Greece...

Graham_Devon

The IMF have dampened things again.

They have updated their debt sustainability report and state that Greece needs far more debt relief than is currently on the table. They also state that the Greek debt to GDP ratio will surpass 200% in the next 2 years.

They state that Greece will either need annual transfers of cash, or deep haircuts upfront haircuts.

Therefore, the fund states it cannot work with another bailout without debt write off.

Not sure if this scuppers the deal offered on Sunday or not? They are supposed to chip in €16bn to bailout 3.

The EU meanwhile, don't seem to be able to find a way of implementing the bridging loans offered.

Seems the deal is unraveling before the Greeks have even had a chance to accept any of it. Schäuble has said the Greeks have now woken up to reality. It seems the IMF has too. Which just leaves the EU itself.

Generali

mwpt wrote: »

No, my point was the anti-austerity party has accepted it. What on earth are they doing? They were elected with a mandate and they've capitulated.

For the record, I never thought they were going to be able to keep their promises, it was never in their control. My question is how they can justify their existence with this action?

Has the anti-austerity party accepted it? From what I'm reading, much of which is confused and contradictory, seems to sat the Mr Tsipras has accepted the terms. That's not the same as getting it through the Parliament.

There's nothing to say that the Greek Parliament has to accept this, unless they already have and I'm behind the times.

BlondeHeadOn

Graham_Devon wrote: »

The IMF have dampened things again.

They have updated their debt sustainability report and state that Greece needs far more debt relief than is currently on the table. They also state that the Greek debt to GDP ratio will surpass 200% in the next 2 years.

They state that Greece will either need annual transfers of cash, or deep haircuts upfront haircuts.

Therefore, the fund states it cannot work with another bailout without debt write off.

Not sure if this scuppers the deal offered on Sunday or not?

The EU meanwhile, don't seem to be able to find a way of implementing the bridging loans offered.

Seems the deal is unraveling before the Greeks have even had a chance to accept any of it.

Looks like it might do, from the Guardian updates:
13:36
Instant reaction: IMF says no more extend and pretend

The IMF’s leaked report is potentially dynamite, because the Fund cannot lend to a country if it doesn’t believe it would be sustainable.
So unless Europe swallows the reality that Greece needs major debt relief, the IMF won’t provide any more bailout funds.
Officially, the IMF line that it “stands ready to work with the Greek authorities,”
But we can now see that it is actually saying that another “extend and pretend” bailout deal is fundamentally flawed.

remorseless

Graham_Devon wrote: »

The IMF have dampened things again.

They have updated their debt sustainability report and state that Greece needs far more debt relief than is currently on the table. They also state that the Greek debt to GDP ratio will surpass 200% in the next 2 years.

They state that Greece will either need annual transfers of cash, or deep haircuts upfront haircuts.

Therefore, the fund states it cannot work with another bailout without debt write off.

Not sure if this scuppers the deal offered on Sunday or not?

And out of the 30+bn owed to IMF, how much is Lagarde willing to write off?

mwpt

Generali wrote: »

Has the anti-austerity party accepted it? From what I'm reading, much of which is confused and contradictory, seems to sat the Mr Tsipras has accepted the terms. That's not the same as getting it through the Parliament.

There's nothing to say that the Greek Parliament has to accept this, unless they already have and I'm behind the times.

You're right. I am behind the times. But Tsipras himself, what is his excuse? Or is he hoping it is rejected in parliament?

antrobus

mwpt wrote: »

No, my point was the anti-austerity party has accepted it. What on earth are they doing? They were elected with a mandate and they've capitulated.

For the record, I never thought they were going to be able to keep their promises, it was never in their control. My question is how they can justify their existence with this action?

Headline of the week.

Tsipras Sells Betrayal of His Campaign Promises to Greece
http://www.bloomberg.com/news/articles/2015-07-13/tsipras-seeks-to-sell-greeks-betrayal-of-his-campaign-promises

Greek politics seems rather odd.

In other news;

Greece misses yet another deadline for an IMF payment, but repays some yen denominated debt that matured today.

Graham_Devon

Oh, seems like the bilateral loan begging bowl is now out!

BlondeHeadOn

From Guardian updates 3 minutes ago:
EC to recommend using EFSM for Greece despite UK objections

Developments in Brussels...... Reuters is snapping that the Commission is going to ignore George Osborne’s concerns, and recommend tapping the EFSM to fund Greece’s bridge financing.

dktreesea

remorseless wrote: »

and your point is?

The issue got settled, these bailouts (#1, #2 and soon #3) were/are not offered to Greece for free!

My point is Germany, and Germany alone, should give Greece all the money they need. I should think the loans they received from Greece during the war and never paid back, with the compounded interest , are now worth well over 100 buillion Euros. Let germany pay what they owe Greece for before asking any other member state to cough up.

Generali

remorseless wrote: »

And out of the 30+bn owed to IMF, how much is Lagarde willing to write off?

That's part of the problem.

The EU brought the IMF in to help structure a deal due to their undoubted expertise in dealing with countries in hopeless positions.

The thing with an IMF bailout is that they work in a pretty simple form (although the details are devilish I'm sure):

- Work out what the country needs to spend to keep the economy and Government moving
- Work out how much tax can be taken from the economy which is consistent with strong economic growth
- Subtract one number from the other. The surplus of tax over debt is what can be used to repay creditors
- Restructure debt by partially defaulting on current creditors and lend money to the country at a low rate of interest in return for preferred creditor status.

The deal is that the creditors get some money back, the country gets back on its feet in the end (hopefully) and the IMF gets all of its money back pretty much all of the time. They lend when nobody else will lend.

The EU have completely stitched up the IMF by this ridiculous notion that they are also preferred creditors. Screw them, they're not. The IMF must always have primacy or the whole thing doesn't work.

The IMF, IMHO, should insist that any restructure of debt ensures that they gain sole preferred creditor status with Greece. The IMF does some brilliant work and it can't have its resources sucked in to the mire of what amounts to bailing out Deutsche Bank and BNP Paribas.