Third Greek Bailout Package Is Finally On Deck

Tyler Durden's picture

As noted on Friday, the Greek soap opera, in which Europe pretends to bail out Greece when it is just bailing out its insolvent banks by not touching the status quo, and Greece pretends to reform and comply with austerity reforms when it merely continues to spend as before until the money runs out and the entire act is repeated, is about to enter its third act.

Yesterday, Greek Kathimerini reported that the reason why the Troika has put Greece on ice and has is behind in the implementation of 153 actions demanded by its lenders, according to a timetable compiled by the Finance Ministry. "Of the outstanding actions, 57 are the responsibility of the Finance Ministry, 17 fall to the Development Ministry, another 17 to the Labor Ministry and eight to the Administrative Reform Ministry. The rest are divided among other ministries. A number of the actions have yet to be completed as the government remains in discussions with the troika about the measures. Inspectors are expected to return to Athens later this month but a date has not yet been fixed." In other words, the bulk of the conditions agreed to as part of the second bailout have yet to be met by Greece.

So what happens next? Why a third Greek bailout of course.

As reported by Spiegel over the weekend, citing a five-page German finance ministry 'position paper', Schauble is preparing the ground for a third aid package for Greece that would amount to €10-20 billion. When will the package be deployed? By May. Because that's when the European elections take place and when the next major Greek debt redemption takes place: after all can't have even the tiniest gust of wind blow on Europe's impecable house of cards...

From Kathimerini:

The possibilities outlined include a further debt haircut that would mainly hit public creditors or a «limited additional program» in which Greece could receive fresh money from the European rescue fund, the report said.


The package could amount to 10 billion to 20 billion euros, said Der Spiegel, and would be tied to commitments from Athens to undertake reforms with more vigour.


A spokesman for the finance ministry denied that a new debt writedown was planned for Greece.


"There is no new situation,» said the spokesman and referred to previous statements made by German Finance Minister Wolfgang Schaeuble.


The minister has in the past said there could be a remaining need for some refinancing but any further package would be far smaller than the aid granted so far.


Greece has received 240 billion euros of support in two aid packages from the International Monetary Fund (IMF) and the euro zone since 2010 in return for spending cuts and reforms.


A senior EU official said last month that Greece was not in urgent need of funds now and extra money would only be needed when Greece must pay back debt. Its next big redemption date is in mid-May.

That said, by now nobody cares as pretty much everyone has figured out the game, which will continue on its unsustainable path until one day it no longer can.

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kliguy38's picture

looks like gyros could be on sale for cash...........yumm yummm

thunderchief's picture

Six years down the road and here we are, right at the beginning.

What if they had just defaulted, dropped the euro and went back to being an independent country again, as the had been for 2, 3 thousand years?

No, I think this is about something more than a bunch of ponzi debt.

They are slave masters of the Germans, just like they were to the Romans...

Pheonyte's picture

They are slave masters of the Germans, just like they were to the Romans...


Who's the "they" you're referring to? (Not a smart-ass question, I'm just interested in your historical viewpoint).

Doña K's picture

UK bookies should give odds and take bets on which country will be the black swan. So far we have:

Argentina, Greece, Thailand, Italy, Ukraine, Spain, Ireland, Slovenia, Egypt, Syria, Iran, China, India should I keep going?

Ok: Indonesia, China, USA, Brazil, running out of ink.

layman_please's picture

countries are irrelevant. still plenty of taxpayers around to fleece ad infinitum. it's all about the banks. just follow the money.

NoDebt's picture

The Greeks already rehypothecated the Golden Fleece at 400:1 leverage.

boogerbently's picture

Now, they need to continue bailing out, (more "good money after bad") or the PREVIOUS money was wasted.

Like we'll get with Obamacare.

Panem et Circus's picture

Bingo. Let's just push nationalization up a notch and do it global style. Put a few million bureaucrats to work, massive global taxation and global bonds which are infinitely fungible!

mjcOH1's picture

"What if they had just defaulted, dropped the euro and went back to being an independent country again, as the had been for 2, 3 thousand years?"


They'd have to constrain spending to match revenue, which wouldn't include bailout money from the IMF/EU (Germans).   So we can safely rule that out.

NoDebt's picture

Yes, but two things would happen the instant they default:

1.  Their balance sheet instantly looks a lot better (more credit-worthy, though it would take a couple years before anyone would loan to them again).

2.  Without the interest payments due on all that debt, their income statement also improves dramatically.

Why they won't do it, is the same reason they haven't done it up to this point- it's messy and important people will lose lots of money.  (Nobody cares about the Greek people, certainly not their bought-and-paid-for puppet politicians)

mjcOH1's picture

"Yes, but two things would happen the instant they default:

1.  Their balance sheet instantly looks a lot better (more credit-worthy, though it would take a couple years before anyone would loan to them again)."


I know I would sign up for that, since surely I would be treated better than the last several million creditors they had fleeced.   And the borrowed money/deficit spending 'this time' would surely not lead to the same result as 'last time'.

boogerbently's picture

Tough Love

The EU needs to KICK them out.

CoonT's picture

Wow! Sounds like the Greek people should unite and take up arms...err sticks and chunks of brick. Yeah, that'll show the man who's in charge.

Not that Canada is really much better off. Sure we've got some guns up here; but we're just simply over-run with liberals and left-wing nutjobs! Unless we pull together and sink every political extremist into the bottom of lake Ontario, I suppose we can only watch and wait, as this thing creeps onto our doorstep too.

Oh well, weak-link Greek people;enjoy your new steady diet of rubber bullets, and teargas-flavoured cardboard.


layman_please's picture

3. bunch of european banks(or whoever is the fool holding the greek bonds/debt) would go bust. this is pretty much the reason why greek politicians feel quite confident and bluff with open hand

limit_less's picture

layman - "bluff"?? What are you talking about? It is not as if the Greek government is doing nothing. They are deliberatly destroying the Greek economy. Where is the bluff?

There is only one game here. The loans to the government are being used to buy the Greek government more time, so they can run up peoples tax debts and then seize their assets.

We are witnessing asset stripping Tony Soprano stlye.

(Video - Papademos is the ex PM, ex Goldman, ex ECB. The rep of the international banking cartel)

Marco's picture

If they uniliterally default every bank in Greece only held up by implicit ECB guarantuees through Greek bailouts defaults right with them. If they confiscate Euros and reissue Drachme's the EU courts would be after them, so they'd have to get out of the EU altogether.

What remains of their economy can't afford either ... we're talking about decades of even worse misery for some far future potential improvement.

limit_less's picture

Marco - The Greek government defaults, the Greek banks go bankrupt. The only issue in this scenario is if depostiers will be reimbursed.

The EU has said back at the start that all European bank accounts are insured up to 100,000Euro. So what is the issue?

You can depend on the government to do the worst things post default so they cling onto power. They cut the last things they should cut first and vice versa and before you know it the country turns into Haiti.

The money is not the issue here, it is the people running the show and the power they have.

The answer for all countries is in the Constitution of the United States.

Ghordius's picture

correct. government spending would be much lower, and any funding would have to be in a major currency

of course, it's also a question of will, then 65% of Greeks still want their country in the monetary union

edotabin's picture

Let ya in on a small secret no Greek will openly admit but (many in their hearts) know to be true.  The majority want the Euro because they realize what a complete bunch of fuckups they are as well as how sly and cunning their thoughts can be. It is for the same reason they all did everything possible to get a government job, realizing full well that this trajectory could not be supported.

So, it is a way to continue to milk the cow ( a new larger one now that they killed their own) and it hands off the problem to someone else.  So, when everything goes to hell, the Greeks will simply blame Europe for everything and try to come out clean. The Europeans simply could not have ever imagined such things and they have gotten themselves into "situation". The Europeans may be naive but they are not stupid. They eventually caught on and are putting the screws to the Greeks.

The whole thing here is if the Greeks can wiggle out of this one, if the troika loses its will or if the whole thing falls to shit. While the banks were suckering them in with loans knowing what was to follow, the Greeks felt that the joke was on the banks.  We shall see.......

Kinda like when a woman really loves you, she'll openly tell you and warn you about what bitches women can be.

Down vote away if you want . The truth never gets too many votes and I think that is reflected by the state of our world.




limit_less's picture

Greeks are up to their eyeballs in taxation now. Only the polticians are wiggling out of something.

Escapedgoat's picture

"What if they had just defaulted, dropped the euro and went back to being an independent country again, as the had been for 2, 3 thousand years?"


One thing to be sure, Is it the GERMANS???? are they Sovereign and Independent THEMSELVES???


They are also under occupation since 1945?

Who has Military Bases on their soil? Just like Greece?

Who was  "mind the GAP  Papandreou" answering to?? (He is holding a USA  passport)

Was his Roommate (SomeAreAss)  in the US of A, not party to the entire Charade from the begining?

Who are they protecting? ..........well we can see who has been fucked in the ass so far.

There were voices in Greece (Somebody called Kazakis)  and abroad (within the IMF ,the Strauss Can affair, even Russia Switcherland, Brazil.etc. etc.) for doing just what you said from the begining if not 1984 (The Central Banker at the time)

And instead of reigning in the expenses, they went into a spending spree, with ARMAMENTS (American and German and French even Russian) to counter the "Turkish Threat" All has been manufactured by the POLITICIANS ON BOTH SIDES OF THE AEGEAN.




Joe A's picture

They would be debt free.

The first bailout to Greece did not go to Greece at all but to Deutsche Bank and some French banks. Deutsche Bank loaned some 500 billion Euro to Greece, Spain and other countries. These investments had to be protected. And the Greek people are paying for it ever since.

Marco's picture

The Greek people import more than they export ...

max2205's picture

Just make it an even trillion and we'll get back to you in 20 years

W74's picture

I love Golden Dawn!

Ghordius's picture

GD has a simple message. btw, it is fascism, euro-style

Panem et Circus's picture

Agreed. Thank you for the truth, it is rare on such subjects.

falak pema's picture

lol, GD avows nazi affliation via its party symbols openly; so the truth as you say was OUT in the open and not secret like some other 'nationalistic' parties hiding their neo-fascism behind the facade of national or ethnic origins. 

jerry_theking_lawler's picture

I don't car so much for Golden Dawn...but golden a changeup sometimes, they aren't bad....

Blazed's picture


The GD are the only hope for countering the Kosher Bolsheviks. Anything else is simply remaining a slave to the banksters and under threat from their ethnic weapon, the deliberate massive influx of third world hordes.

DoChenRollingBearing's picture



Just "Jubilee" them, let them off the hook and never lend to them again.

It's what we do in Peru to stubborn customers who will not pay.  OK, fine.  You can never buy from us again.  No more Korean bearings for you!  Unless you pay more to buy them from our customers...

CrashisOptimistic's picture

This goes to the heart of the morality of what we find ourselves in.  To some extent, it has always been so, but it was hidden behind the simple smooth functioning of the mechanism.

It all comes down to this:  What possible morality can there be when you effortlessly create a substance out of nothingness, lend it to another person, and then demand that person -- at considerable pain and suffering to himself -- return that substance to you with interest.  How can it make sense that the word "deadbeat" exists when we view the entire matter as I just described it?


Stop thinking monetary thoughts.  What is taking the system down is oil scarcity and the overwhelming cost -- in joules -- that increasingly exists to get those joules out of the ground.

Doña K's picture

One reason that I posted before that SDR's or any other basket currency should include a portion of a BTU or KW/H equivalent value.

CrashisOptimistic's picture

Maybe.  Hand waving about debasing and "gold standard" replaces one nothingness with another nothingness.  Things that have value only because parties agree they have value (and can change their minds).

A joules based currency would be filled with meaning.  Joules represent reality and don't care about agreement.

Pheonyte's picture

But that would entail a hard limit to growth, while article 1 of the Religion of Progress is that growth is potentially infinite. You heretic!

CrashisOptimistic's picture

Bring some more joules to the table and you can have more growth.

Of course, the process would then get underway to redefine either joules or the table. 

Hey!  We already counted sunshine.  What about all those other suns?  The universe is our table.

Doña K's picture

Hola! Do Chen, long time.

I just checked Peru is one of the few countries that has budget surplus. 5% or so.

Will be there in March. ....scouting..

Cymore Duttz's picture

"extra money would only be needed when Greece must pay back debt"?

So they are going to give them the money to pay back the debt and pretend everything was alright.  Does the money just go straight to the German Banks or do they have to share it with other bond holders.

QQQBall's picture

I forget the year, but didnt MS loan Argentina the DS payments on a like a $90B debt load... then talk up the Argentines only to see the new bondholders get clipped?

Playtime's Over's picture

Gawd, when will this charade end.

Winston Churchill's picture

When the whole of Grecce is even more wrecked than

the Acropolis.

Vampyroteuthis infernalis's picture

When the whole of Grecce is even more wrecked than the Acropolis.


Are we not there already? You can't get blood out of turnip or water out of a stone.


Winston Churchill's picture

They are going to try very hard to.

Rebel while you still can.

Panem et Circus's picture

Just wait till they are selling the countries assets to the multi-nationals.

A Nanny Moose's picture

After we end the charade that is government.

Athenian's picture

"extra money would only be needed when Greece must pay back debt"

Lend someone just enough money to pay the interest on the money they already owe.  Nice one.

Grow up Greeks. Repatriate the billions in the Swiss bank accounts and tell the EU where to go.

Then eat your olives in peace and bask in the sun.

youngman's picture

more vigour....that is like more is a joke nothing and you get another 10 to 20 billion.....I was schooled all wrong