Treasury plans for Greece to go bust

Source: Telegraph

Treasury ministers have admitted that the Government is drawing up contingency plans for a Greek bankruptcy after being warned by a former foreign secretary that the euro “cannot last”. Jack Straw, the former Labour foreign secretary, said that a “quick” end to the single currency was now better than a “slow death”.

In an emergency debate, senior MPs from all parties demanded that Britain stand aside from a new rescue package for Greece and push for the country to leave the euro.

Mark Hoban, a Treasury minister, admitted that “many scenarios were being considered”. He said it would “not be appropriate” to discuss the detail, but added he would be “guilty of not stepping up to the responsibilities of his office” if plans had not been made to cope with a default.

Read more: http://www.telegraph.co.uk/news/politics/8588047/Treasury-plans-for-Greece-to-go-bust.html

All this will do is buy 'Lil Timmy Geithner and Goldman Sachs another week or two... so they can continue their Ponzi scheme.

currency. This debasement is a technical default, and is enraging the major holders of US debt, especially China.

You will see a temporary lemming-led 'flight to safety' in the US dollar, but that will be but a blip on the timeline when the dollar's post mortem forensic financial autopsy is performed (next 2 to 5 years, max).

Not the US Treasury.

at the feet of Goldman Sachs.

Wouldn't be the first time American investment banks caused bank failures in Europe.

It just boggles my mind.... these folks want the pound that much? Sure, it does feel a hell of a lot better in the hand, sounds, and looks better than the euro, but at what cost? Britain's economic collapse may have been stalled if they were on the euro, but that just has to be ignored now, because associated risks have also come up.... how silly.

In good times, everyone's happy and it works great (much better than trading with individual country currencies).

However, in bad times like with Greece, individual country politics drive monetary decisions and that won't work. Currently, the Germans can't politically lend money to Greece unless Greece makes draconian cuts. Greece politically can't make those cuts. France is worried about all the billions they have loaned to Greece already, but are not in financial shape to bail out anyone. Spain & Portugal are watching to decide their own future. If Greece is bailed out painlessly, then they'll follow the same path further pissing off the richer country taxpayers.

It's doomed.

It always was doomed because bad times will lead to a collision with individual country concerns.

After years of looking backward, now Britain is looking smart now for not going there.

...the Brits look smart for staying out.

The Euro was doomed unless there was a much tighter integration of governments and policies, and indeed political culture. With the situation as it stood, Greece could spend far more that it produced, inflating the standard of living and the expectations of the people who now want to know who "stole" their money. Greek governments could lie about the actual expenses, Greek citizens could lie about taxes and avoid them as much as possible, all because the Greeks could borrow at German rates without having to impose German cultural traits of good, uncorrupt government, law-abiding citizens, and fiscal responsibility. However, eventually all that debt catches up with you, and because they are strapped to the Euro, the Greeks cannot devalue the currency (in essence, taxing anyone holding money or being owed money, whether they want to pay the tax or not) to make up the difference.

If something cannot continue for ever, it won't.

Having worked and lived in Europe for a decade and a half, I believe that your perceptions are myopic. The EU was predicated on voluntary, democratically elected membership. The monetary union is working exactly as planned. The weaker and less disciplined economies are being led into a more tenable financial situation. Addressing Greek economic and entitlement issues, the EU is dedicated to helping its member states achieve a maximum 3% annual deficit. The fact that the EU can bail out so many fragile states is indicative of its understanding of the notion of union and of the underlying wealth that can sustain such stresses. I am sorry, but 90% of what I have read on this board discussing the European Union and the current crisis is just wishful thinking. The EU will be around for a very long time, even if the Brits try to torpedo it for the sake of Sterling. Today, Euro is 1.439 to a dollar and the pound is a mere 1.62 to the dollar. The Brits are running scared that the Euro will become the defacto reserve currency, making the "special relationship" with the US a liability and sinking their beloved pound.

Kind of difficult to achieve if you lie about the real value of expenditures as the Greek government has.

Things will look marginally stable, and the Euro will last, until suddenly a tipping point is reached and things fall apart. That, at least, is the prediction that many are making. Of course, predictions are hard. Especially about the future.

I don't live in Europe, never have stayed more than a month at a time, but I travel there often, and I have friends and family there. And it seems to me that myopia indicates being a bit too close to the object being viewed. Some distance can lend perspective to see the bigger picture. To this outside observer, who is not ignorant of life on the ground, it appears that the strains are coming to a head with no clear way out except for SOMEBODY leaving the Euro behind. Either the Greeks (and perhaps the rest of the PIIGS) or maybe even the Germans who wake up one Sunday to find a new DMark being delivered to banks.

I wish DU had a crying crocodile cuz that's what I'd put here

if the banks lose money they won't lend as much, forcing the economy to grind to a complete halt. Its cutting off your nose to spite your face.

For all those who wish to see these "wall street banks" fail- just remember, you are not just hurting the bankers- you are hurting millions upon millions of average americans who invest their savings, retirements, and other assets. Not to mention unions, local govts, and non-for-profit organizations will be greatly hurt. But what the hell, we are "sticking it to the man" anyway!

We (the global "we") are now at the "can't" stage with a bunch of our systems - climate, oil, food and the oceans spring to mind as well as banking and debt.

IMO the situation isn't so much someone's fault as it was inherent in the economic/financial system the world built starting in the 19th century, then elaborated in the 20th. Lots of people are going to get hurt as it comes apart, but keeping it together isn't an option any more. It's not a question of "sticking it to the man," rather it's a matter of understanding that systems that are too big to fail always do. Nothing personal, just system dynamics.

For the last decade-plus the banks have been engaged in practices that at the very least have been wreckless and have done serious damage to the economy and in saner times would have been treated as criminal.
The banks and wall street institutions that you are so concerned for, the victims of "sticking it to the man" are again engaging in these same practices with little effort to reign them in.
But what the hell, you probably would consider reigning them in as "class warfare."

The Greek economy is in the state its in because, like Ireland, the government is providing security for the banks in spite of their careless business practices.
Practices which have made the poor, significantly poorer, forced middle income earners to take more cuts in pay, benefits and services, while now paying higher taxes. And at the same time cutting money and benefits to retirees.

As to your concern for all those people who have money and would lose it, guess what? They already lost a bunch of it and will likely lose more in the next few years.
The austerity programs that are being forced upon the public will mean more people will need extra services. Services that once were provided by their taxes, will now go to paying off the IMF and European banks.
People will be forced to turn to private charities. Charities that will see more people and, most likely, see a lot less money to provide the services because donations will be down.

But that's okay. I mean (according to you) I'm only concerned with sticking it to the man. I must not be influenced with the hardships the middle class and lower wage earners in places like Greece will have to shoulder due to these austerity programs.

Greece will not default because nearly every bank in France would go down with them.
Merkel has already folded on private losses.

Nobody in power cares if the Greek worker lives or dies.
But bank profits (and bonuses) in Paris are another story.