Is the crisis is Greece going to take down the Euro?

2015-06-29T10:30:43-04:00

http://www.foxnews.com/world/2015/06/29/world-markets-plunge-bank-lines-grow-amid-greece-financial-crisis/

Greece was denied an extension on the emergency bailout that has been ongoing for the past couple years. Now there are calls for a referendum to even continue being a member of the Euro zone. Looks like the Greek leadership is playing chicken with the rest of Europe in the hopes that a desire to keep the EU together will keep the gravy train flowing.

I think there are several telling items. Greece has restricted "capitol extractions" basically trying to prevent a run on the banks - without success. Greece recently was actively courting Russia, signing an energy deal in exchange for bilateral trade agreements in violation of EU sanction in the wake of Russian operations in Ukraine. Tourists are being told that they will be able to withdraw money from Greek ATMs just fine... of course Greece knows it would flounder without tourism.

My personal opinion is that the EU should have thrown Greece out two years ago when it was obvious that Greece had no intention of reducing spending on its vast social programs. Greece had to cook the books to get into the Euro currency in the first place, having never met guidelines established by the EU for spending, debt ratio, and budget deficits.
The risk that greece defaults is a very real danger to the French and German bank systems, and it would put real pressure on the world's economy. Greece is not alone in having a sovereign debt problem. If national debts go into default there is real risk to other fragile economies. We could see 2008 all over again, only bigger and with geo-political implications.

Response by SSgt Private RallyPoint Member made Jun 29 at 2015 10:32 AM

2015-06-29T10:32:43-04:00

I think that it will also depends on how Spain falls. If Spain falls, too. The Euro is doomed. I don't know if I want to watch the dominoes...

Response by SGT Jeremiah B. made Jun 29 at 2015 1:22 PM

2015-06-29T13:22:51-04:00

It'll be interesting to see, for sure. The Grexit could cause problems but it might not. I think a lot of it hinges on just how badly the EU sinks Greek as they exit. A loss of the Euro and a shuttering of open trade will be devastating. If other countries choose to exercise a similar exit, it'll be the end.

I'm more worried about what Russia or China will do. A Russian bailout in exchange for certain concessions could have long-term strategic consequences.

Response by LTC John Shaw made Jun 29 at 2015 11:57 PM

2015-06-29T23:57:13-04:00

1SG Private RallyPoint Member No risk to the Euro as a currency, I think it will continue to get weaker against the dollar, heading toward parity.
I believe the Greek left is prepared to shift to the Russian Ruble if necessary and default on all EU debt. Without any debt payments and a moderately weak currency of the Ruble they can keep their current system of cronyism, payoffs and generous pensions for another year or so until Russia doesn't need them to block the Ukraine vote.
Then the EU will have to decide to remove the Greek's from the EU structure before the Ukraine vote.
Russia gets what they want for a few Billion and the Greek left gets to hang with their apologist friends who will rail against the 'corrupt' Western banking system.