Greece may exit the Euro ?

Pat494

Legendary member
14,617 1,578
What if any will be the consequencies of Greece getting a Socialist Govt and exiting the euro ?

:oops:
 

Jack o'Clubs

Experienced member
1,554 342
Weak Euro, massive widening of core vs. peripheral bond spreads and anything Greek related collapses (including those European banks with Greek loan exposure).

Very unlikely though: Syriza will push as hard as possible for concessions but not so far as would threaten 'Grexit'. Greek public opinion is still pro Euro and Pro EU (given the alternatives) and Syriza is a populist party.
 

highbury fx

Well-known member
338 114
What if any will be the consequencies of Greece getting a Socialist Govt and exiting the euro ?

:oops:

2 different questions.

The first is priced in to an extent as we expect that to happen.

The second question isnt priced in. Even with Syriza in power no one seriously expects grexit. It certainly would'nt happen overnight and steps would be taken to find a compromise and keep Greece in.

If syriza aren't elected id expect euro to be higher tonight.
 

Pat494

Legendary member
14,617 1,578
I expect Euroland exports will be hit with a rising euro.

The Socialists are usually hopeless at positive economics and just spend a lot, which will be tricky if there is not much to spend.
 

Jack o'Clubs

Experienced member
1,554 342
Short Spanish and Italian bonds, long emerging markets hard currency debt (as a direct beneficiary of ECB QE). That'd work.
 

Jack o'Clubs

Experienced member
1,554 342
Probable outcomes:

1. * Syriza Wins, Tsipras Compromises:
2. * Syriza Wins, the Troika Blinks:
3. * New Democracy Wins:
4. * Stalemate:
5. * Grand Coalition:
6. * Syriza Clashes With Troika:

http://www.bloomberg.com/news/2015-...ossroads-how-the-future-may-unfold-after.html


Consequences either way is more uncertainty and volatility for the Euro - which is positive for exports and inflation as slide likely to continue.

If, as now looks likely, Syriza gets a larger than expected majority it won't be 1). 2-5 are out. Which leaves 6). You're right, lots of volatility...
 

Pat494

Legendary member
14,617 1,578
The euro has fallen sharply against the dollar after the anti-austerity Syriza party won the Greek general election.

The euro briefly fell as low as $1.1088 - the lowest level against the dollar in more than 11 years.

Syriza leader Alexis Tsipras has pledged to renegotiate the terms of Greece's €240bn bailout and reverse many of the austerity cuts.

But he said that he wanted negotiation, not confrontation, with Greece's international lenders.

"The new Greek government will be ready to co-operate and negotiate for the first time with our peers a just, mutually beneficial and viable solution," Mr Tsipras said.

The troika of lenders that bailed out Greece - the European Union, European Central Bank, and International Monetary Fund - imposed big budgetary cuts and restructuring in return for the money.

But Mr Tsipras said: "The troika for Greece is the thing of the past."

The euro had already been under pressure following last week's announcement of a new stimulus programme by the European Central Bank.

'Stand-off'

Greece's current bailout programme ends in February, and economists say a short term deal will be negotiated, but difficult talks lie ahead. Germany has indicated that it is not prepared to renegotiate the bailout terms, raising the prospect that Greece could end up leaving the eurozone.

"There is a danger of a prolonged stand-off with the troika as Syriza attempts to negotiate some form of official debt restructuring while not reneging on its promises to voters to cut taxes, raise government spending and increase the minimum wage," said Jonathan Loynes, chief European economist at Capital Economics.

Michael Hewson, chief market analyst at CMC Markets, said: "Tsipras's comments don't appear to leave any room for doubt as he stated that the troika and the bailouts belong to the past,.

"You can be almost certain that these negotiations will be watched carefully by the anti-austerity movements in Spain, Portugal, Italy and France to see what measures if any Greece is able to get out of EU politicians to deal with the problem of Greece's debt, and the terms of the bailout programme."

'Face value'

The UK Chancellor, George Osborne, urged all sides to "act responsibly" is any forthcoming negotiations over Greece's bailout terms. He told BBC Radio 4's Today programme that he understood why, with the Greek economy in trouble, voters were "looking for other answers".

But he warned that Syriza's election promises to spend more on public services and slow the pace of cuts were unlikely to work. "If you take at face value all the things that the new Greek government has promised, including big increases in public expenditure, I think that will be very difficult to deliver," he said.
 

Pat494

Legendary member
14,617 1,578
The 3 major Greek banks have fallen sharply !

Looks like a major disaster shaping up. The country is in the grip numerically of the Left but can't do much if they alienate their rich. I am guessing that a lot of Greek capital has fled abroad before the country lands up on the rocks.

Are they going to have to sell an island or two cheaply ?
 

Pat494

Legendary member
14,617 1,578
They have a E240 billion debt !!
The new party wants others to write off this mountain of debt !!
If it is written off then a plethora of parties across Europe are expected to spring up in Spain, Italy, France etc. with similar demands.

Re-employ public sector workers, raise salaries and reduce taxes ????

About as potty as one can get imho Completely out of a rational world !!

Sounds brilliant BUT nonsense - in yer dreams bozo
 

Splitlink

Legendary member
10,850 1,234
They have a E240 billion debt !!
The new party wants others to write off this mountain of debt !!
If it is written off then a plethora of parties across Europe are expected to spring up in Spain, Italy, France etc. with similar demands.

Re-employ public sector workers, raise salaries and reduce taxes ????

About as potty as one can get imho Completely out of a rational world !!

Sounds brilliant BUT nonsense - in yer dreams bozo

Of course!! That would not be a problem for you, though, would it? :D

Let us say that, if the Germans let the Greeks off the hook, it's because it is good business sense to do it. I don't have much sympathy because they were allowed into the Euro, in the first place.
 

counter_violent

Legendary member
11,283 3,005
Whichever way it goes won't make any difference to the Greeks.

Stay in and pay for all past mistakes.

Leave, devalue, no access to credit markets and return to being a backwater.

Cheep holidays for us all tho if option 2 :LOL:
 

Fugazsy

Veteren member
3,661 677
Greece can create trouble but not per se, but can create a spiral.... a motivation...The italians are not happy neither are the French......which are the heart of Europe.......

The move happened before the election, there was also a gap this morning, now closed, I doubt it will go straight down to parity, bears are looking for a better price and are taking profits, 1450 will be a good spot to revisit the recent low, the gap can also act resistance turned support.... personally I will be looking for a second entry to go long otherwise I stay on the side....
 
 
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