Monday, May 09, 2011

Greek creditors are back at the EU welfare office

Greece has conceded it may need more help beyond last year's €110bn (£95bn) bailout on fears that the country will be unable to return to the markets to refinance its debts in 2012.

European leaders are preparing to let Greece use Brussels' emergency funding mechanism, the European Financial Stability Facility (EFSF), to roll over its maturing debts. The embattled Mediterranean nation needs to raise an estimated €22bn next year to meet repayments that are not covered by the current rescue package.

The alternative would be a "soft" restructuring that would see the terms of the investors' loans lengthened and the interest rate reduced, but Brussels is keen to avoid that.

Greece's options were debated at a summit in Luxembourg with leading European nations over the weekend. As well as access to the EFSF, Brussels and the International Monetary Fund are believed to be considering easing the terms of the original bail–out for a second time, by extending the three–year package for longer.
Read the rest here.

I have said this many times. Greece was broke yesterday. It is broke today. And it will be broke tomorrow. They simply owe too much money. There is a limit to how much austerity one can impose. Greece is already in the middle of a brutal depression. There is no way they can pay this off.

But let's be honest here.  This really is not about Greece at all. It is about the banks. There are a lot of banks in Europe that lent money to Greece and should not have. They made bad business decisions.  Some of them will likely fail if (really "when") Greece defaults.  This is not a "Greek" bailout.  I would be stunned if a single Greek even got to feel the money as it made its way to the vaults of Zurich.  This is just another bank bailout.

Understand this.  It is and has always been about the banks.  The EU would rather that an entire nation be reduced to beggary than suffer the failure of a single major bank.  Banks are the enemy.  They are evil.

1 comment:

  1. I'm amused by the old-country blowhards who talk trash about Americans, but assert their divine right to screw over whomever they wish.

    I'm optimistic. When Greece implodes, some nice vacation homes will become available as long as one can grease enough palms to avoid expropriation.

    ReplyDelete

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