Greeks face six months of cash controls

[Nuclear Unicorn]

Greeks face six months of cash controls

CAPITAL controls will stay in place at Greek banks for at least six months, senior officials in Athens warned yesterday, as the government fights to keep lenders afloat.

Leaders of the four main banks and finance ministry officials will meet tomorrow to discuss how to save the banking system from collapse after a run on deposits.

Options under consideration include a consolidation of four main banks down to two, creation of a “bad bank” to house toxic loans, and a possible forced “bail-in” of depositors. About €15bn (£11bn) is needed to recapitalise banks, senior sources said.

Tomorrow’s meeting is expected to approve new capital controls, which not only put a cap on withdrawals — Greeks have been unable to withdraw more than €60 a day for the past fortnight — but also strict limits on international transfers by the public and businesses.

http://www.thesundaytimes.co.uk/sto/business/Economy/article1580150.ece?CMP=OTH-gnws-standard-2015_07_12

I've read elsewhere that the "bail-in" could take 30% of all depositor accounts over $8,000EU. Considering tax dodging is the Greek national sport I'm not too torn up about that but the fact remains plenty of Greeks who do responsibly pay their taxes are going to get caught up in that without recourse. Why bother doing the right thing if you get hit twice while the cheaters only get hit once?

And 6 months or more of currency controls? That alone can devastate an economy -- assuming you actually have an economy. Methinks a robust underground is in the making but while that is good for individual Greeks it will only exacerbate the lack of revenue being collected by the state which in turn throws off the recapitalization projections being used to underwrite the bail-outs.

The smart money would be to accept the black market then work to incentivize turning it white. People are smart and resourceful and will work in their own best interest without a bunch of cronies/eggheads in distant capitals telling them what to do. It's weird, it's almost as if humans were meant to be free or something. So, instead of trying to overly control this phenomenon the twits in Brussels, Berlin and Athens should allow this wholly natural behavior to work for the betterment of all. The people will be the ultimate beneficiaries and that's supposedly why we have government in the first place.

[PoliticAverse]

1. If you already have a problem collecting taxes because of the size of the 'underground' economy...

driving it further underground will not be helpful to the goal of raising revenue.

[WDIM]

2. Big Surprise the banksters and the rich are stealing more money.

The exploiter class is at it again. Being the succubus class living off the labor of others must be nice. Tell the rich to save their own banks with their own capital. The true workers of greece should do bank runs and take every penny they have from the criminals that are running that mad house. Tell the rich they jave taken enough. If they want money they should get a real job and work for it.

[hack89]

4. If the banks collapse the economy collapses

you cannot run a modern economy without a banking system and the credit it provides.

[WDIM]

5. So that gives the rich license to steal from the workers?

We should just give all our money to the rich since thats the people who need it if the economy is going to work.

Crashing the economy and removing the outdated exploitation and extortion done to the people of this world is the best thing that could happen.

The economy of the world is already broken when the top of the 1% own everything. Then they keep taking and taking how much are we going to let them take before we say enough!

People are affraid of change and the unknown but now is the time for change and it is time for the wealth of the world to be redistributed. Banksters that have exploited the people of the world and have consumed more wealth than 10 lifetimes should have their assets seized and redistributed to the people. Racketeering use to be illegal. Extortion use to be illegal. But for the banks its business as usual.

[Nuclear Unicorn]

6. "So that gives the rich license to steal from the workers?"

If the workers expect to be able to borrow money they have to demonstrate the ability to repay loans.

Debt can be bad, very bad, but it can also allow people who smartly employ it to access opportunities they ordinarily would not have. With modern banks credit isn't just a thing extended to workers solely by the rich but by fellow workers. To say, "Screw the banks!" is to say, "Screw those saving for retirement and children's education and rainy days!" Our monies are so absolutely intertwined as to be inextricable.

People can decry predatory loans and they would be correct but those loans staved off this event by a decade or two. Had those loans not been made we'd still be at the same crisis point only sooner because Greece has no functional economy. They cannot support themselves so they are wholly dependent upon others.

"Caveat emptor" is a saying that has been around for thousands of years. If it's a bad deal don't take it. If it's the only deal, don't take it and do it yourself -- if you can. If you can't do it yourself, learn to live without it. If you can't do it yourself and you can't live without it -- well, I guess we know why prostitution is the world's oldest profession.

[WDIM]

8. your savings is just giving the rich more money.

And when they crash the economy again they will take your savings. Just like they are stealing from the people of greece now. They will steal from you.

The people that own the private banks have more money than people need on 100 lifetimes and they are claiming they have to take money from the people to keep their rich asses afloat in their yauchts and their mansions.

Its all a lie and the fear that the banks are pushing and that you are repeating is the extortion i am talking about.

[Nuclear Unicorn]

11. The private banks can't impose cash controls and bail-ins. That's the government at work.

If a private entity did that they would be at the mercy of the mob of equally private citizens they were stealing from. Only the government can impose this theft because to challenge the theft is to challenge the government which people aren't prepared to do.


yet

[WDIM]

13. A Government that is owned by the banks

The same billionaires that own those banks also own that government.

Just like 2008 in the US the rich that run the country are more concerned about bailing out the rich than bailing out the people.

[Nuclear Unicorn]

15. Don't blame me, I'm an anarchist. But the fact remains: Banks operate under govenment charter.

[hack89]

7. No. But letting the banks collapse is an incredibly stupid idea.

that's all.

[WDIM]

9. No it is not. It is exactly what we need to do.

They have taken enough and they can bail themselves out.

[hack89]

10. We are talking about Greek banks.

the banks that are absolutely needed to keep the Greek economy running. A collapse of the Greek banking system would be a disaster.

[WDIM]

12. Then the banks need to be restructured

So all profits go to the people of greece.

And the private banks owned by billionaires that are extorting the people of greece should have their assets seized.

[hack89]

14. They are in a hole because of all the money they have lent the Greek public

mortgages, car loans, business loans - they are sitting on a huge pile of bad consumer debt. It was not only the Greek government that went on a spending spree.

You can't restructure the Greek banking system without a huge infusion of money. The Greek people will lose all their savings - that is what has to be prevented.

[unblock]

3. the troika doesn't care about saving greece

they want to save the rest of the eu. they are trying to figure out how to surgically amputate greece without the disease spreading to spain, italy, or portugal.

it's looking like greece will accept the ridiculous conditions for the third bailout, but i can't imagine them being able to thrive. they will eventually need a fourth bailout, which absolutely will not happen, so they will exit the euro at that point, maybe 18-24 months from now.

but meanwhile, things might get better within the euro for the other weaker economies, so by the time greece exits, the rest of the eurozone will not mind so much.

[Igel]

16. Presumably.

But it's hard to tell that at times. You make your assumptions, that makes some data more salient and tells you how to interpret other data. Make different assumptions, and different data are suddenly more salient and how you interpret the rest of the data changes.

In other words, this isn't something where the experiment's short term and strives for falsifying and testing the hypothesis. You pick your assumptions and that tells you what your conclusions will be, even before you turn on your computer to examine the data.


A lot of people here and in Greece also don't want to "save Greece." They are more into hurting the evil doers and bad guys. At least those in Greece can be excused because they're willing to sacrifice themselves and their own families. Those outside of Greece have no excuse: They're eager to sacrifice others.

[unblock]

17. but punishing the "evil doers" is not really possible.

first, the greek politicians who passed "irresponsible" budgets are mostly long gone, certainly mostly not in great power anymore.

second, the vast majority of the people who would be punished are ordinary greeks, the poor and the middle class. the least responsible for their situation.

third, the rich and powerful in greece and elsewhere, are mostly able to transfer or insure their wealth, so while they'll take a hit as part of greece's "punishment", they'll come out fine relative to the rest of greece.

fourth, the tax evasion canard is a tired morality play that makes the puritans look modern. every country, not least america, has tax loopholes and evasion. look at how the richest corporations pay little or no tax to the u.s. and how the richest people pay at a lower rate than their secretaries and tell me again how lax greece is in its tax enforcement. oh, and by the way, they're running a primary surplus these days. how is it that will all that tax evasion, they're still taking in more than they're spending (ignoring the interest on their staggering debt, anyway)?


at best, they're punishing those left holding the bag, not the "evil doers".

[Vinca]

18. I wish the GOP would pay attention to all of this and realize their desire

for no taxes would lead directly to what Greece is experiencing. Think Brownback and Kansas.