Greece To Get European Aid Even After It Exits, Speculates Spiegel

Tyler Durden's picture

As suspected, yesterday's report that the Troika may be caving on Greece appears more and more as a red-herring trial balloon, leaked by the Greek press without substantiation, and which sought to lighten the tension ahead of a trading week which is already looking rather askew. Because not even a full 24 hours later, Germany fires right back with an article in the Spiegel which not only anticipates the Grexit, but what happens the day after: namely that Greece would receive further aid from the EFSF if it exited the euro. It also notes that the EFSF aid to service bonds would continue. Greece would continue to get aid as EU member as every other member state. While it is unclear if this article is in response to the WiWo piece we noted yesterday which tried to quantify the costs of a Greek impact, and which has now ominously been picked up by Die Welt, in which Germany was finally starting to get worried about the hundreds of billions in sunk costs should Greece exit, the punchline here, needless to say, is not only the contemplation of a Greek exit but that Greece would be "all taken care of" even as the newly reintroduced Drachma lost a few hundred percent in value every day as Greece stormed its way back to FX competitiveness. Spiegel's punchline: "This is to the consequences of a possible €-egress will be mitigated." Hopefully the market agrees.

From Spiegel:

Greece is to SPIEGEL information even in case of egress expect further € billion bailout from the European EFSF. The European rescue package is designed by the Federal Ministry of Finance therefore emphasize only those amounts that go directly to the household of Greece. Those billions, with which the bonds will be served, which took over the European Central Bank (ECB) as part of its rescue measures should, however, continue to flow.


This is to the consequences of a possible €-egress will be mitigated. This could be prevented with the central bank losses, hit by the end of the budgets of the Member States.


Further consideration of the House of Finance Minister Wolfgang Schäuble (CDU) provide, according to Spiegel, that the Greeks, even if they get no help from the rescue more pots of the euro countries, not to be left alone. Greece remains a member of the EU, they are entitled to assistance from Brussels, as are accorded to other EU countries with its own currency in trouble. These would be funded not only by the countries of the Euro-zone, but by all 27 EU Member States.


After the elections of last Sunday and so far unsuccessful attempt to get a government concluded in Athens, is in the black-yellow coalition government talked more openly about the possibility of a Euro exit - resentment is growing. An Athens exit from the euro would be "not the end of the euro nor the end of the EU," said CSU head Horst Seehofer: "We need to get Germany's economic strength, which is more important than a stay in Greece in the Euro zone."

But, but, less than a year ago the best and brightest among you said: "Were Greece to be forced out of the euro area (say by the ECB refusing to continue lending to Greek banks through the regular channels at the Eurosystem and stopping Greece’s access to enhanced credit support (ELA) at the Greek central bank), there would be no reason for Greece not to repudiate completely all sovereign debt held by the private sector and by the ECB....In the case of a confrontation-driven Greek exit from the euro area, we would therefore expect to see around a 90 percent NPV cut in its sovereign debt, with 100 percent NPV losses on all debt issued under Greek law, including the debt held, directly or directly, by the ECB/Eurosystem. We would also expect 100 percent NPV losses on the loans by the Greek Loan Facility and the EFSF to the Greek sovereign....In our view, the bottom line for Greece from an exit is therefore a financial collapse and an even deeper recession than the country is already experiencing - probably a depression."


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Mae Kadoodie's picture

A little tension is a good thing.

Silver Bug's picture

It is QE to infinity. All these banks are too connected. The contagion is montrous.

MeanReversion's picture

I would go long AFTER a Greek collapse.  Gold will be at fire sale prices immediately after a Eurozone implosion.

The Alarmist's picture

In TV game shows, this would be referred to as a lovely parting gift ... our way of saying thanks for participating and contributing to our ratings by playing the game.

cranky-old-geezer's picture



All these banks are too connected.

Yes, that's the reason Greece will continue receiving EU financial support after they return to the drachma, so those hundreds of billions of Greek bonds held by ECB and other euro banks get serviced and don't go worthless overnight.

None of the financial aid will go to Greece.  It all goes to service Greek debt held by EU banks.

It's a nice idea, makes bankers feel nice and secure about Greece leaving the euro

... but it won't happen.  As soon as Greece returns to the drachma, those other EU nations will tell ECB fuck off, they're not gonna pay back all that  Greek debt while Greece walks away from it, banks can eat the losses themselves.

Bankers thinking other euro nations (read: Germany), will pay off Greece's debt is preposterous beyond belief.  It's sheer insanity. And no the IMF won't pay it off either.

Those euro bankers are gonna eat those losses, as they should.  They loaned Greece money when they knew it would never be paid back.

And yes it's gonna destroy the euro and the EU.  No way will ECB ever get back all the euros they printed and loaned to Greece.  The euro is permanently devalued

...until it collapses altogether from all the additional printing to bail out the other PIIGS nations.

And yes Germany will leave.  When they see ECB go right on printing and loaning euros to other PIIGS nations after Greece walks away from its debt, Germany will go ballistic, say enough of this bullshit, and go back to the deutschmark.

Euro bankers are just flat insane.  They're gonna keep pushing their sovereign debt ponzi scheme till it blows up their faces and destroys their precious monetary union.

WallowaMountainMan's picture

it can't be QE to infinity. QE does not go that far. it only goes 99% of the way.

and that's what the score reads.

in the real big macro world of finance, getting to be of the 1% side is a black swan event. In and of itself. math says so.

the glaring conclusion that i am sure others have seen is that greece is the most powerful country in the world.

that is a direct result of the math program that the 1% have used to create their system.

greece's people (a.k.a., the 99%) will suffer from the exercise of this power. but, when the 99% pull the plug, the 1%'s system reverses.

the real big macro world of finance reverses flow, wealth redistributes from the bottum up. trickle down is a dead math game that math shows always produces a black swan event.

flow is a circle.



Ag1761's picture

Absolutely, and the Hun must ensure Grease gets a little leg up after exit, as the Hun export machine needs to keep going and they needs the Grease earning to keep the beaches cleaned and open for all those hard working in German manufacturing.

Thomas's picture

At least we can stop referring to it as "bailing out Greece". Also, I marvel at the opposition to "austerity". Here's a country that doesn't collect taxes half the time, gives everybody a full pension after 15 minutes of working, and has to turn a blind eye to half the population that cannot get off their butts enough to work for 15 minutes. What part of austerity isn't a truism?

Amish Hacker's picture

Over the last several months, ZH has made a strong case that "bailing out Greece" is just a deceptive way of describing the process that uses Greece as a funding vehicle for European banks. So, while Greece may exit the euro, the funding needs of European banks will continue. Therefore, the "bailing out Greece" will continue also.

cranky-old-geezer's picture



The only way "bailing out Greece" will continue is ECB running the presses, printing currency to service Greek debt, cause it ain't coming from anywhere else.

Actually ECB will just buy all of it.  ECB will end up having all those worthless Greek bonds on their balance sheet and they can keep smiling, saying it still has value, everything is fine.


Amish Hacker's picture

I think you're right. And the ECB will pretend that all those worthless bonds will be worth something, if only they're held to maturity.

Meanwhile, since every good magic trick depends on misdirection, Greece serves to divert attention from the rest of Europe, and from the Fed.

JamesBond's picture

means everyone is paying attention, nobody left out

iDealMeat's picture

Greece will exit and peg to the USD..  No way Ben would let someone out print him..  he has a peeHDee, so you know he's super smart..


resurger's picture

If they exit, the USD will be pegged to the GRD...


Yen Cross's picture

Grexit.  I love that one Tyler.

ThirdWorldDude's picture

Mr. Panos is gonna enjoy this one.

carbonmutant's picture

I wonder how long the borders will stay open after the Grexit...

StychoKiller's picture

Welcome to the Hotel Ka????i????o????????ia... :>(

Sudden Debt's picture

Cutting all ties is the only solution.
Fresh start and not a "fresh" start with new debt and small print in the contact

resurger's picture

Vassilis Paleokostas Bitchez 

disabledvet's picture

The United States has "the moon" and Germany has Greece. What's the problem?

mendigo's picture

I get those refi offers.
I throw them out with the rest of the junk mail.
Will the political leaders attempt to put Greece back on the hook?
No doubt the contacts will so very generous but will have clauses which attempt to protect Germany against debasement of the new currency as well. Some people will get rich on this deal. I hope they offer to repay the in flaming excrement maybe wrapped in dollars even.

dognamedabu's picture

In our view, the bottom line for Greece from an exit is therefore a financial collapse and an even deeper recession than the country is already experiencing - probably a depression."



How much do they pay you? I could have said that for free.. 

dognamedabu's picture

I am not dumb. Half the folks here think Tyler is one person madly finding out the worlds ills. ZH is a great place and I try hard to keep it clean. I may piss sometimes but that in no way should reflect on my esteem for ZH. 

chubbar's picture

So the bottom line is that the ECB will print the bond coupons in order that Greece doesn't officially default and the rest of the EU isn't forced into writing them down, is that the gist of this? Yeah, that seems like it might work.

dognamedabu's picture

Cliff notes for ZH.. Might work.. 

fiddy pence haff pound's picture

a certain amount of time is needed for the losing banks' board to get over their

being 'bummed out' by their employers' big time loss. Once they get back that

zeal for bonus money, they'll tripping over each other to lend Greece more

electronic money. e-drachmas.

Mr Panos, on behalf of the Hellenic people : "fuck you, malaka!"

Default to Reality's picture

Once Greece walks down the path of inevitability, so too does the EU as it Defaults to Reality.  Then China, then the US. 


sessinpo's picture

What Greece and the rest of the world will get is war. When economic depression is abundant, it's about nationalism and blaming the other guy (countries). WWIII

Cycle's picture

Welcome to Stupidalism - whereby the State pledges its citizen's resources to keep befuddled bankers from reaping the results of their profound and unwavering stupidity.  Capitalism RIP.

iamtheeggman whooooooooooooo's picture

Run, do not walk, to your nearest Grexit!

Nachdenken's picture

In about fifteen minutes (CST 11.15, CET 18.15) the results of elections in the state of North Rhein Westfalen will be estimated.  Roughly a fifth of all German voters are in the state of NRW and the candidate under the CDU (Frau Merkels Party) is expected to field the least votes ever for the Party.  A large part of his election platform was the financial crisis.

Berlin will react to these results as well.  Though German losses were always expected, so are probably fenced in, though how great the knock-on damage will be is at best the estimate here on ZH.

Piranhanoia's picture

Does it bother anyone that the only speeches about continuation of the Eurozone are from synthetic credit issuances like Rompuy, Schnauble, Merkel, and other non humans?  The only physical people heard from so far are the citizens of Greece and Iceland.  The actions of these people can't be repeated because it is a viable option for each euro nation.

Iceland answered the threats with; "No, goodbye, it was nice to know you but the pain in my ass is too much for me to invite you in to rape me again".  The people of Greece have voted to go that way too.  The eurorobots profit on the pain of others.   Until.

Joebloinvestor's picture

Like I said, Greece is a charity case and should be treated as one.

StychoKiller's picture

A hand up, NOT a hand out (and another, and another...)

navy62802's picture

If Greece continues to receive EFSF aid after a Euro exit, I would imagine that it would simply accelerate the disintegration of the currency, as more and more countries would say "screw this" and return to their own national currency.

inzider84's picture

Grexit FTW, bitchez!


These f****** will keep bailing, printing, stealing, luting, until it all implodes. Hopefully, we will not se war again in the old continent, and hopefully it will be the end of the EUSSR.

The Alarmist's picture

You ever stop to think that Greece is a potential transit route of a natural gas pipeline from the eastern Med and therefore one of the few alternatives that North Central Europe has to its increasing dependence on natural gas piped from or through the former Soviet Union?  There are reasons to keep the Greeks in the club that have something else to do with things besides directly enriching Bankers.

StychoKiller's picture

How many fault lines will this pipeline pass over?

dcb's picture

only in the perverse worldof central double speak does bailing out greece mean greece will get nothing and all will go to bankers. It drives me nuts that so few news sources call them out of the false naming crap.

q99x2's picture


"Greece To Get European Aid Even After It Exits, Speculates Spiegel"

That is what I also believe.

The EU will move in with false flags, military operations, experimental viruses and larger earthquakes if they refuse to take the banksters debt.


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