Greek Election, EU future?

[cobben]

Re: Greek Election, EU future?

my guess would be that a country could leave voluntarily. the question was whether a country could be expelled.

I predicted, only half in jest, two years ago that Greece would be given an offer it can't refuse to once again become a Turkish province.

This would put the fear of the EU gods into the other weak members, encouraging then to toe the line and willingly accept whatever austerity was on offer.

Still no signs of this happening, except that Turkey recently threatened to formally annex northern Cyprus - which is still part of the EU, but under Turkish control - with no noticeable reaction from the EU.

[unlucky]

Re: Greek Election, EU future?

While there's no procedure for expelling a eurozone member, the problem for Greece would be how to fund its government if it defaults and stays in the Eurozone. There's likely to be a period of time during which no-one will lend to it. And it still has a primary deficit of a few percent of GDP. It would either have to implement some sort of emergency austerity programme to eliminate the deficit post-haste, or else start printing its own currency to finance it. That's the dilemma for eurozone governments that default.

[jk]

Re: Greek Election, EU future?

While there's no procedure for expelling a eurozone member, the problem for Greece would be how to fund its government if it defaults and stays in the Eurozone. There's likely to be a period of time during which no-one will lend to it. And it still has a primary deficit of a few percent of GDP. It would either have to implement some sort of emergency austerity programme to eliminate the deficit post-haste, or else start printing its own currency to finance it. That's the dilemma for eurozone governments that default.

the greek central bank can print euros under the emergency liquidity authority!

[unlucky]

Re: Greek Election, EU future?

the greek central bank can print euros under the emergency liquidity authority!

Possibly. According to the rules, the ECB sets a cap on the amount of ELA the Greek CB can create. In addition, they have to lend the money to Greek banks (not the Greek state). Of course the banks can then lend it to the state, but the rules governing eligibility for the banks are set by the ECB. I don't know what happens if the Greek CB breaks these rules. Maybe they have to pay a fine

[cobben]

Re: Greek Election, EU future?

the greek central bank can print euros under the emergency liquidity authority!

and wants a monopoly on gold trading:


Bulletin of prices of gold bars and gold coins

The Bank of Greece buys and sells gold and gold coins against Euro to individuals. For this purpose, the Bank publishes a bulletin which contains information about the prices at which the Bank of Greece concludes transactions in the following categories:

• Gold
• Sovereign: Fineness 0.9166 (7.940-7.988 gram.)
• Sovereign: Underweight or Of Different Fineness
• Coins

Concerning the purchase of gold bars by the Bank of Greece, and following agreement on the price, the client has to present the bars to the Bank of Greece’s counter for genuineness’ and fineness’ control. The equivalent in Euros is paid to the client after completion of checking. In any case, the client is charged with the control expenses.

The public is reminded that the purchase and sale of gold sovereigns, gold coins and international standard gold bullion in the form of bars, plates, ingots, etc. (i.e. gold other than industrial or commodity gold) may be legally carried out only through the Bank of Greece and credit institutions. Persons illegally engaging in such commercial activity will be prosecuted.

__________________________________________________ ______________

Interesting speech, actually a very good speech.

Now, how can TPTB always manage to keep a straight face when they proclaim the necessity of facilitating the private business sector, while always doing the exact opposite? (e.g., private gold dealers who might want to compete with the privileged bankers will be prosecuted.)


24/04/2012 - Speech by Bank of Greece Governor George A. Provopoulos at the 79th Annual Meeting of Shareholders

THE NEW ADJUSTMENT PROGRAMME PROVIDES MORE FAVOURABLE CONDITIONS THAN PREVIOUSLY, BUT EXIT FROM THE CRISIS WILL DEPEND EXCLUSIVELY ON THE COUNTRY’S WILLINGNESS AND ABILITY TO RISE TO THE HISTORIC CHALLENGE

. . .

Recovery and growth through the mobilisation of the private business sector A strategy for recovery and growth is of utmost priority. Failure to tackle the recession could compromise our ability to meet the targets of fiscal consolidation. In the current context, growth requires the mobilisation of the private business sector; this cannot be achieved as long as the state continues to dominate the economy. Nor can it happen so long as the fiscal deficit and public debt are persistently high. Moreover, there cannot be growth so long as there is a climate of uncertainty and distrust exists about the prospects of the economy. The prerequisites for growth are therefore: • The restoration of confidence and the elimination of uncertainty; • the creation of an environment favouring entrepreneurship; • the transfer of resources from the bloated public sector to the production of goods and services by the private sector and – more generally – from the sector of non-tradable goods and services to that of the tradable.

. . .