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AP Issues Confirmation That Austria Is Withholding €190 Million Tranche From Greek Rescue Fund
Earlier we reported rumors that Austria may withold a major upcoming payment to fund the Greek rescue package that could set the Eurozone on fire once again, as countries pull out of their rescue commitments to the insolvent nation. We have now gotten confirmation.
From the Associated Press:
Austria is balking at paying its share of Greece's financial bailout.
Finance Minister Josef Proell says that the December tranche of Austria's contribution - 190 million euros ($258 million) will only be paid out if Greece can show that it has raised the amount of money it pledged to take in through taxes.
Proell told reporters Tuesday that at this stage that target does not appear to have been met. The Austria Press Agency quoted him as saying that he would "comment critically" on this issue at the upcoming EU finance ministers' meeting in Brussels.
If Austria balks, and other countries follow suit, the Greek bailout package could unravel.
Athens is receiving euro110 billion ($150 billion) in rescue loans from the International Monetary Fund and other eurozone countries.
And some more information from our friends at the Prudent Investor:
Austria is the second Euro member after Slovakia abandoning the fragile solidarity in the Euro club.
Greece said Monday it would miss a target to reduce its government deficit to 8.1% of gross domestic product this year, which was set after Greece took a €110 billion bailout from euro-zone countries and the International Monetary Fund. (Germany put up €22 billion of that total.) As recently as last month, Greece said it would beat its target and report a deficit of 7.8%.
Instead, it now says the deficit is likely to be 9.4% this year, and that government debt would total 144% of GDP at the end of 2010. Citigroup economist Giada Giani said Greece's debt could reach 165% of GDP in 2013. At the time of the bailout, Greece agreed that its 2010 debt would be 133%, rising to 150% in 2013.
Austria's government has come under heavy fire from all sides for its budget 2011. Critics lament that next year's household shows no structural improvements and depends preponderantly on higher taxes while spending cuts target mainly social expenditures. 45 organisations have called for a mass protest on November 27.
If this issue is not resolved imminently, and Austria is certainly posturing for what will now become preferential treatment of EU countries w/r/t ESFS participation, look for all hell to break loose.
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I think they were called "The Hapsburgs."
Austria is a future zombie candidate to be. Trust me, they thought that loaning money to former Soviet Republics and Eastern Europe as a great idea.
Ooops.
Where is my fiddle??
Fiddle dee dee, I'll think about that tomorrow.
Tomorrow. As in bend over, take some of your own medicine.
It's probably in the same place as the distributor cap, wherever the hell the nuns hid that:-) "The hills are alive........." with the sound of
Didn't that trouble in the 1930's start in Austria too?
No.
Poland.
Austria's time in the limelight was 20 years prior.
Yes, the bankruptcy of the bank Creditanstalt in 1931 made things much worse...
About f'kin time
Anarchy Bitchez!
all these technical terms are bull shit. Benny will just press whatever button is necessary and digitally all is well in the global financial markets
Ahmen to that. What a Fed audit would show is that WE in the US have put money up to bail out Greece. Of course it's all funny money that Bernanke is printing but whose counting. So if Austria starts to balk then no doubt Bernanke will be in there with some QE2,3,N money at some point.
Don't worry America none of the QE money will ever have to be paid back as a US debt default will soon be the next on the docket.
This folks is called a credit contraction.. or the bankers finally waking up and getting a friggin clue. Just as soon as the WS Xmas bonuses are doled out of course.. lol
The article reports that the Austrian government's action is in response to widespread pressure from its citizenry. This is not what I would call the banksters getting a clue in economic terms.
Yeah, it's guaranteed that WS Banksters won't be getting the coal in their stockings that they have earned.
I got rid of my last euros during the summer. I have mostly PMs now and some dollars too.
What will happen with the Euro? Will they do bailouts once again by issuing some kind of euro-bond? Or will just germany and france pay for the PIIGS? I think default is not an option, is it?
My guess is the IMF will end up stepping in, thus sticking the U.S. taxpayer with a good chunk of it.
So: it seems there are roughly three possible outcomes. One, Austria backs down after a bit of posturing aimed at domestic audiences. Two, Austria ducks out of its Greek payments but enough other member states continue to carry the load - game theory, indeed. Three, actual excitement. I'd rank their probabilities in about that order.
Unfortunately, I agree. #3 is the one that NEEDS to happen to get this crap over with to let the market correct and naturally heal itself.
A United Front,soon be every nation for itself,the fun is starting.Just wait till the bond holdeers start getting jittery.
It's unravelling unky as we type/speak. The euro that is. They can cut loose the piigs and go to .90 euro or abandon it all together.. decision time. Or sink with the PIIGS> oink oink
The easy way is for Germany to come out and bring back the DM, then just let the Euro fall to ??????
That would sort out all the problems!!
Taxpayer revolt, bitchez!
Credit AnusTaut.
CA is long gone... now it is UNICREDIT run by Milanese Banksters
Pay bonuses in Greek cds.
I'd like to see some chickens roosting, but 190M€ is a rounding error on a rounding error in this context.
Well,
after WWII some countries bravely accepted their mistakes. And the good guys then showed comprehension. Then the world went on towards the bright side. And it is only by being wise enough to show tolerance and comprehention and enabling the "correction of mistakes" that in the long term you achieve progress.
Hostility and hatred (which will easily arise under such attitudes) will once again destroy Europe and in the long-term..harm everyone.
.
Max Keiser
http://www.youtube.com/watch?v=EjIWH7CSP8U
Interesting, especially as the Austrians would never have done this without the nod from Fritz
Jean-Claude is already switching on the printing presses ....
Forget the PMs, I've been stockpiling Ouzo by the case.
http://upload.wikimedia.org/wikipedia/commons/thumb/9/9b/Ouzo_Sans_Rival...
Wonder where all the greek 'bailout' money went the greeks have the last laugh.
They are trustworthy no? A deal is a deal? lol
You see all of this is a crisis of Confidence.. globally amongst bankers and politicians. You know a handshake used to be all that was needed.. now its 'tranches' and 'cds' and a old fashioned dagger in the back.
The proven winners are both individuals and sovereigns who first run up their debts, then default when the bill comes due.
Just as more and more people are beginning to comprehend the advantages of strategic default, so too nation states will begin to execute the same policies.
In the end, the biggest winner will prove to be the first: Iceland.
Very interesting - think you could be right there. Maybe time to invest in Iceland?
go geothermal
Its clear to me that the various treasuries have gotten wind of the Irish deal which is effectively a monetisation of Irish bank debt by the ECB and therefore they have decided not to waste anymore fiscal resources on the Greeks as they expect the ECB to monetize everything.
Or am I missing something.........
Well, the Irish deal that's supposedly on the table - Irish banks bailed out by the Irish taxpayer, using money borrowed from the other member states (the EFSF) - is designed to prevent ECB from having to monetise any Irish bank debt. It's the ECB's exit from Irish support, one which they apparently brought forward by giving the oxygen pipe a little squeeze last week. Buiter explained the game nicely.
Well M.B. I was wrong, its looking like more debt gruel on the menu for European goverments.
But they will want their pound of flesh - the 12.5% corporate tax is toast - Will Hutton who has close connections with the BOE stated in response to RTE radio 1 questions regarding what the UK requires other then interest on a loan - he wants the finance houses out of Dublin.
The basic fact is that at the street level almost all Europeans don't like or trust Europeans from other countries. Why should they - there isn't a family in Europe that doesn't have living memories of rape, torture, bombing, gassing, theft and/or murder of one or more of their relatives by soldiers from some other European country, or from some ethnic group within their own country. That is LIVING MEMORY - not ancient history. That is what the EU tried to paper over ( literally) with the EURO, and that is exactly why the whole kumbaya scheme is inevitably unraveling. We have no equivalent in the US - everybody with any living memory of the War Between The States ( the Civil War to you Yankees) is long gone, and so is anyone with a living memory of our enslavement of Africans and our genocide against Native Americans. No living memory, no sustained hatred. Lots of artifacts of that kind of hatred ( plenty of racism & other vague prejudices) but nothing on the level of how everyday Europeans feel about each other. Hatred, suspicion, vengence - it is all playing out. Again.
same happening in america - look for texas at al to claim their independence from federal government
Remember the Alamo!!
Don't mess with Texas!
I have heard the Civil War being referred to as the "War of Northern Aggression".
Yep.
There's yankees, and damn yankees.
The damn yankees stayed.
yep, took me years to figure out the legal basis and understand the comments from my Citadel-grad friends.
There is a point to this pointless discussion; comes to the fore as we see the "Federal" gov't doing worse (I'd say).
- Ned
p.s. and yes-"cracka'" and "yankee" were involved in the conversation that was fueled with ethanol of various ages and origins ;-)
They've been #uckin at war for thousands of years with each other... so you think they're going to love bailing out a population of bloodsuckers and leaches?
Great observation.
Essentially correct.
However I don't get the feeling that the South ever gave up in the case of the US Civil War. It won't take much at all to rekindle that one, I'm guessing. Might not come to bullets, but could readily screw things up.
I don't think there are many Austrian families who have living memory of one of their relatives being raped or murdered by a Greek soldier.
This is irrelevant noise.
The Austrian Govt (and other Eurogroup members) made a deal with the Greek Govt. The Greek Govt doesn't comply with its part of the deal, why should the Austrian (and any other Eurogroup member)?
I dont care how much 'debt' some assclown at the IMF assigns me, I also refuse to send my 'tranche'! Suck emptiness all you BS world banksters!
Economic anarchy next!
Max Keiser is the Jim Kramer of the internet.
Greeks pay taxes? News to me.
currency war ON
US Bonds are selling off too.. this is going to get nasty.
Yes, it was Rothschild-owned CreditAnstalt that went bust in 1931 and initiated the European depression.
I did not know the Rothschilds owned CreditAnstalt, thanks for the info!
This is the second interesting item I have learned today here at ZH. I feel at home...
The Austrian common man loved the idea of bailing out Greece almost as much as the American common man loved the idea of bailing out Mexico.
Which means they f*cking hated it!
Now the elites, on the other hand.....
This is nothing that a student of the Zimbabwe School of Economics can't handle.
You can only get so much water from a stone. You can only get so much blood from a turnip. Eventually, your creditors are going to figure out that you are insolvent and nothing is going to fix that. Austria was the first to step up and realize this about Greece.
As for the European Union, game over.
Wonderful! As the shit hits the fan after hours in Euroland it will be prime time here in the states. More popcorn please.
I keep telling myself that all this is for show. That Euroland will figure it out and keep moving ahead. I don't see where they have a choice. Six or seven generations of nearly continuous modern warfare (if one includes Napoleon) and I should imagine (hope?) they've finally got the religion.
A tranche here, and a tranche there--pretty soon, you're talking real money...
Papandreou: Bernanke, you can't spend your whole life worrying about your mistakes! You fucked up... you trusted us! Hey, make the best of it! Maybe we can help.
Bernanke: [crying] That's easy for you to say! What am I going to tell the Fed?
Papandreou: I'll tell you what. We'll tell the Fed you were doing a great job taking care of his car, but you parked it out back last night and this morning... it was gone. We report it as stolen to the police. Trichet takes care of the wreck. The IMFs' insurance company buys him a new car.
Bernanke: Will that work?
Papandreou: Hey, it's gotta work better than the truth.
Sarkozy: My advice to you is to start drinking heavily.
So let's say that countries go bankrupt...
Then..fiat money would be destroyed, since debt is wiped out.
Hence, global M would decline.
Hence, gold prices should fall (as they track global M).
So is it surely the case that gold can hedge sovereign risks?
Gold price is rigged, so how do you know how much is it worth?
Just wait enough an buy whatever you need in the future.
Paper holders can not buy anything at all.
Well yes...
My concern is that due to fractional reserve lending, when sovereign debts start to fold, banks will have to call in more loans and ask for more collateral, which is a self-reinforcing cycle.
So, ironically, through government stupidity, while they may be trying to inflate the money supply to pay off debts (QEx), unsynchronized international defaults elsewhere due to the overload of debt may lead to the entire opposite: deflation in all assets and hence a lack of circulating money to pay off the debts.
Asset owners always lose the "Red Queen Race".
Just think of it, every MSM outlet is pumping out "dollar devaluation" message. Yet, it could be that the cartel is planning imminent sovereign defaults, thus setting off a deflation spiral in all assets, including PMs, which is perfect if you are holding ....dollars.
Most likely central bankers will start monthly QE globally if this occurs.
It is all for show.The goldman sachs knows the shit in advance and makes lots more money .
QE to infinity, like the man says time and time again.
I havent seen anything to make me think he s wrong.
Maybe the UK next, or USSA, who knows?(oh yeah GS )
The Africanisation of the western world continues.Lots of poor semi-slaves in shanty towns ruled by the few.
Regards
Ozzy
This is good news. The rules of the aid package say that the eurogroup must unanimously agree, before each payment to Greece, that the preconditions imposed on Greece have been met.
It looks like reaching that unanimous conclusion for the December payment is rather difficult right now.
This is truly getting interesting.
Austria is the next piece to fall.Austria’s largest bank, Bank Austria, which in turn is owned by Italy’s Unicredito along with the German HypoVereinsbank, faces what the Vienna press calls a ‘monetary Stalingrad’ over its loan exposure in the east. In a botter historic irony, Bank Austria bought the Vienna Creditanstalt in recent years in its wave of mergers.
According to estimates published in the Vienna financial press, were only 10% of the Austrian loans in the east to default in coming months, it ‘would lead to the collapse of the Austrian financial system.’ The EU’s European Bank for Reconstruction and Development (EBRD) in London estimates that bad debts in the east will exceed 10% and ‘may reach 20%.’
... but they passed the stress test? Right?
Why is the entire post in bold?
It's annoying and besides, almost every bank in the West - were 10% of its customers to default - would collapse.
The ground rules are simple for the players in this multi-party prisoners' dilemma--conform or defect.
Make your choice bitches.
let's wait and see what's going to happen, my money is on Austria CDS, all of austria´s banks erst bank, bank of austria, Raiffeisen and Volksbank are heavily exposed to easten europe. Forget the Piigs the real euro crisis will start in the east,
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