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Europe Braced For Fresh Plea From Greece Amid Pressure To Stabilise Euro

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http://www.guardian.co.uk/business/2011/may/16/imf-bailout-greece-eurozone-portugal

European governments are wrestling with the prospect of a fresh bailout for Greece a year after they committed €110bn (£125bn) to Athens, under pressure from Washington and Beijing to calm the markets and stabilise the euro.

The meeting of the 17 finance ministers of the eurozone was overshadowed by the absence of Dominique Strauss-Kahn, head of the International Monetary Fund and French presidential hopeful, who is facing sexual assault charges in New York. Strauss-Kahn has been a key player in the Greek drama and had been due to attend the first-night dinner in Brussels.

The ministers – along with the 10 EU finance ministers from outside the single currency, including chancellor George Osborne – agreed on a €78bn bailout for Portugal, the third rescue of a eurozone country in a year. They also signed off on the permanent eurozone bailout fund, the European stability mechanism, which is to shore up the currency from 2013. They were expected to agree that Mario Draghi of Italy be appointed the next head of the European Central Bank in Frankfurt.

.........

The German chancellor, Angela Merkel, was the first to say that Europe should retain its prerogative over the post, amid calls that it was time the IMF job went to someone from the emerging economies. "We know that in the mid-term, developing countries have a right to the post of IMF chief and the post of World Bank chief," she said. "I think that in the current situation, when we have a lot of discussions about the euro, that Europe has good candidates to offer."

During the past year, Strauss-Kahn has been a decisive advocate of the bailouts, influential in the Greek emergency through his close relationship with socialist prime minister George Papandreou. Merkel surprised the rest of Europe last year by insisting the IMF play a central role in the bailouts, with the fund putting up a third of the €750bn rescue pot.

Still if at first you don't succeed, you just have to keep bailing out. Eventually we'll get the results that we all want prosperity for all.

Printing money has never failed in the past, as the French and the Germans.

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Yep, and even before they move on to Greece, they just granted Portugal a Euro 87bn bailout package.

Meanwhile, officials finally admit they are discussing a Greek debt restructuring.

EU officials have so far vehemently denied that a restructuring of Greece's debt was on the table, but on Monday a European finance minister conceded for the first time that such a move was being discussed.

"Of course we discuss all kinds of topics, including restructuring," Dutch Finance Minister Jan Kees de Jager said as he arrived at the meeting. "But in public, we are very reluctant about discussing and debating restructuring."

De Jager did not say whether his country favored a restructuring, but he expressed his frustration with Greece's dire situation.

But it doesn't matter. As Merkel keeps saying, Germany the Eurozone is a tower of strength, what could possibly go wrong? :rolleyes:

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Why would there be pressure to stabilise the euro? Looking at exchange rates over the past year, the dollar would appear to be more in need of stabilisation, given both its variability and loss in value against the other major currencies over this period. :huh:

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They haven't had any bailout, only more loans which puts them deeper into debt. When you bailout a boat you remove water from inside the hull not add more to it.

For the euro to survive, it needs large fiscal transfers from the richer regions to the poorer regions similar to what happens within the UK and US. That's not going to happen, so it's inevitable that the euro will breakup.

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Still if at first you don't succeed, you just have to keep bailing out. Eventually we'll get the results that we all want prosperity for all.

Printing money has never failed in the past, as the French and the Germans.

Bailouts for all... The final revaluation of money isn't going to be fun...

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Germany has no choice but to write Greece the next cheque for 80 billion Euros. Otherwise Greece can simply leave the Euro, default on 100% of the Euro debts it has both public and private.. and create a panic amongst investors in all the other Euro bonds.

What the Germans can do is play a game of brinkmanship to try and get as many concessions out of the Greeks before they give them the money. But because Greece seems completely willing to leave, Germany basically has to cave in to all their demands.

Ireland on the other hand desperately wants to stay in the Euro and not default on private debts, so it has to take a much worse terms.

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I would be interested to hear the debate in Germany on this. More bailouts without trying to solve the real issues makes no sense. Greece is going to have to generate tax revenue and jobs to pay back its debt and the current plan clearly prevents that from happening. There is a year of evidence, Greek unemployment has doubled and tax receipts are lower than in 2010. More austerity will just push them further underwater and make the amount finally repaid lower.

Gutless politics decisions like this will likely lead to the EZ to a massive financial catastrophe sometime 2012-14. When it becomes clear the bailed out countries are not generating enough tax revenue to make the plans work. The real situation in Spain will likely become known at some point in the next 2-3 years as well.

A real solution would have to involve dealing with the Banks holding, Greek, Portuguese, Irish and Spanish debt and ensuring these countries are able to generate enough tax / create jobs and revenue to service their debt over the long term and pay some of it back. This will almost certainly involve restructuring these countries debts, banks, financial reporting and also the EZ itself. The EZ simply does not work for some countries and continuing to ignore the real problems will store up big trouble down the road.

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I would be interested to hear the debate in Germany on this. More bailouts without trying to solve the real issues makes no sense. Greece is going to have to generate tax revenue and jobs to pay back its debt and the current plan clearly prevents that from happening. There is a year of evidence, Greek unemployment has doubled and tax receipts are lower than in 2010. More austerity will just push them further underwater and make the amount finally repaid lower.

Gutless politics decisions like this will likely lead to the EZ to a massive financial catastrophe sometime 2012-14. When it becomes clear the bailed out countries are not generating enough tax revenue to make the plans work. The real situation in Spain will likely become known at some point in the next 2-3 years as well.

A real solution would have to involve dealing with the Banks holding, Greek, Portuguese, Irish and Spanish debt and ensuring these countries are able to generate enough tax / create jobs and revenue to service their debt over the long term and pay some of it back. This will almost certainly involve restructuring these countries debts, banks, financial reporting and also the EZ itself. The EZ simply does not work for some countries and continuing to ignore the real problems will store up big trouble down the road.

+1

Although it could happen sooner rather than later. The Greeks are the most likely to default IMO because, as you say, we have a year of evidence, so do the Greek people and they are not clearly not happy.

The question is can the government survive? I have checked up and it seems that there is no need for an election for a few years yet, so until the Greeks take to the streets in such numbers as to make the country ungovernable or there are sufficient by-elections to topple the government, then Greece will drift deeper and deeper into the mire.

The evidence suggests that the best way forward for Greece is default, it worked for Iceland apparently. There is an awful lot of nepotism in Greek politics apparently so the Greek people may feel that enough is enough on more than one level. Arab Spring spreads to southern Europe anyone?

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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