Thursday , 25 July 2024

What Will the Financial Repercussions Be If Greece Defaults or Leaves the Eurozone?

I want you to under­stand the grav­ity of what Europe is fac­ing; Europe has BET THE FARM and the croupier is about to roll the dice. We are all fac­ing a momen­tous instant in time and all of the noise in the back­ground is quelled by the show­man announc­ing the main event. Let’s Roll! Words: 625

So says Mark Grant ( in edited excerpts from his original article.*

Lorimer Wilson, editor of (Your Key to Making Money!), has edited the article below for length and clarity – see Editor’s Note at the bottom of the page. This paragraph must be included in any article re-posting to avoid copyright infringement.

Grant goes on to say, in part:

Things that go Bump in the Night

Europe is head­ing for a show­down and in a num­ber of places:

1. France: Per­haps the most impor­tant is the stand-off between France and the Euro­pean Com­mis­sion.

The EU bud­getary office is demand­ing that France reduce its deficit to 3.00% for 2012 while the pro­jec­tion is for 4.50% so that the Com­mis­sion is threat­en­ing France with large fines.

Mr. Hol­lande ran his cam­paign upon a reduc­tion in the retire­ment age, more gen­er­ous pen­sions, shorter work hours and more gov­ern­men­tal spend­ing so that the bud­getary miss is likely to be larger than fore­cast; some­where around 5.2% in my esti­ma­tion.

France then finds itself, one way or another, with a larger bud­getary deficit and if the EU then imposes fines and sanc­tions Paris may thumb its nose at Berlin/Brussels in what could be a rather nasty affair with unknown con­se­quences. Mrs. Merkel in one cor­ner and Mr. Hol­lande in another slug­ging it out will not make for har­mo­nious rela­tions.

2. Greece & Spain: Then there are the issues of Greece and Spain and the Social­ist reac­tion is bound to be very dif­fer­ent than the Aus­ter­ity impo­si­tion as demanded by Ger­many….

The new EU fis­cal pact is becom­ing some­thing of a devi­ated piece of humor as Spain is being released from its con­straints and Greece is now only con­strained by the fear and loathing of the coun­try remov­ing its hand from the honey pot. “Keep Eat­ing,” is the resound­ing cry from all of the Euro­pean politi­cians as they are truly fright­ened of the old bear not fol­low­ing orders.

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It may well be that the new polit­i­cal dandy in Greece is cor­rect; Europe may soon be beg­ging for Greece to take the money under almost any terms as they do not wish to dance the jig of con­tin­gent lia­bil­i­ties becom­ing real ones and hav­ing to be accounted for in actu­al­ity with all of the pend­ing losses that this would entail. What will they say in Berlin; “Mein Gott, waren wir nur ein Scherz“(My God, we were just kid­ding.)

The real debt of Greece is approx­i­mately $1.30 tril­lion and as con­tin­gent morphs into actual the impend­ing explo­sion may become real­ity. This amount of money is 40.60% of the entire GDP of Ger­many because it is a small coun­try that now has a giant debt given its pop­u­la­tion. Europe has, in fact, bet the farm and the…Greek elec­torate [did not has made the pay the price. The Euro­pean Union has played its hand badly and real­ity is very close to bit­ing off the hand that fed it!


If Greece defaults or leaves the Euro­zone then:

  • the ECB will be broke and have to be re-capitalized,
  • the IMF will take one seri­ous finan­cial hit,
  • the EIB will be seri­ously impaired and
  • the large European and American banks who hold…the munic­i­pal debt, the deriv­a­tives, the bank loans…will be forced to rec­og­nize thier losses.

Cha­rades is so much fun until some­one comes up with the answer.

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Editor’s Note: The above article may have been edited ([ ]), abridged (…), and reformatted (including the title, some sub-titles and bold/italics emphases) for the sake of clarity and brevity to ensure a fast and easy read. The article’s views and conclusions are unaltered and no personal comments have been included to maintain the integrity of the original article.

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One comment

  1. I am glad that you are gloating Mr. Grant.

    Our turn next time when the dollar and the pound will collapse. Don’t cheat yourself into believing that it will not happen.