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Greek Bailout #3 Coming? Barroso Working On "New Greek Program"

Tyler Durden's picture




 

Well the second Greek bailout lasted all of... 5 weeks. Time for Bailout #3?

  • EC PRESIDENT BARROSO SAYS WORKING ON NEW GREEK PROGRAM
  • BARROSO SAYS EC REVIEWING WITH ECB AND IMF GREEK FIN. ASSIST

From the EU website:

Transcript of President Barroso's video message on the priorities for the autumn

 

"Good afternoon. It has been a busy summer. And the autumn that lies ahead will require further intense work.

 

The Commission has just held an extended session, to take stock of the economic and political challenges facing Europe – our citizens, our businesses – and define our policy responses accordingly.

 

The recent turbulence on the financial markets has inevitably had implications for the real economy. Though there is no magic bullet that can bring this crisis to an immediate close, I believe we have taken far-reaching measures which will have a major impact. We now need rapid and effective implementation of those measures. Implementation is key.

First, the economic governance package, which the Commission proposed almost one year ago, must be now concluded urgently. Let me once again call on the European Parliament and the Council to finalise an agreement which is – and let me stress this – within grasp.

 

Second, we must enact the agreement reached on 21 July at the euro area summit, particularly the reform of the European Financial Stability Facility, which increases its flexibility and its response capacity. That means that the necessary legislative procedures must be completed by the euro area Member States as soon as possible. We are also working on – and must continue to develop – ideas for further strengthening the governance of the euro area.

 

Third, we are working hard to have a new programme for Greece adopted on time including on the foreseen involvement of the private sector. In this context, we are currently reviewing, together with the ECB and the IMF, the implementation of the country's financial assistance programme. It is of the utmost importance that Greece implements the reforms that have been agreed. The task force I created in July is now fully focused on finding ways to boost investment in Greece through a better use of the EU's cohesion funding, in order to contribute to a return to growth and job creation.

 

Fourth, we must complete the strengthening of financial regulation, to ensure greater accountability and responsibility, and also the repair of our banking sector. In the coming months we will put forward additional proposals to complete the financial sector's regulatory overhaul. These will include improving the oversight of markets in instruments such as derivatives; tightening rules on insider trading and market manipulation; and presenting a framework for the resolution of failing banks.

 

When it comes to recapitalising our banks, Europe has been acting decisively. Our banks are significantly better capitalised now than they were six months ago and further measures are being taken following last July's stress tests. 

 

We are committed to seeing the process through.

 

At the G20 summit in Cannes on 3-4 November, Europe will actively drive forward coordinated global action to cope with common economic challenges and bring the world economy back to sustainable growth. Because global responses are also needed.

 

Ahead of the Cannes summit, we will come forward with a proposal for a European financial transaction tax, and we are committed to explore this further also at G20 level. I will be discussing this and other key issues with our G20 partners, such as Australia, where I will travel next week. This visit will also take me to Singapore and New Zealand, two other important partners in the region.

 

The proceeds from this financial transaction tax would help to fund the EU's new multiannual financial framework, which is geared towards investing for growth and jobs across our Union. We will make detailed proposals on this over the course of the autumn.

 

Yesterday I received European Parliament President Buzek and Prime Minister Tusk of Poland, currently holding the Council Presidency. They both conveyed to me the positive reactions that the Commission's proposals on the future financial framework have received so far.

 

And finally: on 1 September I will participate in the international conference in Paris on the future of Libya – a country emerging from 42 years of dictatorship into what we must all ensure is a bright, democratic future.

 

The Commission is playing a central role in supporting the Libyan people, whose astonishing bravery has made this moment possible.

 

First and foremost by providing essential humanitarian aid, in close cooperation with the rest of the international community.

 

And secondly, by doing all we can to support the emergence of a new Libya based on social justice, inclusiveness and territorial integrity.

 

The challenges we face are great. But so is our determination to rise to them.

 

Our interdependence – which is most obvious within our Union, but certainly does not stop at Europe's borders – is not a weakness. It is simply a fact.

 

If our action is guided by solidarity and responsibility –– then we can ensure that it is also a strength."

In the meantime, we learn that while two broke Greek banks just merged to create a bigger broke bank, the country's 4th largest bank admitted to resorting to the last ditch liquidity program discussed on Zero Hedge a week ago.

From Reuters:

Greece's fourth-largest bank Piraeus has been forced to make use of emergency funding from its own central bank after running out of eligible collateral that allowed it to access cheaper European Central Bank funds. 

 

Greek banks have become dependent on the ECB for liquidity after being shut out of wholesale funding markets due to concerns about the country's sovereign debt.

 

Some are now strapped for eligible collateral after a series of sovereign credit downgrades, with Piraeus   the first to admit the need for emergency funding on Wednesday.

 

"We have accessed the ELA mechanism in the third quarter," a Piraeus official said in a conference call after the bank reported a first-half loss of 820 million euros.

 

"It gives us more room to move, more flexibility. It's more expensive than ECB borrowing. The cost is about 3.5 percent versus 1.5 percent at the ECB."

 

Emergency liquidity assistance (ELA) is effectively loans by the national central bank to illiquid but solvent banks.

In retrospect, the two may be connected.

 

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Wed, 08/31/2011 - 13:53 | 1619537 kengland
kengland's picture

Loss of confidence coming? What's going to change long term outcome idiots?

Wed, 08/31/2011 - 13:56 | 1619556 russki standart
russki standart's picture

Greeks getting greeked, french style.  Nothing will change other than the banksters will milk longer before they stick the bad debt to the public.

Wed, 08/31/2011 - 13:59 | 1619572 kengland
kengland's picture

Russki standart? Ach was! Leibstandarte!

Wed, 08/31/2011 - 13:55 | 1619549 ml8ml8
ml8ml8's picture

It is time for a default.  The French and German politicians are just trying to figure out how to make a Greek credit event politically palatable.

Wed, 08/31/2011 - 14:06 | 1619561 kengland
kengland's picture

Greek default means Italy, Spain and Portugual default. They have used Greek debt to "shore up" their capital base. Where do you suppose that low cost collateral is going to come from to plug the hole?

Wed, 08/31/2011 - 15:23 | 1619994 disabledvet
disabledvet's picture

Ooops.

Wed, 08/31/2011 - 13:55 | 1619551 Id fight Gandhi
Id fight Gandhi's picture

What are they gonna do? Default bwahaha. Greece really has the EU by the balls. They can lead them anywhere promised them and spit in their faces because nobody wants to rock the boat and ruin the status quo.

Euro should be trashed, but nope. But maybe that only shows how shitty the dollar is.

Wed, 08/31/2011 - 13:58 | 1619568 russki standart
russki standart's picture

It is worth remembering that the same cabal of banksters control the euro and dollar, just like they control the republicans and democrats. We, the sheeple, are presented with phony, pre determined alternatives that never deviate from the status quo. Different branches, same rotten tree.

Wed, 08/31/2011 - 13:57 | 1619563 papaswamp
papaswamp's picture

Fuck this is comical! 

Wed, 08/31/2011 - 14:03 | 1619592 oogs66
oogs66's picture

comical in a non funny way :)  but all is good, who cares that prior plans never worked - or were even implemented, with this and QE3 we should be at new highs!

Wed, 08/31/2011 - 14:33 | 1619759 Hansel
Hansel's picture

^This.  Announcing new plans periodically is the policy.

Wed, 08/31/2011 - 14:02 | 1619587 HelluvaEngineer
HelluvaEngineer's picture

God bless you EUO November calls.

Wed, 08/31/2011 - 14:03 | 1619590 centerline
centerline's picture

And yet the world seems to ignore the spiral pattern, in tighter and tighter circles around the drain.  When the big flush comes, everyone will say they never saw it coming... of course.

Wed, 08/31/2011 - 14:05 | 1619600 Long-John-Silver
Long-John-Silver's picture

Greece is like the drunk relative that gets free drinks from family members so he'll go away for a while.

 

Wed, 08/31/2011 - 16:46 | 1620475 MS7
MS7's picture

More like the family wants to get him drunk so they can clean out his pockets.

Wed, 08/31/2011 - 14:06 | 1619603 Joebloinvestor
Joebloinvestor's picture

What will really be a hoot is Greece going under and the rest of the EU taking a non catastrophic hit.

The threat of taking everyone else with it is getting old.

Although, if the opposite happens, then proof that the EU was a house of cards that is so fucked up even a printing press won't help.

 

Wed, 08/31/2011 - 14:14 | 1619643 Waffen
Waffen's picture

I admit.. it would be an incredible bummer for Greece to "officially default" leave the EURO and for nothing to happen.

Wed, 08/31/2011 - 14:24 | 1619694 Translational Lift
Translational Lift's picture

Bloomberg just reported that Greece "denies" that it hired a US law firm, Cleary, Gottlieb, Steern & Hamilton, LLP, to prepare for the countries exit from the Euro zone.  Ooops.....

Wed, 08/31/2011 - 14:27 | 1619727 Dick Darlington
Dick Darlington's picture

We all know what it means when politicians deny something in public...

Wed, 08/31/2011 - 14:56 | 1619834 tekhneek
tekhneek's picture

To quote Billy boy: "I did not have sexual relations, with that woman, Ms. Lewinski."

Wed, 08/31/2011 - 15:51 | 1620176 Instant Wealth
Instant Wealth's picture

Never believe in anything until it has been officially denied.

-Otto von Bismarck-

Wed, 08/31/2011 - 15:58 | 1620228 Lord Welligton
Lord Welligton's picture

Headlines from Greece also contributed to a muted tone. The heavily indebted country's parliamentary budget office said in a report that its debt dynamics are veering "out of control" and the country is unlikely to meet its deficit targets for the year. In addition, Greece's finance ministry denied a local press report saying that it had hired U.S. law firm Cleary, Gottlieb, Steen and Hamilton LLP to prepare for a potential exit from the euro zone.

http://online.wsj.com/article/BT-CO-20110831-713656.html

Wed, 08/31/2011 - 14:14 | 1619645 DosZap
DosZap's picture

If they bail these dipwads out one more time I may commit hara-kiri.

I am so sick of this I could literally scream.There,just did it, like a tree that falls in the forest no one heard.

 I mean how many Do Overs do we get?.

Wed, 08/31/2011 - 14:14 | 1619648 SeverinSlade
SeverinSlade's picture

I'm looking forward to CNBS insisting that all is well when the 5th bailout of Greece is announced.

Wed, 08/31/2011 - 14:16 | 1619654 centerline
centerline's picture

Yahoo Finance will report "Stock Market Rallies on 5th Greek Bailout Success"  LOLOLOLOLOL

Wed, 08/31/2011 - 14:19 | 1619676 Rogier
Rogier's picture

Tyler, calling this Greek bailout #3 is simply rediculous, Barroso is simply trying to put himself on the map by playing aroud with a few million from the regular EU budget. Zero Hedge does perfectly fine without hyping this sort of non-news.

Wed, 08/31/2011 - 14:24 | 1619707 Dick Darlington
Dick Darlington's picture

Barroso is just paving the way for his own insolvent country to get some juice out of the european taxpayers.

Wed, 08/31/2011 - 14:22 | 1619690 lizzy36
lizzy36's picture

Everything happens in 3's; bailouts, QE's and 3rd anniversary of LEH bankruptcy.

Hard to believe that that the answer to insolvency or overleverage isn't to inflate the assets side of the balance sheet but to forgive some of the debt on liability side. Of course the status quo loves the former, because it creates the illusion of a solution plus has the added benefit of making them richer. The latter, is the only actual solution.

Wed, 08/31/2011 - 14:22 | 1619693 Dick Darlington
Dick Darlington's picture

There was headlines today where the Ponzimaster Rehn made comments that Greek debt ratio subject to unfavorable developments and that EU figures show Greece's gross debt ratio has increased.

So, who would have thought that pouring 200+ bn into an already insolvent black hole is a BAD idea...

EU conclusion: We need to pour in some MORE!

Greece, default now and then go back to drachma. It's time to disintegrate. It will hurt, just like it hurts now, but it's necessary.

Wed, 08/31/2011 - 14:40 | 1619791 irishlink
irishlink's picture

Usually when Barroso makes an announcement like that , there is also problems surfacing in his beloved Portugal. I will give it a week and we will here more from that quarter. News out of Lisbon has been awfully quiet of late. 

Wed, 08/31/2011 - 14:46 | 1619818 Dick Darlington
Dick Darlington's picture

Correctomundo.

Wed, 08/31/2011 - 14:51 | 1619841 sudzee
sudzee's picture

The european bank run is having its desired effects. Zero interest rates mandated by gov'ts is not a free market rate. What's a bank without depositors? Government.

Wed, 08/31/2011 - 15:10 | 1619945 mfoste1
mfoste1's picture

When will these fuckers get the point that GREEK BAILOUTS ARENT FUCKING WORKING!!!!!!!!!!!!!!!!!!!!!!!!!!

 

All they are doing is literally stealing from citizens

Wed, 08/31/2011 - 15:18 | 1619970 youngman
youngman's picture

Once....Twice...Three times a LADY.....and I love youuuuuuuuuuu.......and your free money.......I have to admit....the Greeks are winning....free money and they just keep on giving....

Wed, 08/31/2011 - 16:50 | 1620486 MS7
MS7's picture

I wish they were winning. No free money is going to the people. Their standard of living is in steep decline, their unemployment rate has skyrocketed. You may say that this would happen anyway if they were to default. True, but at least then they would have had all their assets and their sovereignty. The government of Greece does not do a single thing that the people of Greece want. It is the servant of the Troika.

Wed, 08/31/2011 - 15:27 | 1620023 mfoste1
mfoste1's picture

When all these euro youths riot, why dont they just go straight after the policymakers or banks instead of fucking up shit in the streets? Thats exactly what should have happened in London, they should have went sraight to liverpool St and destroyed the place.

Wed, 08/31/2011 - 15:40 | 1620105 Lord Welligton
Lord Welligton's picture

When it comes to recapitalising our banks, Europe has been acting decisively. Our banks are significantly better capitalised now than they were six months ago and further measures are being taken following last July's stress tests.

But did not the stress tests conclude that a mere €25bn was all that was required to recapitalise the banks? Why is this still an issue? /idiots

 tightening rules on insider trading and market manipulation; and presenting a framework for the resolution of failing banks.

It was the insiders that did it. /idiots

Wed, 08/31/2011 - 16:26 | 1620377 markar
markar's picture

speaking of quiet lately the Irish seem to be suffering in quiet desperation. What's the word out the cored and pitted Emerald Isle? silence of the lambs?

Wed, 08/31/2011 - 16:51 | 1620490 Lord Welligton
Lord Welligton's picture

Unemployment at record levels. over 14% officially. More likely 20% when you count those who are not registered.

Government revenues €34bn. Expenditure €52bn. Deficit of €18bn to be reduced to 3% of GDP by 2014. So cuts or tax increases of say €13bn.

Public service exempt fro redundancy and wage cuts.

 All of the domestic banks bar one now in full State ownership.

 

Mortgage arrears growing. Businesses failing.

 

No policy other than "austerity".

 

Waiting for a domino to fall.

The the politicians will blame "something else" and proceed with default anyway.

Wed, 08/31/2011 - 19:38 | 1621039 Buck Johnson
Buck Johnson's picture

Let Greece default, but they can't or won't.  There is no way that they can pay back anything.

Thu, 09/01/2011 - 02:25 | 1621893 seoerlin
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