More Leaked Greece Details: Downside Case Sees Funding Needs Soar From €136 Billion To €245 Billion

Tyler Durden's picture


The FT's Peter Spiegel has scoped up some additional details from the 10 page debt sustainability analysis that is at the basis of the latest Greek bailout talks. Some of the critical details:

  • "even under the most optimistic scenario, the austerity measures being imposed on Athens risk a recession so deep that Greece will not be able to climb out of the debt hole over the course of the new €170bn bail-out."
  • A German-led group of creditor countries – including the Netherlands and Finland – has expressed extreme reluctance since they received the report about the advisability of allowing the second rescue to go through.
  • A “tailored downside scenario” prepared for eurozone leaders in the report suggests Greek debt could fall far more slowly than hoped, to only 160 per cent of economic output by 2020 – far below the target of 120 per cent set by the International Monetary Fund
    • Under such a scenario, Greece would need about €245bn in bail-out aid, nearly twice the €136bn under the “baseline” projections.
  • “Prolonged financial support on appropriate terms by the official sector may be necessary,” the report said, a clear reference to the possibility that bail-out funds may be needed indefinitely.
  • Even in best case scenario country will need at least €50 billion on top of €136 billion.
  • A recapitalisation of the Greek banking sector, which originally was projected to cost €30bn, will now cost €50bn. A highly touted Greek privatisation plan, which originally hoped to raise €50bn, will now be delayed by five years and bring in only €30bn by the end of the decade.

Translated, this is yet another confirmation of what we have claimed all along - that Germany is no longer playing along.

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Mon, 02/20/2012 - 19:24 | 2179006 I am more equal...
I am more equal than others's picture

Oooo pa

Mon, 02/20/2012 - 19:26 | 2179014 jcia
jcia's picture

Sick and tired of the Greece 'news'. Although, I have to say... I want a gyro right about now.

Mon, 02/20/2012 - 19:29 | 2179030 phungus_mungus
phungus_mungus's picture

Why do they continue to lie?

Why don;t they simply come out and say what everyone else already knows...

They have no fucking idea how much it'll cost to bail Greece out. 



Mon, 02/20/2012 - 19:50 | 2179115 Troll Magnet
Troll Magnet's picture

Don't worry, everybody.  Benny will come to the rescue in 3..2..1...

Mon, 02/20/2012 - 20:09 | 2179180 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Bernanke?  He is priced in.  Priced into a rock and a hard place.

Mon, 02/20/2012 - 20:16 | 2179204 Troll Magnet
Troll Magnet's picture

I'm afraid to say anything in fear of getting detained or assassinated.  It'd be a bummer, too, because the economy's really starting to pick up and I don't want to miss the good times.  /sarc off

Mon, 02/20/2012 - 20:16 | 2179207 nope-1004
nope-1004's picture

Ich Bin Ein Benign!


Mon, 02/20/2012 - 21:19 | 2179322 Zero Govt
Zero Govt's picture

Let's see: debt + more debt = ?

a fuking 4 year old could work this one out

Politicians & Bankers : the village idiots of society for thousands of years

..let them struggle on

Mon, 02/20/2012 - 21:33 | 2179373 WonderDawg
WonderDawg's picture

Unfortunately, they don't struggle at all. If they were truly struggling, they might actually come up with a solution. Instead, they just slowly pile more and more of the burden on the back of the productive in society.

Mon, 02/20/2012 - 21:52 | 2179434 Manthong
Manthong's picture

"10 page debt sustainability analysis "

That's the ticket to prosperity.. sustainable debt.

Even if the model is right, the paradigm is wrong.

Mon, 02/20/2012 - 22:08 | 2179476 Zero Govt
Zero Govt's picture

WonderDawg  -  i'm watching students protesting in Valencia on Spanish TV at the mo ...they're wearing jeans and jackets while the State Police are dressed like Judge Dredd and beating some of them up with big battons. It's only a matter of time before the Police claim one of them has been 'injured' by these unarmed kids, or "rioters" as the State will call them

Anyway if this is what it's like before Spain goes tits up (and Greece before it institutes austerity on the still fattened bloated 50 stone pig that is the Greek Govt) then God help us when the real fireworks start!

Mon, 02/20/2012 - 22:14 | 2179491 WonderDawg
WonderDawg's picture

ZeeGee, I think it is going to get very ugly, in Europe and ultimately in the US. All this focus on Greece and Europe has taken our eyes off Japan, and China, as well. Then there's MENA. Everywhere you look, it's fucked up. The hostile mood is building, and when it reaches a crescendo, all hell is going to break loose. But maybe that's just me and my sunny outlook.

Mon, 02/20/2012 - 22:37 | 2179508 Zero Govt
Zero Govt's picture

maybe "all hell breaking loose' is not to be feared (rioters don't go for Joe Public) but is societies antidote for ridding the cancer (that is Govt)

it's our way of saying we've had enough, time for Regime Change

this is an opportunity not to be missed if it can be used eradicate the sewer that is Govt and its behind the scenes monopolists

public sector workers are afterall kicking off against the public sector Chiefs. Maybe the penny will drop the private sector is where productivity/wealth comes from and it was Govt all along conning them with false promises of the Holy Land

Fingers crossed

Mon, 02/20/2012 - 21:55 | 2179444 flacon
flacon's picture

Keynes would say:

debt + more debt = higher GDP. 


Q.E.D. (problem solved)

Mon, 02/20/2012 - 22:16 | 2179494 Zero Govt
Zero Govt's picture

Keynes did his job as a hired Govt consultant (crone) and underlined the political policy he was hired to underline

as a very sound stock investor he'd easily recognise the stupidity of a company deeply in debt not trying to solve the issue of high debt and low growth/profitability by digging itself even more in debt

I doubt even Larry Summers believes privately half the total shit he's hired to talk in public  

Mon, 02/20/2012 - 22:57 | 2179605 Eireann go Brach
Eireann go Brach's picture

If I met Summers in public, I would take a run at him and land my fist on his jaw and hopefully break it! If it did not break, I would find the nearest physical object to crack his jaw again until it broke!

Mon, 02/20/2012 - 19:51 | 2179118 CClarity
CClarity's picture

As has been stated many times, and not just pertinent to the Greek situation . . . the longer this takes, the more it will cost.  Cost in financial term, cost in personal pain, cost in more and more limited options.

Mon, 02/20/2012 - 21:00 | 2179300 john39
john39's picture

seems like a pretty big assumption that "fixing" the situation was ever the goal.   most likely, the opposite is true.

Tue, 02/21/2012 - 00:40 | 2179976 LowProfile
LowProfile's picture

There is no "fixing" it, unless you mean wiping it clean and starting with a new system.

The goal has always been to kick the can.  That's all they have.

Mon, 02/20/2012 - 19:53 | 2179128 Vaiman
Vaiman's picture

That's what I'm wondering!  When will the market wake up and get wise to bloomberg's bullshit and reuter's one sided ranting?  None of the stuff being shared on zero hedge even shows up there.  No real picture scenario. 

Here's bloomberg's headline!

Greece Moves Toward Second Bailout


Here's reuters headlines!

Second Greek bailout in reach, funding gap narrows

Maybe they actually believe this will be solved one way or the other....even if by force.  It seems the public protests are doing nothing to sway the determination of the governments to sell out the country to the banks and the Euro.


Mon, 02/20/2012 - 21:20 | 2179339 The Fonz...befo...
The Fonz...before shark jump's picture

"Maybe they actually believe this will be solved one way or the other....even if by force."

No....they are HOPING

The only thing that 245 billion euros is going to buy is just a little more time.....

And becoming more expensive after each funding round....

Let's just get Greece over with... So we can begin another long road with Portugal...

Perhaps they want the market to become numb to all this because after Greece the real unwind begins..


Mon, 02/20/2012 - 20:07 | 2179135 TruthInSunshine
TruthInSunshine's picture

I am openly endorsing 'The Krugman Plan,' right here and now, bitchez.

The ECB should print 17 trillion to 26 trillion and use it to pay off PIIGS+France current debt (the debt that shows up on the cooked books - the actual debt, just as in the UK and US, is many, many multiples higher), which will leave a few trillion € left over to fund the government sector and political class of these debt fiefdoms for the next 1 1/2 to 2 years.

Then, they can repeat this process every few years.

On top of that, have the ECB be the buyer of last resort on all future bonds issued by PIIGS+France, at the lowest possible yield.

What could possibly go wrong?

If Krugman says imposing austerity would be akin to withholdng heroine and/or methadone from a junky in withdrawal, and that you double the dose of heroine and/or methadone, don't argue.

Fixing the fundamental flaws that led to the current situation is not the critical or even an important thing.

Kicking the can while debasing living standards is the important thing.

How hard is this shit?

You all flunk Kruganomics 101.



"By a continuing process of inflation, governments can confiscate, secretly and unobserved, an important part of the wealth of their citizens. By this method they not only confiscate, but they confiscate arbitrarily; and, while the process impoverishes many, it actually enriches some.... As the inflation proceeds and the real value of the currency fluctuates wildly from month to month, all permanent relations between debtors and creditors, which form the ultimate foundation of capitalism, become so utterly disordered as to be almost meaningless; and the process of wealth-getting degenerates into a gamble and a lottery.”

There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.”

J.M. Keynes on inflation in The Economic Consequences of the Peace (p. 235-6)


"As the supply of money (of claims) increases relative to the supply of tangible assets in the economy, prices must eventually rise. Thus the earnings saved by the productive members of the society lose value in terms of goods. When the economy's books are finally balanced, one finds that this loss in value represents the goods purchased by the government for welfare or other purposes with the money proceeds of the government bonds financed by bank credit expansion.

In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods. The financial policy of the welfare state requires that there be no way for the owners of wealth to protect themselves.

This is the shabby secret of the welfare statists' tirades against gold. Deficit spending is simply a scheme for the confiscation of wealth. Gold stands in the way of this insidious process. It stands as a protector of property rights. If one grasps this, one has no difficulty in understanding the statists' antagonism toward the gold standard."

Alan Greenspan
written in 1966

Mon, 02/20/2012 - 20:07 | 2179171 wiser
wiser's picture

i second that.... Greece the 51st US state

Mon, 02/20/2012 - 20:09 | 2179179 agent default
agent default's picture

I've got  a better one.  The Central Banks should give every household a printing press.  All problems solved.

Mon, 02/20/2012 - 20:55 | 2179291 TruthInSunshine
TruthInSunshine's picture

Krugman wrote a letter to The Bernank urging him to prod congress & the POTUS to pass legislation funding installation of Federal Reserve Note dispensing ATMs in all households.

That would lead to the greatest economic expansion in human history according to Krugman.

Mon, 02/20/2012 - 21:30 | 2179365 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

This Greenspan guy sounds pretty badass.  What is he up to nowadays?

Tue, 02/21/2012 - 00:42 | 2179983 LowProfile
LowProfile's picture

Hoping that if he lives long enough to go through the collapse, that everyone will believe him when he says "I did it on purpose so we would have to start a new system!".

Mon, 02/20/2012 - 20:12 | 2179189 atomic180
atomic180's picture

Add a -0- maybe -00-

Mon, 02/20/2012 - 20:27 | 2179236 TrulyBelieving
TrulyBelieving's picture

It'll be interesting to see how much more the banks will loan them. Looks like they haven't got much else to loan and Greece can't borrow much more because all wealth for years  is already spent. The question is, will Greece allow itself to become a serf territory or will it throw off this debt with default and then fight itself to become free?

Mon, 02/20/2012 - 20:43 | 2179266 He_Who Carried ...
He_Who Carried The Sun's picture

If I had to pay my taxes in Germany,

I'd ask very tough questions about whether

they're putting my kids on the hook

for this "bottomless pit" !! 

Let them corrupt goat herders go, PLEASE !!

Mon, 02/20/2012 - 21:44 | 2179411 Buck Johnson
Buck Johnson's picture

I know, the cost keep going up and up and Germany is saying let them default now.  There is no way that Greece can increase there GDP with the economy in the country the way it is and most people in the poor house.

Mon, 02/20/2012 - 21:26 | 2179355 King_Julian
King_Julian's picture

In support of Greece I used Kalamata olives on my nachos tonight. Unfortunately, just noticed they were made in Napa. Close enough.

Mon, 02/20/2012 - 19:33 | 2179043 I am more equal...
I am more equal than others's picture

Quote from Zorba the Greek: I felt once more how simple a thing is happiness: a glass of wine, a roast chestnut, a wretched little brazier, the sound of the sea. Nothing else. And all that is required to feel that here and now is happiness is a simple, frugal heart. 


Greece meet frugal.  Frugal meet Greece.  May you live long and be prosperous.

Mon, 02/20/2012 - 19:41 | 2179077 Banksters
Banksters's picture

Double down, bitchezzzz.    Go big or go home, signed 


Mon, 02/20/2012 - 20:12 | 2179190 spastic_colon
spastic_colon's picture

Exactly....this is all just gamesmanship to compel the US to pony up more to the IMF and continue printing.

Mon, 02/20/2012 - 19:46 | 2179101 vast-dom
vast-dom's picture

Hey Ty can we claim a Greece extro default in a specified timeframe? Cause we been claiming this shit for quite some time, and yet there float the hopium on top of the optimismo crackle ad infinitum it seems...

Mon, 02/20/2012 - 20:01 | 2179152 LongSoupLine
Mon, 02/20/2012 - 20:39 | 2179257 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

I've noticed a glitch in the Matrix lately, though.  I like to keep up on pop culture because I like to make sure I can mock it, and so I read Yahoo headlines every few days.  Today, trending with Brittney and Whitney and Clitney and a bunch of other bozos, was....Rob Paul.  I have seen gold prices on there a lot lately, too. 

So it looks like the splinter in the status quo's mind is starti ng to itch, a lil' bit.

Mon, 02/20/2012 - 20:49 | 2179278 LongSoupLine
LongSoupLine's picture


...and when they get Obama's name wrong, there's an all-out 3-day NAACP media blitz lead by AL Sharpton...go figure.

Mon, 02/20/2012 - 20:52 | 2179286 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Woops, meant Ron.  But yeah, can't mess with Darkness.

Mon, 02/20/2012 - 19:24 | 2179007 knukles
knukles's picture

Oh fuck.
Not again.....

Mon, 02/20/2012 - 19:24 | 2179008 gekkobear
gekkobear's picture

$TVIX Long


Mon, 02/20/2012 - 19:34 | 2179045 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Pshaw, c'mon, it's priced in.  Priced in bullishly!  DJ 14k in no time.  No time!!!!!

Mon, 02/20/2012 - 19:52 | 2179124 Troll Magnet
Troll Magnet's picture

Methinks you're being too bearish.  Just look around you, Hendrix.  Our economy is BOOMING!  

Mon, 02/20/2012 - 20:45 | 2179270 navy62802
navy62802's picture

DJIA 16K no time. Record highs.

Meanwhile, we'll be paying $6 for a gallon of gas and $7 for a gallon of milk in the US. But fuck yeah!! The DOW will be going THROUGH THE ROOF!!!!

Mon, 02/20/2012 - 19:27 | 2179011 tom a taxpayer
tom a taxpayer's picture

Please cover the eyes of children and women of delicate sensibilities. Emperor is naked.

Mon, 02/20/2012 - 19:25 | 2179012 Bobbyrib
Bobbyrib's picture

$ that all?

Mon, 02/20/2012 - 19:31 | 2179034 Black Forest
Black Forest's picture

just transitory

Mon, 02/20/2012 - 19:37 | 2179039 CrashisOptimistic
CrashisOptimistic's picture


There is only one course of action.

Whoever prepared that sustainability analysis will be accused of rape by a maid at the hotel where he is staying.  He'll be removed from his analysis position and replaced by someone who predicts different, more palatable numbers.

Mon, 02/20/2012 - 20:14 | 2179199 YesWeKahn
YesWeKahn's picture

It is a lady.

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