This didn't start last week.
"Merkel and Sarkozy made clear to Papandreou that they will not tolerate any interference of the Greek people in the austerity measures dictated by the EU."
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Greece Elections
- Thread starter sityeuropa
- Start date
This didn't start last week.
"Merkel and Sarkozy made clear to Papandreou that they will not tolerate any interference of the Greek people in the austerity measures dictated by the EU."
like I said - if they want to borrow more money then the people lending the money are going to want some conditions attached, hardly unreasonable when they've got prior history of not managing their debt/spending very well leading to them needing to borrow more in the first place
they're free to crash out of the eurozone/default... just if they do that then they'll have to make sure to spend within their means going forward as people will see them as being a bit risky to lend to
they're free to crash out of the eurozone/default... just if they do that then they'll have to make sure to spend within their means going forward as people will see them as being a bit risky to lend to
nope...
Soldato
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A relative who worked for the British Island Revenue many years ago seems to remember UK Greek restaurants were the hardest in the trade to track down workers for tax returns.
Most went by 4 or 5 names and would flee to Athens when the net was closing in.
Then why are you claiming that the Greeks are asking for more money and are complaining about terms?
As I have already posted the Troika imposed the two bailouts upon Greece against the better judgement of the Greek government and possibly the populace (they never got a referendum as Brussels cancelled it).
The narrative we all is hear is that the bailouts were to help the Greek economy. If you follow the money at least 77% went to Greek and foreign banks or financial institutions. Yes, it was another bank bailout funded by the (Greek) taxpayers. As the Greek government are so useless at collecting tax the only way to bleed the money back out of them was austerity and selling off national assets.
Keeping Greece in debt serfdom is beneficial for many other EU countries, as well as private banks. The EU also did a similar thing to Ireland.
The new Greek Government want these bailout loans waived, that means EU taxpayers will probably be on the hook.
did you think they're able to service the existing debt all by themselves? erm nope, they require these bailouts because no one else is going to lend to them at reasonable rates. They are now complaining about the terms, the new govt was elected on the premise that it will complain about and attempt to re-negotiate the terms.
unsurprisingly a country that is in trouble as a result of a big pile of debt and needs money to make payments on that debt else risk a default will perhaps spend a lot of the money loaned to it to service the existing debt on... well doing that
as for tax - I thought you said "The narrative is it is the Greeks fault for not paying their taxes or some other pathetic reason, which is rubbish of course."
so it is now not rubbish that they're not paying their taxes?
well I think they've got some right to want at least some of their money back... the private sector banks have already taken a hit of about 75% on Greek debt, and now they want to re-negotiate again...
At that point in time I doubt that Greece could handle the problem of its debt. You seem to have swallowed the idea that taxpayers bailing out private business is normal?! You still seem to believe that this was a move to 'save' Greece?! Greece could have tried to restructure the debt and improve the economy but it looked like they were considering defaulting and possibly dropping the Euro. The Troika forced them to take loans which were used to bailout banks and move all the risk to the EU taxpayer. You cannot solve a debt problem with debt, you cannot fix an economy with debt and stringent spending rules or ''austerity". It is highly likely that the Greek economy would be in a better position if they had defaulted. It cannot get much worse than the past 4 years. The Greeks are not re-negotiating the terms, they didn't get to negotiate in the first place.
The Greeks and EU have to face the inevitability of a default. Looking at the completely dead Greek economy (austerity killed a quarter of it) they will never be in a position to do anything other than take on more debt. They cannot repay, game over.
I'm not sure where the confusion is. The narrative goes that the EU is bailing out the Greek economy and state (total rubbish) but it isn't working very well because Mr papadopoulos isn't paying his tax. It is also said that the Greeks are blowing it all on the over bloated state full of lazy public sector workers, when over 80% of all the money went to the creditors, this is totally laughable.
Who cares?! its called risk, something that the financial sector doesn't seem to have to take responsibility for any more. Reckless borrowing is fed by reckless lending. These banks knew that Greece did not belong in the Euro.
Besides the private banks got bailed out, Greek debt is nearly all held by the EU taxpayer. Bollinger all round.
Why should the Greek people pay the bankers debts to other banks and vice versa?
They didn't want the bailouts and didn't get any of the money, I don't blame them for not wanting to pay other peoples loans and then sell those very people or institutions Greek assets at knock down prices to pay the unwanted loans at interest on made up money.
The coast of Greece is surrounded by oil and gas fields.
They didn't want the bailouts and didn't get any of the money, I don't blame them for not wanting to pay other peoples loans and then sell those very people or institutions Greek assets at knock down prices to pay the unwanted loans at interest on made up money.
The coast of Greece is surrounded by oil and gas fields.
They could have and are still able to default... they've not 'bailed out' any banks in lending the Greeks money, they've just prevented a Greek default and helped them stay in the eurozone.
so default then...
they didn't get bailed out they took a 75% write down on Greek debt, Greece has already restructured its debts and take low cost loans from the EU, etc... And now they want to renegotiate the terms again...
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perhaps because they might want to borrow more in future and a default might make that rather tricky
Well this party wasn't elected on the basis that it would leave the eurozone and default, it was elected on the basis that it would renegotiate terms of the bailout.
Love to know how you came to the conclusion that Russia is a terrorist state.
You're suffering from incredulity pal.
They were not allowed to default, how many times does it need to be spelled out. The move was made to protect the Euro as well as private French and German banks exposed to a Greek default. If German and French banks are exposed every bank is exposed. Financial institutions received the majority of the 'Greek bailout', the Greek national debt is now nearly all owned by the IMF and EU taxpayer not private banks. The taxpayer is now liable for 80% of Greece's debt. You're telling me that isn't a bailout?
The Greeks don't belong in the Euro, Even Merkel has said it.
Wrong again, they got bailed out. Have you not been paying attention since 2007? the financial sector will be bailed out at all costs. Its preposterous to suggest that these banks can take a 75% hit on debts that big, none of them collapsed so it is obvious that none of them have suffered any losses of any significance.
A myth is developing that private creditors have accepted significant losses in the restructuring of Greece's debt, while the official sector gets off scot free. The reality is that private creditors got a very sweet deal while most actual and future losses have been transferred to the official creditors i.e. taxpayers.
Greece's public debt will [remain] unsustainable at close to 140 per cent of gross domestic product: at best, it will fall to 120 per cent by 2020 and could rise as high as 160 per cent of GDP. Why? A "haircut" of €110bn on privately held bonds is matched by an increase of €130bn in the debt Greece owes to official creditors. A significant part of this increase in Greece’s official debt goes to bail out private creditors: €30bn for upfront cash sweeteners on the new bonds that effectively guarantee much of their face value. Any future further haircuts to make Greek debt sustainable will therefore fall disproportionately on the growing claims of the official sector. Loans of at least €25bn from the European Financial Stability Facility to the Greek government will go towards recapitalising banks in a scheme that will keep those banks in private hands and allow shareholders to buy back any public capital injection with sweetly priced warrants. The new bonds will also be subject to English law, where the old bonds fell under Greek jurisdiction. So if Greece were to leave the eurozone, it could no longer pass legislation to convert euro-denominated debt into new drachma debt. This is an amazing sweetener for creditors. […]
The reality is that most of the gains in good times […] were privatised while most of the losses have been now socialised. Taxpayers of Greece's official creditors, not private bondholders, will end up paying for most of the losses deriving from Greece's past, current and future insolvency
Its just another bailout, but through the back doors and dressed up as the failure of the 'plebs'.
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no one has to give them permission to default, they're free to default and revert to their own currency
no I wouldn't call taking a 75% loss a 'bailout'
They already have taken a 75% hit on Greek debt
none of the official creditors had to accept any write downs, only the private creditors and they had to do so 'voluntarily' albeit with huge govt pressure - so it was mostly big banks that took the hit whereas funds holding Greek sovereign debt could hold out lest Greece wanted to actually compel them to restructure the debt which would trigger credit default swaps
they borrowed/spent too much, they need to keep on borrowing to service that debt and are seen as risky - they've already restructured the debt once with the private creditors leading to a 75% loss of the NPV of Greek bond holdings for a whole bunch of banks
it is up the the Greeks - stay in the eurozone and stick with austerity, maybe they can negotiate something but they've really not got much room to negotiate much... or just exit and default
trying to blame the banks, the Germans, the EU is silly - it is the fault of the Greek government for getting into this mess
Soldato
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The saying that if you owe the bank £100 then it is your problem but if you owe the bank £1,000,000 then it the bank's problem comes to mind. Greece has the EU over a barrel. If Greece is forced out the EU and Euro then it sets a precedent about leaving the EU and the only way it will leave the EU is if it forced to default. If it is forced to default it will hit the Euro hard and probably cause another downturn which the EU is desperately trying to avoid. With the current fragility it might even cause another recession.
jl10000 - an article on the restructuring since you seem to be completely unaware of/denying that it already happened and that the banks took big losses on their Greek debt holdings
http://www.bbc.com/news/business-17110355
the last part alludes to the sneakier move by some funds... the article doesn't explicitly mention it but you'll note the agreement to accept the new debt and take a 75% hit was done voluntarily, the vast majority of the private investors - big banks mostly, agreed to take the hit. What those funds have done is to buy some Greek debt and not agree to any write down - if Greece can either carry on paying them in full (they only represent a small portion of the debt) or it can force a restructuring upon them - it does so without their agreement then it is a default and will trigger the payment of credit default swaps
http://www.bbc.com/news/business-17110355
the last part alludes to the sneakier move by some funds... the article doesn't explicitly mention it but you'll note the agreement to accept the new debt and take a 75% hit was done voluntarily, the vast majority of the private investors - big banks mostly, agreed to take the hit. What those funds have done is to buy some Greek debt and not agree to any write down - if Greece can either carry on paying them in full (they only represent a small portion of the debt) or it can force a restructuring upon them - it does so without their agreement then it is a default and will trigger the payment of credit default swaps
They don't have to ask for more. Without debt repayments Greece is running a +3% surplus - the highest in the EU.
they do if they don't want to default
also that is with austerity measures in place... they want to remove/renegotiate the austerity measures, I don't think a 3% increase in govt spending is going to satisfy the people who were opposed to the cuts, and if they want to spend more than they bring in then they're going to have to borrow more, something that might be a bit harder to do if they default on their current obligations
They are probably free to default now as the EU should be able to deal with it. Stop looking at it from the perspective of Greece and what they wanted to do. Think about the situation in 2011, collapse of the Euro and collapse of the banks, something Brussels will not just allow. After making noises about referendums it was made quite clear by Brussels that Greece will accept the austerity and loans, as shown be the cancelling of the referendum and the resignation of the Greek prime minister.
The toxic, worthless Greek national debt was moved onto the balance sheets of European institutions backed by the tax payer using money provided by European institutions backed by the taxpayer. This was provided to the private banks via the "Greek" bailouts. The supposed bailouts show that the Greek state received 11% of the money, and now Europeran tax payers own over 80% of the Greek national debt.
The supposed 'haircut' on the debt was 100 billion euros, the EU taxpayer shoulders around 400 billion of Greek national debt and will incur ALL future losses.
The loss on the bonds was matched by the increase in the Greek national debt which is owed to the official creditors (tax payers). Who is paying for the bailouts? The official creditors. Who is receiving 80% of the official creditors bailout money? Private banks
75%? Total rubbish.
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A surplus means they could service their overall debt. It doesn't follow that they could pay off debt as bonds become due.
Greece has an €7bn coming up due in March. It can't borrow from the markets to pay it based on current rates. It doesn't have the cash to pay it. The only solution is if the troika lends them the money to pay it.
If the troika refuses to lend them more money, irrespective of what else may be agreed, or what position Greece may wish to take, they will default.