BBC Newsnight@BBCNewsnight

Paul Mason - just back from Athens - will be here tonight to explain why the eurozone might cut Greece loose. #newsnightBBC2, 10.30

Eurozone crisis live: Greek president attacks Germany as bailout deadline moves to Monday

Full article: http://www.guardian.co.uk/business/2012/feb/15/eurozone-debt-crisis-greece-eurozone-gdp

StockJock-e, 

At this point nothing would depend on what you, me or somebody else from HSM board believe in.  All WE can do, is find some correlations and use them as a tool to foresee market's reaction to our benefit.  Here is something I'm looking at:

1. Back in December 2002 United Airlines file for Chapter 11.  Part of reorganization were: canceling pension funds, reorganization of routs, furloughing thousands of workers (replacing those with cheaper labor of service companies).  As a passenger, NOW you have to pay for everything now and the leg room got much smaller.  There were more changes but I would like to keep it simple.  The main thing that I would like you to look at is cancellation of pension funds.  That took a while in court to happen, but it happen...

1.1  Delta, US Airways, American Airlines follow...  Now you are screwed no matter which airline you fly.  I'm not gonna get in to other changes with other carriers since the impact is to small.

Europe:

1. Greece is putting out effort (not going to elaborate) to stay in Eurozone.   The outcome of this effort is ether they stay in or out.  If they stay in, pensions cut, government workers cut, spending cut, ... cut, ... cut, ... cut.  In any case the life will not be the same anymore.

1.1 IF Greece leaves Eurozone and successfully balance their sheets  (budget/ spendings), WILL Italy, Portugal, Spain follow?  Will the union fall a part?  Will Greece have to leave UN to continue receiving oil and gas from countries that are on the Sanction list?  There are a lot of questions that arise at this point.  Just trying to foresee the near future to successfully place my trades. 
 

Quote:

Originally Posted by StockJock-e 

It sure does, contrary to what the current market action would lead you to believe.

 

That happens when you cut expenses everywhere..

http://news.yahoo.com/greek-culture-minister-quits-over-ancient-olympia-theft-084708203.html

but to be fair. The Greeks lack with security anyway..

The riot police works well, but all others can be robbed out easily by a grandma with a stick.

Eurozone crisis: Greek government claims EU bailout deal is close

Hopes are rising that the European Union will agree a fresh €130bn (£108bn) bailout on Monday to save Greece from defaulting on its debts after politicians in Athens said they were close to a deal with their single currency partners.

Amid attempts by Brussels to defuse the tension that has been building between Greece and Germany over the past week, it appeared that the austerity stricken southern European country had found the additional budget cuts being demanded by the rest of the eurozone. "We are almost there," one source said.

European markets were closed when news emerged that weeks of increasingly bitter wrangling might at last be coming to an end, but shares on Wall Street rallied strongly after Antonis Samaras, leader of Greece's conservative New Democrats and the favourite to win the forthcoming election, said: "There is no certainty but there is cautious optimism."

The Dow Jones in New York closed up 123 points at 12,904, its highest close in almost four years.

Financial markets in Europe had been unsettled by concerns that the talks would break down completely and by the warning from the credit rating agency Moody's that it was considering downgrading 114European banks, including HSBC, Barclays and Royal Bank of Scotland.

Talks between Greece and the troika of the European Union, the European Central Bank and the International Monetary Fund threatened to collapse earlier this week after Germany and other hardline northern European members of the euro demanded that Athens find an additional €325m of cuts as part of a €3.3bn deficit reduction package.

Despite widespread civil unrest in Greece at the austerity proposals, it emerged on Thursday night that the government led by Lucas Papademos had found the additional savings by trimming the defence budget by €100m, paring about €90m from the public sector wage bill and reducing the budgets for health, labour and interior ministries by €135m.

Greece's economy collapsed in the final three months of 2011, with output 7% lower than in the final quarter of 2010 and there are fears that the new cuts will intensify the recession and make it harder for the country to reduce its crippling debt burden. Monday's deal will involve the new €130bn bailout and an agreement that Greece's private sector creditors take losses of about 70% on their investments, but some analysts believe that even this will not be enough to make the debts sustainable. The European Central Bank, it emerged today, will not be required to take losses on its €50bn holdings of Greek government debt.

Speculation that the two halves of the deal would be severed was quashed on Thursday, despite pressure from the Netherlands for the bailout to await the result of the Greek general election in April.

Jan Kees de Jager, the Dutch finance minister, said: "It would be preferable to wait until after the elections. Then we could negotiate the commitments with the new government."

Dario Perkins, of Lombard Street Research, said: "Euro area politicians cannot seem to decide whether they want Greece in or out. Yet their actions are unequivocal and point firmly to Greek exit.

"Markets are assuming a 'muddle through' scenario for European monetary union, but even that requires a complete EU policy shift."

Relations between Athens and Berlin remain tense: the spokesman for the Greek government curtly rejected a suggestion from the German finance minister, Wolfgang Schäuble, that Greece could delay elections to allow the unelected Papademos to complete his economic reform package. "I have nothing to say in response to Mr Schäuble – it is absolutely up to Greece when to hold elections," Pantellis Kapsis, spokesman for the new coalition government, told reporters.

José Manuel Barroso, the president of the European commission, sought to ease concerns in Athens that attempts were being made to manoeuvre the country out of the single currency. "I would like to salute the courage of the Greek government and the Greek people in these challenging times. And I would hope that member states, the members of the European Union will accept the commitments given by Greece," he said.

• Larry Elliott, economics editor
• guardian.co.uk,  Thursday 16 February 2012 14.24 EST

Feb. 20, 2012, 11:18 p.m. EST

Second bailout agreed for Greece

By Sarah Turner, MarketWatch

SYDNEY (MarketWatch) — European financial officials have agreed to the terms of a fresh aid package deal for Greece, according to reports out Tuesday citing European officials.

Following a meeting that went into the early hours of Tuesday morning Brussels time, finance ministers and other top officials agreed to release another 130 billion euros ($171.9 billion) to Greece, the reports said.

The country’s debt-to-GDP ratio is expected to fall to just over 120% by 2020, according to the reports, down from around 160% in 2011.

Bondholders will take a final haircut of more than 53% on €200 billion worth of privately-held Greek government debt, the reports said.

That was slightly more than expected, as the writedown for private bondholders was initially expected to cut Greece’s debt load by around €100 billion.

Greece needed to agree to terms on fresh funds with its institutional lenders and reach a deal with its private bondholders in order to head off default as it faces a €14.5 billion bond redemption on March 20.

The euro  jumped after the reports, climbing to $1.3290 in minutes, up from $1.3243 on Monday, though it later eased back slightly to $1.3265.

Prior to the meeting, Luxembourg Prime Minister Jean-Claude Juncker, who chairs meetings of the euro-zone finance ministers, told reporters that he was optimistic a bailout agreement would be finalized.

Euro-zone leaders had agreed in principle to the second Greek bailout last October.

Greece had already received €110 billion in funds from its European partners and the International Monetary Fund when its first bailout was agreed in May 2010.

But Greece’s inability to meet fiscal targets amid a deepening recession caused international creditors to demand a further round of unpopular austerity measures and reforms before they would finally agree to a deal for additional aid

Greece needs more help to hit debt target: report

By Sarah Turner

Greece's financial reckoning looms

Next month's deadline of €14.5bn in loan repayments has been hanging like a sword of Damocles over the country

For the first time, there was a mood of real fear on the streets of Athens. In Syntagma Square, as the eurozone's finance ministers gathered in Brussels to decide whether Greece would be granted the €130bn bailout needed to avoid bankruptcy and the inevitable chaos that would ensue, the worry of the Greek people was almost palpable.

Athenians agreed this would mark a "historic day". It was hoped, as finance minister Evangelos Venizelos said, the decision would close a protracted period of "uncertainty that had not been to the benefit of either the Greek economy or the euro area".

Next month's deadline of €14.5bn in loan repayments has been hanging like a sword of Damocles over the country. Few are in any doubt that if and when it lifts, Greek prospects remain grim.

"Our economy has collapsed and everybody knows it," said Katerina Freri, a civil servant at the finance ministry until her retirement this year. "Officially we have not gone bankrupt because it is in nobody's interest for us to go bankrupt and in Europe they fear the domino effect," she added as she waited to join other protesters outside parliament on Sunday.

"But, unofficially, bankrupt is what we are. And at some point they will say it and there will be chaos here."

"They want us to do what Pinochet did in Chile, fire civil servants and take very painful steps overnight," said one insider. "If we didn't live in a democracy, we could do that. The fact is, people react, they will resist … our lenders know that. They know our public administration is in a terrible state. They should have given us more time to enact reforms." With unemployment at a record 20.9% and poverty having now engulfed more than a third of the population, the measures are bound to add to the nation's dark mood.

Ordinary Greeks are infuriated, conflicted and confused. "Our politicians lied to us. They never told us the extent of the financial mess we were in and that has made us very angry," said Spyros Papadopoulos, an employee at a cosmetics company. "I read the financial press every day and can see for myself that the numbers don't add up. Default is inevitable and all these sacrifices will be for nothing. When the day comes we'll be more bankrupt then than we are now."

Greeks know salvation will come at a price. With the Dutch finance minister, Jan Kees de Jager, arguing for the Greek economy to be monitored by foreign officials placed in ministries on a permanent basis, they also know that in the birthplace of democracy the greatest price may well be democracy itself as Greeks are gradually forced to give up any say in the running of their own affairs.

The prime minister, Lucas Papademos, was expected to return from Brussels with a deal and then oversee passage of emergency legislation on Wednesday that will further cut pensions and wages. The cuts will be part of a salvo of punishing austerity measures the government must enforce by the end of the month to convince its troika of creditors at the European Commission, ECB and IMF of its willingness to enact reforms before a first tranche of aid is disbursed in March.

In the race against the clock to reach implementation deadlines, thousands of civil servants will also be axed and labour laws overturned. They will come on top of sacrifices that have already seen workers' pay docked by 40 %.

With hope that the second bailout would be agreed, one government economist was emphasising the upside: "The agreement paves the way to normality," he said. "By the summer the banks will have been recapitalised, liquidity will have returned to the market, there'll be optimism and no one will be talking about bankruptcy."

On both the left and right, politicians in Athens's interim government concurred. The reforms foreign lenders were asking in return for rescue funds were not "all bad", MPs told media outlets through the day – seemingly trying to convince themselves as well as their voters. In fact, they said, many were long overdue. Once applied, they would be the death knell of an inefficient, corrupt and bloated state.

But while the bailout may keep bankruptcy at bay, many economists agree the latest rescue plan is unlikely to save Greece. Even with Athens's €350bn debt pile reduced by €100bn following the agreement of private sector investors to accept a "haircut" of up to 70% on Greek government bonds, there is growing consensus that the country has too much debt and too little growth to exit the economic death spiral it is in.

Doubts over its eurozone membership will inevitably grow as its economy worsens. "Everyone is kicking the can down the road," said economics professor Theodore Pelagidis. "Europe is biding with time and Greece is biding for time, too."

btw this payment supposedly has their debt to be 120% by 2020

that kinda puts things in perspective here.

Originally Posted by mjoke 

btw this payment supposedly has their debt to be 120% by 2020

 

that kinda puts things in perspective here.

mjoke, you should know better, that numbers do not add up ;)  and it does not matter if it's 2011 or 2015 or 2020

You can not solve your debt by accumulating more debt, the best example is US, where we live and what we can see for ourselves.

lol your telling me that?  known that since day one eh.

i meant that comment in a negative perspective not a positive.

I know that you know; but I hope, you know that I know. 

Quote:

Originally Posted by mjoke 

lol your telling me that?  known that since day one eh.

i meant that comment in a negative perspective not a positive.

 

 

Remind's me of times in US "Refinance your home!!!  Get that money you deserve!!!  You can finally go on vocation!!!  No credit, bad credit - you approved!!!".  Later: knock, knock... "We are here to seize your property under the court order!!!"  A bit later:  "Recession, recession!!!  We are doomed!!!"  

they just got 130 billion euro aid package, so basically, they're being paid to pay their debt.....let's save the banks again
 

Quote:

Originally Posted by Matrix2055 

 

Greece's financial reckoning looms

Next month's deadline of €14.5bn in loan repayments has been hanging like a sword of Damocles over the country

Greek bailout not the rescue it seems

Germany at odds with Dutch and IMF boss over eurozone bailout fund  

Dutch government and the IMF and its managing director, Christine Lagarde, want the ESM to embrace funds still untouched within the current rescue fund, the European Financial Stability Facility (EFSF)

Greek exposure hammers Europe bank earnings

RBS, Commerzbank, Dexia, Credit Agricole take Greek hit

By Polya Lesova, MarketWatch

NEW YORK (MarketWatch) — Exposure to Greece’s sovereign bonds has hit the earnings of many European banks, with lenders including Royal Bank of Scotland Group and Dexia revealing fresh details Thursday about the cost they are paying for the debt crisis in Athens.

Euro-zone finance ministers earlier this week reached agreement with Greece’s government on a second rescue package for the nation. As part of the program, private bondholders are being asked to take a nominal haircut of 53.5% on their Greek debt holdings.

“The influence of Greece was apparent in bank earnings published today,” said Gavan Nolan, director of credit research at Markit.

In France, Credit Agricole S.A., which has a stake in Greece’s Emporiki Bank, reported a net loss of 1.47 billion euros ($1.96 billion) for 2011 compared to a profit of €1.26 billion in the previous year. In the fourth quarter of 2011, the bank posted a loss of €3.07 billion.

Credit Agricole took an average writedown of 74% on its Greek bond holdings. In total, the Greek crisis cost the bank €2.38 billion in 2011.

“Credit Agricole spent €2.2 billion acquiring a controlling stake in Emporiki Bank of Greece in 2006, a decision that looks more unwise by the day,” Nolan said.

The losses at troubled French-Belgian bank Dexia were particularly heavy. The lender reported a net loss of €11.6 billion for 2011, with total impairments on its exposure to Greece amounting to €4.61 billion last year.

Royal Bank of Scotland, which was rescued by the U.K. government at the height of the financial crisis, also paid a price for its exposure to Greece.

The bank reported Thursday a loss of 1.99 billion pounds ($3.12 billion) for 2011, up from the £1.13 billion loss posted in 2010. RBS took a £1.1 billion impairment on Greek sovereign debt last year. As of Dec. 31, the bonds were marked at 21% of par value, the bank said.

“As a result of the continued deterioration in Greece’s fiscal position, coupled with the potential for the restructuring of Greek sovereign debt, the group recognized an impairment charge in respect of available-for-sale Greek government bonds,” RBS said.

Besides Greece, RBS also holds debt from other euro-zone countries, but it noted that “Ireland, Italy, Portugal and Spain are facing less acute fiscal difficulties and the group’s sovereign exposures to these countries were not considered impaired” at the end of last year.

And in Germany, Commerzbank AG said Thursday it took a €700 million writedown on Greek sovereign bonds in the fourth quarter of 2011. The bank marked down the value of its Greek bonds to 26%. Still, the German lender managed to post a rise in fourth-quarter profit to €316 million from €257 million.

For European banks, “I don’t expect that there could a dangerous reaction or effect [from the disclosure on Greek debt writedowns],” said Stefano Caselli, finance professor at Bocconi University in Milan.

“In terms of capital, it’s not a surprise,” he said. “However, if we discover tomorrow that there is a problem with the bonds of another state, obviously banks will have to recalculate the impact on regulatory capital.”

Caselli noted that this week’s deal between Greece and the euro zone is “enough for avoiding the default of Greece.” “In terms of GDP growth, it’s not enough,” he said. “The gamble — and this is unpredictable — is the plan to reduce the ratio between debt and GDP.”

Greece is going through a severe recession which makes it even more difficult for the nation to meet its debt-reduction goals. Euro-zone officials are hoping that the nation’s debt-to-GDP ratio will fall to 120.5% by 2020, from around 160% in 2011.

Germany has run out of patience

Greece has been left in an impossible position – and Wolfgang Schaeuble's finance ministry knows it