Posted on 06/17/2011 8:03:00 PM PDT by Graneros
HOPES OF a “Greek miracle” calmed investor nerves yesterday, and lifted the Irish index in line with its Continental counterparts.
Markets opened down, but they steadied after German chancellor Angela Merkel retreated from demands that bondholders should shoulder a substantial part of the cost of a Greek rescue.
Expectations of a “Greek miracle” grew after the chancellor’s meeting with French president Nicolas Sarkozy, and sparked a rally across European markets, a Dublin broker said.
Dr Merkel confirmed she would work with the ECB to resolve the Mediterranean nation’s sovereign-debt crisis. “We would like to have a participation of private creditors on a voluntary basis,” Dr Merkel told reporters in Berlin yesterday. “This should be worked out jointly with the ECB. There shouldn’t be any dispute with the ECB on this.”
Mr Sarkozy said a “breakthrough” had been made on the Greek debt crisis, following his meeting with Dr Merkel.
Greece’s ASE Index surged 3.8 per cent, the largest gain of 17 western European markets trading yesterday. The Stoxx Europe 600 Index rose 0.2 per cent to 267.17 trimming the gauge’s drop this week to 0.4 per cent. Despite the optimism evident across equity markets yesterday, the euro zone’s finance ministers would have to “clutch victory from the jaws of defeat” when they meet tomorrow and on Monday if a second Greek bailout is to be agreed, the Dublin broker said.
“If they do pull it off, it really will be a miracle, because Greece is in a hell of a lot worse situation than us,” he said.
(Excerpt) Read more at irishtimes.com ...
I’ll bet you the amount of money of the Greek debt that the EU and US are wasting our resources on Greece. :(
Loaning them money that they cannot pay back is just delaying the inevitable.
Ah, the old “It’s different this time”. Greece is a bit like Cousin Eddie in the Vacation movies who has to hit Clark up for a few bucks.
Yes, throw money at the problem but do not address why they got in that position in the first place. We are doing the same.
The Greek miracle will be a Greek mirage. Greece need at least 10 years of real economic growth of 5 to 10% a year.
With all of their socialist institutions, work rules, militant trade unionists, communists etc. they will be luck to get 2%.
The bailout will not be enough. Greece will continue to need money and bailouts as long as the growth in government spending exceeds the growth in revenue.
The Greek miracle will be a Greek mirage. Greece need at least 10 years of real economic growth of 5 to 10% a year.
With all of their socialist institutions, work rules, militant trade unionists, communists etc. they will be luck to get 2%.
The bailout will not be enough. Greece will continue to need money and bailouts as long as the growth in government spending exceeds the growth in revenue.
Germany is the most solvent country in Europe right now, I would not be suprised to see them dominating much of the continent including Greece in pretty short order.
Doesn’t the Good Book say the debtor is the slave of creditor?
I would say that the majority of the bonds are held by banks.
They would be the majority of the reserves which support the banks. Default means banks go under on a massive scale all over Europe then as funds are withdrawn from banks here a chain reaction could set in collapsing our economy (even more than it is).
Review the history of our banking from 1929 to 1934 for a similar situation. We are on the edge of an abyss.
There are certain periods in history when the players seem clueless as to solutions and sleepwalk into horrendous disasters.
The time of the Peloponessian Wars, the late Roman Republic, 1861, 1914, the 30s. Mistake after mistake in every nation.
Al Queda’s attack on 9/11 was an amazing blow struck with almost no material resources. Capitalism was knocked out of its equilibrium and as it fell it grabbed whatever it could to break the fall and only created more dislocations.
As the stock market collapsed and the economy was poised to decline the decision to lower the interest rate to historic lows created the housing boom which in conjunction with the fedgov’s housing policy made a real estate collapse inevitable. That collapse is at the heart of our economic woes.
“Doesn’t the Good Book say the debtor is the slave of creditor?”
In the case of Germany, the creditor is the slave of the debtor. The real reason Germany is bailing out Greece is that German banks were the primary creditors for Greece and a default by Greece would drive the German banking industry into insolvency and further devastate the Euro. Germany is trying to buy time for the German banks to build up capital reserves that will be able to offset an ultimate default by Greece.
Today we pull the table cloth off to reveal...
Voilà , disaster
Not moving in the right direction.
Papandreou fired his Finance Minister this week because the austerity measures were too severe for the parasite publicans. Brought in a “spread the wealth” cuddly hyper socialist.
No discipline, just more burning of borrowed money.
Angela, your Euros are toast.
How does Ireland get in the shape it’s in? Five years ago they are the no 1 or 2 GNP in Europe equal or just behind Germany. They have low taxes, low unemployment. What happened?
Greece, I can understand, they’re socialists. But Ireland, what happened?
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