"Con men in the Euro family - will Greece swindle us out of our money?"
Posted on 02/28/2010 6:00:53 AM PST by Loyalist
Sources close to the German finance ministry said Germany’s state-owned KfW bank will buy Greek bonds or provide guarantees to other banks to buy them. France’s state-owned Caisse des Depots will also be involved in the aid package, according to Greek newspaper Ta Nea.
The debt sale under consideration is thought to be between €20bn and €30bn. About half will be sold to France and Germany and half to debt investors.
Greece has to repay €22bn to lenders in the next few months and raise a further €30bn in new borrowings. It fell deeper into recession last month and the government’s borrowings are expected to reach 120pc of the size of the entire annual output of the economy, while the cost of servicing debt is rising. Greek public deficit has hit 12.7pc, four times the European Union limit.
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In return for the support of the Germans and the French, the Greek government has agreed to implement €4bn of new austerity measures to reach its target of cutting the budget deficit by four percentage points this year.
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He (Greek PM George Papandreou) will visit Angela Merkel, the German chancellor, in Berlin on Friday, before jetting to Washington to meet President Barack Obama on March 9.
(Excerpt) Read more at telegraph.co.uk ...
But seriously folks....
Is Obama going to help bail out Greece? Does he understand the political blowback that will come if he sinks one dollar of taxpayer's money into Greece?
Americans are fed up with government bailing out American business. How much more angry will they be with bailing out foreign governments?
I think it is more likely that he will help bail out Greece, but keep it a secret from the American people.
This will be about as successful as the taxpayer bailouts of Fanne Mae and Freddi Mac.
The root cause of the failure is a socialist mindset.
The Fed can buy Greek debt without anyone knowing about it.
I am surprised that neither the Soviets nor the Arabs have purchased Greece yet. Both have the means too do it. Maybe even China could buy Greece and make a Med Sea province out of it.
Rewarding failure never works.....
Germany blinked. I guess the digging up the Nazis worked for the Greeks. What are the chances Greece actually follows through on the austerity program? Of course, the other PIGS are going to line up for their bailouts.
I’m reading the European press (esp. the German press, in German) and I’m rather dubious of this report.
It appears that the source for these projections is a rather low-level MEP of the Free Democrats party of Germany of Greek descent, named Jorgo Chatzimarkakis. How he would know of such high-level issues is completely unclear.
Earlier this week, Chatzimarkakis claimed in a TV interview that German and French private banks would consider buying Greek paper, guaranteed by the German government, and it was immediately denied by German finance ministry officials.
What is more dubious is that Chatzimarkakis’ part, the pro-business “Free Democrats” have, as a party, taken a pretty firm line *against* Germany bailing out Greece.
So I’m completely confused at this point.
What I do know from reading the German press is that the German voters will be pretty pissed off if Germany directly props up Greece with public money. Merkel knows this. Merkel also knows that giving the Greeks any money means that Italy and Spain are right in line with bigger liabilities and problems right after Greece - and Germany’s pockets aren’t deep enough to handle either one of them.
I can’t see Obama or the US Treasury bailing out Greece. There’s no law that would allow for such nonsense. I could see the Fed trying to prop up the Euro with some of their swaps nonsense, since the Fed would see the collapse of the Euro as “destabilizing to the world banking system.” (What intrusion of reality onto the world banking system isn’t destabilizing today? Reality poking into pink fluffy clouds has a habit of being destabilizing....) The problem again is that once anyone wades in on the Greek issue, there’s the Italian and Spanish issues just waiting for a bailout of much larger size. How do you prop up Greece and then tell two much larger problems “No, sorry, we won’t do anything...”
The Germans are going to buy Greek debt, or worse, guarantee the bonds for other banks that buy Greek debt?
How could this possibly end badly?
Postponing the inevitable....
Here’s an article which makes me really doubt that the Germans are all that eager to prop up Greece:
The title is “Greece-crisis could be a case for the IMF.”
You can shove it through Google translation and get a feel for what it says - Google’s translations are never quite idiomatic, but you’ll get something that gives you the overall flavor. And the overall flavor is that the highest levels of the German government are not talking of a bailout for Greece. There’s only the one aforementioned junior MEP talking out of his hat.
More relevant, IMO, are the three comments at the bottom - which give you a small sampling of German public opinion. These opinions are why Merkel won’t leap to Greece’s aid. The Germans responding to the German-language press articles about the Greek situation sound very, very much like members of the US Tea Party.
And as a student of German history, I’m here to tell you that is *very* unusual.
On the other hand, will the EU be willing to let them collapse? Unless they cut Greece loose from the Euro it will dramatically affect all of them.
Someone has to blink.
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