Greece channels Wimpy
Greece’s Loan-Agreement Bluff
Excerpt:
On Tuesday night, when Greek officials began briefing that they would seek an extension to the country’s rescue deal from the rest or the eurozone, they insisted journalists understand a clear distinction: “The request is going to ask [for] the extension of the loan agreement and not the bailout,” one of them said. The difference, the officials explained, was that extending the loan agreement would give Greece access to its last installment from the eurozone’s bailout fund, the European Financial Stability Facility. But it wouldn’t mean, the officials stressed, that the government actually had to accept all the “toxic” austerity measures listed in the Memorandum of Understanding (the legal name of the document that has ruled Greek policymaking for almost five years). This insistence on making that distinction gave some journalists pause. Was the government of Prime Minister Alexis Tsipras asking for money without any conditions, even though it had been told over and over again that that was a no-go? Or was this yet another euphemism, the proverbial old wine in a new bottle, similar to referring to the “troika” of the European Commission, the European Central Bank and the International Monetary Fund simply as “the institutions”?Comment: Image source. More on the Wimpy character.
Germany sees through it: Germany Rejects Greek Request for Bailout Extension:
ReplyDelete“The letter from Athens doesn’t offer a substantial proposal for a solution. In reality, it aims for a bridging loan without meeting the terms of the [bailout] program,”
Europe's firewalls may not be enough to stem Grexit investor panic
ReplyDeleteMy own take is that everyone has already figured out that Greece is deadbeat. Giving them another lifeline would be flushing $$ down the drain
Who Greece owes and when
ReplyDeleteGreece Can Pay Its Debts in Full, but It Won’t:
ReplyDeleteThe Greece crisis is reinforcing a cardinal rule of sovereign-debt crises: It isn’t whether a government can pay what it owes, it’s whether it wants to.
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Nobody is claiming—as they might of a bankrupt company—that Greece doesn’t have the wherewithal to pay back all its €320 billion-plus ($365 billion) of foreign debt in full: The assets of the country dwarf that figure.
What is in question is whether the Greek government can levy taxes or charges on its people—or can sell assets—sufficient to service its debts and still do all the other things Greeks expect it to do.
Sovereign bankruptcies are different animals from corporate bankruptcies, said Carmen Reinhart and Kenneth Rogoff in their 2009 book “This Time It’s Different.” Lenders simply don’t have the same enforceable rights to seize assets from governments as they do with companies and individuals.
However, “in most instances, with enough pain and suffering, a determined debtor country can usually repay foreign creditors,” they said.
The authors cite the example of Romanian dictator Nicolae Ceausescu, who forced Romanians to shiver through freezing winters with little or no heat and made factories close through want of electricity so he could repay the $9 billion his government owed to foreign banks.
Europe basically "kicked the can" down the road by four months. Euro gains on agreement to extend Greece's bailout package:
ReplyDeleteeuro zone ministers agreed to extend Greece's financial rescue package by four months.
The agreement removed the immediate threat that Greece could run out of money next month and be forced out of the single currency area. The new leftist-led Athens government now can try to negotiate longer-term debt relief with official creditors.
Set your calendars to June!
Greeks Stash Their Cash, Just in Case:
ReplyDeleteAthens may be in danger of default, but Greece is awash in cash.
Worry over Greece’s membership in the euro has prompted the withdrawal of more than €20 billion ($23 billion) in recent months, government officials say. Most of the money has remained in Greece, squirreled away in kitchen cabinets, flowerpots and under mattresses.
Greece’s Leaders Face a Revolt at Home as They Try to Appease Creditors:
ReplyDeleteWhile the government of Prime Minister Alexis Tsipras hailed the chance to propose its own overhauls as a victory, the deal represented a steep climb down for his Syriza party, which had vowed to get rid of the current bailout program.
Conclusion: Tsipras failed to deliver.