Euthinophobia is the Greek word for the fear of responsibility and duty, the word wouldn't have been coined by them for no reason. If that weren't the case then Greece Prime Minister Papandreou wouldn't ask for a referendum on the bail out deal which was considered to solve the crisis that threatened the global economy. Consensus that comes after long debates and sacrifice of 50% value of debt is now put to risk by a politically motivated decision.
May be Euthinophobia is a modest word for what is being done by Greece, it wouldn't be harsh to term it Economic Terrorism. EU is been cheated by Greece from the time the union was formed, fudging the numbers to join the Union to reporting wrong fiscal numbers when the country was running on high deficit. Despite this the current development comes as a big surprise, just because the country is about to say no to the only option available for them to avoid chaos in their country. May be the Greeks are dissapointed that they are not given 100% write off on the debt, rest of the world would laugh at it but they may consider it their right. Call it ignorance or arrogance it doesn't matter, the effect is same. Global economy along with Greece's suffers.
As Greece plays out this drama, banks & global businesses would be on their toes speculating until December about the referendum results. Parliaments vote of confidence on Friday adds more spice & suspense to the game, any surprises here would put everything at risk immediately. Hopefully EU does some trick and gets the referendum cancelled so that the plan is implemented and all ends well. EU's trick may have to be a harsh & strong one for Papandreou to cancel it.
If no decision is taken on referendum cancellation then all major transactions & trades will be on hold for a month, paralyzing already troubled economy. This stuff is no good as people will get further risk averse reducing the flow of money in the already troubled economy.
If referendum were to take place with a nightmarish "No" to the debt deal package then hell breaks loose. The contagious effect kicks in bringing down the global markets with high probability of collapse of economic system which would take years to build again. Impact of this scenario playing out would be worse than 2008 when Governments had cash to bail out. Interesting times to watch ahead, hope sense prevails and correct decisions for larger good are taken to resolve the issues.
For now no bets is a good bet, atleast until there is some clarity on which direction the politicians are headed.
May be Euthinophobia is a modest word for what is being done by Greece, it wouldn't be harsh to term it Economic Terrorism. EU is been cheated by Greece from the time the union was formed, fudging the numbers to join the Union to reporting wrong fiscal numbers when the country was running on high deficit. Despite this the current development comes as a big surprise, just because the country is about to say no to the only option available for them to avoid chaos in their country. May be the Greeks are dissapointed that they are not given 100% write off on the debt, rest of the world would laugh at it but they may consider it their right. Call it ignorance or arrogance it doesn't matter, the effect is same. Global economy along with Greece's suffers.
As Greece plays out this drama, banks & global businesses would be on their toes speculating until December about the referendum results. Parliaments vote of confidence on Friday adds more spice & suspense to the game, any surprises here would put everything at risk immediately. Hopefully EU does some trick and gets the referendum cancelled so that the plan is implemented and all ends well. EU's trick may have to be a harsh & strong one for Papandreou to cancel it.
If no decision is taken on referendum cancellation then all major transactions & trades will be on hold for a month, paralyzing already troubled economy. This stuff is no good as people will get further risk averse reducing the flow of money in the already troubled economy.
If referendum were to take place with a nightmarish "No" to the debt deal package then hell breaks loose. The contagious effect kicks in bringing down the global markets with high probability of collapse of economic system which would take years to build again. Impact of this scenario playing out would be worse than 2008 when Governments had cash to bail out. Interesting times to watch ahead, hope sense prevails and correct decisions for larger good are taken to resolve the issues.
For now no bets is a good bet, atleast until there is some clarity on which direction the politicians are headed.
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