Quote:
Originally Posted by Paul Markham
The Greeks have called the EU's bluff.
Now the ball is in the EU's court. A few factors to consider.
1. Greece will never repay or try to repay the debt while they're in the EU. Even if they are willing, they can't.
2. They default and run out of money.
3. Or the EU pumps in more to keep the Euro from tanking. Which is a continuation of the last few years. The EU lays down conditions, the Greeks agree, get the money and ignore a lot of the conditions. They are now at the point of no return.
4. They leave the Euro, for which there is no procedure, the EU can't force them to. The Euro was set up as a one way ticket. Once in, it was not envisaged someone would leave.
Once out they go back to the Drachma, which is going to be very low value. From there they rebuild their economy. Still not paying the right tax rate.
evy97 points out what happens when a Government doesn't collect enough money to keep a country running. Not even a wasteful administration can run up that kind of debt.
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Few factors to consider:
1. they have already run out of money.
2. They have already defaulted.
3. Other countries won't keep bailing Greek out without substantial agreements from Greek. That would be politically impossible.
4. Yes, they won't pay the whole debt at least, as it already has been cut, and even in best case scenario, it will probably be cut further.
5. Doesn't really matter what Greek will do besides making a deal. If they don't agree, they are cut off. If they want any money, they have to leave euro as there is no more money coming from that direction. Other option is to use something else than money, but I doubt that they will switch to trading with chickens, etc. What is the point being in euro anyways if they use chickens to trade.