"There Must Not Be A Bail In": Germany Vows "No Debt Relief For Greece"

Tyler Durden's picture

The standoff over the Greek debt crisis was nowhere closer to an amicable resolution on Sunday, when Germany's deputy finance minister Jens Spahn said in an interview with German broadcaster Deutschlandfunk that Greece must not be granted a "bail in" that would involve creditors taking a loss on their loans, reiterating the German government's opposition to debt relief for Athens, and confirming that when it comes to Europe's recently adopted "bail-in" protocols, they "work" in theory, but certainly not in practice (see the latest taxpayer funded bailout of Monte Paschi for another recent example).

"There must not be a bail-in," Jens Spahn said quoted by Reuters, adding that "we think it is very, very likely that we will come to an agreement with the International Monetary Fund that does not require a haircut," he said, referring to losses that Greece's creditors would have to take if debt was written off.

As everyone is aware by now, the IMF - which recently admitted its bailout policy vis-a-vis Greece has been a disaster perpetuating the Greek depression to unprecedented levels - has repeatedly called for Greece to be granted substantial debt relief, but this is opposed by both Germany, which makes the largest contribution to the budget of the European Stability Mechanism (ESM), the euro zone's bailout fund, and the ECB, whose Greek bond holdings would be impaired should a haircut on official Greek bonds be implemented.

In a positive sign over the recent impasse, last Monday Greece and its creditors agreed to further reforms by Athens to ease a logjam in talks with creditors that has held up additional funding for the troubled euro zone country. As a result, inspectors from the Troika are due to return to Athens this week where they will hardly be greeted with a warm reception.

Spahn, a senior member of Chancellor Angela Merkel's conservatives, said Greece's problem was a lack of growth rather than debt and said that giving Athens debt relief would upset other euro zone countries such as Spain that had to deliver tough reforms.

"Our Spanish friends, for example, say: 'Hang on - that wouldn't be fair: we carry out reforms and get no haircut and now you're talking about giving Greece one?!'"

Spahn said Germany was campaigning hard to keep the IMF on board in Greece's bailout because of its expertise in helping countries that need to deliver reforms in return for aid.

Yet while Spahn is not wrong that Greece is in dire need of more growth, especially since "less" growth seems almost mathematically impossible at this point...


... the German has a clear political agenda in pushing for more Greek growth, which would likely be funded with even more debt, and against a haircut since the real problem facing Europe remains an insurmountable debt load. And as the third Greek bailout case study showed, Germany is willing to risk a Grexit rather than give a greenlight to the rest of Europe's periphery that they, too, can come asking for debt haircuts and similar concessions.

Meanwhile, despite recent progress over stalled Greek bailout talks, Manfred Weber, who leads the conservative bloc in the European Parliament, said this month that if the IMF insisted on debt relief for Greece, it should no longer participate in the bailout, breaking ranks with Berlin's official line that the program would end if the IMF pulled out.

A survey published on Friday showed around half of people in Germany are against granting debt relief to Greece.

Today's news will hardly be welcome in Athens, where the increasingly more unpopular Syriza party has been promising a debt haircut, despite Germany making it abundantly clear such an action would not take place. In any event, we expect no real progress over the latest Greek "situation" for at least another 5 months, when Greece faces €6 billion in bond payments on July 17 and 20, at which point the can will once again be kicked, even if it means more unsustainable debt for the insolvent nation.

Finally, as laid out earlier this month, here is the timeline of near-term events for Greece, via Credit Suisse:

There is an immediate set of events (in February) that could resolve the issues and make the programme progress swiftly. If not in February, there are several intermediate dates that could still deliver an agreement, although at a later stage, most likely around the scheduled Eurogroup meetings – although an extraordinary gathering to approve the bailout happened in the past and cannot be discarded. July 17 – or 20 – would be the “hard” deadline, as Greece would be, same as in July 2015, unable to repay those amounts without additional support under the EU/IMF programme. There are earlier relatively large redemptions, notably in late February and in April – but we believe there is probably room in Greece’s public finances  to fulfill those commitments.

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Spaced Out's picture

Whenever someone starts their pitch with "So"...I switch it off.


Sonny Brakes's picture

Greeks should simply all move to Germany.

Greece and maybe other countries are turning into human zoos.

Isn't this what Hilter was doing with the Jews until they were set free by the Russians?

max_leering's picture

hey Greece, do what other nations do when creditors (DB,GS and JPM) come calling... default and don't give them a fucking red drachma

kommissar's picture

then switch to the dollar or ruble.

max_leering's picture

ruble perhaps, as it's more stable... never the dollar... ....... period.......

directaction's picture

Why do the once-proud Greeks tolerate this crude, 1800s-style imperialism?
Just unplug from the hungry IMF/ECB monsters. Do it tomorrow. Grexit! 

Jaspergers's picture

Why? This could have something to do with it:

“The Greek people are anarchic and difficult to tame. For this reason we must strike deep into their cultural roots: perhaps then we can force them to conform. I mean, of course, to strike at their language, their religion, their cultural and historical reserves, so that we can neutralize their ability to develop, to distinguish themselves, or to prevail; thereby removing them as an obstacle to our strategically vital plans in the Balkans, the Mediterranean, and the Middle East.” 


Henry Kissinger 1974


...but it isn't over yet. There will be surprises. 

Hongcha's picture

Kissinger is truly an evil blood-drinker.  Come to think of it, the strategy he describes is eerily familiar ... hmmmm ...

" ... to strike at their language, their religion, their cultural and historical reserves, so that we can neutralize their ability to develop, to distinguish themselves, or to prevail; thereby removing them as an obstacle to our strategically vital plans ..."

shovelhead's picture


They need a loan first.

PrefabSprout's picture

ZH, over the past few days, you're back to have huge typos in your headlines and articles. Someone back on the sauce; the editor on vacation? What's going on here?


yovatti's picture
yovatti (not verified) Feb 26, 2017 11:53 AM

Maybe the Russians can help.


Ooops, I forgot, they're broke too.


flacorps's picture

Don't just default, repudiate!

Grow your own food and survive without the EU's deadly embrace (which your departure will destroy anyway).

tuetenueggel's picture

It´s the most important point

The EU will destroy Greece anyway. As they destroy any country for the lazy wealth of their Brussels criminal regime.

Got it ? Think about it every day any of those politician assholes talks to you.

Avichi's picture

Seinfeld Episode - "No Soup for You"  GREECE , Love IMF https://www.youtube.com/watch?v=ryNxl-lpOME

DetectiveStern's picture

Ok, no bails in. So by the same logic don't charge any interest seeing interest is the risk premium for lending the cash. How can you charge high interest when taking no risk?

No bail ins, like negative interest, is fucking the whole point of having a capital based system.

If you fuck up and lend badly then you are in as much shit as debtor. This balance is essential for the efficient running of an economy and reducing debt inflation.

I'm bored of this shit. Either have rules that make the system work or come up with a system that suits the rules you want. Dicking about making a system work in ways its not designed to ruins the wealth of everyone involved.

Avichi's picture

These bastards and MOFUs at IMF have not changed the GAME PLAN for past 6 decades,bury a country in to debt, then come calling for the very existance and survival, and come down with a machete to cut these countries in to pieces for their share of meat...

Disgruntled Goat's picture

Because large politically connected creditors must never have to take a loss on stupid reckless lending decisions.

Its like a sick joke

Tlön Uqbar's picture
Tlön Uqbar (not verified) Feb 26, 2017 12:04 PM

Hey Jens Spahn,

Take your IMF and shove it up your Nerd-Dork glasses wearing ass.

It will fit. Just keep licking it.

tuetenueggel's picture

He is a homo. He will shove it in his ass because he likes the feeling beeing assfucked.

hotrod's picture

Cant imagine being in the EU and having one country like Germany call all the shots.  Be like New York telling us Georgia boys we owe'em some money.  Come git it Yankees. Yehawwwwww  it wont happen twice.

TRN's picture

Young people are leaving Greece and there is no end to the deflation!

hotrod's picture

The allure of easy money has ruined so many.

TRN's picture

Agree. There is a self inflicted portion to this mess!

Herdee's picture

Greece needs to do what Germany did after WW1. You just print into heaven with your own currency and pay back in your own paper fiat. Do it very quickly because hyperinflation will result before going bust. Germans know this. If Greece doesn't do this, Germany will rape them for everthing under the sun. Don't forget one thing, all the rich in Germany have their cottages and second homes throughout all the Greek Islands,we wouldn't want to spoil the party.

MEFOBILLS's picture

There is a lot of disinformation about the hyperinflation.  At the time the Reichsbank was privatized under the Dawes plan.  The private banks in outlying regions were given the legal authority to print deutchsmarks. 

Germany was not allowed to export to the U.S. to get dollars. They needed dollars to give to England and France.  England and France needed to pay interallies debts to U.S. Treasury.

So, the triangular flow of debt was the reason for the hyperinflation.

Bear raiders like Soros people of the day, shorted the Reichsmark.  This then causes more reichsmarks in a feedback loop.  The banks then printed the reichsmarks which matched the new loan creation.

So, it was private bank created deutchmarks created in response to currency shorts.  There was pressure to put deutschmarks out via the exchange rate to acquire dollars to then pay inter ally debts.

The reichsbank was brought under state control, to stop the hyperinflation.  Schacht introduced the rentenmark, and did currency controls.  He also lowered the boom on many of the german bankers.

One factor in the Greek drama, is that post ww2, Greece was subsidized by U.S. and England - to then be a bulwark against Soviet Union.  This way the Soviet Subs could be monitored as they came down the Bosporus.  So, a greek aristocracy evolved, to then spread largesse to its population.

Later this same aristocracy created debts to be monetized into Euros at mostly Germany banks.  They then spent the money in the way they were used to, and then said credit Euros soon left the greek economy.  

Now, there are debt instruments located outside of greece, and the Euro's are gone too.  

It cannot be paid - it is impossible.  Transferring all the islands and real property to cancel debts is the usual magikal trickery bankers engage in, so they can own the world.

NobodyNowhere's picture

Banksters doing what they do best

  1. Buy the politicians
  2. Make then indebt the nation - they get reelected, people go partying at the beach
  3. Then enslave the taxpayers in perpetual debt while the likes of Goldman Sachs (who 'consulted' for the Greeks) reap billions in bonuses and their masters rule the world
BritBob's picture

Time for Greece to follow the UK out of the EuroZone.

The UK has opted for a hard Brexit especially when one country (or part of a country in Belgium) can stall negotiations for so long. Spain could act in a similar fashion over Gibraltar and has the cheek to maintain its Gibraltar sovereignty claim. Claim?

Gibraltar - Some Relevant International Law: https://www.academia.edu/10575180/Gibraltar_-_Some_Relevant_Internationa...


So it looks like a quick hasta luego !

missionshk's picture

whatever they say, the opposite is true..


BAIL INS  on the way

BidnessMan's picture

Remarkable the charade continues. Greece can never repay the debt. The Emporer has no clothes.

bluskyes's picture

Time for greece to raise its own army. If the nation wont, then the cities need to.

Millions for defence. Not a penny for tribute.

tuetenueggel's picture

They have the 3 rd large army in Europe.

Bank_sters's picture

To the good people of Greece, I say hang the next banker, IMF representitive or Eurocrat that comes into the country.  Otherwise, shut the fuck up and enjoy the buttfucking.

realWhiteNight123129's picture

Trump should build the wall..... in Berlin between West and East again.


Miss Informed's picture

Or better still build it between US and Israel. It would bisect the IMF.

adonisdemilo's picture

Hey Greece, you will have to go back to the Drachma whatever develops in the EU.

Even if you kiss ass again the EU is going down.

Jump ship now before you are the only ones left on the sinking ship.

Did you see Marine Le Pen tear a strip off Frau Merkel on UTube. When I ripped off an employee like that they usually went in tears straight to the employment office looking for an easier ( read softer managemet ) job.

Walk away and renationalise every utility that's already been "stolen" for a few cents on the Euro by TPTB and their asset stripping friends. 

tuetenueggel's picture

Let Rosneft devellop your oil and gasfields in front of your coasts and become as whealthy

as Norway was. This the US wouldn´t like but shit on them. They are not more then turds.

French, Turkish and Bristish likewise.

Mountainview's picture

They don't have Drachma they have "Tickets" now...ask state employees.

bluskyes's picture

You know that devaluation is at hand when the pm and finance minister get up, and vehemently deny it. I would think that the same principle applies here.

malek's picture

"There Must Not Be A Bail In"

Right, ignore the Target2 imbalances growing to record highs,
and SPD's Martin Schulz even would want Eurobonds.

Hey, it's not a bail-out or bail-in until we politicians call it that name!

androkles's picture

Greece, you know how to fend for yourself, thousands of years already. just leave the stinking EU!

shovelhead's picture

They need a loan to do that.

tuetenueggel's picture

No they don´t at all.

They simply leave Euro and introduce the new drachme.

Finish of music for criminal bankers. A Very simple way to fuck off EU and EURO.

In the same second leave NATO - Criminal System and save billions of money.

PrivetHedge's picture

The Euro is what's killing them, the EU is just their fascist master.

Miss Informed's picture

Meet the EU at Thermopylae.

wmbz's picture

Germany Vows "No Debt Relief For Greece"

"Vow" all they want, another bailout, bailin, just keep bailing. That's all the whole fucking world knows how to do.