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Greece's Budget Deficit Worsens

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http://www.bbc.co.uk/news/business-11755320

Greece's 2009 budget deficit was worse than previously calculated, making it the largest in the eurozone, new figures have shown.

The country's deficit last year stood at 15.4% of its annual economic output, said Eurostat, the European Union's statistics office.

This is higher than the 13.6% figure reported in April.

Due to the revision, Greece said its 2010 deficit would only be cut to 9.4%, not its earlier target of 7.8%.

It comes as Athens is continuing efforts to reduce the deficit through austerity measures that have sparked protests from workers.

The Greek government is also being visited by EU and International Monetary Fund officials on Monday, who will decide whether to release more funds.

Greece is seeking the third part of its 110bn-euros ($150bn; £93bn) rescue deal, which was arranged in May.

Prime Minister George Papandreou said over the weekend that Greece might be forced to ask for an extension to the time before it has to start repaying aid money.

The Greek government said Eurostat had revised up the 2009 deficit figure for three main reasons; a downward revision of the country's economic growth rate that year, an adjustment of social security funds, and by adding data from certain public sector bodies into the general government figures.

As a result, its 2009 deficit of 15.4% overtook the Republic of Ireland's 14.4% figure, which was previously calculated as the worst.

Are the Irish the distraction for the mess in Greece? Get everyone focussed on the Irish debt problem whilst the Greek one just keeps getting worse?

Still at least we have a Royal wedding to all look forward to. I hope we are all going to get the day off work.

See it's easy to forget about money worries we just need a good news story.

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http://market-ticker.org/akcs-www?post=172398

Austria is now reported to have said "NUTS" to Greece.

Finance Minister Josef Proell says that the December tranche of Austria's contribution -- 190 million euros ($258 million)-- will only be paid out if Greece can show that it has raised the amount of money it pledged to take in through taxes.

And that, my friends, is that.

Greece isn't going to raise taxes further, and it hasn't met its commitments. In fact, it has now been shown that Greece was lying even more severely than previously believed.

This entire EU "rescue fund" is about to come apart.

I hope you're appropriately protected - my prediction that the next leg of this mess was going to initiate in Europe appears to coming to fruition.

Oh, and Ireland isn't assured to "go smoothly" either.

From Denniger.

O dear if taxes are down because the growth wasn't there, this is going to get interesting very quickly.

Remember keep your eyes on the distractions....

Edited by interestrateripoff

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http://www.telegraph.co.uk/finance/economics/8138739/Greek-rescue-frays-as-Irish-crisis-drags-on.html

The clash caught markets off-guard and heightened fears that Europe's debt crisis may be escalating, with deep confusion over the Irish crisis as Dublin continues to resist EU pressure to request its own rescue.

Olli Rehn, the EU economics commissioner, said escalating rhetoric in Europe was turning dangerous. "I want to call on every responsible European to resist the centrifugal tendencies and existential alarmism."

Swirling rumours hit eurozone bond markets, while bourses tumbled across the world. The FTSE 100 fell 2.4pc to 5681.9, and the Dow dropped over 200 points in early trading. The euro slid two cents to $1.3460 against the dollar as the US currency regained its safe-haven status.

Austria's finance minister Josef Proll said he was "very critical" of Greece's performance, saying Athens had failed to meet the tax revenue targets agreed under the EU Memorandum.

Credit default swaps on Greek debt rocketed 97 basis points to 950 as investors woke up to the awful possibility that the EU could turn its back on Athens, which will run out of money by mid-January without loans. A Greek default would trigger $300bn (£188bn) worth of CDS contracts.

A 'Troika' of EU-IMF inspectors is currently in Greece but has not indicated whether the next €6.5bn (£5.5bn) tranche will be approved. German influence is crucial, yet Greek premier George Papandreou courted fate on Monday when he accused Chancellor Angela Merkel of driving the weaker EMU states into bankruptcy by scaring investors with talk of "haircuts".

Quick talk about the Irish, talk about the Portuguese debt crisis. Just don't talk about the Greeks.

Did I mention the Royal wedding?

So if the Greeks run out of money by Jan no wonder the Irish can play chicken as they've got enough money to last until June/July 2011. The Irish are gambling that Greece will implode before them.

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I think Greece holds the upper hand. If other nations in the Euro refuse to give them money, the Greeks just have to start 'thinking' about defaulting. And those nations will run with buckets full of money. Afterall in a default their banks would lose hundred of billions of Euros. And the destabilization, perhaps collapse of bond markets in many European nations.

Now it looks like Ireland and Portugal are going to get in on the action too.

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Investors? woke up?

I think they mean:

Speculators...Caughtout and wanting a bailout.

let them eat vaccuum.

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So if the Greeks run out of money by Jan no wonder the Irish can play chicken as they've got enough money to last until June/July 2011. The Irish are gambling that Greece will implode before them.

It's a poker game involving IOU chips and bluff. None of these tinpot nations have any real money and no real growth prospects to get any either. All they can do is sit around the poker table and bluff their way through the game hoping someone else goes 'all in' before they have to.

Don't forget the Royal Wedding though people, that will soothe away all out worries...

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Investors? woke up?

I think they mean:

Speculators...Caughtout and wanting a bailout.

let them eat vaccuum.

Would have been interesting if the EU had just allowed a default. Greek would make the payments it wanted, creditos could try to re-negotiate a deal. And Greece would be locked out of future debt markets until a deal was made. Say 60% of the debt was wiped away in a settlement, Greece would once again gain access to the credit markets as now they would have a light burden.

Honestly as a sovereign Greece could simply say it wasn't going to pay those past debts.

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Would have been interesting if the EU had just allowed a default. Greek would make the payments it wanted, creditos could try to re-negotiate a deal. And Greece would be locked out of future debt markets until a deal was made. Say 60% of the debt was wiped away in a settlement, Greece would once again gain access to the credit markets as now they would have a light burden.

Honestly as a sovereign Greece could simply say it wasn't going to pay those past debts.

well, there you have.

the old saying is..You cant get blood out of a stone.

while there is even a chance of a Bailout, creditors have the upper hand...once the door is slammed shut, the power is with the debtor.

Its so obvious, but clearly, there is another agenda at work here.

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http://www.bbc.co.uk...siness-11755320

Are the Irish the distraction for the mess in Greece? Get everyone focussed on the Irish debt problem whilst the Greek one just keeps getting worse?

Still at least we have a Royal wedding to all look forward to. I hope we are all going to get the day off work.

See it's easy to forget about money worries we just need a good news story.

Wedding? What wedding? Shiite - am I missing something important here? :o

As for the Greek debt.........

'Nothing to worry about',Captain, 'It's just a little leak into the engine room'.

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well, there you have.

the old saying is..You cant get blood out of a stone.

while there is even a chance of a Bailout, creditors have the upper hand...once the door is slammed shut, the power is with the debtor.

Its so obvious, but clearly, there is another agenda at work here.

Imo the other agenda is the super rich who would lose very large amounts of money in the event of each sovereign default.

Most citizens in the nations have no savings, no stocks, so bailouts of wealthy investors don't help them.

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Imo the other agenda is the super rich who would lose very large amounts of money in the event of each sovereign default.

Most citizens in the nations have no savings, no stocks, so bailouts of wealthy investors don't help them.

The super rich can afford to lose some.

Sadly, Politicians suck the ***** of the Super Rich, like they were God.

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Where did the money go? Here's a start.

http://www.savarian.com/2010/04/greek-public-sector-salaries.html

Tuesday, 27 April 2010

Greek Public Sector Salaries

Here are just a few facts and approximate figures I picked up from one of my students today. The public sector wage bill in Greece is 30 billion euros a year. There are over 1 million public workers, who thus form about a quarter of the workforce. Their numbers have risen from levels of around 700,000 in 1981 and perhaps half that level during the Junta. The basic salary is quite low at about 700 euros a month, but this is augmented by a battery of supplements which take most people over the 1000 mark and leave many with several thousand. There are some quite shocking anomalies in the system. An example being that working at the Finance Ministry attracts particularly high supplements which are taken directly from tax income rather than the central budget. This means cleaners working there earn about 2500, in contrast to teachers who earn generally earn at least a thousand less.

A headteacher burdened with huge pedagogical and administrative responsibilities recently appeared on TV, saying that he was prepared to take a cut in his 1800 euro salary to help get Greece out of trouble, but that he would like to invite a Treasury cleaning lady to swap posts with him for a while.

A riot policeman who was hospitalised with an arm injury in one month found his salary reduced by 150 euros to 800 in the next.

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Honestly as a sovereign Greece could simply say it wasn't going to pay those past debts.

You really don't understand economic do you.

If they refuse to pay the debt doesn't "go away". It will just sit there building up interest.

If the government looks like it will default it will suddenly find it has to pay cash up front for everything.

Default means no more loans, no more trade. You're on you own. For at least a decade.

And all that is ignoring the important point... those debts aren't owed to "wealthy bankers" they are owed to the banks depositors and pension fund members.

If the PIIGS all defaulted they would wipe out all the european pension funds.

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You really don't understand economic do you.

If they refuse to pay the debt doesn't "go away". It will just sit there building up interest.

If the government looks like it will default it will suddenly find it has to pay cash up front for everything.

Default means no more loans, no more trade. You're on you own. For at least a decade.

And all that is ignoring the important point... those debts aren't owed to "wealthy bankers" they are owed to the banks depositors and pension fund members.

If the PIIGS all defaulted they would wipe out all the european pension funds.

Blimey - I didn't realise that. :blink:

We're all up shiite creek without a paddle then?

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You really don't understand economic do you.

If they refuse to pay the debt doesn't "go away". It will just sit there building up interest.

If the government looks like it will default it will suddenly find it has to pay cash up front for everything.

Default means no more loans, no more trade. You're on you own. For at least a decade.

And all that is ignoring the important point... those debts aren't owed to "wealthy bankers" they are owed to the banks depositors and pension fund members.

If the PIIGS all defaulted they would wipe out all the european pension funds.

It didn't take too long for Argentina to get back on it's feet again and then off them again.

The same with Russia.

People will still want to trade with you, it's all about whether you want to take the risk.

Although it would appear there is good news for those who love TV:

Producers of television channels were forced to produce more reality shows than any other type of shows, because these were generally cheap to produce as compared to other programmes. Virtually all education-related TV programmes were canceled.

http://en.wikipedia.org/wiki/Argentine_economic_crisis_%281999%E2%80%932002%29

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Blimey - I didn't realise that. :blink:

We're all up shiite creek without a paddle then?

I'm hoping that having their pensions wiped out, might help to concentrate some people's minds on the problem a bit, rather than casting about for scapegoats

It's only a faint hope

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There are some quite shocking anomalies in the system. An example being that working at the Finance Ministry attracts particularly high supplements which are taken directly from tax income rather than the central budget.

Well, if you're given the keys to the zaxaroplasteio, it would be rude not to.

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Blimey - I didn't realise that. :blink:

We're all up shiite creek without a paddle then?

Where did everyone think all the money was coming from?

It didn't take too long for Argentina to get back on it's feet again and then off them again.

The same with Russia.

People will still want to trade with you, it's all about whether you want to take the risk.

They had their own currencies.
Huh? No they can just restructure (in fact I would be willing to bet this is what will happen eventually). There's a long history of sovereign defaults. It will happen eventually.
They can only restructure if the creditors choose to. As they are a COUNTRY and can't "not pay" the creditors don't have much incentive to restructure. Creditors restructure for 2 reasons: private companies can go bust, some money is better than no money, and restructuring onto more profitable terms... spreading repayment over a longer period etc
I'm hoping that having their pensions wiped out, might help to concentrate some people's minds on the problem a bit, rather than casting about for scapegoats
More likely they will end up with a government bailout.

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They had their own currencies.

Whole new ball game now.

Ireland defaults and gets kicked out of the Euro and gets it currency back.

Ireland defaults and stays in the Euro - how that ends is anyone's guess.

Ireland defaults and brings down the Euro it gets it's currency back.

I'm sure there are other options to the outcome.

Place your bet.

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I heard an "expert" on the radio (sorry no memory of who) suggest that the EU would have to kick somebody out in order to make the other PIIGS responsible. Right now they all think they can get away with robbery but if one of them was made an example of, the others would get into line.

Anybody think this is a reasonable expectation? Pick one.

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I heard an "expert" on the radio (sorry no memory of who) suggest that the EU would have to kick somebody out in order to make the other PIIGS responsible. Right now they all think they can get away with robbery but if one of them was made an example of, the others would get into line.

Anybody think this is a reasonable expectation? Pick one.

All the PIIGS need kicking out, the entry criteria should never had been fudged.

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All the PIIGS need kicking out, the entry criteria should never had been fudged.

True enough but that was then and now is now. We have to play with the cards we have, not the cards we should have had.

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You really don't understand economic do you.

If they refuse to pay the debt doesn't "go away". It will just sit there building up interest.

If the government looks like it will default it will suddenly find it has to pay cash up front for everything.

Default means no more loans, no more trade. You're on you own. For at least a decade.

And all that is ignoring the important point... those debts aren't owed to "wealthy bankers" they are owed to the banks depositors and pension fund members.

If the PIIGS all defaulted they would wipe out all the european pension funds.

Yes Greece would have to pay cash for things for awhile if it defaulted on past debts. But then again think of Argentina, after it defaulted, the bankers were back again lending huge amounts within a few years.

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  • 145 Brexit, House prices and Summer 2020

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      • down 5% +
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      • up 5%



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