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."
Ahead of the debt deal, Moody's had already slashed Greece's credit grade to its lowest level, "C," and so there was no impact on the rating.
Moody's said it will revisit the rating to see how the debt writedown, and the second eurozone bailout package, would affect its finances.
However, it added, at the beginning of March "Moody's had said that the risk of a default, even after the debt exchange has been completed, remains high."
Spain’s eye-wateringly high unemployment and the collapse of its real estate market mean that Spain has significantly worse problems than Greece and could threaten the euro zone’s new-found, albeit fragile stability, an analyst told CNBC.com Tuesday
“Spain has very large downside risks and it needs to tread very carefully – Spain is in a very fragile situation. Its problems are significantly worse than Greece’s,” Sony Kapoor, managing director at international think tank Re-Define said.
He added that a “huge danger” was posed to the macroeoconomic situation and the social fabric of the country by the current austerity program and an expected 5 percent deficit adjustment.
“The financial panic is temporarily over but 2012 will be the year of austerity across Europe and Spain is a microcosm for the euro zone as a whole,” he said.
Earlier this month the Spanish premier Mariano Rajoy, publicly defied Brussels-imposed targets, which were 4.4 percent of gross domestic product, saying that the targets were based on forecasts of economic growth when in fact the government expects the Spanish economy to contract this year.
The country has the euro zones highest rate of unemployment - now over 22 percent.
Did you know the think tank's solution to the European Debt Crisis isn't for Greece and Spain to continue with their austerity measures? Re-Define thinks Europe's problem isn't public debt, but the European's failure to fix their banking system and start Keynesian counter-cyclical spending:
When excessive levels of Greek debt were first revealed at the end of 2009, it was shocking how quickly the narrative of the crisis changed from one of a financial crisis to that of a fiscal crisis. This change was driven by politics and ideology where leaders in some countries found it easier to blame ‘lazy Greeks’ for the crisis rather than address endemic problems in their banking system. The weakness of the financial sector was pushed out of sight and Europe is now paying the price. Despite enjoying unprecedented public support, the EU banking system remains broken and is failing in its job of supporting the real economy.
The leap made by EU leaders and some intellectuals from Greece’s very particular public debt problem to attributing Europe’s current problems primarily to excessive levels of public spending defies both facts and logic. Efforts to prescribe treatment on the basis of faulty diagnoses are bound to fail. That is why the EU’s crisis management efforts have faltered so far.
According to Eurostat, a significant part of the so called excessive public indebtedness has been built up after, not before 2007 as countries struggled to respond to the near-death experience of their financial system and its repercussion for the real economy. Between 2007 and 2011, Irish government debt has risen by 273% from 24.8 to 92.5, Latvian debt has more than quadrupled from 9 to 44.7 and UK debt has almost doubled from 44.4 to 79.9 per cent of GDP.
The excessive levels of public deficits observed in most of the troubled economies result from a combination of a crisis-induced collapse of public revenues and demand for more public support of the banking system and welfare to support citizens the crisis has thrown out of jobs. Most crisis countries have much lower levels of public expenditure compared to Denmark. This is not a crisis caused by excessive levels of public spending so simply cutting public spending, the current approach in the EU, will not work.
...
The best way to reduce both public and private indebtedness and nurse the financial system back to health is through a single-minded focus on growth. For this, Europe needs a combination of sustained public investments and structural reforms not endless cuts to public expenditure.
"If the facts don't fit the theory, change the facts." - Albert Einstein "I don't stand by anything." - Trump “Bad men need nothing more to compass their ends, than that good men should look on and do nothing.” - John Stuart Mill, Inaugural Address Delivered to the University of St Andrews, 2/1/1867 “It is the impractical things in this tumultuous hell-scape of a world that matter most. A book, a name, chicken soup. They help us remember that, even in our darkest hour, life is still to be savored.” - Poe, Altered Carbon
I think that misses an important part of the problem. No matter how much is spent internally in Spain and Greece, their productivity cannot match Germany and France. It's the same situation here where states like Mississippi can in no way match the per capita output of California. There's not enough productivity there. Here, that means the Federal government pours a disproportionate amount of money into the state.
In Europe, I'm not sure the haves have much interest in subsidizing the economies of the have-nots, and since they're all on the same currency, there's no way to balance the two the way we do with Mexico. China, or Europe.
Black Lives Matter
"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
Kraken wrote:Some of the latest reportage hints of a Drazzil-scale meltdown coming unless Europe's finance wizards can pull a rabbit out of their hat. Quickly.
Does this pretty much put the nail in the coffin that US banks are horribly regulated and we need some of that European oversight?
Black Lives Matter
"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
Kraken wrote:Some of the latest reportage hints of a Drazzil-scale meltdown coming unless Europe's finance wizards can pull a rabbit out of their hat. Quickly.
Does this pretty much put the nail in the coffin that US banks are horribly regulated and we need some of that European oversight?
The problem was the Euro currency forcing interest rates on countries who couldn't handle it... not bank regulation imo. Although we probably need some more of that too.
Banks take any risks they want but suffer no consequences when they fail, they just get bailed out because we need banks. How is this a healthy system?
But you've seen who's in heaven
Is there anyone in hell?
"Lagom you are a smooth tongued devil, and an opportunistic monster" - OOWW Game Club
noxiousdog wrote:Does this pretty much put the nail in the coffin that US banks are horribly regulated and we need some of that European oversight?
Probably not. As you yourself pointed out, the big problem with Europe is that Greece is not Germany much as Mississippi is not California, but while the people of California are content to give money to the people of Mississippi in perpetuity, the people of Germany are not willing to do the same for Greece. This makes a common currency situation very difficult.
Of course, we have fraud and bubbles and all kinds of other fun stuff thrown into the mix, but even if the fraud had not occurred, the PIGS would have found themselves in trouble eventually. Trying to form a financial union without a political one to back it up is going to cause some very distorting effects on national economies.
/. "She climbed backwards out her
\/ window into Outside Over There."
noxiousdog wrote:Does this pretty much put the nail in the coffin that US banks are horribly regulated and we need some of that European oversight?
Probably not. As you yourself pointed out, the big problem with Europe is that Greece is not Germany much as Mississippi is not California, but while the people of California are content to give money to the people of Mississippi in perpetuity, the people of Germany are not willing to do the same for Greece. This makes a common currency situation very difficult.
Of course, we have fraud and bubbles and all kinds of other fun stuff thrown into the mix, but even if the fraud had not occurred, the PIGS would have found themselves in trouble eventually. Trying to form a financial union without a political one to back it up is going to cause some very distorting effects on national economies.
The banks knew all of that too. If they were making bad loans, they were making bad loans. Unless it was some catastrophic event, they should have anticipated.
The question would be how much political pressure was put on them and who applied it.
Black Lives Matter
"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
noxiousdog wrote:Does this pretty much put the nail in the coffin that US banks are horribly regulated and we need some of that European oversight?
Probably not. As you yourself pointed out, the big problem with Europe is that Greece is not Germany much as Mississippi is not California, but while the people of California are content to give money to the people of Mississippi in perpetuity, the people of Germany are not willing to do the same for Greece. This makes a common currency situation very difficult.
Of course, we have fraud and bubbles and all kinds of other fun stuff thrown into the mix, but even if the fraud had not occurred, the PIGS would have found themselves in trouble eventually. Trying to form a financial union without a political one to back it up is going to cause some very distorting effects on national economies.
Yeah, there's a balkanization there that doesn't apply here. One of Europe's immediate perils is that interbank lending has virtually frozen, primarily along national lines. Nobody wants to be holding Greek or Spanish or Italian debt. While interbank activity was also a problem in our financial meltdown, it wasn't based on individual state debts so much as shady investment vehicles -- which more regulation might have ameliorated.
I think. I'll readily admit that I don't understand the highest echelons of capitalism very well.
Kraken wrote:
Yeah, there's a balkanization there that doesn't apply here. One of Europe's immediate perils is that interbank lending has virtually frozen, primarily along national lines. Nobody wants to be holding Greek or Spanish or Italian debt. While interbank activity was also a problem in our financial meltdown, it wasn't based on individual state debts so much as shady investment vehicles -- which more regulation might have ameliorated.
I think. I'll readily admit that I don't understand the highest echelons of capitalism very well.
International banking is international banking. While the players might change regionally, all the big banks are making loans to each other.
It's really not about more or less regulation. It's about appropriate and targeted regulation. But the idea that the US lets corps get away with far more than Europe does just got a big pile of evidence to the contrary.
Black Lives Matter
"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
Meanwhile Barclays have been busted for pumping up their interest rate exchange numbers and been smacked with a half billion dollar fine. And now we sort through another chain of thieves about who else was involved and how long they had been doing it.
I'd like to see the return of the stocks or running the gauntlet for these arseholes.
Bruce wrote:Meanwhile Barclays have been busted for pumping up their interest rate exchange numbers and been smacked with a half billion dollar fine. And now we sort through another chain of thieves about who else was involved and how long they had been doing it.
I'd like to see the return of the stocks or running the gauntlet for these arseholes.
The wiki says they did both raising and lowering. I think damage to financial institutions is probably much greater than damage to consumers as unclear if they had enough influence to alter LIBOR much.
Not that it excuses anything. I hope there's follow through on civil and criminal prosecution of all involved.
Black Lives Matter
"To wield Grond, the mighty hammer of the Federal Government, is to be intoxicated with power beyond what you and I can reckon (though I figure we can ball park it pretty good with computers and maths). Need to tunnel through a mountain? Grond. Kill a mighty ogre? Grond. Hangnail? Grond. Spider? Grond (actually, that's a legit use, moreso than the rest)." - Peacedog
Spain has entered a constitutional crisis. The decision of Catalonia’s nationalist government to call a snap election in November – which in practice will amount to a referendum on independence – has opened the way to Catalan secession. That decision, in turn, may give a lift to Basque separatists, now running neck and neck with mainstream nationalists in regional government elections due next month, after winning the largest number of Basque Country seats last year in local and general elections.
As a Spain trapped in the eurozone crisis tries to battle its way through a wrenching recession, it must now contemplate the real possibility that its plurinational state, which replaced the suffocatingly centralist Franco dictatorship with highly devolved regional government, may break up.
Socialist President Francois Hollande unveiled higher levies on business and a 75-percent tax for the super-rich on Friday in a 2013 budget aimed at showing France has the fiscal rigor to remain at the core of the euro zone.
The package aims to recoup 30 billion euros ($39 billion) for the public purse with a goal of narrowing the deficit to 3.0 percent of national output next year from 4.5 percent this year - France's toughest single belt-tightening in 30 years.
But the budget dismayed business and pro-reform lobbyists by preferring tax hikes and a simple freeze of France's high public spending to attacking ministerial budgets as Spain did this week in its battle to avoid an international bailout.
With record unemployment and a barrage of data pointing to economic stagnation, there were also fears the deficit target will slip as France falls short of the modest 0.8 percent economic growth rate on which it is banking for next year.
"This is a fighting budget to get the country back on the rails," Prime Minister Jean-Marc Ayrault said, adding that the 0.8 percent growth target was "realistic and ambitious".
With public debt at a post-war record of 91 percent of the economy, the budget is vital to France's credibility not only among euro zone partners but also in markets which for now are allowing it to borrow at record-low yields around two percent.
The government said the budget was the first in a series of steps to bring its deficit down to 0.3 percent of GDP by 2017 - slightly missing an earlier target of a zero deficit by then.
France's benchmark 3.0 percent 10-year bond was steady, yielding 2.18 percent after the announcement but some analysts remained skeptical.
"The ambitions that were flagged are very audacious," said Philippe Waechter at Natixis Asset Management. "I struggle to see how we'll find the growth needed in 2013 and afterwards."
So that austerity plan that Romney-Ryan are proposing for the U.S. has worked out well for Europe, then?
"If the facts don't fit the theory, change the facts." - Albert Einstein "I don't stand by anything." - Trump “Bad men need nothing more to compass their ends, than that good men should look on and do nothing.” - John Stuart Mill, Inaugural Address Delivered to the University of St Andrews, 2/1/1867 “It is the impractical things in this tumultuous hell-scape of a world that matter most. A book, a name, chicken soup. They help us remember that, even in our darkest hour, life is still to be savored.” - Poe, Altered Carbon
Zarathud wrote:So that austerity plan that Romney-Ryan are proposing for the U.S. has worked out well for Europe, then?
Republicans have been saying for years that the US should be more like Europe, so at least they're being consistent.
I'm thinking maybe he meant with regards to the austerity plan.
Oddly:
"I know what it takes to get us working. He's put us on a road to Europe," Romney said. "Europe doesn't work in Europe, all right? I want to get us back to being America."
Zarathud wrote:So that austerity plan that Romney-Ryan are proposing for the U.S. has worked out well for Europe, then?
Republicans have been saying for years that the US should be more like Europe, so at least they're being consistent.
It's 109 first team All-Americans.
It's a college football record 61 bowl appearances.
It's 34 bowl victories.
It's 24 Southeastern Conference Championships.
It's 15 National Championships.
At some places they play football. At Alabama we live it.
Gaurdian wrote:Spain's prime minister, Mariano Rajoy, has ruled out a multi-billion euro bailout before this weekend, despite the worsening economic situation and pleas from Madrid's neighbours for a resolution to the current crisis.
Rajoy dismissed persistent speculation at a meeting of MPs that he was close to negotiating a rescue package with Brussels that could release up to €400bn in EU loans.
...
Rajoy, who is becoming notorious for prevarication, is understood to have asked for a delay until after elections in his home region of Galicia set for next month.
The prime minister fears his PP party will lose the election if he is forced to accept a humiliating rescue package in advance of the vote.
Does he have any idea what a delay of a bailout he will inevitably accept costs his country (and world markets)? Of course he does. Party first.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
We drew attention a few days back to the IMF’s new pragmatism. It used to stand for austerity first. Lately, it’s sounded more moderate than many of the governments it advises.
The IMF’s latest World Economic Outlook cautions Europe in general, not just Greece -- and the U.S. as well -- against tightening fiscal policy too much too soon. It worries about the vicious circle of slowing growth, worsening public finances and further budget stringency.
It’s a new line -- but mostly consistent, if you think about it, with what it used to say. As Keynes advised (or is said to have advised), when the facts change, sensible people change their minds. Too much fiscal stringency is far riskier today than in previous recessions because the slump is internationally synchronized and demand is suppressed almost everywhere.
Monetary stimulus is harder to do with interest rates close to zero. It is twice as hard in Europe’s case, where the worst- hit countries also suffer from an acute loss of competitiveness, which they can’t reverse with a currency devaluation.
The IMF used to demand a severely conservative orthodoxy in fiscal and financial affairs. Its officials never saw a budget deficit that wasn’t too big or a financial restriction that wasn’t choking growth. As a dispenser of aid to governments under financial duress, the IMF could insist on its way or else, and rarely flinched from doing so.
That made the IMF controversial, and in some quarters detested. It was attacked, including by economists with Nobel prizes, for acting as an instrument of capitalist oppression, concerned only with the repayment of odious debts and to hell with the human consequences. ...
...Digging out from a balance-sheet recession -- one brought on by excessive debt and prolonged by sustained deleveraging -- may require a bit more tolerance of inflation risk than usual, if the alternative threatens to be endless recession and outright repudiation of debt. ...
...While insisting, as it should, that plans for better, medium-term fiscal control in countries with bailout programs are real, it’s warning against doing too much, too soon -- in marked contrast to statements from Berlin and other European capitals.
Addressing the U.S., the IMF implores Congress and the Barack Obama administration to deal as quickly as possible with the fiscal cliff of abrupt spending cuts and tax increases that will take effect in January unless legislation is passed.
In each of these debates, the new pragmatic IMF is the voice of reason. It’s impressive to see such a culturally conservative institution leading this change, rather than being reluctantly dragged along. We’ll be even more impressed when governments start acting on its advice.
Black Lives definitely Matter Lorini!
Also: There are three ways to not tell the truth: lies, damned lies, and statistics.
This weekend marks an important milestone for the eurozone. The Republic of Ireland, the second European country to need bailing out, will leave the programme - exiting financial rehab.
There will be no safety net; Ireland will gradually fund itself from the markets. "We are confident we are making a clean exit." says Finance Minister Michael Noonan. "We are not junk. We are doing well."
So Ireland will be the first of the bailed-out countries to step free from its economy being overseen by the troika - the European Commission, European Central Bank and International Monetary Fund.
There will be quiet satisfaction in the corridors of Brussels and Berlin. They will grasp the moment as providing evidence that the medicine of bailouts, austerity and reforming labour markets can work. In their frequent praise for Ireland they can scarcely disguise their gratitude.
...
"Having obtained our political independence from Britain to be masters of our own affairs," the lament continued, "we have surrendered our sovereignty to the European Commission, the European Central Bank and the International Monetary Fund". The Irish finance minister at the time told the BBC that it felt like "hell was at the gates".
That was just over three years ago, but the shamed Celtic Tiger knuckled down. The government cut nearly 30bn euros in spending and raised taxes. Salaries were squeezed by 20% and benefits even for unemployment and disability were reduced.
The country, with its low corporate tax rate, became the hi-tech gateway into Europe for companies like Google, Paypal and Facebook. Gradually Ireland returned to growth. It is expected to hit 1.8% next year. Unemployment, although still at 12.5%, is falling.
Victory, however, has been bought at some cost.
It is claimed that the poorest have borne the brunt of the cuts. The think-tank Social Justice Ireland claims the poorest 10% have lost a fifth of all their income; that is harsher than for other groups in society.
Homelessness has increased by 20% since 2010. In a major survey, Growing up in Ireland found that 60% of families were experiencing difficulties in making ends meet - double the number from four years before. And 13% are behind with paying utility bills. A very significant number of homeowners are struggling to pay their mortgages.
And then there is emigration. The writer Fintan O'Toole once said that "mass emigration had always been the index of Ireland's failure". It is back. Last year more than 75,000 left the country. And 200,000 have gone since 2008. Some moved to the UK, but many headed west to Canada and the US as previous generations had done.
...
Going forward there will have to be another round of cuts and it will take decades to pay back the loans. But investors have rediscovered their faith in Ireland.
It may be that Portugal and eventually Greece will follow Ireland in throwing off the bailout "straitjacket". But for Europe two questions follow: will hundreds of thousands of young people across Europe have to look outside the continent for work? And have the years of austerity weakened Social Europe which, previously, had been one of its defining features?
Greeks are heading to the polls again. Prime Minister Antonis Samaras has called a snap election to appoint the country's new head of state. Despite only being a symbolic role, the vote for a new president has sent nerves jangling across the eurozone once again.
With the first of a round of three votes completed, the fate of the current moderate centre-right coalition government hangs in the balance. Waiting in the wings is the radical hard-Left Syriza, who have promised to defy the country's bailout terms and whose election could trigger financial panic at the prospect of a 'Grexit' once again.
Syriza leader Alexis Tsipras says he does not want Greece to leave the euro, but after €245bn (£193bn) in loans bailouts from the Troika, and one near-debt default later, here are the numbers that show why Greece can't remain in the single currency any longer.
Black Lives definitely Matter Lorini!
Also: There are three ways to not tell the truth: lies, damned lies, and statistics.
The eurozone’s long-simmering crisis has returned with a vengeance as snap elections in Greece open the way for an anti-austerity government and a cathartic showdown over the terms of euro membership.
Yields on 3-year Greek debt surged 185 basis points to 11.9pc on Monday amid default fears after premier Antonis Samaras failed to win the extra votes in parliament needed to avert a general election on January 25, despite dire warnings that such an outcome risked “bankruptcy and exit from the euro.”
The upset opens the door for the hard-Left Syriza movement, which has vowed to tear up Greece’s hated ‘Memorandum’ with EU-IMF Troika creditors “on its first day in office”, and threatened to default on up to €245bn of rescue loans unless the EU grants debt relief.
Syriza is leading by 29.9pc to 23.4pc in the latest Palmos Analysis poll, though other surveys are closer. It is likely to become the first truly radical group to take power in any EMU state since the creation of monetary union. A quirk in Greece’s electoral law gives the winning party an extra fifty seats in parliament.
Alexis Tsipras, the bloc's firebrand leader, vowed to overthrow of the austerity regime and launch new era of social salvation, claiming the government’s campaign of “blackmail and terror” had failed. “There will be an end to austerity. The future has started,” he said.
Greece exiting the Euro would be a net benefit for them. To be straitjacketed to repaying a debt that their grandchildren would see. Bad. Greece exits Euro, defaults, or better yet denominates the new Drachma against their debt, Drachma falls, manufacturing and tourism boom and back to normal, yeah it'll be hard but it wont be generations of "austerity" bad.
The euro stabilized Monday during North American morning trade after falling to its lowest level in nine years despite a weak reading on German inflation for December, as investors bought euros to lock in profits.
...
The selling in the euro was triggered by analyst expectations that ECB President Mario Draghi will soon begin large-scale purchases of government bonds, a policy known as quantitative easing, which could add around €1 trillion to the central bank’s approximately €2 trillion-balance sheet. This will increase the amount of euros in circulation, lowering their value. The ECB’s next monetary policy meeting is Jan. 22.
...
The euro’s weakness has been exacerbated by the U.S. dollar’s broad-based strength, which has pressured currencies across the board. The ICE U.S. Dollar Index, a measure of the greenback’s strength against a trade-weighted basket of currencies rose to a nine-year high Wednesday as investors globally bet on a recovery in the U.S. economy.
Both this and oil sinking to below $50 a barrel is directly because I opened the market on January 2nd by submitting my Roth IRA contribution for 2015 into SPY.
On the other hand, the Shanghai composite is up over 3%. You are loving life if you are invested in China right now.
The Syriza party won 149 seats in the 300-seat Greek parliament in Sunday's election, Reuters reported, adding that the radical leftist party's victory followed years of austerity policies demanded by the European Union and International Monetary Fund after the country's economy received a 240 billion-euro bailout ($269 billion) in the fallout of the global financial crisis.
Alexis Tsipras, the party's leader would now move to form a government Monday by meeting with the Independent Greeks party that also opposes Greece's bailout deal, the report added.
The Greek prime minister also repeated demands that Germany - Greece's biggest creditor - pay reparations for World War Two and repay a loan that the Nazis forced the Bank of Greece to pay when they occupied Greece.
Greece had "a moral obligation to our people, to history, to all European peoples who fought and gave their blood against Nazism", he said.
But the other issue is a loan Greece was forced to make to Germany. In 1942, Nazi Germany forced the Greek national bank to pay out an interest-free loan to the tune of 476 million Reichsmarks. The Nazis used the money to finance the their occupation of Greece as well as military operations. The loan was never repaid. A Greek committee has come to the conclusion that Germany therefore owes Greece about 11 billion euros ($12.48 billion).
Peace, but no treaty
The German government says the question of reparations has been closed.
The first conference on reparations, in Paris in the fall of 1945, granted Greece a percentage of Germany's reparation payments for WWII damages. Athens received non-cash benefits worth up to 2 billion euros.
In the 1953 London Debt Agreement, the Western allies not only postponed settling further demands for reparations until the signing of a peace accord - they also granted Germany a debt reduction.
However, there never was an official peace treaty between Germany and the Allied powers. Instead, the so-called Two-plus-Four -Agreement on the final settlement with respect to what was then East and West Germany took effect in 1990. The agreement was recognized by Greece and provides for no further reparation payments...
...In 2010, Athens was forced to ask the EU for help to prevent state bankruptcy. Germany loaned Greece about 65 billion euros for that very purpose.
Black Lives definitely Matter Lorini!
Also: There are three ways to not tell the truth: lies, damned lies, and statistics.
When in doubt double down on Greece with more loans.
"The world is suffering more today from the good people who want to mind other men's business than it is from the bad people who are willing to let everybody look after their own individual affairs." - Clarence Darrow
This whole thing is madness - Greece has 50% youth unemployment. 50 fucking percent. The dam will burst eventually one way or another. Either Syriza takes this all the way to end or violence probably eventually erupts. This experiment with extreme austerity as a fix is simply not working.
Greek Deputy Finance Minister Dimitris Mardas made the demand on Monday, seizing on an emotional issue in a country where many blame Germany, their biggest creditor, for the tough austerity measures and record high unemployment connected with two international bailouts totaling 240 billion euros.
Sigmar Gabriel, who is economy minister and German vice chancellor, called the demand "stupid", saying Greece ultimately had an interest in squeezing a bit of leeway out of its euro zone partners to help Athens overcome its debt crisis.
...
Berlin is keen to draw a line under the reparations issue and officials have previously argued that Germany has honored its obligations, including a 115-million deutsche mark payment made to Greece in 1960.
...
But Greece's demand for Germany to repay a forced wartime loan amounting to 10.3 billion euros found support from the German opposition, with members of the Greens and the far-left Linke party saying Berlin should cough up.
Can't blame Greece for trying but it's crazy to expect Germany to pay €279bn (or even the €10B).
I think Russia and China are licking their chops to get in there and help out poor old Greece. The Greek PM is meeting with Putin tomorrow. Greece has a vote in the EU sanctions on Russia over the Ukraine.
And China just extended a $3B loan to the Brazilian government-owned Petrobras. So they're not shy about loans to failing economies either.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
hepcat wrote:In most of those cases it isn't Germany itself. It is just people banding together for a cause.
This is a good point. A very good point.
" Hey OP, listen to my advice alright." -Tha General "No scientific discovery is named after its original discoverer." -Stigler's Law of Eponymy, discovered by Robert K. Merton MYT
