Opinion – Will Greece run out of cash? | Zsolt Darvas at Bruegel.org

This is an interesting read by Zsolt Darvas, published by the think-tank, Bruegel.

via Will Greece run out of cash? | Zsolt Darvas at Bruegel.org.

Personally, I disagree with the article.

I cannot see Greece’s current government selling declining financial assets to meet loan repayments to the IMF and the ECB.

I see the government giving priority to meeting existing wage bills in Greece to public sector workers. This is a very dangerous decision because if Greece formally defaults emergency crisis measures will be required – I would expect large numbers of public sector workers to be at risk.

Greece could learn from the US government and shut-down non-essential government until new cash is found.

However, what really worries me is that I struggle to see the current Greek government with an effective contingency plan. I hope I’m wrong.

Thoughts?

Greek default necessary but Grexit is not -Wolfgang Münchau – FT.com

The entrance of Bank of Greece.

The entrance of Bank of Greece. (Photo credit: Wikipedia)

According to Wolfgang Münchau in the FT, a Greek default is both necessary and almost a certainty. However, a Grexit is still not assured. It’s a must-read article. Check it out!

via Greek default necessary but Grexit is not – FT.com.

Most critically, it seems that both sides to this negotiation are sleep-walking towards an uncontrolled Grexit.

According to Münchau, there’s not enough hard-negotiating and contingency planning.

Personally, I would expect financial markets to go into free-fall, like 2008, until the central banks, especially the ECB, stomp up eye-watering support. For sure, if Greece takes the Grexit route, it will be decades before the economy of Greece returns to the 2015 GDP level.

Thoughts?

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