Grexit. Any impact on Spain day to day?

[olive]

I believe that time has run out for the Greeks now.

All they are doing is amassing as much debt as they can to default on. Hopefully in the meantime they have been working on currency controls, protecting the holiday business, printing new drachmas and so on.

No doubt the IMF and ECB have drawn up their plans.

Personally I can't see any other countries following suit and leaving the euro though magically it may now be time to loosen austerity "now that it has worked".

Assuming it does happen what impact (if any ) will it have on us expats living in Spain?

[costakid]

The greek debt is now owned by the IMF and the EU central bank so it will not have the same impact that it would have had 2 years ago when a lot of the debt was owed to other countries in the euro zone.

[anyroads]

It will have some impact on Spain however if Greece went back to the Drachma.

The country would be dirt cheap again for a number of years. Why holiday in Spain when you can do so for half the price in Greece. This would have serious implications for the tourist job market and all the spin offs in Spain.

Not good for Greece, not good for Spain.

anyroads

[El Cid]

If they leave, the £/€ exchange rate should improve.

Sid

[olive]

Cid- in which way? Euro stronger because not saddled with Greece uncertainty? Weaker because other countries might follow suit?

Interesting thought about Greek hols being cheaper- they undoubtedly would be but people would soon lose faith when they couldn't get their schweppes tonic or other "bought in" products or couldn't afford to hire or fuel a car.

[Mowser]

If they leave, the £/€ exchange rate should improve.

Sid

Probably. Any time I do a large currency transfer, the rate improves.

[katy]

Amazing that a tinpot country could cause so much havoc on the markets. All the stock markets are down including the UK. Spain's has done particularly bad. A few days ago interest rate on Spanish 5 year bonds doubled, albeit from a low point. Greece is damned if it does and damned if it doesn't it's debt will still be rising in the 2020s whatever it does. Spain is going the same way with debt approaching 99% of GDP.. However, I am sure Nerkel, Juncker et al will cobble some more fudge for Greece at the eleventh hour

[anyroads]

Not only Spain, but will effect a lot of people.

Anyone with a few bob on the Stock Market, anyone with a Stocks and Shares ISA, anyone saving into a private pension. Alas will hit a lot of people.

anyroads

[olive]

I am quite surprised there are so few replies or views of something that could have profound effects on our lives. Is that symptomatic of a lack of interest, fade as it has been going on so long or we can't control it so not interested?

Even Greeces central bank has warned for the first time that the country could be on a "painful course" to default and exit from both the eurozone and the EU.

What does it mean for the euro, holiday makers already booked for Greece. How will the IMF and banks make up the default? If it is true that 2/3rds of their pensioners are at or below the poverty line now who is going to keep them alive after a Grexit when the country suffers huge increases in any bought in goods?

[anyroads]

If as you suggested 2/3 of their pensioners are at or below the poverty line, and they are in hock for 350 billion Euros, wonder what happened to all that money ?

anyroads

[ChrisM]

One immediate, tangible, indication is bond prices - in this instance, government debt/'loans'. Usually considered a dead cert, Germany's is next to zero percent; i.e. no risk/no return. The equivalent Spanish 10-year bond prices at one stage this week jumped 2.5% - the highest since last August - settling at 2.4%.

My instincts say Syriza are politically dogmatic enough to go the distance and Grexit. They'll surprise themselves if it ever actually comes to that though. Logic and pragmatism tells me that 95% of rational scenarios means that 11th hour+ brinksmanship will come out in favour of them accepting austerity (i.e. realism) and accepting a deal. My instincts are usually what I rely on though.

Either way, Spain is already being seen in the markets as higher risk; therefore higher interest rates; therefore higher drain on government coffers. Anyone with a crystal ball would absolutely mint it.

If Syriza go the distance, the Greek people will pay the price for all the rhetoric and tax avoidance.

[ChrisM]

Amazing that a tinpot country could cause so much havoc on the markets. All the stock markets are down including the UK. Spain's has done particularly bad. A few days ago interest rate on Spanish 5 year bonds doubled, albeit from a low point. Greece is damned if it does and damned if it doesn't it's debt will still be rising in the 2020s whatever it does. Spain is going the same way with debt approaching 99% of GDP.. However, I am sure Nerkel, Juncker et al will cobble some more fudge for Greece at the eleventh hour

Greece is 2% of the EU economy. The markets have seen this on the radar for some time so rationally, it should have a negligible impact. However, as one pre-big bang City chap told me "Old chap, the markets are driven by two things - greed and fear". Therefore, there will be more than a negligible impact on the stock markets.

That's fine for those fortunate enough to have a longer view, as they can buy low.

[anyroads]

katy is probably right..

The Greeks probably need to be saved from themselves.

Something may be cobbled together at the last minute, but just buying more time. Without those debts being written off, and the odd bit more tax collected, we will be back to the drawing board, before you can say, eureka !

anyroads

[BENIDORM]

I doubt that the problems in Greece will have any real negative effect on expats living in Spain, probably the opposite with anyone being funded from the UK having a few more euros in their wallets.

What saddens me most is watching the demise of one of the major founding cultures of the 'world as we know it'.
Regards,
Gordon

[Beachcomber]

I think this excellent article says it all:

Article about Greece

[ChrisM]

The fudge rumbles on. A heads of state on Monday. Talk about a train wreck in slow motion - or, one side is massively bluffing. Either way, it's irresponsible. You couldn't run a business this way, let alone nation states. Or has the EU created a disconnect between how business used to be done and reality?

[costakid]

A country of 11 million people and they owe 140 billion. Someone should be accountable for that mess.

[El Cid]

The UK has 64 million people and they owe 1560 billion. Someone should be accountable for that mess.

Sid

[costakid]

Totally agree Sid but the Uk are not in the same Sh== as Greece. We may one day be able to get ourselves out of the mess but Greece never will.

[anyroads]

Yes, Greece is in the last chance saloon,

But, as usual, someone else is buying the drinks !

anyroads