The Cost Of The Combined Greek Bailout Just Rose To €320 Billion In Secured Debt, Or 136% Of Greek GDP

Tyler Durden's picture

Some of our German readers may be laboring under the impression that following the €110 billion first Greek bailout agreed upon and executed in May 2010, the second Greek bailout would cost a "mere" €130 billion. Alas we have news for you - as of this morning, the formal cost of rescuing Greece for the adjusted adjusted adjusted second time has just risen to €145 billion, €175 billion, a whopping €210 billion, bringing the total explicit cost of all Greek bailout funds to date (and many more in store) to €320 billion. Which incidentally is a little more than Greek GDP (which however is declining rapidly) at 310 billion, only in dollars. So as of today, merely the ratio of the Greek DIP loan (Debtor In Possession, because Greece is after all broke) has reached a whopping ratio of 136% Debt to GDP. This excludes any standing debt which is for all intents and purposes worthless. This is secured debt, which means that if every dollar in assets generating one dollar in GDP were to be liquidated and Greece sold off entirely in part or whole to Goldman Sachs et al, there would still be a 36% shortfall to the Troika, EFSF, ECB and whoever else funds the DIP loan (i.e., European and US taxpayers)! Another way of putting this disturbing fact is that global bankers now have a priming lien on 136% of Greek GDP - the entire country and then some now officially belongs to the world banking syndicate. Consider that when evaluating Greek promises of reducing total debt to GDP to 120% in 2020, as it would mean wiping all existing "pre-petition debt" and paying off some of the DIP. Also keep in mind that Greece has roughly €240 billion in existing pre-petition debt, of which much will remain untouched as it is not held in Private hands (this is the debt which will see a major "haircut" - or not: all depends on the holdout lawsuits, the local vs non-local bonds and various other nuances discussed here). If you said this is beyond idiotic, you are right. It is not the impairment on the Greek "pre-petition' debt that the market should be worried about - that clearly is 100% wiped out. It is how much the Troika DIP will have to charge off when the Greek 363 asset sale finally comes. This is also what Angela Merkel will say tomorrow when Greece shows up on its doorstep with the latest "revised" agreement from its parliament to take Europe's money ahead of the March 20 D-Day. Because finally, after months (and to think we did the math for Die Frau back in July) Germany has done the math, and has reached the conclusion that letting Greece go is now the cheaper option.

So how do we get to the €210 billion number? Well, there is the €130 billion already "agreed" upon.

  • Then there is the additional €15 billion which Spiegel broke 2 weeks ago... New net second bailout : €145 billion, and €255 billion total.
  • Then there is the fact that the ECB's bond swap into the EFSF for the 15 cent sweetener in "cash" equivalents to creditors has to be funded. As Credit Suisse's William Porter explains: "The ECB's reported bond swap has to be funded." Bingo. The WSJ further adds today, that according to a new 19-page bill, "An additional €30 billion will be provided in the form of bonds issued by the EFSF and will be offered to private creditors as a "sweetener."" Ah, so another €30 billion cost in the hole. Which incidentally begs the question- if the ECB is Europe's bad bank (courtesy of the potential $7.1 trillion collateral expansion discussed here, just what the hell does that make the EFSF which is now the ECB's bad bank)... So new net second bailout: €175 billion, and €285 billion total.

And finally, and going back to the WSJ's article, it appears that in addition to the €30 billion in Ponzi accounting which will have to be funded from the EFSF so the ECB does not "profit" on its Greek bond holdings (can someone please look at this chart and explain to us how the ECB can profit on this security).

Greece will borrow up to €35 billion from Europe's temporary bailout fund to finance an ambitious debt-buyback plan from the European Central Bank, according to official documents released by the government Saturday.


The 19-page bill sets out how the restructuring will be implemented and includes a plan through which Greece will buy back those bonds now held as collateral in the national central banks of euro-zone countries.


The plan is part of a raft of new measures Greece must take to secure a €130 billion bailout from its European partners and the International Monetary Fund, along with a €100 billion debt write-down the country is negotiating with its private-sector creditors


The measures, which will be voted on in parliament Sunday, include sweeping reforms such as €1.1 billion worth of cuts in pharmaceutical costs, abolishing restrictive rules on tourist guides and opening up Greece's energy market to foreign investment.

Who funds this latest and greatest addition to the monetary black hole that is Greece? Take a wild guess...

According to the bill, the European Financial Stability Facility, the euro zone's transitional rescue fund, will lend Greece the money to carry out the buyback. The ECB will act as an intermediary in this transaction, buying the bonds on Greece's behalf.

In other words, joint and several EFSF member countries such as Italy and Spain, oh and Greece of course, will be funding even more money to bail out Greece, only they won't be doing it, the ECB will... If your head is not spinning yet, you are not paying attention.

One person, whose head is most certainly not spinning and whose mind is long made up, is Angela Merkel. Who will promptly put an end to this lunacy as soon as the ball (bail?) is back in her court officially, some time on Sunday. And all that is of course assuming that there are Greek member of parliament who have not resigned by the time tomorrow when Greece is now fully expected to pass this latest bill.

Finally ask yourselves this: what would have happened if Greece had been allowed to default in May 2010 and all debts wiped out, and instead of feeding its creditors, the funding sources had provided the country with €320 billion in new debt (as they are anyway, only it is to make its creditors whole). It would mean that, assuming a dollar for dollar equivalency between GDP and debt, Greece would have grown by about 36% more in the past two years compared to where it is now, even with the occasional German submarine purchase. Something tells us the Greek people should have the right to know this.

Finally, a chart of what is coming to a Keynesian banana republic near you, or what it means when you can no longer mask insolvency in nominal terms.

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Ecoman11's picture

Tyler would be great if you could cover the links below. Somethings up in Canada.

Read related to

Chris Jusset's picture

It would really suck to be a German taxpayer ... and be forced to support this basket-case economy.

Blotsky's picture

Indeed! Because to support our own addiction... errr, lie... I mean endless debt, makes so much more sense! But then again, we are supporting their idiocy, via Helicopter Ben! We're on the winning track!

Randall Cabot's picture

No medicine for you:

"The measures, which will be voted on in parliament Sunday, include sweeping reforms such as €1.1 billion worth of cuts in pharmaceutical costs, abolishing restrictive rules on tourist guides and opening up Greece's energy market to foreign investment."

The Big Ching-aso's picture



Germany should bailout Greece in Weimar Marks.   

CrashisOptimistic's picture

Papademos is an EU puppet and he will force the vote through his coalition.  It's why he was hired.  Further, the EU will refuse to allow him to step down for new elections until the people are fired and the pensions removed.  The EU won't risk a new government undoing the legislation.

We have to be ever vigilant and remember the Prime Directive of the New Normal.  Governments will do anything to keep the wheels turning.  Simply that.  ANYTHING.

It is very clear that they are terrified of default.  If nothing was passed and no consensus existed, then when the March date came along the ECB would write a check to make the debt payment.  Greece, under no circcumstances, is going to be allowed to default.  The EU is terrified of it.

Nothing will change without bullets flying and entering skulls.  

Calmyourself's picture

+1 No contracts, no CDS, no derivatives = No rule of law = do anything.  Hunger and then bullets and then skulls a popping.  Unfortunately, only this equation changes anything.. 

SamAdams1234's picture

Its like a good English breakfast plate, the chickens are present, but the PIGS are committed.

Jefferson's picture

The decision to let Greece default was made years ago when Greece was allowed to lie its way into the Euro.

agent default's picture

Why would you want to let Greece default and end all the confusion?

Amish Hacker's picture

And GS showed them how. Through the magic of swaps, massive debt disappeared from the Greek balance sheet just long enough for Greece to pass the EU entrance exam. The debt reappeared, and grew exponentially, once they were in.

Oh, and Goldman made a boatload of money doing this.

Future Tense's picture

Calling Kyle Bass...oh wait, he already explained to everyone months ago that a formal 100% default on Greek debt would not solve the problem.  I forgot he has already moved on to shorting Japan.

nasdaq99's picture


You know this and most bearish bloggers know this, but the language and the body language of everybody involved in this say otherwise.  Frau Merkel does not want Greece to default and you seem to be saying that since the math is so compellingly evident that default is the only rational course then that is the course she will take.  But you, we have been saying this for 2 years now.   And Greece can't seem to grow a pair and walk away to do the right thing for their own people.

Seems to me that this will go on until they suck the IMF dry and get what they can out of China, then in defalut call in the Fed for what money they can get out of the US in default before anybody walks away from Greece.  I think her math is better than we give her credit for.

Merkel is socialist through and through.  Look at her Wiki page.  

Timmay's picture

Maybe Greece understands its' proximity to Russia and China....

fiddy pence haff pound's picture

Thanks to the mnimonio, Greece is not allowed to seek help from anybody else.

Greece officially has a pimp; the EU.

That's why I hope these crises- there will be more- destroys the union, not just the currency.

Pencil-neck soldiers from Brussels doing the bidding of Timmie.


Cyprus went to the Russkies and got a loan.


jonjon831983's picture

Body language is important... when speaking to peasants who know nothing.   Everybody up top knows about the importance of body language.  Nowadays with poker, politics, business, etc (don't forget what actors do in entertainment) there are courses and training for knowing what message you are projecting with your body language and how to project a different message.


Hell, even I keep thinking about my own body language when I go to pick up chicks (unsuccessfully).


Stand up right, head straight = confidence

Hands in pockets = defensive, self conscious

Feet spread slightly and standing upright = strength and confidence.

Look at watch often = defensive, self conscious.

etc etc


Really, all you gotta do is fake it.  Especially when you know you will have pictures taken of you, you modify your behaviour to project what you want others to think.  Say CHEEESEEE!

ThaBigPerm's picture

Translation: When the bonds come due, the dollar will be worth a handful of dirt, so our debt will be CHEAP! to finance :0D

Canucklehead's picture

Ecoman11, I think the answer to your question is that it is in Canada's interest to structure the deal that way. 

If you believe what you have read here, there will be a managed descent in the value of the USD relative to the CDN.  As the US prints money, generally the monies tied up in bonds will look to move to new financial instruments that should hold value.... likely commodities or equities, or government bonds of economies that will prosper.  The CDN increases on both accounts.

Borrow in today's currency and pay back in tomorrow's currency.

Another side point is the Canadian social/cultural/economic connections are shifting more north/south rather than staying east/west.  It is amazing how many families have family members working in the States or now have property in the States; be it vacation property, USD denominated financial instruments, equities, etc.

SwingForce's picture

This is nonsense, run that chart again showing WHERE the Greek Bailout money will go. The Tricycle is screwing themselves. 

Tyler Durden's picture

Actually with 81% of it going back to banks, it is going precisely where it is intended to go.

SwingForce's picture

Excellent! I mean they are screwing themselves by STALLING, the sooner they get on with this is the sooner they can go for another bailout to themselves  (that is if Greece is still in the EU).

disabledvet's picture

"Chancellor Miracle lines up center. Team Bankster's defence has been playing Team Sovereign tough all day. They've already knocked Guard Greece out of the game with a season ending knee injury. Looks like they're set up for a running play with Prez Sarkozy anchoring the "I" formation. Look likes she's calling an audible! ("300 billion! 300 billion!") Receiver Portugal is in coming in motion! "Hut! Hut! HIKE!" Miracle is dropping back...SHE'S GOT SARKOZY ON A SCREEN PLAY.....but wait!'a Bankster blitz and Linebacker Dimon is ROARING up the middle! WHAT A HIT! 15 YARD LOSS AND THE MEDICS ARE OUT...AGAIN! Miracle's down! Miracle's down!"
"Man, that's gotta hurt, John." Here's the replay:
"man, those Banksters are MEAN i tell ya! EMM-EEE-AYY-ENNN MEAN!"

Arius's picture

TD - w/ all due respect it was Banks money to start with ... so, it is only logical to go back to them ... well, agreed multiplied a little bit - after all they are in business of making money...

Raymond Reason's picture

Multiplied a little bit?  The returns they are getting, especially considering woldwide ZIRP, come from taking massive downside risk.  And the belief that they can push the downside onto the taxpayers.  So heads they win and tails we lose.   

Arius's picture

agreed - but they (the banks) owned it; it is their system, they can milk it anyway they want...correct?

unununium's picture

>> it was Banks money to start with ... so, it is only logical to go back to them

Listen spud.  It's not going BACK to them.  YOU and I are making them whole.

Let that sink in before you reply.



Arius's picture

i do not mind that, do you?  before you reply, think where would you and me be if banks were not bailed out ....

we all went into a spending bindge and we all got to bend together and pay the price ... just take the pill, it will be easier ...

GMadScientist's picture

In a paid off home purchased at a reasonable price?

Watch that use of the word 'we', dipshit.

GMadScientist's picture

Nothing French about being completely debt-free.

UP Forester's picture

Not you, Anius must be French, tossing around the "we" all the time.

GMadScientist's picture

That may be their 'business', but they apparently SUCK AT IT.

Unless by 'making' you actually mean 'fabricating'.

Arius's picture

well said scientist ! 

if thats how they teach bankers to apologize - they SUCK AT IT.

Rgds - Erin Bronkovich

nasdaq99's picture

So then TD, why do you say this:

"One person, whose head is most certainly not spinning and whose mind is long made up, is Angela Merkel. Who will promptly put an end to this lunacy as soon as the ball (bail?) is back in her court officially, some time on Sunday. And all that is of course assuming that there are Greek member of parliament who have not resigned by the time tomorrow when Greece is now fully expected to pass this latest bill."


Nobody disputes that default is the correct course but everybody in Europe has cognitive dissonance so they keep this thing going because the otherwise they have to confront the unconfrontable-that the house of cards gets blown over.  But is this the absolute endpoint?  I just don't think so.

earleflorida's picture

angela has been walking a fine line [energy is nearly exhausted?],... a parallel line, so to say, regarding greek wants' - the greek's too, have been 'talking-and-a-walking' an [in]finite parallel line [not enough kinetic energy?], under the variable radar-rated retention of time,... a directional curve in this financial universe we call reality - but, in close proximity to angie baby's  defined parallel line - sadly, as the laws of [theoretical physics?] money regarding relativity are concerned -  fiduciary responsibility would posit the unequivocal finality that human nature is undoubtedly bounded by the laws of a 'darwinian, financial universe', where parallel lines, do, and must, come to a point, and an abrupt ending

just plain old reality at its present best?


Archon7's picture

This is why governments shouldn't do business with banks, especially if they're engaged in a fractional reserve system.  Seriously, does anyone here believe that the average government bureaucrat is a match for the average bankster?  Despite what else you may think of them, banksters are highly-skilled, highly competent, and ruthless businessmen.  The average government bureaucrat is barely half as competent as their "private industry" counterparts, as if their "counterparts" in industry would even be able to hold a job in the first place.  Banksters are the top predators in the shark tank, and governments are just another tasty morsel that can't get out of the tank.  This is one of the many reasons why some kind of "gold standard" is necessary, because governments have neither the discipline nor the competence to swim with the sharks.

wiser's picture


Out of the 130 billions (+30 billions to be found)

88,5 billion will go back to banks as interest payments due and rolling of bonds expiring

30 goes to PSI participants (banks & private bond holders)

39 has been promised to Greek banksters for recapitalization

nothing goes to the real economy........

slewie the pi-rat's picture

L0L!!~ TheTricycle

"they're" not stalling;  greece is!  lQQky why in these #s!

well at least:

  • it's a shitload of "money", and
  • it's going to a good cause

germany is so fuked, angela is off babbling about trying to get The City into this!

like, theyre gonna let her know what the deal is before it's over? 

if germany doesn't like what the banksters want, they can leave the EU, right?  but, if they somehow participated in this "magic show" by kiting checks into electronic floatPonzi, and "finding" stuff, just in case that shit has any basis whatsoever in truth, there is that french existential no exit thingy, gain.  oops!  other than that, i'm sure they're free to leave and may be planning on doing so.  with the blunderBank, how could there be a problem?

what the hell does greece give a fuk for at this point? 

they are gonna agree to something "tomorrow", but only if they feel like at and it keeps them bankrolled

the farce that roared

heilcopterz a go-go,000,000,000e/fringe, BiCheZ!

fiddy pence haff pound's picture

Timmie's behind it all, and London.

It's surprising how the Germans haven't said that Douchebank owes

them two, so she has to go talk bailouts.

Seems though that by squeezing Greece, she's convincing her

people that a bailout is needed, meanwhile, her people

love to watch Greeks suffer. They get their payoff.

Schadenfreude, and expensive, too.

Sockeye's picture

Germany has done the math and concluded correctly that it's cheaper to let Greece go, where does that leave France?

cossack55's picture




"Drinking some wine, eating cheese, catching some rays, ya know."


                            Kelly's Heroes

roadhazard's picture

They shouda made a movie about how oddball spent his share of the loot.

Early Woodstock - with Wavy Gravy and the Hog Farm, yo.

earleflorida's picture

the 'city of lights' has the illuminati to overshadow any darkness there may be


Whiner's picture

Chapter 11, Zorba. Confirmation of plan rejected: insufficient votes and lack of feasibility. Country converted to Chapter 7 Liquidation. Auction under the big tent.

lolmao500's picture

Well that's gonna be hilarious when the world is forced to bailout the US... Combined bailout of America, 2016 : 20+ trillion!

The trend is your friend's picture

The Martians will bail out the US and Europe.  I little birdy told me they want to set up bases here and will fund our interest payments in exchange for those bases

John Law Lives's picture

Martian: "Bleep blip bloop blop dink doink dong."

Translation:  "All your base are belong to us."

aleph0's picture

Does Greece use a Bad Credit Card ? .. certainly looks that way.
I guess of that 320 Bio. , at least 200 Bio. is PURE INTEREST ... for the Bankstas.
... just the usual to "bail out" Bankstas I suppose.

@Tyler ... LOL , just saw your post .. 100% correct !