Greece heading towards financial collapse - Any lesson?

  • 9:00PM BST 28 Jun 2015

    Markets were poised for their worst period of turmoil since the height of the eurozone crisis four years ago, after Greece temporarily shut down its banks and suspend trading on its stock market, putting the country on the perilous path of a banking collapse and the issuance of a parallel currency.

    The Greek government announced it would be imposing capital controls and enforced bank holidays following a drastic decision by the European Central Bank to freeze the life support it had been drip feeding banks for the last five months.

    Athens main stock index will also remain closed from Monday, as Greece hurtles towards the final stages of a traumatic five-year euro crisis. The euro dropped by more than 1pc against the dollar at the start of Asian trading.

    The debtor is now all but certain to default on a €1.6bn loan to the International Monetary Fund on Tuesday and will also see its €240bn bail-out expire at the end of the day.

    In his second televised address in three days, Greek prime minister Alexis Tsipras said he had taken the measures after country's lenders had attempted "to stifle the will of the Greek people."

    He added that all bank deposits would remain "completely safe" during the transitionary period and urged Greeks to show "patience and composure".

    "It is clear that the objective of the Eurogroup’s and ECB’s decisions is to attempt to blackmail the will of the Greek people and to hinder democratic processes, namely holding the referendum," said the prime minister."

    "They will not succeed."

  • It is about time that someone has guts to stand firm against these IMF and World Bank financial blackmailers.

  • The words of Thomas Jefferson:

    “I sincerely believe that banking establishments are more dangerous than standing armies, and that the principle of spending money to be paid by posterity, under the name of funding, is but swindling futurity on a large scale.”

  • Greece is just the tip of the iceberg. Entire western economies are drowning in the sea of debt. The paper they were printing and selling to the world for the last hundred year has now proven its worth. The global ponzi scheme is coming to its logical conclusion. Greece will be the first drop of the rain and then it will start raining cats and dogs. Next to go will be Spain, Portugal and Italy and with them up goes the Euro.


  • European debt crisis: It's not just Greece that's drowning in debt

    While the eyes of the world are on Greece and its potential default on its debt, there are several other countries in the EU that have debts to rival the struggling nation.

    Altogether there are six European nations whose debts are larger than their economic output, and 16 that have debts larger than the 60%-of-GDP limit set out in the Maastricht Treaty.

    Greece’s public debt is, unsurprisingly, the highest in the EU - standing at 177% of its GDP. Italy and Portugal are the next most indebted countries, with debts of 132% and 130% of national economic output respectively.

    The smallest debts, as a proportion of GDP, were seen in Estonia, Norway and Bulgaria - all of whose government debts are below 30% of their GDP.

    The United Kingdom’s debt currently accounts for 89.4% of its GDP, ninth highest in the EU.

    Debt levels across the eurozone continue to rocket, with the monetary bloc’s debt reaching nearly 92% in 2014 - the highest level since the single currency was introduced in 1999.

    Increases in debt across the continent show that countries are struggling to take control of their public expenditure, while the countries with the smallest total debt are often those that have seen the largest increases over recent years.

    Just three European countries have managed to reduce their total debt between the first quarter of 2012 and the last quarter of 2014, while eight have managed to do so as a proportion of their GDP.

    Norway has reduced its total debt by 17.9% over the three year period, and by 11.4% when measuring it as a proportion of GDP.

    Total public debt increased by its fastest rate in Estonia, which has seen an 87 per cent increase - from €1.1bn in 2012 to €2.1bn in 2014. Bulgaria and Slovenia have also seen increases of over three quarters in three years.

    13 EU nations saw their public debt accelerate at a faster rate than Greece’s over the period, while five have debts standing at over €1trn: Germany, Italy, the UK, France and Spain.

  • dar sahib

    what is your solution in the situation for greece... should they move back to darham and dinaars and finish paper money and start barter trade.. westren are smart they have seen worst than these crysis... they will come to another solution instead of moving back to Jesus Christ

  • Fear,

    The underlying problem of the western economies is; they are all debt based economies. Having a debt is not a bad thing or a crime but accumulating a debt more than what you can payback is definitely a crime. The debt based economies fuel consumption, and during this orgy one can go on a spending spree and would end up consuming more than what they deserve.

    Now to your point that should they drop the paper money and choose dirham or dinaar instead. Well, paper is not the issue here. Any commodity can be traded as money as long as the value of that money is inside the money. Like Gold or Silver. Even Oil can be traded as money.

    But when you put a price of 100 dollar on a worthless piece of paper then it gives an immense power to those who print that paper for you i.e. the banksters.

    When me or you run out of money, we usually have to work hard to earn it again through our blood and sweat. But unlike me or you these banskters have found an easy way out of this problem.

    Just print it.

  • The European Debt Crisis Visualized

    No monetary union can work without a fiscal or a political union.

  • ڈار صاحب اپ کوئی حل نہیں بتا رہے کہ اگر وہ قرضے پر سود یا منافع نہ لگیں تو بینک کیسے چلیں ... عملے کی تنخوا کہاں سے اے ... قرضے کا مسلہ جہاں تک انفرادی ہے .. جیسے کہ اسلام میں سود کو حرام کہا گیا .. وہ انفرادی سطح ہے کیوں کہ اس زمانے میں بینک نہیں ہوتے تھے ... مثال کے طور میں اپ کو ١٠٠ روپیہ دیتا ہو مہینے بعد کہتا ہوں ١٢٠ دو تو غلط ہے لیکن جہاں اجماتیت ا جاتی ہے مثال کے طور پر ایک بینک کسی کو قرضہ دیتا تو وہ اپنے ذاتی پیسوں سے نہیں دیتا ہے ... اس کے پیپر پرنٹ ہوتا ہے ..... اور بہت بھی خرچے ہوتے ہیں ... اس لئے کا کوئی موثر حل بتائیں.. قرضہ بیس مشیت میں بہت سے مسائل ہیں .. لیکن اس سے بہتر اپ کے پاس کوئی حل ہے تجویز کریں شکریہ

  • Greece economy is relatively small so if this crisis contained there will not be much issue but if crisis spread to other countries it could be very disturbing for global & European economy.

  • Across Europe, protesters call for solidarity with Greece

    Brussels and Amsterdam have joined London, France, Germany and Italy in hosting mass rallies in support of cash-strapped Greece. Demonstrators said the financial sector must take responsibility for the damage it caused.

    Thousands of demonstrators took to the streets in Brussels on Sunday at the same time as hundreds of similarly minded protestors crowded the streets of Amsterdam, rounding out a weekend of anti-austerity solidarity with Greece that also saw protests in France, Italy, Germany and the United Kingdom.

    The protests come on the eve of where Athens is scheduled to meet with its creditors in a last-ditch attempt to resolve its debt crisis before it's forced to default on its loans.

    "This crisis was caused by the financial sector, not by the Greek people," Manolis Glezos, a Greek parliamentarian and World War II resistance hero, told the crowd in Amsterdam.

    "It's the financial sector that has to pay, not the Greek people."

  • Old but still relevant as they are kicking the can down the road:


    Interesting post on BBC live coverage.

    Do Monty Python have the answer?

    Sketch from 1974 explains the Greek-German divide

    Posted at 14:13


    Sometimes, explaining the difference in the Greek and German positions can be a challenge even for the most able journalist.

    So, as the Washington Post suggests , let this sketch from 1974 by Monty Python explain it for you instead.

  • Greeks are a proud nation, they do not want to be dictated by couple of arrogant European governments and IMF.

    Good for them! No has 60% votes.

  • Courageous nation!

    Even in the most difficult circumstances, #democracy can't be blackmailed—it is a dominant value and the way forward. #Greece #Greferendum

    Alexis Tsipras


  • The basic problem is excess consumption on borrowed money. It leads loss of freedom and eventual slavery. The only option for Greece is to leave currency union and devalue their currency. Political problem promising too much in free goodies by leaders is quite difficult to fix. There is a lesson here for Pakistani politicians.

  • Europe's model of economic union w/o the political union is flawed, it can't sustain.

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  • The basic problem is excess consumption on borrowed money.

    Entire western capitalism is based on excessive consumption on borrowed money and if they stop, system will fall apart, isn't it?

  • The country most against help to Greece on Greek government terms is the country that got the biggest bailout in the history, Germany