Greece's financial fate takes a big turn today: Nai ve Oxi

[paratise]

Greetings.

Greece is having a huge financial crisis, hopefully to everyone's knowledge. Things were going downhill for the last several years, but they peaked at the recent times. Unemployment rate is 25%, for the last week people can not take more than 60 € from the ATMs with Greek bank accounts (there are more than 10 people of lines infront of every single one of them), banks are closed, there are billions of € debt.

As you may or may not know, currently millions of Greeks are voting in referendum to say yes (nai) or no (oxi) to Europe's finacial bailout program. According to this program Greece will remain in Eurozone but they have to pay doubled taxes since they have so much debt.

Government (left wing party) wants the people to say 'no'

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If they say no they won't accept the program thus lose the financial deals come from Eurozone, exit Eurozone and change into another currency (possibly drachma, older one). This currency will have a really low value.

Generally (again, just generalizing) the people who wants to say "yes" are likely to be from higher class with higher income and/or have financial deals with Eurozone. The people who want to say "no" are likely to be left wing, young students or people with low income who also see "no" as a stance against EU's pressure on them.

From what i have observed there are posters which said 'Oxi' everywhere, much more than 'Nai' (which some of them got sprayed over with 'oxi' word). Media presents different predictions and observations. So, anything may truly happen.

Point of the thread:This is the summary of things and what do you people think?

PS: be grateful for everything you have and value and try preserving them.

Update: "No" is 60% ahead, voting still continues:

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Update 2: "Oxi" have won by 61% of votes:

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[Obito the supreme jin]

Thanks for the info. I hope that Greece's economy can fully recover.

 

[NineSNS]

It will be a difficult decision for them. Neither option is good but hopefully will prevent a total collapse of their economy.

 

[paratise]

Thanks for the info. I hope that Greece's economy can fully recover.

You are welcome.
I hope things will be okay for them. They (the people) really do not deserve to be going through such thing.

It will be a difficult decision for them. Neither option is good but hopefully will prevent a total collapse of their economy.

I honestly do not know what i would vote.

Either things will not be pretty; because they are not pretty to begin with. There is even a bailout fund raise in internet (they raised more than a million in 5 days i think), it is not likely to work.

 

[Joon]

I'm with the no's party. They hold the power of their economy. At least saying no could keep them stable for a little longer. Yes, only puts them more in a whole because of the huge tax raise.

 

[MangaArtist007]

The crisis was caused by those with money not behaving with the responsibility they should though many people were tax dodging. There are flaws in both the bailout system and greece's tax system but the rich behaved in an appalling manner. My opinion.

 

[paratise]

I'm with the no's party. They hold the power of their economy. At least saying no could keep them stable for a little longer. Yes, only puts them more in a whole because of the huge tax raise.

My opinion: make a time machine to 2002 and never change currency to € (in current situation this is not even the least hopeless option). Same currency zone for such different countries is toxic. Croatia is not in Eurozone and economicly better off than Greece. Prices increased in Lithuania ever since they got into zone. In fact Croatia's current currency has a lot more value than Greece's former currency that they switched.

People have to live under multiple stupid decisions. It sucks. Saying no will not erase the debts either.

The crisis was caused by those with money not behaving with the responsibility they should though many people were tax dodging. There are flaws in both the bailout system and greece's tax system but the rich behaved in an appalling manner. My opinion.

Their former corrupt governments ****ed it up. Eurozone was a dumb decision to begin with (as i stated above).

 

[LustyLover]

Guess I'm not going to Greece anytime soon lol

 

[V h o]

Honestly it is a tough choice either way. Getting the bailout would probably help the overall economy however the taxes probably would turn people poor and make things hard for typical citizens. Saying no would hurt their trade and perhaps their current economy, however I believe for a country to revive it needs to step down and change from the ground up. If only a third solution giving a way to keep the economy running without heavy taxing while maintaining their economic state was an option Zzz

Edit

If I had to pick I would say no, high taxes on an already unemployed society seems foolish and probably wouldn't change what caused them to fall into such an economic disaster.

 

[Conspirator.]

To be honest, Greece should never have joined the Eurozone which meant changing their currency to Euro, and consequently all but losing the ability to inflate its debt away. Either way, it's a horrible choice for the Greek citizens to make, but if you pointed a gun to my head, I would probably go with the no's.

 

[paratise]

Guess I'm not going to Greece anytime soon lol

For now things are not so bad (for a financially stable non-greek) tourists were walking around yesterday. There were just demonstrations at evening/night in main square. But things really look sad. Then again things may escalate really quick after referendum because both changes will be drastic.

Honestly it is a tough choice either way. Getting the bailout would probably help the overall economy however the taxes probably would turn people poor and make things hard for typical citizens. Saying no would hurt their trade and perhaps their current economy, however I believe for a country to revive it needs to step down and change from the ground up. If only a third solution giving a way to keep the economy running without heavy taxing while maintaining their economic state was an option Zzz

Edit

If I had to pick I would say no, high taxes on an already unemployed society seems foolish and probably wouldn't change what caused them to fall into such an economic disaster.

Thing is the continuity of current economic system is about as bad as those 2 yes or no options. As if they stand on a bridge about to break down, and the bridge has fire at both ends.

My yes or no would depend on how the taxing system would get implemented on people. No scares people because results are much more unpredictable, this same reason also gives hope to people.

 

[V h o]

For now things are not so bad (for a financially stable non-greek) tourists were walking around yesterday. There were just demonstrations at evening/night in main square. But things really look sad. Then again things may escalate really quick after referendum because both changes will be drastic.


Thing is the continuity of current economic system is about as bad as those 2 yes or no options. As if they stand on a bridge about to break down, and the bridge has fire at both ends.

My yes or no would depend on how the taxing system would get implemented on people. No scares people because results are much more unpredictable, this same reason also gives hope to people.

Yea that's why it's such a tough choice. The current system absolutely must change since it seemed to drop them in this situation.

I agree that the taxing method is powerful factor, although I'm not sure if the unemployed or the people employed can handle higher taxing. It is uncertain what will happen if the country is no longer in the eurozone, but I believe it's still better to restart from the bottom to get everything running as normal. Believe Germany or Russia had an economic depression after some war (WW2?) and the country was truly 'piss broke' but they refurbished their economy and return back stronger (took awhile though).

I'm not really too informed on economics though so I'm not really sure what to say. Zzz

 

[LustyLover]

For now things are not so bad (for a financially stable non-greek) tourists were walking around yesterday. There were just demonstrations at evening/night in main square. But things really look sad. Then again things may escalate really quick after referendum because both changes will be drastic.

That's good then. Greece is one of the places I'd really love to visit.

 

[paratise]

To be honest, Greece should never have joined the Eurozone which meant changing their currency to Euro, and consequently all but losing the ability to inflate its debt away. Either way, it's a horrible choice for the Greek citizens to make, but if you pointed a gun to my head, I would probably go with the no's.

Yeah the fact that working and lower class choosing no says something. But i am not gonna lie, if i worked with a Eurozone program i would choose yes.

Yea that's why it's such a tough choice. The current system absolutely must change since it seemed to drop them in this situation.

I agree that the taxing method is powerful factor, although I'm not sure if the unemployed or the people employed can handle higher taxing. It is uncertain what will happen if the country is no longer in the eurozone, but I believe it's still better to restart from the bottom to get everything running as normal. Believe Germany or Russia had an economic depression after some war (WW2?) and the country was truly 'piss broke' but they refurbished their economy and return back stronger (took awhile though).

I'm not really too informed on economics though so I'm not really sure what to say. Zzz

I believe they will pick themselves up somehow. I mean Germany lost a war miserably and get held down under 2 super powers, 2 decades later now they are one of the greatest economies in World. Finland did not even have much yet they became a pleasant country over years. Greece has sources and tourism.

That's good then. Greece is one of the places I'd really love to visit.

You should, it is amazing. Just neess to be more stabile which will happen in time.

Update:

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No is ahead.

 

[Jazzy Stardust]

Damn that's an extremely tough situation. I heard it was bad but I didn't know to what extent. I should've paid more attention.

But I say they just pay the taxes till they get on their feet. It will get them on their feet faster and it won't last forever. I mean they already barely have money and unemployed don't have to pay taxes, forcing the wealthy to have to help stabilize the economy more. Not to mention tourists will have to pay more on their vacations which is a plus. And for those that don't make as much the prices of goods and services should drop more with the rise of the taxes, so it will hurt the low income households but not as bad. But it will hurt for everyone.

Because the road to creating a new currency in the world and giving it value is a long one. And they need goods and services from other countries. No one will want to import anything to there if the payment they're receiving isn't worth anything. Which will make goods and services harder to come by and cause inflation of prices. Not to mention the country is already broke people can barely take money out of the bank, creating a new currency to replace the old one won't solve that problem in my opinion. It's just a temporary solution to make them feel better but in reality it won't achieve anything for a long time.

 

[KingHashirama]

Either could lead to a coup against the government. So pretty risky.

 

[Ansatsuken]

Much of the problem for country like greece is, this country relies mainly on tourism industry and service industry. They had small manufacturing industry.

They are importing/buying nation and not exporting/seller nation. Bail out or not from eurozone still will not get Greece moving forward if the country didnt have an industry that can generate big money and help create good job prospect. Using Germany as a role model of successful country that once destroyed by war cant help the case either as Germany got attitude and its citizen is well organized and very discipline, it cant be said the same for Greece.

But its not easy to do all that in current time. If Greece have strong industry, joining the euro can be a good move. Japan had much higher debt compared to Greece, but they still do well because they have strong industry.

Make matter worse, corruption is alive inside Greece

 

[Ken Kaneki]

Hindsight is a wonderful thing. It is always 20/20. Sure we can say that Greece should have not joined EU, but now its pointless saying so.

Now this thread warrants me to waste my time on it,so I shall. (Also its Sunday so whatever)

First I would confine my post to Greece and how the nai or oxi would effect Greece. Because what is best for Greece may not be necessarily good for the EU and the rest of the world, at least in the short term, so we won't get into that.

If Greece says 'No'

Well I will assume here that if EU does not renegotiate any more bail out packages. (If it does renegotiate, it may show a weak hand to Portugal, Italy, Ireland and Spain. And if they follow the same route as Greece, Oh boy!!!)

What happens is as follows:-

1) The banks go bust overnight. Greece would also default on a lot of its loans (well not a good news for you if you are French or German). One of the 4 major Greek Bank had already gone bankrupt and the other 3 will go bankrupt on Monday, or so the reports say.

2) The ECB may offer aid. It is highly unlikely that this aid would be sufficient to get Greece back up on its feet since it would mainly be on humanitarian grounds

3) Since it can't borrow money, Greece would have to print it. But how do they print it? They can't print Euros. Yes they would have to go back to Drachmas and adopt that as a currency. But they would have to 'move out' of the Euro. That is no smooth process.

4) Conversion of all the financial liabilities and assets occur at par I think. The banks would be 'closed' for more time during this process. Before the printed notes are finally out, euro notes and coins would be temporarily used. As the demand would be more and Euros much less, we can expect black-market/ or merchants accepting euros for premium. (More on how situation can go uncontrollable at the end)

5) As soon as the Drachma is allowed to float, it will devaluate. Some say 20%, some say 30%, others say 60% some even say more. Market breeds on fear, so anybody's guess is as good as anybody else's.

6) So what does this all mean:-
Asset prices would fall as Drachma falls
Inflation would soar
Unemployment would rise (mind you the current levels are near 26% or so, more so than the unemployment levels in the great depression, and a further rise would mean.....)
(More on how situation can go uncontrollable at the end)

7) Lets assume that chaos does not ensue and that Greece is able to balance itself in times of hardships, it would take a long time to get it back on its feet. Its GDP would have fallen a lot, its economy shrunk even more, but you get the picture I think.

8) Once we are at this point, Greece should be able to independently decide its fiscal and monetary policy and start a new economy, hopefully a better one.

Now what if situation gets out of hand in the process?
Of course as you might have guessed that defaulting does not make a country very investment friendly. So when investment and imports stop (yeah countries cutoff ties with the countries who cant pay their debts), what happens? People don't get enough oil and don't get many essential things. Keep in mind, the value of their assets decreasing constantly and the unemployment is rising. People would start to get impatient. What does that impatience lead to? Protests, riots, autocracy? I don't know. All you can do is guess. (I tend to be more negative people say, so accept it as much as you like)

Maybe it won't come to that. Maybe Greece could leverage its good relations with other countries and get the support needed to meet the basic demands of people. But people would still lose a lot. I don't like seeing the situation as in the image below, but it would get worse in the short term

Spoiler

This is an old Greek man's reaction, when he could not take out his money from the bank. Money he desperately needed.

You must be registered for see images

But maybe saying No would scare the ECB and get them a better deal, who knows? Its all a punt. But in these negotiations, Greece might get a better deal than it would if it says Yes.

If Greece says 'Yes'

It would bring money immediately and the much needed immediate relief. But what happens next?

Firstly the government collapses again. Yes that would be because Greece does not back its Prime Minister and the Finance Minister. Reformation of government, re-election or coalition, I don't know. Probably somebody who follows their politics more closely does.

Renegotiation would take place. Banks would still be closed till a new financial deal is in place. Though Greece won't have much say in these terms. It would be pretty much as per the terms and conditions set by ECB. IMF won't be into these negotiations unless ECB strikes off a huge debt. ECB has said it won't.

There would also be a demand to structurally change the Greek economy. There would be massive structural changes required so that the creditors are assured that the loan can be repaid. These 'austerity measures' would include the following :-
1) More Taxes
2) More Pension Cuts (revisit the image I posted earlier, see what it means to people actually)
3) Standard of living would be decreased. Everything that is not considered as 'essential' would be stripped off. So that includes medical facilities, public facilities, schools etc. The more the economy shrinks, the more cuts would be there.

Only austerity measures won't do. Surplus would also have to be generated. I don't know how this would be done given the noncompetitive Greek rates, if it continues with the Euro. But you can be sure that the interest rate is going to be even higher (how much is also speculative) . And Greece would have to beat that or comeback to a worse situation than the present one, after some time again. But this would mean that the Greek economy would have to structurally change more and more rapidly. Greeks have had enough with the change, as apparent by the re-election.

__________________________________________________________________________________________


Although its a very difficult choice as neither of the options are good, I would have also probably voted No. Reason is that, I don't see structurally different European economies being clubbed together. Sooner than later, there is bound to be a fallout. The later the bigger (I feel). So I would say No. But that is just my personal opinion. Its all a punt at the end of the day. There is no correct answer.

It seems that the Oxi / No is the popular vote winning by landslide.

A long post. I realise now how much effort Chie used to put in her posts. It's not for me, the effort.... :wesobi:

 

[paratise]

Hindsight is a wonderful thing. It is always 20/20. Sure we can say that Greece should have not joined EU, but now its pointless saying so.

Now this thread warrants me to waste my time on it,so I shall. (Also its Sunday so whatever)

First I would confine my post to Greece and how the nai or oxi would effect Greece. Because what is best for Greece may not be necessarily good for the EU and the rest of the world, at least in the short term, so we won't get into that.

Spoiler

If Greece says 'No'

Well I will assume here that if EU does not renegotiate any more bail out packages. (If it does renegotiate, it may show a weak hand to Portugal, Italy, Ireland and Spain. And if they follow the same route as Greece, Oh boy!!!)

What happens is as follows:-

1) The banks go bust overnight. Greece would also default on a lot of its loans (well not a good news for you if you are French or German). One of the 4 major Greek Bank had already gone bankrupt and the other 3 will go bankrupt on Monday, or so the reports say.

2) The ECB may offer aid. It is highly unlikely that this aid would be sufficient to get Greece back up on its feet since it would mainly be on humanitarian grounds

3) Since it can't borrow money, Greece would have to print it. But how do they print it? They can't print Euros. Yes they would have to go back to Drachmas and adopt that as a currency. But they would have to 'move out' of the Euro. That is no smooth process.

4) Conversion of all the financial liabilities and assets occur at par I think. The banks would be 'closed' for more time during this process. Before the printed notes are finally out, euro notes and coins would be temporarily used. As the demand would be more and Euros much less, we can expect black-market/ or merchants accepting euros for premium. (More on how situation can go uncontrollable at the end)

5) As soon as the Drachma is allowed to float, it will devaluate. Some say 20%, some say 30%, others say 60% some even say more. Market breeds on fear, so anybody's guess is as good as anybody else's.

6) So what does this all mean:-
Asset prices would fall as Drachma falls
Inflation would soar
Unemployment would rise (mind you the current levels are near 26% or so, more so than the unemployment levels in the great depression, and a further rise would mean.....)
(More on how situation can go uncontrollable at the end)

7) Lets assume that chaos does not ensue and that Greece is able to balance itself in times of hardships, it would take a long time to get it back on its feet. Its GDP would have fallen a lot, its economy shrunk even more, but you get the picture I think.

8) Once we are at this point, Greece should be able to independently decide its fiscal and monetary policy and start a new economy, hopefully a better one.

Now what if situation gets out of hand in the process?
Of course as you might have guessed that defaulting does not make a country very investment friendly. So when investment and imports stop (yeah countries cutoff ties with the countries who cant pay their debts), what happens? People don't get enough oil and don't get many essential things. Keep in mind, the value of their assets decreasing constantly and the unemployment is rising. People would start to get impatient. What does that impatience lead to? Protests, riots, autocracy? I don't know. All you can do is guess. (I tend to be more negative people say, so accept it as much as you like)

Maybe it won't come to that. Maybe Greece could leverage its good relations with other countries and get the support needed to meet the basic demands of people. But people would still lose a lot. I don't like seeing the situation as in the image below, but it would get worse in the short term

Spoiler

This is an old Greek man's reaction, when he could not take out his money from the bank. Money he desperately needed.

You must be registered for see images

But maybe saying No would scare the ECB and get them a better deal, who knows? Its all a punt. But in these negotiations, Greece might get a better deal than it would if it says Yes.

If Greece says 'Yes'

It would bring money immediately and the much needed immediate relief. But what happens next?

Firstly the government collapses again. Yes that would be because Greece does not back its Prime Minister and the Finance Minister. Reformation of government, re-election or coalition, I don't know. Probably somebody who follows their politics more closely does.

Renegotiation would take place. Banks would still be closed till a new financial deal is in place. Though Greece won't have much say in these terms. It would be pretty much as per the terms and conditions set by ECB. IMF won't be into these negotiations unless ECB strikes off a huge debt. ECB has said it won't.

There would also be a demand to structurally change the Greek economy. There would be massive structural changes required so that the creditors are assured that the loan can be repaid. These 'austerity measures' would include the following :-
1) More Taxes
2) More Pension Cuts (revisit the image I posted earlier, see what it means to people actually)
3) Standard of living would be decreased. Everything that is not considered as 'essential' would be stripped off. So that includes medical facilities, public facilities, schools etc. The more the economy shrinks, the more cuts would be there.

Only austerity measures won't do. Surplus would also have to be generated. I don't know how this would be done given the noncompetitive Greek rates, if it continues with the Euro. But you can be sure that the interest rate is going to be even higher (how much is also speculative) . And Greece would have to beat that or comeback to a worse situation than the present one, after some time again. But this would mean that the Greek economy would have to structurally change more and more rapidly. Greeks have had enough with the change, as apparent by the re-election.

__________________________________________________________________________________________


Although its a very difficult choice as neither of the options are good, I would have also probably voted No. Reason is that, I don't see structurally different European economies being clubbed together. Sooner than later, there is bound to be a fallout. The later the bigger (I feel). So I would say No. But that is just my personal opinion. Its all a punt at the end of the day. There is no correct answer.

It seems that the Oxi / No is the popular vote winning by landslide.

A long post. I realise now how much effort Chie used to put in her posts. It's not for me, the effort.... :wesobi:

Yeah oxi won:

You must be registered for see links

Atleast in social level there will be less outrage and more trust the government. Now the results are unpredictable as Greeks are going into a path that never happened in EU's history: getting out of Eurozone. They see what they do as a statement for independence.

Good post btw; i do not know what to say. I am not good with economy and it is 6 in the morning:/

 

[Ridoku X]

The referendum's question was wether people agree with the new austerity measures or not. People tend to generalise it way too much. Sure, the answer can lead to many things, but of course we can never be sure. There are many scenarios. All this terrorism from the media and not only, was just pathetic. Everyday there'd be about 10 ads that encouraged people to vote YES. Famous people and actors would often come out and do the same thing. But the people's frustration was pretty clear, and that reflected upon their choice.

To most people it was a simple choice. A choice between sure torture, and a potential escape from this particular torture. This escape though, may prove to be an even greater torture than what was being expected. It was a risk. A risk that the greek people were willing to take, and that says a lot. By saying NO, the greeks didn't say no to Europe. They said NO to the ridiculous austerity measures and that's the essence of the situation. The goverment should now focus to strike a good deal that will be viable for economic developement, but that will not put a CRUSHING and HEAVY burden onto the people's heads. They've had enough.

Yanis Varoufakis, the minister of economics, has submited his resignation in public. The Eurogroup didn't like him and his attitude it seems. Mr.Tsipras(The prime minister) asked Mr.Varoufakis to step down, in order to strive for a better deal and Varoufakis accepted. All this is evidence that Greece just wants to be treated equally and fairly by their European "coleagues" and not as if they're the laughing stock of Europe. They don't necessarily want the so called "Grexit" but they don't want to be treated like shit either, and it was about high time they realised this. v_v