Contrary To Previous Lies, Greece May Not Be Able To Access Capital Markets After All; Likely To See 50% Creditor Haircuts

Following the just completed teleprompted preaching of concentrated, yet inverse, truthiness, we find that yet another bankrupt country has in fact been lying about its economic prospects. Following the recent stunning disclosure out of Portugal that contrary to constat promises to the contrary the country was in fact, broke, now we get another admission, this time from a country already bankrupt. Per the FT: "Greece needs time to convince international investors about its reform programme and may not be able to return to financial markets next year as planned, its finance minister has admitted. Greece’s budget plans are fully funded this year but Athens will have to raise between €25bn-€30bn on financial markets in 2012 – a step that would mark the first stage of its international rehabilitation. But Mr Papaconstantinou suggested that goal was in doubt and the timetable would not become clearer until an EU-IMF agreement had been struck for Portugal, the latest victim in the eurozone debt crisis. “A judgment cannot be made before the summer and before Portugal closes its deal,” he said." So now it is trendy for one broke country to bash another broke country? In retrospect Greece should have a right of first refusal of bailout funding: after all it first (was forced to) disclose its bankruptcy. Surely there should be some brownie points for that. But all this may well be moot: Germany is now openly saying the need for a Greek restructuring is coming. Which means that senior creditor haircuts (supposedly up to 50%) are imminent.

From Reuters:

Germany  acknowledged for the first time on Wednesday that Greece may need to restructure its debt but said such a step could only be pursued before 2013 if it were done on a voluntary basis.

In an interview with Die Welt newspaper, German Finance Minister Wolfgang Schaeuble said on Wednesday "additional steps" would have to be taken to deal with Greece's huge debt burden if an analysis from the European Central Bank and European Commission in June showed it is unsustainable.

 When asked by the daily how Greece, or other countries like Portugal, would ever be able to eliminate their "mountains of debt", Schaeuble said:

"In June we will get a progress report. I'm expecting a detailed analysis on the debt sustainability of Greece, that will be done in consultation with the Commission and the ECB. If this report concludes that there are doubts about the debt sustainability of Greece, something must be done about it."

Uh, doubts?

Schaeuble made clear, however, that any restructuring would have to happen on a voluntary basis if done before 2013, when new rules go into effect that envision private creditors shouldering losses in the event debt relief is provided to stricken euro zone states

"Until then a restructuring could only take place on a voluntary basis," Schaeuble said.

Yes, bankers are just lining up to be forced to disclose that their holdings of Greek debt, market at par plus, need to be haircut by over half.

Earlier on Wednesday, German weekly Die Zeit reported that EU experts have estimated that Greece must wipe away 40-50 percent of its debt load through a restructuring in order to return to a sustainable economic path

The newspaper, citing EU sources, said no decision had been taken on whether to pursue a restructuring of Greek debt, but various options were under consideration, including "less radical" solutions like a voluntary extension of maturities.

Which means a viable "fresh start" position will require at least a 100% haircut. And so what - by now each European bank should have been able to access the Fed's discount window and buy enough Netflix to make up for any possible losses associated with a complete wipe out of not only Greece but every single other insolvent European country. Which would be pretty much all of them.