Why UK is bailing out Greece?

movilogo

http://www.dailymail.co.uk/news/article-1265275/This-outrage-British-taxpayers-Deal-rescue-Greece-soak-millions.html

Why should we pay? We are not even in Euro zone!
:mad:

Generali

movilogo wrote: »

http://www.dailymail.co.uk/news/article-1265275/This-outrage-British-taxpayers-Deal-rescue-Greece-soak-millions.html

Why should we pay? We are not even in Euro zone!
:mad:

There are 2 bailouts:

- The Eurozone EU members' bailout
- The IMF bailout

The UK is not putting up a single cent to pay the first. The UK is however partially funding the IMF bailout as members of the fund.

As former beneficiaries of an IMF bailout, it probably isn't unreasonable that the UK pays in today.

It is rather sneaky of the Daily Mail to write this article in such a way that allows the readership to link the 2 things without actually linking them for you:

In a move aimed at shoring up dwindling confidence in the stricken country, the 16 eurozone members announced they would lend 30billion euros this year alone.

Asian markets were rising this morning on the news, as was the price of oil. Greek bank shares also rose as analysts said the bailout was 'above expectations'.

Germany and France agreed that Athens should receive preferential cut-price loans to stave off a financial crisis.


But another cash injection from the International Monetary Fund means Britain will have to pay part of a further £13billion bill to prop up Greece in the money markets.

On the website there is a big picture between the 3rd and 4th paragraphs I quote to further enable confusion.

Spartacus_Mills

Generali wrote: »

There are 2 bailouts:

- The Eurozone EU members' bailout
- The IMF bailout

The UK is not putting up a single cent to pay the first. The UK is however partially funding the IMF bailout as members of the fund.

As former beneficiaries of an IMF bailout, it probably isn't unreasonable that the UK pays in today.

Very reasonable in that case.

Especially as, if Labour get in, we will probably be going cap in hand to the IMF ourselves

tomterm8

movilogo wrote: »

Why should we pay? We are not even in Euro zone!
:mad:

Well, we should pay because if Greece goes down the toilet, the markets will look to find out who else is borrowing 13% of gdp a year, with a prospective government that thinks its more important to buy votes with national insurance cuts and marriage allowances than bring our economy into fiscal sustainability.

In some ways, we are a worse bet than greece... neither of our parties appear to have any plan whatsoever to get us out of this mess... and the eurozone can't let greece fail without consequence, but they can let us fail!

rl290

movilogo wrote: »

http://www.dailymail.co.uk/news/article-1265275/This-outrage-British-taxpayers-Deal-rescue-Greece-soak-millions.html

Why should we pay? We are not even in Euro zone!
:mad:

Read the article again: this has nothing to do with us being in Europe, and we are not giving a penny to the Eurozone fund! We are giving money to the IMF, who have helped us in the past.

Suppose Singapore needed a bailout. The IMF would put some money in (which would include a contribution from us) and ASEAN (Assoc. of South East Asian Nations) would also set up a local fund. We wouldn't be contributing because we are part of Asia, would we!

Another misleading article from a terrible paper.

R

Masomnia

Thanked for the principle. I disagree with the bailing out. Moral hazard and whatnot.

Let them default, stop the borrowing, they'll have to make the tough decisions and get their house in order. Bailing them out is just storing up future trouble.

StevieJ

tomterm8 wrote: »

Well, we should pay because if Greece goes down the toilet, the markets will look to find out who else is borrowing 13% of gdp a year, with a prospective government that thinks its more important to buy votes with national insurance cuts and marriage allowances than bring our economy into fiscal sustainability.

Don't forget the promise to reduce petrol by 10p a litre

michaels

Hmm - there was some talk earlier of 'accelerating payment of EU structural funds to Greece' to help them with their budgetary 'situation' ie the money that goes to poorer EU countries for infrastructure etc which comes from the main EU budget to which we do of course contribute - so may be not directly but indirectly we are ponying up.

Also amusing was the comment by I think Germany that lending Greece money at 5% when the market wants 7.5% was not in any way German tax payers bailing out the Greeks...

Generali

michaels wrote: »

Also amusing was the comment by I think Germany that lending Greece money at 5% when the market wants 7.5% was not in any way German tax payers bailing out the Greeks...

Well the Germans can borrow money at about 3-4% depending on the term so lending that to the Greeks at 5% should make a tidy profit. Unless the Greeks default of course.

So why do we all think Mr Market is pushing up the interest rate on Greek Government debt?

1. Evil bankers...bonuses...Gnomes of Zurich....Uncle Quentin....Nuclear Submarine
2. A cabal of Jewish Turkish bankers wants to destroy the Greek economy to make Cyprus (or Northern Zion as it is otherwise known) part of a greater Israel/Turkish state
3. They fear default so are pushing up the interest rate like a sub prime lender back in the day.

Joking aside, if the EU lends to Greece at a market price (as the Germans wanted) it isn't a bailout. The Greeks have pretty much run out of money and the UK is heading in the same direction, even if they are a fair way behind. If as a Government you spend 1/3rd more than you take in taxes then you will be in a horrible mess very quickly.

purch

Joking aside

probably a good choice

tomterm8

Generali wrote: »

So why do we all think Mr Market is pushing up the interest rate on Greek Government debt?

.

4. Bankers will only ever lend you money if you can prove you don't need it.