\n\tSince several months now, either we live in Romania, Greece or… USA, we keep on reading about the "Greek tragedy". Actually it has become something like a… soap opera. Every day we have new episodes, new events and situations. We hear and watch the heroes stating their… lines, plus special guests appearing. But what a surprise… it always happens something interesting: Some news in the end of the day leave the audience eager to find out more during the next day. "And so the story goes"…<\/p>\n
\tLet us discover the truth, in a clear and simple way, which will help everyone understandwhat is going on…\n<\/p>\n
\n\tWho have the Greek bonds in their treasury?<\/strong> \n\tWhat does it mean for all of us Greece to bankrupt or default?<\/strong> \n\tSpill over effect: 8,7 billion Euro, causing damages of trillions…<\/strong> \n\tWill Eurozone be in danger?<\/strong> \n\t \n<\/p>\n \n\tWhat does this mean for Greece itself<\/strong> \n\t \n<\/p>\n \n\t"Lethal spiral", once it starts<\/strong> \n\t \n<\/p>\n \n\tAll Eurozone (and not only) is tied to Greece<\/strong> \n\tGreece<\/strong> will NOT bankrupt this May<\/strong> \n\t"Is there any hidden risk?"<\/strong> Since several months now, either we live in Romania, Greece or… USA, we keep on reading about the "Greek tragedy". Actually it has become something like a… soap opera. Every day we have new episodes, new events and situations. We hear and watch the heroes stating their… lines, plus special guests appearing. But what a […]<\/p>\n","protected":false},"author":3,"featured_media":59454,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[216,17,204,236],"tags":[],"_links":{"self":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/4086"}],"collection":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/comments?post=4086"}],"version-history":[{"count":0,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/posts\/4086\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media\/59454"}],"wp:attachment":[{"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/media?parent=4086"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/categories?post=4086"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.iliaspapageorgiadis.ro\/english\/wp-json\/wp\/v2\/tags?post=4086"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n\tGreece has issued bonds worth about 300 billion Euro. Based on the information we read on the Greek media today:
\n\tAlmost 15% of them (45 billion) are bought by Greek banks.
\n\tFrench banks have another 70 billion.<\/span>
\n\tThe Germans are also strong players with 45 billion.<\/span>
\n\tAbout 140 billion is spread in the financial institutions and pension funds of several countries, most of them the ones belonging in the G20, the strong economies of Europe and the world.<\/span><\/span>\n<\/p>\n
\n\tLet us say that tomorrow morning Greece defaults and announces that it will pay 70 cents for every 1 euro of debt. Automatically we will have the following chain reaction:
\n\tGreek banks will be in trouble<\/strong>, as they will not be able to find the necessary capital to cover the damage. Most of them will face serious problems of survival.
\n\tAll the banks (and countries) which hold Greek bonds, or bonds issued by Greek banks, will enter into big trouble<\/strong>. So if "Bank A" holds today Greek bonds worth 1 billion Euro, it will have to automatically declare this. It will instantly be considered as a major drawback. The shares of "Bank A" will collapse. Whoever else holds shares of "Bank A" (even if he has not any Greek bonds) will see his shares collapsing too. <\/span>
\n\tAll the countries where there are banks which hold Greek bonds will be in trouble too<\/strong>.<\/span>
\n\tThe problem will spread with geometrical growth, destroying countries and banks in few hours.<\/span>
\n\tThe domino effect will spread<\/strong>. For example, Greek banks will face trouble in their investments in the Balkans. But also the French ones too, for sure the German, probably the Austrian and the Italian ones. So who will finance the Balkans? Which bank will remain strong in Romania? Like this the Romanian economy will further decline, together with the rest of the Balkans.<\/span><\/span>\n<\/p>\n
\n\tSo if Greece does not cover its bond expiring on May 19th<\/sup>…
\n\t8,7 billion euro will be the actual damage.
\n\tBut the whole amount of the Greek debt, summing at over 300 billion, will be considered dangerous (8,7 <\/strong>à<\/strong> 300).<\/strong>
\n\tThen all the banks which have part of these 300 billion Euro<\/strong> (plus the bonds issued by Greek banks) will be "exposed to investments which may lose part of the capital".<\/strong><\/span>
\n\tThese banks have issued bonds themselves<\/strong>. How many billions? You should better say hundreds of billions or some trillions of Euro. <\/span>
\n\tThese banks belong to countries, which also issued bonds… many trillions of bonds…<\/strong>
\n\tThe European Central Bank will be in trouble too. <\/strong>Because it will discover that it borrowed a river of billions to several banks, having as guarantee national bonds. If national bonds will start collapsing, then…<\/span> <\/strong>\n<\/p>\n
\n\tAfter Greece, it will be Portugal, Spain and Italy (actually the attacks have started already). And many other countries will follow.
\n\tEurozone will risk a possible meltdown.<\/span>
\n\tWhat is the sign that this news will transmit to the investors? "Yes, Euro is nice, but it includes also economies which have defaulted".<\/span>
\n\tSo "Euro" currency will collapse as well. <\/span>
\n\tSo other billions or trillions will be lost by investors who trusted the currency itself.<\/span>
\n\tHundreds of thousands, or millions of people will lose their jobs.<\/span><\/span>
\n\tInsecurity will be come the main characteristic of this decade.<\/span>\n<\/p>\n
\n\tThe country will not find lenders for the next 5 – 10 years<\/strong>. Argentine defaulted several years ago. They may succeeded to pay much less than they owed, but also noone is willing to provide them a loan today, noone dares to buy their bonds.
\n\tMost probably the country will be forced to exit Eurozone <\/strong>and return to Drachma. Inflation will strike and Drachma will be devaluated.
\n\tSalaries, prices, incomes, everything will collapse<\/strong>. Poverty will knock at Greeks' door.<\/span>\n<\/p>\n
\n\tSo, once it starts, it will not stop before it will burn everything. Like a "lethal spiral" (an expression that the famous George Soros likes using), which burns until all will be burned into ashes.\n<\/p>\n
\n\tSo, this is why Greece is tied with Europe. The interests are too big and the amounts so small, in order to let a country like Greece to default. It is easier for everyone (16 countries and the IMF) to borrow Greece 120 – 140 billion Euro, instead of letting Greece fall and handle losses of trillions. <\/strong>\n<\/p>\n
\n\tThis is why I am sure that until the crucial 19th<\/sup> of May (when Greece must pay to its lenders 8,7 billion), every solution will be found<\/strong>. Greece will be probably saved, following a very strict programme which is under negotiation today. On the other side of the table you will find the experts of European Union (E.U.), the European Central Bank (E.C.B.) and the International Monetary Fund (I.M.F.).\n<\/p>\n
\n\tDefinitely. If Greeks will not follow the programme they will agree with E.U., E.C.B. and I.M.F., then they will risk their bankrupsy. But it is difficult to imagine that Greeks will choose to return to… 1950, losing all and becoming poor. In the end of the day, Greeks may have made all possible mistakes, but they are clever enough to avoid a suicide…<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"