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Greece: Are You Finally Ready To Do The Right Thing And Leave The Euro?
Submitted by Charles Hugh-Smith of OfTwoMinds blog,
The era of living off borrowed money is over in Greece, and the Greek people now have a choice.
Almost four years ago I wrote Greece, Please Do The Right Thing: Default Now (June 1, 2011). Default remains the only real way forward for Greece and Europe.Consider the destructive "gains" reaped by four years of lies, predation, debt-serfdom and austerity in service to kleptocrats: tremendous suffering by many Greek citizens, all for nothing but propping up the evil of debt-serfdom to the Greek kleptocracy and the financial royalty of Europe.
The truth is Greece squandered four years propping up a patently false illusion that using the euro as a currency was worth everything, when it was always worth nothing. As I have described at length for four long years, the euro created a brief (and highly profitable to the kleptocrats and banks) fantasy that marginal borrowers would magically be transformed into solid credit risks simply because they were now borrowing euros instead of drachmas.
It doesn't matter what is being borrowed--euros, drachmas, quatloos or beads--marginal borrowers are still high credit risks. The entire subprime mortgage fiasco was based on a similar financial fraud: that the housing bubble would enable homeowners with insufficient cash, income and creditworthiness to service gargantuan mortgages--mortgages that were issued with the intent of defrauding buyers of mortgage-backed securities.
Greece is simply an example of the same fraud played out on a larger stage.
The euro is one of the greatest monetary frauds in history, and its managers have waged one of the greatest campaigns of financial terrorism in history. These managers have persuaded (or bamboozled) the majority of Greeks (if polls are to be believed) and just about everyone else on the planet that exiting the euro would be an unmitigated disaster for the Greek people.
This is absolutely opposite of the truth: exiting the euro and returning to its own sovereign currency will be the greatest possible good for the Greek people, for the simple reasons that 1) they will finally be in control of their own destiny and 2) issuing one's own currency disciplines the entire economy in positive ways.
Ask yourself who is more likely to succeed in the world: the spoiled child who lacks even the most basic self-discipline, or the child who has learned that actions today have long-term consequences?
It's not that difficult to lay out a fiscal and monetary plan that would quickly build trust in a new Greek currency. The hard part is breaking the cycle of corruption and lies that is the Status Quo in the Greek economy.
1. Announce that the government can only spend what it collects in taxes and fees. The state will not borrow money, period.
2. Announce a new, simplified tax structure, with tax rates far below those of other European nations. For example, if the value-added tax (VAT) is 17% elsewhere in Europe, the Greek rate would be set at 7%. (Compare that to the sales tax in California, which is 9%.)
3. Explain that the future of Greece depends entirely on everyone paying taxes, since the government will no longer borrow-and-spend.
3. Hire 10,000 currently unemployed accountants (including recent college graduates who have been unable to find jobs in accounting), train them in forensic accounting and auditing and unleash them on the Greek economy, starting with the top 1/10th of 1% (the kleptocracy class) and working their way down to the corner cafe.
3. Make the pain of cheating and non-compliance higher than the pain of paying relatively low taxes.
4. Change the social perception that not paying taxes is acceptable behavior. Publicize the list of tax cheats, etc.
5. Make government spending transparent and auditable by any citizen with an Internet connection.
6. Enforce strict banking laws where lenders that loan money without regard for risk management are forced to absorb their losses and close their doors. Encourage prudent private lending and borrowing.
A nation's currency is a measure of global trust in that nation's fiscal and monetary order. If that order is based on a culture of corruption, lies, fraud and debt, the currency will lose value: why own a currency that is constantly being debased by lies and unpayable debts?
A currency based on transparency, fiscal prudence, little state debt and strictly enforced taxation and risk management will gain trust and value. The people who fear a Greek currency are actually afraid that the current culture of corruption, tax evasion and lies cannot be transformed. They are wrong. That culture can be transformed by strict adherence to simple rules of transparency, low tax rates, prudent state spending and a private banking sector that is held accountable for its risk management (or lack thereof).
In sum, the era of living off borrowed money is over in Greece, and the Greek people now have a choice: they can continue down the path of poverty by leaving their culture of corruption unchanged, or they can grasp the nettle and support a new culture based on transparency, fiscal prudence and strict adherence to the basic rules of monetary management.
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I hope for the sake of humanity
Better yet.
Just shut down the Greek "government" completely and let the Greeks fend for themselves.
Yes let´t put a giant Glass Bowl with a small opening at the top for air on top of them .. sounds like an idea somebody has tried before just can´t remember exactly where .. oh well should insulate the Greeks from the World problems and the World from Greek problems, sounds like a win-win to me.
do not confuse illiquidity with insolvency as long as the banker racketeers can inject synthetics into the process.
Crazy how much time people waste pondering the oxymoron of a "poltical solution."
The suggestion that any of the current western demagogues running around would willingly implement sound policy and accept the damage to their power and influence that would be necessary to do so, is preposterous.
Or, Charles, if the Greeks can be smart enough let go of the idea that it is necessary to collect information on everyone and snoop into their business by assessing income(!) , and just stick to COLLECTING TAXES (!) through a consumption tax there wouldn't be a tax evasion problem to begin with...I've spent years trying to convince Americans to embrace the FairTax on the same basis.
Just emailed today to the Greek aqmbassador to the US:
His Excellency, Ambassador Christos Panagopoulos
Your Excellency:
Never have I read in times of peace the issuance such as the insane ultimatum of war as that issued by the Eurogroup Chairperson Jeroen Dijsselbloem against Greece: It is no less than the threat of unlimited warfare to destroy the Greek nation, if not by munitions, then by money.
The quote attributed to the Greek Finance Minister, Yanis Varoufakis, could not possibly be more true: "A clueless political personnel, in denial of the systemic nature of the crisis, is pursuing policies akin to carpet-bombing the economy of proud European nations in order to save them."
Many unenlightened Americans will fail to understand the reasons the Greek nation has declared its freedom from the extortion, and debt slavery, imposed on it by the psychotic sociopaths of the ECB, the IMF, and various European central banks, manipulating the financial machinery of the EU.
Unlike them, I do not fail to understand that this so-called austerity is nothing more than economic warfare designed to rape the nation of its assets, and the people of their survival, by creating an endless series of faux "bailouts" which have the real purpose of draining the nation of all its pride, dignity, and future.
When I read of the unemployment rate, the poverty level, the share of unemployed youth without hope, of female physicians reduced to prostitution to feed their children, of individuals who set themselves ablaze publicly because they are so beaten down by this war against the Greek nation, of these actions by the Troika which constitute nothing less than Crimes Against Humanity, my soul cries out in horror, and unimaginable pain, for the Greek nation.
There comes a time in history when a nation has no choice left but to put its destiny on the line, and be willing to sacrifice everything to throw off the chains, and regain its freedom, no matter what those sacrifices entail.
Because of what amounts to no less than a Declaration of War against Greece by the Eurogroup's chairperson, you are now at that point.
It is time for the world's first democracy to reclaim its heritage, and once again teach the world that remaining free sometimes requires that men and women fight for it. Whatever comes, the Greek people will adapt themselves and overcome it, just as they have overcome every other attempt by others to bury them.
Thucydides wrote, "The secret of happiness is freedom. The secret of freedom is courage."
Now is the time when the courage of the Greek nation must rise up, and face down the forces that would continue to enslave it.
Meet the ultimatum with 3,000 years of freedom, and shatter the predatory, criminal, strangle-hold of the EU on your people.
-30-
NotApplicable:
Human beings ARE "political animals." However, real politics is actually based on the principles and methods of organized crime. The more successful those systems of organized crime become, the more totally those system control their apparent opposition. Hence, if, but only if, one accepts that "politics" is the farce presented in the mass media, then there are no "political solutions" possible within the context of that farce.
There WILL be "political solutions," but those will take place in the real world, which is controlled by organized crime. The established systems of enforced frauds have BASIC PROBLEMS inherent to their structure, and the limits of the planet. The established systems of debt slavery have generated numbers which have become debt insanities. There are not enough natural resources left to strip-mine at an exponentially accelerating rate, and so, the systems have to adapt to that ... However, the only ways that the established social pyramid systems could adapt to runaway debt insanities, which can NOT be resolved by more exponential growth by strip-mining the planet, are to change gears to provoke death insanities.
The only genuine "political solutions" are drastic changes in the death controls. There is nothing else which is either theoretically sufficient nor practically possible. However, since the established systems most successfully operated their death controls through the maximum possible deceits and treacheries, while their controlled opposition stayed within the same bogus frame of reference, developing genuinely better systems of death controls is extremely improbable, while provoking death insanities is the automatic default setting of social pyramid systems.
"Political solution" is NOT an oxymoron, anymore than "military intelligence" is an oxymoron, AFTER one recognizes that military success was based on deceits, and thus, the most successful politicians are the best available professional liars and immaculate hypocrites, which politicians tend to be the banksters' puppets, performing for the muppets on the stage set by the mass media.
NotApplicable, although I found your comment witty, and therefore voted it up, I have replied to point out that your statement is ONLY "correct" as long as one accepts the biggest bullies' bullshit definnition of "politics." HOWEVER, real politics necessarily operates according the the principles and methods of organized crime. Real "political solutions" are changes in the dynamic equilibria of the defferent systems of organized lies and robberies, and those real "political solutions" depend upon the actual envirnomental situation.
The article above by Hugh-Smith is typical of those republished on Zero Hedge, in that it grossly underestimates the nature of the problems, and therefore, grossly overestimates the ability to resolve those problems. That kind of article typically presents the standard of relatively good analysis of the issues, on the superficial level that is done, followed by collapse to bullshit "solutions," because the original analysis never went deep enough, and thus, the proposed "solutions" end up being silly. The suggested "solutions" outlined by Hugh-Smith are an idealized list which manifest a sublime "rule of law," which does not realistically deal with the basic paradox of enforcement, that NOBODY GUARDS THE GUARDIANS. Plato pointed that out in his Republic long, long ago. That political problem has never since been solved, because, in principle, there is NO solution.
Stating that "the era of living off borrowed money is over" is WRONG, because that "borrowed money" was an enforced fraud, due to the ways that the biggest gangsters, the banksters, controlled governments, which are the biggest form of organized crime. Hugh-Smith suggests the typical miraculous bootstrap "solutions" which promote the same old false fundamental dichotomies, and related impossible ideals, such as an ideal manifestation of the "rule of law," which deliberately ignores that the established mechanisms were due to the development of the methods of organized crime. The only way to actually replace the old systems of organized crime is with some new systems of organized crime.
Here is a link to a recent 10 minute audio recording which discusses these issues: Greek Debt Chicken Game The Greek situation is merely one of the leading edges of the ways that human societies' real politics are based on organized crime, while the majority of people who discuss those issues do so as forms of controlled opposition, who deliberately ignore and deny those basic facts, in the manner illustrated by guys like Hugh-Smith.
THERE ARE REAL "POLITICAL SOLUTIONS," BUT THOSE TAKE PLACE IN THE CONTEXT OF REAL "POLITICS," WHICH ACTUALLY OPERATES ACCORDING TO THE PRINCIPLES AND METHODS OF ORGANIZED CRIME. Any other "political solutions" which are based upon deliberately ignoring or denying that are necessarily bullshit, which is either ignorant, or deceitful, or both, because political economy is inside human ecology; the debt controls are backed by the death controls, and so, private property is based on backing up claims with coercions, while money is measurement backed by murder. SINCE THOSE ARE THE REALITIES, ANY REAL POLITICAL SOLUTIONS MUST RECOGNIZE AND ADDRESS THOSE REALITIES.
The problems that Greece has are the same as the rest of the world has. The real political solutions to those problems are necessarily going to have to be changes in the death controls, which are most probably going to continue to directed in the most deceitful ways, because the established systems have so totally controlled their opposition that guys like Hugh-Smith can propose such as list of impossible to implement "solutions" in ways which deliberate ignore the mechanisms that made those problems, while such a list of "solutions" based on impossible ideals does not concern itself with the paradoxes inherently present in its kind of presentation.
The problems that Greece and the rest of the human world have ARE that the debt controls were based on the maximum possible frauds, while the death controls were based on the maximum possible deceits. In that context, the controlled opposition groups continue to operate within the same bullshit frame of reference about all of that, so that the new government of Greece, as well as Hugh-Smith, are typical reactionary revolutionaries, who present relatively accurate analysis of the problems, on their superficial level (albeit, which are an improvement over the absurdities that the established systems continue to promote). HOWEVER, the contradictions inherent in human civilizations based on backing up legalized lies with legalized violence, being pumped up and UP by advances in science and technology, which NEVER are allowed to happen in political science, is the reason why it appears that the phrase "political solution" is an oxymoron.
The only reason for an income tax is to collect money to pay interest on the unnecessary sovereign debt. Why do sovereigns issue debt that is purchased by their banking systems? The banks just create the money out of thin air. If you are going to have an irredeemable fiat currency why doesn't the sovereign just print the money directly rather than paying interest to the banking system for doing the same thing, i.e. nothing? If the banking system could be taken out of the gold manipulation business and gold were allowed to trade freely against sovereign currenies that would be the barometer necessary to measure whether the sovereign is printing too little or too much currency to pay its bills. Freegold. There does not need to be a fixed relationship, i.e. peg, of a currency to gold. But gold DOES need to be free of manipulation. Currencies are accepted and used based upon confidence. The global supply of gold does not need to grow at the same rate as the currency base to maintain equilibrium because, again, confidence in fiscal management is the primary determinant of currency value.
Agreed, wouldn't it be fantastic if they did this?!
DavidC
Exactly. Where is this in your list of suggestions, Charles? The government is the largest drain on the economy - it is THE alpha parasite - so where are the suggestions that FIRST the government will be cut to the bone - a 90% or more reduction? He's actually suggesting GROWING the government - how retarded can you get? Even CHS has apparently drunk too much of the "biG guBminT aRe gOOd" Kool-Aid ....
chucky is a hippie drop out, turned failed developer from hawaii, now turning to the blog o sphere as a one eyed two minded beast to punish us with nonsense about financial crap. "of two minds" ohhh the torment....lol. his five friends all rushed to vote a solid five for his mindless dribble until i voted one....snicker
update: now twelve votes for 4.3....slip sliding away
The fallacy is thinking some recent college grad making 50K a year (if that) is going audit some billionaire and actually generate tax receipts. Same problem with the SEC over here, they look the other way knowing they are in line for a 7 figure salary the second they leave the SEC. They put in their 15 years protecting the big dogs and then go to work for them as a payoff.
Agreed. An article full of hypocrisy and inconsistency. So let me get this straight on points 2 and 3: We will be so kind and gracious as to only take 7% of your wealth. However, if you you choose to disregard our whims and rebuff our charity then we shall drop the hammer on you even harder. Sounds like a winning strategy.
Then you better make even bigger bowls for Italy, Spain, France..ect. ect.
"2) issuing one's own currency disciplines the entire economy in positive ways."
LOL....seriously?
Is he refering to the US as an example? Issuing one's own currency does not infer any discipline at all and does not necessarily influence the economy in positive ways. Zimbabwe issued their own currency,
I do believe that abandoning the Euro will....eventually, lead to something beneficial but thats because I believe that the closer one gets to self government the better government we have. However, the road to get there will not be an easy one. Unwinding millions of Euro denominated financial relationships will be very challenging.
Nice. A zimbabwe reference. But I missed the Weimar reference...? </sarc>
Issuing one's own currency is not the stake-through-the-heart that Austrian economists imply, with their 'everything-is-a-currency-crisis' model of history. The Greeks are undergoing an economic crisis that runs deeper than the devaluation of their currency; as an example, if they accept the privatization demands implicit in a putative IMF negotiation, that means their ports, harbors and beaches are up for grabs.
Do you guys realize what that means? It means foreign investors can essentially buy the Greek port system. It means foreign capital can buy rights to their waterways. In America, this is disallowed by some act.. can't remember its name. Otherwise Chinese and Saudi investors would own almost everything here, literally they would own a ton of shit. But thats seen as a security risk, so our lendors have to sit on a mountain of T-bills, instead of owning, for example, Google. Which they could easily do if they were allowed. Its an example of a protectionist policy (anti Free Market! ha) which has kept America from being foreign-owned in spite of its massive foreign debt burden.
Not every economic issue is a currency crisis. Not every economic situation resolves down to the relative value of a currency. Greece's problems appear to me to be so deep, that worrying about the value of their currency is just one of several concerns and by no means a pre-eminent one. Greece has to reconsider the role it wants to let foreign finance capital play in its economy -- it probably has to adopt some strongly nationalist/protectionist policies to prevent it from being enslaved/bought-out by outsider money.
What I think we are learning, is that "Foreign Investors" are really not the kind of people you want deeply involved in your economy. Kind of a radical statement given the globalist nature of capital today, but I think it will stand. Machiavelli said a quote that I always remember: "Its better to lose a war, with an army of your own people, than it is to win a war, with an army of mercenaries." I think that quote will apply to our post-Finance economies, of which Greece is apparently lining up to be the first.
No, Socialist have no inner drive, self presrvation.
It is all the Gubberments responsibilty. They will fold I sadly think.
Socialists are Lemmings sprinting for the Cliff, except those are "smart-lemmings" smart enough to grab a hold-on anybody in their reach to drag them down to the bottom, than again maybe this "smartness" is just their instinct and not real brain power, still Keep Away from Socialist Lemmings!
Had Luke been Greek, the Emperor would have observed, "Sloth is strong in that one."
There's absolutely no way the Greek culture will change in this life time or the next ten... which is fine. To each their own. But for God's sake, stop lending deadbeats more and more money.
Almost every country is a deadbeat in the new normal, the US has a snowball's chance in hell of ever having a balanced budget let alone paying off its debt.
You can do lots of things with nettles!
I hope they do, but when they try, suddenly, Al-Queda, ISIS, and weapons of mass destruction will suddenly be problems in Athens.
Exactly, they won't be given a chance.
lol
A disciplined greek is an oxymoron, except for those from Sparta.
They are one of the most disciplined people in the world!!
If they say they're not working today, THEY MEAN IT!
They really need to find their 300
Yup. And stop pretending that today's Greek has anything in common with ancient Greeks.
P.S. The Hugh Smith guy is extraordinarily ignorant when it comes to Greece. Perhaps the exact opposite holds true in other matters. I don't follow the guy.
You lost me at "little state debt". State debt is the underpinning of modern banking and capitalism. I know ZH opposes the current "monetarist status quo", but I do not believe that fixing the problems in Greece requires a new system of capitalism. As your article tried to point out "It doesn't matter what is being borrowed--euros, drachmas, quatloos or beads--marginal borrowers are still high credit risks." By the same token a fiscally prudent borrower is still a low credit risk even if they are still in Euro currency.
Once there is nothing left for the bankers and financiers to steal, not before.
The euro is one of the greatest monetary frauds in history....
Comming from a guy who pays his bills in dollars :-)
Imitation is the sincerest form of flattery - or so I've heard.
I hope the average Greek isn't a t-shirt wearing chain smoker.
It's time to man up and take back your country.
Tuck your shirts in and tell the EU to drop dead.
Greece is a fucked up state, Euro or not, EU or not. Thats why Tsipras' sermons are so laughable.
The only resource the EU wants from Greece are its human resources.
Slaves to pay interest on EU debt for a few shareholders of a CB.
If the people only knew what they truly are.
Give them the right to vote and feel free.
When have tax revenues ever been enhanced by an appeal to the general welfare? When have audits ever begun with the top 0.1%, or even affected them? Where will Charles Hugh-Smith find a genie that grants six wishes instead of three?
"syriza will be crushed in one way or another and greece will return to proper debt slavery where it belongs", said the squid, ":and they are probably anti semitic but not in a good way way like our guys fighting for us in ukraine".
God I hope so. Those officious Eurocrats deserve hanging, but watching the total destruction of their lifes' work is the second best thing.
"1. Announce that the government can only spend what it collects in taxes and fees. The state will not borrow money, period."
No government has or can do that. Remember the proposal of a balanced budget amendment back in the 90's? Where did that go?
missing the point, without a back stop Greece is going nowhere. Now that Russia is appearing as that back stop with a viable economic vision, they have the motivation to remove themselves from the Vamp (Troika). Blood sucking Troika is fighting hard though. Better than any movie!
Don't talk. Do.
lol.
this sint a borrower problem.. this is a lender problem. duh. centrals create debt. THATS THEIR SOLE PURPOSE
they will create debt loney "money" to rocks if they can get their lawyers to write up well enough
P < P + I
In Denmark: P > P + I
If Greece leaves the Euro (which I believe they should) wouldn’t that increase the value of the Euro. Don’t the poorer members of the EU drag down the value of their currency. Won’t Spain, Portugal, and Ireland want out as well? Germany won’t have to put these countries on its back. Of course, if you listen to the corporate media and the bankers, you will hear that its bad for Germany because it raises the cost of its exports. It’s amazing that people buy into this. A devalued currency is not good for the citizens.
I believe the Europeans and Japanese markets are what lies ahead for US. Foreign investors are fleeing these zones to what they believe they feel is safe. They are putting their money in dollar denominated assets. What they should be buying is gold and silver. All these fiat currencies will collapse like a house of cards, because they are all pegged to each other.
Even if you aren’t an investor you should buy silver. It is truly real money. A great way to start someone in silver in giving them a candle with a silver coin: https://www.etsy.com/shop/ScentSavers?ref=hdr_shop_menu
They will not only have a real silver coin, but they will knowledge of its value when they research what their coin is worth.
A northern and southern Euro?
Even that may not work. The EU needs to be rolled back to a Trade Zone, and depopulate Brussels of its bureaucrats. Ditto for NATO.
Firstly, you should be ashamed of yourself promoting those bullshit candles on here. $20 bucks for less than a quarter of an ounce of silver (most of the time)? Go fuck off!
Secondly, you have it ass backwards that a currency gains value as it loses adherents. This should literally be common sense (which you obviously lack).
Thirdly, silver is NOT money (and I say this as someone who likes and owns silver). Gold, and gold alone, is money. Silver is an industrial commodity that has historically been used as a money substitute. It's highest and best use is in the production of goods. And, in fact, one of the merits of gold (for use as money) is that it is relatively useless in industry and easy to substitute for various properties (e.g. copper for conductivity).
So gold is like fiat: dependant on trust and conviction for it's value.
greece as a country wasn't living off borrowed money.
The European and German banks and government operating in Greece . . . run by foreign banks and the Troika were all living on bailouts to fund their keptocratic govt.
The Greek people did not benefit at all from the Euro system....
And in anycase when multiple states join together to use the same currency no one state owes another anything.
If California went perpetually broke because the Californian govt was corrupt and owned by the elite of a neighboring state . . . would the Fed swoop in and bail them out to keep their kleptomaniac friends partying ?
Would the rest of the States in the Union demand that Californias population live under austerity to pay the rest of the states back??? . . . probably not.
There is your evidence that the European Union is anything but a "Union", its a scheme to label some nations "creditors" and other nations "debtors" even though they are all doing the same thing.... counterfeiting money through banks to fund themselves and move wealth from their respective populations into the hands of kleptocrats , govts and banks.
Greece doesn't owe shit.
Unfortunately none of this is part of the Syriza platform. They want to devalue the currency further to pay more government benefits. Think Venezuela without the oil. The net result is a Haiti like state that scares the masses of the EU even more about the prospect of leaving the EU. Either result, in the Euro or out of the Euro is a Short-term victory for the status quo.
Leave the Euro . . . good idea . . . Greece can be great again... grow crops . . make beer / wine .
Yes:
... the battle is peaking now. In case that banksters will risk to pull the rope to the edge, ECB will cut the last funding source through the ELA mechanism. Therefore, Greece should be prepared for the last defence line: return to national currency.
The Greek government would have huge problems following these six prescriptions. Why? Because trying to be one small solvent country in a world of easy-money debt is too costly. If others prosper on borrowed money, what would the Greeks gain from living within their means? While the debt bubble expands, even well-intentioned countries find it too hard to resist the temptation to borrow at near zero interest. Free money is too alluring. The only reason to avoid it is the prospect of pain when the bubble bursts. But think about it; if everyone is in the same debt-ridden condition, the central banking system will have to bail them out when the bubble bursts. The alternative is another worldwide depression. Therefore, why experience the pain of missing the bubble profits for some fictitious prize from living within one'd means? This is what insurance labels moral hazzard. We are living through the moral hazzard created by decades of central banking policies. One small country cannot fix it on its own, even if it wanted to. Besides, there is no indication that the Greek government wants to. It just wants debt forgiveness to begin a new round of borrowing.
It is just a matter of timing. If Greece goes to sound money and isolates itself from the world right before the whole system implodes and we are all trading different kinds of seashells, then Greece looks brilliant.
Given the current event horizon, this is not impossible.
not one small solvent country: Iceland and Russia for example are in the same camp
"Ask yourself who is more likely to succeed in the world: the spoiled child who lacks even the most basic self-discipline, or the child who has learned that actions today have long-term consequences?"
If you are a banker your actions have no consequences.
More unconditional bailouts lads.
Probably why they behave like spoilt children.
As long as there is printed toilet money ........ a fraud to start with , things will never change ......
I have a proposal for the Troika . Let the Greek government pay for the Paper and the ink needed to print 340 billions euro and call it " debt estiguished " . Any other way is FRAUD and Highway robbery !
I’ve been thinking a lot lately about the situation in Greece. The question in my mind is whether this will become a trigger event that leads into the next phase of the ongoing financial crisis. In my mind, by the way, this crisis began at the turn of the century when the credit cycle – two decades into its expansionary phase at that point – finally rolled over. So anyway, here are my thoughts on how the “Greek affair” might play out.
Suppose that Greece simply defaults on its debt. It declares a moratorium on all principal and interest payments until such time as its economy has recovered. Does that mean that Greece must exit the eurozone and return to the drachma?
I would argue not! The Greeks have clearly rejected austerity, but does that mean they want to resurrect the drachma? Do Greeks really want to go the way of Zimbabwe or the Weimar Republic?
If the drachma were resurrected, it would immediately become a banana currency from which Greek citizens would be the first to flee. The Greek central bank would find itself in a position similar to Argentina or Venezuela, under constant assault by the markets and struggling to stave off a currency collapse. Unless the Greek central bank is willing to go the way of Zimbabwe, interest rates will be sky high and could easily lead to circumstances even worse than what the Greeks have already experienced.
My point is, for the foreseeable future the Greek government will not be able to tap the credit markets, whether it remains under the tutelage of the Troika or defaults. It has no choice but to live within its means and run a balanced budget, and there is a strong possibility that the Syriza government understands this situation. In other words, austerity cannot be avoided no matter what path the government takes.
Given that austerity is inevitable, why not give the Troika the middle finger and then rally public support for the measures that need to be taken? If Greek citizens see that the Syriza government has been true to its word, the sense of crisis created by a default may facilitate passage of needed reforms.
The first casualty of a Greek default would be its banking system. But the Greeks have had plenty of advance warning. Surely by now everyone with assets to protect has a bank account in Zurich or Frankfurt or London or New York. Surely even the least sophisticated and least wealthy of Greeks know to keep their cash under the mattress rather than in a bank that could topple any day. Why does Greece need any domestic banks? If there are profitable banking opportunities in Greece, foreign banks will be eager to establish branches, and investors may even start up new, fully-capitalized banks.
I suppose that it would be difficult for the Greek government to run its affairs without any domestic banks. Having defaulted, the government might have to deal with creditors trying to seize any deposits held in offshore banks. But it’s hard to believe that there wouldn’t be at least one bank willing to provide the government with protected accounts, and I’m sure the Greek government would make it worth that bank’s while. The crucial question in all this, of course, is whether the Syriza government will actually attack the corruption and cronyism that plagues the country, and whether this government will provide an environment conducive to economic growth.
In any case, let’s just assume that Greece has defaulted and, as I just described, now refuses to leave the eurozone. What happens?
A Greek default would force its creditors to write down their holdings, and most of that debt is now held by official institutions. That means the European Central Bank and other government entities, which are not supposed to ever incur losses, would in fact incur losses. And that would pose a serious political challenge to the entire edifice of bailouts that has been erected to support the debt of the Club Med countries. It might even call into question the rollout of Quantitive Easing by the ECB this coming March. Eventually, the markets might even start to price in the fact that most governments are bankrupt, and that they are dependent on constant monetization of their debt in order to avoid financial collapse.
From another perspective, if Greece is able to default on its debt and weather the storm, that might inspire the other Club Med countries to push for significant restructuring of their own debt. Spanish elections are scheduled for late this year, and the Podemos party has come from nowhere to lead in the polls. French elections are just over two years away, and the National Front leads in the polls. Who knows how long the current Italian government will last, and the Five Star Movement is waiting in the wings. At a minimum, it’s hard to imagine that these countries wouldn’t at least try to weasel out of taking their share of the losses from a Greek default. German outrage at being asked to shoulder even more losses would surely ratchet up the political pressure.
At some point a schism will develop between the hard money (northern) members of the eurozone, who refuse to finance any more bailouts, and the Club Med (southern) members who refuse to continue down the path of austerity. All of which will bring us to a climactic moment.
I predict that there will eventually be an emergency weekend meeting of the eurozone finance ministers, or perhaps even the prime ministers. The markets will be on the brink, the politics of the zone will have reached a stalemate, and it will be painfully obvious to all the ministers present that the monetary union can no longer be sustained. At that moment, I believe the southern members will ask the hard money members to withdraw from a position of strength, rather than forcing the Club Med members to withdraw from a position of weakness. And faced with a political disaster of epic proportions, I believe that request will be granted as a sop to appease somewhat the bitter feelings that will surely endure for a long time to come.
This may very well be the strategy of the current Greek government, and if so would be all the more reason for Greece not to exit the eurozone after defaulting. Freed of the constraints imposed by Germany and its monetary brethren, the ECB (whose HQ would presumably move to Paris) could open the monetary spigots and provide financing to all the Club Med countries, Greece included. There are nineteen members of the eurozone, and I predict nine of them would remain after this schism (Belgium, Cyprus, France, Greece, Italy, Malta, Portugal, Slovenia & Spain). Together, they would wield enough economic heft to support a currency regime on a par with any large Third World country.
By convincing Germany et al. to exit the eurozone, the Club Med countries would be spared the necessity of re-introducing their legacy currencies, re-denominating bank accounts and financial instruments, and arbitrarily re-writing contracts to the advantage of one party and the disadvantage of the other. Their markets could open normally on Monday morning, and everything would function exactly as it had the previous Friday, except of course that now the ECB has their backs beyond any shadow of a doubt.
But what about Germany and the exiting countries? First of all, I do not believe that they will form a new common currency regime. If they exit the eurozone, there will be absolutely zero political appetite for another monetary adventure. They will resurrect their legacy currencies and carry on as before. There may very well be a currency bloc where different countries peg their currencies to one another. But when monetary pressures build, they will be addressed by simply adjusting the peg, just as was done before the Maastricht treaty came into effect.
So, the emergency weekend meeting concludes with a decision that ten countries will exit the eurozone (Austria, Estonia, Finland, Germany, Ireland, Latvia, Lithuania, Luxembourg, Netherlands & Slovakia ). At this point, conventional thinking seems to be that the countries pulling out will declare an emergency banking holiday for a day or two while all the accounts in each country are converted into its legacy currency. I do not agree, and here is my alternative scenario.
I think that instead, Germany et al. will announce that in the next few days, each country will bring back its own legacy currency. These resurrected currencies will not replace the euro, but rather will circulate alongside the common currency. There will be no automatic re-denomination of accounts, and all contracts will be honored as written. When the markets open on Monday, the euro will drop sharply but everything throughout the entire eurozone will function normally, just as it did on the previous Friday.
Then, when each exiting country has put in place the technical requirements for resurrecting its legacy currency, its central bank will begin auctioning off a portion of its euro reserves and thereby inject some of the newly resurrected currency into the banking system. In the early days these resurrected currencies may only exist in electronic form, just like the euro when it was first introduced, but notes and coins should start to circulate within a matter of weeks. Simultaneously with its central bank injecting the resurrected currency into the banking system by selling euro reserves, the government of each exiting country will auction debt denominated in said legacy currency.
With only the Club Med countries remaining in the eurozone, the common currency will drop sharply against the legacy currencies coming back into existence. While the government debt of the Club Med countries may be money good, now that the ECB has their back, it’s money good in a rapidly depreciating currency. That means euro interest rates will quickly move back toward levels that reflect the risk of inflation, probably north of 5%. The combination of higher interest rates and a depreciating euro will allow the exiting countries to retire their euro-denominated debt at a significant discount in terms of their newly issued legacy currency.
The process I’ve just described will have a lot of market players screaming in outrage. In particular, anyone holding German debt or similar assets, with the expectation that they would be protected in the event of a eurozone breakup, will be shocked to find they are not shielded at all. And since there have been no defaults, since there has been no breach of contract, plain vanilla credit default swaps would not be triggered.
A lot of citizens from the exiting countries would also be quite unhappy to see the value of their euro-denominated savings shrink with the depreciating euro. To mollify their own citizens, each exiting country would therefore issue tradable warrants giving holders the right to convert euros into the legacy currency at the same rate where the legacy currency was converted into euros back when the common currency was launched. Each citizen and “qualified” corporation would receive those warrants in amounts equal to two or three years of income. In addition, banks headquartered in the exiting country would probably receive warrants in the amount of twice or thrice their capital. (As an aside, this could go a long way toward recapitalizing those still questionable banks.)
So there we are! The eurozone has broken apart without any defaults, without any contracts being breached, and without any banking holidays being declared. Of course, none of the underlying economic problems that led to the breakdown have been resolved. The structural imbalances and impediments to economic growth still remain. And the division of Europe into a northern and southern bloc could easily lay the groundwork for the world’s next great conflict.
As long as I’m painting “what if” scenarios, consider how the struggle in Ukraine might turn out. With Europe divided, the Club Med countries remaining in the eurozone will surely seek to solidify and expand their economic heft. It’s not hard to imagine the rump eurozone pushing east. The ten northern European members that withdrew could be replaced by ten new members from the Balkans. Once the eurozone bumps up against Ukraine, it’s easy to imagine a deal with Russia. In return for energy, trade and banking agreements, the rump eurozone accepts the dismembering of Ukraine and gives official recognition to the Republic of South Ukraine, a nation allied with Russia and bordering Moldova. I think you can already see the nightmare developing.
I could go on and on with possible scenarios on how the breakup of the eurozone might turn out for better or worse. Belgium could split up, with Flanders joining the Netherlands and Wallonia joining France. Northern Italy could secede, become independent and join the northern bloc. Maybe Ukraine leads to WW III, or maybe Germany and Russia come to agreement on carving up the country along ethnic lines. Who knows, maybe Texas secedes and becomes the capitol of a new USA, the northeastern states become the USSA and join the rump eurozone, and Latin America becomes a colony of China. Stranger things have happened.
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Sorry.
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EXCELLENT analysis! Thank you for writing this comment.
-- Paul D. Bain
PaulBain@PObox.com
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Greece should leave before Germany does. They might as well leave with some Euros that are worth something under their mattress. Once Germany leaves, the Euro is going to zero. Then everyone loses everything.
not bad..
“the euro created a brief (and highly profitable to the kleptocrats and banks) fantasy that marginal borrowers would magically be transformed into solid credit risks simply because they were now borrowing euros instead of drachmas.”
Exactly, which is why countries like Greece wanted to join the EMU in the first place: i.e. to get access to the credit teet (so as to be able to finance their extraordinarily bloated governments).
“The entire subprime mortgage fiasco was based on a similar financial fraud”
There was no fraud. The Greek government knew exactly what it was doing. It simply didn't care about the long-term consequences (short-sightedness is always a problem for democratic governments).
“issuing one's own currency disciplines the entire economy in positive ways.”
If a state prints money to finance itself, all holders of that money pay the inflation tax. It matters not whether its the GCB or the ECB doing the printing. Costs are costs, there is no free lunch. However, it would be better for the GCB to print drachmae, since then only Greeks would pay the inflation tax (whereas right now its being paid by everyone in the EMU), which means there would be more political resistance to money printing. It's similar to the US situation, because of the reserve status of the USD. The Fed can print more than it otherwise could because the burden is distributed throughout the world (by all USD users) rather than focused on Americans only.
“1. Announce that the government can only spend what it collects in taxes and fees. The state will not borrow money, period.”
The most important thing is the total amount of spending (the lower the better). Whether the funds come from taxes, borrowing, or printing is not so important from an economic point of view – but it does matter politically. A state funded entirely by taxation will tend to spend less than a state funded by borrowing or inflation, since the costs are more visible to the average person, and so there's likely to be more political resistance to increased spending.
*regarding taxes*
You don't need some big tax enforcement apparatus if you choose the right kind of tax system in the first place. Income tax, for example, is really easy to evade – so you need a big enforcement agency. VAT is much much harder to evade (the system is designed such that companies have an incentive to police each other). Real estate tax is impossible to evade (you can't hide that you own land).
“6. Enforce strict banking laws where lenders that loan money without regard for risk management are forced to absorb their losses and close their doors. Encourage prudent private lending and borrowing.”
In other words, no more bailouts: allow failed businesses to fail. Yes, failure is essential to free market capitalism, it is the only way to weed out the incompetent.
At least the Greeks have a stronger 'stomach' than Haggis!
Why don't the Greeks 'Do the Fed' and simply 'Print' more Euros? All they have to do is stamp out more cheap coins or print more paper Euros -- then send the whole pile to Germany!
That would be an act of war.
No state is going to allow another to counterfeit its currency.
http://www.ekathimerini.com/4dcgi/_w_articles_wsite2_1_06/02/2015_546977 ...
plan c and d, bridging with rus and china.. lots of greek island on sale in alibaba and quora
I believe that is now plan A.
how about renting few of these islands for rus and china as a military base, boyz can bring few nukes there too and quarantee greeces safety, no need for army there any more.. lot of savings..
There is the whole problem of NATO before anything like that could happen, I think that Greece and Turkey will be the first countries leaving NATO.
the youngsters could do some hooking and drug selling for soldats.. just like in detroit so bye, bye youth unemployment.. the rest (not so goodlooking, the hairy ones and old) will go under seasonal adjustments.. they could borrow the algo from fed... homebrewing ouzo would be hit among ruskie soldat
The Laffer curve demonstrates the tax avoiding nature of the rich.
Taxes on land, property and assets are the things they can't hide.
We all remember the onerous conditions placed on bankers after the bailouts in 2008.
We stopped them taking their bonuses after crashing the Western financial system.
We cleared out all those that had made big losses.
Those guilty of fraud were imprisoned.
The 1930s legislation that kept the bozos of Wall Street on the straight and narrow for six decades was restored.
Wait a minute; I don't remember any of those things because they never happened.
Unconditional bailouts for bankers and austerity for people.
Why are they protesting?
While the MSM were supporting the right wing fascist coup in Ukraine.
RT were covering a week of anti-austerity protests in Spain.
"Unconditional bailouts for bankers and austerity for the people"
was a very popular banner in these demonstrations.
I should imagine these people are now Podemos supporters and have no time for the mainstream Centrists who supported this.
Banks couldn't be allowed to collapse but banker austerity should have followed.
My money in my pocket - GOOD. My money in government's pocket - BAD!...What else can I say?....
The deadbeats are long gone! Now they can manage their 'own' austerity!
Merkal in Moscow. We'll give you Ukraine and drop all sanctions if you stay out of Greece.
Preaching to the Greeks...
"Ask yourself who is more likely to succeed in the world: the spoiled child who lacks even the most basic self-discipline, or the child who has learned that actions today have long-term consequences?"
Is Charles suggesting that the Greeks bring back the Colonels?
Merkel demands ultimatum to resign Greek people even the crumbs. Merkel refuses (!) To the Greeks have three dimes even for heating oil. Refuses to Greek elders of euro 700 to add to their pension massacred even these 2 euros per day of 13 pension. Merkel - spokeswoman ruler EU imperialist Germany, German monopolies, Germany of "Siemens", the "Chochtif", the "Tisen", the "Deutsche Ban" and submarine drooping - is "partner" ? It's "girlfriend"? It's "ally"?
The k.Ntragki - former Vice «Goldman Sachs» and current commander EKT - since turned black holes of banks in debt with domestic "patriots" upload to hump the Greek people now blackmailing Greeks with economic suffocation. The k.Ntragki, the central EU banker, is "partner"? It's "friend"? It's "ally"?
The k.Olant the ... socialist, welcomed yesterday the ECB's decision to throw tracer shot undermining the Greek economy, saying it was a "lawful and reasonable" action by the Draghi. The k.Olant is "partner"? It's "friend"? It's "ally"?
The k.Giounker, the gentleman over 18 years as prime minister of Luxembourg did backs multinationals to foroapofefgoun through the country, told us that he only recognizes the commission is Memoranda. That all is well pleased to allow the Greek people are watching him crawl on his knees. Mr. Our Juncker said ... republicanism by the European Commission that "will not overturn everything because we had an election result" in Greece. The k.Giounker (and the European Commission) is "partner"? It's "friend"? It's "ally"?
The k.Ntomprofski, vice Juncker told us yesterday not imagine canceled even privatization, can not imagine even go the minimum wage in the meager level of 751 euros not imagine that something will not be laid off tens of thousands of public officials yet. He, Juncker, the the European Commission, their Ntaiselmploum, the Eurogroup is their "partners"? It's "friends"? It's "allies"?
The k.Soults, the president of the "democratic" EU Incense in Strasbourg, threatened with bankruptcy Greece and the Greek people with extinction. The k.Soults and "democratic" the censer is "partner"? It's "friend"? It's "ally"?
Developments in recent days "clamoring" for the obvious. They confirm the obvious:
The issue is not the bargaining skill or good intentions of the negotiators of SYRIZA. The issue is not the dapper or tsalimakia under the "game theory". The point is that during this "game." The thing is per se the negotiation framework. The issue is of itself the European Union.
The point is: The European Union, the European Commission, the Eurogroup, the banks, the of Schauble, not the "our common European home", said k.Tsipras in meeting with Hollande. The European Union was, is and will be for the Order which housed a brutal "komantatour" of international, European and domestic plutocracy. It is a grasshopper that has epipesei on the head of Greek and all the peoples of Europe.
The point is that: The EU is a jungle with or without troikas, with or without Memoranda, promotes policies that amount to social holocaust. Composed of gravatomenous cannibals and smiling political pachyderms. It is the executive body of the multinationals that triggers crematoria working "Auschwitz" and builds the slave social "Dachau".
The point is: No deal in "Auschwitz" is not set aside the rules of operation of "Auschwitz" - the "pact for the euro," the rules "surveillance and monitoring", the "stability pact" and austerity, the faits accomplis of Maastricht.
The point is: The European Union is the union of the capitalists, is the union of the imperialists against the peoples of Europe who are not within the reigns "equivalence" and "social justice", but the unevenness and the "law" of strong.
The k.Soults, the president of the "democratic" EU Incense in Strasbourg, threatened with bankruptcy Greece and the Greek people with extinction. The k.Soults and "democratic" the censer is "partner"? It's "friend"? It's "ally"?
The European Union, the Eurozone and the whole structure of evroenosiakou establishment is a slaughterhouse workers, ablation of popular rights and freedoms standing obstacle to the "competitiveness" of monopolies.
This is the "competitiveness" which eklise in all cases yesterday Schaeuble in interview with Varoufakis and which kinezopoiei wages and "suicide" people in Greece.
This altar Rights, the EU is karampinati scam appear as "one way" and much more like a potential "haven" of the people!
What the hell is inexcusable delusion be regarded as the field "negotiation", it is sufficient to find a good negotiator.
Where the hell treated as trading field, then it will be a negotiation - inevitably - will start with what I said yesterday the k.Varoufakis. Who when asked what part of mnimoniakou program rejects Greece, said that "60% - 70% of the program are measures that we would get"!
But if - before you start negotiating - accept the "60% to 70%" of a program by ... 1,000% inhumane, then? Is it self-pity to assume that the start foreshadowed for that could end this deal?
It is self-pity. Realistic analysis of data. That has nothing to do with "pemptofalangitiki" gloat some wretches in domestic politics, which in opposition as ruled: With the compass emails Troika.
It realism on the basis of analysis of reality. That has nothing to do with foolish prophecies about "kolotoumpas" negotiator. It has to do with the obvious: That the Coliseum limits of negotiation does not define the good intentions of the negotiator. The tigers define the Colosseum.
It is an illusion that the Coliseum is no room for negotiation. In Colosseum question was never what you'll win. In Colosseum much - much we can hope is to fight for what pieces of your flesh will salvage.
***
Developments in recent days cry: Another route to a dominant Greece and a people with prosperity and dignity throughout there is the route of exit from the EU in terms of overturning the entire system of domination of monopolies.
Of course not daydream. We know that the majority of the Greek people do not have this view. Respected. But this is not a presumption of correctness of the view that our people will only damage counts as is "alliance", in "partnership" dependence and interdependence with a compound of wolves who drink blood. As there was a presumption of correctness to stay in power ND and PASOK that people over 40 years of tolerated.
The Greek people deserve to be convinced that Greece is not a "small" country "can not" oppose - if all matter - the powerful. It is satisfied that this winding road is infinitely easier than the impassable road continuing acceptance of smaller or larger blackmail. It followed its own flag. Do not settle for the "little pregnant" or a "loop" that "Schaeuble 'will to tighten or to relax at will.
Our people deserve to get more tharreta on track to become a person "negotiator" spearheading a true people's Europe where everyone individually and all people together will not wait as the "Second Coming" to "overthrow the correlations' from above after having upset the very brutality from below. Worth apeitharchisei and stand patriotic, internationalist and disobedient stature towards the union of "Schaeuble ', since there has to negotiate with them nothing of what he is entitled.
And the value of this necessary road, if something indicates conditions that the people have not yet taken such a decision, is this: The responsibilities of those who have debt, but detached from the current popular feeling, to persist and lead to convincing, with decisive and unifying for the people way in this effort.
email: mpog@enikos.gr
https://translate.google.gr/translate?sl=el&tl=en&js=y&prev=_t&hl=el&ie=...!.html&edit-text=
Google Translate fails again.
1. Announce that the government can only spend what it collects in taxes and fees. The state will not borrow money, period.
2. Announce a new, simplified tax structure, with tax rates far below those of other European nations. For example, if the value-added tax (VAT) is 17% elsewhere in Europe, the Greek rate would be set at 7%. (Compare that to the sales tax in California, which is 9%.)
3. Explain that the future of Greece depends entirely on everyone paying taxes, since the government will no longer borrow-and-spend.
3. Hire 10,000 currently unemployed accountants (including recent college graduates who have been unable to find jobs in accounting), train them in forensic accounting and auditing and unleash them on the Greek economy, starting with the top 1/10th of 1% (the kleptocracy class) and working their way down to the corner cafe.
3. Make the pain of cheating and non-compliance higher than the pain of paying relatively low taxes.
4. Change the social perception that not paying taxes is acceptable behavior. Publicize the list of tax cheats, etc.
5. Make government spending transparent and auditable by any citizen with an Internet connection.
6. Enforce strict banking laws where lenders that loan money without regard for risk management are forced to absorb their losses and close their doors. Encourage prudent private lending and borrowing.
Yes, and those same steps would be ideal for us in the US, too. However, considering the abject financial ignorance of the citizenry combined with the fact that those negatively affected control the system, the chances of ANY of that happening are virtually ZERO even after our next economic collapse.
Good luck getting elected on that platform!
In the last year Americans have learned the geography of more countries than they knew existed. US politics is almost irrelevant now which is just the way it should be.
All dressed up with no place to go! It's gonna be a long hot summer on the Island!
Greece, are you finally ready to return to periodic devaluations and debasements, politicized monetary policies, recurring loss of wealth and crippling import prices, an even more dominant DM to the north and west, an even more aggressive and islamicized Turkey to the East, and a future, at the very best, as a third-world dirt-cheap retirement venue?
That's up to the Greeks. They'd be fully in control of their own destiny and got away with not paying their previous debts. If that's not enough to avoid the status you suggest then it is indeed no more than the country deserves.
There was a solution offered to some people in Greece back in June 2012. If you go to the 13 minute mark and listen to Hugo Salinas Price. This remedy, BTW, has been offered to many, but I think there is some fear in using it ... a fear similar to any country offering Oil for Gold
The main by by HSP is to never place a monetary amount on the coin, only its Weight and Purity
https://www.youtube.com/watch?v=Hhi2BBfbZU8 It is also detailed here: http://www.plata.com.mx/mplata/articulos/articlesFilt.asp?offset=40&fiidarticulo=185
For this reason, we have proposed that any new silver coin to be used as money, anywhere, must have a quoted and not a stamped value; a quote which will set the coin’s monetary value above the “melt value”; and in order to keep the monetary value above the “melt value”, the quote would have to be increased with increases in the price of silver, but once raised, the quote would not be diminished with falls in the price of silver. (Remember that the price of the silver in the silver dollar fell considerably during the period 1877-1963 and yet no one questioned the monetary value of the silver coinage, as we noted above.)
In this way, the silver coin – whatever its weight and purity – would be kept in a state of permanent liquidity useable as money in any transaction with no problem at all. It would continue to be money indefinitely.
I should have added the "some people" were Syriza officials
Fiat gives the printers the ability to buy everyone willing to sell out. Sadly thats just about everyone.
#3 will never happen (all 3 of them).
Nepotism is not addressed.
Disagree with the private banking sector part, the state should issue all currency as credit without interest and it should be completely transparent with the public able to veto any amount that isn't in their interest to create. The banks should never be allowed to profit by creating currency out of thin air, they've proven innumerable times that they can't be trusted. It's time to close all private banks, they're evil criminal parasites.
If the Greek are smart, which I think they are, they leave the European monetary union but like Denmark keep the Euro infrastructure so that tourists can keep paying in Euro’s and like in Denmark give funny ‘tourist’ money in return.
Greece won't have the problem like the Danish Krone which get's pushed up because the Greek love a strong currency that's why the fell in love with the Euro in the first place.
Coming up with a checklist of solutions that would turn things around is easy. The problem is not a lack of solutions. Solutions abound.
The problem, in Greece and the entire developed world, is that their dumbed-down elecorates won't allow real solutions. They are too in love with the delusions breast fed to them their entire lives, which real solutions would expose.
The denizens (calling them "citizens" lends them far too much credibility) of today's nanny states will drive their countries into bankruptcy before they will give up sucking at the government teat. Simple as that.