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What The Third Greek Bailout Will Look Like
Mere weeks after the Merkel re-election, it will come as no surprise to anyone that Greece is to be bailed out for the third time. Germany's Die Zeit newspaper notes the government is assembling a Greek bailout plan which essentially has four gimmicks to fill the "high-single-digit-billion" budget shortfall. Despite having been told time and again that the worst is over, Greek Bailout III will entail shifting cash from the bank recap fund, Bill sales to specific banks which can be instantly collateralized with the ECB, possible extensions of credit by existing creditors, and reduction in interest rates on existing debt. Of course, we will be told that this is the last time and that Greece will emerge victorious in just 1 or 2 more years...but after a few weeks of epic strength, the Athens stock index is giving some back in the last 2 days.
Via Bloomberg,
German government is assembling Greek bailout plan involving shifting funds, ECB assistance, expanded credit and outstanding-debt reduction, Die Zeit newspaper reports, citing unidentified finance officials.
- Creditors to shift unused Greek bailout funds earmarked for bank recapitalization in current program to fill 4 bln euro funding gap
- Amount in current program could be topped off by funds raised in short-term government debt sale to private banks, which can use the bills as collateral through the ECB
- Creditors weighing additional financing to Greece to 2016 after current bailout ends next year; IMF program to end then
- "High single-digit billion’’ sum needed to finance Greece through beginning of 2016
- Creditors considering extending credit maturities and lowering interest rates to help Greece carry debt burden
Seems to us that if the bank recap fund is greatly rotated into government funding then all that hot money flows into Greek banks may be a little caught offside?
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It won't look much different from the 4th and 5th I'm thinking.
Didn't the Greek govt recently say they didn't want anymore bailouts?
Anyone checked with them?
Goldman is the Master ....
Greece had $2.8 billion debt in 2003, Goldman turned into $1.2 trillion debt ...
http://www.bbc.co.uk/news/world-europe-17108367
The next Greek bailout will look like a Golden Dawn rallying cry
They don't decrease your rates when you can't pay folks, they eargly look forward to raising them or declare chapter 7 or 11. It's just that easy.
This is actually the 4th Greek bailout:
May 2010 was the 1st Bailout. It proved insufficient in about a year. Negotiation began on the 2nd bailout which was agreed to by the troika and Greece in March 2012. Again, Greece's debt pile kept growing as the economy and employment continued shrinking. Greece was unable to make debt payments without assistance from the ECB purchasing newly issued T-bills, so the 3rd bailout was rolled out in December of 2012.
Another financing hole began materializing in the Spring, and by July it was apparent that more Greek aid would be required prompted by a €2bn health system deficit and over €1bn in arrears to government vendors, figures which are not included in the official government deficit.
The adherence to the euro is crushing the Greek economy, and there is no end in sight to this dynamic; hence, Greece has become a permanent ward of the Eurozone. It will remain so as long as the political establishment remains in power.
http://dareconomics.wordpress.com/2013/06/20/greece-requires-4th-bailout/
+1 for the recap. nevertheless I disagree with the two conclusions
"The adherence to the euro is crushing the Greek economy..." - you mean because Greece does not devalue, and so partially default on the debt? what would Greece's position be if that debt was for example in... gold? If you think that Greece should default, why don't you say so?
"It will remain so as long as the political establishment remains in power" - which was elected, not long ago, and where polls still show some 65% of Greeks in favour of keeping the EUR
What about the prostitutes? Who will bail them out?
'Americans' going on vacation there will take care of that.
'Americans' have always excelled in flesh trading and assorted.
been awhile
What about winding down what remains of Greek industry like they did with the takeover of East Germany and create another easily governed province of merely welfare/pension recipients, government leeches that make life hard for the
people to keep them busy coping and some working poor in the food distribution chains ?
How is there even a Greek stock market left that's not just an open-air bazaar with chickens and goat cheese?
just put the word "infinity" to everything now, bailout to infinity, make money to infinity, loose money to infinity etc, etc
What is the definition of insanity ?
Stuffing billions to Greece and expecting new results.
And I totally thought it would look like Christine Legarde wearing a strap on.
Wait, wait, wait. I was told the Germans had it up to here with this Greek bailout crap and would refuse to do anything further after Merkel was reelected.
If so - it wouldn't matter much, because Merkel hasn't been elected, yet. The new "Bundestag" will have it's first meeting on October 22nd. It is not to be expected that she already gets elected then. She lost her partner, the "FDP", and is now in need of a new one. We will have to be patient, it could take a long time until she really gets reelected. She's just carrying on provisional, and will do nothing before the new Bundestag has elected her again.
But Bear, they SWORE to me all hell would break loose the day after the elections. There were MANY articles about it here by very respected people. They pegged the damned date, fer cryin out loud. How could it not be happening already? I feel violated.
They told me very blatantly, that they regard it as very unfair to be measured by their promises after an election. One cannot rely on them. If you can understand german, hear Murksel say it loud and clear: http://www.youtube.com/watch?v=vGuXVzgZ1uA
You mean they..... lied to me? No, no, no. Please no. <Sniff, sniff>
The unending chronicle continues, Financial "Crisis" in Greece
Those who don't rebel have it comming.
Seems like the mayority really likes to live like a lemming.
Why not send them all to the German salt mines? They won't mind.... let's at least try to do it.
SHIT OVER 50.000 HUMAN DRONES!
Glad I watched "Groundhog Day". Otherwise I wouldn't understand whatz going on...
Phil Connors became a better person with each passing day. Nothing is getting better here.
It sounds so much less ominous when they change the budget shortfall description to a derivative of scientific notation- I wonder how long it will take for the slightly more MATH-DEFICIENT American kleptocrats to follow suit...
"What The Third Greek Bailout Will Look Like"like 4th and 5th
Greece: large public sector,economy relies on tourism(when the tear gas clears).
Puerto Rico: very large public sector,economy relies on tourism.
Quod Erat Demonstratum: At some point debt kills society.