9 Years Later... Greece Is Still In A Debt Crisis!

Tyler Durden's picture

Authored by Simon Black via SovereignMan.com,

Sometimes you have to marvel at the absurdity of the financial universe in which we live.

On one side of the Atlantic, we have the United States of America, which triggered yet another debt ceiling disaster last Thursday when the US government’s maximum allowable debt reset to just over $20 trillion.

Of course, the US national debt is pretty much already at $20 trillion.

(That’s roughly $166,000 per taxpayer in the Land of the Free.)

This means that Uncle Sam is legally prohibited from ‘officially’ borrowing any more money.

But far be it from the US government to start living within its means. Sacrilege!

These guys have zero chance of making ends meet without going into debt.

Just last year, according to the government’s own financial report, their annual net loss totaled $1 TRILLION, and the national debt increased by $1.4 trillion.

And that was in a relatively stable year. There was no major war or financial crisis to fight. It was just business as usual.

This year isn’t going to be any different.

So, cut off from their normal debt supply (the bond market), the Treasury Department is resorting to what they call “extraordinary measures.”

They’re basically pillaging government employee retirement funds, and will continue to do so until Congress raises the debt ceiling.

It’s a repeat of what happened in 2015. And 2013. And 2011.

Pretty amazing to consider that the “richest” country in the world has to plunder retirement funds in order to keep the lights on.

Former US Treasury Secretary Larry Summers said it perfectly when he quipped “How long can the world’s biggest borrower remain the world’s biggest power?”

Then, of course, on the other side of the Atlantic, we have Greece, which is now in its NINTH YEAR of a major debt crisis.


Greece has had nine different governments since 2009. At least thirteen austerity measures. Multiple bailouts. Severe capital controls. And a full-out debt restructuring in which creditors accepted a 50% loss.

Yet despite all these measures GREECE IS STILL IN A DEBT CRISIS.

Right now, in fact, Greece is careening towards another major chapter in its never-ending debt drama.

Just like the United States, the Greek government is set to run out of money (yet again) in a few months and is in need of a fresh bailout from the IMF and EU.

(The EU is code for “Germany”…)

Without another bailout, Greece will go bust in July– this is basic arithmetic, not some wild theory.

And this matters.

If Greece defaults, everyone dumb enough to have loaned them money will take a BIG hit.

This includes a multitude of banks across Germany, Austria, France, and the rest of Europe.

Many of those banks already have extremely low levels of capital and simply cannot afford a major loss.

(Last year, for example, the IMF specifically singled out Germany’s Deutsche Bank as being the top contributor to systemic risk in the global financial system.)

So a Greek default poses as major risk to a number of those banks.

More importantly, due to the interconnectedness of the financial system, a Greek default poses a major risk to anyone with exposure to those banks.

Think about it like this: if Greece defaults and Bank A goes down, then Bank A will no longer be able to meet its obligations to Bank B. Bank B will suffer a loss as well.

A single event can set off a chain reaction, what’s called ‘contagion’ in finance.

And it’s possible that Greece could be that event.

This is what European officials have been so desperate to prevent for the last nine years, and why they’ve always come to the rescue with a bailout.

It has nothing to do with community or generosity. They’re hopelessly trying to prevent another 2008-style meltdown of the financial system.

But their measures have limits.

How much longer do Greek citizens accept being vassals of Germany, suffering through debilitating capital controls and austerity measures?

How much longer do German taxpayers continue forking over their hard-earned wages to bail out Greek retirees?

After all, they’ve spent nine years trying to ‘fix’ Greece, and the situation has only become worse.

For a continent that has been at war with itself for 10 centuries and only managed to play nice for the last 30 or so years, it’s foolish to expect these bailouts to last forever.

And whether it’s this July or some date in the future, Greece could end up being the catalyst which sets off a chain reaction on both sides of the Atlantic.

Do you have a Plan B?

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BuddyEffed's picture

"If Greece defaults, everyone dumb enough to have loaned them money will take a BIG hit."
More like the taxpayers of the countries where the banks are located will eat the losses.

cue in cue's picture
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Mr 9x19's picture

greece... who still fucking care  ??

Manthong's picture

Hey, look at the good news about this…

The securities and derivatives exchange never called a default there.

..maybe there is a little chink in the armor in that faux german market

Haus-Targaryen's picture

They won't let Greece go.  

They'll package it up about some "European Unity" bullshit where Germany pulls out its ITAN list and makes one massive wire transfer, but at the end of the day ...

We live in a ponzi scheme.  You cannot remove some EUR 300 billion from the middle of the Ponzi and except the show to keep going without lots of magic trickery. 

Greece will get more cash for free, which I'll pay for with my kids' future (German tax payer here). 

The quicker this God foresaken financial system burns to the groud, the better. 

Manthong's picture


Gee.. I thought that of my DE friends were fully on-board with the financial conquest.

tuetenueggel's picture

only the really stupid ones.

WallHoo's picture

You are not paying anything from your own taxes to Greece,Germany borrows money at a negative interest rate, then lends to Greece for a nice 3.5% which then Greece pays back to german and french banks...You (as a German tax payer) are not involved anywhere here.Not only you are not involved anywhere but the borrowead money of Germany are not paying for ANY greek expenditure.

Althought you are correct,the sooner everything burns down,the better.

Haus-Targaryen's picture

While this is the case today, last time Germany sent stupid amounts of money to Greece it was in 2015 (80 Billion EUR) and then in 2012 (again German part was 80 billion EUR) and then in 2010 which was another 80 billion EUR. 

We borrowed the money (so now we're on the hook for it), we were borrowing at 3% and lending it to greece at 1.95% eating the 1% difference on the 2012 tranche.  2010 was even a bigger shitshow.  Bund likely made a little money on interest carry from 15 but they still paid out billions they'll never see again which the idiot German tax payers will have to pay back.  

IF you think Germany gets its money back then perhaps we'll make money.  Odds of that happening are more or less zero (nevermind the fact that the German government is on the hook to the EFSF which now holds som 80% of Greek debt). 

German taxpayer = fucked. 

WallHoo's picture


Even if what you say is true,YOU as a taxpayer or your children(sic) are not paying for anything.Its borrowed from our lord the ECB and her grace the QE.

Germany is on the hook to the EFSF as long as an EU(and EFSF) exist.And if it does the odds of taking your money back is a clean 100%.

The ECB is monetazing for the Germans(and the rest) like theres no tommorow,something that doesnt happen for Greece or Greek banks which is crazy cause central banks are supposed to be the lenders of last resort for commercial banks.

And when it come to you and your children(hillary clinton sic),i think you oh so poor german taxpayers are more that well of with the captured european market that you constantly rape industrially financially and politically.

Again,you cant blame Greece for debt recycling,if thats what worries you...

Nobody loves the victim narative haus...

Haus-Targaryen's picture

You fail to apprecaite the difference between "profiting from [the €]" and "being hurt the least [by the €]" 

German growth (I know growth, but relevant) from 1948 - 1999 averaged 2,7% per annum.  Since 1999: averaged 1,6% and falling annually. 

The opportunity cost of the lost 1% annual is some trillion DMark equivalent (500 billion EUR or almost 20% of our GDP) per year. 

Good thing for the power that be that the average moron cannot understand "opportunity cost"

What is going to happen is quite simple: 

Greece or Spain or Portugal at some time in the not too distant future is going to give their creditors and the ECB the massive middle figure, a colorfully worded letter which will say, more or less "fuck you ... not going to pay"

You'll have the idiots in the Bundesfinanzministerium have the choice: 

A) Use the opportunity to renig on all our debt Germany owes as well as "signed up for" under the EU and EMZ as well and bring back the D-Mark, wipe out all debt and start the finance system over again from nothing:

-- or --

B) "In the Spirit of European Unity" they'll try and paper it over by over-indebting the Bund.  People will get pissed.  You'll have some man dressed up as Angla Merkel walk out on stage and tell us some platitude about Germans having a special obligation due to their history and we'll keep paying even long after everything else decided bankruptcy was a better idea. 

Never underestimate the the power of "WWII guilt" that politics in Germany plays. 

WallHoo's picture

Now thats more like it!That i can agree with!Nothing more to be said!

Its just that i dont like the me the german taxpayer and my children narative.

The rest of what you say good staff.

Al Tinfoil's picture

Better to look at where the "bail out" funds actually go.  Each "bail out" sum is added to the total shown as Greece's debt, but I have read that Greece receives a very small percentage of the money - the money goes to the French, German, and other banks that lent so recklessly to Greece and to Greek banks and businesses before it became clear that Greece could never pay back the loans.

The entire "bail out" process is a way to bail out these banks and stave off default in the Euro banking system, while making it appear that Greece is being saved from disaster.  This echoes the classic IMF process of taking over a country by loading it up with unpayable debts, then imposing austerity and looting its assets. 

This is not, and never was a process to help Greece.  This is a process to bail out German and French banks - to save tottering financial houses of cards like DeutscheBank from bankruptcy, and avoid cascading defaults that would have followed if German and French banks had been forced to write off their loans to Greece and Greek entities.  The credibility of the Euro and stability of the EU banking system were at risk if Greece's debts had been written off without a bail out of the German and French banks.


sebmurray's picture

Lets not forget the 70billion Euro negative TARGET balance that Greece has (we know who that is owed to as well!)

WallHoo's picture

Not to you or haus anyway...

Snoopy the Economist's picture

WallHoo: Of course Greese will pay all their debts - so there is nothing to worry about - huh?

WallHoo's picture

Never said that,but whatever...Greece bad Germany good ECB and FED good,bankers good!doo doo dah dah...

tuetenueggel's picture

Neither me nor my family pays a single cent of german tax. 

expatriated. Fuck this moron homeland Germoney.

GreatUncle's picture

Watch and observe your future economic position.

How you will be held in debt at the maximum limit, unable to feed or clothe yourself etc. forever.

If you don't care about what the future holds for you don't come complaining when it happens to you as it will us all.

tuetenueggel's picture

assholes voting up themselves.

CCanuck's picture

Mr Panos sums up the Greek bailout and repayment plan.



tuetenueggel's picture

No, They´ll be bailed out again and again by states on taxpayers expense.

Politicians are the same criminal species as banksters.

BorisTheBlade's picture

9 years and billions of dollars later, Greece is still in debt crisis. And it will be all the way through 2050 with debt-to-GDP circa 170% http://graphics.wsj.com/greece-debt-timeline/

StocksWayUp's picture

And we all know that the problem never went away and will come back in a sense much worse than before and this time directly destroying America. 

StocksWayUp's picture

Good timing on the emergence of this article at ZH.  Despite the fact that ZH has been trying to call a market top for many years now and has been wrong it will happen. I just think it is probably going to happen when ZH decides to turn bullish.


Too many people are guessing what the markets will do and are calling themselves analysts. Nice to see there are some real analysts out there. 



The group of analysts who split off from Goldman about 30 years ago have been nailing markets. 

Their charts on one of their FB pages contains past charts that prove their correctness with market calls.


https://t.co/f3mU9N8rc4       This group is probably ZH's greatest discovery. Thanks.

Irvingm's picture

Their market calls have been right on time. They are probably the only analyst who knows when to actually buy and sell for trading purposes. 

Dame Ednas Possum's picture


'ZH's greatest discovery'... yeah right, like discovering you just trod in fresh dog shit. 


Montani Semper Liberi's picture

 But...but, his post is in all bold and just look at all those upvotes for a guy who has been here 6 weeks.

 I'm going to do the smart thing and click on that blind link. What could possibly go wrong?

tuetenueggel's picture

You know what the term Analyst has hidden in it ?


MEFOBILLS's picture


Yanis Varoufakis explained how stunned he was by politicans like Wolfgang Schauble.  Despite Varoufakis patiently trying to make them understand how debts couldn't be paid, the "lawyers" would always come around to rigid interpretations of the law.  The Euro system money laws are malformed.  So.. simple minded lawyers and politicians following malformed laws = crises.

The West also has a crises of leadership, as there are almost no statesmen to be found anywhere.



WallHoo's picture

Well as you corectly point out MEFOBILLS the RESPECTED FROM SOCIETY LAWERS THAT RULE OVER US dont know anything when it comes to the economy...How money is created,what is money,what is currency,banking,trade policy,industrial policy,economic policy.

But despite being that handicaped they are still respected and rule over us.I can imagine your pain seeing all that supidity...


Anyone care for a trade?Be the carpenter you were bornt to be...

tuetenueggel's picture

It´s a lack of brain only:

You take a loan of 1.000 $.

Because your are short on cash. You have to pay back this loan + 5 % interest. So you have to pay back 1050 $.

Where do you get this 50 $ from ? OK an additional loan. Fiat money they call it.

WallHoo's picture

Well be my guest in this insanity!You are correct!But keep in mind that this is how credit works fiat or no fiat!

tuetenueggel's picture

Neither Indians nor real Statesmen ride dead horses.

Snípéir_Ag_Obair's picture

of course. The money system itself is just a long con. prosperity through paying bankers through labor/income that which they create from out of thin air.


Fiat is the root of all evil.

MEFOBILLS's picture

Fiat is the root of all evil


Let's call it "banker credit."  

Legal Fiat that fluxes relative to goods and services is a blessing. Humanity doesn't use that kind of money now, but did -at certain times in the past.  There are different kinds of fiat, depending on the law.

Banker Credit is a type of fiat money, where the money pops into being upon hypothecation.  It puts private citizens into debt to a private third party.  This third party is a parasite in the two way evolution of man.  This third party takes a tithe in the form of seigniorage, as the interest is paid up front.

Other fiat systems in history did not work using the private banker usury method.  For example, Benjamin Franklins colony would monetize land in 8 year notes.  The note would be paid off in yearly increments.  Any interest needed to pay off note was injected into the supply in advance by Franklin's State Bank.  In this way, interest was available in the money supply to repay the loan. Even better, Franklin would inject into the commons, building bridges, etc.  So, this injection was a renewal...life giving.

ZH denizens are falling for the "fiat" narrative, which is deforming the word.  All money in history is fiat, including gold.  Over 2000 years of coin history was fiat.  As soon as a coin gets its King's stamp, it becomes fiat.  Metal coins issuance is restricted due to scarcity of metal - so this takes care of only one fiat variable (volume).


Sequitur's picture

America is Greece -- with a lot more zeros. But who cares, so long as the WIC dollars keep flowing to all the breeders who can't afford their bastards.

GreatUncle's picture

+1 and with the global reserve currency to tap into "money is not a problem".

The US has never lived within its means and why it had to drop the gold standard ... printing to many dollars to gold to back it all up.

This is a long time argument and will never go away because to be the top dog ruling the world if you need money you do not borrow it you just create all you need.

In some ways why the USSR was always going to lose the cold war too.

Drop out's picture

Aren't they on or near the top of the list for donating 2% of their GNP to NATO? I may be wrong, but I thought they were near the top and it seamed funny. I don't understand economics at all, but how can the US have possitive GNP at all when in debt 20+ trillion not including internal promises such as pensions? Is there a GNP indicator that takes that into consideration? Maybe I have it all wrong, please correct me if so.

tuetenueggel's picture

As long, as world accepts us-FED printed paper ( Dollares ) nothing will happen.

From the first second, any country in this world refuses $ as payment, US have finished.

China or Russia will be in further days.Trump is no politician but businessman.

He knows the mechanism behind ecomomy.

Jubal Early's picture

Greece has a strong navy because Turkey already stole half of Cyrpus and there are hundreds of greek islands the turks would love to get their hands on.  The irony here is that Greece's defense budget is so big to protect itself from Turkey, another Nato member.

An interesting fact is that Germany bribed Greece ministers to purchase several ships and submarines from them, and this is one reason Greece is so broke.  The joke is that Merkel GAVE the same submarines to Israel knowing that the Yids were going to modify them for nuclear weapons that would be used to threaten Europe if they stop paying the yid tax.

alphasammae's picture

just keeep printing. nobody seems concerned now. They only get concerned when they want to take profits and initiate a scare. a boring merry go 'round with fake news.

BurningBetty's picture

I guess bondholders prefer foodstamps over "wasting money on women and beer".

WallHoo's picture

"And a full-out debt restructuring in which creditors accepted a 50% loss"

And then Greece was forced right the next day to take another loan of bigger size...(conveniently forgoten by the author)

tuetenueggel's picture

Wrong. Not Greece is in a debt bubble, but european banks, German and French most.

They pumped loan after loan, trillions of Euro into Greece, knowing, that Greece never would be able to pay back. Their intention was a simple one: high interests and EU never will let a single member fail. They knew that such a failure would have killed EU totally.

Same with US-Subprime bubble.

whatisthat's picture

I would observe Greece is another example of failure due to free giveaways by the corrupt governments and politicians like what was done in the U.S. that resulted in $20,000,000,000,000.00 in debt while Bush and Obama were POTUS.

BritBob's picture

Greece would be better off outside of the EU where they can adopt their own currency and set their own interest rates.

Time to follow the UK out.

Brexit - The UK will opt 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 !

Last of the Middle Class's picture

Just think if they had told the EU to fuck off, nationalized all banks and armed their citizens against all bankers, they could have been well on the road to recovery by now. Pitiful.