances_coppola

So Much For Subtlety

The debt is rising so much for two main reasons:

1) Debt is quoted as a percentage of GDP. Greece’s debt is rising as a percentage of GDP because GDP is shrinking fast – as Sunny’s article points out.

2) Greece is making interest payments at loan-shark levels on its debt. Almost all of its current deficit is accounted for by interest payments. Greece is currently on course to achieve primary surplus next year.

Austerity measures are CAUSING the shrinkage of GDP that is raising the debt percentage. It is completely the wrong medicine for growth and debt reduction.

Yes, Greece does need structural reform of its public sector. But trashing its economy to achieve this is pointless without compensatory measures to encourage private sector development. Where is the inward investment from richer Eurozone countries that is necessary to enable the private sector to grow? Come to that, where is the investment from rich Greeks? Where are the exports going to come from while Germany is running massive trade and fiscal surpluses?

Structural reforms are needed in the richer countries too. Germany and other surplus countries need to relax their fiscal discipline to encourage domestic spending so that smaller Eurozone countries such as Greece have a fighting chance of being able to export to them. Unless the trade imbalances between Eurozone members are addressed, the severe recession in Greece will spread to the rest of the Eurozone, including Germany. It is already beginning to do so.

38. So Much For Subtlety

15. Planeshift

and how are you going to pay for these jails?

That’s what we pay tax for.

It’s cheaper to pay benefits to someone than keep them in jail.

No it isn’t. Someone who goes to jail commits something like 150 crimes in the previous year. Only the very dumb go to jail so the rest are, presumably, getting away with more. If it costs, say, somewhere between £30,000 and £45,000 to keep someone in our luxury hotels that pass themselves off as prisons, then as long as they inflict more than £200 to £300 worth of damage per crime it is cheaper to keep them in prison. £200 might get your window repaired. So yes, prison is the cheaper option.

” It’s much easier for them to deal with stitch-ups negotiated by governments and IMF officials…”

I really think you need to get the simple facts right to understand the issues. If the IMF had been leading things from the beginning they would have forced Greece to default on their creditors. The stitch up along has been by the European officials. The IMF can only lend if they have privileged creditor status senior to all other creditors. Therefore, the IMF nearly always insist on default to other creditors because that makes repaying IMF loans easier. Unless the nation is a complete failed state they do not default to the IMF. The IMF is the end of the line for nations who need to borrow. Default to them and there is nowhere else to go. Put the blame firmly where it belongs and that is at the door of the European officials who created the whole mess.

There are no good options for Greece now. Easy options never existed for them at any time and that is why market participants pick apart every half baked scheme that officials come up with. The latest ‘ voluntary ‘ default for the commercial sector and no default for debt held by the official sector is just the latest in a long line of idiocies.

The myth is growing in Greece that the debts were somehow nothing to do with them. Except it was this sovereign debt that was paying for their schools, hospitals and 14 month in the year salaries for their public sector. Greeks did not value those things highly enough to actually pay for them so turned to others to pay for their state. The tap has been turned off and they are now learning the size of state that they were prepared to pay for and that self-evidently means austerity. Given a choice between paying taxes and national bankruptcy, they chose the latter.

They can’t austere themselves to prosperity. However, they are trying to cut themselves to a primary surplus and even that seems a forlorn hope. The plan along seems to have been to try to get to a primary surplus and then default on all external debt. The state with a primary surplus would then not be reliant on external creditors for revenue. However, taxing the tax avoiding and evading rich in Greece is not so easy. They have exited Greece taxing their capital with them because they knew what was coming. Capital controls would now be almost pointless.

What the dominant wishes in Greece want to happen is incoherent.’ We should default on our debts, stay in the eurozone and you must continue giving us money because we do not like austerity. ‘ They should default and leave the EZ, that route is the only way that they can exit the trap that they are in. However, it is no easy option and they will suffer an even bigger fall in living standards than they are currently experiencing. The difference is it allows them a way to recover. Moreover, as long as they have a primary deficit even after leaving the EZ, some international body must fund the government.

Greece is manageable even for the numpty European officials. Italy will crush them and Italy can’t survive paying current rates on their debt.

No bankers have gone to jail for the mortgage fraud that has destroyed the economy on both sides of the Atlantic.

No banker has gone to jail for packaging up parcels of worthless piles of shit and then flogging it to their clients.

No member of any credit agency who signed off on AAA ratings has gone to jail.

Message to tory trolls, don’t spout your moral clap trap about prisons on here.

41. Leon Wolfson

@34 – ““Referendum” is a dirty word in Brussels. ”

As it should be. As it is here. As it is anywhere where external funders can buy their way to victory.

And thanks for admitting you support Tyranny here.

@38 – Cite.

From Reuters…

“The full extent of the futures brokerage’s big bets on the recovery of European debt only emerged in recent weeks, as MF Global revealed in public filings that it had a long position of $6.3 billion in short-duration European sovereign debt — roughly five times the firm’s book value, or net worth.”

And people tell me that this is sensible investing. Shit no, this is the actions of the loons at the casino table. If you are betting 5 times your firms value then sooner or later you are going to get screwed.

How are these people better than the Greek people?

“How are these people better than the Greek people?”

Well, they were buying Greek debt which is more than the Greeks seem willing to do.

Meesage to Sally

No-one who overstated their earnings to borrow more than they othereise could afford has gone to jail. That actually is illegal, where banks have discretion about how much to lend.

CDOs caused some issued, but the vast bulk ever sold is still AAA and hasn’t gone wrong.

Credit ratings are just that. Ratings. They don’t gaurantee anything. Smart people actually do some research.

Should we jail the politicians who wasted vast amounts of money and left econimies across the world in terrible shape?

Well there are not many smart people in the banks who lent Greece the money. But then they don’t have to be smart when they are playing with a fixed casino. They rely on the puppet politicians who always cover for their losses.

So here is the plan: Greece defaults on ALL loans – what would the world do?

It is crazy beyond belief to let a lack of little pieces of paper with numbers on them throw a society into chaos!

Why don’t they issue local currencies in parallel to the euro to keep people in work and re-start the real economy? The case of Wörgl in Austria during the great depression is a great example of how this could work.
(http://en.wikipedia.org/wiki/Local_currency#Historical_local_currencies)

“So here is the plan: Greece defaults on ALL loans – what would the world do?”

We’re about to find out (possibly).

And what would the world do? Shrug its shoulders and carry on pretty much.

Greece being in default isn’t new. It’s been in default for some 50% of its time as an independent nation since 1823. There have been at least 800 defaults of sovereign borrowers over the centuries.

This is the thing that is just so damn annoying about the whole debate that’s going on. Countries do go bust, we’ve a system for dealing with it, the banks lose some money and boo hoo hoo.

This is vastly better than plunging an entire country into penury, which is what the EU plans for Greece have done and will do.

Dang, default already, get it over with!

@47: “Why don’t they issue local currencies in parallel to the euro to keep people in work and re-start the real economy? ”

Several districts in England are in the process of doing just that.

“A new group is planning to give Sutton its very own currency. Residents have already met to discuss the possibility of introducing the Sutton Pound. The currency would run alongside the regular pound sterling but is designed to support local businesses.

“Consumers who join the scheme will be asked to pay a one-off fee of £5, which will allow them to buy Sutton Pounds in exchange for Pounds Sterling.

“Following the successful introduction of the Lewes, Totnes, Brixton and Stroud pounds, Sutton could be next in line to make the move.”
http://www.yourlocalguardian.co.uk/news/local/topstories/9306962.Licence_to_print_cash/

Accountability and transparency issues: How do we know that the number of local Pounds issued will be backed 100% by UK Pounds?

@49

“Accountability and transparency issues: How do we know that the number of local Pounds issued will be backed 100% by UK Pounds?”

Given the BoE’s recent decision to create £75 billion, I think the accountability and transparency issues are more pressing in Threadneedle Street than Sutton High Street.

@50: “Given the BoE’s recent decision to create £75 billion, I think the accountability and transparency issues are more pressing in Threadneedle Street than Sutton High Street.”

That’s nonsense. The BoE, if it really deems it appropriate, can (and routinely does) mop up unwanted liquidity in the financial system by “open market operations”, meaning, in this context, selling bonds in the financial markets, which will tend to force down bond prices and force up their yields. In the process, the cash balances of financial institutions with the BoE will be reduced as the institutions pay for the bonds.

You really need to read one of the mainstream texts on financial institutions and economics. The Federal Reserve Bank in America has also been engaging in Quantitative Easing and for much the same reason as the BoE. At represent, there is a serious risk of the British economy lapsing back into recession with falling aggregate demand, especially with the hiatus in the Eurozone, the destination for 40% of Britain’s exports

The worrying question with local Pounds is how do we know the issuers won’t be printing off a few hundred for their own pockets? Come to that, will the new local notes be easy to forge?

The whole notion is fraught with the possibility of scams. At best, it represents a fairly typical beggar-my-neighbour policy intended to discourage shoppers from comparing prices between local shops in the scheme with shops in neighbouring shopping centres or online retailers.

In Britain, unless net exports, business investment and spending from heavily indebted consumers rise sufficiently to compensate for the cuts in public spending, aggregate demand will fall and so will the income of businesses.

Local currency is mind numbing stupidity. By all means argue for competitive currency like the free bankers do. However, local currency is unadulterated protectionism. It is the type of thinking that comes from vile Romanticism, rather than Enlightenment. George Selgin quoting Tim Harford, “the gains from more trade with locals are more than offset by the losses from less trade with strangers. Otherwise economic sanctions would be a blessing.” (Try telling a Palestinian or Cuban about the virtues of “buying local”!)

http://www.freebanking.org/2011/07/14/the-folly-that-is-%E2%80%9Clocal%E2%80%9D-currency/

@51

“You really need to read one of the mainstream texts on financial institutions and economics.”

Yeah, and you really need to read something by Hazlitt or Mises or one of the contemporary economists who saw this disaster coming a long way off, such as Peter Schiff, rather than follow the very people who got us into this mess and didn’t see it coming, in fact were telling us that everything was fine.

Central banking in general, and the Fed in particular is more responsible than anything else for the crisis.

“Local currency is mind numbing stupidity”

Absolutely IMO too. But I’ve been amazed by encountering much enthusiasm for it among some local people I know who were completely unable to appreicate the pitfalls. The instructive, worrying insight is the extent to which populist thinking from the 1930s depression years persists.

Under the Smoot-Hawley tariff act of 1930, duties of more than 60% percent were slapped on 3,200 imported products and by 1933 imports into the US had fallen from $4.4bn to $1.3 bn, while exports had decreased 69% over that same period.

The tariff law ignited a domino effect of retaliation and counter-retaliation among trading partners, which contributed to a severe contraction of international trade, decimated growth and drove up unemployment around the industrial world.
http://news.bbc.co.uk/1/hi/business/7866930.stm

Recap on Gresham’s Law: Bad money drives out good

55. Leon Wolfson

@52 – Yes, it’s amazing, people might actually see closer to the value of their time rather than seeing it piss away into the pockets of you and your 1% friends.

It’s not coincidence either that sites basically organising trading services among professionals with pseudo-currencies are showing strong growth.

Oh dear, Leon. How many times do I have to smack you down before you stop talking nonsense? You my friend are a 1 percenter. I can prove it.

http://www.globalrichlist.com/

From henceforth you will be known as Leon the global 1 percenter.

Leon the global 1 percenter who thinks mercantilism makes us rich.

Internet pseudo-currencies are fine by me and good luck to them. However, local currencies with the express intention to restrict their exchange to a specific area is pure mercantilism in its ethos. Moreover, in aggregate it will make that area worse off.

57. Leon Wolfson

@56 – Okay! Let’s see;

You’re in the TOP 13.48%
richest people in the world!

Hint: I’d of made more money sitting around on benefits last year, and this year is looking to be even worse.

Moreover, as usual you’re ignoring cost of living issues. Moreover, Wörgl shows what can be done when people receive deacent value for their time spent. It also completely debunks your corporatism…you’re talking about protecting the share value of corporations investments in areas.

(Oh, and given UK law prevents payment in local currencies, it’s an entirely voluntary exchange, before you bring THAT up)

And internet pseudo-currencies like Bitcoins. Remind me how well that was working out, again?

58. Paul Newman

Ha ha , we have made the Bob B news, the Lewes Pound is promotional voucher accepted by participating local shops . It is not a currency , but it was a terrific idea for advertising Lewes( The bonfire capital of Europe !)

@8

“so we can spot the psychopaths among us ”

Pot, kettle, etc.

@ 57. Leon Wolfson

I am somewhat saddened to read that you are languishing in the ‘ TOP 13.48% richest people in the world! ‘, Mr Leon. I feel your pain as the bishop may have said to the actress.

” (Oh, and given UK law prevents payment in local currencies, it’s an entirely voluntary exchange, before you bring THAT up) ”

I don’t know what leads you to reach that conclusion. UK laws vary depending on the country. For example, there are no legal tender laws in Scots law. Very few legal tender laws in England and the law does not prevent anyone from issuing their own currency. If a contract does not specify a currency, then a UK court will assume sterling as currency for settlement. Other than that the law does not care how two parties wish to settle their debts. What is illegal is counterfeiting the currency as Bank of England notes. Issue some Wolfson notes and you never know the public may take to them and accept them in exchange for goods and services. A one way note to the 1% for you, Mr Leon.

” And internet pseudo-currencies like Bitcoins. Remind me how well that was working out, again? ”

Eh? You were the one praising pseudo-currencies. I just said good luck to them.

Tweet from The Economist analyst Megan Greene: Greek default a “feta compli”.

“You are the 354,883,748th richest person in the world”

So going to use this a tagline.

63. Frances_coppola

@32 Sally, you are absolutely correct. The Wilson government (Labour) held a referendum on membership of what was then the EEC in 1975. That’s the only referendum the UK has had on anything in relation to what is now the EU.

The Tory party took us into the EEC. The first application to join was made in 1963 by Harold Macmillan’s government (Conservative) and was vetoed by the French. The UK finally joined in 1973 under the Heath government (Conservative). And we all know that Thatcher signed up to the Maastricht agreement and took the UK into the doomed Exchange Rate Mechanism. John Major’s government renegotiated the terms of the UK’s membership and famously exited the ERM. But it’s Labour’s Gordon Brown who kept us out of the Euro.

So for all you regular commentors this site who think that Tory = Eurosceptic, the evidence of the last 50 years is that Tory governments have generally been pro-EU. As is the present one. Yes, there is a minority within the Tory party who are Eurosceptic. But there’s also a minority within the Labour party who are Eurosceptic. Euroscepticism crosses party boundaries.

And it is of course quite possible to be pro-EU and still think that the Euro in its current form is unworkable and bound to fail, as did its predecessor the ERM for similar reasons. That’s pretty much where I stand. I think Sunny has called it about right in this article.

64. Leon Wolfson

@60 – And once more you ignore the basics about the cost of living. Your contempt for me speaks volumes about who you are. I have yet to see evidence you feel pain for anyone or anything, or any degree of empathy for that matter.

And actually I take it back, if the currency is fully backed and convertible then you can pay people in it under the ERA1996 S27 (5), a partial back down from the Truck Acts. My bad.

Funny money isn’t fully convertible, and hence isn’t money under UK law. The regional currencies are fully backed and convertible, so you’re not only tilting at windmills but arguing *against* freedom of contract within the law.

And I said nothing about internet pseudo-currencies, you did that. The hours trading scheme I’m involved in is local and indeed restricted within a single community.

What a shambles. The Finance Minister is suggesting that there will be no referendum. The market is rallying because if there is a referendum the question will be on a straight yes or no to eurozone membership. With the result then expected to be positive to staying in the EZ. Why Greece remaining in the EZ should be interpreted as bullish is questionable.

” With the result then expected to be positive to staying in the EZ. Why Greece remaining in the EZ should be interpreted as bullish is questionable.”

Because it is an indication that the greek elites are planning on ensuring the referendum is a stitch up that ensures support for a bailout plan. The last thing financial institutions want is greece withdrawing and defaulting, as if that works (which is the only way I can see Greece recovering) it will act as a further incentive to others to default.

67. Leon Wolfson

@65 – This is the same bunch who didn’t see the problem with complex financial instruments which caused the crash. Why are you expecting any greater intelligence from them now? You’re not willing to as much support pushing them out the sector, let alone the appropriate civil and criminal charges, so…

68. Leon Wolfson

@66 – That too. But when it comes to British referendums, despite the complete lack of financial controls on funding, THEY’RE all fine and dandy with the right, you’ll note.

Planeshift, that is the reasoning. However, the reasoning is flaky, keeping the weakest members in the club is not solving anything.

O.K then – plan B:- Europe buys all and anything in Greece that might be worth a few bob, any nationalised bits, tourist sites, holiday complexes, bus services, railways, in fact anything that is owned by government/bodies/orgs. Now that releases an enormous amount of cash to pay debts. Stage2:- Dump the Euro. Stage3:- Introduce new currency (you have the funds now) which would automatically be priced at the equivalent of a devaluation. Stage4:- Prepare to be invaded from every corner of the globe by tourists, you have now become so attractive that your national product will be tourism which is what you were and what you should have stayed. Stage5:- Buy back the bits we all bought with all your new found wealth. Stage6:- Celebrate, it’s all over.

Now Italy…………………

@ 67. Leon Wolfson

WTF are you on about now Leon. Have you been smoking crack again?

72. Leon Wolfson

@71 – Typical far right belittling tactics again I see, assigning illegal drug use to anyone who challenges your corporatist line. Shill harder.

Keep pretending that you’re rational, I’ll try to not make that mistake again.

Umm, corporatist line ? Let’s see. I suggested the euro rally this morning in the FX was misguided on the newsflow. How is that taking a corporatist line? Looks like I was right when the rally reversed 60 pips after the ECB cut rates by 25 basis points.

The current crisis was anticipated a long while back. The fact is that there was and is a substantial body of professional literature, much of it generated by top ranking professional economists, forewarning of the latent problems of monetary unions, without supporting fiscal unions, which EU Commission economists must be aware of and which has been persistently ignored. The chickens have come home to roost.

For an intro to the sceptical literature, try the 2-part book: Both Sides of the Coin – The Arguments for the Euro and European Monetary Union, by Christopher Huhne and James Forder (Profile Books, 2001). Forder is the sceptic.

It’s all very well for France and Germany to complain about fiscal indiscipline on the part of Greek governments but both France and Germany have been guilty of unpunished breaches of the EU Growth and Stability Pact of 1997.

All is well. Cuba has just legalised the buying and selling of houses. This means we have a new housing bubble to invest in!!!

I’ve just read on the FT website that the referedum plan is scrapped.
Call it a Pyrrhic victory of the holy alliance of eurocracy and “the” financial markets, with a little help from a Greek sense of (messy) tragedy.

I wish we could afford to forget about the failing European Monetary Union project and just leave them to get on with it but we can’t afford to do that. This is the warning in Thursday’s news on the NIESR, an independent and highly reputed economics think-tank and forecasting agency:

NIESR predicts 70pc chance of UK recession

There is a 70pc chance the British economy will fall back into recession if policymakers adopt a “muddle through” approach to the eurozone crisis, the National Institute of Economic and Social Research (NIESR) said.
http://www.telegraph.co.uk/finance/economics/8865422/NIESR-predicts-70pc-chance-of-UK-recession.html

Referendum scrapped? Ooooo……………. bit eggy on facey. Looking on the bright side, the world can close its mouth now which dropped open so far its a wonder it wasnt swallowed!!

Ho hum, so what is next on the panic menu??? Do you think it might be a ‘Language’ thing? Cultural thing? Also:- have you noticed what short arses Angela and Sarkozey are?

79. So Much For Subtlety

37. Frances_coppola

1) Debt is quoted as a percentage of GDP. Greece’s debt is rising as a percentage of GDP because GDP is shrinking fast – as Sunny’s article points out.

That is certainly true. Although a collapse of 16% in the economy does not explain debt levels of 180%. That takes poor spending decisions.

2) Greece is making interest payments at loan-shark levels on its debt. Almost all of its current deficit is accounted for by interest payments. Greece is currently on course to achieve primary surplus next year.

It is going to default. It is lucky it can find any idiot to lend it money at all. And the austerity programme, in so far as there is one, seems to be working. They will return to primary surplus. This is all good news.

Austerity measures are CAUSING the shrinkage of GDP that is raising the debt percentage. It is completely the wrong medicine for growth and debt reduction.

In the short term, yes. But in the long term, no. Greece needs to default, devalue and disconnect from the Euro. That is true. But they will still have a credibility problem once they have gone. It would have been better for the Greeks if default was *never* an option because then their governments would never have got themselves into this mess. If they had the self discipline to avoid incontinent spending, they would have a stronger economy over the long run. As with the example I gave before of Barbados and Jamaica. It does matter in the long run.

Yes, Greece does need structural reform of its public sector. But trashing its economy to achieve this is pointless without compensatory measures to encourage private sector development.

Absolutely.

Where is the inward investment from richer Eurozone countries that is necessary to enable the private sector to grow? Come to that, where is the investment from rich Greeks? Where are the exports going to come from while Germany is running massive trade and fiscal surpluses?

I think the bigger problem is keeping money from rich Greeks. The Euro is absurd. We all know this. No argument from me there. But Greece needs those fiscal reforms.

I think it is too late to save the Eurozone now. I thought Spain would be next but it looks like Italy will be. You wipe a trillion or so euros worth of value and Europe will be in recession for a decade. All for an idiotic political project that should never have been born.

The inherent failings of European monetary union, absent a supporting fiscal union, and that lack of fiscal discipline by Greek governments have been known for years but nothing effectively constructive was done about either issue up to the current hiatus.

Listen carefully to hear the steady tramp of chicken feet on their way home to roost.

81. Frances_coppola

So Much For Subtlety

I agree, mostly. I was just pointing out the trade imbalances that lie at the heart of the Euro crisis. No-one is talking about them. But it is very difficult for smaller countries to compete with Germany, so unless Germany makes a considerable effort to encourage imports from its Eurozone neighbours, fiscal consolidation in smaller countries will simply drive them further into recession. And leaving the Euro (and by implication the EU) doesn’t improve the export prospects for these countries – in fact it may make them worse.

There was a glimmer of light in Sarkozy’s speech earlier when he noted that countries in fiscal surplus needed to consume more. I don’t see much evidence that Merkel agrees with this though.

Frances: “I was just pointing out the trade imbalances that lie at the heart of the Euro crisis.”

The deflationary pressures caused by chronic trade deficits from failing competitiveness are the direct result of abolishing exchange rate flexibility in a monetary union and having no automatic fiscal mechanism to compensate deficit countries.

Add to that the loss of national autonomy with monetary union to set national interest rates appropriate to national conditions and there is a sure recipe for trouble for economies which haven’t converged sufficiently with those of other monetary union members. Greece should never have been admitted to the Eurozone on the basis of the eligibility tests set out in the Maastricht Treaty of 1993.

None of that is novel. The potential problems of monetary unions without fiscal unions have been recognised for years in an extensive professional literature. But the enthusiasts for EMU wanted a monetary union regardless in order to promote European integration. As John Major reminded us in a sound diagnosis of the failings of EU summit last week in the FT, at the time of the Greek application to join the Eurozone, France had said: You can’t say No to the country of Plato.

Note that: not the country of Socrates or Aristotle but Plato, whose prescription in the Republic for the ideal state was thoroughly authoritarian. The economics didn’t matter. We can now appreciate the consequences.

83. Frances_coppola

Bob B

Indeed. But it’s not even a question of fiscal transfers – though it’s notable that the same Germany that provided fiscal support to the former East Germany throughout its period of structural reform is now refusing to allow similar support for Greece. It’s basic economics failure again.

Since the members of the single currency no longer have control of monetary policy, economic tensions between them can only be resolved by means of fiscal adjustments ON BOTH SIDES. Expansionary fiscal policies are required in surplus countries to balance the austerity required of deficit countries. At present the dominant members of the Eurozone are insisting that only the countries in deficit should make adjustments. Their intransigence, if pursued much longer, will drive the entire Eurozone into recession.

The Euro project looks likely to go down in history as a prime example of political fancy trumping economic reality.

On http://www.guardian.co.uk/business/2011/nov/03/greece-may-leave-euro-leaders-admit:
“Nicolas Sarkozy, took credit for changing sentiment in Greece, saying “the message addressed to the whole Greek political class by France and Germany” had focused minds. “Things are progressing,” the French president added. “We have said clearly that we want Greece to stay in the euro, but we cannot wish for this if she does not want it herself. We have to defend the currency … we cannot accept the breakup of the euro. That would mean the breakup of Europe.”
It is all about saving the euro -and eurocracy’s face- at all costs -and it has cost billions already.

85. Leon Wolfson

@85 – Cheap compared to a breakup. Cheap compared to a war.

A 300 billion bailout (and counting) and a 50% debt haircut for Greece.
Bailout packages for Ireland and Portugal.
Italy to be under IMF scrutiny.
G20 now working on a plan “to help EU economy.”

And some are still selling us the euro as a success story!

@Leon: It might still be cheaper than a breakup and than a war. But the breakup will happen anyway. As to wars, expect at least some civil riots and a big surge of nationalist movements. Sowing and reaping…

Frances: “Expansionary fiscal policies are required in surplus countries to balance the austerity required of deficit countries”

That is crucial but there are few, if any, effective systemic pressures in either the Eurozone or the global economy to oblige chronic surplus countries to undertake expansionary policies.

That was one of the major reasons why the old Gold standard of rigid exchange rates failed – and also why the Bretton Woods system of pegged (but adjustable) exchange rates also failed.

The trouble was that chronic deficit countries in either system have to take austerity measures to rein back trade imbalances while the chronic surplus countries – like Germany nowadays – can act to prevent trading surpluses from generating internal expansion.

The overall consequence of deficit countries being forced into austerity while surplus countries just sterilise accumulating reserves of foreign exchange is to exert a depressing effect. That is exactly why we need to worry about the possibility of another global recession.

88. So Much For Subtlety

87. Bob B

That is crucial but there are few, if any, effective systemic pressures in either the Eurozone or the global economy to oblige chronic surplus countries to undertake expansionary policies. That was one of the major reasons why the old Gold standard of rigid exchange rates failed – and also why the Bretton Woods system of pegged (but adjustable) exchange rates also failed.

Sorry but neither of those claims is true. The old Gold Standard did have an automatic mechanism by which chronic surplus countries had to undertake expansionary policies – their interest rates went down. Surplus countries would acquire more gold. That would inflate their money supply. Whether they liked it or not. Nor is that the reason the Bretton Woods system failed. Rather it was America pushing its inflation on to everyone else. Especially the French.

89. Frances_coppola

@87 Bob B

NIcely put. That’s exactly the point I have been trying to make. Value judgements about goverment financing (surplus = good, deficit = bad) obscure the need for balance. So in the Eurozone, deficit countries (=”bad”, profligate) must accept austerity to reduce their deficits, but surplus countries (=”good”, prudent) are models of fiscal rectitude so need not make any changes. I commented earlier today on twitter that structural reforms are required in surplus countries too, and someone asked me why success should be punished. Missed the point entirely.

However, Sarkozy did comment that surplus countries need to consume more, and the G20’s communique today did include a commitment from surplus countries to do something to stimulate demand. So maybe light is beginning to dawn. I seriously hope they follow through on this, because if they don’t the unbalanced economic policies being pursued in the Eurozone will not only cause deep recession there but will push the rest of the world into recession too.

@88: “Sorry but neither of those claims is true. The old Gold Standard did have an automatic mechanism by which chronic surplus countries had to undertake expansionary policies – their interest rates went down. ”

That’s your usual rubbish.

Under the gold standard, chronic trade surplus countries often “sterilised” incoming gold – through central banks selling bonds into financial markets – to prevent the additional gold reserves from adding to the money supply as it was theoretically supposed to. But chronic trade deficit countries were forced into austerity measure to halt the loss of gold from central bank reserves – except for Nazi Germany, in the period before WW2, which maintained the gold peg of the Reich Mark but introduced a raft of regulatory measures to limit imports and control foreign exchange transactions. The asymmetry had a depressing effect on the international economy.

Sterilisation by chronic surplus countries also happened uder the Bretton Woods system of pegged – but adjustable – exchange rates. The West German economy flourished in the 1950s and 1960s through export-led growth made possible by W Germany maintaining an under-valued DMark by serial belated revaluations of the DMark in response to international political pressures. China is applying a similar policy now by tardily readjusting the exchange rate of the Renminbi to the US Dollar.

After much internal US debate, the Nixon administration unpegged the US Dollar from gold in 1971. In Britain, the Heath government decided to float the Pound the following year. Both were sensible policy decisions which many economists had long pressed for. Non-economist readers may like to know that Milton Friedman – of monetarist fame – was a persisting advocate of flexible exchange rates.

Oskar Fontaine, the German social democrat finance minister until he was dismissed in March 1999 by the chancellor, Gerhard Schröder, had been pressing for fixed exchange rates between the US Dollar, the Pound and the Euro to be launched later that year. Very sensibly, this was quickly rejected by both the GW Bush administration in America as well as by Gordon Brown, the New Labour chancellor.


Reactions: Twitter, blogs
  1. Liberal Conspiracy

    Why Greece should default on its debts and leave the Euro http://t.co/6HDht0hJ

  2. Laura Johnson

    Why Greece should default on its debts and leave the Euro http://t.co/6HDht0hJ

  3. William McEvoy

    Why Greece should default on its debts and leave the Euro http://t.co/6HDht0hJ

  4. Stephanie Brooke

    Why Greece should default on its debts and leave the Euro http://t.co/6HDht0hJ

  5. Gagging Order

    Why Greece should default on its debts and leave the Euro http://t.co/6HDht0hJ

  6. Alf

    Why Greece should default on its debts and leave the Euro http://t.co/1f7AUmtP

  7. sunny hundal

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  8. Dave Taylor

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  9. Jane Samuels

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  10. Peter Watt

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  11. Christa Mackinnon

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  12. Dario Llinares

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  13. Jane Samuels

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  14. robert tressell

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  15. Scott McLean

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  16. andrew cox

    RT @sunny_hundal: Why Greece should default on its debts and leave the Eurozone http://t.co/TuqFKPsE < by me <- i agree with sunny hundal 🙂

  17. Alex Braithwaite

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/2hJSdbgI via @libcon

  18. Kelly

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  19. Gweirydd ap Gwyndaf

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  20. Clive Burgess

    The Greek problem is peanuts compared to Italy, with €1.9 trillion in public debt & nearly €3.5 trillion in total debt http://t.co/sWfTQ9Ob

  21. bill bold

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  22. Paris

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/XQF5fe3r via @libcon

  23. Doilum

    @gotofritz RT @sunny_hundal Greece peanuts compared to Italy, €1.9 trillion public debt & €3.5 trillion total debt http://t.co/7oMZmN7z

  24. James Harvard

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  25. Doilum

    The bailout is a plan to save French and German banks, destroying the Greek economy in the process http://t.co/7oMZmN7z

  26. j sheeran

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  27. M.A.K.

    The bailout is a plan to save French and German banks, destroying the Greek economy in the process http://t.co/7oMZmN7z

  28. The Old Politics

    Why Greece should default on its debts and leave the Eurozone http://t.co/sWfTQ9Ob < by me

  29. Matt Saltmarsh

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/1CnAQcFv via @libcon

  30. Soho Politico

    So hang on, u accuse Dan of repetition while serving up this one again? 😉 RT @sunny_hundal Why Greece should default http://t.co/o4f8SC56

  31. Matthew Holmes

    Why Greece should default and leave the Euro http://t.co/ADKWdh2f #euro #economy #politics

  32. DPWF

    Me, from this morning > Why Greece should default on its debts and leave the Euro http://t.co/sWfTQ9Ob

  33. Frances Coppola

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/9t201qlO via @libcon #gfc2

  34. peter fainton

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/9t201qlO via @libcon #gfc2

  35. Vijay Patel

    Why Greece should default on its debts and leave the Euro -http://t.co/sWfTQ9Ob – this in many ways is so 'duh! (@sunny_hundal).

  36. Owen Blacker

    RT @sunny_hundal Me, from this morning > Why Greece should default on its debts and leave the Euro http://t.co/2fJOWaK6

  37. sunny hundal

    @jonworth its just not in Greece's interests. and that's why I'm opposed to Greece staying in http://t.co/sWfTQ9Ob

  38. ray turner

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/aYpwtvux via @libcon Good piece agree every word

  39. Gustavo Erickson

    http://t.co/W2YVhQZ7 Why Greece should default on its debts and leave the Euro | Liberal …

  40. Angel Li

    Why Greece should default on its debts and leave the Euro | Liberal Conspiracy http://t.co/w74IP861 via @libcon

  41. Jonathan Swarbrick

    RT @johnwhittaker: Bang on the money re Greek Bailout http://t.co/fK6p4fB5

  42. European democracy – a failed project? « Democratic Deficit

    […] it is locked into a system that helps a group of diverse economies led financially by Germany! Even Europhiles agree that thanks to the inability to do anything with its currency, Greece will be in economic […]

  43. The democratic deficit in the EU « Dorset 4 Democracy

    […] it is locked into a system that helps a group of diverse economies led financially by Germany! Even Europhiles agree that thanks to the inability to do anything with its currency, Greece will be in economic […]

  44. abi ramanan

    @Big__Kev @leftfootfwd @libcon yes…I think Greece should default, for the reasons outlined here: http://t.co/jBWApWZx + a million more.





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