Hopes are rising that the European Union will agree a fresh €130bn (£108bn) bailout on Monday to save Greece from defaulting on its debts after politicians in Athens said they were close to a deal with their single currency partners. Amid attempts by Brussels to defuse the tension that has been building between Greece and Germany over the past week, it appeared that the austerity stricken southern European country had found the additional budget cuts being demanded by the rest of the eurozone. "We are almost there," one source said. European markets were closed when news emerged that weeks of increasingly bitter wrangling might at last be coming to an end, but shares on Wall Street rallied strongly after Antonis Samaras, leader of Greece's conservative New Democrats and the favorite to win the forthcoming election, said : "There is no certainty but there is cautious optimism." Greece's economy collapsed in the final three months of 2011, with output 7% lower than in the final quarter of 2010 and there are fears that the new cuts will intensify the recession and make it harder for the country to reduce its crippling debt burden. Monday's deal will involve the new €130bn bailout and an agreement that Greece's private sector creditors take losses of about 70% on their investments, but some analysts believe that even this will not be enough to make the debts sustainable. The European Central Bank, it emerged today, will not be required to take losses on its €50bn holdings of Greek government debt. The second EU bailout plan, totalling €130 billion, has been nonetheless suspended. The Eurozone Finance Ministers, in fact, doubt that the government of Prime Minister Lukas Papademos is up to the task of applying the announced austerity measures – not without reason. The cuts already enacted do not work because they only make things worse. In addition, the Greeks are putting up a stiff resistance to the programme of pauperization and decline of their country. Is this the prospect for a united Europe? Transforming the land in which Western culture and democracy were born into a protectorate of Brussels – with no hope for improvement? Is this a continent ever more deeply divided between the rich North and the South with its misery in which people wonder where their daily bread will come from? Meanwhile, in Germany, the ruling coalition is seriously thinking about cutting taxes. Yet, one cannot be indifferent to what is happening on the rest of the continent. And not only because it heightens the risk of political radicalism and the return of nationalism, as will be evident in the upcoming Greek elections..... We should also be concerned because this development, fraught with consequences and clearly promoted by Berlin, threatens our own model for success. The German economy prospers only because their firms do business to the detriment of weaker countries.
Access Investments-Building Awareness - European Union-ROMANIA
Friday, February 17, 2012
There is no certainty but there is cautious optimism
Hopes are rising that the European Union will agree a fresh €130bn (£108bn) bailout on Monday to save Greece from defaulting on its debts after politicians in Athens said they were close to a deal with their single currency partners. Amid attempts by Brussels to defuse the tension that has been building between Greece and Germany over the past week, it appeared that the austerity stricken southern European country had found the additional budget cuts being demanded by the rest of the eurozone. "We are almost there," one source said. European markets were closed when news emerged that weeks of increasingly bitter wrangling might at last be coming to an end, but shares on Wall Street rallied strongly after Antonis Samaras, leader of Greece's conservative New Democrats and the favorite to win the forthcoming election, said : "There is no certainty but there is cautious optimism." Greece's economy collapsed in the final three months of 2011, with output 7% lower than in the final quarter of 2010 and there are fears that the new cuts will intensify the recession and make it harder for the country to reduce its crippling debt burden. Monday's deal will involve the new €130bn bailout and an agreement that Greece's private sector creditors take losses of about 70% on their investments, but some analysts believe that even this will not be enough to make the debts sustainable. The European Central Bank, it emerged today, will not be required to take losses on its €50bn holdings of Greek government debt. The second EU bailout plan, totalling €130 billion, has been nonetheless suspended. The Eurozone Finance Ministers, in fact, doubt that the government of Prime Minister Lukas Papademos is up to the task of applying the announced austerity measures – not without reason. The cuts already enacted do not work because they only make things worse. In addition, the Greeks are putting up a stiff resistance to the programme of pauperization and decline of their country. Is this the prospect for a united Europe? Transforming the land in which Western culture and democracy were born into a protectorate of Brussels – with no hope for improvement? Is this a continent ever more deeply divided between the rich North and the South with its misery in which people wonder where their daily bread will come from? Meanwhile, in Germany, the ruling coalition is seriously thinking about cutting taxes. Yet, one cannot be indifferent to what is happening on the rest of the continent. And not only because it heightens the risk of political radicalism and the return of nationalism, as will be evident in the upcoming Greek elections..... We should also be concerned because this development, fraught with consequences and clearly promoted by Berlin, threatens our own model for success. The German economy prospers only because their firms do business to the detriment of weaker countries.
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FRANKFURT—The European Central Bank has moved to protect its €50 billion Greek-bond portfolio from losses by swapping the bonds for new ones issued by Greece.
The exchange is aimed at protecting the ECB and the 17 central banks that make up the euro from any efforts to force the central bank to take losses through collective-action clauses connected with negotiations between private-sector creditors and Greece, according to a person familiar with the matter.
The new bonds will have the same features as the ECB's existing ones, the person said, meaning the ECB isn't taking any losses.
ECB officials have steadfastly refused to take losses on their Greek bonds, saying their charter forbids the central bank from financing governments.
But ECB officials have signaled in recent days that they are willing to forgo profits on Greek bonds in their portfolio. ECB President Mario Draghi said last week that if the ECB distributes its profits to its member countries, it wouldn't break the rules.
The ECB started purchasing Greek, Irish and Portuguese bonds in May 2010. The ECB justified the purchases by saying they were needed to ensure their interest-rate and bank-support measures transmitted through the economy. It bought these bonds from banks at distressed prices in the secondary market.
Insiders said Lucas Papademos was scrambling to meet Brussels’ demands for austerity even as the latest data pointed to Greece missing yet more debt-reduction targets. Officials said that eurozone finance ministers had been given a report showing Greece’s public debt was on track to fall to just 129pc of GDP, far short of the 120pc target agreed under the €130bn (£108bn) second bail-out package.
With concerns mounting about Greece’s ability to deliver its promises, the European Central Bank (ECB) sought to protect €50bn of its Greek debt portfolio by swapping old bonds for new ones while Europe’s leaders reportedly demanded fresh spending controls.
One condition of a new bail-out is now expected to be that Greece permanently sets aside enough money to pay its debts for at least nine months, to prevent a repeat of the latest last-minute dash to avoid a default.
Why don't we (UK) make a promise to the Greeks that if they default on their debts and devalue, we'll help them economically to find their way back to independence as a sovereign nation.
We did just such a thing in 1827-28, and it was one of our finer moments.
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antoncheckout
10 minutes ago
It is possible that this whole problem will be pre-emptively solved if/when the oil price rises in March, due to little local difficulties elsewhere on the globe. Greece would then be forced to default.
Do the Germans have any comprehension of what they are now doing?
Imagine they manage to defer Greek elections indefinitely. Roll forward a year, when the Greek GDP has imploded by a further 7% (as now forecast) or more likely another 10% or more, and when hundreds of thousands more Greeks are unemployed, when the murder and suicide rates have skyrocketed.
Until Papandreou was replaced, the EU and Germans had a figleaf for pretending whatever went wrong in Greece was all the fault of the Greeks. Once they imposed a gauleiter to run Greece, it became plainly their problem and their responsibility.
The people of Greece are certainly going to see themselves run by an occupying power and all that goes wrong, and gets worse, will be blamed on that occupying power.
There is no benefit for Germany in Greece, just a morass. All the misery experienced by the people of Greece, they will want to inflict on Germans and look for ways to do so, and Germany cannot turn the Greek economic situation around while Greece remains in the EZ.
I have thought for a month or so that Germany now wants to push Greece out of the EZ, despite having blocked Papandreou from holding a referendum on just that point a little over 3 months ago.
But if that is Germany's intent, clearly Germany finds it impossible to be honest about the matter. Instead of saying publicly, Greece should leave and then we will provide reasonable support to help it adjust, Germany keeps setting more and more unreasonable demands that its gauleiter then has Greece trying to meet until it reaches an absolute breaking point.
For God's sake put the Greeks out of their misery. They are a third -world country trying to exist in a first-world economy. With a new drachma they would all suffer the effects of devaluation. At present, it is the Greek poor who are baring the brunt. Sales of Lambos and Ferraris have not suffered. It would be interesting to see who has gained as a result of the arson attacks in Athens. I would offer long odds that it isn't the poor and I would offer even longer odds that it is the property owning classes..
Let those who created this massive crisis be named. Not just the Greeks - they were always only a small part of the problem.
The French - the French who under Chirac, a master of corruption and dishonesty, cheated the system to gain entry for Greece to enter the euro.
Why? So that France had first pick of the plum projects - financed by French banks with guarantees from the EU Commission. Billions rolled out in loans - billions rolled back into France in profits from these mega Projects.
France took the big projects - Germany, who had a deal to split up the PIIGS with France - took Athens Airport and several major power stations and resorts.
Germany got Ireland and we all know how that ended. Irish taxpayers bailed out German banks.
They tried to do the same with their casino loans to Greece. It didn't work.
80% of the guilt lies with France and Germany in their new Axis.
There is no doubt this new Axis is the successor to the failed experiments of other evil regimes like Napoleone's and Hitler's.
Instead of bombs and tanks it is loans and banks.
Well EU - Sarkozy and Merkel, the new jackal in the pack Kees de Jager, Junkers, Barroso and van Rompuy and the evil pair, Schauble and Rehn - it is not going to work.
You will see - your corrupt empire will fall on these and other deceits and hopefully we will witness your destruction soon.
Now get out you filthy fascists.
The regime of drastic cuts has tipped the economy into a violent downward spiral. They thought that private industry would muddle through as the state went through the austerity mincer. What the EU-IMF "Troika" did not fully understand is how many firms were really part of the state in disguise.
"The Greek government outsources everything," said one official with close knowledge of the events.
Faced with the guillotine, the state first slashed procurement contracts and then stopped paying its bills altogether. The government is now €7bn (£5.8bn) in arrears to private companies, including €3bn in unpaid VAT refunds for exporters. It is why business has borne the brunt of the fiscal squeeze, suffering 450,000 job losses, and why Greece's unemployment has soared to 21pc.
At the same time the banking system seized up. More than €60bn of deposits were withdrawn. By November, no Greek bank could issue a letter of credit accepted anywhere in the world, with calamitous implications for trade – and for exporters trying to meet Troika demands for export-led recovery. "Greece became a leper, and is now stuck in Catch-22," said one official.
Hellenic Petroleum was unable to import basic fuel. The reason why Greece's reliance on oil imports from Iran jumped from 15pc to 70pc in a two-week period in November was because Tehran agreed to take on the credit risk.
Desperation in Europhobia
Europhobes have sat up all night posting 10 pages of anti-Greek bilious comments. They only succeed in proving that euroscepticism is a trivial pursuit for the feeble minded and mischievous Teletrolls.
Euroscepticism is achieving nothing in Europe. Due to the harangues of certain British MEP's in the European Parliament to the midnight rambling of europhobes on right wing blogs Britain is more isolated in Europe. Angloscepticism is on the rise in Europe particularly since David Cameron waved his veto and isolated Britain 26-1.
Greece, the eurosceptics favourite whipping boy has made it perfectly clear that it has no intention of leaving the Euro, and there is no clamour among the Greek people to do so. Greece's travails are caused by the profligacy and deceit of previous Greek politicians, not the Euro.
Greek will receive generous assistance from the EU in the years to come to assist with its social and economic problems. Something the City of London will not offer the Greek people as its sharks circle Greece looking to make a killing in a fire sale of Greek assets were Greece ever to leave the Euro. They are going to be disappointed.
The Chelyabinsk Challenge is safe.
A simple example, how the Greek government debt was created.
Only one German company, Siemens, has admitted that has paid 100 millions of Euros for bribery to Greek politicians, to buy their overpriced products.
Christoforakos, General manager of Siemens Hellas and other members of administration had escaped to Germany. Greek Justice is asking Germany to send them back to Greece to face the courts, telling names, but Germany denies that.
Diabolic "coincidence" is that the father of Christoforakos was sentenced for collaboration with Nazis at WWII
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