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It's Official - EU Agrees On Greece Bailout

Tyler Durden's picture





 

German opposition crumbles, as a Greek bailout plan is now official. We expect Portugal, Spain, Italy, Latvia, Ukraine, Bulgaria, Austria, and, finally, the UK, to line up next at the trough. And for all of you cynical bastards who thought that G-Pap was full of methane when we claimed he was not looking for aid... You were right. So now, under the wise tutelage of Goldman, make sure to plough all your money into the Euro. After all there are at least a few months before the next bailout has to be effected.

From The Guardian:

The eurozone has agreed a multibillion-euro bailout for Greece as part of a package to shore up the single currency after weeks of crisis, the Guardian has learnt.

Senior sources in Brussels said that Berlin had bowed to the bailout agreement despite huge resistance in Germany
and that the finance ministers of the "eurozone" – the 16 member states
including Greece who use the euro – are to finalise the rescue package
on Monday. The single currency's rulebook will also be rewritten to
enforce greater fiscal discipline among members.

After all bailing out worked miracles for the US financial system and Dubai, so why not again... and again... and again. Good thing the UK, which as UniCredit pointed out yesterday could be next in the bailout wagon, is not paying. Now that would be truuly ironic.

The member states have agreed on "co-ordinated bilateral
contributions" in the form of loans or loan guarantees to Greece if
Athens finds itself unable to refinance its soaring debt and requests
help from the EU, a senior European commission official said.

Other
sources said the aid could rise to €25bn (£22.6bn), although it is
estimated in European capitals that Greece could need up to €55bn by
the end of the year.

Germany, the EU's traditional paymaster, but
the most reluctant to come to the rescue of a fiscal delinquent in the
current crisis, has played the pivotal role in organising the rescue
package, the sources added.

"There have been quite intensive
preparations under the eurogroup. We have the ways and means to do it,"
said the senior official, asking not to be named because of the
subject's sensitivity.

We expect Greek rioting to break out in Berlin relatively soon.

 

 


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Fri, 03/12/2010 - 14:06 | Link to Comment TraderMark
TraderMark's picture

Next!

Fri, 03/12/2010 - 14:32 | Link to Comment WaterWings
WaterWings's picture

We expect Greek rioting to break out in Berlin relatively soon.

Just in case anybody wants to see what a real-life example of herd-mentality "looting" looks like as the flood gates open:

http://www.youtube.com/watch?v=A8_b5Z5_k5c

Just think, someday soon it will be US supermarkets...their precious little minds.

Fri, 03/12/2010 - 15:29 | Link to Comment Gold...Bitches
Gold...Bitches's picture

someday soon it will be US supermarkets...

already happens anytime the weather report shows the possibility of an inch or two of snow.

Fri, 03/12/2010 - 16:17 | Link to Comment Cognitive Dissonance
Cognitive Dissonance's picture

I already have my 6 cases of "don't squeeze the Charmin" toilet paper and 9 cases of Bubble Bee white albacore "packed in virgin spring water" tuna fish.  So I'm all set for the riots. :>)

Fri, 03/12/2010 - 19:23 | Link to Comment jomama
jomama's picture

bumble bee dolphin?

Fri, 03/12/2010 - 20:40 | Link to Comment Hulk
Hulk's picture

Better stock up on Spam CD, not many calories
in Tuna...50 yr shelf life too

Fri, 03/12/2010 - 18:30 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

To think a year and a half ago I said there would be riots soon.  Let me correct that statement; "Ahem.  Attention shoppers, the revolution will NOT be televised.  Thank you."

Fri, 03/12/2010 - 14:08 | Link to Comment gmak
gmak's picture

Ooops. Did GS factor this into their 1.45 target?  I guess the underlying assumption is that there will be a QE III or some such thing in the states, and that it will be the US taxpayer footing the bill indirectly through the GS / JPM conduit.

 

Fri, 03/12/2010 - 14:18 | Link to Comment Lionhead
Lionhead's picture

Now the German taxpayers can feel just like the US taxpayers. Misery loves company as they work harder for less & less...

Fri, 03/12/2010 - 16:04 | Link to Comment carbonmutant
carbonmutant's picture

It looks like The ECB with the help of  Merkal and Sarkozy have manged to create a "European Monetary Fund" for endangered EU member states.

I wonder if the IMF will be used to bailout California?

Fri, 03/12/2010 - 14:21 | Link to Comment 10044
10044's picture

Gold bitches...

Fri, 03/12/2010 - 14:23 | Link to Comment Divided States ...
Divided States of America's picture

who ever needs an eventual bailout better cry wolf now and get their bailout soon before the line-up gets crowded and the EU (or IMF) runs out of money

Fri, 03/12/2010 - 14:23 | Link to Comment Hondo
Hondo's picture

Someone needs to read the fine print of the agreement.  What does Greece have to accomplish from a budgetary perspective (if anything) and how/when will that be monitored.  And what happens if it is found that Greece instead of clamping down on its budget now relies solely on the guarantees.  After all screw the Germans I need my vactation and pension.

Fri, 03/12/2010 - 15:23 | Link to Comment faustian bargain
faustian bargain's picture

I'm sure the Greeks will do the honorable thing.

No really.

Stop laughing.

Fri, 03/12/2010 - 14:25 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

The single currency's rulebook will also be rewritten to enforce greater fiscal discipline among members.

...and to allow for bailouts of members?

Fri, 03/12/2010 - 14:28 | Link to Comment Anonymous
Fri, 03/12/2010 - 14:32 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Hey Wolfgang cough up those Euros now - we in Ireland are not a great fan of this austurity thingy.

And please please do not take the Piss out of us - we are all Europeans now baby

Fri, 03/12/2010 - 14:32 | Link to Comment Anonymous
Fri, 03/12/2010 - 15:17 | Link to Comment Orly
Orly's picture

The key to that game was the Ukraine.

:D

Fri, 03/12/2010 - 16:30 | Link to Comment Anonymous
Fri, 03/12/2010 - 14:33 | Link to Comment Get_to_the_choppa
Get_to_the_choppa's picture

Just one step closer to a split in the eurozone and the currency itself.  It will happen.

Fri, 03/12/2010 - 14:35 | Link to Comment Oso
Oso's picture

not sure how reliable the Guardian is, all of us need a second source to verify.

 

i do admit, GS' trading call on EUR seems remarkably coincidental with this, though. 

Fri, 03/12/2010 - 14:41 | Link to Comment dumpster
dumpster's picture

bailouts for all states .. QE to infinity ..

 

bend over grab ankles go ah

Fri, 03/12/2010 - 14:42 | Link to Comment carbonmutant
carbonmutant's picture

You gotta wonder how the Irish feel about this...

Fri, 03/12/2010 - 14:49 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

For a while I thought the Irish government had a plan of sorts - express to the Germans that we will take some pain and then when the situation becomes impossible the Teutonic Calvary could come in to clean up the mess but now I am not so sure - maybe the Greeks are just better poker players.

Fri, 03/12/2010 - 15:13 | Link to Comment carbonmutant
carbonmutant's picture

 I think the Greeks used the riots to sell the threat of economic collapse to the rest of the EU. It's interesting how quickly the EU was willing to violate their own rules.

It certainly provides a template for other countries that need financial support.

Fri, 03/12/2010 - 15:23 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

Yes the second Lisbon treaty was a wake up call for me - nothing gets in the way of the EU juggernaut , it just gets a bit messy for a while and they stumble on and invent new conventions.

The funny thing about the Lisbon treaty is that the whole economic thrust of that article is now obsolete - it will be hilarious to watch the bureaucrats in Brussels trying to salvage something from this bonfire of the vanities.

Fri, 03/12/2010 - 15:05 | Link to Comment Gunther
Gunther's picture

Strange that the bailout did not get any attention in German online newspapers.

Handelsblatt, Spiegel online and Financial Times Deutschland did not report any bailout plan.

The story closest to a bailout-report is in Handelsblatt and has a totally different spin. A bailout would include strict austerity measures and harsh sanctions if overspending continues. In the extreme a country could even get expelled from the monetary union while staying in the EU.

http://www.handelsblatt.com/politik/international/schaeuble-plan-pleites... (in German)

Fri, 03/12/2010 - 15:15 | Link to Comment Anonymous
Fri, 03/12/2010 - 14:46 | Link to Comment AnonymousMonetarist
AnonymousMonetarist's picture

A Euro version of a 'bazooka in my pocket'

By the way TD your blog is winking in and out of existence today ...

Must be all the MSM staff getting buggy-whipped and frantically trying to figure out where in that 2000+ page opus
your nuggets are coming from :)

Fri, 03/12/2010 - 14:56 | Link to Comment Anonymous
Fri, 03/12/2010 - 14:59 | Link to Comment AxiosAdv
AxiosAdv's picture

Greece will never be able to pay off these loans.  There is no will - the people are selfish and greedy only showing interest in their own pocket.  Their ability to tax is highly limited as most people of any financial consequence are self employed and report very little income.  The taxes are staggering and getting worse.  Benefits will be slashed hurting morale even more.  Strikes will continue slowing any potential growth and really damaging their tourism trade especially if it continues for another few months...May is almost here.  Bottom line - the economy is not big enough or strong enough and the people aren't committed enough to pull this off.  Greece will default, it's just a matter of when.  When it does happen, it wouldn't surprise me to see them forced to resign from the EMU in exchange for some debt forgiveness.  Who knows if they'll stay part of the EU for trade.  People who think this is over are whistling past the graveyard...kinda like the first stages of the subprime debacle.  Oh it's "contained".  Sure...

Fri, 03/12/2010 - 15:09 | Link to Comment zenon
zenon's picture

Sure looks like they are buying some time & kicking the can down the road. Mind you, by then either we'll have more countries on the default-list (including some biggies) or the world economy will be improving.  Either way, it's the only viable option for Greece & the EU to take right now.

Fri, 03/12/2010 - 15:19 | Link to Comment Stranger
Stranger's picture

Why should you feel morally obliged to pay back a loan that the banker just printed into existence?

It's a scam. You're just sharing in the scam with the banker.

 

Fri, 03/12/2010 - 20:52 | Link to Comment taraxias
taraxias's picture

+1000

Fri, 03/12/2010 - 15:57 | Link to Comment Anonymous
Fri, 03/12/2010 - 16:22 | Link to Comment Mark Beck
Mark Beck's picture

Consider for the moment, that Greece will only need make a payment in perpetual debt peonage. Which, in its smallest installment, is servicing interest on the loans. So, can Greece pay interest on the loans?

One outstanding question is one of how to enforce or gauge Greece austerity from the EU? If indeed this is a real concern.  How does one do this?

Also, if more countries are going to default, or threaten to, it may be that getting the loans now is in Greece's favour. After all there is a possible play here in currancies if the EURO is under pressure in the near future.

Mark Beck

Fri, 03/12/2010 - 14:59 | Link to Comment Anonymous
Fri, 03/12/2010 - 15:05 | Link to Comment Anonymous
Fri, 03/12/2010 - 15:16 | Link to Comment buzzsaw99
buzzsaw99's picture

Wrong thread, sorry.

Fri, 03/12/2010 - 15:18 | Link to Comment chet
chet's picture

You get backed into bailing out the first one (Bear Stearns), while offering stiff warnings to others that they need to clean up their act because you won't do it again.

The (German and French) public get really pissed off about paying the tab, so the next time, you don't blink and you let them go down (Lehman).

Everything goes to hell, panic ensues, and the (German and French) public bails out everyone with newly printed money.

How this all works when you've already been in a recession and pumping out stimulus programs for two years is an unknown....

Fri, 03/12/2010 - 15:19 | Link to Comment BlackBeard
BlackBeard's picture

I don't see how going down this path is bullish for the Euro....

Fri, 03/12/2010 - 15:21 | Link to Comment Orly
Orly's picture

The Euro hasn't reacted one iota since the announcement.  That in itself is kind of strange.

Fri, 03/12/2010 - 15:25 | Link to Comment reading
reading's picture

I don't see how going down this path is bullish for the Euro....

Because Goldman said it is...


Fri, 03/12/2010 - 15:57 | Link to Comment tenaciousj
tenaciousj's picture

By the time they get around to telling everyone else what to do, aren't they usually starting to do the opposite?

Fri, 03/12/2010 - 16:41 | Link to Comment hedgeless_horseman
hedgeless_horseman's picture

Yes.  It is called front running and is a clear conflict of interest, but not anything the US.gov wants to worry about.  Barry O'Potus has "free health care" to sell, and multi-tasking is not his strong suit.  So stop asking questions, and have a drink.  It's Friday.

 

Fri, 03/12/2010 - 15:21 | Link to Comment Anonymous
Sat, 03/13/2010 - 04:24 | Link to Comment jeff montanye
jeff montanye's picture

nice.

Fri, 03/12/2010 - 15:27 | Link to Comment SWRichmond
SWRichmond's picture

I really thought the IMF would do it.

Fri, 03/12/2010 - 15:27 | Link to Comment kevinearick
kevinearick's picture

so, we are now on global welfare, and all the nation/state systems are officially obsolete.

now, they all march toward the precipice together.

actually, it's progress. the precipice tends to clarify the thinking of individuals.

Fri, 03/12/2010 - 15:29 | Link to Comment Stevm30
Stevm30's picture

"The single currency's rulebook will also be rewritten to enforce greater fiscal discipline among members."

Let me guess... Fiscal "planning meetings" with each nation's finance minister to be held quarterly in Monaco, or one of the Baleric islands.

Fri, 03/12/2010 - 15:30 | Link to Comment Anonymous
Fri, 03/12/2010 - 15:30 | Link to Comment SgtShaftoe
SgtShaftoe's picture

I could be wrong I think Mr Market has the Greece bailout priced in for now.  The contrarian view as Faber says is bullish on JPY... maybe Euro too in the shortrun, before it all flies apart like a helecopter crashing into the ground.

 

Fri, 03/12/2010 - 15:35 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

Tomorrow, it seems, never comes. So why not put it off?  Was there ever a question? Now that the easy one is done, it's time to move on up the chain.

Fri, 03/12/2010 - 15:44 | Link to Comment deadhead
deadhead's picture

going to be entertaining.

seems that we are genuinely at a tipping point for some of our States as well......this sure seems to me to be the eye of the storm and that backwall is just gonna be a son of a bitch!

Fri, 03/12/2010 - 15:59 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

+1 states and municpalities dropping like flies. 

Fri, 03/12/2010 - 15:37 | Link to Comment Anonymous
Fri, 03/12/2010 - 16:00 | Link to Comment Ned Zeppelin
Ned Zeppelin's picture

You are using reason.  Stop it. 

Fri, 03/12/2010 - 16:00 | Link to Comment tenaciousj
tenaciousj's picture

No, no, you have it all wrong see.  Print more US dollars and the value declines because there are more dollars so each dollar is worth less.  Print more Euros and the value increases because... well because there are more Euros and that means they are stronger.

I've given up trying to make sense of it all at this point.

Fri, 03/12/2010 - 19:52 | Link to Comment THE DORK OF CORK
THE DORK OF CORK's picture

I believe a American Bureaucrat once said to a French Technocrat that it is our currency but your problem.

What he meant by that is the Fed can print all the reserve  it wants since it is the reserve - so it actually cheapens other currencies buying power since they are not the reserve and therefore are squeezed out since the only "real money" is the FRN. The rest of the world is then forced to hold FRNs to preserve their buying power - it is a beautiful system of control but the rest of the world is getting a tad pissed off.

This may be the one of the reasons that foreign banks got payed through the AIG conduit as it was the only way that Europe could withstand the 2008 shock - there were perhaps other reasons but I seem to remember reading somewhere the French Finance Minister had some heavy dealings with the US treasury.

 

 .

 

Fri, 03/12/2010 - 15:42 | Link to Comment carbonmutant
carbonmutant's picture

 Kurier from Austria is also reporting the story...

"The German government put together an emergency package for Greece - and hopes that it will ultimately cost you nothing."

"While the policy was the creation of a "European Monetary Fund" for endangered EU member states and stricter rules for speculation in CDS derivatives in fixed income trading vociferously debated, they played secretly through the concrete life of Greece. Chancellor Merkel is the engine - along with French President Sarkozy. "

http://www.google.com/translate?sl=de&tl=en&u=http%3A%2F%2Fwww.kurier.at%2F

 

Fri, 03/12/2010 - 15:40 | Link to Comment Shameful
Shameful's picture

Go go global infinite moral hazard!

Let this be a lesson to the states in the USA. If you want a bailout, riot. Don't tighten your belts like Ireland, break shit like Greece! Can't wait for the CA and MI riots, hell I wonder if the state reps will advocate the riot "People break out the gas and the hammers!  We need free money from Uncle Sugar!"

At least now I get to see what the Germans are made of, if they will take this lieing down like the Americans have. If they do then we'll see them fully gutted to save the everyone for a few more months.

Fri, 03/12/2010 - 16:02 | Link to Comment Gordon_Gekko
Gordon_Gekko's picture

I have absolutely NO DOUBT in my mind that the American people will choose rioting over austerity, considering that for the majority of them hard work means watching American Idol. 

Fri, 03/12/2010 - 16:04 | Link to Comment faustian bargain
faustian bargain's picture

hard work = what happens when the batteries die in the remote.

Fri, 03/12/2010 - 16:18 | Link to Comment Gold...Bitches
Gold...Bitches's picture

hard work = "isn't there an illegal around i can pay cheap to do that?"

Fri, 03/12/2010 - 16:25 | Link to Comment carbonmutant
carbonmutant's picture

 Hard work for many millennials is finding a place to crash.

Fri, 03/12/2010 - 16:45 | Link to Comment Anonymous
Fri, 03/12/2010 - 18:23 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

To add, "hard work" includes facebooking.

Fri, 03/12/2010 - 18:47 | Link to Comment Shameful
Shameful's picture

Yeah but it will do no good.  If I was steering the American operation for the oligarchs I would have Zimbabwe Ben prop up the muni/state market and when I can't hold it up anymore (dollar weakness) kick the legs out from under it and wipe out all the states pretty much at the same time.  They go for bailout and you can either vaporize the dollar right there with mass printing or also kick the legs out of the Treasury market and really put the screws in.  After all if gas reaches record highs and you have TSA goons looking for "terrorists", how many could really get to DC to protest?

Fri, 03/12/2010 - 15:52 | Link to Comment Anonymous
Fri, 03/12/2010 - 16:19 | Link to Comment Anonymous
Fri, 03/12/2010 - 16:42 | Link to Comment no cnbc cretin
no cnbc cretin's picture

It seems to me bailouts do not fix anything. And they will only make things worse, in the long run. Unless you fix it the problems. But, when human nature comes into play, meaning greed/corruption/fools/banksters - I don't see any of our problems going away, until it all goes BOOM!

Fri, 03/12/2010 - 17:45 | Link to Comment Anonymous
Fri, 03/12/2010 - 17:46 | Link to Comment Anonymous
Fri, 03/12/2010 - 18:19 | Link to Comment Anonymous
Fri, 03/12/2010 - 22:37 | Link to Comment Anonymous
Sat, 03/13/2010 - 16:34 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Mob Rule"...yeah great thx!

Fri, 03/12/2010 - 20:22 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

About time they made the news "public record".

Fri, 03/12/2010 - 18:45 | Link to Comment Anonymous
Fri, 03/12/2010 - 19:13 | Link to Comment Anonymous
Fri, 03/12/2010 - 19:18 | Link to Comment Aductor
Aductor's picture

Time to buy some more Vrenelis.

Fri, 03/12/2010 - 19:25 | Link to Comment jomama
jomama's picture

And what role is the Fed playing in this, the latest installment of the ongoing charade?

Fri, 03/12/2010 - 20:33 | Link to Comment Asimov
Asimov's picture

Just imagine how much fun the german politicians are going to have trying to defend themselves against incumbents when all they have to do is point out that the sitting politicians gave money to people who called them nazis.

 

Until somebody OFFICIAL stands up and says the same "sources" isn't good enough to make me believe this is anything but another bullshit news release meant to prop up the euro for a short time.

 

Remember the south korean investment bank don't you?

Fri, 03/12/2010 - 22:34 | Link to Comment Anonymous
Fri, 03/12/2010 - 23:21 | Link to Comment Anonymous
Sat, 03/13/2010 - 00:17 | Link to Comment Anonymous
Sat, 03/13/2010 - 00:18 | Link to Comment Anonymous
Sat, 03/13/2010 - 05:49 | Link to Comment asdf
asdf's picture

once again, this is the usual bs from british newspapers. How many times have they written about a bailout?

 

German dementi from saturday:

 

http://www.salzburg.com/online/nachrichten/wirtschaft/Deutschland-dementiert-Bericht-Griechenland-Hilfen.html?article=eGMmOI8Vgt8NH8hhMFpTosunDbtLbcR67C4lVQo&img=&text=&mode=

 

the government doesn't know anything about a bailout and expects that greece can refinance itsself.

Sat, 03/13/2010 - 12:21 | Link to Comment dcb
dcb's picture

I don't get you folks. chart out FXE. you had  three days of higher lows on thursday good rsi, and indicators. I wish I had bought a few days ago, bu got a good pop for the overnight. I'll take the low of friday, put in a dollar bull purchase order, in case it's a fake break out. the bollenger bands were narrowing. it had a classic bull set up. with a hug bottoming volume day.

to me the interesting thing is how the markets didn't follow currencies are all. we should not by anywhere a new top in spy.

Sat, 03/13/2010 - 15:07 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

"Germany, the EU's traditional paymaster, but the most reluctant to come to the rescue of a fiscal delinquent in the current crisis, has played the pivotal role in organising the rescue package, the sources added."

Thus Germany could have fairly asked for the IMF gold.

Sat, 03/13/2010 - 15:35 | Link to Comment Anonymous
Sat, 03/13/2010 - 16:33 | Link to Comment Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Are you referring to the corp?  If so, is the corp the same that was founded by Fritz Thyssen, the chief Nazi fundraiser, whom had his money drawn from a bank in Holland, that was provided by loans by the bank of Brown Bros, Harriman while Prescott Shelden Bush was pres. of said bank? 

PS, All gvmnts fllwng wrng pth.

Sat, 03/13/2010 - 16:55 | Link to Comment Anonymous
Thu, 04/15/2010 - 08:56 | Link to Comment mark456
mark456's picture

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