Greek debt restructuring (at tax payers expense) looks inevitable according to leaks from the EU troika

[Adar]

According to leaks reaching Spiegel magazine (major German news agency) it looks like the EU troika is finally going to move and officially accept the restructuring of Greek debt. To the tax payers this essentially mean that the EU troika have been lying to us for a year to buy time for the financial institutions to sell their bad debt holdings to public institutions. To me this clearly show three things:

1) Both the loony left and loony right have proven correct when claiming that the EU is screwing the tax payers by saving the financial institutions at the tax payers cost. The Greek debt levels are unmanageable for Greece and everyone with even a tiny bit of financial understand this. Despite this the EU troika have been using public funds to buy Greek obligations while pretending that they will be paid for. By denying the obvious for a year they have been able to buy time for the financial system to disengage from their debt holdership while even more public funds are being sunk into a black hole.

2) The EU leadership is purposefully trying to make the debt crisis impossible to understand for the public. The TWC search engine seems to be down but a few months ago I posted a thread about how EU commissioner Barosso wanted to create rules of conduct to prevent EU politicians from making "dissentive statements" that could lead to dissention within the EU. This was directly aimed at EU politicians who stated that the loans wouldn't be paid back, which is just what's going to happen.

3) The ineptitude of German leadership in the EU. German politicians like Wolfgang Schäuble (minister of finance) are against a restructuring of Greek debt as they are among the largest debt holders. But still they have enabled each financial aid package in order to make other European politicians accept necessary reforms. So far Greek have only enacted 60 % of the promised reforms while they've been given all of the money. And now the troika is completing the manoeuvre by writing off Greek debt as it is physically impossible for Greek to produce enough to pay their debt in a realistic time frame. The Germans might be able to manage their own nation, but at a EU level they have been completely owned by France and South European nations who want a strong EU capable of transferring wealth from the productive areas to save the South.

http://www.bloomberg.com/news/2012-1...e-spiegel.html
Troika Wants New Debt Restructuring for Greece: Spiegel

The European Commission, the European Central Bank and the International Monetary Fund proposed a restructuring of Greek debt that would require public-sector lenders to take heavy losses, Spiegel reported.
Representatives from the so-called troika presented their plan at a meeting of high-level officials from euro-area finance ministries on Oct. 25, according to an article in this week’s Spiegel magazine, which didn’t say where it got the information.
This would be the first time euro aid would cost taxpayers “serious money,” Spiegel said. Public creditors to Greece would be expected to participate and to relinquish a large part of their claims, it said.
European policy makers are awaiting the final report, due by Nov. 12, on Greece’s progress in meeting internationally agreed targets compiled by the troika.
The Frankfurt-based ECB, which owns 40 billion euros ($52 billion) of Greek government bonds, isn’t allowed to take part in the restructuring. Instead, the central bank would “make available” any profit it makes on the bonds, Spiegel said.
Greece has only completed about 60 percent of the required changes, the troika’s presentation showed, according to Spiegel. The Greek government is discussing 20 percent of the revamp, and the remaining 20 percent hasn’t been addressed.
The troika recommended measures to force Greece to fulfill promises, including a provision to automatically raise taxes if reforms aren’t completed. Greece will be given two more years to get its budget on track, Spiegel reported.
Representatives from some countries, including Germany, opposed the proposal, Spiegel said.
German Finance Minister Wolfgang Schaeuble, in a radio interview with Deutschlandfunk broadcast today, rejected another debt restructuring and said it’s unrealistic to expect public or private bondholders to take losses on their Greek holdings.

Especially number 1 felt odd writing and I can only congratulate the Finnish tax payers as they are the only Euro nation with politicians level headed enough to demanded specific securities in return for the loan packages.

[Thorn777]

Would not call it "only ones level-headed enough". If Germany had demanded the same thing then we'd practically own half of Greece in any event, which seems to me an unacceptable political situation.

Also it has always been transparent that financial institutions holding Greek debt, which is largely pension and insurance funds, are being saved simultaniously to (as I seen it) an effort to keep foreign exchange deficitary Greece within the strong currency and try to internally devalue by getting price and wage levels down. Which worked in Ireland supposedly.

[Braindead Colonel]

The bailout package was just a way to pass large part of Greece's debt from the banks of Germany and France to the Goverments (i.e. taxpayers) of the Eurozone. Greece could not pay it back then, and it sure as hell can't pay it back now, after 2-3 years of austerity that have ruined an economy that wasn't that great to begin with.

[Xraider]

You do realize that the article is from 2011,a debt restructuring already happened and that Greece will get the next batch of cash (31.5 billion euros) only when it passes its 14.5 billion worth austerity package so no, it has not received all the intended money, right ?

IMO another debt restructuring will be necessary in the near future. Despite the previous restructuring, the present debt is still unsustainable and there is no light at the end of the tunnel for Greece.

[Adar]

You do realize that the article is from 2011,a debt restructuring already happened and that Greece will get the next batch of cash (31.5 billion euros) only when it passes its 14.5 billion worth austerity package so no, it has not received all the intended money, right ?

My mistake, I read it from a Swedish newspaper about todays news and linked to the article as I couldn't find it at Spiegel online.

Swedish paper but I'll revise the initial post.
http://www.di.se/artiklar/2012/10/29...ekonstruktion/

Source in English
http://www.bloomberg.com/news/2012-1...e-spiegel.html

The EU needs to install a mechanism that will allow it to kick members out of the EU and the Eurozone. If some Balkan state takes the piss like this again we have no defence, we just have to bank roll their hangover.

I think we also need to to combine this with a more heavy handed approach to the baking system as we're skewing the risk-benefit analysis by bailing out the banks. In Sweden the government took over the failing banks in the 1990s which ment that we could keep the financial system moving without subsidizing reckless behaviour. It also kept the tax payers damageless as we later could sell the banks at a profit.

[removeduser_487563287433]

We've known this for some time, pragmatically speaking. I don't know why we've rewarded the Greeks for appalling behaviour for so long.

The EU needs to install a mechanism that will allow it to kick members out of the EU and the Eurozone. If some Balkan state takes the piss like this again we have no defence, we just have to bank roll their hangover.

[alhoon]

Shouldn't this be in the Euro-crisis thread? Since it's after all... about the Euro Crisis?

In anyway, is it reliable to trust those articles about this? Will we see a new restructuring of the debt?
While it's certainly possible, it seems like fear-mongering too.

[Adar]

Shouldn't this be in the Euro-crisis thread? Since it's after all... about the Euro Crisis?

It's too large to get into that huge and unwieldy thread which by now probably should be moved to the Political Academy. With that logic we could pretty much turn this into a four thread forum. "Americans do something bad", "The EU stuff", "Muslims do something bad and "Racists are stupid" would cover 80 % of all threads.

In anyway, is it reliable to trust those articles about this? Will we see a new restructuring of the debt?
While it's certainly possible, it seems like fear-mongering too.

It will happen sometime and based on the rethorics I think it is plausible that the change to accepting the restructuring will be soon.

[Manuel I Komnenos]

Oh, look, the austerity program failed once again...

By the way:

while they've been given all of the money

No, that's not true. Greece is experiencing huge problems at paying her expenditures to the private sector because the worth 31,5 bn euros installment has been withheld until the Greek Parliament passes the new measures. Some 3 bn euros will be used to pay costs to pharmacies and other contractors. The rest will be taken by the Greek banks.

[Adar]

No, that's not true. Greece is experiencing huge problems at paying her expenditures to the private sector because the worth 31,5 bn euros installment has been withheld until the Greek Parliament passes the new measures. Some 3 bn euros will be used to pay costs to pharmacies and other contractors. The rest will be taken by the Greek banks.

Okay, Greece didn't get all of the money from the latest payment. But they still got a lot of money.

[Thorn777]

The bailout package was just a way to pass large part of Greece's debt from the banks of Germany and France to the Goverments (i.e. taxpayers) of the Eurozone. Greece could not pay it back then, and it sure as hell can't pay it back now, after 2-3 years of austerity that have ruined an economy that wasn't that great to begin with.

Largest holders of Greek debt being saved where Greek banks themselves.

And I dont get people having the notion that when one thing happens, another cant happen simultantiously. Like indeed toxic assets largely held by pensionfunds being laundered, while dealing with a situation that could evolve into a domino effect, and then Greece getting a shot at not having to go trough a state bankrupcy, or hyper-inflation if you will. All while saving political face of this EU project.

1) Both the loony left and loony right have proven correct when claiming that the EU is screwing the tax payers by saving the financial institutions at the tax payers cost. The Greek debt levels are unmanageable for Greece and everyone with even a tiny bit of financial understand this. Despite this the EU troika have been using public funds to buy Greek obligations while pretending that they will be paid for. By denying the obvious for a year they have been able to buy time for the financial system to disengage from their debt holdership while even more public funds are being sunk into a black hole.

I have a hard time figuring out how this IMF suggestion proves that. The haircut already undergone was one of the private-holders. Lagarde now suggests that the tax-payers jumping in need to get a haircut, and in my opinion its perfectly right that Schauble is against this.

If anything it proves them wrong.

Also imagine future rescue packages...no parliament can act against the public interest in such a way. It would also be illegal btw in Germany. Issuing public loans for abroad knowing you wont get it back.

[neoptolemos]

Greece seen winning fight on money laundering
Greece is no longer seen as a black sheep with regard to the fight against money laundering and graft, according to official data released by the Financial Action Task Force (FATF), the head of a watchdog responsible for investigating financial crimes said Monday.
Responding to a question in Parliament, Panayiotis Nikoloudis, who is vice prosecutor general of the Greek Supreme Court and president of the National Agency for Combating Money Laundering, said that according to official data due for release later this year,
Greece is a “role model” in the fight against money laundering. Nikoloudis said his agency successfully investigated 162 cases in 2011 and seized 223,982,146 euros in illegal money.

http://www.ekathimerini.com/4dcgi/_w...10/2012_467818

[Odenat]

Is it true that the Troika asked from Greece that Aegean islands having less than 150 people need to be emptied ?

[removeduser_487563287433]

Is it true that the Troika asked from Greece that Aegean islands having less than 150 people need to be emptied ?

Doubt it. I don't see the economics in that.

[Vizsla]

Is it true that the Troika asked from Greece that Aegean islands having less than 150 people need to be emptied ?

Doubt it. I don't see the economics in that.

Lebensraum?

Writing off Greece’s debts isn't going to cover it.
They have to default on everything – public, private everything – and then drastically devalue their currency by leaving the euro. Nothing else will work. Economics 101. Everyone who knows anything knows this.

[Stavroforos]

Is it true that the Troika asked from Greece that Aegean islands having less than 150 people need to be emptied ?

The reason this may have been suggested is because isolated islands with low population are entirely dependent on outside supplies to live. The state provides benefits to shipping companies who ship water, food, etc., to these islands, and naturally it's an expensive prospect for people who contribute little to nothing in return due to the limited sizes of the islands.

[Slaytaninc]

Sounds about right, you can't have a population of 150 people with a first-world standard of living without outside support.

[removeduser_487563287433]

Sounds like crap to me.

[Mythos]

The Greek debt is completely unsustainable. Greece should deny the next installment of 31.5 billion euros. We can't simply dig ourselves into debt, enslave ourselves to the whims of Herr Schäuble while the european taxpayers pump money into a black hole, waiting for the mathematically inevitable Greek bankruptcy. This has to stop. The ECB should either find a way to increase money supply in the Eurozone, an anathema to the inflation-fearing Germans or Greece must return to the drachma, renegotiate its debt and stop paying it back until it has a growth rate. The current course of action has all the disadvantages and no advantages. Greece has had a cumulative negative growth of more than 25% (unprecedented in a state of peace), unemployment is over 25% and there is NO way to get out for the next 3-4 years. The EU and the IMF have been promising positive growth rates for 2012 and we had the biggest negative growth this year, more than 6.5%! What the hell are those ing clowns think they are doing?! The Nazis are getting 15% in the polls because the people are freaking out. Someone, somewhere in Europe must take a decision because otherwise the events are going to take it for them and it is not going to be a good one...

[nemgod]

I just don't see why the EU won't just take the stolen tax money the rich elite have, knowing it was stolen from the tax payers and take that to pay the Greek debt. The stolen money hidden off shore it actually more than the debt itself and having that taken away from the corrupt thieves would not only pay off the debt but could be used to pay for a restructuring. Everyone wins except the thieves.