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A "No" Victory Appears Probable: What Happens Next According To Deutsche Bank
The Varoufakis gambit - with some last minute assistance by the IMF - succeeded and in a landslide vote, the Greeks said "No" to a deal (that was no longer on the table). What happens next? Here is Deutsche Bank's "map for the post referendum" which presents the four possible outcome.
In this document DB, which is one of the banks that may stand to lose the most from any major stresses to Europe's precarious status quo as a result of its tens of trillions of notional derivatives, lays out the possible post-referendum scenarios.
Here is how the German megabank sees the possible outcomes of what is shaping up to be a "No" vote:
- N1 – Soft deal: The most unlikely scenario is that the euro-area partners offer a much softer programme to Greece.
- N2 – Default-and-stay: Moderately less unlikely is a scenario where Greece defaults but stays in the euro thanks to a direct recapitalisation of Greek banks by the euro-area partners, with the Greek government using only domestic resources for the country’s fiscal needs.
- N3 – New deal: The third scenario is one in which the rising economic and political cost of a closed banking system results in the Syriza government being replaced by a new government of national unity and a new deal with creditors being reached.
- N4 – Grexit: In our view, Grexit and Scenario N3 are the most likely – with about equal probabilities. That said, we see the probability of Grexit increasing the larger is the margin of victory of the NO vote. Even with a NO vote, the cumulative probability of the first three scenarios still exceeds that of Grexit.
And the details:
NO, Scenario #N1. Soft deal
This, in our view, is by far the least likely outcome, as it would generate significant moral hazard issues, which in the longer term could be as damaging as an exit. If Europe were to offer significant concessions to Greece following a no vote, it would de facto incentivize other borrowing countries to call domestic referenda to improve the terms of their rescue packages. This would be unsustainable in the long-run as (a) it would create obvious political issues in creditor countries, (b) it would not deal with the structural adjustments and political integration which are necessary for the longer term viability of the euro area.
NO, Scenario #N2. Default-and-stay
A direct recapitalization of the Greek banks is more likely, we think, than a very soft programme, but would be a challenge for Greece and, above all, euro-area partners to accept.
From the European perspective, it could be the start of a new round of financial commitments, all the more so unless there is a strong, credible agreement on structural reform to boost growth and protect Europe’s capital investment. After a default, getting the necessary consensus for such a bank-based deal will be difficult. Indeed, a public default would likely lead to a cascade of private defaults — starting with corporates.
The most serious flaw with this scenario is the moral hazard it creates. If Europe facilitates this default-and-stay option in Greece, it opens the door across the periphery to similar demands. If it is easy to renege on debts but have Europe preserve your banking system and access to the single currency, others will want the same. It will promote instability.
It is not only a question of ex-post moral hazard either. There are general elections in Spain at the end of the year and in Ireland by April 2016. How could the governments of these countries explain to their electorates that they should help to shoulder the direct recap of Greek banks after their own public debt ballooned because of the recap of domestic banks?
From Greece’s perspective, the cost of direct recapitalization in terms of deposit bail-in and general economic conditionality (see Box 1) means this scenario is not a shoe-in either.
It is also a scenario that needs time, measured in months, to come to technical fruition. In the meantime, the economic and political cost of a closed banking system will be mounting. There is a considerable probability if Greece and Europe go down this route that it merges into Scenario N3.
An additional consideration is that the HFSF is a guarantor to the EFSF. In the event of a Greek default, the EFSF may have a direct claim on the HFSF shares in the Greek banks. If Europe becomes the beneficial owner of the Greek banking system, the argument for direct recapitalization could grow. This does not diminish the technical and political complexity of direct recapitalization.
NO Scenario, #N3. New deal
Whether the ECB withdraws ELA — and when — is almost beside the point. The liquidity in the Greece economy is seriously impaired and as each week passes the economic, social and ultimately political cost of the crisis will rise exponentially. The tourist season may be compromised. We cannot judge Greece’s capacity for this. There may be new negotiations after a NO vote, but the chances of a soft programme (Scenario 1) or direct bank recapitalization (Scenario 2) are, in our view, very low. In the meantime the domestic political cost of a closed banking system will rise.
At some point, the rising economic and political cost of a closed banking system could cause the Syriza government to fall. A national unity government could emerge and new negotiations could take place around a deal with the international creditors.
How quickly such a scenario plays out depends on the economic and political cost. By that time, after the economic shock of failing talks and default, the scale of debt relief required to return Greece to sustainability will be even larger. If the EU wants to retain Greece in the single currency, more debt relief might be the price to pay.
Such an agreement would have to be based on a more balanced programme, probably along the lines outlined by the IMF in their latest debt sustainability report. There would need to be much more emphasis on structural reforms in exchange for a less growth-unfriendly fiscal consolidation and a commitment on a gradual debt relief based on implementation milestones . There needs to be a sequence that creates the incentives to improve the ability of the Greek economy to pass and implement the structural reforms that would allow the country to stands on its own leg within the monetary union.
A risk under this scenario is political deadlock could result if the Syriza government resigns but parliament is incapable of forming a new, stable government capable of striking a deal with the international creditors. The parliamentary arithmetic says that about 45 Syriza MPs – about one third of the parliamentary party – would have to join forces with the MPs of New Democracy, PASOK and River to gain a majority in parliament. Syriza retains strong support in opinion polls. Combining forces with the opposition could erode support and push voters further into the political extremes.
If a government cannot be found, the next step would be early elections. Note that there would be legal and financial challenges to new elections. According to the Greek constitution, the incumbent government cannot call elections within 12 months of the previous election. The government would first have to resign, followed by renewed attempts by the President of the Republic at forming a government. The constitution calls for three rounds of at most 3-day negotiations with the next three largest parties in parliament before an early election can be called.
NO Scenario, #N4. Grexit
A resounding NO would embolden PM Tsipras to ask for a complete overhaul of the programme. Actually, from his perspective it would make a much softer deal for Greece a necessity. But as we wrote in Scenario N1, an excessive compromise might be as damaging to medium-term euro area stability as Grexit, if not more damaging.
There is no formal mechanism in the EU Treaty that allows a member state to be expelled. That does not mean exit is impossible. First, Greece can take a unilateral decision to change its national currency back to the Drachma. Greece has this right under international public law (“Lex Monetae”). Second, exit could be agreed by mutual agreement. There is a view that Article 352 of the Lisbon Treaty might provide a basis for such an approach. It requires the unanimous agreement of the European Council, i.e. all EU countries in the EU including Greece.
Even though there is no legal mechanism that allows a member state to be expelled, there is a practical mechanism to trigger exit, namely the withdrawal of ELA. Withdrawing ELA would force the Bank of Greece to call in the emergency lending. The banking system does not have the capital for allow this and the government guarantee for ELA triggers a general default. The Greek banks would not regain access to ECB funding until they have been resolved and recapitalized, a lengthy and costly process.
The Syriza government claims it has no intention of leaving the euro area and that it would fight attempts to force it out through the European courts. This leaves economic circumstance to determine the point at which Greece feels it has no choice but to leave the euro area.
What differentiates the Scenario N4 (Grexit) from Scenario N3 (new deal) is that the Syriza government survives and takes the decision to exit. After a NO vote, these are the two most likely scenarios, in our opinion. They have a broadly similar probability, but we see the probability of Scenario 4 (Grexit) rising the larger the margin of victory for the NO campaign.
It is important to note that leaving the euro area and leaving the EU are two separate questions. If Grexit occurs, Greece would leave the euro area but not the EU. There is no argument being made for Greece to leave the EU. Staying within the EU limits the geopolitical ramifications of the Greek crisis.
Sequencing of events after a NO vote
Given the limited contagion in other peripheral markets and the rising domestic pressures in Greece, it is probably in Europe’s interest to wait. The exposure to Greece is no longer growing now that the ELA is capped. Contagion has been contained and the ECB has the ability to intervene more forcefully if necessary. Therefore, there is little cost in waiting for now.
On the other hand, precipitating an exit by e.g. suspending ELA, would lead to a crystallization of the losses on the existing official sector exposure to Greece, the introduction of potentially more challenging contagion risks and initiating a process that will be difficult to reverse. Conversely, given the trust lost over the last six months, Europe is unlikely to find it attractive to loosen its terms without a more credible commitment from the Greek side (or a change in government), as discussed in Scenario N1.
Given the above, it would be rational for Europe to wait for the political process in Greece to play out, even in the case of a NO vote. It would neither trigger a formal exit, nor offer more lenient terms until one of the following three outcomes realizes.
First, in the most optimistic scenario, there is a credible change in position from the Greek government. This would then enable Europe to restart more constructive negotiations along the “new deal” scenario.
Second, Greece itself gets closer to considering an exit. At that point, Europe may consider other alternatives such as a managed default within the eurozone, which will require Europe to recapitalize and control the Greek banking system which could lead to either “exit” or “default-and-stay” scenarios.
Third, there is an event that makes it institutionally very difficult for Europe to avoid exit. For instance, if the ECB decides that it is unable to maintain ELA following a default on the Greek bonds it owns, and Europe is not willing to recapitalize Greek banks, which would lead to the “exit” Scenario.
Note that it is not necessarily the case that ELA is suspended as soon as Greece fails to pay the ECB on 20 July – indeed, the ECB left the ELA volumes unchanged on 1 July despite the ‘default’ on the IMF. The rules of ELA are not published. It might also be the case that there is a 30-day grace period on the ECB held bonds. If so, the ECB could avail of the grace period before taking action on collateral (or suspending ELA). The counterargument will be that by permitting ongoing ELA the ECB will probably be in breach of the monetary financing prohibition in the EU Treaty.
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We now know that the Troika have been negotiating in bad faith.
Expect more of the same to lead to massive crisis and then demands for ceding of sovereignty of individual Euro nations.
We all know where this is going. Nationalize the banks now, and keep the filthy claws off your working capital. Nothing else is of much significance.
n3 looks like result of a YES vote, which is not. N4 anyone ?
They skipped one....
N5 - Sino-Russian Scenario - Grexit + Assistance while instituting new currency + Realignment of strategic alliances.
Missed the one about "we pay back the IMF" too.
Next up....PAYMENT TO THE ECB...
that's what happens "next"...
Greece will switch to the Yuan.
If I were a Greek....this would be my message to the Banksters.
"you haircut my bank deposits, I will haircut my mortgage, my car loan, and shread every Credit Card invoice I get without opening it"
The objective of this manufactured crisis is European fiscal integration, so that's unfortunately what we'll likely get. The Germans won't dare being responsible, "once again", for division in Europe.
This report from Deutschebanke, who are sitting chock a block full of deravitaves getting ready to implode.
Got grains of salt?
Got collateral?
Oh my, new demand for additional UST's !!!!!!
Will this No vote now queue another run on the banks, this time where the banksters line up outside each others branches and try to collect on CDS and derivative type instruments?
This year the fireworks start on the 5th.
The German Banks are delusional. Since Greeks are into 3-letter words, the Germans need to learn the meaning of this one: GFY.
-30-
None of the above.
Greece, Italy and Spain share a common history that still existed in the 80’s and that’s the rise of a communist government , socialisme to the max with a sniff of fascisme
So my bet will be that new political parties will form.
First they’ll try to rebuild but it won’t go fast enough and that will feed a lot of populists.
This appears to be the beginning of a "rash" of defaults...but to what exactly...
Central Banks and the IMF are facing their own Frankendebt. To destroy it would be to destroy themselves.
N3 = keep voting until you deliver the correct result.
N1 – Soft deal; the most unlikely scenario will surprisingly turn out to be the only viable option.
Actually, the smart and most devious thing that Greece could do, is to switch to the Drachma (after Nationalizing the banks), and then...
Pay off the Debt with with €350 Billion that they've preprinted for Day 1 of the Switch, when €1 = 1 Drachma. The Drachma would start dropping on Day 2 and thereafter, but not on Day 1.
Hence the need to pay off the debts with preprinted Drachmas on Day 1. Better call Putin and have Russia start printing... CTRL-P.
Douche bank is going to be holding a lot of bad paper and since they aren't as solvent as they like to pretend , this could be very, very painful. This is also why I think if Greece holds a hard line, they will be offered a large bribe to leave the Euro......
The European Union collapses because of Douche Bunk's bad Derivative Bets?
Best new possible as it will FREEZE the entire Global Economy.
Yeah...Do not bogart that popcorn.
MELTDOWN and burn into ashes bastards!!!
That sounds about right.
Default to "Douche Bank."
Yet another building in Manhattan goes up for sale...
Great report, coming from an institution which didn't forsee any of this.
Their opinion and $5 will get you a coffee at Starbucks
And in the sixth paragraph from the bottom is this sentence:
"Contagion has been contained and the ECB has the ability to intervene more forcefully if necessary."
So they think contagion is contained. I think contagion hasn't even started yet.
I just checked Google News for an update on the Greek vote but nothing there. They do have a story on some guy eating 62 hot dogs to win the hot dog eating championship. Only in America would this be news breaking.
#5 new drachma with swaps from BRICS bank
That would be their smartest move although China bank is starting to look like a chump.
it's only swaps, ruble, yuan, swap at 80% of euro value, then greeks have ruble and yuan to spend, boosts non US dollar trade too! They can trade ruble to Germany so that it can be used for EU to buy gas from Russia. All good.
Either that or a nice 20 year zero coupon covering Greece debt payments and deficits for the next 2 years. There is no way the debt gets reduced.
The dead prognosticating on the dead. That's rich.
You’re never TOO DEAD to make a profit…
D BANK IS DEAD
CITY OF LONDON NEXT ON THE CHOPPING BLOCK
Please explain why?
THE ROTCHILDS ARE FINISHED.
UNFORTUNATELY, THE ROCKEFELLERS LIVE.
Not much longer...
That fucking murderous family will see justice yet.
The Rotchild's CB system is not sustainable in a cashless society.
Utilities/Energy is the new currency.
Bitbytes sounds better than Bitcoin.
Leveraged DERIVATIVES
"There is no formal mechanism in the EU Treaty that allows a member state to be expelled"
Typical EU Mindset ... It's like saying .... "you can't die , we haven't got any Forms for that ".
This is as originally intended, too bad what's happening in Greece wasn't intended. Magic thinking got them into this and they think magic thinkin will get them out......
That only works if they keep you on life support forever......or until they can't.
It iis like the Eagles' Hotel California
You can check out any time you like but you can never leave
"Given the limited contagion in other peripheral markets"
Is that a fact or just DB's hope/assumption?
No. It is just more Corporate PROPAGANDA.
They believe if they can manage the perspective that somehow, magically, it will balance their books.
The Bankers are also INNUMERATE.
So when are the referenda scheduled in Italy, Spain, Portugal, and France?
Good question....
"Sounds like more non-payment en-route" when that happens.
Words of this month; Greece Contagion. Greece Fallout.
The impacts will be worse than the pumpers on CNBC will tell you.
"even though China just burned through a Brazil in three weeks...
Sounds about right.
"Not even capable of understanding that truth even exists let alone capable being capable of speaking it."
Hope they aren't behaving...UNETHICALLY as well...
http://www.youtube.com/watch?v=xoMgnJDXd3k
What ever scenario Greece takes,DoucheBank is fucked.....
Grexit will equal pain. But not the forseeable pain of economic dislocation. Punitive pain. To serve as an example of what happens to those who try to check out of Hotel EU.
A fresh helping of schadenfreude, much to the germans delight. Get ready for the nazi epithets to be flying faster and furiousier.
Let's dance the Greek Sirtaki https://www.youtube.com/watch?v=auERE6rREL8And btw, how can the people vote "yes" for a deal that's no longer being offered? Typical government insanity.
This is why I hate the colusion of state and markets.
What's the point of having markets if the government is there to always ensure it goes up?
One of the key needs for markets are price discovery, how can you have that in this artificial financial system?
You see what's happening in Greece, voting for an offer that's no longer being offered.
And then you see what China's government is doing - anything it can to force it's stocks to stay high - and you realize what a silly game this all is.
There is no free market, or pricing anymore. It's all just manipulated and rigged, everybit of it.
Welcome to ZH!
Fuck Deutsche Bank!
And indeed it is so...
LET THE WORDS RING FORTH!
ON THIS DAY HERETOFORE!
DUETCHE BANK IS FUCKED!
THE WORD IS GIVEN ANDMADE TRUE!
An Appropriate Expletive. Now the dance to keep Greece "IN". Kudos to the Greek People who set an example for the World that Bureaucrats pushing Bankster/Oligarch Agendas are not DAFTS.
Still a long and painful journey ahead for global preys but hopefully the vested interests behind veils will revisit their useless functionaries and change guards.
Troika & IMF shall also hopefully be enshrined in History as having lost "EU" as this plays out. Still listening to and worse having your monies with DB ?
The importance of this to institutions and political entities pretty much ensures foul play, funded insurgency, attempts to discredit, etc. to follow in icelands footsteps will now be like navigating a minefield. Cheers
durablefaith
To escape, Greece will have to negotiate an exit from both the EU and NATO
A trap being set is ObamaTrade:
The Transatlantic Trade and Investment Partnership (TTIP) is a proposed "free" trade agreement between the European Union and the United States.
The Trade in Services Agreement (TiSA) is a proposed international trade treaty between 24 Parties, including the European Union and the United States.
I think Greece should invade Germany. Strike Hard! Strike Fast!
Gritzkrieg!!!
Hitler's response regarding GREXIT....
https://www.youtube.com/watch?v=OZPmnCC2d8U
You would think that the GErmans would have learnt to take defeat on the chin by now!
And speaking of defeat - smart arsed prediction market lapdog Justin Wolfers has some explaining to do:
"Political betting markets suggest that Greece's prime minister, Alexis Tsipras, may have misread the mood of his own electorate in calling for a financial referendum this Sunday.....The value, I suggest, is that as they adjust betting odds in response to the flow of money, their odds come to represent a quantifiable assessment of the conventional wisdom."
Wolfers represents that school of thought that says that markets are right except when they are wrong - although when they are wrong we are typically met with a wall of silence vis a vis the failure of conventional wisdom.
First the UK General Election, now the Greek Referendum - can we please send these so called prediction markets to the dustbin of history once and for all. Markets are only ever actually right, when they contain a significant proportion of insiders, who alreadt know the outcome.
If it ends in a no/oxi then I'll drink an ouzo or three tonight. I draw the line at that fucking awful retsina cow piss but I will try to make a little contribution to their new economy.
Anther greek custom that I would like to see the troika subjected to is a good traditional ass fucking.
- delete -
Saw a piece on the BBC this morning where it laid the blame at the Greek front door.
Oligarchs and the corrupt Greek government.
Yeah, an election is gonna fix everything.
DB just doesn't get it. JPM coincidental cornering of gold with 96% and Citi with 70% of the silver sure do. How much can these two drive prices down this week.
N5 - DB going the Lehman bros way...
Funny, I didn't see a 5th scenario discussed where Greece gets financial help from Russia and/or China . . . .
Which I'm sure wouldn't have any interest or strings attached to it. Nice avatar.
It's Stalingreece for Germany.
5th scenario, Deutsche Bank goes boom due to their 75 trillion $ in derivatives
Deutsche Bank down toilet.....
Don't underestimate the Euro-Idiocy. It was a political project from the beginning, not economic commonsense. A Grexit would be the begin of the end of the Euro. Also a Grexit is currently impossible by treaties, it would take years to fix it in order to throw out a country legally. The only way to do it quick would be breaching the treaties, but that would be the end of the Euro anyway.
The Eurozone will become more transfer union (as it already is today). Hard times for the German government who has to sell it to their people. It will give strong boost to the Eurosceptics in Germany and an exit of Germany will become more likely.
So GREXIT then, bitchez
8)
I'd like to cut Geoff Cutmore of CNBC EUwope's throat.
English Establishment talking Syriza's BLACKMAIL & TERRORIST and NOT AN HONEST BROKER IN NEGOTIATIONS.
This is the EVIL we're up Against.
I don't see the Greek people toppling their government at this point. I don't think you have a 60+% vote on a matter and then suddenly say, "Oh fuck you and the horse you rode in on" to the people that recommended you vote this way.
Of course, if there is any outside influence (think Ukraine), then all bets are off. But internally? I don't see it. And if it does come as a result of external influence, I think Greece quickly devolves to civil war.
The faster the Eurozone and EU begin to fall apart, the more dangerous NATO becomes in its ongoing effort to justify its own existence.
http://www.activistpost.com/2015/07/austrians-sign-petition-to-leave.html
the delicate Genius :The faster the Eurozone and EU begin to fall apart, the more dangerous NATO becomes in its ongoing effort to justify its own existence.
Amen brother.....ain't that the truth. I's hard to find a bigger pile of steaming shit on this planet than NATO... I guess a close second would be the US Air Force and the Army fighting and "destroying" ISIS / ISIL as the See Y Ayyy is traning them, re-arming them and supporting them. Guess where ISIS gets medivac'd? Oh, and one of the top leaders in ISIS just sought refuge in Turkey. Yea, that's gonna work out good.
Does this mean that Greece is going to default?
The timeline has been long enough. Let the nukes fly.
What is this guy babbling about? What *is* a "soft deal"? Etc.
The Varoufakis gambit - with some last minute assistance by the IMF - succeeded and in a landslide vote, the Greeks said "No" to a deal (that was no longer on the table). What happens next? Here is Deutsche Bank's "map for the post referendum" which presents the four possible outcome."
The Deutsche Bank is free to speculate about today's resounding "NO" vote all it likes...
...as long as it (and the rest) understand that what Greece does is up to THEM, not the EU, troika, or DB.
If I were part of any of those outfits, I'd be pretty quiet about right now...
m
They will stick a douche bag in Deutsch bank; I doubt it will get all the blood and other $hit out!!! Too many Greeks have been f*cked by the Deutsch bags which are originally centered in downtown Manhatten.
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...What Happens Next...
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Nobody has considered the domestic repercussions in Germany.
FIWI, I think that although Merkel would have spent German taxpayer money without limit to maintain her dream of the United States of Europe, the operative word is _would_.
Indeed, the chance of a German return to the DEM (long overdue, IMHO) has significantly increased...
Watson
The Swiss will prop up the Euro for a while, so don't expect that to fall much at first. Maybe around Thurs or Fri it will drop like a rock. Each govt will use its plunge protection team to keep its stock market afloat the first few days, and then the equity markets drop.
The weakest part of the current equation is the Greek government.
They have less than six months to broker some kind of China centric plan to stabilize the country.
Everyone knows this and will otherwise create intense short term scarcity into the Greek economy which manifest another drop-kick election by which time Team IMF will either have "their" politicians in place receive and direct a new government to a "more realistic and conciliatory" debt relationship with the troika.
It will be interesting to see if these Golden Dawn fascists gain more support from younger Greeks and how or if this fringe group gains some larger support in another year.
Is this Deutsche Bank or German Reichsbank of '44?
With all the handouts of the u z gooberment, cant we just fix it with QE from the all knowin all fixin and all everthin O
All of those scenarios are fucking propaganda to scare Greeks of Syriza.
I admit that today's vote was symbolic and means nothing unless Tsipras listens to majority of young people since this is mostly about them. Old people are already half dead.
I have my big reservation about Syriza and who they really represent but history teaches us that movements and parties can transform in times of crisis and I hope it will transform Syriza into peoples movement for future. And the fact is that there is no future for Greece with 240 billions euro of debt and growing with 11 millions people to pay it off and shrinking.
Writing off 90% of debt is an imperative, it is not mater of political program, it is reality of physical world. Anything else is nothing but magical trick of deceit.
But with the strange declarations of Tsipras to stay in EURO no mater what is either very disturbing or has intention to break up EU from inside.
In the imperial EU regime only one small crack is needed to break the dam and cause flood that would drown EU banking mafia and destroy the glue, the only glue that EU is holding by together namely banker paying off all EU leaders to enslave their nations.
The Roman empire was practically defenseless and collapsed as functioning state at least 150 years before official fall, just because of impression, a propaganda of infallibility it kept going. The same is with EU house of cards, which collapse was predicted by US economists to occur in 2015 according to prognosis from as early as in 2002 a few years after introduction of euro.
Keep heat on Syriza may be something new, new alternative to Syriza as well to other bankrupt Greek political parties, better for ordinary people will come out of it.
What does DoucheBank say again ?
Lying fuckers.
I am not as sophistamacated as you all with my humanities degrees.
Will Grandma Yellen crank out some of her Green ultraplush to keep Douche Bank from going Lehmantard?
Because even with my liberal arts math skills I know the one truism in finances is socialize the risk, privatize the profit
Please explain it to me in simple one or two syllable terms. Like I am as dumb as Obama
A real leader of Germany would leave NATO, the WTO, and the IMF.
German independence is possible again.
Lending German Marks w/o interest again.
Consider the source. And realize that Deutsche Bank has swallowed so many turkeys at this point that completely aside from the Greek situation, if anyone actually takes a close look at their books they'll realize that it is insolvent.
No mention of a pivot to the east ...
"This would be unsustainable in the long-run" (N1)
as if any other "solution" was sustainable in any way...
"the scale of debt relief required to return Greece to sustainability will be even larger"
the amount of debt to cancel is constant regardless of what path Greece takes, and it includes those 300 bn euros it is supposed to pay until 2050. everything has to be purged. what kind of short-term wishful thinking suggests Greece may be ok defaulting on less than it?
"Greece can take a unilateral decision to change its national currency back to the Drachma. Greece has this right under international public law (“Lex Monetae”)"
phew, if it wasn't for "international public law", Greece would be unable to simply issue a decree, becuase today sovereignty means nothing
I wonder if Obama ever thinks about "international public law" when he erodes US laws with his exec. orders