The International Monetary Fund said on Thursday that it would not disburse
funds under its part of the EU-IMF package unless the eurozone delivers on a
bond "buy-back" scheme, which is supposed to cut Greece’s burden by 10pc of GDP
and is deemed crucial for restoring long-term viability. If the IMF withdraws, Finland and Holland will also pull out of the
programme. "This has become a really big problem," said Raoul Ruparel from Open
Europe. The dispute comes as Moody’s said the EU-IMF deal to unlock €44bn in bail-out
payments to Athens merely papers over cracks and does little to alleviate
Greece’s "extreme economic and social fragility". "We believe that the country’s debt burden remains unsustainable," it said.
Moody’s warned that there can be so lasting solution until EU states and
official creditors agree to write down their holdings, now the lion’s share.
Private investors are furious at demands that they take a second "haircut" of
70pc on residual holdings, after already taking a 53.5pc loss earlier this year,
while official creditors still refuse all loses. Having given guarded and subsequently misleading support for the latest Greek
bail out plan, Ms Lagards has now done her job, which is to carry out IMF
policy, not French, Euro or personal inclinations. This whole Greek farce is a tragedy for the Greeks and everyone connected with them and their failed economy.
She should have made the IMF position clear at the meeting rather than offer false hope to so many, and she should be condemned for that. The Greeks, meanwhile seem to have two options.
Leave the Euro, or alternatively, leave the Euro.
The only moral approach to this nightmare is for the EU to
allow/encourage/force Greece to return to its own currency and instead of
pouring endless zillions into the bottomless pit of keeping Athens in this
latest piece of European utopian insanity, the EU/IMF etc should use what funds
it can donate to help the Greek economy benefit from its newly minted but
devalued Drachma to rise again from the dangerous and irrational EMU.
5 comments:
German lawmakers approved latest aid package for Greece by a large majority on Friday , but the voting also showed growing displeasure with the impact on German taxpayers in the run-up to elections next year.
Chancellor Angela Merkel failed to secure an absolute majority from her centre-right coalition after 23 MPs rebelled, leaving her relying on the votes of the main opposition Social Democrats (SPD) and Greens. Of 584 deputies present in the chamber, 473 voted for the bailout with 100 against.
Under the agreement, reached by European finance ministers this week, Greece will be given two more years to reach its budget goals. It paves the way for Greece to receive €44bn (£35.6bn) in critical rescue loans, without which the country would face bankruptcy and a possible exit from the single currency zone.
The package, which aims to cut the Greek debt load to 124% of national output by 2020, has fuelled speculation among German lawmakers and media that eurozone governments will eventually have to write off much of the Greek debt they hold. German government, as the biggest contributor, acknowledged for the first time this week that the bailout will mean lost federal revenues, starting with a €730m shortfall next year.
During the debate, finance minister Wolfgang Schäuble defended the aid package and said that speculation about a possible writedown could undermine the Greek government's reform drive. "If we say the debts will be written off (Greece's) willingness to make savings is correspondingly weakened. Such false speculation does not solve the problems," he said. "A Greek bankruptcy could lead to the break-up of the eurozone."
Frank-Walter Steinmeier, SPD parliamentary leader and their candidate for chancellor, said the deal on the table "is not a sustainable solution for Greece" and argued that the government had merely "bought time" above all to avoid addressing "unpleasant truths." However, he said his party would back the deal because "we cannot leave the Greeks in the lurch."
Finland and the Netherlands are two other eurozone countries which must give parliamentary consent before the funds for Greece are released. According to think tank Open Europe the French parliament will also need to approve the deal but this is likely to be done along with the 2013 budget vote, this means it is very likely to pass. There are also reports that Slovenia will need to accept the deal by 13 December.
Unemployment in the eurozone hit a record high of 11.7 percent in October, official Eurostat figures showed Friday, with more than 170,000 more jobs lost as the continuing debt crisis undermines hopes for an economic recovery.
Unemployment in the eurozone hit a record high in October with more than 170,000 more jobs lost as the debt crisis continued to undermine an economy slumping into recession, official data showed Friday.
The eurozone had a jobless rate of 11.7 percent in October, up from 11.6 percent in September, with the numbers out of work rising to 18.7 million from 18.49 million, the Eurostat data agency said.
The picture was particularly bleak for under 25-year-olds, with year-on-year figures showing almost one in four out of work both in the 17-nation eurozone and 27-nation European Union.
The highest unemployment rate was recorded again in Spain, where 26.2 percent of adults are out of work, with Austria again posting the lowest rate of 4.3 percent and benchmark Germany and the Netherlands at 5.4 and 5.5 percent respectively.
Across the 27-state European Union single market of half a billion consumers, 25.92 million men and women were out of work
foxenburg
Today 01:28 AM
It's only the other day that laws were passed in EU to make it easy to sue ratings agencies if one lost money taking their advice. So guess which institutions first get given the hairy eyeball? And what bankrupt company would expect credit because the idiots running it had "commitment" - whatever that means? Commitment to saving their jobs?
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paulweighell
Today 01:50 AM
Agencies do not give advice so it would not be easy to prove that it led to a bad investment decision.
Agencies are now obliged to give more reasons for their ratings and that's no bad thing.
Politicians always want to gag the messenger but the EU watered down its agency gagging proposals so much that many say there is no significant dilution of ratings.
What the world does not need is politicians rating their own economic performance :-)
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