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The Three Greek "Scenarios" Discussed Today In Brussels
Curious what the Eurogroup of finance ministers will be discussing behind closed doors for the next several hours (unless the meeting is very short which will be either a very good, or much more likely a very bad thing since the Greeks apparently came to today's meeting without a proposal so there is nothing to discuss)? Greek Kathimerini has summarized what it believes are the three scenarios currently up for debate in Brussels.
According to Eleni Varvatsiotis, citing European sources, the subject exit of Greece from the Eurozone now is openly discussed and examined how much it would cost to do a political and economic rescue or exit of Greece from the eurozone and what consequences it would have. Also discussed is whether the Eurogroup could "limit the damage" in Greece or would extend to other countries, such as Spain. Several Member States seem to prefer a clean solution, a Grexit, because the other two options require more than several chapters.
Here are the three scenarios (Google translated):
- First scenario: A new program requiring very major structural reforms of the Greek side, and much larger than the last Juncker proposal. However, it is the most expensive of all, requiring deficits coverage, reimbursement of internal borrowing that made the previous months Greece and recapitalize banks. And all this while it is extremely doubtful whether Athens and SYRIZA-ANEL government has the political will to implement those for which he undertakes. "The negotiation starts again from zero," European officials are warning as the last sentence of Athens has rejected and members of the Eurogroup tomorrow expect a new one that could talk. Without this there can begin and negotiations. The commitment to redefine debt at the end of the program. The European Commission vice-B himself. Ntomprovskis said yesterday that the commitment of the Eurogroup in November 2012 (that would consider further easing if Greece complied with the obligations of the plan) no longer applies, and ended the last program. "The agreement on the debt is no longer on the table," he said, which sounded for the first time by a European official.
- Second scenario: Introduction of parallel currency, primarily through promissory IOU. This proposal is inspired by the German Finance Minister Schaeuble. However, officials who contacted the "K" version IOU is clearly the first step exit from the monetary union. Furthermore it will be something entirely hybrid within a monetary union. Thus, one reason that adds more concern for the success of this project is that we need, first, a very organized state to achieve, and secondly, a very good technical preparation, and European partners do not consider that the state mechanism the country is well prepared.
- Third scenario: Controlled bankruptcy and leaving the euro. Climate after the referendum has borne particularly by anger feelings longer expressed in the European Commission building for Handling the Greek government and its credibility Tsipras government is at its lowest, 16 of the 18 remaining members are in favor of the third scenario ie the controlled bankruptcy and leaving the euro. The two members who are against this third solution is France and Cyprus, with Paris, according to European official, to vacillating. This scenario is considered the most "cheap" for member states and the European Central Bank, and puts an end to potential damage. It provides little funding, mainly to cover commodity imports (balance payment facility), in order to prevent a humanitarian crisis, and probably some support the banking system. However, Greece will only cover the budget deficits, a significant portion or all of recapitalization needs of banks and part of the deficit. What you decide, finally, the next few hours the governments are at present unknown. But as he says official, the important thing is that now the Greek side to present credible proposals, which open at least at this stage of the negotiations.
None of these are good for the Greek people, and will certainly be a hard sell for Tsipras as the much hoped for support for a debt haircut fails to materialize as all the current finance ministers realize their political careers are finished if they concede to Greek demands.
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Greece has started something that will ripple very far.
The real problem in Europe lies in Brussels and Frankfurt.
How much more suffering and turmoil must Europeans endure before they overthrow the EUSSR?
This is not about Greece - it's about Europe!
At least for those who can look behind the current shit and theater.
Europe is toast - latest within the next 2-3 years.
Ukraine (beside Bruessels) is a black hole sucking in billions and billions ...
Huge damages for trade with Russia ...
Greece and everything around it is a farce ... whole Southern europe is a farce ...
Zillions of refugees flooding in ....
Zillions of unemployed ... increasing in numbers ...
Endless regulations
TTIP, TISA, TPP ... all just to serve corporates and oligarchs ... lies, lies, cheating and stealing where you look ...
These useless EU suckers and clueless bureaucrats have achieved nothing, burned trillions, are destroying the currency via endless printing, and just produce chaos and more chaos and more unemployment and more pain ... bigger and bigger with each month
Within next 2-3 years the ultra left wings and ultra right wings will gain in power, election after election, country after country ... until finally everything is in shambles ... thanks to those criminals ...
But it's over anyway - as they have lost everything within the last 2 years.
These blood sucking vampires are finished - whether they like it or fight it - or not.
Just follow coming elections - it will tell you all you need to know. You will see the very same trends everywhere - centriest losing, ultra lefts and/or rights and nationalists winning. Your guess when finally it will all come down with most ATMs dark, bancrupties whereever you look and everything out of control.
For Europeans it's definitely time to start to think hard - and to prepare - and to think ahead - FAST - and to act !!! - as latest within the next 2-3 years - most parts of Europe will have similar protests and revolts and centriest parties losing their shirts - like Greece has them today. Leading to chaos and more chaos and finally and blood and tears in the streets. Brother against brother - like they have seeded it in Greece and Ukraine. It will all come back and hunt them down.
And that will spill over into the rest of the planet.
We have the middle ages behind us - and the darks ages lie ahead.
So much for Europe bringing peace and properity to Europeans.
It's the beginning of the end for this flawed European monetary union, no matter what scenario they chose. At best, it may survive among some core countries, but even then, the major benfit of the EMU for countries like Germany will be gone by then. I do not expect the euro to survive the next threee decades, most likely it will be gone even much earlier.
oxi-gene for the soul
Somehow I suspect that all three proposals will eventuate in the order that they are mentioned.
oxi-gene for the soul
Those mofos in Brussels and Frankfurt ought to get sent to jail asap. be it draghi, Schaeuble, merkel, Juncker, Schulz - this entire band of criminals and blackmailers.
That's how dictatorships work - there's nobody and nothing in a position to sue them.
Until finally there is a french-style revolution.
It might ripple all the way to Crete.
This is about strengthening the Euro Zone and cutting out a 2nd to 3rd world member that should have honestly never been allowed to join.
This is EURO positive.
I couldn't disagree more. This is about weakness being exposed by the weakest links. Links that extend through every central bank supporting the western monetary system of insolvent Countries.
Not one of us could pay our debts as structured and Greece is simply the current weakest link in the ponzy. More debt with extended terms is not a solution to insolvency and Greece is but a symptom, not the disease.
The US debt has been frozen for weeks now because we too are insolvent and will be facing another threatened Government shutdown shortly if we don't pony up to the oligarchs with more unpayable debt and extended terms.
The current system is on life support and Greece is but child's play compared to what's coming, when the world refuses to buy more of our debt and America's wealth disappears over night.
With Congress facing another debt ceiling, just months from the last, I figure they will soon give Obama what the Oligarchs want, unlimited borrowing - the vary trigger to tell the world we're no longer a safe haven, but a time bomb waiting on China to dump our debt. With China crashing and a debt fight looming in Congress, who will purchase our debt going forward?
I do get the first scenario, something the EU can decide.
Do not get two or three, isn't that up to Greece ?
Does Greece have an army? I know they have submarines, and they have new friends in Russian and China.
The plot has already been written, and press releases will get more intense and intense with each side Cold War daring the other.
#Greece
Slovak finance minister Peter Kazimir Tuesday said that "debt relief" for Greece is a "red line" for his country. "I am rather sceptical that a deal will be found today" he said, adding that prolonging a decision on Greece would be "detrimental" for both…
Real Live Ticker:
https://tersee.com/#!q=greece&t=text
"We have a printing press and we intend on CONTINUING to use it!
Indeed....MANY OF US HAVE PRINTING PRESS!
1) is a myth; "structural" reforms (good governance) is immensely difficult, in time and political capital. And isn't the ruling party Communist? For all those who just woke up, dat's the "free shit" party.
2) is the hybrid system when the EU cuts off Greece. And since the drachma will depreciating with printing, euro's, dollars, and even yuan will be preferred currencies of exchange.
3) really, this is the only option.
Second scenario: Introduction of parallel currency.
How about the US dollar? the EU would go nuts lol.
Want to squeeze the Greek people with capitol controls so they turn on us ah.
That's exactly what is going to happen.
Greece will return to DOLLARS.
They can keep the euro and just not be part of the Euro Zone.
Euros have more appeal as most of their trade will be settled in Euro (based on Geography).
Dollarizing Greece would be a nightmare... although a novel idea.
Although Dollarization is really only for countries that have some semblence of monetary self control.
The Greek's need the Drachma as they don't know the concept of fiscal management.... With the Drachma they can still spend like crazy and just devalue every few years as they had been doing before joining the Euro.
China and Russia will help stock Greece with dollars. They're trying to dump theirs.
scenario 4 - guillotines for some and greece figures out its own problems on its own. no one in the west or europe gets involved
And this will resolve what?
You need to kill politicians -as- (or before) they are racking up debt. Killing them -after- the debt is racked up is like US citizens digging up Ronald Reagan and kicking his dead bones for racking up all the debt during his debt extravaganza '80 to '88.
Maybe that's been the plan all along...the beginning/end for the great reset?
No ... it's as simple as that:
They - EU bureaucrats - are in the corner. So they think there's the need for an example.
Saudi Arabia blogger anybody?!
As are most CBs. In the corner.
Both live in the illusion they can get away with it. With whatever they do.
As there are no rulers and no laws above them.
It's all just about "Under NO circumstances don't loose control". As otherwise you are finished.
What they don't know: they ARE already finished. They just can't see it.
Sort of the one-eyed leading the blind.
Further elections will lead the way.
They have lost it all.
As long as they have their lives and ill gotten gains all they have lost is possible future ill gotten gains.
1. Keep capital controls in place
2. Summon a national emergency to seize the Bank of Greece away from the ECB
3. Default
4. Prepare temporary IOUs to pay for imports and salaries, trade
5. Print the New Drachma (should have already been done) and set a fixed exchange for the IOUs to swap them into the new currency, then float it.
6. To fight inflation might need to peg the New Drachma to a stable currency for a while and build up forex exchange reserves maybe with external help (Russia/China dumping some dollars to Greece in exchange for access to resources/ports)
Not an economist, but this should be discussed within the Greek government. No more illusions about the Eurozone.
"Dollars only please." Move along.
Start buying solar panels..."solar powered everything/free internet for everyone."
Ban cell phones.
I don't think step 6: is Viable - quite simply there needs to be a massive devaluation of Greece per se. There'll probably be somewhere in the region of a 50% devaluation which might have been viable for a net exporter with commodities priced in dollars (Argentina) which could act as a bulwark against the worst effects of inflation but in Greece you have the reverse, a nation that is far more reliant on imports and for whom the only real export is tourism, I wouldn't be at all surprised to see the sorts of long-term currency manipulation that the Argentines use and the emergence of a "blue" market for Euros which will fit in only too naturally in a cash-happy nation like Greece.
The good news is that they'll find a way to make it work for them, they are not Teutonic in their mindset and in some ways their mindset makes them quite well-suited to the emergence of significant underground economies etc, what won't happen either way is meaningful reform so they're basically going on ahead for the rest of the "developed" world and showing us all what to expect.
Pretty sure the people of Greece have already decided these three options:
Opt 1: YOU GET NOTHING! We're defaulting and never paying you back!
Opt 2: YOU GET NOTHING! We're defaulting and never paying you back!
Opt 3: YOU GET NOTHING! We're defaulting and never paying you back!
there, now go make the CDS world a cornucopia of popcorn munching entertainment that it should have been for the last five years.
I cannot understand how they can be forced to leave the euro... I do not believe that is in the treaty..... I am not sure how the Euro group can unilaterly kick out a member state...... can someone explain this?
You're correct but the mechanism is somewhat as follows:
a) No Deal therefore no bailout and no further ECB action to protect Greek banks which:
b) Fail to reopen or reopen in a situation of insolvency.
c) Either of which leads to the Greek government needing to print some sort of parallel currency which:
d) Is in contravention of Eurozone rules and it is at this point that Greece gets expelled - remember
e) ANY RULES AND REGULATIONS YOU BELIEVE TO BE IN PLACE FOR THE PROTECTION OF PEOPLES OR MECHANISMS WILL BE SUBJECT TO OVERRIDE.
IOW: Don't expect greek appeals to Euro courts to do jack shit once the politicos have decided Grexit is on the menu.
There's only one scenario on the table, realistically.