Greece To Miss Budget Deficit Targets, As Usual, While Qatar Prepares A Bailout Pennies-For-Gold Swap
As the Greek parliament meets to finalize huge public sector job cuts, Reuters is reporting that Greece will miss the deficit targets set in its EU/IMF bailout this year and next... We would say "again" but at this point "as usual" makes far more sense, Why this should come as a surprise to anyone is beyond us but the next steps by the Troika (as again and again targets are not met and yet still bank-extending-and-pretending-funding is provided) will be fascinating as they switch from carrot to stick and back to carrot perhaps. Assuming, of course, the "wildcat strikes" at any and all government institutions by government workers about to be sacked, allow Troika member access at some point in the near to long-term future. Although using numbers conceived on napkins as a replacement will be nothing new to either Greece, Eurostat or the Troika. Add to this the comment from the Deputy Leader of the CSU (one of Merkel's tri-party coalition) that Greece would find it easier to recover outside the currency bloc and rhetoric remains high, as do expectations for an inverse surge in the EURUSD at open in a few hours. The biggest winner: Qatar which just snuck in some recycled petrodollars into Greece, which will last the kleptocorrupt government about 1 week, in exchange for Greek gold.
Deutschland sets to pace of what to expect from the EURUSD in two hours:
"I believe it is a solution, if one wants to bring Greece back into a economically stable competitive condition, that this would be done outside the euro zone,"
More from Reuters:
Greece will miss the deficit targets set in its EU/IMF bailout this year and next as it faces worse-than-expected recession, sources said ahead of the adoption by the cabinet of the 2012 draft budget on Sunday.
Greece sees its 2011 budget deficit reaching 8.5 percent of GDP this year, missing a 7.6 percent target, the documents set to be approved by the cabinet show, two sources said.
The budget draft foresees that the deficit will be brought down to 6.8 percent of GDP, above a 6.5 percent target in the bailout that saved Greece from bankruptcy, the sources said.
In the same documents, Greece sees its economy contracting by 5.5 percent this year and 2 percent next year. This is in line with the IMF's World Economic Outlook, published last month, but much worse than the projections used for the July bailout negotiations, which predicted the country's economy would return to growth next year.
Athens blames its failure to meet EU/IMF deficit targets on the worse-than-forecast contraction of the economy, while its lenders say failure to push through much-needed structural reforms is also largely to blame.
A deeper-than-expected recession makes it harder for Greece to collect revenues and meet its deficit targets. It also makes the impact of austerity measures such as tax hikes and wage cuts weigh harder on people.
At least it is always somebody's fault.
The good news, at least for Qatar, is that the Arab country will provide some much needed funding... in exchange for gold.
Qatar's sovereign wealth fund will invest $1 billion in European Goldfields including $600 million to finance operations in Greece, where the London-based firm has a permit to mine gold, the fund's head said on Saturday.
It was the second major investment in Greece by the Gulf state in two months. Qatar struck a deal in August to provide funding for a merger of two of the recession-hit country's largest banks.
Greece, which is in dire need of private investment as its worst recession in four decades is seen extending into next year, has long sought to convince the wealthy emirate to invest in its private and public companies.
Qatar Holdings will buy a 10 percent stake in European Goldfields from Greek building firm Ellaktor (HELr.AT) and has a call option to buy another 5 percent, CEO Ahmad al-Sayed said after a meeting between Greek and Qatari officials in Athens.
"In total, we will invest in the company about $1 billion," Sayed told reporters.
And in a shocking twist of Ph.D. fate, Greek spam factories remain without any Petrodollar funding.