Results 1 to 6 of 6

Thread: Greece say no effect on SA

  1. #1
    Moderator IanF's Avatar
    Join Date
    Dec 2007
    Location
    Jhb
    Posts
    2,679
    Thanks
    197
    Thanked 529 Times in 405 Posts

    Greece say no effect on SA

    After the no vote for the Greek Referendum. What will the effect be here in SA.
    I see the all share index is down 1.5%.

    And there are major consequences for Europe.

    Here are 10 consequences of the vote that could unfold in the next few days:

    1. The victory of the “No” camp — with more than 60 percent of the vote, according to preliminary returns — will initially lead to a general selloff in global equities, along with price pressures on the bonds issued by Greece, other peripheral euro zone economies and emerging markets. German and U.S. government bonds will benefit from a flight to quality.

    2. Having been caught off guard, European politicians will urgently seek to regain the initiative: Chancellor Angela Merkel of Germany and President Francois Hollande of France will meet in Paris on Monday to work on a response. In a perfect world, these leaders would move quickly and effectively with the Greek government to get past the conflict and acrimony that preceded the referendum. This is likely to be difficult, given the mistrust, bad blood and damaging accusations that have poisoned the relationship.

    3. Even with those challenges, Greek and European politicians don’t have much time to get their act together. The horrid conditions in Greece will get a lot worse before they improve. Without huge emergency assistance from the European Central Bank– a decision that faces long odds — the government will find it hard to get money to the country’s automated teller machines, let alone re-open the banks.

    4. As hoarding increases, shortages of goods, including fuel and food, will intensify. Capital and payments controls will be tightened. The economy will take another worrisome step down, worsening unemployment and poverty. And the government will struggle to pay pensioners and the salaries of civil servants.

    5. As a result, the government will be under mounting pressure to issue some type of IOUs to maintain a sense of a functioning economy. If it does, the IOUs will take on the role of a parallel currency, quoted domestically at a discount to the single currency.

    6. Outside Greece, a lot of thought will be given to limiting adverse spillovers. The ECB will most likely have to roll out new measures to contain regional contagion, including expanding the current program of large-scale purchases of securities. This will weaken the euro’s exchange rate. In addition, together with the International Monetary Fund– to which Greece is already in arrears — officials will be preparing for serial Greek defaults.

    7. All parties involved will find themselves slipping into their Plan B mode. This transition will probably be much more traumatic for Greece than for the rest of Europe.

    8. With the ultimate goal of countering as quickly as possible the likelihood of further human suffering, pain and uncertainty, Europe has the instruments and institutions to limit contagion and maintain the integrity of the euro zone. But this will require ECB action to be coupled with measures by the European Stability Mechanism and the European Investment Bank aimed at completing a banking union and making progress on fiscal integration.

    9. It is quite doubtful, however, that Greece will be able to restore its status as a full member of the euro zone. Indeed, without very skillful crisis management, it is at high risk of becoming a failed state. Rather than just stand by, Europe needs to ensure that Greece’s exit from the 19-member euro zone doesn’t also result in its dissociation from the larger European Union. This could involve special membership in an association agreement, for example,

    10. Finally, expect an explosion of blame. This unproductive activity may end up delaying Europe’s urgent need to internalize the lessons from this sad outcome: A series of broken reform promises by several Greek governments was made worse by political stubbornness, poor analysis and inconsistent follow-through by Europe, which is contributing to the loss of Greece as a functioning member of the family. Part of article from Moneyweb
    I feel Europe should be strong enough to absorb this shock, but there could be other shocks on the way for them with Spain and Italy also having problems.
    Will Greece eventually go back to it's own currency and then let the falling currency take care of the Government obligations?

    What do we do in SA about this?
    Only stress when you can change the outcome!

  2. #2
    Diamond Member tec0's Avatar
    Join Date
    Jun 2009
    Location
    South Africa
    Posts
    4,624
    Thanks
    1,884
    Thanked 463 Times in 410 Posts
    Blog Entries
    3
    to put a little twist on this, i wonder if we as South Africans must consider using something like the British pound or the US dollar considering that our own is worth basically nothing as well. I personally think forget paper money and go back to gold coin. Yes it is heavy but at least the coin in your pocket will be worth something again. I know some say that people must adopt bitcoin? i don't know about that but right now our Rand is worth less then nothing.
    peace is a state of mind
    Disclaimer: everything written by me can be considered as fictional.

  3. #3
    Moderator IanF's Avatar
    Join Date
    Dec 2007
    Location
    Jhb
    Posts
    2,679
    Thanks
    197
    Thanked 529 Times in 405 Posts
    Looks like a blip at the moment. Reading up on this it looks like Greece has big problems with tax avoidance big public service payroll and a shrinking economy.

    As to hard currency look how long it took Zimbabwe to give up the Zim $ I don't see us switching anytime.
    Only stress when you can change the outcome!

  4. #4
    Diamond Member wynn's Avatar
    Join Date
    Oct 2006
    Location
    east london
    Posts
    3,338
    Thanks
    548
    Thanked 625 Times in 524 Posts
    Quote Originally Posted by tec0 View Post
    right now our Rand is worth less then nothing.
    I remember when R2 would buy you a carton of 10 packets of 20 cigarettes and a packet of 10 boxes of matches.

    Perhaps a coin like the five rand coin but with a small 1oz solid gold insert able to be traded everywhere like a Kruger Rand so if you kept a box full of them under your bed they would fluctuate with the price of gold and strengthen when they sense the nervous whim of governments instead of weakening like the present paper rand, or for that matter the almighty US dollar.
    "Nobody who has succeeded has not failed along the way"
    Arianna Huffington

    Read the first 10% of my books "Didymus" and "The BEAST of BIKO BRIDGE" for free
    You can also read and download 100% free my short stories "A Real Surprise" and "Pieces of Eight" at
    http://www.smashwords.com/books/view/332256

  5. #5
    Diamond Member Justloadit's Avatar
    Join Date
    Nov 2010
    Location
    Johannesburg
    Posts
    3,480
    Thanks
    134
    Thanked 695 Times in 593 Posts
    Blog Entries
    1
    Another main issue here for Greece, for it to function again, it will require capital, which it does not have, so it has to borrow. Now based on the referendum vote, who is going to risk their invested money, and loan it to Greece?

    It clearly shows that their is a total disregard for signed agreements. As soon as they get the money, will they pay it back ever?
    Victor - Knowledge is a blessing or a curse, your current circumstances make you decide!
    Solar pumping, Solar Geyser & Solar Security lighting solutions - www.microsolve.co.za

  6. #6
    Silver Member bones's Avatar
    Join Date
    Aug 2014
    Location
    Pretoria
    Posts
    223
    Thanks
    73
    Thanked 6 Times in 6 Posts
    Quote Originally Posted by Justloadit View Post
    Another main issue here for Greece, for it to function again, it will require capital, which it does not have, so it has to borrow. Now based on the referendum vote, who is going to risk their invested money, and loan it to Greece?

    It clearly shows that their is a total disregard for signed agreements. As soon as they get the money, will they pay it back ever?
    well what is South Africa doing differently ?

Similar Threads

  1. [Question] effect transistor???????
    By mattmro444 in forum Electrical Contracting Industry Forum
    Replies: 3
    Last Post: 21-Aug-14, 12:25 AM
  2. New COC laws in effect 1 May
    By garthu in forum Electrical Contracting Industry Forum
    Replies: 5
    Last Post: 23-Sep-09, 07:47 AM
  3. Privatisations effect on telecoms in SA
    By duncan drennan in forum South African Politics Forum
    Replies: 0
    Last Post: 27-Aug-07, 08:01 PM
  4. Effect of NCA on tracing (ITC search)
    By Ronel Fourie in forum National Credit Act Forum
    Replies: 3
    Last Post: 12-Jul-07, 02:46 PM
  5. The FICA knock-on effect.
    By Dave A in forum Business Finance Forum
    Replies: 3
    Last Post: 12-Jun-07, 02:25 PM

Did you like this article? Share it with your favourite social network.

Did you like this article? Share it with your favourite social network.

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •