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Reinfeldt: Greek vote 'signals major problems'

Reinfeldt: Greek vote 'signals major problems'

Published: 01 Nov 2011 15:28 GMT+01:00
Updated: 01 Nov 2011 15:28 GMT+01:00

Reinfeldt meanwhile played down the threats to the eurozone and dismissed the doomsday scenarios.

"No, it is exaggerated. The Greek economy's share of the eurozone stands at around two percent. But it is however a signal that there are major problems in the Greek economy," Reinfeldt said on Tuesday.

The Swedish PM considers the decision to allow for a referendum to be a reflection of domestic politics.

"This is a manifestation of Greek domestic politics, but in the current uncertainty many people will see a Greek 'no' in a referendum as the beginning of discussions of Greece's status in the euro," Reinfeldt said.

Sweden's foreign minister Carl Bildt revealed on Tuesday that the Greek decision came as a complete surprise:

"You could describe it that way. I have trouble understanding what the issue is. A number of clarifications are required. Do you want to be saved or not, is this the question?"

Bildt argued that the announcement increased uncertainty over Greece's future.

"There are a number of major question marks with regards to Greece and this referendum," said Bildt, who is currently in London to take part in an international conference on internet issues.

Nobel prize winner Paul Krugman meanwhile argued in a opinion article in The New York Times on Tuesday that the he expects the eurozone to fall apart.

Krugman wrote of his expectation that there will be a negative response to the Greek referendum and that Italian interest rates are already at levels which indicate the inevitability of a bankruptcy.

"And with everyone simultaneously pushing for fiscal austerity, a recession seems almost certain, aggravating all of the continent’s problems.

Sven-Arne Svensson, chief economist at fund manager Erik Penser, argued that it is likely that Greece will be forced to leave the eurozone.

"My interpretation is that this is the first stage to leaving the eurozone," he said.

Despite the added uncertainty over the referendum on the rescue package, which must first be approved by parliament in a vote expected to take place next week, Svensson expects funds to arrive.

"In some way I believe that the Greeks will get the money they need anyway, if they were to stop payments in November in line with speculation then it would have quite dramatic consequences."

TT/The Local/pvs (news@thelocal.se)

Your comments about this article

16:40 November 1, 2011 by Twiceshy
Hilarious when he says:

"Do you want to be saved or not, is this the question?"

That's not the question Mr. Reinfeldt. The real question is, "do you want to be helping foreign banks write down as little as possible of the Greek debt which should never have existed in the first place, but does exist due to combined irresponsibility Greece plus German / French / UK / Swedish etc. banks ?"

But of course if he said it this way it might become a little bit clearer why everyone is so interesting in "helping" Greece, and that wouldn't be so good for politicians and their banking buddies.
17:02 November 1, 2011 by RobinHood
The whole rotten structure seems to be caving in this afternoon. The Greeks, as usual, just will not follow the program, and politicians everywhere, not only Bildt, cant believe their eyes.

The EU and the Euro were a great idea. But, like Communism, didnt take into account that people and countries will always lie and cheat to get what is best for themselves, at the expense of everyone else.

Thank you Greece, the homeland of democracy, for being the catalyst that will restore a little democracy to Europe.
17:02 November 1, 2011 by eddie123
what's wrong with having a referendum? what's wrong with asking the people to decide for themselves as their economy should be run? it is so wrong to always assume that governments know best. the people must ultimately decide because it is the people who bear the brunt and not the politicians.
17:25 November 1, 2011 by skogsbo
eddie123, by the time January comes around for the vote, Greece will be finished and the EU/ Euro will be close behind it.

If Greece doesn't change it current course and get a grip, it probably going to trigger the most serious event in Europe since WW2. Causing 'major problems' is a bit of an understatement.

The Greek people should be been bearing the brunt for the past decade and avoided this whole mess in the first place.
17:45 November 1, 2011 by Twiceshy
skogsbo this is not just the fault of the Greek people, not even close. If you think this will not happen to most other countries including Germany (which has a pretty high debt-to-GDP ratio itself) you're in denial.
17:48 November 1, 2011 by mibrooks27
It's Wall Street's problem! Greece was DEFRAUDED into insolvency! The Greek people know that and they aren't about to allow Wall Street firms to run off after those snakes *looted* their nations retirement system, health savings accounts, government reserves. This is Iceland all over again. I have a lot of friends in Greece and Italy, ordinary people, believe me when I tell you that they are going to do whatever it takes to utterly destroy the US and Wall Street gangsters before looking at any scheme concocted by Bersconi, Merkel, and Clinton-Geithner and some committee dominated by the Germans, UK, US, India and China. Sweden is in for some rough sledding by allowing China to buy Saab, for permitting American firms to own Swedish companies. Now, the Italian's hate both the Chinese and Indian's with a passion, and would gladly see Manhattan lopped off and shipped off to Shanghai. China's bumbling into the EU's economic mess offering to buy the EU out for trade and outsourcing concessions, provided the tipping point. The people of Europe blame the United State's Wall Street pirates and their cousins in Berlin and London and Hong Kong for all of the world's current economic problems; they want an international tribunal to try them for crimes against humanity.
17:48 November 1, 2011 by RobinHood
@skogsbo

Greece was only the weakest link. Several much bigger EU countries have been living and borrowing beyond their means, and doing nothing to avoid the innevitible consequences that occur when socialist economies run out of other peoples money to borrow and waste. The whole bunch of them are going down the pan, Greece is only the first, but certainly not the worst. The "major problems" will be when Spain, Italy and France cant get access to more money to finance their useless economies. One, two or all three of those will be responsible for wrecking the project. Not Greece.
17:52 November 1, 2011 by skogsbo
Greece and Italy are more critical, then Portugal, then Spain, in terms of level of debt to GDP. The rest can afford their debt - for now!
17:56 November 1, 2011 by ?????
It's so nice to see politicians being so scared of what the people want.

Enough with this "Do you want to be saved or not" nonsense. You can't save a debt by lending more money and asking for dramatic social security cuts. That's politicians' language and talk. At last, someone has to try to spend no more than he/she produces. If the first one to do that has to be Greece, then so be it. Greece had given the light of civilization and democracy before, anyway.

I'm curious to see how the people of the rest of the EU will perceive the new situation that emerges
17:58 November 1, 2011 by McChatter
@ eddie123 Nothing wrong with having a referendum. Why don't they have one for the rest of the Euro-landen? The question being: "Do they want Greece in the euro? Yes or no?" Who's taking bets on the outcome? Another question: how come there are 9.000 people over 100 years old in Greece? We, the European taxpayers, have "subsidised" the Greek government(s) to pay out 8 billion Euro to bogus pensioners over the past 10 years! Yet another question: how come Greek civil servants get 14 months' salary each year? Kick them out now, don't wait until January!
18:00 November 1, 2011 by Twiceshy
skogsbo actually Spain has lower debt-to-GDP than Germany, UK and France.

That pejorative PIIGS acronym is extremely biased and borders on xenophobic given facts like the above...
18:15 November 1, 2011 by christopher1959
Countries defaulting on their debts has happened before. There are all these doom and gloom mongers who think it would be a disaster for Europe. To be honest, no one knows what will happen.

What does not help is too much austerity measures pursued by many governments and too much negativity. A combination of both could well push Europe and beyond into another recession.

Finally, I think that Fredrik Reinfeldt is right to playdown the doomsday scenarios.
18:15 November 1, 2011 by mibrooks27
I believe the worst debt to GDP mess is in the US. There, the oligarch's running the country have bled the treasury so dry they are cutting basic food and medical subsidies to seniors and the desperately poor.
18:24 November 1, 2011 by conboy
Apparently Reinfeldt and Bildt want democracy in the middle east but not in Greece funnty old bunch aint they?
18:41 November 1, 2011 by planethero
The UK prints €100 billion a year. But nobody seems to notice. Wierd. Also well said Conboy.
19:26 November 1, 2011 by Kevin Harris
I am struggling to understand how the banks are at fault here.

If I applied for a bank loan, and gave false information about my economy to get it, that would be a crime, and I would be an idiot. Why is that the bank's fault?

If I ran my personal finances in such a terrible way that I couldn't repay the loan, why is that the bank's fault?

If the bank will only lend me even more money at very high interest rates, why is that the bank's fault?

If the bank refuses to lend me even more money unless I sell everything I have, give up every benefit I am entitled to, and work hard until I am 65, why is that the bank's fault?

The bank's only fault would have been for doing for business with a crook like me in the first place.
19:49 November 1, 2011 by ?????
@Kevin Harris

Don't think that banks are so naive!
20:15 November 1, 2011 by GLO
This is why you need your own Money, Language,Culture,and why you should not embrace all these American/Europe Fads. Your family and a simple life have a great benefit. This Ameri-Sweden guy can hope you all reflect on all this one world dream.
20:16 November 1, 2011 by eddie123
if you feel Greece has hitherto being a drain on EU finances, why ain't you actively canvassing that they be kicked out? why offer to bail them out of these crisis? allow them to fail, allow them to revert to their own currency, and calculate their debt to the EU and they will pay in time to come.

the problem with the world as we now know it is that we put too muc trust in our politicians and hope they know what is best for the country. that is false. politicians are concerned with winning elections and pleasing big business, huge donors and nothing else.

for years, UKIP's Nigel Farage has criticized the EU and their undemocratic posturing. If Greece needs a referendum, so be it. Let dooms day come. Like someone mentioned above, the West seeks to further democracy abroad but are highly undemocratic themselves back home.

watch a bit of Nigel Farage on youtube
20:54 November 1, 2011 by Kevin Harris
@?????

Are you suggesting this is a cunning plan by the banks to lose all their money? If it was, it has been a great success.
21:17 November 1, 2011 by skogsbo
well us europeans love a war, so lets see who starts it first. The Greek defence minister has just sacked all his military chief of staffs, you think they were worried a military coo was brewing?
22:05 November 1, 2011 by Twiceshy
@Kevin Harris:

One thing is the banks losing money... They do, but they get bailed out and the executives typically keep getting a lot of money, bonuses and often profit further from insider trading etc.

As for your earlier question, yes, the bank is at fault if they lend you money without doing their due diligence. For any bad loan there are two guilty parties, the lender and the borrower. The problem in this crisis is that the lenders almost always get rescued by taxpayers (but even taxpayers run out of money, so it can't go on forever).
22:10 November 1, 2011 by McChatter
@????? Banks aren't necessarily naive, but they are at times certainly greedy. And that's got them into this sh!t as well. Doesn't matter who writes down Greece's debts - the banks or the countries - Joe 6-pack picks up the tab. And that's me and that's all of you as well. Did we get a say in things? Did we get a referendum? No. Of course Papandreou is right - a referendum is the ultimate tool of democracy. In that case, let's have one about Greek membership of the Euro!
22:27 November 1, 2011 by wxman
Looking a gift horse in the mouth, how arrogant! Let the Greek bastids starve to death.
22:56 November 1, 2011 by Rebel
The little bald dude is merely being a spokesman for the international banking interests. Yes, democracy is a troubling thing, isn't it Freddie?
23:50 November 1, 2011 by mibrooks27
Let's be clear about one thing. Greece (and Italy, Spain, Portugal, Ireland) DO NOT have a debt problem. Wall Street and those big banks do. They defrauded these countries and the only reason Sweden isn't screaming mad is because the US government bailed us out.
07:41 November 2, 2011 by Rick Methven
@eddie123 "watch a bit of Nigel Farage on youtube "

The guy who is so against Europe and the whole 'undemocratic' process.

Strange that he is so willing to take his pay as a member of the EU parliament and to milk every cent he can in expenses. He does not really want the UK to leave Europe as it would put paid to his EU gravy train. He is just another hippocritical windbag.
13:48 November 2, 2011 by Thebinary1
Question: How do the Greeks say 'Hey EU ... f**k you very much' :) ?

(smiley face intended)

Answer: http://blogs.telegraph.co.uk/finance/ianmcowie/100012894/fast-cars-and-loose-fiscal-morals-there-are-more-porsches-in-greece-than-taxpayers-declaring-50000-euro-incomes/
10:16 November 3, 2011 by bells on the knight
kick those useless geeks out.

a german doctor retires at 70 because the law prohibits him from continue, paying taxes all the time whilst a greek hairdresser retires at 50 and doesn't pay any taxes. go figure where the problem lies.

historically greece hasn't been able to put any industrial concepts together let alone having a high quality product. it paints a clear picture that greece doesn't belong to an organized community.
11:50 November 4, 2011 by salalah
He is saying:

Last night my little one was about this size....
05:43 November 6, 2011 by shahislam
There are enough wise persons -who are absolutely right when talking about 'Balance' because the perfection is longer lasting in the 'acts' not 'states'. We need just "One benevolent dictator-type honest head with qualities and 'No personal greed for luxuries' in control of World's Powers or in the UN"; -supervising 'One global democratic system for equally distributing wealth in order to try to close the gap between too poor and too rich' and currently available Obama has those qualities who just needs a little more time.

The uprisings against too wealthy big guys with small minds world-wide, will continue to be bigger and biggest and the all type of goons, even 3rd WW won't be able to suppress anymore -the timely voice of the 'Hard-working, digitally well communicated more intelligent Middle Class People'.

The suppressed evidences of old Russian style political hoaxes are now re-discoverable and not destroyable in the name of procedural destruction to save "the Elusive Crocodile".

National secrets is a concept of the old world to validate ugly plots and acts of some guys in then, world powers. New World will do much better without those acts and foreign policies etc.

New policies needed to validate phone and e-mail hacking by the Government in a no secret manner, then only bad guys, whether be a citizen or its leader; a member of the public or a public servants have to worry and become good.

Nothing will ever be perfect but 'Perfection' is in the acts of balancing (50%'s of opposing forces) and that's how everything about our humanly existence and mundane things are programmed.

To be honest, I must state: otherwise, dishonesty always to be remained in the fabric of politics and the old norm is to continue where there won't be enough honest supporters behind to build a honest leadership, therefore, negatively powerful dishonest leader-ships will prevail. We-the non-violent wise persons need to be united and 'not divided' in our unique aim to build a Wise Leader-ship of the world in the soil of North-America!

Shahislam
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