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Leaked Troika Documents Show Greece Needs Huge Debt Relief
Submitted by Raul Ilargi Meijer via The Automatic Earth blog,
Just when you think things can’t get any crazier, they always do. The Guardian reports on unpublished Troika documents that show Greece is only too right in asking for debt relief. That for the Syriza government to sign what the Troika wants to force them to sign would see Tsipras et al plunge their country into a financial hell hole.
* * *
As a reminder, this is what hell looks like...
So let's say that somehow Greece kicks every can left until the end of 2015. Surely Greece will be out of the woods then, right.
Wrong. Because for Europe's most devastated country, it is only then that the debt nightmare officially begins.
Below are all upcoming Greek debt payments until 2057, also known as the first, ninth and all circles of Greek hell inbetween:
* * *
What’s potentially even weirder is that all German MPs have received the documents, because a vote on them was supposed to take place, but none have said a thing about them. Good thing one at least was awake enough to send them to the press.
So they have these docs, and then yesterday Merkel says no more talks until after the referendum, and total silence follows. Boy, has she fallen from her pedestal. We know the Troika are composed of lackeys to the banking system -and this proves it once and for all-, but Merkel is worse. And she has the entire Bundestag wrapped around her finger. Some democracy, that Germany.
But the documents were also part of a package that was sent to Greece and everyone else. But still debt relief remained off the table? What am I missing here? How could Tsipras have signed off on this? He could see the Troika’s own numbers, and still they refused to take them into account and make them part of the deal?!
The Guardian gives the write up a half-ass title, but the contents are clear enough.
IMF: Austerity Measures Would Still Leave Greece With Unsustainable Debt
Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors. The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery.
They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the IMF deems unsustainable. The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded.
That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession. The documents admit that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes.
Even under the best case scenario, which includes growth of 4% a year for the next five years, Greece’s debt levels will drop to only 124%, by 2022. The best case also anticipates €15bn in proceeds from privatisations, five times the estimate in the most likely scenario.
But under all the scenarios, which all assume a third bailout programme, looked at by the troika, Greece has no chance of meeting the target of reducing its debt to “well below 110% of GDP by 2022” set by the Eurogroup of finance ministers in November 2012. In the creditors own words: “It is clear that the policy slippages and uncertainties of the last months havemade the achievement of the 2012 targets impossible under any scenario”.
These projections are from the report Preliminary Debt Sustainability Analysis for Greece, one of six documents that are part of the full set of materials that comprise the “final” proposal sent to Greece by its creditors last Friday. These, which the Guardian has seen, were obtained by Süddeutsche Zeitung after they were sent to all German MPs with the expectation that the deal would need to be approved by the country’s parliament. A vote in the Bundestag never took place as the Greek prime minister, Alexis Tsipras, rejected the plans and called a referendum on whether to accept the creditors’ demands. While the analysis underlines the fact that Greece has already benefited from a number of debt-reducing measures – maturities have been extended, interest payments are similar to those of less indebted nations and the PSI in 2012 cut debt by about €100bn – the document also admits that under the baseline scenario “significant concessions” would improve sustainability.
But despite the lenders’ admission that Greece cannot thrive without debt relief the documents provide no clarity about what such a package might look like, nor does it provide any detail of a third bailout programme despite assuming one would exist. They promise only a more detailed debt sustainability analysis in due course.
There’s more in the article. But who needs more of this?
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Oh you don't say ...~_^
Yea... "leaked".
Syrzia has economic logic on its side. This is why the Troika's stance is so dubious.
lucky for them markets and public opinion are based upon logic...
should i add /sarc??
2057? How the hell will Earth's surviving population of ~500 million make that payment? That's plain crazy talk!
"Leaked.....Greece Needs Huge Debt Relief"
Seriously? This article is a candidate for the "Captain Obvious Award".
...uh, left wing groups are notoriously terrible at basic economics.
They might be getting the math re debt right, but that doesn't mean their politics or economics are sustainable. See: leftist measures (like generous pensions for little work, massive government, high tax rates rates chasing away the productive and inducing tax fraud on a massive scale) that got Greece here in the first place.
This shitshow will go on for the next 40 years.
exactly
the good news, is that if you spread it out, Greece only needs to cough up about 200,000,000 Euro's a DAY!!!! in July.
Here's my idea for a fund raiser...Greece could SELL voting rights to foreigners on the referendum this weekend. i'd pay $100 for my "no" vote.
Greece can sell 6.5 billion $ us treasury reserves, but somehow that is never mentioned
Everyone needs debt relief. Its kind of obvious, no?
The global Ponzi financial system of debt will need a huge reset. Applies to all.
Balance sheet hell comes first before WW3
WW3 will have to put more nations in moar debt. No?
I'm shocked!!
/sarc
I think every Greece story should be postscripted with that picture of Merkel, et. al. laughing it up like a bunch of old pals from elementary school. Anyone got a link?
This shit is just a farce.
http://imgur.com/JH5G9wG
Every story needs this at the end.
Thank God -- she has clothes on.
just restructure with a big balloon payment in 2058 and it's problem solved.
Great idea - and with interest rates so low, the banks will be able to mark the loans at close to book value. Everybody wins!
Raul, those numbers, this way, are simply another populistic way of yours to make the situation even less transparent
the basics of sovereign debt are this:
- nobody to forbid sovereigns to make debts
- nobody to ask more then 20% to 25% of tax income from a sovereign - compared to the "usual" tax base and load of similar countries
so the whole "unsustainable" or not part of sovereign debt is all about how much taxes it gathers compared to what it is due for payment
so if you put out this endless list of payments, you ought to put those payments in comparison and context to the tax base... not the total of debt
then debt is not created equal. sovereigns aren't individuals, and often find themselves paying back debt from a century or more back
You sound like Juncker -- ranting against the populists.
Funny with with Juncker, when "populisim" is pro EU, he loves it, when its anti-EU he despises it.
Funny that.
first, populist, in my vocabulary, is most probably something different then the definition you grew up with. one of many words that the English-speaking media has changed
in my definition, there is a modicum of simplifying to the point of hiding the facts
second, you still think that I have a pro-EU stance. meanwhile, I ask you for alternatives, and the one you propose are not in the realm of "possible" or "feasible"
have a look at my avatar. that's what many pro-EU federalists have begun to hate for it's "Austrian School" properties... including our populist Raul here
over and out, my batteries are down
I gave you a feasible alternative. It would work beautifully, economically. However, politically it would be a "no-go."
So there we have it -- in Europe they would rather have a economically unworkable situation that is popular than an economically feasible situation which is unpopular.
And this is *exactly* why the EMZ is on limited lifeline. Its an economic union confined to the "ideals of Europe" which are economically impossible.
Patience ladies & gentlemen. Tsipras is about to fall on his sword here momentarily, but this will eventually fall apart. If not today or tomorrow then later.
hey Ghordius, welcome back.
Even when I think you are somehow assigned to do this blogging, your posts are generally very interesting and very well written.
I remember from a one of your previous posts that the study of the history of propaganda is a hobby of yours.
I am a bit struggling with this concept propaganda. (What is and what isn't propaganda).
I am curious what your understanding/definition is of propaganda. Some say that propaganda had a neutral meaning in the very beginning, and later acquired a more negative connotation. Where do you draw the line then between propaganda and public diplomacy ? When becomes the selective presentation of information unethical ? (something that comes to mind is that presentation of information is always selective, but when does it become propaganda ?)
But first go recharge your batteries.
Imagine a rheostat.
the dividing line between information and proaganda is wherever you choose to set the wiper.
I keep mine set to 11.
Cuz it's 1 more than 10, innit?
Didn't you get banned once already?
Yes, I was. But what are you suggesting exactly ? Is this not a legitimate question to somebody who most likely knows a lot about the subject ? Besides, you still think Ghordius is a Tyler? ( that would be black propaganda :-))
As long as they continue to get bailed out to 2057, they will be okay.
Wtf? Stop paying, there's your debt relief. You're a sovereign country, all sovereign lending is unsecured, and you were given loans with the foreknowledge that you'd be unable to pay. So don't pay.
Please contact me at your convenience to discuss payment for my consulting fees though.
Always curious the timing of leaked documents. Good ammunition though. The Greek should shout this out loud.
But.."Because for Europe's most devastated country"? The author apparently has not been to Bosnia, Serbia, Kosovo, Albania and Moldava. The Greek have it hard but they have not hit rock bottom yet as these countries have. Not EU members but certainly European countries.
I wondered about these "leaked troika documents" too. Leaking info is one way to test response to an action before you take it.
Greece could still easily make their payments if they printed a ton of Drachmas and told them to STFU. That's what the FED and ECB do.
Dear Raul, in my family we are getting prepared for unexpected disastrous situations. We hope it won't happen, but we think it's prudent to do so. I would kindly suggest the same for everyone, so if you have never eaten crow, you might want to get a taste in advance, in case you actually have to do it, come Sunday night.
just remember, people eat bats in Africa, and consider it a treat
Usually when someone knows you're in dire straits & offers you a shitty deal, they're basically telling you to leave. My morbid curiousity wants to see some fireworks
Better to find out before ultimate political union is, er, executed, no?
Turns out the economic union is/was a one-way street.
Proof that Dire Straits don't make Brothers In Arms.
+1 for 80s music reference
I wonder how Italy, Spain, France and Portugal are feeling right now?
This thing is going to blow up when the dirt on this starts trickling out. I suspect most Club Med countries will want similar debt relief. The genie is out of the bottle.
Anything to stop The Purge.
ANYTHING.
War, depression, famine, plague, tyranny, all better than debt purge to these monomaniacs.
And yet......who is to stop them? It is not yet written.
Yes, god forbid a Nobel Laureate is actually wrong/evil....
....
Speaking of debt, it appears that the Tylers in their infinite wisdom have decided to give no nodebt the boot. He probably said something controversial like water is wet or the sky is blue. Who knows why the fuck the Tylers kick people out.
Hi name was nodebt
He was a showgirl....
And they done her wrong.
But that was thirty years ago, when they used to have a show...
Ditto for noben.
was nodebt the arm waving puppet guy? or is that sudden debt?
Yeah you're thinking of Sudden Debt, another name I don't see often these days.
His name was NODEBT
His name was NODEBT
His name was NODEBT
His name was NODEBT
His name was NODEBT
But Krugman has a Nobel prize and he says debt is a "zero-sum" game...
will someone please flush this turd already!
Q: How does a bank become less bankrupt?
A: Make more loans.
Anyone see the problem here?
the problem is the reptiles would rather kill people than tke a hair cut on paper money. sick people.
Hey what about Japan at 200 and whatever percent,three nuclear reactors in total meltdown,a rapidly ageing population,fuck all commodities how fucked up is it?
Bad Publicity Dept.
They'll share the pain and adapt ... advantage of a homogenous society.
Japanese can send their daughters as hoes all over the world for making money.
Anyway their american colonizers are already enjoying them
so whats the difference, its the global economy.
----
We dont need no education ....
All you Japanese need is a
prick in the hoe
----
Geisha country
Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED! Greece is SAVED! Greece is FUCKED!
Are you beginning to see a pattern here?
AlexanderTheGreatHomo
----
Once upon a time Greece fcuked all the world
Karma bites back
Oooooooooooooooooooooooooooooouch
The payment schedule of Greece is hardly news ... they have to run a surplus, so fucking what? About 3% of GDP does it on average, whoopdefucking doo.
The EU could have gone "we'll give you a 100% haircut, you deal with your bank deposits however the fuck you want ... we're out of here" 5 years ago ... Greece wouldn't have been in a better position, but my country would have subsidized Greek consumption a whole fuckton less.
If there is a collapse in EU tourism it might be time to forgive some extra debt, but for the moment they can run the surplus or they can get fucked.
"Greece wouldn't have been in a better position, but my country would have subsidized Greek consumption a whole fuckton less."
Well, then perhaps your anger is better directed towards those in your country who did all that subsidizing, hmm?
Besides, if they're in power it's because they were elected. Doesn't that mean that folks like you are kinda stuck with whatever they have done? That's the argument used against Greece...They should pay because they elected the government that borrowed...Well, maybe you should pay because your country elected the government that threw your money into a bottomless pit...Are you starting to understand what the problem IS here?
Or maybe we should ALL stop bitching at each other and focus on the real enemy.
Since we're "fucking" about here why don't we drop all of the pretense and stop blaming the "lazy" Greeks here. That's a populist fucking meme and nothing more. When was the last time anybody, anywhere voted down free money?
Look - the EU has a problem - you can't have a monetary union of diverse economies without also having a transfer union. Large economies have to make transfer payments to the weak ones - that's how it fucking works - in the US, Brazil, India, China, Russia - EVERY FUCKING WHERE ON EARTH...
The politicians of YOUR country know this - anyone with half a brain knows this. They knew it when the let Greece in - they knew all the weaker economies were fudging the numbers - but the euro train had momentum and they turned a blind eye.
So just remember that when you go chunking stones. YOUR fucking country had a veto to keep the Greeks out in the first place and YOUR fucking country let them in anyway knowing the consequences. So as far as you wanna blame a lazy Greece also blame your fucking self for being a fucking idiot for letting them in and then pissing 360bln down the black hole.
You deserve and have always deservd every fucking thing you get out of this broken down unholy union...
You have it backwards, friendo. It is the weak economies that make the transfer payments to the stronger ones.
it is very simple - Greece declares default the whole debt gets written off and then Greece does not get any new loans for several years
There's that whole "Hair Club For Men" thing.
Once you start giving out free implants then everyones going to want em.
Soon everyone is bitching about their shitty comb-overs.
Looks like they get a pretty sweet break in 2050.
Its all a sick joke.
Greece is totally fucked, no way of escape no matter their present day choices. Impossible to grow wtih euro, whilst austerity measures will plunge them into a deeper hole, never to climb out.
The Troika KNOW this, they know what they are proposing tosses Greece to a bottomless pit with Zero hope of recovery.
Thus it must be that a totally destroyed and subservient Greece is exactly what is intended.
Greece should go the whole nuclear option. Default 100% Nationalise banks, fall into a deep hole, but without a euro very slowly recover. Better a painfully slow recovery than an endless decent into different layers of hell.
Absolutely nothing to do with debt, and all to do with politics and geopolitics.
Debt and the Euro are a inevitable path to a perpetual poverty trap for these weaker less industrial economies.
Let's forget the EU. It's not a country, only a talk shop. The EZ is the real deal, and let's call it what it is: Germany's export zone.
Greece is in such bad shape because its manufactures cannot compete with Germany's. It bought and bought and bought German stuff but its currency could not adjust to balance trade because it does not have its own. German exporters ended up with piles of euro from their sales in Greece. They could not put the money back into the German economy because it is an industrialized capitalist economy that cannot absorb all the new capital it creates. Just like that German guy, Karl Marx, said a long time ago.
So they used the money to buy a whole bunch of Greek bonds. But the Greeks can't put the money to productive use, thus to generate new capital with which to repay principal and interest. They are already swamped with German manufactures, see. That is the whole idea of the EZ.
In essence the Greek government got a lot of money from sovereign debt but could not turn it into capital.
The evidence is a whole bunch of EZ countries are in the same boat, just not as far down s**t crick. The EZ is not sustainable. Lenin was right. An international merger of capital is not possible as long as private property in means of production exists.
But the EZ is the means by which Germany runs the world's largest export accounts. Its breakup will throw Germany into deep, deep trouble. France too, which is why the troika are such a*******s.
Germany in crisis? Oh boy, ain't we got fun. The precedents are not good.
The Euro is Germany's straw quitely sucking growth out of other countries. Yet having sucked these countries dry, now berate them for not being well.
How is this news? Post better shit
so much for their glorified neoliberalism. its pure savagery and it deseves to go to hell.
2 Things.
1. Flipping channels this morning and even Jim Cramer realizes Greece cannot pay back debt.
2. What is going on with Greece is what went on with the US. Banks made bad loans to people and countries that shouldn't have received a loan. Then when the shit hit the fan, the banks were bailed out but the loans were not forgiven.
Now we can get into the "borrowers are thieves and despots" discussion but the fact remains that the taxpayers will be required to continuously bail out the banks forever whereas if the banks were bailed out with the condition that the loans are forgiven it would be a one time payment (as long as regulation is put in place to eliminate too big to fail bullshit).
The South was right!
all good americans should be confederates now.
Last EW chart from this site predicts U.S. will soon suffer the same fate...
http://www.globaldeflationnews.com/
"to sign what the Troika wants to force them to sign would see Tsipras et al plunge their country into a financial hell hole."
What, another one?
What is news in this article is that the troika is admitting publicly that they will have to take a haircut to keep Greece in the fold. Greece must not be allowed to leave the EU and join some other consortium like Russia's. Obama even said in one of his latest speeches that Greece must stay with the EU. Too many geo-political plots depend on Greece.
I'm just waiting now for Uncle Sam to announce a guarantee of some or all of Greece's debt, while at the same time Merkel announces a partial forgiveness / forbearance.
deleted repeat.
I'm sorry when did greece not borrow this money? The core issue isn't debt relief the core issue is greece refuses to fix their broken revenue system. From the goverment being one of the most corrupt in the world to their lack of tax revenue. Until they can prove the ability and desire to manage their finanaces, why should they get relief?
who lent it? they assume the risk not the borrower. fuck the lender, always fuck the lender. life is better. i have defaulted twice on credit card debt. are you saying i have some moral, ethical obligation to pay the lender back? you are wrong. it is just business. they lost. fuck 'em. the greeks(and many others) will figure it out(i hope).
I'm saying the lender has no responsibility to help the money addicit unless their terms are meet. Greece has a way out they can default, if greece doesn't want to default then they have to agree to the lender's terms.
While I agree the lender lent the money and assumed the risk, It takes two to tango and greece has more than enough blame here. And the citizens taking a haircut is not that bad as it is them who elected the crooks, supported the crooks, and benefited from the crooks.
the borrower actually has no fault in taking out a loan. the bank should have done their fidicuary duty and vetted the borrowers ability to pay. greece has no ability to pay so the lender, if they want their money, should adjust their terms(not including lending more money) to retrieve as much of the principle as they can. it is a math problem for the bank. the alternative is a 100% hair cut.
the banks would rather kill people than take a haircut. fuck 'em.
Your wondering why with this data, they still won't come up
with a better deal for Greece???
How 'bout that is the better deal???
They simply and knowingly used the Greeks as
a currency sink to provide demand for the
EU central economies???
Greece served its purpose... time to move on...
and what happens to Greece is irrelevant.
Except for who ever is holding the bag...
oh... and the derivatives unwinding
( that can't be controlled ) that comes
from this.
"What am I missing here? How could Tsipras have signed off on this?"
Jezuz, because it's all a delaying GAME! Why can't more people get that? What he signs has little to nothing to do with what he or anyone else in Greece will actually comply with or DO. They are hopelessly in debt and will suffer no matter what, so they drag out the issue as long as possible and borrow as much more as they can to make the unpayable debt they owe even more systemically dangerous to the EU as a whole thereby increasing the likelihood of debt forgiveness.
Mabbe
BRICS & AIIB can give money to Greece & Greece like nations with collaterals such as
(1) Gold, Silver, Platinum etc precious metals : if they have any
(2) Historic valuable Art - Indians can buy it especially the panjabi people who are the offspring of Greek invasion by Alexander, the great, forefather
(3) Mines
(4) Land : Yes land , why not, the govt owns max. land so let it be pledged , piece by piece and if not redeemed , let the land belong to donors who would develop it/use it for gain.