Among The Smoke, The True Goal Of This Weekend's Greek Drama Emerges: Lower Interest Rates For Everyone

Tyler Durden's picture

Back on Friday we shared a prediction that not only will Greece not leave the Eurozone, but what will happen after the weekend: "I'm convinced Greece is jealous that the portuguese got a much better deal.  They want the same deal arguing that they have already suffered long enough...  Monday they announce that Greece is getting better terms and we are off to the races... by early 2012 greece restructures debt." Once again, this was spot on. Reuters reports: "The European Union is looking to lower interest
rates on bailout loans to Greece and Ireland and is working on a second
rescue for Athens in a chaotic effort to prevent a disorderly debt
restructuring. The executive European Commission said on Monday it hoped to see a decision within weeks on reducing the rate charged to Ireland to make Dublin's debt more sustainable.
"The Commission is clearly in favour of a rate
cut," a spokesman for EU Economic and Monetary Affairs Commissioner Olli
Rehn said. "The Commission is against debt restructuring."
" Once again Europe looks the can in the mouth, and kicks it as far down the street as it possibly can. Next up: fully blown, uncontrolled restructuring in early 2012 as nothing will change in the interim, and more taxpayer revolts will continue taking Europe by storm until we have one that actually matters and puts the PIIGS out in the cold.

From Reuters:

The new Irish government's bid for lower interest payments has so far been blocked by Germany and France, which want Dublin to drop its veto on harmonising the corporate tax base in Europe in exchange or raise its own low corporate tax rate.

In Germany, a senior lawmaker in Chancellor Angela Merkel's conservative party said a further cut in the rate on emergency loans to Greece, already reduced by one percentage point in March, would be justified if it carried out further reforms to reduce its debt risk.

Michael Meister, finance policy spokesman of Merkel's Christian Democrats, told German radio he opposed any idea that Athens should restructure its debt or that it should consider leaving the euro zone.

However, German Finance Ministry spokesman Martin Kotthaus told a news conference: "There is no discussion at the moment about extending the payment schedule or lowering the interest rates for Greece.

Other things we were right on:

A German government spokesman said Merkel would meet European Commission President Jose Manuel Barroso, head of the EU's executive arm, and European Council President Herman van Rompuy, who chairs the bloc's regular summits, on Wednesday to review the situation.

A Greek exit from the euro had never been under discussion and was not now, he told a news conference.

Euro zone and EU finance ministers are due to meet next week to approve Portugal's aid programme amid lingering uncertainty over whether Finland, which has a caretaker government and has not yet begun negotiations for a new coalition, will be in a position to give the required agreement.

Pressure is mounting for those meetings to deliver decisions on Ireland and Greece as well.

Responding to anger in some countries that were not invited to Friday's talks, a German Finance Ministry spokesman insisted there was no attempt to create a two-class euro zone.

Greek Finance Minister George Papaconstantinou, who attended the Luxembourg meeting, said investors did not believe his country could return to capital markets next year as envisaged in its EU/IMF plan, so it might need alternative funding.

Jean-Claude Juncker, chairman of the Eurogroup of finance ministers of the 17-nation euro area, said after Friday's talks there was a consensus that Athens would require a second rescue.

"We think that Greece does need a further adjustment programme," he said after meeting with ministers from Germany, France, Italy, Spain, the EU's Rehn and European Central Bank President Jean-Claude Trichet.

A further adjustment "programme" based on far lower interest rates: shades of AIG anyone? Next up, Greece will be buying back pieces of the Cyclades pledged to the New York Fed's Santorini Lane I programme in 2 years after Bernanke manages to blow the global credit bubble to fresh all time highs.

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hugovanderbubble's picture

Short Spanish Banco Popular till 1.65 euros per share.



_ Santander and BBVA Too..---


The big issue is save or not Spanish banks and government + sub government debt.--...


? The answer next weeks...= my bet _-----------SPAIN IS a huge black hole

ZeroPower's picture

New York Fed's Santorini Lane I programme


Haha! But for serious, Mykonos FTW

Mr Sir's picture

When you are broke any interest rate above 0% is too high.

Sudden Debt's picture









Overflow-admin's picture

Your avatar fits so good that kind of days...


Free money for everybody, from everybody (except richest few, corporations, etc.)

Mr Sir's picture

Greece had never been able to borrow long term money for a rate below 8%. Then when they joined the Euro their borrowing rates fell more than 5% despite their government statistics being falsified. Over the following 10 years they bought a socialist economy they could not afford. Then in 2010 when their short term and long term rates spiked they could no longer afford the payments nor could they afford to keep their beautiful socialist utopia because they could not refinance. Now they are foreclosing, along with the other pigs in the neighborhood. This story sounds familiar.

Urban Redneck's picture

Doesn't bode well for the US

DogSlime's picture

It wasn't a socialist utopia.

Socialism requires that the population contribute to society - typically by taxation.  Paying tax isn't popular in Greece.  It was Socialism, but with no-one actually paying for it properly.  That isn't really Socialism.

Bubbles the cat's picture
Bubbles the cat (not verified) DogSlime May 9, 2011 9:11 AM

Semantics. Just a tiny detail in the fineprint of human existence. Politics 101: "It's what you say that's important. Not what you do."

orca's picture

Please note that today is Europe Day, so rejoice for the common good of mankind

This shitty project will go down like Osama in his compound, but not today my friends, today we celebrate.

Gold 36000's picture

Europe isn't all bad.  Even if they are socialists they are majority white, the natural ruling race.  Holding strong for 500 years and counting.  We real Americans salute you real Europeans.

orca's picture

I flagged you asshole, this is not the place to spout your racist tendencies.

Josephine29's picture

Whilst we see all sorts of talk and hyperbole so much is hidden and not understood. I wonder how many are aware of what is something of a scandal and is explained below.

As to debt restructuring the Euro zone has by a combination of incompetence and dithering got itself into a position where a lot of the restructuring would take place on the books of the European Central Bank! They are fortunate that the vast majority of their taxpayers and voters do not understand what has taken place here. In fact it is worse than that as the accountancy used is that of the madhouse which declares the interest-rate profits but assumes that capital losses cannot happen! Yes a position which can only have large losses as we stand is declaring a profit…

Gold 36000's picture

The Greeks are crazy like a fox.  They staged this whole thing for 50 basis points.

three chord sloth's picture

Well, they could lower the interest rates by fiat. Of course, then no sane person would lend them money, so they'll have to force lending from captured deep-pocket organizations, like pension funds. Then when the still inevitable restructuring happens, their own seniors will take the kick-in-the-teeth.

Gold 36000's picture

I forgot I was supposed to cover for Village Idiot while he was on vacation.  Sorry.  Anyway mom is calling.  Village idiot should be back soon anyway.

Al Gorerhythm's picture

You've done a "stand up" job. You've both made a fine replacement. Now, your villiage is calling.

agent default's picture

In the end, haircuts for everyone.

Catullus's picture

These governments are only going to accept "market-defined" rates so long as they can define the market.

Al Gorerhythm's picture

They want to make the Irish debt "more sustainable". You couldn't make this shit up!

shushup's picture

Once again only "too big to fail" gets enormous amounts of help while everyone else gets "See ya-wouldn't want to be ya!". And record bonuses all around for banksters.

NOTW777's picture

lower rates for "everyone" except the average person.  jamie gets zero, joe sixpack gets 20%. maybe it should read lower rates for bankers

slewie the pi-rat's picture

the IMF is quite the silent party these daze.

politicians, everywhere!

nauagos020's picture


hello i am Greek.

I am a real estate developer (with no loan obligation) and even now in the so called greek-crisis i am building 5 apartment buildings, 1 office building and 2 holiday-residence complexes.

PLEASE listen carefully what i have to say about Greece.

Greece is one of the poorest countries but the Greeks (as an average) are very wealthy.

I am not talking about wealth being happy, healthy and so on.

Greeks (as an average) own more real estate that any other,

They do not rely on lending as much as other eauropeans or americans

They have gold (especially english gold pounds) that no average european or american has

I am not saying they are good people or that they have a lot of exports i am just saying they are wealthy.

However the wealth they have you cannot find it anywhere because it is no declared anywhere.

My friend that works for 850 euros per month has 4 acres of land outside the city near the sea, 24 gold coins (worth 6000 euros) he got as a gift from his family on the day he was born 25 years ago, and his own apartment he bought with no loan for 230000 euros (i am not talking about what his family owns but what he owns). How can this happen? he gets his 850 euros, he has a second job (as a plumber-not declared) that gets him another 850 euros (where he pays no taxes-poor Greece), he has a farm in the 4 acres that gets him minimum 1000 euros (from selling produce) also not declared anywhere (so he pays no taxes-poor Greece) and some times (3 or 4 times per year) he earns another 2000 to 2500 euros doing part time jobs  (like waiting or plumbing in hotels in summer-not declared and tax-free ofcourse). So he gets 10200 from his day job thatbecause in Greece until 12000 income you pay no tax he is tax free and 25000 euros from the rest that are tax free. so with a clean income of 35000 spending less that 9000 per year (no rent or mortgage) say 10000 with his vacations (health insurance and so on have been discounted from his 1050 euros pay giving him 850 euros) he gets 25000 euros in his bank each year.

That is why greek people are rich but Greece as a country is poor. The example i gave you can happen in smaller numbers (however not vry often) but at the most of time can be really magnified in case we talk about doctors, lawyers and so on that make  with the same method (these are real - calculated numbers) 200000 euros at least but they declare 12000 geting away tax free.

sure there are poor people and rich people like any country, sure there are people loosing their homes to the banks like every country.

But as an average believe me

Greeks are wealthy.

So whether Greece leaves Eurozone or not, whether drachma comes back it doesnt really matter.

All that matters is that the Banksters (Rothchilds and the gang -imf fed central bank of Greece...all properties of the same families...Rothchilds and the gang) come and get Greece for a  fraction of what it really costs. It is happening and it will continue to happen and the Greeks will beg for it to happen so that they continue to have theur 25000 at their bank accounts each year because they do not care what happens to the railway stations, the ports, the energy/water companies. They may even give them free like we did with Meganisi Island that the Rothcilds bought to build homes for the super rich just a cople of months ago(they bought land with value 60 mil euros for 6 mil euros).

To sum up...

do not worry about the Greeks just worry about Greece (but why should you-Greeks don't) and wahtever you do always remember it does not matter what you feel or what you do you are not in control no one except a few, very very few people are and what they want will happen and you DO NOT  know what will hapen NOONE does. You just guess.