Greece’s public debt is 180pc of GDP. The loans are in a currency that the country does not control. It is therefore foreign currency debt. The IMF knows that Greece cannot possibly pay this down by draconian austerity – the policy already implemented for five years with such self-defeating effects – and the longer it pretends otherwise, the more its authority drains away. It is has pushed for debt relief behind closed doors but only half-heartedly, unwilling to confront the EMU creditor powers head on. Objectively, it is acting as an imperialist lackey – as Greek Marxists might say.  Indeed, it has brought about the worst possible outcome. The Fund’s man on the ground in Athens – Poul Thomsen – has pushed the austerity agenda with a curious passion that shocks even officials in the European Commission, pussy cats by comparison. This would be justifiable (sort of) if the other side of the usual IMF bargain were available: debt relief and devaluation. This how IMF programmes normally work: impose tough reforms but also wipe the slate clean on debt and restore crippled countries to external viability.  It is a very successful formula. On the rare occasion when the IMF goes wrong it is usually because it tries to prop up a fixed-exchange rate long past its sell-by date.  All of this went out of the window in Greece. The IMF enforced brute liquidation without compensating stimulus or relief. It claimed that its policies would lead to a 2.6pc contraction of GDP in 2010 followed by brisk recovery.  What in fact happened was six years of depression, a deflationary spiral, a 26pc fall in GDP, 60pc youth unemployment, mass exodus of the young and the brightest, chronic hysteresis that will blight Greece’s prospects for a decade to come, and to cap it all the debt ratio exploded because of the mathematical – and predictable – denominator effect of shrinking nominal GDP.

make the world go away....goooooood

Common sense says bond investors might want to lighten up on their holdings of long-term government bonds and other fixed-income investments after the Federal Reserve warned of coming bond market turbulence in Wednesday’s release of the Fed’s April meeting minutes.  But, on the other hand, why exit the bond market when U.S. economic data for April and May keeps coming in below expectations, despite the consensus investment thesis that the economy would — and will — bounce back? Well, the hoped-for rebound Wall Street keeps betting on was a no-show again Thursday. The so-called Philly Fed manufacturing index came in weak. Existing home sales for April came in light, too. Even the latest weekly reading on first-time jobless claims was a miss, rising 10,000 to 274,000, above the 270,000 Wall Street had forecast.   The result: bond investors keep buying U.S. government bonds....So, once again investors reacted more to soft economic data than they did warnings of market volatility and potential losses in the future when the inevitable Fed interest rate increases begin.  Need proof? The yield on the 10-year Treasury note fell Thursday, which means bond prices rose, a day after the Fed warned of potential pain once rates rise in response to rate increases. “Yields on the U.S. 10-year Treasury dipped following the release of weaker-than-expected housing data and in increase in jobless claims,” Tradeweb told clients. The 10-year was at 2.19%, down from Wednesday’s intraday high of 2.29%.  Investors will again be listening closely to any hints of when the Fed might hike rates when Yellen delivers a speech on the outlook for the economy this afternoon. In early trading Friday the yield on the 10-year Treasury has dropped once again, and is now trading at 2.167%.

European leaders should "not discuss" treaty change, the European Parliament president has warned in a clear block on David Cameron's renegotiation aims.

Martin Schultz, a leading social democrat, said there were "a lot of obstacles" to making changes to the laws binding the Union together in the short space of time before a referendum on Britain's EU membership.  It marks the biggest warning today as Europe's big players have been filling into the summit in Riga. The Prime Minister has repeatedly said he wants treaty change.

Mr Schultz's full remarks...   I don't know what he is asking for. I had a phone call with him two days ago, he spoke about migration, he spoke about the ever closer union. He won the election, he wants to anticipate the referendum. We know in which direction the UK wants to go that's better for both sides.  Both sides are stronger together. David Cameron and the government should take into account that we are stronger together. If this is to make the EU more efficient, democratic and transparent I support that.  Not everything has to be done in Brussels. I agree entirely. This is feasible without a treaty change. I think the overwhelming majority of the member states of the EU know there will be a lot of obstacles for treaty change.  Therefore we should not discuss about treaty change. Treaty change lasts a long time. You need a ratification in 28 countries. It will take a lot of time. I prefer to discuss about reform steps now. The EU has the four freedoms - of movement, persons, goods capital and services. We will not change that basis of the European Union.

Athens' Syriza government has failed to extract any concessions from its international lenders after four months of fruitless talks.

German finance minister Wolfgang Schaeuble has hinted the country should not remain in the euro at all costs, pressuring Mr Tsipras to back down over his Leftist "red lines" on labour and pensions reform.  The German number two is also thought to have touted the possibility of a "parallel currency" for Greece at a recent meeting of European officials, according to reports in Bloomberg.

Greece, which has been without international aid since August 2014 is also battling to convince lenders of its planned reforms to VAT and agreeing to softer budgetary targets for the next two years...Ms Merkel's comments contradicted Athens' claims that a release of bail-out cash would be agreed within "10 days"....In the comments below, the consensus seems to be

1. The Greeks can never pay their debt

2. Any attempt to manage the Greek economy by EU/EZ is considered intrusive, with comments such as "evil EU", nazi, anti-democratic, etc

3. EU does not have rules or a treaty to expel Greece, even though almost everyone on this forum wants it

So the USA solution, when states or municipalities cannot pay their bills over the last couple of centuries ...California, Louisiana, Detroit, etc

A. Cease all bail out payments

B. Cease all subsidies, credits (Any subsidies normally paid would be used to cover the debt default)

C. Let Greece Default

D. Stop all intrusive attempts to manage Greek economy

E. Advise all European banks that EU offers no guarantees on loans to Greece

F. Greece continues to use Euros (in cash only)

G. Euro notes are printed outside Greece and so such notes would only be sent to Greece in exchange for worn-out notes of same denomination.

H. Greece remains in EU and can vote, but will be no more than a minor irritant

Declare freedom for Greece ... Then it is for Greece to decide to stay or go

The world is sinking under too much debt and an ageing global population means countries' debt piles are in danger of growing out of control, the European chief executive of Goldman Sachs Asset Management has warned. Andrew Wilson, head of Europe, Middle East and Africa (EMEA), said growing debt piles around the world posed one of the biggest threats to the global economy.

"There is too much debt and this represents a risk to economies. Consequently, there is a clear need to generate growth to work that debt off but, as demographics change, new ways of thinking at a policy level are required to do this," he said. The Organisation of Economic Co-operation and Development (OECD) has also sounded out a warning about Japan's growing debt pile. The Paris-based think-tank said gross government debt was on course to balloon to more than 400pc by 2040 if the government did not carry out reforms.  Angel Gurria, the OECD's secretary-general, said monetary stimulus and stronger growth alone would not be enough to haul the economy out of its two-decade malaise.  "Japan's future prospects depend on ensuring fiscal sustainability over the long term. With a budget deficit of around 8pc of GDP, the debt ratio is set to rise further into uncharted territory," he said.  Others have warned privately that Japan's debt mountain is unsustainable. "The crunch point is when it starts to run a current account deficit," said one senior banker. "When they stop running a current account surplus and they need our money to survive, we're not going to lend to them at 30 or 40 basis points."  High profile executives including Jamie Dimon, the head of JP Morgan, and Tim Adams, the head of the Institute of International Finance have warned that the raft of regulation introduced in the wake of the 2008 crisis could potentially cause huge volatility in the markets.  While Mr Wilson said the European Central Bank's €60bn a month bond-buying progamme meant it was hard to judge how liquid the market was, he added: "We should expect some growth in volatility - but I do not view that as a negative. In fact, I would view this as getting back to a more normal world. Moving out of an environment where there is a huge amount of government and central bank policy designed to provide certainty and liquidity and to dampen volatility is a healthy sign, not an unhealthy one."

Europe is taking a rather unorthodox approach to the problem of long-term unemployment, according to The New York Times, by creating networks of fake businesses. While engaged in no actual economic activity, the routines of these fake businesses provide unemployed Europeans with the chance to keep up habits, skill sets, social connections, and a sense of purpose. Their incomes come from Europe's social safety net programs, in particular jobless benefits — though these often replace only a fraction of a previous salary. The idea for the fake businesses got its start in Europe after World War II, when many people needed to learn new skills. Now there are 5,000 of them across the continent, pretending to be engaged in everything from selling pets to providing office furniture.  Years after the 2008 collapse, large swaths of Europe remain mired in economic sclerosis. In 2014, just over half of the continent's unemployed had been without work for a year or more, and many had been without work for two years...Amazing how those rabid Europhiles cling on to their beliefs that the EU is something to be proud of. It is a corrupt mess with both Germany and France conducting secret deals and ready to stitch up the other members at every turn.