Germany Refuses Greek Demands For Public Sector Debt Cuts As It Is "Shouldering Everything Anyway"

Tyler Durden's picture

Yesterday, Greek finmin Venizelos did his best to exude confidence when he, of all people, decided to give the ECB, and thus Germany, a virtual ultimatum demanding that public sector creditors are also impaired (supposedly only some, while excluding Greek pension companies). Kathimerini has more on this in "Never mind PSI, OSI is all the rage." And the only reason why Veni needs this critical step is because the hedge fund holdouts among the PSI creditors demand it. Alas, Germany does not deal well with ultimatums, especially from fiscal vassals. As OpenEurope notes, Die Welt reports that Greek Finance Minister Evangelos Venizelos has called for Greece’s official creditors, such as the ECB and national central banks, to take part in the restructuring of Greek debt, something German Economy Minister Philip Rösler insisted was “not currently on the agenda”. It gets better. According to Goldman, German Finance Minister Wolfgang Schäuble said that "no additional contributions from the public sector are necessary.”  German finance minister against public sector participation in Greek debt restructuring. Speaking to news channel n-tv finance minister Schäuble said that "Greece needs a reduction in private sector claims of 50% … It does not need an additional contribution from the public sector because we're shouldering everything anyway". When asked whether he thinks that the composition of the Euro area would be the same at the end of the year as today, Schäuble replied: "I hope so". So there you have it: Greece needs further concessions, which Germany will give, if and only if Greece concedes to previous German demands of abdicating fiscal independence. The only question is how badly Greece needs German help. Everything else is smoke and mirrors.

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Mongo's picture

Auf Deutsch bitte!

celticgold's picture

YES!     shallow , i know

PaperBear's picture

Why not have all debt written down 50%, Italian government bonds, Spainish government bonds, Irish government bonds, Portuguese government bonds, personnel unsecured debt. I think you get the idea.

Matt's picture

Why not have all debt written down 50%?

Because then you would have to bailout all the banks and pension funds.

WonderDawg's picture

So, pretty much the same as is being done now, then?

celticgold's picture

dammit ,  missed it by THAT much , chief....

battle axe's picture

And the dance goes on and on and on. It is time for Greece to find their balls and take the hit and do the Iceland two step and tell everyone to fuck off. Just bail on the Euro and watch Germany and France howl. Christ, this is death by a thousand cuts, end it already. 

economics1996's picture

Greece is like some punk assed bitch cock tease.

trav7777's picture're like presenting a drug addict who borrowed and blew it on coke as a hero for "stiffing the lenders."

Greece isn't a hero.  They want to reneg on public debt they borrowed effectively from german CITIZENS, aka people.

Iceland told the bankers that the state aka people were not going to backstop PRIVATE debts.  Greece just wants to keep all the shit they've spent all their money on and maintain their lifestyle of laziness and leisure on Germany's dime.  Fuck them.

battle axe's picture

I do not think that a country that uses helicopters as a tool to count swimming pools so that they can asses taxes is a hero by any means. They are a car full of clowns that are speeding towards a brick wall. I think they are hosed no mater how you crunch the numbers and they are going to go down no matter what. So given that logic, put a gun to the head of the goat and pull the trigger and get it done. Germans/French know this is going to happen and are just stalling for time so that they can ring fence the shit out of their banks, to limit the huge blowback that is coming. 

Newsboy's picture

Hey Trav,

Look what's under the-other-hand.

The Greek military budget is still classified. It is the source of massive spending, including recent purchases of more German weapon-systems. Nobody is talking about it. The military spending is at least as big a problem as the wealthy folks not paying their swimming-pool taxes. It is a hold-over from when the military ruled Greece. The computer illiterate Greek (previously) workin' folks are not the real problem in this equation.

mushioov's picture

Yesterday I went to buy some bullion and after buying some I decided to go sailing... well... you know the rest

i-dog's picture

You can't help bad luck! A while back, just before an IRS audit, the office suffered an unfortunate and ill-timed fire. And to add to the bad luck, the fire dept did more damage to the records in putting the fire out than the fire itself would have done. Most unfortunate!

navy62802's picture

Schauble has a point there. Not sure what it is, but he has one ... of that, I'm 100% positive. As if the German public sector isn't already paying for this abortion of central planning.

falak pema's picture

why was Lagarde of IMF so hot on this? Was she talking for the PSI lobby?

atomic180's picture

The Germans are not going to inflate been there done that...

Troy Ounce's picture



ESM treaty signed in secret yesterday by the EEC ambassador rats


Prepare the guillotines, and start with ambassadors signing their nations future away.




_ConanTheLibertarian_'s picture

Maximum lending capacity

The adequacy of the ESM's maximum lending volume will be reviewed regularly. The current joint EFSF/ESM lending capacity ceiling, 500 billion euros, will be reassessed by the heads of state or government on 1 March.


The capacity won't be increased because a court decided Germany would need a popular referendum.

Troy Ounce's picture



Nope, debt increase is unlimited, no oversight, irrevocably, unconditionally, ESM, its directors, etc have legal immunity, etc.


Just watch the f%$king video:


Signed, in secret, yesterday:

neverm0re's picture

Yeah, unfortunately, the ESM law hasn't even been passed by the German parliament yet, let alone survived the inevitable complaints to the constitutional court.

trav7777's picture

lol you don't get it.  None of this money is actually real and the system that all of these countries think is their birthright is in default.

Rogier's picture

The problem is that the IMF will not participate in the second Greek bailout without some form of OSI that will get Greek debt back to a 'sustainable' 120%. So we've got a Mexican standoff right now...

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