Cost Of Second Greek Bailout Raised To €145 Billion

Tyler Durden's picture

When the first revision of the second Greek bailout to the tidy round number of €130 billion was announced, we scoffed, mockingly. Because a country which then had a 7% budget deficit, and now has a deficit that will be well in the double digits, and not to mention a banking system that is now hollow following tens of billions in deposit withdrawals as month after month the Greek bank run gets worse, would obviously need much more liquidity (but banish the thought that it is a solvency crisis...) Sure enough, earlier today Der Spiegel broke the news that the second bailout, which has yet to be re-ratified, and absent Greece meeting demands to cede fiscal sovereignty, is likely a non-starter, would be increased to €145 billion "citing an unidentified
official from the so-called troika." So whether or not this is true is irrelevant: what matters is that Spiegel released the article in the same series of posts in which it explained just why Germany has full right to demand (via European enforcement mechanisms or however) virtually anything in exchange for the ongoing endless bailout (such as: Merkel macht Wahlkampf für Sarkozy and Griechenland sträubt sich gegen EU-Aufpasser). Which means one thing only: the great propaganda spin machine is now on, and its only purpose is to provide Germany a buffer of "having done everything in its power" to prevent the now inevitable Greek default. Which, incidentally, means that a Greek default is inevitable. Because at this point once the default floodgates open, the question will be not where the bonds will trade, but just how big the impairment on the European DIP (aka Troika bailout package) will be.

More from Spiegel:

The situation in Athens is more dramatic: the EU wants to take control of Greece's budget, the rescue package for the ailing state amounts to SPIEGEL information on 145 instead of 130 billion euros. In Berlin, formed a broad resistance to further aid.


It's like a bottomless pit: the planned emergency measures for Greece are not enough to lead the country out of crisis. According to the troika of the EU Commission, European Central Bank and the International Monetary Fund, the country still needs one additional 15 billion euros. Instead of 130 billion euros, as yet decided in late October last year, would be about 145 billion euros due, according to SPIEGEL information in the Troika, which started recently, her work in Athens again.


Reason for the gap is worsening the economic situation in Greece. "We do not believe that you can collect the missing money solely with the private creditors," it says in the Troika.


In the Berlin coalition is forming, however, resistance to further Griechlandhilfen , as it has brought, among other things, the EU Commission comes into play. "At our attitude has not changed," said CSU leader Horst Seehofer in Der Spiegel. "For reform standstill, there is no money." The CSU reject new aid for Greece over the programs adopted out, Seehofer said. "If the Greeks do not implement the reform programs, it can give no further assistance."


Also FDP parliamentary leader Rainer Bruederle calls for a relentless attitude towards Athens. "Solidarity is a two way street, so far as the European Community must stand firm and demand the necessary structural reforms," ??he says. "Only when the Greeks also provide evidence that they are serious, we can and must help the European Community."

German political support for a Greek bailout is next to zero:

The first coalition MPs have already announced that they plan to vote against a new Greece package. The Bavarian FDP members Erwin Lotter, who has previously approved all the euro rescue package would not do the same in the case of Greece. "I thought, the Greeks took their time," he says. "Now I am assuming that there is a bankruptcy, the problems can not be solved with more money."


The CDU -female politician Wolfgang Bosbach, announced that he will not vote for new tools Greece. "The Greeks do not lack the political will, but the economic strength to get back on its feet." Even in the European wing of the party is spreading now from discomfort. "It has become a big annoyance made ??broad," says the chairman of the EU Affairs Committee Gunther Krichbaum.


"All Greek parties must finally show the absolute will to change anything fundamentally." The deputy chairman of FDP Toncar Florian said, Greece is by far the most difficult decision for his party.

Last, and certainly least according to the Germans, is the Greek government, which until the news broke late last night, had no advance warning of German intentions:

The government in Athens according to the information officially know nothing of the plan.

At least Hank Paulson was kind enough to let congress and the population know when he came up with his three-page blank check term sheet to bailout his former employer. In Europe, Greece apparently was not even worthy the cost of a fax with the German one-pager before it was leaked to the press.

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
malek's picture

While that's all true, Dumas misses an important point:
The wage restraint and trade surplus allowed the Germans to keep their unsustainable federal pension system (the only retirement income source for >90% of the population) afloat a little longer. Exiting the Eurozone will have tremendous consequences for it within a few years.

Use of Weapons's picture

This time you can't send them to the trenches, and they're all coming home.


Ah, the internet lets us down:

Mr. Newberry: "Well, it's a growth industry son".

Caviar Emptor's picture

Police fired tear gas at hundreds of Occupy Oakland protesters on Saturday who tried to take over a shuttered convention center, arresting 19 people in the latest clash between anti-Wall Street activists and authorities in the Bay Area city.

UP Forester's picture

So, it's Corporate-Fascist Police State vs Communo-Fascist Anarchist State.


Anybody willing to give odds?

San Diego Gold Bug's picture

Look at what gold has been telling us this month.....shit is going to happen soon so the smart money (ZH readers etc) are buying gold and silver.  there are a lot of things happening around the world and most of them are filter out the noise and see that some really bad (gov controlled times) are coming.  Prepare yourself and your family and try (if possible to warn some friends) of what is coming.  this is just a repeat of history and it will not be kind to the unprepared.  Get the best prices you can on all goods like long term storage food, ammo, water, silver (comparesilverpricesdotcom) gold and much more.  If you can, leave the big cities when it starts to go bad.

Good luck. A friend

disabledvet's picture

here comes the EU now!
looks very similar to our own Administration actually...

Caviar Emptor's picture

Since the U.S. will eventually have to be sold off in little pieces, maybe Romney is the best guy. 

zerozulu's picture

Be prepared and get ready.

Hope does not seems to be the part of this equation.

dlmaniac's picture

I wonder when China will demand Obama to hand his budget over to Beijing?

falun bong's picture

my German is rusty, but "...resistance to further Greichlandhifen"

Let's see...would that be "Greek-Land-Heaving"?

UP Forester's picture

You forgot an "l" in the hilfen.  As in help.'s picture

Gomez was always better with French.

WmMcK's picture

Morticia spoke French to get Gomez's stock ticker running.

The Alarmist's picture

Your translation would work back to Griechenlandheben ... The original translates to "assistance to Greece."

Atomizer's picture

Gauged on our 2011 appetite of 10 billion/day [avg]. Greece would only last for another 15 days (+/- 2 days)


Show us the books. Stop with your fucking bullshit that you need money to cover another delinquent payment.


Caviar Emptor's picture

Plan for Greece: Troika to print vouchers redeemable at McDonald's and Netflix-Greece. Distribute on weekly basis to unemployed. Fed and ECB cover the bill (by pretending not to print). There. that was easy! 

The Alarmist's picture

Another reason for the Germans to be angry ... They don't have Netflix.

francis_sawyer's picture

That's cause every goddamned movie ever made in Hollywood was about the holocaust...

Peter Pan's picture

What this all boils down to is that the size of the final size of the Greek write off will be closer to 130 per cent.

Apart from tourism showing a great uptick in 2011, every other metric is a disaster. Government tax collections fail to reach targets, expenditures exceed targets, large current account deficit, aging population, extremely large illegal immigrant population, still bloated and unproductive public service, scumbag politicians, underdeveloped state assets that will be sold for a pittance, a hypocritical Europe that is still happy to sell Greece billions of excess military armaments rather than guarantee its territorial sovereignty, a banking system that is being gutted by people spending their euros to supplement their standard of living or sending them to safer havens,non-existent pension claimants and finally an educated class that is fleeing the country.

So If Europe thinks it can handle this list it must be incredibly stupid or incredibly dishonest. I fear they are both.

Peter Pan's picture

By the way, i forgot to add the minor issue of unemployment to the list.

Peter Pan's picture

By the way, i forgot to add the minor issue of unemployment to the list.

StychoKiller's picture

We'll put you down for two...

withnmeans's picture

 Yes, there are other problems, like the vast amount of people, not just here in the U.S. but in Europe as well, that massively over-spent and incurred a large debt. The inflation is and has been excessive for long periods of time, not that our government or corporate bosses would agree with me. Along with the customer base of super brainwashed "Me Generation", that has been taught to spend, though no fault of their own "supposedly". If an economy is over inflated, yes its a revved up engine and the companies are making good money for their Wall Street investors, however the general public has to pump out the money whether for survival on necessities or for their "me" items. Over an extended period of time it adds up, sure it makes the GDP look great. Now comes the time of restructuring debt, and with this, there will need to be a time of major deflation to reset the economy on a whole. This will not be by choice and the government will do what it may, but to no success. There will be corporations large and small go under, if they start soon enough to strengthen their balance sheets and lean their business model, they may make it through. I feel that the public will start to find that what they need and what they want will soon be defined. Extra curricular spending will soon cut at different intervals like tiers, the masses will try to save at first, unfortunately they will have a hard time trying to quit their spending addiction. Many still don't understand this period, its happened before, as an example it happened right after 1929. There was a short period of time that the public and Wall Street thought the worst was behind them "WRONG". This is precisely where we are now, the "Euphoric Period". Now we will go into the "oh, what the hell am I doing time". During this time people will start to cut some spending but not to an excess, this will cause a drop in GDP, Wall Street will start to drop, a few banks and businesses will close their doors. Then after a time of finger pointing and the hell is happening sinks in, we get to what I call the "BLACK PERIOD". During this period people try to hoard anything and everything, they start to lose all trust in the government and in all other people. The Stock Market goes into free fall as the contagion is now going full speed, businesses are dropping like fly's as people are not spending on non-essentials "These companies know who they are".  Well, we all kind of know this story don't we, but why does our psyche lets us not believe it. We are taught through centuries of evolution to be optimistic, to think things are going to be alright, also to some extent brainwashed to think things are great. There is still more tiers, yes, times will be difficult, but with winter , the cold, the dark, the hungry, then it happens. Spring, like a resurrection, the resetting begins, families are tighter, friends are closer, people start to spend a little more, but on since-able things. Banks will go back to loaning a little bit at a time, but this time they will do it knowing what happened. Jobs will pick up, wages will small, but with the "Great resetting" it brings lower cost for all classes. What once was the Elite class has now been eliminated to a select few. You may not think it now, but we need this resetting. It will be a very difficult period, but it has to be. Our governments are only prolonging the event, IT WILL HAPPEN.

Mr Lennon Hendrix's picture

Welcome to Fight Club.  Good post.  May I offer some advice:  use paragraphs....but keep it up.

withnmeans's picture

Sorry to all that read that piece! The use of paragraphs would have been useful "I know". It was late and I was pissed, so I HIT SAVE. Then went to bed and started to drea - no, have a NIGHTMARE about what this world will soon be coming to. 

Like I have said before, We made our bed, now we have to sleep in it. We shouldn't have made it out of rocks, it's going to be uncomfortable.

Good Day, fellow American's

withnmeans's picture

Sorry to all that read that piece! The use of paragraphs would have been useful "I know". It was late and I was pissed, so I HIT SAVE. Then went to bed and started to drea - no, have a NIGHTMARE about what this world will soon be coming to. 

Like I have said before, We made our bed, now we have to sleep in it. We shouldn't have made it out of rocks, it's going to be uncomfortable.

Good Day, fellow American's

Hulk's picture

My brain ran out of breath reading that ...

WillieNelsonListener's picture

tried to read this, all the time thinking - wish there was a paragraph break...

Mr Lennon Hendrix's picture

cool.  oakland has been the only city to do it right so far.

Caviar Emptor's picture

Rumor OWS NYC protest in sympathy

Mr Lennon Hendrix's picture

It was a short winter.  Maybe people will be back o the streets again soon.  Hopefully they focus on taking action like shutting down more ports and occupying the Federal Reserve banks.

toomanyfakeconservatives's picture

300+ arrests reported so far and it isn't even midnight on the left coast... Occupy Oakland is the real deal...

StychoKiller's picture

Sooner or later, the Mayor is gonna run out of overtime pay for the polizei, funds for jail guards, funds to feed all his new-found friends -- go ahead, squeeze harder (and watch more star-systems slip through your fingers!)

monopoly's picture

This is Europe's worst far.

Mr Lennon Hendrix's picture

Yap that fool!  [Ante up!]

Kidnap that fool!

It's the perect timin'!  You see the man shinin'! 

Get up off your god damn diamonds!

Yen Cross's picture

I normally listen to your posts. WTF?  Diamonds? Ok I See your point.    BUT DIAMONDS?

Mr Lennon Hendrix's picture

Get up off your god damn Dimons?

Yen Cross's picture

 A /Hop/Skip/ Jump/ into The Weekend.

Mr Lennon Hendrix's picture

What yu think next week will bring?  I figure looking at the techs the VIX ramps, and the dollar gets a minor boost, eur/usd back to $1.265.  But I don't know now that Bernanke is all up in my grill.

chindit13's picture

What growth rate does Europe require to meet the obligations of its sovereign debt?  Has Europe's growth rate ever been that high at any time in history, even in the rebuild period after WWII?

I think everybody knows the answer, even the Eurocrats.  It's the same answer for the US, Japan---even China.

Pretending things are different allows everyone to sleep at night, at least for a while.

Reality is an acquired taste.

Sandmann's picture

Forget backing global credit with gold - you could not even back it with coal. There are not enough resources on the planet to collateralise this Debt Explosion over the past 50 years - just look at that exponential curve since 1964. There are whole cities, even nations that have living standards based on a credit bubble. Maybe Detroit is the future for Sunbelt Cities ?  More people have entered the industrial era in China than in the history of the world hitherto but they are using a lot of copper, oil, coal and food that used to gorge American bellies - so just how thin will Americans have to be in future to balance income and expenditure ?

Die Weiße Rose's picture

The German Government of Angela Merkel seems to be the only People left,

with any credibility or knowledge about fiscal and economic responsibility.


There are two economic models right now:

Economic Model 1) the British colonialist economic model, this model was the very cause of the Global Financial Crisis from july 2007 to now,this model believes that by creating more Debt, the world can "stimulate" their economies out of Debt.However this creates a race to the bottom between trading-partners and that is what we are witnessing right now.the problem for Europe is, that even though the EU financial centre is in London, England does not consider itselfpart of the EU and is basically nothing more than the morally and financialy bankrupt 51st State of the bankrupt USA.

This British colonialist economic model shares the same common and dangerously mistaken believe: Pay down Debt by taking on ever more Debt, thereby devaluing Asset Values and the reserve Currency at the same time and hopefully "begger thy neighbour" without too much resistance and vilify or attack anyone who dares to object against this economic corruption and this abuse of the very universal and fundamental principals of economic responsibility.

Economic Model 2) this is the economic model that has been at the very fundamentals of any economic fiscal responsibility and every mum and dad who runs a household knows about this economic model. It is quite simple: Don't spent more than you can make in Income and don't take out more Loans and Debt, to pay down exsisting Debt unless you can Not Pay it Back, otherwise you will be BANKRUPT as well as insolvent, unless you can liquidate and sell All your Assets.

This economic model is advocated by Angela Merkel and the German Government, because it is the only one with any shred of credibility left and is not completely morally and financially corrupted, as the British economic model has proven to be.

As we all know:

The british economic model is bankrupt and was adopted by: Goldman Sachs, AIG, Lehman Bros, "Madoff Hedgefunds" and only recently; MF-Global, with their insane leveraged bets on Credit Default Swaps and Contracts for Difference Derivatives of Crap based on leveraged Crap each way...etc.

It is well known that the main stream media and corrupt Polititians the world over back the corrupt and now bankrupt british economic model, but I had expected a little more from ZH and Tyler and especially William Banzai,who is a brilliant illustrator. But to my surprise, they are all now advocating the same shit they themselves not so long ago, vehemently opposed.

However I have again been disappointed.

What did I expect ?

Integrity and sincerity on ZH ?

Don't waste your time, trying to find it here !

The Germans have all the money, so lets bring Hitler and the Nazi's back

and perhaps that way they pump another trillion or so of Debt into the bankrupt british financial system.

that should make the price of Gold come up, and also sell some more Greek CDS's from the GS Vampire Squid.

Contrarian my arse!

Reading through these ZH posts

I might as well read through one of mad Rupert Murdochs rags

that dictates the "News of the World" Garbage to the docile british public

and caters its sensationalist crap to the lowest common denominator and intellect -

to the ignorant and all-consuming unsuspecting comforting sheeple,

I suspect that would be you ?


zilverreiger's picture

"The Germans have all the money, so lets bring Hitler and the Nazi's back"


I noticed this stupid rethoric too on many websites. It's the last defense of the broke UK and Suthern Europe and also some Wallstreeters.

Neuro region did their fair part they can pull the plug with a clean conscience if they do.

Sandmann's picture

The German Government of Angela Merkel seems to be the only People left,

with any credibility or knowledge about fiscal and economic responsibility


You are of course on drugs. When has Merkel cut spending or taxes domestically ? She has NO control over her own budgets and makes Gerhard Schroeder look like a hard-nosed businessman in contrast to her socialist policies.