I think its fair enough tbh. Syriza were elected on the platform of stay in the euro but with no austerity, after months of negotiation they have eventually realised that this is not an option, so they are saying to the Greek people in effect, we cant give you what you wanted, so do you want to stay in the euro with austerity or leave the euro. They are also saying that they think leaving is the right answer, which advise the people can take or leave.
But if they vote 'yes' there isn;t any guarantee that (a) the damage won't already have been done irreversibly or (b) that the EU/Eurozone and IMF will give the Greeks anything.
Indeed, but that plays both ways, the EU might have dramatically underestimated the contagion from a GrExit and several large banks might go bust, I doubt the EU is in a big hurry for that to happen either.
Which banks?
The biggest (non-Greek) owner of Greek debt is a British bank, HSBC, which has $5bn worth. Then there are a couple of holders of about $3bn worth (Credit Agricole is one, I forget the others). There are a bunch of hedge funds that own debt too, and a few distressed debt funds.
It's worth remembering a few things:
1. Banks hold provisions against Greek government debt. So, HSBC may have $5bn of Greek debt on its balance sheet, but I suspect it will have (guessing here) $2bn of provisions against it. If Greece did default such that recovery was zero, then HSBC would only have to recognise another $3bn of losses.
2. The banks that hold Greek government debt are big, profitable and well capitalized. Take HSBC: it makes about $18bn a year pre-tax profit. BNP is slightly smaller, but it still makes more than $10bn a year. In this context, losing a billion or two is embarassing, but won't even push a bank into an annual loss.
You appear to be suggesting that despite form in this area, all the banks trading in the EU are completely honest about their liabilities.
Are there no derivatives based ultimately on Greek debt which might turn out to be rather overvalued ?
The ECB decision was inevitable as soon as the negotiations had clearly failed. Syriza isn't "just" saying that the people should decide. They're saying that they disagree with the deal, want the people to reject it, but are also demanding that - in the interim - the ECB continue pouring in support, and that everyone just ignores the repayment deadlines that can't be met.
Even if the ECB received political pressure eg from France to go along with this, legally they can't. They are legally obliged to stop supporting banks which are insolvent and the failure of negotiations and apparent inevitability of Greek default means that is what the Greek banks are.
I'm not saying blame the Greek government for everything by the way. Just saying the ECB have a much narrower framework to act in than the other actors in this sorry drama, so it would be wrong to think of their decision today as a last chance lost, or a decision primarily motivated by spite or a desire to kick the Greeks out or to teach others a lesson. The parameters of their decision were already set by others.
Absolutely correct.
I believe it was the IMF who effectively pulled the plug. They told Tsipiras that they could not extend the deadline on the 30 June payment unless his government was supporting the referendum. If the June 30th payment is missed, then Greece goes into default, and the ECB is legally obliged to declare that Greek government bonds can no longer be used as collateral. At which point Greek banks become insolvent.
Holding the referendum *after* the IMF deadline was either a masterstroke or a dreadful error. Some people have suggested that the only way to avoid the banks all going bust is to have a week of bank holidays in Greece, thus allowing the banks not to have to consider the question of their solvency until after the referendum. Sensible as that would be, I can't believe Tsipiras will go for it.
Thank you for the clarification Rob. I did not know the IMF came so close to accepting an extension.
Do you have any idea how much support the EU might be willing to give to Greece in the interim to prevent total, expensive, collapse? I can't see anyone stepping in to fill the ECB role in propping up the banking system, and without that (unless, as you say, the banks just go into hibernation and hope to wake up after a Yes vote) I'm not sure what meaningful help can be given.
The polling is compelling, Scotland wants Full Fiscal Autonomy and this means no more Barnett. They want it because they know that the £12bn of Fiscal Transfers to London are larger than the £7.6bn alleged Deficit including these transfers.
One academic study by Edinburgh Uni during the campaign showed that every time Labour, Tories or Liberals talked about FFA, SNP support rose.
Can you link to the FFA polling and the support for an end to Barnett? Of course, not even the SNP is now pretending Scotland pays in more to the UK than it gets back.
If you trawl back through the Site Which Cannot Be Mentioned Or Linked To you will find it all laid out.
I think its fair enough tbh. Syriza were elected on the platform of stay in the euro but with no austerity, after months of negotiation they have eventually realised that this is not an option, so they are saying to the Greek people in effect, we cant give you what you wanted, so do you want to stay in the euro with austerity or leave the euro. They are also saying that they think leaving is the right answer, which advise the people can take or leave.
But if they vote 'yes' there isn;t any guarantee that (a) the damage won't already have been done irreversibly or (b) that the EU/Eurozone and IMF will give the Greeks anything.
Indeed, but that plays both ways, the EU might have dramatically underestimated the contagion from a GrExit and several large banks might go bust, I doubt the EU is in a big hurry for that to happen either.
Which banks?
The biggest (non-Greek) owner of Greek debt is a British bank, HSBC, which has $5bn worth. Then there are a couple of holders of about $3bn worth (Credit Agricole is one, I forget the others). There are a bunch of hedge funds that own debt too, and a few distressed debt funds.
It's worth remembering a few things:
1. Banks hold provisions against Greek government debt. So, HSBC may have $5bn of Greek debt on its balance sheet, but I suspect it will have (guessing here) $2bn of provisions against it. If Greece did default such that recovery was zero, then HSBC would only have to recognise another $3bn of losses.
2. The banks that hold Greek government debt are big, profitable and well capitalized. Take HSBC: it makes about $18bn a year pre-tax profit. BNP is slightly smaller, but it still makes more than $10bn a year. In this context, losing a billion or two is embarassing, but won't even push a bank into an annual loss.
You appear to be suggesting that despite form in this area, all the banks trading in the EU are completely honest about their liabilities.
Are there no derivatives based ultimately on Greek debt which might turn out to be rather overvalued ?
Practically everything has been written down to zero value - one thing that came out of the 2008 mess in Greece was that national governments and regulators where quite prepared to play all kinds of games to get the relevant authorities (such as ISDA) to declare that a default wasn't a default when it suited them.
Calum Yers, but if, as Robertson suggest, the 'material event's clause could not just be the EU referendum but arguments not enough powers have been devolved to Scotland in the Scotland Bill or even the level of austerity then that would put a different take on things
You really are in your own dreamworld.
It is compelling that the evidence points to the current Scotland Bill being insufficient to meet the desires of the general electorate in Scotland. The SNP will ride that backlash to an increased Majority and a Second Referendum.
Your dreams that new leaders of Scottish Labour and that somehow the Scotland Bill can be sold as more than the utter pup it is doesn't translate into the public mood. Scotland wants more, it can vote SNP and get more.
Meanwhile the opposition in Scotland will ignore the politics, ignore the debate and issue dodgy dossiers trying to portray comments about football as evil, anti-English rabble rousing.
Is there any evidence that Scots want an end to Barnett? The SNP calling a second referendum on the basis that the Tories want to mitigate austerity in Scotland by retaining UK-wide redistribution of wealth from London and the south of England to elsewhere would be a gamble. But maybe this does need to happen. Scots should have the right to vote on whether to become poorer so that fundamentalist nationalists can get their international border. The outcome of a second referendum would surely end the issue for once and for all.
SO, what dreamworld do you live in, there is no redistribution from London. I was there last week and all you can see are cranes and building work, they are sucking up all our money and spending it on themselves. We have heard all this pooling and sharing rubbish and more and more people realise it is just garbage, lots of pooling but little sharing. You are correct that it will end it all next time, there will not be a need for a third.
It's not your Scottish money fuelling the cranes and building works. As any fule kno - it is dodgy Russian and Chinese money.
Loving the sulky victim mentality though, malc. Going to be a race to the bottom with the Greeks to see who can be the most self-pitying man of Europe....
Boris makes it look like he's support "out". This closes the door for any cabinet-level careerist who might otherwise have been tempted to jump in the hope of taking leadership of the "out" campaign, because there's hardly any benefit if somebody more senior is leading it. Cameron does his "renegotiation", they all have to go on record supporting his wonderful negotiation triumph, and finally Boris says, yes, I think it's wonderful, too, and the "out" campaign is still stuck with Farage.
Out of interest, will people stop accepting Greek-issued Euros? Or is the European Central Bank guaranteeing their value?
(The 11 digit serial number on every Euro note begins with a prefix which identifies which country issued it. German notes begin with an X, Greek notes start with a Y, Spain's have a V, France a U, Ireland T, Portugal M and Italy S. Belgium is Z, Cyprus G, Luxembourg 1, Malta F, Netherlands P, Austria N, Slovenia H, Slovakia E and Finland L.)
This is a particularly silly post. Please find ANY economics textbook that talks about a "Zero Resources Economy" (complete with capital letters, like a proper economic term!) then applies it to an entire country the size of England, Wales and Northern Ireland. This is sub-GCSE economics, enhanced by the view that anyone who disagrees with it is "economically illiterate".
All countries are interdependent. Even North Korea is not an autarky and engages in trade for vital resources that it does not possess. Your examples are nothing special - it is true that no nation can do without electricity and water, but there are indeed countries that import them. The UK has been "negative" on food for over a century. We have neither starved to death nor has our currency collapsed because of it. In terms of the balance of payments, imported electricity and water would likely be a drop in the ocean for rUK compared to the deficit on manufactured goods, for instance.
You only have to go back to the 1970s to see what happened to the UK Economy in a Zero Resource situation and the long term devaluation of Sterling is pretty extant to even passing observation. The acceleration of this trend for the rUK without Scotland is, to me, an obvious outcome of Scottish Independence and the key reason why the UK Establishment is so terrified of it.
The problem, and the reason I highlight the term Zero Resource, is that outside of micro-economies I can think of no example of a country being able to maintain positive balance of trade without a high level of Primary Sector Output or exceptionally cheap Labour Inputs.
I would think most people would see the latter option as being undesirable (well maybe not some Tories but hopefully a majority of people don't want to see an economy reliant on ultra-low wages). Therefore you need to consider, quite carefully, the former. The UK tried to make it work with Service Sector reliance. And it failed.
Mr. Dair, the lender of last resort ultimately stands behind financial institutions which might otherwise fail (hence the money thrown at RBS and Lloyds [previously HBOS] to keep them afloat).
If you don't have a currency union and a Scottish bank (post-independence) is running out of money and about to fail, from whence will the money flow?
Scotland's financial sector is proportionally larger than England's. I cannot see why, post-independence, the UK would see it as desirable to put the UK taxpayer at risk for the privilege of providing a foreign nation who had rejected the union with a financial safety net.
If Scotland wanted independence, it would have it. And if it wants independence in the future, it will have it. But independence means standing on your own two feet.
Again you demonstrate a lack of understanding.
Lenders of Last Resort do NOT provide Capital injections. Which is what happened with RBS and Lloyds TSB which were undercapitalised and the UK Government decided to recapitalise them at the taxpayers expense.
This is quite different to provision of Liquidity (which is what a Lender of Last Resort does).
Anything beyond Liquidity is a question of governmental choice and there is nothing to preclude an independent Scottish Government from making such a choice. Technically there is nothing to stop an independent Scottish Government from also acting as Lender of Last Resort but as the Bank of England and ECB already exist this would be pointless.
And again, activity outside of Scotland which required Liquidity support would be a matter for the Lender of Last Resort applicable for that jurisdiction so regardless of Currency Union, the Bank of England would still be responsible (and have a Commercial Contract to provide) any Liquidity support for activities of Scottish banks in London.
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Calum Yers, but if, as Robertson suggest, the 'material event's clause could not just be the EU referendum but arguments not enough powers have been devolved to Scotland in the Scotland Bill or even the level of austerity then that would put a different take on things
You really are in your own dreamworld.
It is compelling that the evidence points to the current Scotland Bill being insufficient to meet the desires of the general electorate in Scotland. The SNP will ride that backlash to an increased Majority and a Second Referendum.
Your dreams that new leaders of Scottish Labour and that somehow the Scotland Bill can be sold as more than the utter pup it is doesn't translate into the public mood. Scotland wants more, it can vote SNP and get more.
Meanwhile the opposition in Scotland will ignore the politics, ignore the debate and issue dodgy dossiers trying to portray comments about football as evil, anti-English rabble rousing.
Is there any evidence that Scots want an end to Barnett? The SNP calling a second referendum on the basis that the Tories want to mitigate austerity in Scotland by retaining UK-wide redistribution of wealth from London and the south of England to elsewhere would be a gamble. But maybe this does need to happen. Scots should have the right to vote on whether to become poorer so that fundamentalist nationalists can get their international border. The outcome of a second referendum would surely end the issue for once and for all.
SO, what dreamworld do you live in, there is no redistribution from London. I was there last week and all you can see are cranes and building work, they are sucking up all our money and spending it on themselves. We have heard all this pooling and sharing rubbish and more and more people realise it is just garbage, lots of pooling but little sharing. You are correct that it will end it all next time, there will not be a need for a third.
It's not your Scottish money fuelling the cranes and building works. As any fule kno - it is dodgy Russian and Chinese money.
Loving the sulky victim mentality though, malc. Going to be a race to the bottom with the Greeks to see who can be the most self-pitying man of Europe....
Unfortunately for you we don't do self pity
Or self-awareness either it seems.... Or maybe it's just that you really are a Brummy?
Charles, did you forget there are 59 MP's in Westminster and that previous committee's have always been comprised of MP's from Scottish seats. How odd that now we have SNP MP's that tradition is being traduced. It is ill concealed Tammany Hall politics.
No, it's not. You need to look at the purpose of the Scottish committee, not the form.
From the UK government website:
The main role of the Scottish Secretary is to promote and protect the devolution settlement. Other responsibilities include promoting partnership between the UK government and the Scottish government, and relations between the 2 Parliaments.
The role of the Scottish committee is to hold the Scottish Secretary to account for his actions.
Given that a majority of voters in the referendum voted to remain part of the UK, their interests need to be represented in this. Of course it would be ideal if it was possible to staff the committee entirely with SMPs, while also adequately ensuring appropriate representation of Scottish voters. But, because of the workings of FPTP, it's not currently possible to do so.
Hence it is appropriate to suspend the convention - to focus on the function, not the form - and to ensure proper representation of different interests.
The polling is compelling, Scotland wants Full Fiscal Autonomy and this means no more Barnett. They want it because they know that the £12bn of Fiscal Transfers to London are larger than the £7.6bn alleged Deficit including these transfers.
One academic study by Edinburgh Uni during the campaign showed that every time Labour, Tories or Liberals talked about FFA, SNP support rose.
Can you link to the FFA polling and the support for an end to Barnett? Of course, not even the SNP is now pretending Scotland pays in more to the UK than it gets back.
If you trawl back through the Site Which Cannot Be Mentioned Or Linked To you will find it all laid out.
That'll be a no then. Thought so.
LOL, he tells you exactly where it is and you prefer to go "la la la la "
I think its fair enough tbh. Syriza were elected on the platform of stay in the euro but with no austerity, after months of negotiation they have eventually realised that this is not an option, so they are saying to the Greek people in effect, we cant give you what you wanted, so do you want to stay in the euro with austerity or leave the euro. They are also saying that they think leaving is the right answer, which advise the people can take or leave.
But if they vote 'yes' there isn;t any guarantee that (a) the damage won't already have been done irreversibly or (b) that the EU/Eurozone and IMF will give the Greeks anything.
Indeed, but that plays both ways, the EU might have dramatically underestimated the contagion from a GrExit and several large banks might go bust, I doubt the EU is in a big hurry for that to happen either.
Which banks?
The biggest (non-Greek) owner of Greek debt is a British bank, HSBC, which has $5bn worth. Then there are a couple of holders of about $3bn worth (Credit Agricole is one, I forget the others). There are a bunch of hedge funds that own debt too, and a few distressed debt funds.
It's worth remembering a few things:
1. Banks hold provisions against Greek government debt. So, HSBC may have $5bn of Greek debt on its balance sheet, but I suspect it will have (guessing here) $2bn of provisions against it. If Greece did default such that recovery was zero, then HSBC would only have to recognise another $3bn of losses.
2. The banks that hold Greek government debt are big, profitable and well capitalized. Take HSBC: it makes about $18bn a year pre-tax profit. BNP is slightly smaller, but it still makes more than $10bn a year. In this context, losing a billion or two is embarassing, but won't even push a bank into an annual loss.
You appear to be suggesting that despite form in this area, all the banks trading in the EU are completely honest about their liabilities.
Are there no derivatives based ultimately on Greek debt which might turn out to be rather overvalued ?
Actually, I think the banks are (now) pretty honest about their assets and liabilities. The situation has changed quite considerably in the last five years.
Also, don't forget that Greece simply doesn't owe very much to non-Greek, private sector creditors. This chart shows the holders of Greek debt by type (http://uk.businessinsider.com/government-debt-holders-2014-12), and you can see that non-Greek banks are a negligible proportion.
Mr. G, I have confidence in the ability of Scotland to run its own monetary policy.
Also, let it not be forgotten I rightly called the total lack of desire for a currency union before polling confirmed that and the entire UK political establishment agreed. It's a serious question, and one that must be considered before any theoretical second referendum.
We'll believe the Loyalists nonsense about refusing currency union as long as Scotland wants it when they explain how they will prop up Sterling with a Zero Resources economy. And we's not just talking about zero resources in terms of what you pull out the ground. rUK would be negative on electricity and is about to tip into the negative on potable water.
Of course the economic illiteracy of the Loyalists sees them apply the same paternalistic nonsense that they apply to other parts of the debate and somehow they just think Sterling will survive "because it will".
Loyalist lunacy.
RUK would amount to 92% of current UK GDP. GDP per head would be unchanged. It isn't a zero resources economy.
Calum Yers, but if, as Robertson suggest, the 'material event's clause could not just be the EU referendum but arguments not enough powers have been devolved to Scotland in the Scotland Bill or even the level of austerity then that would put a different take on things
You really are in your own dreamworld.
It is compelling that the evidence points to the current Scotland Bill being insufficient to meet the desires of the general electorate in Scotland. The SNP will ride that backlash to an increased Majority and a Second Referendum.
Your dreams that new leaders of Scottish Labour and that somehow the Scotland Bill can be sold as more than the utter pup it is doesn't translate into the public mood. Scotland wants more, it can vote SNP and get more.
Meanwhile the opposition in Scotland will ignore the politics, ignore the debate and issue dodgy dossiers trying to portray comments about football as evil, anti-English rabble rousing.
Is there any evidence that Scots want an end to Barnett? The SNP calling a second referendum on the basis that the Tories want to mitigate austerity in Scotland by retaining UK-wide redistribution of wealth from London and the south of England to elsewhere would be a gamble. But maybe this does need to happen. Scots should have the right to vote on whether to become poorer so that fundamentalist nationalists can get their international border. The outcome of a second referendum would surely end the issue for once and for all.
SO, what dreamworld do you live in, there is no redistribution from London. I was there last week and all you can see are cranes and building work, they are sucking up all our money and spending it on themselves. We have heard all this pooling and sharing rubbish and more and more people realise it is just garbage, lots of pooling but little sharing. You are correct that it will end it all next time, there will not be a need for a third.
It's not your Scottish money fuelling the cranes and building works. As any fule kno - it is dodgy Russian and Chinese money.
Loving the sulky victim mentality though, malc. Going to be a race to the bottom with the Greeks to see who can be the most self-pitying man of Europe....
Unfortunately for you we don't do self pity
Or self-awareness either it seems.... Or maybe it's just that you really are a Brummy?
BBC groupthink is interesting - a series of things they "know" on various topics. For example a friend who worked there was told to do a program on proposals for flat rate income tax. Which, as she told me - before she'd done any research - couldn't work, had never been tried and was a Fascist policy.
Watching her world expand when I mentioned the various countries that have implemented a flat tax, the serious debates in economic about it* and the fact that Fascists have never implemented a flat tax (big armies are expensive)....
Her protests of "everyone knows....." were quite revealing.
(*) The modern debate is between (1) those who think it is good idea, (2) those who think that it is suitable for a developing economy to help stamp out corruption, but not for a fully developed economy and (3) those who think it is somewhat a bad idea. No economist buys into the end-of-the-world argument any more -its been done too many times.
Greek debt has effectively been nationalised by the ECB which has provided the money to allow Greek banks to pay down their external debts in exchange for debts to the ECB which now stand at approximately £150bn.
So when the rest of the EZ scream blue murder about the default and their losses be aware that those who have gained from this exercise are those that had large positions in Greece a few months ago and managed to get out euro for euro. This includes British banks before we start to get all sanctimonious about it.
The ECB has been building up a capital base to allow it to contain this default. That will effectively sterilise the default for the remainder of the EZ. Of course since Bankers are greedy bastards there will always be some in their trying to extract the last few cents of profits but their losses will not be a systemic risk.
The longer answer involves just quite how unlikely it would be that if Greece left the eurozone, the European Central Bank then started cancelling its notes.
This would be an almost impossible task. Notes may have a country of origin but as a common currency they are spread far and wide across the eurozone.
The Greek ones will be owned by Germans, Italians, Spanish and Irish people - in fact here in Britain we've probably got a few too.
No one would be particularly happy about some of the cash in their wallet being cancelled.
And it would be completely unneccessary, that euro note still serves its function regardless of where it originally came from.
If the ECB decided that with Greece out of the euro it needed to reduce the number of notes in circulation, it could simply remove however many it needed to from the overall pile. Somehow I doubt this would be a major concern right now considering the massive dose of money-printing through quantitative easing being delievered
So while you might want to check your euros to see if any are Greek just to test this out, I wouldn’t worry if any of them are.
Out of interest, will people stop accepting Greek-issued Euros? Or is the European Central Bank guaranteeing their value?
(The 11 digit serial number on every Euro note begins with a prefix which identifies which country issued it. German notes begin with an X, Greek notes start with a Y, Spain's have a V, France a U, Ireland T, Portugal M and Italy S. Belgium is Z, Cyprus G, Luxembourg 1, Malta F, Netherlands P, Austria N, Slovenia H, Slovakia E and Finland L.)
MalcG Indref1 brought the Smith Commission and the Scotland Bill, if and when there is indyref2 that would bring FFA, a similar gradual increase in powers occurred in Quebec after their 2 referenda
I wish Boris Johnson would just shut up and stop stirring the pot. He is just a 'back-bencher' when all said and done. He maybe incredibly intelligent but he never thinks anything through and very poor at articulating his comments.
On another note, why do the media (SKY,BBC) send their commentators to Tunisia and then spend all their time interviewing people who are back in this country?
I don't like the narrative the media are trying to get going, that "is enough being done by the government". They are so bloody predictable.
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Nothing would be stopping an independent Scottish Government from borrowing funds to provide support if necessary. Of course it would not have to because the probability of such an exposure is very, very low.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
Mr. Dair, you're right on recapitalisation/liquidity when it comes to RBS/Lloyds [I was wrong to indicate that was lender of last resort stuff], but Mr. Observer makes a critical point on the inability of a Scotland using the pound without a currency union to hurl money at a failing bank, unless it had built up large reserves (which would take both significant time and a tight fiscal approach).
And I fail to see why the UK would want a currency union with a foreign nation that had voted to leave.
Out of interest, does the SNP have a set position (akin to a manifesto) on independence aims/desires, or (given there's no vote after the last was lost) do they just have the vaguer goal of independence?
I'm just wondering where the party stands on currency, given the view of the UK (ex-Scotland) is that there's sod all chance of a currency union with us, post-independence, and the eurozone does not necessarily look lovely. A Scottish pound (at least briefly) would seem the best option.
I think Indyref2 will be in the manifesto but there will be a " Material Events " clause which would need to kick in before any referendum could be pursued. Sturgeon has indicated on a few occasions that this would be their approach, when pushed for an example of a material event she uses the rUK voting to leave EU and Scotland voting to stay.
In terms of currency whatever the politicians say an iScotland's currency arrangements would be driven by the markets. In the short to medium term I think there would have been a " Currency Cooperation Pact ", currency union in anything but name to save the politicians blushes. The long term currency of Scotland would then be determined in due course.
LuckyGuy1983 Anyway Australia is the closest ally of the US, not the UK, Wilson did not send British troops into Vietnam, Australia did.
At the end of the day in WW2 it was US troops who liberated Europe from the Nazis alongside Brits. I recently revisited the D-Day beaches and 10,000 Americans died on the first day at Omaha and Utah alone, they did not have to die, many US isolationists wanted to keep the US out of the war, however you seem keener to make overtures to Putin, forgetting that once the US had liberated western Europe they left free democracies, the Soviets once they had taken Eastern Europe left an Empire
You confuse casualties and deaths. You then go on to confuse allied and U.S. You confuse British and Commonweath/Imperial. You forget that Hitler declared war on the U.S.
No, it's not. You need to look at the purpose of the Scottish committee, not the form.
The problem is that your thinking about semantics and not perception.
It doesn't matter what the Scotland Committee does. It doesn't matter how the Scotland Committee works. And it doesn't matter what the goals of the Scotland Committee are.
What matters is how the political parties in Scotland create the narrative over what happens. And in this case it is an own goal for Unionism as the SNP get free reign to point out how English MPs get to "decide Scotland's future".
Reality will always come second to how things are perceived.
This is a particularly silly post. Please find ANY economics textbook that talks about a "Zero Resources Economy" (complete with capital letters, like a proper economic term!) then applies it to an entire country the size of England, Wales and Northern Ireland. This is sub-GCSE economics, enhanced by the view that anyone who disagrees with it is "economically illiterate".
All countries are interdependent. Even North Korea is not an autarky and engages in trade for vital resources that it does not possess. Your examples are nothing special - it is true that no nation can do without electricity and water, but there are indeed countries that import them. The UK has been "negative" on food for over a century. We have neither starved to death nor has our currency collapsed because of it. In terms of the balance of payments, imported electricity and water would likely be a drop in the ocean for rUK compared to the deficit on manufactured goods, for instance.
You only have to go back to the 1970s to see what happened to the UK Economy in a Zero Resource situation and the long term devaluation of Sterling is pretty extant to even passing observation. The acceleration of this trend for the rUK without Scotland is, to me, an obvious outcome of Scottish Independence and the key reason why the UK Establishment is so terrified of it.
The problem, and the reason I highlight the term Zero Resource, is that outside of micro-economies I can think of no example of a country being able to maintain positive balance of trade without a high level of Primary Sector Output or exceptionally cheap Labour Inputs.
I would think most people would see the latter option as being undesirable (well maybe not some Tories but hopefully a majority of people don't want to see an economy reliant on ultra-low wages). Therefore you need to consider, quite carefully, the former. The UK tried to make it work with Service Sector reliance. And it failed.
You're still writing Zero Resource in capital letters like it is some term of art. It isn't. Is it something you made up or a trope you borrowed from elsewhere? It isn't going to be in a serious textbook. Nor does the idea that the UK has ever had "zero resources" make any sense. The obsession with a trade deficit sounds mercantilist - while it is true there are disadvantages to running a deficit, the mercantilists were wrong to believe that running a trade deficit inevitably makes you poorer. Similarly for your remarks on devaulation of currency. A country's currency can become weaker and it can run a trade deficit and yet it still can become wealthier - even without moving to an ultra low wage economy, indeed with wages rising!
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
There is no choice. The banks are empty and dependent on daily deliveries of notes from the ECB which will now not come.
I am really struggling to see a way back from this even if there was any inclination.
The Greek banks are now bust because they don't have a lender of last resort which can provide the liquidity required for their day to day operations.
If Scotland got independence it will no longer be a part of the UK. Is that not the point? So such liquidity operations will no longer be provided to banks based in Scotland for any trading in Scotland. So if there is a run on the bank here in Scotland they go bust. Not the Bank of England's problem.
I would like to think this would be unarguable after this coming week but obviously that will not be the case. Not on here anyway. I admire MBE's perseverance. I gave up a while ago.
Calum Yet Angus Robertson today has seemed to suggest the 'material events' clause would include Scotland not getting further powers beyond the Scotland Bill or too much austerity being imposed on Scotland, so not just an Out vote in EU ref. Close examination needs to be made of this 'material events' clause next year to see what it actually refers to
The longer answer involves just quite how unlikely it would be that if Greece left the eurozone, the European Central Bank then started cancelling its notes.
This would be an almost impossible task. Notes may have a country of origin but as a common currency they are spread far and wide across the eurozone.
The Greek ones will be owned by Germans, Italians, Spanish and Irish people - in fact here in Britain we've probably got a few too.
No one would be particularly happy about some of the cash in their wallet being cancelled.
And it would be completely unneccessary, that euro note still serves its function regardless of where it originally came from.
If the ECB decided that with Greece out of the euro it needed to reduce the number of notes in circulation, it could simply remove however many it needed to from the overall pile. Somehow I doubt this would be a major concern right now considering the massive dose of money-printing through quantitative easing being delievered
So while you might want to check your euros to see if any are Greek just to test this out, I wouldn’t worry if any of them are.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
You're still writing Zero Resource in capital letters like it is some term of art. It isn't. Is it something you made up or a trope you borrowed from elsewhere? It isn't going to be in a serious textbook. Nor does the idea that the UK has ever had "zero resources" make any sense. The obsession with a trade deficit sounds mercantilist - while it is true there are disadvantages to running a deficit, the mercantilists were wrong to believe that running a trade deficit inevitably makes you poorer. Similarly for your remarks on devaulation of currency. A country's currency can become weaker and it can run a trade deficit and yet it still can become wealthier - even without moving to an ultra low wage economy, indeed with wages rising!
No-one is talking about Richer vs Poorer.
The discussion is "why would a currency union be good for the rUK".
My argument is that the value of Sterling has been supported (to some, debatable extent) due to the Resource and Export led economy of Scotland and that this has stemmed the gradual Devaluation of Sterling over the years and this can be seen especially in the clear breakpoint as Scottish Oil came on stream and the UK economy stabilisied and Sterling's rate of fall reduced.
The conservative solution for rUK would appear be Currency Union as the risks and the cost of a once in 40 years event like the recent crash appear to be markedly less than the risk of an accelerated decline in the value of Sterling.
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Nothing would be stopping an independent Scottish Government from borrowing funds to provide support if necessary. Of course it would not have to because the probability of such an exposure is very, very low.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
I'm really not sure that the UK is remotely comparable to "the countries that barely noticed 2008" - could you name a few that you think would provide a meaningful comparison? It is true that the UK wasn't particularly well prepared - plenty of Tories, as well as non-Brownite Labour supporters, would agree with you there.
The Greek banks are now bust because they don't have a lender of last resort which can provide the liquidity required for their day to day operations.
The Greek Banks are bust because attempts to provide SHORT TERM (which is all Lenders of Last Resort are supposed to do) Liquidity are incapable of addressing the scale of the problem and the underlying structural issues over capitalisation.
They are bust because they are bust. No Lender of Last Resort will ever change that.
I said British troops fought alongside US troops (as did troops from Canada), Hitler did declare war on the US but mainly because he feared the US would declare war on him first. It was Japan who attacked the US in 1941, the US declared war on them, they were under no immediate threat from the Nazis in Europe
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Nothing would be stopping an independent Scottish Government from borrowing funds to provide support if necessary. Of course it would not have to because the probability of such an exposure is very, very low.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
I'm really not sure that the UK is remotely comparable to "the countries that barely noticed 2008" - could you name a few that you think would provide a meaningful comparison? It is true that the UK wasn't particularly well prepared - plenty of Tories, as well as non-Brownite Labour supporters, would agree with you there.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
That was part of my thinking - if the Greeks still have the printing plates, they can just keep printing Euros unless and until the ECB says that Y-prefixed Euro notes will no longer be legal tender.
I wouldn't want a bunch of them in my wallet, just in case. If that attitude takes hold, they are effectively dead anyway.
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
There's another option between "f***ing idiots" and "what is happening is exactly what they want to happen", which is that they're prioritising short-term politics. The trickier a political situation gets, the shorter the short term gets.
SO , it is all one way traffic , from us to London.
You are aware that 90% plus of the cranes in London are building on privately owned land, generally blocks of flats, that are sold off plan to foreigners? The seed money to get things going is also generally from outside the UK....
No public money involved.
If you want the same in Edinburgh, I suggest a targeted campaign in the coastal areas of China(*), advertising the joys of living in Boney Scotland.
* The reason for this is that buying a flat in London gives you several things. One, is the rising property market. Two is the rental income. Three is that the price puts you through the investment criteria for a visa. If you are in the Chinese middle classes, an investment in property that also gives you an exit strategy in case things go back to The Fun Old Days(**) is considered a brilliant idea
** Which, of course, weren't fun at all
Who pays for all the inftrastructure, Olympic games , etc not the Russians and Chinese, we get to do that bit.
The Greek banks are now bust because they don't have a lender of last resort which can provide the liquidity required for their day to day operations.
The Greek Banks are bust because attempts to provide SHORT TERM (which is all Lenders of Last Resort are supposed to do) Liquidity are incapable of addressing the scale of the problem and the underlying structural issues over capitalisation.
They are bust because they are bust. No Lender of Last Resort will ever change that.
Tosh. They are bust because the security they were offering (basically Greek Gilts) is no longer acceptable to their lender of last resort which has withdrawn its services and is no longer willing to offer liquidity. Without that or an ability to liquidate those assets in the market they are bust whether they are insolvent or not.
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
That is perfectly possible.
But Leaving the Euro in this manner is not to the advantage of ordinary Greeks. A disorderly default and Euro ejection will leave the IMF and private sector creditors seeking redress from the Greek government for decades. It will also cause all kinds of problems for Greek firms with Euro denominated liabilities. Finally, the cost of Grexit will be born by those with savings and fixed incomes.
It also seems a fundamentally cowardly and dishonest way of achieving Grexit. Surely you are best off being honest with the people? "We don't think Euro membership is in the best interests of the Greek people, and while the transition may be hard, we believe a sovereign Greece with its own currency is the best option." Instead they said "Grexit? You won't have Grexit, we'll stand up to that nasty IM and those hateful Germans and they'll give us what we want."
We'll soon see if there was proper planning for Grexit. I sincerely hope that New Drachma have already been printed, because Grexit without money to replace Euros would be a complete shit show. I suspect, however, they have not. Because the SYRIZA leadership believed their own bullshit: they believed that the troika would always fold.
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
There's another option between "f***ing idiots" and "what is happening is exactly what they want to happen", which is that they're prioritising short-term politics. The trickier a political situation gets, the shorter the short term gets.
SO , it is all one way traffic , from us to London.
You are aware that 90% plus of the cranes in London are building on privately owned land, generally blocks of flats, that are sold off plan to foreigners? The seed money to get things going is also generally from outside the UK....
No public money involved.
If you want the same in Edinburgh, I suggest a targeted campaign in the coastal areas of China(*), advertising the joys of living in Boney Scotland.
* The reason for this is that buying a flat in London gives you several things. One, is the rising property market. Two is the rental income. Three is that the price puts you through the investment criteria for a visa. If you are in the Chinese middle classes, an investment in property that also gives you an exit strategy in case things go back to The Fun Old Days(**) is considered a brilliant idea
** Which, of course, weren't fun at all
Who pays for all the inftrastructure, Olympic games , etc not the Russians and Chinese, we get to do that bit.
Are you aware that infrastructure for new domestic construction is generally paid for by the developers & local councils?
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
Its a theory but it is not one I think is correct. It is really hard to imagine a more catastrophic way for Greece to come out of the Euro than this. As Robert has pointed out there were other options as recently as January with the help of the IMF and that was probably the correct way to go.
If they have done this to their country because it makes them look a little better politically then they are beneath contempt. Many, many people are going to suffer for this.
As an aside, it's hard to see how Greece disintegrating tomorrow will lead to immediate Euro break-up.
Realistically, there are two ways in which Spain or Italy or Portugal might leave the Euro.
1. Because they are unable to fund themselves in the market due to spiralling bond yields, and therefore having their own currency to print becomes essential.
or
2. Because Greece has been such an enormous success outside the Eurozone that the political pressure in Spain and the like builds to a level to make exit politically essential.
In the near term, 1 seems unlikely. Given QE in Europe, it's hard not to see the ECB backstopping peripheral bond yields at least in the short term.
Likewise, it would take several years of Greek success before the message got through to the populations of Italy and Spain. And if you wanted Grexit to be a success you wouldn't do it this way. You'd do it with a sensible centre right government and the help of the IMF.
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Nothing would be stopping an independent Scottish Government from borrowing funds to provide support if necessary. Of course it would not have to because the probability of such an exposure is very, very low.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
I'm really not sure that the UK is remotely comparable to "the countries that barely noticed 2008" - could you name a few that you think would provide a meaningful comparison? It is true that the UK wasn't particularly well prepared - plenty of Tories, as well as non-Brownite Labour supporters, would agree with you there.
Canada, Norway, Australia
I guessed you'd say Australia and perhaps Canada. There are a lot of Tories out there who'd say we should have taken their approach to the national debt during the good times... but the British economy can't realistically be directly compared to any of the three, and certainly couldn't aim to copy them, for reasons that I assume are blatantly obvious. (In the event of a Chinese slowdown, I can imagine some of those economies rather wishing they had eggs piled up in a greater range of baskets, but that is by the by.)
Incidentally, I never did get an answer about "Zero Resource Economy". Is this economic redefinition something you made up yourself? Or is it a meme in general circulation? Please don't make me have to search the depths of Twitter etc to find out. My ears burn enough on this site, to face that lot is rather daunting.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Charles, did you forget there are 59 MP's in Westminster and that previous committee's have always been comprised of MP's from Scottish seats. How odd that now we have SNP MP's that tradition is being traduced. It is ill concealed Tammany Hall politics.
No, it's not. You need to look at the purpose of the Scottish committee, not the form.
From the UK government website:
The main role of the Scottish Secretary is to promote and protect the devolution settlement. Other responsibilities include promoting partnership between the UK government and the Scottish government, and relations between the 2 Parliaments.
The role of the Scottish committee is to hold the Scottish Secretary to account for his actions.
Given that a majority of voters in the referendum voted to remain part of the UK, their interests need to be represented in this. Of course it would be ideal if it was possible to staff the committee entirely with SMPs, while also adequately ensuring appropriate representation of Scottish voters. But, because of the workings of FPTP, it's not currently possible to do so.
Hence it is appropriate to suspend the convention - to focus on the function, not the form - and to ensure proper representation of different interests.
The referendum has nothing to do with it, it is long gone and fact is that they are jerrymandering the committee to keep the SNP out, UK democracy in action. Your other point is just pathetic, SNP had 50% of voters in Scotland, Tories had significantly less anywhere in UK yet in your twisted Tory logic they can manipulate and cheat on committees. Very telling.
No, it's not. You need to look at the purpose of the Scottish committee, not the form.
The problem is that your thinking about semantics and not perception.
It doesn't matter what the Scotland Committee does. It doesn't matter how the Scotland Committee works. And it doesn't matter what the goals of the Scotland Committee are.
What matters is how the political parties in Scotland create the narrative over what happens. And in this case it is an own goal for Unionism as the SNP get free reign to point out how English MPs get to "decide Scotland's future".
Reality will always come second to how things are perceived.
SNP-phites would make that claim anyway.
And please stop using the term "Loyalists". It's inaccurate and offensive.
If they have done this to their country because it makes them look a little better politically then they are beneath contempt. Many, many people are going to suffer for this.
How much of the bail out money actually stayed in Greece before the last election ? If, as some portray it they were basically being given money to pay their debts, but none actually to improve their situation, then they were building up future debt for no purpose. Sounds more like a heads I lose, tails I lose scenario to me.
There standard of living in Greece has fallen by 30% in the last six years as I understand it, there doesn't appear to be any reason to suggest it wasn't going to continue to fall for the next six years, this denouement appears to be mostly an exercise in taking that pain in one shot right now, and then being able to devalue and grow their economy again.
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
Its a theory but it is not one I think is correct. It is really hard to imagine a more catastrophic way for Greece to come out of the Euro than this. As Robert has pointed out there were other options as recently as January with the help of the IMF and that was probably the correct way to go.
If they have done this to their country because it makes them look a little better politically then they are beneath contempt. Many, many people are going to suffer for this.
It depends on what you think Varoufakis et al really want. Remember they originally wanted out of the Euro - but trimmed their sails to match what the electorate wanted.
Getting out of the Euro and defaulting on the debt, while blaming it all on the neo-con-nazi-imf-troika-germans could be the outcome they want.
It would be rather sociopathic - the misery that will ensue in Greece with a disorderly default and return to the Drachma, complete with a government determined not to cut spending...
Tragically the first victims will be the pensioners - they will be facing what happened to pensioners in 1990s Russia. Pensions paid in full that can't buy a slice of bread.
I am an expert in Operations Research. Varoufakis is playing chicken - the game where you try and act crazy and belligerent to get the other guy to swerve. As described in Herman Kahn* - who pointed out all the times in history where acting bellicose to get the other guy to back down had ended in disaster.
(*) Read "On Thermonuclear War". As Kahn put it - "The problem of reaching 1970 while being alive"
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Greece has the plates for up to 20 euro denominated bank notes as I understand it.
There standard of living in Greece has fallen by 30% in the last six years as I understand it, there doesn't appear to be any reason to suggest it wasn't going to continue to fall for the next six years
'We'll believe the Loyalists nonsense about refusing currency union as long as Scotland wants it when they explain how they will prop up Sterling with a Zero Resources economy.'
Serious question, have you just returned from a Syriza training seminar in Greece ?
Calum Yet Angus Robertson today has seemed to suggest the 'material events' clause would include Scotland not getting further powers beyond the Scotland Bill or too much austerity being imposed on Scotland, so not just an Out vote in EU ref. Close examination needs to be made of this 'material events' clause next year to see what it actually refers to
I think the " material events " clause will not go into much detail, I'd expect the SNP would want to leave themselves maximum scope for manoeuvre here.
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
There is no choice. The banks are empty and dependent on daily deliveries of notes from the ECB which will now not come.
I am really struggling to see a way back from this even if there was any inclination.
The Greek banks are now bust because they don't have a lender of last resort which can provide the liquidity required for their day to day operations.
If Scotland got independence it will no longer be a part of the UK. Is that not the point? So such liquidity operations will no longer be provided to banks based in Scotland for any trading in Scotland. So if there is a run on the bank here in Scotland they go bust. Not the Bank of England's problem.
I would like to think this would be unarguable after this coming week but obviously that will not be the case. Not on here anyway. I admire MBE's perseverance. I gave up a while ago.
First order of business would be to shift all the banknotes in their UK branches north of the border, thereby exporting the problem. And the BofE couldn't refill the branches without that being sucked out as well (or introducing border controls)
'We'll believe the Loyalists nonsense about refusing currency union as long as Scotland wants it when they explain how they will prop up Sterling with a Zero Resources economy.'
Serious question, have you just returned from a Syriza training seminar in Greece ?
Japan has zero natural resources and is also prone to severe natural disasters rather more frequently than we are, it seems to have muddled along adequately most of the time.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Thanks - what happens to Greek notes in the event of Grexit? Are they withdrawn gradually as they find their way back to EZ banks? Otherwise presumably the EZ will have more liquidity than it has planned for the remaining members?
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Yes they do. They have the plates. They can print as many as their consciences and paper supplies allow. And this is Syriza we're talking about.
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Nothing would be stopping an independent Scottish Government from borrowing funds to provide support if necessary. Of course it would not have to because the probability of such an exposure is very, very low.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
I'm really not sure that the UK is remotely comparable to "the countries that barely noticed 2008" - could you name a few that you think would provide a meaningful comparison? It is true that the UK wasn't particularly well prepared - plenty of Tories, as well as non-Brownite Labour supporters, would agree with you there.
Canada, Norway, Australia
I guessed you'd say Australia and perhaps Canada. There are a lot of Tories out there who'd say we should have taken their approach to the national debt during the good times... but the British economy can't realistically be directly compared to any of the three, and certainly couldn't aim to copy them, for reasons that I assume are blatantly obvious. (In the event of a Chinese slowdown, I can imagine some of those economies rather wishing they had eggs piled up in a greater range of baskets, but that is by the by.)
Incidentally, I never did get an answer about "Zero Resource Economy". Is this economic redefinition something you made up yourself? Or is it a meme in general circulation? Please don't make me have to search the depths of Twitter etc to find out. My ears burn enough on this site, to face that lot is rather daunting.
It sounds rather like the late 19th Cent concept that without direct access to primary raw materials you can't run an economy. Hence the need to colonise....
The ironic bit is that if you believe that if you can't run an economy without primary natural resources as a major component, then you are saying that when the oil stops, Scotland will cease to exist!
The Northern Bank of Belfast is to reprint and reissue all its bank notes within eight weeks to thwart the gang that robbed it of £26.5 million.
Yesterday Hugh Orde, the province's chief constable, told a press conference that on the basis of evidence gathered, the IRA was responsible for the raid.
Mr Orde said the bank's decision to reprint an estimated £300 million of its bank notes meant that the robbery was "the largest theft of waste paper in living history".
As Unionists called for the expulsion of Sinn Fein, the political wing of the IRA, from negotiations for the restoration of the Northern Ireland Assembly, detectives were hoping that the bank note reissue would force the IRA to speed up its money laundering, leading to mistakes.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Thanks - what happens to Greek notes in the event of Grexit? Are they withdrawn gradually as they find their way back to EZ banks? Otherwise presumably the EZ will have more liquidity than it has planned for the remaining members?
Compared to the trillions it is magicking out of thin air for QE, the value of the bank notes is probably going to be a rounding error
If they have done this to their country because it makes them look a little better politically then they are beneath contempt. Many, many people are going to suffer for this.
How much of the bail out money actually stayed in Greece before the last election ? If, as some portray it they were basically being given money to pay their debts, but none actually to improve their situation, then they were building up future debt for no purpose. Sounds more like a heads I lose, tails I lose scenario to me.
There standard of living in Greece has fallen by 30% in the last six years as I understand it, there doesn't appear to be any reason to suggest it wasn't going to continue to fall for the next six years, this denouement appears to be mostly an exercise in taking that pain in one shot right now, and then being able to devalue and grow their economy again.
As I have said the bail out money has mainly been to the advantage of Greece's external creditors who have been protected from the losses they would otherwise have to bear.
The Greeks are in fact a classic demonstration of the limitations of GDP figures as a measure of economic success. GDP was boosted by borrowing and deficits until 2008 but the underlying economy was not in fact growing anything like as quickly. We suffered the same effect to a lesser extent. What has happened as credit has been limited and the government has been forced into a primary surplus is that the underlying economy has come to the fore and it has become apparent that Greeks did not in fact earn the standard of living they enjoyed. Not even close.
I am not arguing they should stay in the Euro. That ship has sailed. What I am arguing is that there are no worse ways of leaving the Euro than this and the leadership should be ashamed.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Greece has the plates for up to 20 euro denominated bank notes as I understand it.
One assumes (always a bad idea, I know) that the ECB directly control if not the plates themselves then some part of the security feature embossing or embedding process of Euro note production - precisely for this scenario of a nation wanting to print Euros outside the system.
For all those which say, this can't happen because no one wants it to happen is ignoring history.
Did anyone want WW1 or WW2 to actually happen? No, but they were still unable to avoid it, it's a series of steps which have consquences.
WWI - there were a few who wanted war and who had influence in the decision-making, Conrad being one example. There was a larger number who were willing to accept war as a possible outcome; one that was less bad than backing down. Indeed, that was the precise reason the war broke out (and is the same reason that Greece is about to collapse).
WWII - Yes, Hitler (and the majority of Nazi high command) wanted WW2 to happen, which is why it did. It wasn't like the Japanese, who felt themselves compelled into a pre-emptive attack; it was a positive policy choice.
However, your main point is right. Those who turn their eyes away from unthinkably bad possibilities simply because they're unthinkably bad are making an error: others may not view them as that bad, or may view them as so unlikely as to be worth the risk.
So they were trying to topple the government (as with Papandreou) but it didn't work and now they are having to row back in a big hurry to prevent the crisis getting out of hand ?
Japan has zero natural resources and is also prone to severe natural disasters rather more frequently than we are, it seems to have muddled along adequately most of the time.
Fish and trees count as natural resources, don't they? Also plenty of hydro, and lots of potential for geo-thermal (mostly untapped) etc.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Greece has the plates for up to 20 euro denominated bank notes as I understand it.
One assumes (always a bad idea, I know) that the ECB directly control if not the plates themselves then some part of the security feature embossing or embedding process of Euro note production - precisely for this scenario of a nation wanting to print Euros outside the system.
They can deauthorise Greece. They can't physically stop them. There is no[1] physical element of printing Euronotes that is outside Greek control. They can switch the machines on and go "squee" and devalue the Euro to their little heart's content.
What the ECB can do is issue new plates, create a new design, and make sure Greece doesn't get any. That takes, what, six months minimum?[2]
[1] Quick plausibility check: am I right here? Is there some quality of the ink or paper that is not available on the open market? Anybody know, because I'm not sure if I'm bullshitting here. [2] as somebody pointed out below, it can be done faster
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
There is no choice. The banks are empty and dependent on daily deliveries of notes from the ECB which will now not come.
I am really struggling to see a way back from this even if there was any inclination.
The Greek banks are now bust because they don't have a lender of last resort which can provide the liquidity required for their day to day operations.
If Scotland got independence it will no longer be a part of the UK. Is that not the point? So such liquidity operations will no longer be provided to banks based in Scotland for any trading in Scotland. So if there is a run on the bank here in Scotland they go bust. Not the Bank of England's problem.
I would like to think this would be unarguable after this coming week but obviously that will not be the case. Not on here anyway. I admire MBE's perseverance. I gave up a while ago.
First order of business would be to shift all the banknotes in their UK branches north of the border, thereby exporting the problem. And the BofE couldn't refill the branches without that being sucked out as well (or introducing border controls)
I think we can assume that capital controls would be put in place very quickly as a condition of any liquidity assistance in such a scenario.
Let's hope it never happens to test whose right about this!
So they were trying to topple the government (as with Papandreou) but it didn't work and now they are having to row back in a big hurry to prevent the crisis getting out of hand ?
"The Associated Press reports that worried Greeks continue to line up at ATM machines today. A top Greek financial official urged Greeks on Sunday to remain calm and not withdraw all their savings. " - Telegraph
If Scotland does not have its own currency the Scottish government would not be able to provide any kind of cash injection because it would have no control over the currency Scotland is using. Unless, that is, it had built up a sizeable reserve - which, of course, would mean the imposition of eye-watering austerity.
Nothing would be stopping an independent Scottish Government from borrowing funds to provide support if necessary. Of course it would not have to because the probability of such an exposure is very, very low.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
Scotland would be entering independence with the highest deficit of any country in Europe in terms of GDP. Try finding a lender on the back of that, without the country's government imposing eye-watering austerity. The fact is that institutions will only lend if they believe they have a chance of getting a return - see Greece. And like Greece, an independent Scotland would not control its currency under the system the SNP has been proposing, the rUK would. What is currently happening in Euroland should terrify any non blood and soil Scottish nationalist who has advocated a currency union with either the Eurozone or the rUK post-independence. Blood and soil nationalists are different, I understand that: they believe any price is worth paying for that international frontier. But they do not have the honesty and integrity to put that argument in front of the Scottish people.
So they were trying to topple the government (as with Papandreou) but it didn't work and now they are having to row back in a big hurry to prevent the crisis getting out of hand ?
The programme has not expired. They cannot end funding simply because the government might hold a referendum even though they're still in a programme.
Forgive my ignorance, but presumably each member of the EZ has an 'allocation' of notes based on their monetary contribution to the EZ. So what is there to stop the Greeks simply printing a ton of 20 euro notes that could then circulate across Europe? Does the EZ have a mechanism for policing/stopping this?
Greece don't print the notes.
Greece has the plates for up to 20 euro denominated bank notes as I understand it.
One assumes (always a bad idea, I know) that the ECB directly control if not the plates themselves then some part of the security feature embossing or embedding process of Euro note production - precisely for this scenario of a nation wanting to print Euros outside the system.
They can deauthorise Greece. They can't physically stop them. There is no[1] physical element of printing Euronotes that is outside Greek control. They can switch the machines on and go "squee" and devalue the Euro to their little heart's content.
What the ECB can do is issue new plates, create a new design, and make sure Greece doesn't get any. That takes, what, six months minimum?
[1] Quick plausibility check: am I right here? Is there some quality of the ink or paper that is not available on the open market? Anybody know, because I'm not sure if I'm bullshitting here.
But Leaving the Euro in this manner is not to the advantage of ordinary Greeks. A disorderly default and Euro ejection will leave the IMF and private sector creditors seeking redress from the Greek government for decades. It will also cause all kinds of problems for Greek firms with Euro denominated liabilities. Finally, the cost of Grexit will be born by those with savings and fixed incomes.
It also seems a fundamentally cowardly and dishonest way of achieving Grexit. Surely you are best off being honest with the people? "We don't think Euro membership is in the best interests of the Greek people, and while the transition may be hard, we believe a sovereign Greece with its own currency is the best option." Instead they said "Grexit? You won't have Grexit, we'll stand up to that nasty IM and those hateful Germans and they'll give us what we want." (somewhat snipped)
Academic and ex-BoE wonk Tony Yates blogged about this a couple of weeks back.
The holdup in negotiations between the Troika and Syriza is described as being over the latter’s inability to support a cut in pensions, an extension of VAT, and, formerly, to reverse measures to rehire civil servants. Measures that are ‘red lines’ for the Greeks.
However, those Syriza are bargaining on behalf of face a calculus that isn’t often teased out properly.
In the aftermath of default, there may be an interregnum when no public sector salaries or pensions are paid in anything at all. Or anything that has any widespread, stable, accepted value. The Greek government would at some point set up its own currency again, and, with luck, may be able to devise an arrangement that brings stability to it, insulated from the continuing pressure on Greek finances. May. And in the meantime?
...
This is not to suggest anything about the morality or even economic efficiency of the Troika’s and Syriza’s bargaining stance. Those are separate questions entirely. Except that if you buy the arguments above, then Syriza themselves are not characterising the nature of the options as accurately as they might for their own constituents. But that is not an uncommon crime in modern politics.
Which I think was one of the fairest things I've read about the situation lately.
Japan has zero natural resources and is also prone to severe natural disasters rather more frequently than we are, it seems to have muddled along adequately most of the time.
Fish and trees count as natural resources, don't they? Also plenty of hydro, and lots of potential for geo-thermal (mostly untapped) etc.
As does the rUK (geothermal aside), my point was the the Nats saying that no natural resources means perpetual national penury is patently tosh, not that anything should be news to us there.
To shift back to Greece: is the Monday choice simply between a bank holiday or a bank run?
Can I steal that one?
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
Despite all the ranting on here from certain people about the Greek leadership being f***ing idiots etc. I find that rather unlikely, Varoufakis is a very smart cookie, a talented economist, and a world expert on games theory. I think it is rather more plausible that what is happening is exactly what they want to happen, to leave the euro, but with someone else to blame.
If he was that smart a cookie, he would not be about to preside over the meltdown of the Greek banking system. Considering Greece's history of anti-democratic coups, you have to ask what the probability of another one within the year now is.
Calum Rubbish SLab is a shadow of its former self and there is no point wiping out SLAB entirely to set up for 2020 if Scotland becomes an independent country by 2020. Most Scottish Tories are unionists first and foremost and the enemy now at Holyrood is the SNP
I'm starting to wonder if you actually know any Scottish Tories. All I was doing by indicating very few, if any, of them would vote tactically to save SLAB and that they harbour hopes for becoming Holyrood's opposition if not the largest party. This is not my view but based on the many Scottish Tories I know. I don't think you quite appreciate the Tory v Labour animosity.
In some ways I admire your tenacity on sticking to your grand Unionist alliance rising up to defeat the SNP in 2016. The problem is to achieve this somebody must be able to herd a cat, a donkey, a mouse and a bulldog into the voting booth and somehow agree to vote for the same person. There're many websites out there trying to organise this alliance SNPout, United against Separation, Smash the SNP and Tactical Voter etc. They're disorganised and at times contradictory and many if not most of the posters live in rUK.
Japan has zero natural resources and is also prone to severe natural disasters rather more frequently than we are, it seems to have muddled along adequately most of the time.
Fish and trees count as natural resources, don't they? Also plenty of hydro, and lots of potential for geo-thermal (mostly untapped) etc.
We have a fair few natural resources if fracking is allowed...
And anyway it's hardly minerals etc which are the sole determinant of a successful economy. Our services sector runs a huge surplus
So they were trying to topple the government (as with Papandreou) but it didn't work and now they are having to row back in a big hurry to prevent the crisis getting out of hand ?
The programme has not expired. They cannot end funding simply because the government might hold a referendum even though they're still in a programme.
True, but the program ends in two days time, and the referendum isn't for a further six days after that.
SO , it is all one way traffic , from us to London.
You are aware that 90% plus of the cranes in London are building on privately owned land, generally blocks of flats, that are sold off plan to foreigners? The seed money to get things going is also generally from outside the UK....
No public money involved.
If you want the same in Edinburgh, I suggest a targeted campaign in the coastal areas of China(*), advertising the joys of living in Boney Scotland.
* The reason for this is that buying a flat in London gives you several things. One, is the rising property market. Two is the rental income. Three is that the price puts you through the investment criteria for a visa. If you are in the Chinese middle classes, an investment in property that also gives you an exit strategy in case things go back to The Fun Old Days(**) is considered a brilliant idea
** Which, of course, weren't fun at all
Who pays for all the inftrastructure, Olympic games , etc not the Russians and Chinese, we get to do that bit.
Are you aware that infrastructure for new domestic construction is generally paid for by the developers & local councils?
LOL, what planet are you on , who is paying for the sewer replacements, crossrail , HS2, etc , etc
Calum Yet Angus Robertson today has seemed to suggest the 'material events' clause would include Scotland not getting further powers beyond the Scotland Bill or too much austerity being imposed on Scotland, so not just an Out vote in EU ref. Close examination needs to be made of this 'material events' clause next year to see what it actually refers to
I think the " material events " clause will not go into much detail, I'd expect the SNP would want to leave themselves maximum scope for manoeuvre here.
Yep, it will be the only way to keep the SNP together. But how long it can hold the line is another question altogether. Can blood and soil nationalists sit with social democrats for ever without a schism occurring?
Charles, did you forget there are 59 MP's in Westminster and that previous committee's have always been comprised of MP's from Scottish seats. How odd that now we have SNP MP's that tradition is being traduced. It is ill concealed Tammany Hall politics.
No, it's not. You need to look at the purpose of the Scottish committee, not the form.
From the UK government website:
The main role of the Scottish Secretary is to promote and protect the devolution settlement. Other responsibilities include promoting partnership between the UK government and the Scottish government, and relations between the 2 Parliaments.
The role of the Scottish committee is to hold the Scottish Secretary to account for his actions.
Given that a majority of voters in the referendum voted to remain part of the UK, their interests need to be represented in this. Of course it would be ideal if it was possible to staff the committee entirely with SMPs, while also adequately ensuring appropriate representation of Scottish voters. But, because of the workings of FPTP, it's not currently possible to do so.
Hence it is appropriate to suspend the convention - to focus on the function, not the form - and to ensure proper representation of different interests.
The referendum has nothing to do with it, it is long gone and fact is that they are jerrymandering the committee to keep the SNP out, UK democracy in action. Your other point is just pathetic, SNP had 50% of voters in Scotland, Tories had significantly less anywhere in UK yet in your twisted Tory logic they can manipulate and cheat on committees. Very telling.
I don't know what the percentages on the Committee are, and I don't really care.
There needs to be a meaningful proportion of the UK governing party on the committee otherwise it just becomes a venue for party political games (but probably with a majority of opposition seats). I'd be fine with the opposition seats being split roughly along the lines of the popular vote - so the SNP would get 50/85%, Lab 25/85% etc
Greek banknotes are identified in two ways. They have a Bank of Greece issuing letter and a Bank of Greece printing works letter. Issuing banknotes without the owners' permission wouldn't exactly be a minor thing in international diplomacy as it would effectively be high-quality counterfeiting. (This is public information available on Wikipedia.)
@EdConwaySky: As expected & contrary to some reports, ECB freezes, rather than “turning off”, emergency support to Greece. Tough rather than apocalyptic
Comments
Or - and here I'm showing my age - how about Green Shield Stamps as a currency?
Are there no derivatives based ultimately on Greek debt which might turn out to be rather overvalued ?
If not, they need another slap.
http://www.telegraph.co.uk/education/11702470/The-Tories-must-sort-out-this-Marxist-education-mess.html
http://www.telegraph.co.uk/comment/11703758/The-BBC-is-in-a-fog-of-groupthink-and-cant-see-how-biased-it-is.html
http://www.telegraph.co.uk/news/politics/labour/11703677/Labour-has-no-thinkers-until-it-does-it-will-carry-on-losing.html
Do you have any idea how much support the EU might be willing to give to Greece in the interim to prevent total, expensive, collapse? I can't see anyone stepping in to fill the ECB role in propping up the banking system, and without that (unless, as you say, the banks just go into hibernation and hope to wake up after a Yes vote) I'm not sure what meaningful help can be given.
Insurance that doesn't actually insure....
Boris makes it look like he's support "out". This closes the door for any cabinet-level careerist who might otherwise have been tempted to jump in the hope of taking leadership of the "out" campaign, because there's hardly any benefit if somebody more senior is leading it. Cameron does his "renegotiation", they all have to go on record supporting his wonderful negotiation triumph, and finally Boris says, yes, I think it's wonderful, too, and the "out" campaign is still stuck with Farage.
(The 11 digit serial number on every Euro note begins with a prefix which identifies which country issued it. German notes begin with an X, Greek notes start with a Y, Spain's have a V, France a U, Ireland T, Portugal M and Italy S. Belgium is Z, Cyprus G, Luxembourg 1, Malta F, Netherlands P, Austria N, Slovenia H, Slovakia E and Finland L.)
The problem, and the reason I highlight the term Zero Resource, is that outside of micro-economies I can think of no example of a country being able to maintain positive balance of trade without a high level of Primary Sector Output or exceptionally cheap Labour Inputs.
I would think most people would see the latter option as being undesirable (well maybe not some Tories but hopefully a majority of people don't want to see an economy reliant on ultra-low wages). Therefore you need to consider, quite carefully, the former. The UK tried to make it work with Service Sector reliance. And it failed.
From the UK government website:
The main role of the Scottish Secretary is to promote and protect the devolution settlement. Other responsibilities include promoting partnership between the UK government and the Scottish government, and relations between the 2 Parliaments.
The role of the Scottish committee is to hold the Scottish Secretary to account for his actions.
Given that a majority of voters in the referendum voted to remain part of the UK, their interests need to be represented in this. Of course it would be ideal if it was possible to staff the committee entirely with SMPs, while also adequately ensuring appropriate representation of Scottish voters. But, because of the workings of FPTP, it's not currently possible to do so.
Hence it is appropriate to suspend the convention - to focus on the function, not the form - and to ensure proper representation of different interests.
Also, don't forget that Greece simply doesn't owe very much to non-Greek, private sector creditors. This chart shows the holders of Greek debt by type (http://uk.businessinsider.com/government-debt-holders-2014-12), and you can see that non-Greek banks are a negligible proportion.
Watching her world expand when I mentioned the various countries that have implemented a flat tax, the serious debates in economic about it* and the fact that Fascists have never implemented a flat tax (big armies are expensive)....
Her protests of "everyone knows....." were quite revealing.
(*) The modern debate is between (1) those who think it is good idea, (2) those who think that it is suitable for a developing economy to help stamp out corruption, but not for a fully developed economy and (3) those who think it is somewhat a bad idea. No economist buys into the end-of-the-world argument any more -its been done too many times.
So when the rest of the EZ scream blue murder about the default and their losses be aware that those who have gained from this exercise are those that had large positions in Greece a few months ago and managed to get out euro for euro. This includes British banks before we start to get all sanctimonious about it.
The ECB has been building up a capital base to allow it to contain this default. That will effectively sterilise the default for the remainder of the EZ. Of course since Bankers are greedy bastards there will always be some in their trying to extract the last few cents of profits but their losses will not be a systemic risk.
On another note, why do the media (SKY,BBC) send their commentators to Tunisia and then spend all their time interviewing people who are back in this country?
I don't like the narrative the media are trying to get going, that "is enough being done by the government". They are so bloody predictable.
The biggest problem with your argument is that you try to portray events which historically occur once every 40 odd years as being "normal" and automatically assume they would impact Scotland in the way they impacted the poorly regulated and run UK when plenty of countries around the world barely noticed the events of 2008.
You would be as well resorting to the sort of argument some of the more unhinged Loyalists came up with during the Referendum campaign and worry about Scotland's exposure to invasions from Space.
And I fail to see why the UK would want a currency union with a foreign nation that had voted to leave.
In terms of currency whatever the politicians say an iScotland's currency arrangements would be driven by the markets. In the short to medium term I think there would have been a " Currency Cooperation Pact ", currency union in anything but name to save the politicians blushes. The long term currency of Scotland would then be determined in due course.
It doesn't matter what the Scotland Committee does. It doesn't matter how the Scotland Committee works. And it doesn't matter what the goals of the Scotland Committee are.
What matters is how the political parties in Scotland create the narrative over what happens. And in this case it is an own goal for Unionism as the SNP get free reign to point out how English MPs get to "decide Scotland's future".
Reality will always come second to how things are perceived.
You're still writing Zero Resource in capital letters like it is some term of art. It isn't. Is it something you made up or a trope you borrowed from elsewhere? It isn't going to be in a serious textbook. Nor does the idea that the UK has ever had "zero resources" make any sense. The obsession with a trade deficit sounds mercantilist - while it is true there are disadvantages to running a deficit, the mercantilists were wrong to believe that running a trade deficit inevitably makes you poorer. Similarly for your remarks on devaulation of currency. A country's currency can become weaker and it can run a trade deficit and yet it still can become wealthier - even without moving to an ultra low wage economy, indeed with wages rising!
I am really struggling to see a way back from this even if there was any inclination.
The Greek banks are now bust because they don't have a lender of last resort which can provide the liquidity required for their day to day operations.
If Scotland got independence it will no longer be a part of the UK. Is that not the point? So such liquidity operations will no longer be provided to banks based in Scotland for any trading in Scotland. So if there is a run on the bank here in Scotland they go bust. Not the Bank of England's problem.
I would like to think this would be unarguable after this coming week but obviously that will not be the case. Not on here anyway. I admire MBE's perseverance. I gave up a while ago.
Seriously: I think that's right. The responsible action is to call a bank holiday. But if your goal is to leave the Euro without looking like you want to leave the Euro, then a bank run seems the best option.
Seriously Greece: leave the Euro in a sensible manner, not by blowing up your banks and f***ing savers.
The discussion is "why would a currency union be good for the rUK".
My argument is that the value of Sterling has been supported (to some, debatable extent) due to the Resource and Export led economy of Scotland and that this has stemmed the gradual Devaluation of Sterling over the years and this can be seen especially in the clear breakpoint as Scottish Oil came on stream and the UK economy stabilisied and Sterling's rate of fall reduced.
The conservative solution for rUK would appear be Currency Union as the risks and the cost of a once in 40 years event like the recent crash appear to be markedly less than the risk of an accelerated decline in the value of Sterling.
They are bust because they are bust. No Lender of Last Resort will ever change that.
I wouldn't want a bunch of them in my wallet, just in case. If that attitude takes hold, they are effectively dead anyway.
But Leaving the Euro in this manner is not to the advantage of ordinary Greeks. A disorderly default and Euro ejection will leave the IMF and private sector creditors seeking redress from the Greek government for decades. It will also cause all kinds of problems for Greek firms with Euro denominated liabilities. Finally, the cost of Grexit will be born by those with savings and fixed incomes.
It also seems a fundamentally cowardly and dishonest way of achieving Grexit. Surely you are best off being honest with the people? "We don't think Euro membership is in the best interests of the Greek people, and while the transition may be hard, we believe a sovereign Greece with its own currency is the best option." Instead they said "Grexit? You won't have Grexit, we'll stand up to that nasty IM and those hateful Germans and they'll give us what we want."
We'll soon see if there was proper planning for Grexit. I sincerely hope that New Drachma have already been printed, because Grexit without money to replace Euros would be a complete shit show. I suspect, however, they have not. Because the SYRIZA leadership believed their own bullshit: they believed that the troika would always fold.
Did anyone want WW1 or WW2 to actually happen? No, but they were still unable to avoid it, it's a series of steps which have consquences.
If they have done this to their country because it makes them look a little better politically then they are beneath contempt. Many, many people are going to suffer for this.
Realistically, there are two ways in which Spain or Italy or Portugal might leave the Euro.
1. Because they are unable to fund themselves in the market due to spiralling bond yields, and therefore having their own currency to print becomes essential.
or
2. Because Greece has been such an enormous success outside the Eurozone that the political pressure in Spain and the like builds to a level to make exit politically essential.
In the near term, 1 seems unlikely. Given QE in Europe, it's hard not to see the ECB backstopping peripheral bond yields at least in the short term.
Likewise, it would take several years of Greek success before the message got through to the populations of Italy and Spain. And if you wanted Grexit to be a success you wouldn't do it this way. You'd do it with a sensible centre right government and the help of the IMF.
Incidentally, I never did get an answer about "Zero Resource Economy". Is this economic redefinition something you made up yourself? Or is it a meme in general circulation? Please don't make me have to search the depths of Twitter etc to find out. My ears burn enough on this site, to face that lot is rather daunting.
Your other point is just pathetic, SNP had 50% of voters in Scotland, Tories had significantly less anywhere in UK yet in your twisted Tory logic they can manipulate and cheat on committees. Very telling.
And please stop using the term "Loyalists". It's inaccurate and offensive.
There standard of living in Greece has fallen by 30% in the last six years as I understand it, there doesn't appear to be any reason to suggest it wasn't going to continue to fall for the next six years, this denouement appears to be mostly an exercise in taking that pain in one shot right now, and then being able to devalue and grow their economy again.
Getting out of the Euro and defaulting on the debt, while blaming it all on the neo-con-nazi-imf-troika-germans could be the outcome they want.
It would be rather sociopathic - the misery that will ensue in Greece with a disorderly default and return to the Drachma, complete with a government determined not to cut spending...
Tragically the first victims will be the pensioners - they will be facing what happened to pensioners in 1990s Russia. Pensions paid in full that can't buy a slice of bread.
I am an expert in Operations Research. Varoufakis is playing chicken - the game where you try and act crazy and belligerent to get the other guy to swerve. As described in Herman Kahn* - who pointed out all the times in history where acting bellicose to get the other guy to back down had ended in disaster.
(*) Read "On Thermonuclear War". As Kahn put it - "The problem of reaching 1970 while being alive"
https://twitter.com/mattyglesias/status/614948627451146242
'We'll believe the Loyalists nonsense about refusing currency union as long as Scotland wants it when they explain how they will prop up Sterling with a Zero Resources economy.'
Serious question, have you just returned from a Syriza training seminar in Greece ?
They have the plates.
They can print as many as their consciences and paper supplies allow.
And this is Syriza we're talking about.
https://en.wikipedia.org/wiki/Euro_banknotes#Issuance_and_printing
The ironic bit is that if you believe that if you can't run an economy without primary natural resources as a major component, then you are saying that when the oil stops, Scotland will cease to exist!
Which is obviously garbage.
The Greeks are in fact a classic demonstration of the limitations of GDP figures as a measure of economic success. GDP was boosted by borrowing and deficits until 2008 but the underlying economy was not in fact growing anything like as quickly. We suffered the same effect to a lesser extent. What has happened as credit has been limited and the government has been forced into a primary surplus is that the underlying economy has come to the fore and it has become apparent that Greeks did not in fact earn the standard of living they enjoyed. Not even close.
I am not arguing they should stay in the Euro. That ship has sailed. What I am arguing is that there are no worse ways of leaving the Euro than this and the leadership should be ashamed.
that can is pretty dented now
WWII - Yes, Hitler (and the majority of Nazi high command) wanted WW2 to happen, which is why it did. It wasn't like the Japanese, who felt themselves compelled into a pre-emptive attack; it was a positive policy choice.
However, your main point is right. Those who turn their eyes away from unthinkably bad possibilities simply because they're unthinkably bad are making an error: others may not view them as that bad, or may view them as so unlikely as to be worth the risk.
What the ECB can do is issue new plates, create a new design, and make sure Greece doesn't get any. That takes, what, six months minimum?[2]
[1] Quick plausibility check: am I right here? Is there some quality of the ink or paper that is not available on the open market? Anybody know, because I'm not sure if I'm bullshitting here.
[2] as somebody pointed out below, it can be done faster
Let's hope it never happens to test whose right about this!
Ha, good luck with that one!
Having the plates isn't the be all and end all. And I assume back up designs are also ready to go in case of a massive failure.
https://longandvariable.wordpress.com/2015/06/15/cost-benefit-analysis-of-default-for-your-typical-greel-public-sector-dependent/ Which I think was one of the fairest things I've read about the situation lately.
In some ways I admire your tenacity on sticking to your grand Unionist alliance rising up to defeat the SNP in 2016. The problem is to achieve this somebody must be able to herd a cat, a donkey, a mouse and a bulldog into the voting booth and somehow agree to vote for the same person. There're many websites out there trying to organise this alliance SNPout, United against Separation, Smash the SNP and Tactical Voter etc. They're disorganised and at times contradictory and many if not most of the posters live in rUK.
Anyway the SNP are now polling 60%.
And anyway it's hardly minerals etc which are the sole determinant of a successful economy. Our services sector runs a huge surplus
There needs to be a meaningful proportion of the UK governing party on the committee otherwise it just becomes a venue for party political games (but probably with a majority of opposition seats). I'd be fine with the opposition seats being split roughly along the lines of the popular vote - so the SNP would get 50/85%, Lab 25/85% etc