Greek Pm, Ecb Officials Reject Debt Restructuring

[interestrateripoff]

http://uk.reuters.com/article/2011/05/21/uk-greece-press-measures-idUKTRE74K1LE20110521

Greece must avoid debt restructuring and push on with budget cuts and privatisations to overcome its debt crisis, the country's Prime Minister George Papandreou and senior ECB officials said on Saturday.

Papandreou must present a fiscal plan next week that is credible enough for the European Union and the International Monetary Fund to continue bankrolling his debt-laden country.

But a large majority of Greeks reject more austerity, according to a poll published on Saturday, which also shows the ruling socialists losing their lead versus the conservative opposition for the first time since their 2009 election victory.

"Debt restructuring is not under discussion," Papandreou said in an interview in Sunday newspaper Ethnos.

One year into its EU/IMF 110-billion euro bailout, Greece is struggling with weak revenues and deep recession, fuelling speculation that it will have to restructure its debt to pull itself out of the fiscal mess that triggered a euro zone crisis.

Amazing no one is mentioning that Greece should run a balanced budget.... or even mentioning paying the debt back!

How much longer can they keep dragging this farce on for?

[interestrateripoff]

http://www.zerohedge.com/article/sp-lowers-italy-outlook-negative

First Credit Agricole, now Italy....Maestro: the EUR take down orchestra is reaching the fortissimo cadenza. Next up: the glissando.

Overview

In our view Italy's current growth prospects are weak, and the political commitment for productivity-enhancing reforms appears to be faltering.

Potential political gridlock could contribute to fiscal slippage.

As a result, we believe Italy's prospects for reducing its general government debt have diminished.

We have therefore revised the rating outlook on Italy to negative, implying a one-in-three chance that the ratings could be lowered within the next 24 months.

We have also affirmed the 'A+/A-1+' sovereign credit ratings on Italy.

From zerohedge, and now Italy gets brought into the cross-hairs...

[crash2006]

http://www.zerohedge...utlook-negative

From zerohedge, and now Italy gets brought into the cross-hairs...

PIG JUICES

[billybong]

Soon they'll all be in the supermarkets with their buckets begging for aid for Greece....

[rockhopper]

There is a link to a 7 page pdf in the comments of the zerohedge report (by 'Zero Govt') which is

from armstong economics , and is about the destruction of rome which it attributes

to unfunded public pensions (seems to be mainly military) . It also explains the

'inflation' that affected them and how costly it was to buy the military support .

I found it an interesting read anyway

http://www.martinarmstrong.org/files/What%20Destroyed%20Rome%2005-18-2011.pdf

cheers,

rockhopper

[EvilEdna]

http://www.zerohedge.com/article/sp-lowers-italy-outlook-negative

From zerohedge, and now Italy gets brought into the cross-hairs...

Thanks for posting that, I've been waiting for Italy to get drawn in. How much longer can this go on? The Emporer has no clothes damn it

[Errol]

Clearly the solution is just to lend them vast amounts of money. It's bound to work.

[crash2006]

http://uk.reuters.co...E74K1LE20110521

Amazing no one is mentioning that Greece should run a balanced budget.... or even mentioning paying the debt back!

How much longer can they keep dragging this farce on for?

Greeks should just go bust, they'll keep their national assets without having to sell them to the very people that forced them into this mess. Have they got the guts to say look we arnt going to pay it back.

[MC Fur Q]

Clearly the solution is just to lend them vast amounts of money. It's bound to work.

+1

Worked for the US of A

[interestrateripoff]

Clearly the solution is just to lend them vast amounts of money. It's bound to work.

http://www.zerohedge.com/article/greece-has-less-two-month-cash-left-insolvent-ecb-sees-widening-rift-germany

Today's EUR trading session which begins in about 4 hours, may be rather violent. While on one hand we have bond-negative news out of Spain, the biggest news once again comes out of the Swiss journal NZZ, which citing greek newspaper Kahtimerini, discloses that insolvent Greece has less than two months of cash left, or enough to last it until July 18, unless a new installment in the bailout tranche is approved for the country by the now headless IMF, and the suddenly insolvent ECB. Insolvent, because as Spiegel will report in its headline article tomorrow, and as we have noted many times before, the bank is "suddenly" finding itself lending out money collateralized by now virtually D-rated bonds: something not even Trichet will be able to spin off to the increasingly malevolent media. Per Dow Jones: "Skeleton risks amounting to several hundreds of billions of euros are on the balance sheet of the European Central Bank, magazine Der Spiegel writes in a preview of its edition to be published Monday. Those risks arise because banks, above all from Greece, Ireland, Portugal and Spain, have provided as collateral asset-backed securities that are unfit for central bank loans as their debt rating is low or non-existent, the magazine says." Alas, the European central bank's dirty laundry is being exposed just as a rift between the bank and Germany: its most solvent backer, is starting to develop. Also from Dow Jones: "German Finance Minister Wolfgang Schaeuble cautioned in an interview published Sunday that there shouldn't be a conflict with the European Central Bank over a possible restructuring of Greek debt. "If in the end it should come to an extension of bonds, of course, we need the approval of the IMF and above all of the ECB. Under no circumstances should it come to a conflict with the ECB," Schaeuble told Bild am Sonntag. "I advise all of us to use restraint in public debates about this question." Several ECB officials have rejected a restructuring of Greek debt and have warned of possible catastrophic consequences, while European finance ministers are slowly warming up to the possibility of some kind of restructuring as a last resort." Thus the crunch time for Europe's latest kick the can down the road round, once again centered on a bankrupt Greece, may be coming fast, and this time with a rather furious Germany.

From NZZ:

If experts from the EU, the International Monetary Fund (IMF) and the European Central Bank (ECB) do not give the go ahead for the next installment of the bailout package totaling 12 billion euros by the end of June give, then Greece will become insolvent on July 18, as the conservative Journal "Kathimerini" reported.

In the coming days Athens will fast track an aggressive privatization program. According to media reports, real estate should be taxed higher than before.

Further cuts in wages and pensions in the public sector and pensions are no longer excluded. In addition, state-run enterprises are privatized and will sell real estate, they said. The new savings program should be approved by parliament in early June.

It's clear either they lend Greece vast sums of money or Greece fails. You get the impression a Greek failure will also crash the ECB who've clearly been very very stupid.

[interestrateripoff]

http://www.zerohedge.com/article/here-what-happens-after-greece-defaults

What happens when Greece defaults. Here are a few things:

Every bank in Greece will instantly go insolvent.

The Greek government will nationalise every bank in Greece.

The Greek government will forbid withdrawals from Greek banks.

To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

Greece will redenominate all its debts into “New Drachmas” or whatever it calls the new currency (this is a classic ploy of countries defaulting)

The New Drachma will devalue by some 30-70 per cent (probably around 50 per cent, though perhaps more), effectively defaulting 0n 50 per cent or more of all Greek euro-denominated debts.

The Irish will, within a few days, walk away from the debts of its banking system.

The Portuguese government will wait to see whether there is chaos in Greece before deciding whether to default in turn.

A number of French and German banks will make sufficient losses that they no longer meet regulatory capital adequacy requirements.

The European Central Bank will become insolvent, given its very high exposure to Greek government debt, and to Greek banking sector and Irish banking sector debt.

The French and German governments will meet to decide whether (a) to recapitalise the ECB, or ( to allow the ECB to print money to restore its solvency. (Because the ECB has relatively little foreign currency-denominated exposure, it could in principle print its way out, but this is forbidden by its founding charter. On the other hand, the EU Treaty explicitly, and in terms, forbids the form of bailouts used for Greece, Portugal and Ireland, but a little thing like their being blatantly illegal hasn’t prevented that from happening, so it’s not intrinsically obvious that its being illegal for the ECB to print its way out will prove much of a hurdle.)

They will recapitalise, and recapitalise their own banks, but declare an end to all bailouts.

There will be carnage in the market for Spanish banking sector bonds, as bondholders anticipate imposed debt-equity swaps.

This assumption will prove justified, as the Spaniards choose to over-ride the structure of current bond contracts in the Spanish banking sector, recapitalising a number of banks via debt-equity swaps.

Bondholders will take the Spanish Banking Sector to the European Court of Human Rights (and probably other courts, also), claiming violations of property rights. These cases won’t be heard for years. By the time they are finally heard, no-one will care.

Attention will turn to the British banks. Then we shall see…

It will be interesting to see how many of these events happen in the event of a Greek default.

[The Masked Tulip]

Endgame

What happens when Greece defaults

http://blogs.telegraph.co.uk/finance/andrewlilico/100010332/what-happens-when-greece-defaults/

Eurozone defaults edge closer as US stocks fall for a third week

http://www.arabianmoney.net/gold-silver/2011/05/22/eurozone-defaults-edge-closer-as-us-stocks-fall-for-a-third-week/

['Bart']

Every bank in Greece will instantly go insolvent.

The Greek government will nationalise every bank in Greece.

The Greek government will forbid withdrawals from Greek banks.

To prevent Greek depositors from rioting on the streets, Argentina-2002-style (when the Argentinian president had to flee by helicopter from the roof of the presidential palace to evade a mob of such depositors), the Greek government will declare a curfew, perhaps even general martial law.

But other than that, it's contained.

[mel in w9]

Just out of curiosity, how long can a nation teeter on the brink of default?

I mean I have been reading about the impending default of Greece for months?

What's the hold up?

[interestrateripoff]

http://www.bbc.co.uk/news/business-13476796

Bond markets are pricing in a growing risk of an outright debt default by Greece, with its 10-year cost of borrowing hitting a new high of 16.7%.

I wonder what today's interest rate will be?

[interestrateripoff]

Just out of curiosity, how long can a nation teeter on the brink of default?

I mean I have been reading about the impending default of Greece for months?

What's the hold up?

How long is a piece of string?

It all depends on what finally spooks the herd. Essentially it's like trying to predict an earthquake you know one is due but it's hard to predict when it will happen.

They'll teeter on the brink for as long as support remains, once someone buckles it will be game over, it's clearly a bit more complex now because the ECB is clearly up to it's neck in crap from the PIIGS.

[izzy]

When Greece defaults, the Greek banks are likely to become insolvent. But what about the international banks in Greece, like HSBC. What will happen with Greek customers' deposits held by international banks?

[interestrateripoff]

http://www.bloomberg.com/apps/quote?ticker=GGGB10YR:IND

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