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Germany Crushes All Hope Of Greece Getting Debt Relief
As the Grexit debate is falling into the background a new, far more powerful conflict emerges: one between Germany on one side, and the IMF, France, Italy, and perhaps even the US, when it comes to the all important issue of debt relief.
As a reminder, it was the unexpected release of the IMF's debt (un)sustainability draft late last week (with US support over the vocal objections of Europe) that not only gave Tsipras a Greferendum win (he did not desire), but showed clearly that without a debt haircut of at least 30%, any Greek deal will merely lead to another, even more violent Greek default down the line.
Of course, it is not only Greece that needs debt reduction but so do all the other peripheral nations:
Overnight, the Telegraph reported that the "debt-haircut" axis has even more supporters in Europe:
French leaders are working in concert with the White House. Washington is bringing its immense diplomatic power to bear, calling openly on the EU to put "Greece on a path toward debt sustainability" and sort out the festering problem once and for all.
The Franco-American push is backed by Italy's Matteo Renzi, who said the eurozone has to go back to the drawing board and rethink its whole austerity doctrine after the democratic revolt in Greece. He too now backs debt relief for Greece.
Finally, it was none other than Tsipras who piggybacked on the IMF's imlicit recommendation and in the hours following the "victorious" Greferendum, made a clear demand of Europe:
- TSIPRAS ASKS FOR 30 PERCENT DEBT HAIRCUT
Fast forward to this morning when shortly after the latest Greek capitulation, when in Tsipras' official request for ESM bailout he said timidly that "as part of a broader discussion to be held, Greece welcomes the opportunity to explore potential measures to be taken so that its official sector related debt becomes both sustainable and viable over the long term" Germany made it very clear whether there will be any debt haircuts, or reprofiling in the coming years.
Nein.
Reuters just reported that "the German government does not see any reason to grant Greece either a classic debt haircut or any other measures that would slash the value of money on loan to the crisis-ridden country, a spokesman for the finance ministry said on Wednesday.
"At the moment and in principle we see, as the chancellor said expressly in her press conference in Brussels, no occasion at all to discuss this issue - there is no leverage or basis for that," Martin Jaeger said at a news conference.
"That refers to a haircut in the classic sense but I explicitly add we also take that to mean measures that aim to bring about a reduction in the cash value of debt - those are things that you hear in discussions under profiling, restructuring and similar things."
In other words, the only thing one needs to add here is a Greek expiration date, because as the table which we will not tire of showing shows, Greece has zero hope of ever repaying all of its debt stretching well into the second half of the 21st century.
The only quesiton is whether the German hard-line stance against Greek debt reduction also means that the Troika as we know it is finished, and even more importantly, whether the two European camps, one for and one against debt reduction are now on terminal collision course. This is what the Telegraph concluded on this open item:
The two sides are talking past each other, clinging to long-entrenched narratives, no longer willing to question their own assumptions. The result could be costly. RBS puts the direct financial losses for the eurozone from a Greek default at €227bn, compared with €140bn if they bite the bullet on an IMF-style debt restructuring.
But that is a detail compared with the damage to the European political project and the Nato alliance if Greece is thrown to wolves against the strenuous objections of France, Italy and the US.
It is hard to imagine what would remain of Franco-German condominium. Washington might start to turn its back on Nato in disgust, leaving Germany and the Baltic states to fend for themselves against Vladimir Putin's Russia, a condign punishment for such loss of strategic vision in Greece.
And all to preserve the equity "wealth" of a few banker oligarchs because as we showed on Tuesday, saving the banks is what this has been all about from day one.
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No soup for you!
Take the challenge.....how long can you last?
https://www.youtube.com/watch?v=kQeKskCvJwc
Good -- now that the referendum is over and the Greeks gave a big FU to Rainbow Land -- we need decisions that drive as large of a wedge between North & South as possible to thus destroy this unholy EZ alliance.
Thus, I switch from compassionate Haus with "oh the poor Greeks" to "Go get'em Frau Merkel!"
No debt relief for the Greeks within the EZ. If the Greeks wants debt relief, they need to leave EZ-land go back to the Drachma, and tell all their creditors to sodomize themselves.
"No debt relief for the Greeks within the EZ"
What about from outside the EZ? You just watch. You think I'm pulling your leg, but I'm not. We're gonna stick our big, ugly, gin-blossom nose right in the middle of this shit. I guaranfuckintee you.
You can not get blood out of a stone. Greece, stick it to them and give them a hard default.
Obergruppenfuhrer Schauble probably doesn't want anyone to bring up the fact that Germany got a massive debt bailout in 1953, 50% of their debt written off, 50% extended to 30-yrs, the "German Economic Miracle" proceeded from there. I think those kinds of terms would suit the Greek people pretty well. Seig heil!
No shit
What a shock, huh..
With the referendum results the Greeks should feel emboldened, these rumors of Greece folding and requesting an ESM bailout seems to have done the same to the Germans. I see another impasse.
The Greeks and Europeans must be elated that Washington has stepped in to bring freedom and democracy to their forlorn continent and will be committing an initial 400 troops the help train somebody to do something for the Bill and Melinda Vaccine Distribution Foundation..
Remember the Pipelines!
What about the Treaty of Versailles ?
What about it?
fuck u PAY ME
Great movie. Been thinking of that scene a lot - and its inevitable conclusion. https://www.youtube.com/watch?v=5ydqjqZ_3oc
Greece clearly needs to talk Paulie.
As long as the banksters get their monetary pound of flesh then the poor and elderly can DIE
" Washington is bringing its immense diplomatic power to bear"
RFLOL!!!!!!!!!
You can't see it....but Seal Team Six is laughing their asses off up here.
dup....I hit it once...honest.
We will "greece" some folks? huh?
Greece should stick two fingers up at them and go, NO, if that is the case, you can whistle for your money
I wouldn't be surprised if the bank holiday ends with the reintroduction of the Drachma. Fuck you Germany and EU!
Backed by what?
I wish that were true but I don't see the political leadership yet in Greece for that to occur.
Does Germany know something we don't? From the headlines, I have concluded Greece does not have the money to pay. However, Germany keeps a hard stance. What does Germany want for compensation? Can't be money (Greece doen't have it). Is it Olives? Yogurt? Free vacations for Germany? Land? indentured srevants? I think the later will proove to be difficult without some military action. Since Germany and Greece are part of NATO, is in-fighting actionable by the other members?
Germany understands that even if you remove all the debt all the debt payments the Greek budget is still negative. Until Greece fixes their structual failure of a goverment there is no reason to do any more debt relief (which greece already got a write off through the restructuring). Basically the ECB, IMF gave them the ability to run a balanced budget while the rolled the paytments through loans, and greece overran their budget and used that rolling loans to pad their pockets.
Gold.
Tell you what Mr. Tsipras -- give us your gold and we'll write off 50 Billion in debt.
Who cares? All that matters is that, once again, hope has invaded the minds and spirits of the HFT machines on Wall Street. Stawks are well off the lows and poised to open at least near green, probably green by noon, then definitely green by close.
This isn't about Greece. It's about grease for the squeaky wheels of the trading machines.
Fuck Germany, the hypocritical serial defaulters of WW I and WW II debt.
Merkel is getting a massive ration of shit at home from all those who told her in 2010 & 2012 it was rathole. Greece is a goner.
Does Schauble ever smile? He looks like a sour lemon all the time.
Why?.... To show his Greek flesh stuffed canines?
... he does look like a 'sour' kraut ... :)
That's because they still have that Gestapo mentality in Germany. It's like a bad stink you can't get out of the furniture.
Being paralysed and in a wheelchair after being shot might have something to do with it.
Merkel's retirement appears imminent
If Greece repudiates the debt and simply declares "bankruptcy", would not they be better off? They could go back to the Drachma and start to rebuild.
By better off, I do not mean to imply the outcome would be good. It will just be less bad than having to grovel to Germany and Brussels.
I cannot believe Tspiras is going to turn and walk off tail between his legs and cower to the Banksters.
HE HAS TWO OTHER OPTIONS!
1) Fuck you EU, we're going to the Drachma and we'll work our way out.
2) Hello Russia, let's get this pipeline on.
Man up Tspiras and give them hell.
"Man up Tspiras and give them hell"
Therein lies the problem. Tspiras is a gutless wonder girlie man!
Germany is a problem for the world. There must be debt forgiveness, or there will be Hell. Germany of all nations should remember this.
Fuck Germany.
At what point will the Greeks take some responsibility for their future? This is getting so old. Man up already.
Who will win? Tsipras who turned his back on the NO vote and is now willing to bend over, or Germany who wants to kick Greece out according to GS?
Wouldn't it be funny if Obama's meddling pushed Germany into the arms of Putin instead of Greece? Trading the richest country in Europe for the poorest country in Europe seems about right.
The Germans don't want Greece to repay because they kept making offers Greece couldn't possibly accept. Greece should just say fuck the whole thing, not pay another nickel and leave the EU. They will not be treated better for trying to replay anything. There's no reason to stay.
Greeks need to learn that if they want to keep the Euro they need to keep looking at Schäuble's face (at least until he retires) and hear "Nein" and if they want to stop looking at both him and Merkel and stop receiving dictates from the EU they need to leave the Euro.
And they need to realize that the good times are gone for now and that only with hard work will they return...
So it's time to wake up and see through the mist!
What's the world's all-time most revolting example of hypocrisy?
A German lecturing anyone about morality.
Let's not forget the 800 pound gorilla in the room which is Deutsche Bank's 70 trillion dollars of derivatives.
Germany was granted a 60% debt relief of WWI and WWII debt in 1953. Greece was one of the countries that granted it.
Another German bastard, EP 'president' Martin Schulze decided not to let a good crisis go to waste and while everybody was focusing on Tsipras he pushed a resolution through that allows the EU continue with the TTIP negotiations with the US. Included in the resolution is that dreadful ISDS, Investor State Dispute Settlement.
Stop TTIP! https://stop-ttip.org/
Stop Schultz! https://secure.avaaz.org/en/petition/European_Parliament_Investigate_EP_...
(Petition started by the Greek for his shameless interference in Greece's poll).
If the EU were to consent to a debt write-off, all the owner/guarantors of the ESM would have to put up immediate capital for the ESM in order to keep the corporation solvent. And if they have to give Italy, Spain, Ireland, and Portugal equal treatment well, then, you are talking about serious, serious, serious on-budget outlays.
This is all just rearranging the deck chairs on the Titanic...and will prove just as effective. The problem is that the right to create money in the EU has been taken over by banksters who have abused it to such an extent that a domino collapse has begun that will in time claim every country in the union. This is what needs to be addressed and the way to do it is cancel all debt, nationalise the private banks as they fail, return the right to create money to individual governments, shut down the capital markets and start issuing sovereign money that is not debt.
Arbeit Macht Frei ---
I think Tsipras is a nutcase. They should have grabbed on to the BRICS shooting star months ago, leased a naval port to Russia and requested liquidity help from China and Russia. If there was ever an EU mole in place, I would say Tsipras is it!
I have been away on vacation and out of the loop. Did Tsipras throw Watthefackus under the bus so he could surrender to the Troika? Otherwise, why hasn't he defaulted yet? Is Tsipras the villain and Whatthefackus the martyr? OR are they in cahoots to pull one over on the Troika wh won't negotaite with the former FinMin.
Sounds like either way they are saying Nein. Greece on the hook for the whole nut
What IF there's a different angle to all of this? What if Germany refuses to hear of any debt restructuring and/or relief simply because it WANTS Greece to leave the Eurozone (and potentially the EU)?
Why? What if they have finally decided to take a look into the future and have seen the eternal servitude they are being set-up for by their big brother, the US? If they pushed Greece out, they can hope others in similar dire straits follow suit, starting with Spain, Portugal, Italy, which would bring about the dissolution of the Eurozone and EU. If that happens, who is to say that Germany cannot cut loose their shackles that bind them to the Western hegemons and align with Russia, China and other emerging economies for the sake of their national interest? Something that is simply impossible for them as long as they are seen as "the leaders of the united Europe", whatever the f*** that means...
Think about it. And then cheer for Germany to stay the course. :)
So the farce continue ....... It all makes me think that a Greek default will make explode the Deutsche bank debt of over 70 trillions .
Schouble is desperate And Tsipras must default and go over to Russia . 30 % reduction of the debt is peanuts ...........
It must be reduction of all debt acquired through the rigged financial system ..... Odious debt must not be paid .
It is quite amazing how the Greek crisis brings to life again all of the old and not so old hate that people cultivate against Germany.
Gone are the days of rationality, "SS-Merkel" and "Nein-Schaueble" (the "lemon") rule the waves.
A member of my family was burned and mass-murdered in the Anglo-Saxon air-raid against Dresden (more than 200.000 dead). My fathers family lost all their possessions in Eastern Prussia (German for hundred of years).
We paid more than our fair share of reparations after WW II.
The more I read the comments shown above the more I am convinced that Germany is second only to the Jews in terms of defamation.. Sadly German politicians act out of sellf-hate and forget all their dignity.
But again: thank you Zerohedge and commentators for renewing my feelings towards the German nation.
If Germany accepts a haircut on Greek debt, German voters will blame Merkel.
If Germany accepts a haircut on Greek debt, then all the other FPIIGS will want one too and Germany will be committed to pay for all of Europe. And German voters will blame Merkel.
If Germany refuses a haircut on Greek debt, and Greece defaults and exits the euro, then German voters will blame the Greeks and haircuts on the debt of other FPIIGS is kicked down the road past Merkel's tenure as chancellor.
That is why Germany is refusing any writedown of Greek debt.