Greek money pit swallows another Eur120bn

Graham_Devon

Wasn't expecting anything on this large a scale.

It's just making any default even worse and dragging other countries further down the default road with it.

Sure, may fix the immediate problem, but at what cost? There is no way that the cost later cannot be larger than the cost now. How are they even getting away with it? It's going to drag other nations down, such as the US and the UK. They determined if they are going to fall over, to take everyone else with them?

shortchanged_2

Isn't this exactly what they keep telling us in the UK not to do. i.e not to keep throwing/spending money at our economy.

Milarky

Just watched 'Debtocracy' on Youtube. Taught me a thing or two.

(A case of 'Odious debt'?)
Any people have the sovereign right to repudiate debt if/where it is shown the debt was entered into as a result a malfeasance etc. In the case of Greece there are now attempts to establish a genuinely independent 'Audit Committee' which would examine the circumstances of every loan taken by current and former Greek government along the lines of the Ecuadorians in 2006. For instance, Goldman Sachs were exposed in 2010 to have helped the Greek state conceal the extent of its debts by doing currency swaps from Euros to Japanese Yen at deflated exchange rates - or wot not. Then there's the curious way France and Germany have been busy selling weapons quite a lot lately to Greece even though it had no means to pay them without borrowing that money from ECB or IMF etc.

As usual we aren't being given the whole story here - just the side of business and finance. [Useful idiots?]

Graham_Devon

President Sarkosy is now stating that the French banks are ready to "roll over" the loans to the greeks.

Credit agencies have already stated they will class this as a default. However, the Eurocrats are now in discussions to find a way to do this, without it being deemed as a default.

They do try...you gotta give em that!

http://www.bbc.co.uk/news/business-13925971

Mr_Mumble

Bloomberg have the best report I've seen of the French proposal, a snippet:

“The mechanics of the French plan are so daunting that I don’t see how any bank can evaluate them,” said Carl Weinberg, chief economist of High Frequency Economics Ltd in Valhalla, New York. “Half the debt maturing over the next three years includes paper at 98 cents on the dollar and other paper at 54 cents. Do banks have a choice? If so, they would fork over the 2013s or the 2014s and hold on to the 2012s.”

Investor concerns that time is running out have pushed up the cost of insuring European debt against default. The Markit iTraxx SovX Western Europe Index of credit default swaps on 15 governments rose 3 basis points to a record 246. Contracts tied to Greece climbed 28 basis points to 2,143, signaling an 84 percent probability of default within five years, according to CMA.

Its well known that the French banks have a lot of short-dated Greek debt (probably thanks to a couple of its largest banks having sizable subsidiaries in Greece) so its no surprise they've come up with this idea. For those owning Greek debt with a maturity date in late 2012-2014 it does seem to be an effective subsidy from taxpayer to creditor.

The market thinks creditors have got paper worth 55-65 cents on the Euro in the 2-3 year range and the banks are willing to give it back for 30 cents cash + 20 cents guaranteed (ultimately by whom?) + 50 cents in 30 year Greek debt? I think that's the gist of the proposal. No way should european or Greek taxpayers stomach this, nor would longer-dated credit holders who're more likely to be the German banks and insurers!

Ironically if this was forced upon creditors (unlikely) the biggest losers would be short-term creditors, as stated by the HFE economist. Greece has been able to sell 3 & 6 month bills in the last month at a yield of just under 5%, imagine if these creditors now found out they've effectively given the spendthrift Greeks a 30 year loan!

As with every other idea on Greek debt its clever but will not work!

Thrugelmir

Rochdale_Pioneers wrote: »

So countries in deep financial diffic ulties like Ireland Spain and Portugal are going to "lend" even more cash they can't afford to a country who will throw it on the bonfire and say "more please".

So what's the difference between public sector workers in the UK and Greece when it comes to pensions?

The UK is not immune to the wrath of the money markets.

vivatifosi

Thrugelmir wrote: »

So what's the difference between public sector workers in the UK and Greece when it comes to pensions?

The UK is not immune to the wrath of the money markets.

The life span in both Greece and the UK is more or less identical. Per the article below, the average Greek retirement age last year was 53, as opposed to 60/65 in the UK rising to 66 for all and then some. Even though Greece is working to change its retirement age, it has a lot further to go, and if you think about the arguments in the UK over tinkering over a couple of years, you can imagine how furious people will be if they find they've got to work another 10+ years.

Assuming people go to school until say 16, that's only 37 years of economic activity, less than half the lifespan even if people don't go to Uni, have kids or spend periods of time otherwise inactive.

I'm soooooo glad I'm not a trustee of a pension fund in Greece.

http://www.channel4.com/news/articles/business_money/greek+rescue+deal+agreed+but+ampaposbig+sacrificesampapos+ahead/3634287.html

Wookster

vivatifosi wrote: »

Even though Greece is working to change its retirement age, it has a lot further to go, and if you think about the arguments in the UK over tinkering over a couple of years, you can imagine how furious people will be if they find they've got to work another 10+ years.

Just throw them to the dogs.

They do not want to be saved.

vivatifosi

Wookster wrote: »

Just throw them to the dogs.

They do not want to be saved.

I have to declare an ulterior motive. I'm waiting to be able to buy Sifnos for £2.87.

The_White_Horse

this is what happens when you let the public sector have its way.

get back to work teachers and thank us you have a pension at all, with all the illiterate and innumerate mongos you churn out.

when i said to my teacher friend that he should be paid according to his results he laughed in my face. jokers.