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Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

French President François Hollande said on Monday that "Greece alone" can decide on whether to stay in the euro, writes Anne Penketh, a Guardian correspondent in Paris.

Hollande was asked about a German report over the weekend that Chancellor Angela Merkel would let Greece leave the single currency, during an interview on France-Inter radio. But he said that the Greeks were "free to decide their government" in the forthcoming elections, and that "as for Greece remaining in the eurozone it's up to Greece alone to decide."

He noted that both Greece and Spain had "paid a heavy price" to keep the European currency, and that there had been a "radical" reaction from fringe parties. But he played down the danger of electing the radical Syriza party in Greece and Podemos in Spain, saying that they could not be compared to the risks from the extreme-right. And if the radicals were elected in either country, he added, they would have to stick to the commitments of previous governments, in particular regarding the management of debt.

He added that "the rules governing the euro," should be respected.

Hollande used the turmoil in Greece to reaffirm that the EU now needed to ditch its unpopular German-led austerity policies. "Europe can't be identified with austerity, now that the euro has been stabilised," he said.

Asked about the divergence between Germany and France on austerity measures, he announced that he would meet Merkel and the President of the European parliament, Martin Schulz, next Sunday to discuss "the future of Europe and Franco-German relations".

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:19:21 AM EST
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

The German government has poured more cold water on that Spiegel story that Angela Merkel is ready to see Greece exit the eurozone.

Via the wires:

  • German govt spokesman says there is no change in stance of the German govt towards Greece.
  • German finance ministry spokesman, we expect Greece to stick to its commitments.
  • German govt spokesman says Greece has long-term commitments, a new govt will not change that.
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:20:07 AM EST
[ Parent ]
Industry minister and SPD boss Gabriel declared that "Greece cannot blackmail us" and should stick to agreements. Nice way to package an actual blackmail.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jan 5th, 2015 at 02:02:13 PM EST
[ Parent ]
He actually seems to have said "no longer". Greece has been so devilishly efficient at blackmailing Germany, er, since when?
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 02:12:04 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours | Business | The Guardian

Gabriel told the Hannoverschen Allgemeinen Zeitung that the German government's goal was to see Greece stay in the Eurozone, but that it also expected Athens to fulfill its promises to the EU.

Regardless of who forms the next government, we expect that they stick by the agreements made with the EU. The Eurozone is considerably more stable and robust than it was several years ago, which is why we can no longer be blackmailed.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 02:16:38 PM EST
[ Parent ]
Though that translation into English may be more than he said:

Gabriel erwartet Vertragstreue von Griechen / Deutschland / Welt / Politik / Nachrichten - HAZ - Hannoversche Allgemeine

,,Deshalb sind wir übrigens auch nicht erpressbar,
by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 02:24:33 PM EST
[ Parent ]
True dat. This is more along the lines of

"And btw that's alswo why we can't be blackmailed."

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 08:21:12 AM EST
[ Parent ]
When a German throws in "deshalb" as a supposed add-on or afterthought, you know the real point is coming and is probably the tip of the sword.  Sort of, "Oh by the way, the Wehrmacht has just invaded Poland."
by rifek on Wed Jan 28th, 2015 at 12:41:13 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

Speaking at his party congress on Saturday, Alexis Tsipras, leader of Syriza, vowed to end "unreasonable and catastrophic"austerity.

He said a Syriza-led government would write down most of the nominal value of Greece's debt.

That's what was done for Germany in 1953, it should be done for Greece in 2015.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:21:19 AM EST
[ Parent ]
Alexis Tsipras:
That's what was done for Germany in 1953, it should be done for Greece in 2015.

Just what Merkel and Schäuble needed: a potential Greek PM who can return 'Pacta sunt servanda' straight to sender...

by Bernard (bernard) on Mon Jan 5th, 2015 at 05:09:22 PM EST
[ Parent ]
Euro hits 9-year low on Grexit rumours - business live | Business | The Guardian

German inflation fell to 0.1% in December, its lowest level in five years, according to figures just released by the Federal Statistics Office.

The figure was below economists expectations of a 0.2% increase in prices.

by afew (afew(a in a circle)eurotrib_dot_com) on Mon Jan 5th, 2015 at 08:22:24 AM EST
[ Parent ]
Grexit divides politicians in Athens | EurActiv

Eurozone membership is "irrevocable", the European Commission said today (5 December), after media reports about Greece leaving the single currency that triggered strong reactions in Athens. EurActiv Greece reports.

Der Spiegel reported this weekend that Berlin considers "Grexit" almost unavoidable if the left-wing Syriza opposition party, which steadily leads all opinion polls, wins Greece's parliamentary elections on 25 January.

Commission spokeswoman Annika Breidthardt, told reporters today that, according to the EU treaty law, "euro membership is irrevocable".

by afew (afew(a in a circle)eurotrib_dot_com) on Tue Jan 6th, 2015 at 12:55:11 AM EST
[ Parent ]
Actually, as I understand it, "euro membership is irrevocable" as long as the nation in question remains an EU member. So to leave the euro Greece would have to withdraw from the EU.

Also, while a nation can withdraw, the EU treaties make no provision for the expulsion of a member nation.

(http://en.wikipedia.org/wiki/Withdrawal_from_the_European_Union - since I'm not on my own machine right now I can't quote using Tribext.)

A Grexit ain't gonna happen. At least not within a timeframe that has any immediate relevance.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 08:29:44 AM EST
[ Parent ]
Although Migeru pointed out that the current treaties do not prevent a country from having another currency as well.

Greece could state that they accept Drachmas, which they would use to pay salaries, and not contravene to the obligation of using the euro.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Tue Jan 6th, 2015 at 08:48:48 AM EST
[ Parent ]
Actually, according to this, that's not the case:

http://ec.europa.eu/economy_finance/euro/cash/legal_tender/index_en.htm

Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law.

Theoretically, I suppose, Greece could issue some kind of scrip à la Wöhrl:

Yet, contractual parties are free to agree to use in transactions other official foreign currencies with legal tender status in the state of issuance, e.g. the Pound Sterling or the US Dollar. The same applies to privately issued money like local exchange trading systems (e.g. voucher-based payment systems in certain communities) or virtual currency schemes (e.g. Bitcoin). Although these are not official currencies and have no legal tender status, parties can agree to use them as private money and without prejudice to the official currency (euro or national currency) being the sole legal tender.

However, it would seem to me that it would be difficult to decouple the value of the scrip from the euro.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman

by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 09:18:09 AM EST
[ Parent ]
it would seem to me that it would be difficult to decouple the value of the scrip from the euro.

It seems to me that, what governments cannot/willnot do by fiat 'the market', (esp. blackmarket), can do routinely and with ease.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Tue Jan 6th, 2015 at 09:58:12 AM EST
[ Parent ]
Probably. But in this case I would assume that the government would actually want its scrip to devalue against the euro.

The fact is that what we're experiencing right now is a top-down disaster. -Paul Krugman
by dvx (dvx.clt št gmail dotcom) on Tue Jan 6th, 2015 at 10:11:25 AM EST
[ Parent ]
And it would likely get it, absent some extraordinary intervention by the ECB.

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Wed Jan 7th, 2015 at 12:43:32 AM EST
[ Parent ]
Within the euro area, only the euro has the status of legal tender. This results from the fact that the money used in a monetary system does only have the status of legal tender if it is provided for under the respective monetary law.

"Legal tender," however, can mean at least three different things:

  1. Legal tender for the settlement of all debts. In the minimalist reading this means that a debtor can void his debts by presenting the coin of the realm, in preference to whatever other currency or payment in kind is specified in the contract. In the maximalist reading, the debtor can do this with prejudice to all other obligations to settle in particular currencies, and the creditor can demand the coin of the realm in settlement in preference to other currencies. (Which would actually make for an interesting ECJ challenge to the requirements in various "trade" treaties that expropriations must be compensated in the currency of the former owner's choice, on the basis that this prejudices the status of the Euro as sole legal tender of the Eurozone.)

  2. Legal tender for the settlement of taxes. In the minimalist reading this means that you can always settle your debts to the tax man with the coin of the realm: The tax man cannot demand payment in kind if you are able to pay in the coin of the realm. In the maximalist reading, the coin of the realm is the only valid means by which to settle taxes.

  3. Legal tender for the settlement of purchases. In the minimalist reading this means that merchants must offer their wares at prices denominated in the coin of the realm, and must transact if those prices are met by a customer solvent in the coin of the realm. In the maximalist reading merchants may only transact in the coin of the realm.

Greece could argue for an interpretation of legal tender as the minimalist reading of all three prongs, which would enable it to operate a dual currency system. This reading would actually seem to be supported by the EC document you link to.

In principle, maintaining a dual currency system is a major inconvenience. In practice, Gresham's Postulate will usually suffice to keep the hard currency out of general circulation. And even if it does not, operating a dual currency system is a considerably smaller inconvenience than regular major industrial depressions, which is the result of the current mismanagement of the eurosystem.

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Tue Jan 6th, 2015 at 12:19:10 PM EST
[ Parent ]
Greece could fail to live up their obligations under the treaties regarding the euro.

A country that fails its obligations can be sued in Court by the Commission and get to pay a fine. Happens all the time and have never resulted in country leaving the EU or being expulsed.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Tue Jan 6th, 2015 at 09:42:43 AM EST
[ Parent ]
There are actually obligations on both sides. The troika has reneged on some of its agreed to obligations.
by Upstate NY on Wed Jan 7th, 2015 at 10:58:25 AM EST
[ Parent ]
Yes, thanks for pointing out in another thread that Greece has already been promised a debt rescheduling.

So if Greece starts using something else, Greece fails its obligations.

After the Troika (which includes the commission and the ECB) failed on their promises for restructuring the debt.

After the ECB, the Commission and the Eurogroup totally ignored that the social protocol talked about social protection and not about destroying it.

After the ECB used a 3% deficit rule that the Italian minister at the time claims were non-binding to bludgeon member states with trade deficits into giving up powers that never belonged to the Troika.

All in all, there are a number of vioaltions and if Greece defends itself with vigor a case before the Court can be interesting.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Wed Jan 7th, 2015 at 04:10:22 PM EST
[ Parent ]
Greece could balance its budget with the ticket sales and broadcast rights.
by rifek on Wed Jan 28th, 2015 at 12:29:31 PM EST
[ Parent ]

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