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Showing posts with label Greece. Show all posts
Showing posts with label Greece. Show all posts
And the Greek election accomplished what exactly?: Pro-bailout parties want to delay deficit reductions for two years

And the Greek election accomplished what exactly?: Pro-bailout parties want to delay deficit reductions for two years

Remember all the fears about what would happen if the radical left anti-bailout Syriza party won the election?  That they would insist on the bailout being renegotiated.  Well, the pro-bailout parties also said that they wanted more favorable terms and it is finally clear what they want.  From the BBC:

Greece's new coalition government has proposed an extension to the deadline for it to reduce its budget deficit by at least two years, to 2016.
In a policy document, the government said its aim was for the fiscal target envisaged by the bailout deal to be met without further cuts to salaries and pensions. . . .
Nor does the future for this coalition sound extremely promising.

All three parties have signed a agreement to fully support the coalition, giving it a majority of 29 in parliament.  However, the cabinet is dominated by the conservative New Democracy party, after its left-wing partners Pasok and Democratic Left barred their MPs from joining.  They are represented by two party officials each. It is believed that they may not want to be associated with austerity measures. . . .
Greeks want to buy guns for self protection as country deteriorates

Greeks want to buy guns for self protection as country deteriorates

People are talking about buying hunting rifles, not able to buy pistols.  This is from The Australian newspaper:

MILOS, a gentle-natured civil servant in a Greek government agency, made a startling confession over a beer in an outdoor cafe in central Athens yesterday."I'm thinking of buying a gun to protect my family," he said in a late-night discussion about the tense lead-up to Sunday's national election. "I have never even considered owning a gun before, but I am seriously worried about what might happen after the election."
Gun-shop owners in Athens say the 37-year-old father of one is not alone, reporting rising interest in purchases for personal safety. . . .
Street violence and petty crime have risen during a savage slump that has cut average incomes by 20 per cent, and the leftist radicals who like to hijack peaceful protests over the economy are now being overshadowed by neo-Nazi thugs who have carried out at least one attack a day on immigrants and political opponents in the past week.
With fears Sunday's election could plunge the nation deeper into economic distress, there are widespread concerns the nation is about to see new levels of street crime and political violence.
Criminologist Vassilis Karydis, an academic at the University of Peloponnese, said there had been a rise in "attacks on people in the street to steal things like wallets, mobile phones and jewellery".
"There has certainly been a rise in robberies in the home, which is partly a rational response by criminals to the fact that many people, especially the elderly, have lost faith in banks and are keeping large amounts of money in their homes," he said. "Many (of the culprits) are jobless immigrants and some are drug addicts." . . .

Even the Pension fund for the Greek Military isn't going for agreement for bondholders

Even the Pension fund for the Greek Military isn't going for agreement for bondholders

You have to believe that the Greek government can put sufficient pressure on the Greek military pension fund to get them to agree. Can the government get 2/3rds of the remaining bondholders to fold? You would think that Greece would go into default. From the UK Telegraph:

Athens officials last night estimated more than 85pc of private creditors had accepted the €206bn (£173bn) bond swap shortly after a deadline expired yesterday evening. That is enough for the deal to go through, but leaves the possibility the government might have to use its controversial Collective Action Clauses (CACs).
Ratings agencies have warned they will declare a default if Greece activates the CACs, which allow the government to impose the deal on the remaining bondholders. The CACs will be used if the take-up falls below the desired 95pc but above the required 66pc.
The International Swaps and Derivatives Association (ISDA) is poised to convene again to decide if the deal amounts to a “credit event” that would trigger billions of euros of insurance.
Athens said the figures would be revealed at 6am GMT today. The 17 eurozone finance ministers have scheduled a conference call at lunchtime today to review the deal. They will meet on Monday to decide if Greece’s €130bn bail-out funds can now be released.
With the bondholder acceptance level too close to call yesterday, Evangelos Venizelos led the charge against a group of rebel Greek investors. The Greek finance minister said it was an embarrassment that six out of 15 state-controlled pension schemes – including one that serviced his own ministry – were withholding their support hours before the deadline. “When pension funds in other countries that invested in Greek bonds are taking a haircut, how can our own funds refuse to join in?” he said. . . .


UPDATE: AFP:

Moody's declared Greece in default on its debt Friday after Athens carved out a deal with private creditors for a bond exchange that will write off 107 billion euros ($140 billion) of its debt.
Moody's pointed out that even as 85.8 percent of the holders of Greek-law bonds had signed onto the deal, the exercise of collective action clauses that Athens is applying to its bonds will force the remaining bondholders to participate.
Overall the cost to bondholders, based on the net present value of the debt, will be at least 70 percent of the investment, Moody's said.
"According to Moody's definitions, this exchange represents a 'distressed exchange,' and therefore a debt default," the US-based rating firm said.
For one, "The exchange amounts to a diminished financial obligation relative to the original obligation."
Secondly, it "has the effect of allowing Greece to avoid payment default in the future." . . .
Europe giving up on Greece keeping its promises

Europe giving up on Greece keeping its promises

From the Financial Times:

Olli Rehn, the European Commission’s top economics official, warned there would be “devastating consequences” if Greece defaulted, and pleaded for eurozone governments to approve the bail-out quickly. Officials said Mr Rehn has support from the European Central Bank and the French government.
But a group of eurozone governments, particularly those that retain triple-A credit ratings, has lost faith Greece will ever deliver its end of the bargain. Hardline officials in Germany, the Netherlands and Finland are increasingly urging a Greek default.
“We are getting closer to default,” said a senior eurozone official. “Germany, Finland and the Netherlands are losing patience.”
Finance ministers will hold a conference call on Wednesday and reconvene at a scheduled meeting on Monday.
One key reason for the increasing boldness in northern Europe is a growing belief the EU can contain the blowback from a disorderly default, having built up the eurozone’s financial “firewalls” against contagion. Some officials also believe financial markets have priced in a default, meaning any adverse reaction will be limited. . . .
Stock prices falling in EU despite (or because of) Greek Debt deal?

Stock prices falling in EU despite (or because of) Greek Debt deal?

Why does the EU and the US government think that their money will be spent any better this time? Last time the Greeks got a bailout they just kept spending as they had previously. From Market Watch:

“They don’t trust Greece. Agreeing is one thing, but implementing is another and they want assurance that Greece will live up to the agreement,” said Lenhoff. “If the parliament refuses to approve the measures, Greece will have to leave the euro zone, because they’ll default.”
Greece races clock to avoid default

Greece races clock to avoid default

The Financial Times has this discussion:

. . . a race against time to secure a second financing package from the country’s international creditors if Greece is to avoid a disorderly default in March.
The country must redeem a €14.4bn bond on March 20. Almost all analysts agree it will be unable to do so unless its official creditors approve a second €130bn bail-out package and unless a deal is agreed to cut the country’s debt by imposing a 50 per cent haircut on €206bn of privately held bonds.
Greece has already received about €73bn from the first bail-out package of €110bn, financed by the European Union and the International Monetary Fund. That package was approved in May 2010 to help the country stave off default.
Government officials hope the terms of the bond exchange, known as private sector involvement, or PSI, will be finalised well in advance of the EU summit on January 30. By the same deadline, the government hopes to have reached an agreement on “conditionality” – the set of economic policies and structural reforms required by the EU, IMF and European Central Bank.
Only when these requirements have been met will the so-called troika of lenders agree to disburse a large amount of funds, estimated at €89bn, in the first quarter of this year. That will include money towards implementing PSI, since private creditors will most likely receive €30bn in cash or equivalent upfront, while Greek banks will also be recapitalised by some €30bn. . . .
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