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Greek Deal "Categorically Not Viable" Without Debt Relief, IMF Insists
If there were any questions about where the IMF stands on Greece’s debt sustainability they were answered earlier this week when an updated version of the Fund’s Greek debt sustainability analysis was "leaked" to Reuters on Tuesday morning. The document, which was made available on the Fund's website later that day, said the country's debt "can now only be made sustainable through relief measures that go far beyond what Europe has been willing to consider so far." Recommendations for ameliorating the situation include "maturity extensions with grace periods up to 30 years, explicit annual transfers to the Greek budget or deep upfront haircuts." "The choice between the various options is for Greece and its European partners to decide," the Fund concluded.
The updated sustainability analysis was the latest suggestion from the IMF that its participation in a third Greek program was contingent upon debt relief for the Greeks - a conditionality that Christine Lagarde has threatened to stand by before but never entirely followed through on.
On Wednesday, the European Commission’s own report on the prospects for Greek debt was published and indeed it too showed Athens’ debt load to be entirely unsustainable without "re-profiling" although unsurprisingly, upfront haircuts and budget transfers were not listed as options.
Finally, on Thursday, German FinMin Wolfgang Schaeuble said he doubted if Greece’s problems could be solved without a "real haircut." The problem, Schaeuble continued, is that a real haircut "is incompatible with membership in the currency union," meaning the only way to make writedowns possible is for Greece to take the now famous "time-out" which Schaeuble still contends "would perhaps be the better way for Greece."
Now, with German lawmakers debating the new Greek package, the IMF is digging in on the debt sustainability issue. Speaking to Europe1 radio on Friday, Christine Lagarde said the new Greek deal is "quite categorically not" viable without debt relief. In case that isn’t clear enough, here are the highlights from Dow Jones:
- IMF'S LAGARDE: NO SOLUTION POSSIBLE FOR GREECE WITHOUT DEBT REDUCTION
- IMF'S LAGARDE: GREEK DEBT COULD BECOME SUSTAINABLE WITH RESTRUCTURING
That said, Lagarde now seems resigned to the fact that Germany and its allies in the bloc simply are not going to consider a traditional haircut.
- IMF'S LAGARDE: GREEK DEBT CAN BE SUSTAINABLE WITH MATURITY, RATE CHANGES
- IMF'S LAGARDE: GREEK DEBT'S DIRECT HAIRCUT SEEMS EXCLUDED
Yes, it does "seem excluded," but in case anyone wasn’t entirely clear on this issue, Angela Merkel can help:
- MERKEL SAYS GERMANY WON'T AGREE TO DEBT CUT FOR GREECE
And here’s Bloomberg on Finland’s position:
Finland’s Prime Minister Juha Sipila on Thursday dismissed talk of debt reduction as "useless."
Yes, "useless", and almost as "useless" as the entire discussion around Greece’s funding needs because with the Greek economy in free fall, any estimate of what counts as "adequate" in terms of the size of a third bailout package is out of date the second it’s committed to paper and is ancient history by the time lawmakers across the currency bloc get around to deciding whether or not the Greek cause is worth still more taxpayer support.
All of the above helps to explain why Schaeuble would rather see the Greeks simply leave the currency union - that way, they could legally receive a debt haircut as a kind of parting gift and German taxpayers could be assured that this time truly is the last time.
And for all of the rhetoric out of Angela Merkel about the overarching goal being to keep Greece in the currency bloc, the real reason why Schaeuble’s plan is a non-starter (for now anyway) is rather simple (via Bloomberg):
French Finance Minister Michel Sapin says says he’s "radically against" a plan evoked by Germany’s Finance Minister Wolfgang Schaeuble that Greece could be temporarily put out of the euro currency
"Nothing can happen in Europe if France and Germany disagree," he added.
Perhaps Yanis Varoufakis was right all along.
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But the political capitol of European Unity will definitely make it viable.
Gotta take on more debt.....to get out of debt.
Only the dude abides.....everyone else.....pay the hell up.
Hark! Alas! Poor little Greece has too much debt, and is having debt problems. Pray teleth thee, what schalt thy do? Alas! To extinguish the torment of Greek Debt, thy must borrow more to solve thy debt crisis.
Forsooth.
<-- You pay, bitch!
<-- You pay, bitch!
Looney ;-)
All those other bitches can print money, why can't I?
Give me the money, Lebowski!
This year is the jubilee year, all debts will be forgiven.
Go for it peeps.
The pensioners will really starve then.
Unless we humanely euthanize them sending them back to Jesus.
Que the pale horse.
Here I come...
By the time they get around to actually providing this "third bail-out" to Greece they'll already be in negotiations for the fourth. Taking... for... fucking... ever.
Greece has been stringing the world along since the ‘80’s…. ‘80’s BC that is.
Can't get anymore fake than this folks
China banks lend $209 billion to margin lender to lift stock prices: media
| Reuters
China's biggest banks have lent 1.3 trillion yuan ($209.4 billion) to the country's state-backed margin lender to halt a meltdown in Chinese shares, local media said on Friday, underlining the government's determination to support stock prices.
Financial magazine Caijing cited unnamed sources as saying that 17 commercial Chinese banks had coughed up the cash for China Securities Finance Corp as of Monday, after China's central bank said it wanted to extend funding to the firm.
China Merchants Bank Co (600036.SS) was the biggest financier, lending 186 billion yuan to China Securities Finance, Caijing said.
China has created what amounts to a state-run margin trader with $483 billion of firepower, its latest effort to end a stock-market rout that threatens to drag down economic growth and erode confidence in President Xi Jinping’s government.
China Securities Finance Corp. can access as much as 3 trillion yuan of borrowed funds from sources including the central bank and commercial lenders, according to people familiar with the matter. The money may be used to buy shares and provide liquidity to brokerages, the people said, asking not to be named because the information wasn’t public.
While it’s unclear how much CSF will ultimately deploy into China’s $6.6 trillion equity market, the financing is up to 25 times bigger than the market support fund started by Chinese brokerages earlier this month. That’s probably enough to restore confidence among China’s 90 million individual investors, says Bocom International Holdings Co. The Shanghai Composite Index jumped 3.5 percent on Friday, capping a two-week rally that’s turned it into one of the world’s best-performing equity gauges.
http://www.bloomberg.com/news/articles/2015-07-17/chinese-bazooka-xi-rea...
State backed gambing insurance, the people's QE!
What's this with Lagarde now coming out mouthing? If the Americans hadn't kicked the initial IMF Greek debt relief report into the open she would still be simpering in Merkel's armpit.
Do not put the feminine tendency in control of anything important. You have been warned.
Greek package, lulz.
I can't believe that debt is ever a problem in a nirp world. change the maturity to 100 years and the rate to zirp and it's problem solved.
"Recommendations for ameliorating the situation include "maturity extensions with grace periods up to 30 years, explicit annual transfers to the Greek budget or deep upfront haircuts."
As one person said in an RT.com interview yesterday, the EU/EZ was never announced publicly as a"transfer union" because many of its members would not have joined up.
But for the EZ to work, it has to be one - as I have long predicted. (The US federal dollar could not work without USD billions quietly transferred to the poorer states each year.)
And I believe ClubMed countries expected it to be and were (probably) quietly promised it would be by the slimeballs in Brussels and elsewhere to get them on board.
Without it being a transfer union, countries like Greece will always be buried in unrepayable debt which is a downward spiral into societal collapse. That is what we now see happening in Greece. Others will follow.
Either the EZ will become a transfer union or it will collapse by a thousand cuts and the EU will fall apart.
German citizens do not wish their .gov to join up to a transfer union because they already know that the bulk of the funds would come from them. Mutti and her wheelchair have a problem. They might decide to quit the EZ themselves which is a plan tossed around for some while.
Agreed. Let the Boche first toss the tossers and when we can see the whites of their eyes, we open fire.
I just saw the trailer for the new mission impossible movie and the "bad" guys are plotting to destroy the IMF. Never have I rooted for the bad guys so much.
Lagarde is doing it for them.
Schäuble is applying double standards (the polite way of saying he is lying): "Schaeuble continued, that a real haircut "is incompatible with membership in the currency union," Well if breaking the EU rules were impossible the EU would not have survived for example the annual violations of the Maastricht rules by Germany which runs government debt to GDP of more than 80% wheras Maastricht rules permit only 60%. Not to talk about the other honourable members of the bankrupt EU-club such as Italy and Spain etc. etc.. If the rules can be continously violated withhout any consequences it appears possible that Greece receives debt relief contrary to the (anyway useless) EU-rules.
The sad truth is that it's not just Greek debt that is not viable. The country has also not been viable for quite some time. Greece as it stands at the present time cannot even feed herself or power herself without large inputs from overseas. And what it can export and earn from tourism is nowhere near enough to bridge the gap at the present time.
So even though a wholesale writeoff of debt would be great, it would still not be sufficient to overcome.
It is only when Greece can become self sufficient on an import/export basis that the IMF and Europe need to look at the issue of writing off debt.
Greece is a FAILED STATE because it is a FAILED CULTURE AND FAILED SOCIETY.
Greece has been this corrupt and failed for many, many generations -
NOT just since FRAUDULENTLY joining the EZ
and
DEFRAUDING THE BOND BUYERS AND LENDERS OUT OF HUNDREDS OF BILLIONS OF EUROS
WHICH THE GREEK PARASITES AND THIEVES **TOTALLY SQUANDERED AND HID IN OFFSHORE ACCOUNTS**.
THERE HAS BEEN **ZERO** PUBLIC ACCOUNTING FOR WHAT THE GREEKS DID WITH ALL THE MONEY THEY BORROWED *ORIGINALLY* WHICH THEY DID NOT REPAY AND WHICH WAS THE BASIS FOR THE SUBSEQUENT BAILOUTS.
Corruption is rampant and embedded in the Greek genetic structure –
ANY AND ALL MONEY GIVEN TO GREEKS UNDER CONTROL OF THE GREEKS WILL BE SQUANDERED.
AND
THE HYPER-CORRUPT GREEKS WILL *NEVER* IMPLEMENT *ANY* REFORMS UNLESS THEY ARE OCCUPIED BY MILITARY FORCE.
IMF’s Lagarde: Straight ‘haircut’ for Greece’s debt is off the table
17 July 2015, by Inti Landauro - Paris (MarketWatch)
http://www.marketwatch.com/story/imfs-lagarde-straight-haircut-for-greeces-debt-is-off-the-table-2015-07-17
I'm actually gaining some modicum of respect for LaGarde. It feels, really, really weird...
You need fucking help man.
look if it makes it easier,, its just the fucking Parisian whore hatching plans to fuck Greece over for the IMF benefit alone.
That fucking orange cow doesn't like sharing.
Then, Why hasn't IMF canceled yet his part of greek debt?
All these people with advanced knob rot in Brussels and they can't see what so many of us could see with laser like precision 15 fucking years ago.
Unelected Christine Lagarde should keep her mouth shut.
Germany should leave the EU.