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European Central Bank Threatens To Pull The Plug On Greek Lending

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http://www.telegraph.co.uk/finance/economics/gilts/8524454/European-Central-Bank-threatens-to-pull-the-plug-on-Greek-lending.html

The eurozone's central bank has played its "last card" in an attempt to prevent the debt restructuring it fears, said analysts. The cost of insuring Greek sovereign debt rose to more than €1.33m to protect every €10m of bonds as the threat laid bare the divisions in Europe over how to resolve the crisis.

The Mediterranean nation is struggling to carry out the reforms agreed under its €110bn EU/IMF bail-out, prompting fears Athens will not be able to repay its debts, currently totalling about €340bn.

EU officials have been floating the idea of a "soft" restructuring of the debt, whereby the holders of the bonds see the terms extended.

However, Juergen Stark, ECB chief economist, said that if the country altered its repayment terms, the eurozone's central bank would not be able to lend to Greek banks putting up government bonds as collateral.

"A sovereign debt restructuring would undermine the eligibility of Greek government bonds," he said. "A continuation of liquidity provisions would be impossible."

Hasn't the ECB already bent the rules to keep accepting Greek bonds? Perhaps they should have stopped accepting junk a while back.

I problem is this is an empty threat, stop accepting the bonds and the ECB triggers a European wide financial collapse.

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Great game of chicken as we've been talking about. I still think the ECB will veer ito the ditch at the last second, because Greece seems willing and happy to leave the Euro if needs be.. and accept everything good and bad that that entails. Probably the ECB will look for a face saving way to give Greece the next 80 billion Euros they want.

Whereas Ireland insta caved into the demands and the Germans dominated them.. because on a fundamental level the Irish are not willing to leave the Euro and not willing to see the Euro savings they have wiped out.

Personally I think the Euro authorities should grow some balls and play hardball with Greece and force Greece out to set an example. In the short run it would be extreme pain as bondholders sold from all the countries wih the slightest chance of default, which would have cascade effects. But in the long run the credibility of the EU would be enforced.

There is other factors though, like I am sure the Germans want to keep political control over Greece that they have.

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Everybody knew the outcome before the game ever started. Greece will promise whatever you whatever you want and deliver you nothing. They have done this many times before. Words are cheap and lying is considered part of the game rather than dishonourable. I am sure we have all met people with the same attitude. They will borrow money from you with no intent of ever paying it back and cannot see why this is a wrongful action.

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Everybody knew the outcome before the game ever started. Greece will promise whatever you whatever you want and deliver you nothing. They have done this many times before. Words are cheap and lying is considered part of the game rather than dishonourable. I am sure we have all met people with the same attitude. They will borrow money from you with no intent of ever paying it back and cannot see why this is a wrongful action.

Their only defence being that the banksters didn't have any money until they went into debt to start with.

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Words are cheap and lying is considered part of the game rather than dishonourable.

Exactly like almost every politician in every country (yes including the good old Uk).

Also the previous conservative Greek government that accumulated the high deficit and covered it up, had Goldman Sachs consultants advising them on how to best do it.

I am sure we have all met people with the same attitude. They will borrow money from you with no intent of ever paying it back and cannot see why this is a wrongful action.

Actually no government has any intention of every paying back the national debt (they just keep rolling it over and increasing it) since in a debt based monetary system, the national debt is a large part of the monetary base.

The main problem Greece has is that banksters have stopped buying the new debt issued to cover the old debt (the rolling over process), while at the same time demanding ridiculous amounts of interest.

It's the banksters that have forced Greece into a corner, in order to rape the population of things of real value in exchange for the IOUs.

Edited by wise_eagle

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  • 284 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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