THE GREAT BIG FAT GREEK THREAD

[Noallegiance]

22 minutes ago, copydude said:

You just don't get it, Errol.

The EMS says that the

IF Greece implements the reforms. 

It is clearly Greece causing the problem. In fact, the lenders are being quite nice. If Greece would put VAT up to 30%, cut all pensions by another 50%, scrap all benefits and close all schools and hospitals until 2075 then they could easily pay it off. 

Good heavens, what ARE they waiting for?

[copydude]

And so, on to Bailout #4

How long has this been going on?

Actually, 7 years to date. The current standoff is about implementing measures now in advance for 2018 - 2020, which weren't in Bailout #3

It all started with holding Greece to ransom in order to bail out French and German banks. It shows the folly of bailing banks. The crisis in Iceland was effectively over in three years. The country has been uprated to A- this year and people are worried about the strength of the Krone.

Iceland’s Long-Term Credit Rating Up

Is the Icelandic Króna too Strong?

Most Christmas Spending in Years

[dryrot]

IMF: ‘Greek debt unsustainable, we will no longer bail them out’

"Dutch Public Broadcaster NOS broke the news today that the board of the International Monetary Fund (IMF) has called Greek public depth “unsustainable“. This would entail that, according to its own rules, the IMF is not able to allocate new financial support to Greece. Without the IMF, the entire 86 billion euro aid package to save Greece is in danger. The NOS further reports that it’s the first time since 2013 the IMF has written a so-called Article 4-report, an in-depth analysis of the situation in Greece. In response, the interest on Greek two-year state obligations has shot up from 12.7 to 15.4%. This is an indication that investors want to get rid of Greek debts. The IMF boardI meanwhile is unsure of how to continue. A majority of the 24 members of the Board thinks Greece cannot be asked to push through even more budget cuts:"

We can only hope the IMF pulls out. They should never have been involved anyway: the Euro nations should sort out Euro problems. 

Edited February 7, 2017 by dryrot

[reddog]

Amazing, nothing is fixed.  Who new?? Lol

 

The thing is we keep thinking a crunch time will come but it never does.  Maybe we will be taken by surprise one day??!!

 

(Goes without saying this is getting very little coverage in the MSM)

Edit: just logged on to the Telegraph and it is front page news!!

Edited February 7, 2017 by reddog
Correction

[Noallegiance]

The BBC were all over this for two weeks straight in 2015.

Absolutely zilch on the website right now.

[copydude]

Quote

Despite citing poverty at 35.7%, unfortunately all of the IMF’s board directors agreed to call “for rebalancing fiscal policy by broadening the personal income tax base and rationalizing pension spending to make room for targeted social assistance to vulnerable groups and lower tax rates.”  Source

 

'Rationalizing' and 'broadening' . . . In other words, more pension cuts and wage cuts through taxation. Yeah, that should kick start the economy.

I think the point is, the IMF has realised it's hopeless. The twin pillars of an IMF program have always been austerity and devaluation. But with the Euro, it's stymied. Greece's currency is absurdly overvalued . . . some say by 30%. Along with all the VAT hikes and airport fee hikes, even the tourist industry is becoming uncompetitive . . . not helped at all by islands full of refugees.

12 hours ago, hotairmail said:

Bailout fatigue, financial crisis fatigue call it what you may, eventually the drowning man relaxes and lets the water run over his face and he gives himself up to his fate.

Well, we've now reached extending without pretending. 

[interestrateripoff]

13 hours ago, hotairmail said:

By the way, the Germans are resisting the attempts by the IMF to provide debt forgiveness to the Greeks and are insisting in the participation of the IMF in the next bailout.

Lagarde is finally resisting the idea of helping, having initially coraled global monies to save French banks effectively....And this was before Trump arrived on the scene. There is no way the IMF could participate in another bailout of a region of the Eurozone when the 80% shareholder of the IMF would be against. Trump is no Obama.

How big is the contagion risk?

[dances with sheeple]

8 minutes ago, interestrateripoff said:

How big is the contagion risk?

With EZ elections coming up, I would say big.

[Gigantic Purple Slug]

13 hours ago, hotairmail said:

By the way, the Germans are resisting the attempts by the IMF to provide debt forgiveness to the Greeks and are insisting in the participation of the IMF in the next bailout.

Lagarde is finally resisting the idea of helping, having initially coraled global monies to save French banks effectively....And this was before Trump arrived on the scene. There is no way the IMF could participate in another bailout of a region of the Eurozone when the 80% shareholder of the IMF would be against. Trump is no Obama.

I haven't quite figured out the politics here.

For example in the IMF the US and EZ hold approximately equal voting rights. My understanding was that on some of the other votes some of the larger poorer members such as Brazil were complaining that this should be an EZ only issue.

I don't understand how the voting works. I think that the current US IMF member is a democrat. So I don't know whether or not he is able to make his own decisions like for example the Fed, or whether he has to take orders from higher up - the President.

It certainly puts the UK in an interesting position, I guess whether it votes with Germany or the US sends a strong political signal. If the US and EZ votes do end up cancelling each other out, then it seems like the fate of the decision will largely be in the hands of China/Japan. It would be interesting to see whether historically any IMF decisions have been carried that didn't have US backing.

https://en.wikipedia.org/wiki/International_Monetary_Fund

 

[copydude]

I think regardless of the split, the IMF cannot lend if the debt is not sustainable. Against the rules. This has always been wobbled before - nonsense growth forecasts, Greece is 'broadly on track' . . . it's sustainable 'if the reforms are adopted' . . . so on. I think it's end of the line here.

However, Germany will not proceed without the IMF and some other countries may not want to fund Greece either  . . .

Quote

 

The director at S&P Dow Jones Indices said if the International Monetary Fund stops giving the southern European country money, taxpayers in other nation states may have to “fill the gap” instead.

The IMF has labelled Greece’s huge debts as unsustainable over the long term and it may not give new loans to Athens. An exit by the organisation could mean that tax payers across Europe end up footing the bill. 

Speaking on Street Signs on CNBC, Mr Edwards warned the situation could affect the outcome of French, Dutch and German elections this year.

 

There could also be Italian Elections in 2017. The legislation to hold early elections has been put in place.

So, yes, all very political.

[copydude]

42 minutes ago, hotairmail said:

http://uk.reuters.com/article/uk-eurozone-greece-bonds-investors-idUKKBN15N0YP

Investors fear 'accident' as Greek debt repayment nears

That's a good, succinct overview of the different positions.

It's quite clear that someone has to lose.

 

[TheCountOfNowhere]

1 hour ago, hotairmail said:

http://uk.reuters.com/article/uk-eurozone-greece-bonds-investors-idUKKBN15N0YP

 

Investors fear 'accident' as Greek debt repayment nears

Did someone tell them they'd not loose...

[rollover]

 

Quote

 

IMF 'ruthless truth tellers' on Greece economy: Lagarde

IMF chief Christine Lagarde defended her organization's pessimistic outlook for the Greek economy, saying Wednesday the fund must be the "ruthless truth teller" even if some do not like the analysis. The International Monetary Fund and Greece are at odds over the outlook for the troubled European nation's economy, a split that likely will continue to hold up further IMF financing. Greece Finance Minister Euclid Tsakalotos said the IMF report on the economy, released Tuesday, "fails to do justice" to his country by underestimating growth and the progress made through years of sacrifice. Yahoo

 

Doing the same thing over and over again, but expecting different results.

[interestrateripoff]

IMF's Lagarde says Greece needs work on economic data reporting

 

WASHINGTON Greece still needs to improve its reporting of economic data but transparency issues are likely not the cause of differing views over Greece's debt sustainability, International Monetary Fund Managing Director Christine Lagarde said on Wednesday.

 

Greece lying over it's economic data shocker...

[interestrateripoff]

Greek central bank disputes IMF's view on bank capital buffer need

 

ATHENS Greece's central bank is disputing the International Monetary Fund's view that the country's banks need a 10 billion-euro capital buffer to cover any further bailout support, saying the IMF does not explain why such support would be needed.

[interestrateripoff]

Investors fear 'accident' as Greek debt repayment nears

 

LONDON Investors in cash-strapped Greece appear to be losing faith in a pledge from European officials five years ago that the country's default would be a one-off.

 

No 5h1t sherlock.

[Errol]

Trump's EU Ambassador Says Greece Likely To "Sever Ties With Germany & Exit The Euro"

http://www.zerohedge.com/news/2017-02-08/trumps-eu-ambassador-says-greece-likely-sever-ties-germany-exit-euro

[Little Frank]

23 hours ago, Gigantic Purple Slug said:

I haven't quite figured out the politics here.

For example in the IMF the US and EZ hold approximately equal voting rights. My understanding was that on some of the other votes some of the larger poorer members such as Brazil were complaining that this should be an EZ only issue.

I don't understand how the voting works. I think that the current US IMF member is a democrat. So I don't know whether or not he is able to make his own decisions like for example the Fed, or whether he has to take orders from higher up - the President.

It certainly puts the UK in an interesting position, I guess whether it votes with Germany or the US sends a strong political signal. If the US and EZ votes do end up cancelling each other out, then it seems like the fate of the decision will largely be in the hands of China/Japan. It would be interesting to see whether historically any IMF decisions have been carried that didn't have US backing.

https://en.wikipedia.org/wiki/International_Monetary_Fund

 

The politics is EU don't want EZ to blow apart & want to protect their own political jobs. Merkel/Schauble/Djisselbloem et al.

Rest of IMF (majority) want debt write-downs.

Nobody cares about Greek (EU) citizens. 

Difference this time is US now don't care much about EU/EZ and actively want a higher Germany currency.

[Gigantic Purple Slug]

1 hour ago, Little Frank said:

The politics is EU don't want EZ to blow apart & want to protect their own political jobs. Merkel/Schauble/Djisselbloem et al.

Rest of IMF (majority) want debt write-downs.

Nobody cares about Greek (EU) citizens. 

Difference this time is US now don't care much about EU/EZ and actively want a higher Germany currency.

I think it is a bit more nuanced than that.

My guess is that the US funds the IMF because it believes that it is in its best interest. If the US acts the same way to the IMF that it is currently acting on other global issues such as trade, the UN, climate change and defence and becomes more isolationist, that is going to leave a power vacuum that needs to be filled. Who is going to step up ?

For me the IMF is a globalist organisation. It serves countries best which need to trade. Japan, Germany, maybe China to a lesser extent. With the Greek bailout I also think it has gone along way away from its previous behaviour, which is intervention based solely on economic consideration, with little consideration for politics (whether you view the economic consideration as right or wrong is another issue). This suits countries like Germany, but its less clear what value countries like the US and Brazil stand to gain from it.

If Trumps policies take hold I think it really is going to lead to a new world order, with the UK being a political football between the EZ and the US. Or maybe it can strike its own niche as the interface.

There used to be a thread on here, called "Protectionism then War". Maybe it should have been retitled "Monetary Intervention, Proctectionism, then War". It feels like we are starting to reach the end point of the Monetary Intervention stage. With Brexit, Trump and other European countries such as France and Holland it seems like we are now electing protectionist governments. War is probably going to follow some time after.

 

 

[onlooker]

27 minutes ago, Gigantic Purple Slug said:

I think it is a bit more nuanced than that.

My guess is that the US funds the IMF because it believes that it is in its best interest. If the US acts the same way to the IMF that it is currently acting on other global issues such as trade, the UN, climate change and defence and becomes more isolationist, that is going to leave a power vacuum that needs to be filled. Who is going to step up ?

For me the IMF is a globalist organisation. It serves countries best which need to trade. Japan, Germany, maybe China to a lesser extent. With the Greek bailout I also think it has gone along way away from its previous behaviour, which is intervention based solely on economic consideration, with little consideration for politics (whether you view the economic consideration as right or wrong is another issue). This suits countries like Germany, but its less clear what value countries like the US and Brazil stand to gain from it.

If Trumps policies take hold I think it really is going to lead to a new world order, with the UK being a political football between the EZ and the US. Or maybe it can strike its own niche as the interface.

There used to be a thread on here, called "Protectionism then War". Maybe it should have been retitled "Monetary Intervention, Proctectionism, then War". It feels like we are starting to reach the end point of the Monetary Intervention stage. With Brexit, Trump and other European countries such as France and Holland it seems like we are now electing protectionist governments. War is probably going to follow some time after.

 

 

I don't think it is more nuanced. The IMF was set up to help mainly poorer countries to reform and improve their economies, when there was really nobody else to turn to. They have one solution i.e. local currency devaluation, reduce bureaucracy, improve tax recovery, liberalise the economy and privatize, in return for low interest loans (not grants!).

In terms of IMF dogma, sorting out Greece is the responsibility of the EU and ECB, but they can't achieve anything permanent while Greece stays within the Euro. The Greeks need a devaluation. The problem could be solved tomorrow if the Germans agreed to an EU debt union, but the German people will never agree, so in my view the EU governments are trying to spread the pain around the whole World via loans from the IMF. But everybody knows these loans will never be repaid, and the biggest IMF funder, the US is now (under Trump) thinking that enough is enough.

[Little Frank]

1 hour ago, Gigantic Purple Slug said:

I think it is a bit more nuanced than that.

My guess is that the US funds the IMF because it believes that it is in its best interest. If the US acts the same way to the IMF that it is currently acting on other global issues such as trade, the UN, climate change and defence and becomes more isolationist, that is going to leave a power vacuum that needs to be filled. Who is going to step up ?

For me the IMF is a globalist organisation. It serves countries best which need to trade. Japan, Germany, maybe China to a lesser extent. With the Greek bailout I also think it has gone along way away from its previous behaviour, which is intervention based solely on economic consideration, with little consideration for politics (whether you view the economic consideration as right or wrong is another issue). This suits countries like Germany, but its less clear what value countries like the US and Brazil stand to gain from it.

If Trumps policies take hold I think it really is going to lead to a new world order, with the UK being a political football between the EZ and the US. Or maybe it can strike its own niche as the interface.

There used to be a thread on here, called "Protectionism then War". Maybe it should have been retitled "Monetary Intervention, Proctectionism, then War". It feels like we are starting to reach the end point of the Monetary Intervention stage. With Brexit, Trump and other European countries such as France and Holland it seems like we are now electing protectionist governments. War is probably going to follow some time after.

 

 

That WAS the nuanced explanation.

[dryrot]

1 hour ago, onlooker said:

I don't think it is more nuanced. The IMF was set up to help mainly poorer countries to reform and improve their economies, when there was really nobody else to turn to. They have one solution i.e. local currency devaluation, reduce bureaucracy, improve tax recovery, liberalise the economy and privatize, in return for low interest loans (not grants!).

In terms of IMF dogma, sorting out Greece is the responsibility of the EU and ECB, but they can't achieve anything permanent while Greece stays within the Euro. The Greeks need a devaluation. The problem could be solved tomorrow if the Germans agreed to an EU debt union, but the German people will never agree, so in my view the EU governments are trying to spread the pain around the whole World via loans from the IMF. But everybody knows these loans will never be repaid, and the biggest IMF funder, the US is now (under Trump) thinking that enough is enough.

+1000. The IMF should never have got involved with baling out a part of one state. It should only intervene when a state screws up (like we did in 70s). Then emergency loans, devaluation and the breakup of corrupt elites and they can start again. But w/o devaluation its pointless, and the responsibility of the other Euro members. I imagine the Asaian IMF members were spitting tacks when Lagarde bailed out Greece.

[copydude]

On 2/9/2017 at 3:01 PM, onlooker said:

I don't think it is more nuanced. The IMF was set up to help mainly poorer countries to reform and improve their economies, when there was really nobody else to turn to. They have one solution i.e. local currency devaluation, reduce bureaucracy, improve tax recovery, liberalise the economy and privatize, in return for low interest loans (not grants!).

The Greeks need a devaluation. 

That really is the nub. It's the essential medicine in the IMF remedy and it doesn't work without it. 

There's an interesting article (in the FT unfortunately) which shows how Greece has underperformed even the world's biggest basket cases post-crisis. Argentina, Brazil, Thailand, so on . . .  and by a sizeable margin. The exchange rate tool also mitigates the effect of austerity on civilians. 

Greece hasn't recovered for 7 years and there is absolutely nothing to say it will. 

 

 

 

 

[Errol]

They are coming for the gold.

 

German Minister Calls For 'Plan B': "Greece Should Pledge Gold, Real Estate For New Loans"

http://www.zerohedge.com/news/2017-02-20/german-minister-calls-plan-b-greece-should-pledge-gold-real-estate-new-loans

[TheCountOfNowhere]

Just now, Errol said:

They are coming for the gold.

 

German Minister Calls For 'Plan B': "Greece Should Pledge Gold, Real Estate For New Loans"

http://www.zerohedge.com/news/2017-02-20/german-minister-calls-plan-b-greece-should-pledge-gold-real-estate-new-loans

Government to mortage citizens assets so Government can get money....Finally, someone has found the perfect solution!!!