Is the end nigh for the Euro? [vol. 3]

[maffski]

Borghetto said:

It seems that within the IMF rules, Greece can bundle all payments due to the IMF into one payment at the end of the month. So on this pantomime will go until the next "final deadline".

Plus I think they are allowed to be 30 days late making that payment. So that takes us to the end of July. Plenty of time to get the agreed 7bn Euro funding so they can pay the IMF.

[gruffalo]

maffski said:

Borghetto said:

It seems that within the IMF rules, Greece can bundle all payments due to the IMF into one payment at the end of the month. So on this pantomime will go until the next "final deadline".

Plus I think they are allowed to be 30 days late making that payment. So that takes us to the end of July. Plenty of time to get the agreed 7bn Euro funding so they can pay the IMF.

They may get the 7bn but by the end of July they need more like 14bn and a further 6 in August, the 7bn only gets then through June.

[eldar]

gruffalo said:

They may get the 7bn but by the end of July they need more like 14bn and a further 6 in August, the 7bn only gets then through June.

So, the Greeks need another 2,500 euro per head to cover 3 months repayments over running-the-country costs?

[Steffan]

Art0ir said:

What I don't understand is how the IMF's creditors are going along with this?

There's no way in hell they are going to get back all of this bailout money.

gruffalo said:

maffski said:

Borghetto said:

It seems that within the IMF rules, Greece can bundle all payments due to the IMF into one payment at the end of the month. So on this pantomime will go until the next "final deadline".

Plus I think they are allowed to be 30 days late making that payment. So that takes us to the end of July. Plenty of time to get the agreed 7bn Euro funding so they can pay the IMF.

They may get the 7bn but by the end of July they need more like 14bn and a further 6 in August, the 7bn only gets then through June.

Interesting posts from many on here and a lot of chatter in the Media. As ArtDir suggests the reality is that the creditors of Greece are all going to be stuffed and as Borghetto confirms Greece are acting within their rights and as maffski suggests this is all nonsense because in July Greece needs another 14 Billion and a further 6 Billion in August.

Tsipras is currently settling (??) the concerns in the government of Greece itself and is quoted by the BBC as regarding the EU as bullies. See: http://www.bbc.co.uk/news/world-europe-33020420 hardly helpful!

The faint remaining notion that anyone might actually hold any hope of any recovery by Greece and the even more remote possibility that Greece might actually attempt to repay these debts simply does not add up does it? What we are witnessing is the steady downward spiral of a wholly insolvent Sovereign State seeking to bamboozle their creditors into lending even more good money after bad.

There may be a temporary fix as there have been before in this madness. But in reality once Sovereign States or indeed any financial body borrow massively more than they can afford to repay the inevitable end must be the financial collapse of that entity. Tragic for the population of Greece and most unwelcome for the EU. But the direct consequences of repeatedly refusing to face reality, sadly. Greece has been bust in reality ever since the debts soared and the Greek Economy failed. More than five years ago. There will be no recovery for Greece within the EU.

This nonsense has gone on far too long already and the EU have to face this fact. Greece is spiralling down into abject insolvency. The EU has made a major mistake with this affair and serious damage has already occurred to the reputation of the EU in consequence. The position of Greece is indeed desperate and steadily worsening. But hoping for a recovery by Greece is just cloud cukooland dreaming. The EU has to face that fact and act accordingly. It will be interesting to see how much longer it takes. But the die is cast.

[Quarterly]

Thats a great post Steffan, but what do you mean by act accordingly? What is their best way out of this mess?

[RYH64E]

The Telegraph has a great article on Greece and the IMF involvement, with some mention how the Greek bail out money was used to pay off creditors who should have suffered the full consequences of their unwise lending. That's the real scandal,imo.

http://www.telegraph.co.uk/finance/economics/11654...

Telegraph said:

It loaded yet more debt onto the crushed shoulders of an already bankrupt country, and further complicated the picture by allowing one large French bank and one German bank – no names please – to offload much of their €25bn combined exposure onto EMU taxpayers.

“Debt restructuring should have been on the table,” said Brazil's member. The loans “may be seen not as a rescue of Greece, which will have to undergo a wrenching adjustment, but as a bailout of Greece’s private debt holders, mainly European financial institutions”.

[turbobloke]

RYH64E said:

The Telegraph has a great article on Greece and the IMF involvement, with some mention how the Greek bail out money was used to pay off creditors who should have suffered the full consequences of their unwise lending. That's the real scandal,imo.

http://www.telegraph.co.uk/finance/economics/11654...

Telegraph said:

“Debt restructuring should have been on the table,” said Brazil's member. The loans “may be seen not as a rescue of Greece, which will have to undergo a wrenching adjustment, but as a bailout of Greece’s private debt holders, mainly European financial institutions”.

If so, this is another angle on a feature of the EU pointed out in another thread, the impoverishment of some nation states to the benefit of a few others...including via protection of financial institutions in the others.

[NicD]

It was said from the beginning of the rescue, I thought everyone was aware. It was never about Greece, always about saving the Euro banks from further shock.

[turbobloke]

NicD said:

It was said from the beginning of the rescue, I thought everyone was aware. It was never about Greece, always about saving the Euro banks from further shock.

Part and parcel of trying to help ze zone and euprojekt, ja.

It's a saga that runs and ruins.

Pre-2010 and on:
http://www.keeptalkinggreece.com/2015/03/10/german...

[RYH64E]

turbobloke said:

If so, this is another angle on a feature of the EU pointed out in another thread, the impoverishment of some nation states to the benefit of a few others...including via protection of financial institutions in the others.

It's the surreptitious use of public money to bail out private institutions that bothers me, especially institutions that are quick to lavishly reward success yet expect others to bear the costs of failure.

[turbobloke]

You could always e-mail the troika.

[telford_mike]

maffski said:

Plus I think they are allowed to be 30 days late making that payment. So that takes us to the end of July. Plenty of time to get the agreed 7bn Euro funding so they can pay the IMF.

Unfortunately it doesn't work like that. If the Greeks do not complete the current programme of reforms to the satisfaction of the institutions by 30th June, the remaining €7.2bn is lost. Even if they do, there's probably insufficient time left to get the assent of those countries who need to get the agreement ratified by their parliaments.

The game is already over, IMHO.

[Steffan]

Steffan said:

RYH64E said:

turbobloke said:

If so, this is another angle on a feature of the EU pointed out in another thread, the impoverishment of some nation states to the benefit of a few others...including via protection of financial institutions in the others.

It's the surreptitious use of public money to bail out private institutions that bothers me, especially institutions that are quick to lavishly reward success yet expect others to bear the costs of failure.[/quote

telford_mike said:

maffski said:

Plus I think they are allowed to be 30 days late making that payment. So that takes us to the end of July. Plenty of time to get the agreed 7bn Euro funding so they can pay the IMF.

Unfortunately it doesn't work like that. If the Greeks do not complete the current programme of reforms to the satisfaction of the institutions by 30th June, the remaining €7.2bn is lost. Even if they do, there's probably insufficient time left to get the assent of those countries who need to get the agreement ratified by their parliaments.

The game is already over, IMHO.

As RHY64E and Turbobloke confrm on here this nonsense is now visibly resulting in injudicious investments by institutions being bailed out by this process at the cost of the EU taxpayers and the institutions are continuing to invest in the knowledge that they are effectively above reproach or responsibility. As Telford_mike suggests the game is over for Greece and for the futile attempts of the EU to hold Greece within the Euro are just that in these circumstances. Completely futile.

Greece has not made the necessary changes to repair their economy and reduce ther overspending, despite knowing perfectly well, that these changes were essential. As a result Greece will default. Unwelcome and desperately sad though this may be for Greeks, no country can permanently live beyond their means and there have been more than enough warnings and confirmations that without massive change, Greece would go bust. Regrettably their decision to not undertake the economic changes and essential refroms, needed, has had that consequence. Greece are Bust.

On a broader front, relating to the changing attitudes to hollow promises by politiians, and the changing attitudes to the consequences and responsibility of countries to live within their economic means, I do think we are seeing a general change in attitudes internationally against gross overspending by governments. I think the growing awareness of the absolute refusal by Labour in the UK to either accept any responsibilty for the damage they did to our economy, when in power and the utter economic nonsense that E Balls and E Milband proffered to the UK electorate, in the recent election, had the effect of causing massive numbers of voters in the UK to vote for anyone other than Labour politicians. In direct consequence Labour achieved the worst result in 50 years and the Conservatives were home and dry.

There will still be Socialist politicians promising everything to everybody, naturally at no cost to anyone, because that is their favoured style. It used to win votes. Not sure this will do anymore? I do think the reality of the cinsequences of borrowing more than you can afford are beginning to be seen, as intensely foolish and generally as the fools gold philosophy that it actually has always been. There are still fools about, as there always will be.

But I do think that a sense of reality and a realisation that empty political promises may suit the promiser but cannot actually ever be delivered. I think that the gradual attempts by the UK government, to reign in the hopelessly over bloated benefits claims and resolve an affordable National Heath Service and to prevent abuse by non nationals is another sign of that change. Not yet wholly effective, but in time I think Ian Duncan Smith may well be remebered as being as important to the system continuing to work as Beveridge was in setting this up initially.

Quite where Cameron is going with his Referendum I know not. I have been highly doubtful for some time that the majority of voters in the UK woud wish to remain within the EU. A very big gamble IMO. The EU are going to have a pretty torrid time once Greece defaults. An awful lot of chickens will be coming home to roost. When the costs and the responsibility for those costs becomes apparent, which it most certainly will, there will be one hell of a kerfuffle within the EU.

That could well make the prospect of the UK leaving the EU deeply serious for Europe, because that blow would fall following the departure of Greece. Could well be that the EU accepts the changes Britain requires to avoid that. But would the referendum actually confirm continuing membership in any event? That is the question? I have my doubts. We do live in interesting and changing times!!

Think I have said enough now!

[DJRC]

Forgive me but "certain French banks are massively exposed and are absolutely toast if certainly European countries go under" and "Frau Merkel and the German banks" will only sign this lark off if they are massively protected" exactly what some of us said on here many moons ago?

The protection of the French banking industry was the paramount concern when the bailout deals were put together because they were utterly fked and if they went France and the European economy was fked.

[Steffan]

Quarterly said:

Thats a great post Steffan, but what do you mean by act accordingly? What is their best way out of this mess?

I appreciate the comments.

I used the phrase "acting accordingly" because I have found it commonplace in circumstances where the changes required in large organisations that are affected by changing circumstances in markets etc and in business finally become apparent abd tyerefre admitted, and the phrase really fits the bill of the identifying the consequences of the reality of a failed policy. "acting accordingly" in thise curcumstances means those responsible deal with the consequences of the failure and attempt to minimise the damage. Frequently seen in big organsations that have to make very difficult changes and adaptions when the plans come unstuck as they often do. Not what was intended but the reality of the actual position.

The EU could (and still may!) try to push this forward which is their generally chosen approach. However I think this has gone on far too long aready hence that phrase coming to mind. Greece is a busted flush and way beyond recovery. If the EU seek to continue this nonsense then I think that ther standing financially would crumble steadily. Continuing to follow hopeless causes is not a good idea.

[Steffan]

DJRC said:

Forgive me but "certain French banks are massively exposed and are absolutely toast if certainly European countries go under" and "Frau Merkel and the German banks" will only sign this lark off if they are massively protected" exactly what some of us said on here many moons ago?

The protection of the French banking industry was the paramount concern when the bailout deals were put together because they were utterly fked and if they went France and the European economy was fked.

Good to hear from you DJRC and as usual you are right on the button. You were right on the button all those years ago when you remarked France was toast! I entry agree that the protection of the French banking industry was absolutely paramount when these bailout deals were originated and the banks of other EU countries also benefitted enormously. The massive mstakes of these banks have been foisted off onto the poor unsuspecting hard working taxpayers caught within the Euro. Particularly those in the solvent stares therin.

Nothing but trouble coming from this and I suspect this nonsense will be recognised as a game changing mistake when the reality of the consequences does become apparent, which inevitably they will, despite all the best efforts of the EU, to keep the consequences hidden. Just a question now of whether the EU will try to keep the reality of the hopelessly and abject insolvency of Greece hidden a little longer by printing and throwing away yet more billions of Euros? What the EU cannot do is to enable Greece to actually even begin to recover, because Greece is quite cleary, not prepared to undertake the necessary economic changes to enable recovery to begin. Greece is totaly bust.

[DJRC]

Nobody gives a stuff about Greece to be honest Stefan and nobody ever has. Greece and the Greeks have been irrelevent to pretty much everything except summer holidays since Alexander passed away.

Frau Merkel has hung them out to dry. She enabled the French to stay solvent, the German banks not to lose too much, German industry to carry on and a functioning European economy. And kept herself elected. Never ever underestimate how many steps ahead of you mutti actually is.

Its not really a beach day, start of hurricane season so some rain on and off, hence I'm making use of the free WiFi under the shelter whilst one enjoys a St Lucian afternoon tea The is much to be recommended in raping Europe for everything you can get!

[Steffan]

DJRC said:

Nobody gives a stuff about Greece to be honest Stefan and nobody ever has. Greece and the Greeks have been irrelevent to pretty much everything except summer holidays since Alexander passed away.

Frau Merkel has hung them out to dry. She enabled the French to stay solvent, the German banks not to lose too much, German industry to carry on and a functioning European economy. And kept herself elected. Never ever underestimate how many steps ahead of you mutti actually is.

Its not really a beach day, start of hurricane season so some rain on and off, hence I'm making use of the free WiFi under the shelter whilst one enjoys a St Lucian afternoon tea The is much to be recommended in raping Europe for everything you can get!

DJRC, I entirely accept that Greece is not of any economic significance in the great scheme of the EU masters who are all to a man out for theselves. Indeed I would accept that the EU could well afford to carry Greece if the EU actually chose to admit the reality of Greece being hopelessly insolvent and way beyond economic recovery. But in order to do so the EU would first have to admit that their "Solution" is an abject failure. I agree this whole episode was engineered to ease the debt black hole faced by the French banks and others caught with defaulting loans to Greece, and to trade out of this self inflicted mess which the intervening years of subsidy have enabled. I do agree with your analysis and have for many years. This nonsense was always about the EU and never about Greece or the consequences to Greece and the Greek peoples.

My concern from the start with this has been the outright dishonesty shown by the EU in pretending that there was ever a possibility of Greece recovering. There never was a chance for Greece once Greece decided to elect Socilast politicians, who like the EU are out for themselves. The policies of successive Greek governments have steadfastly avoided facing reality which has inevitably ensured very bad news for the Greeks.

I do think we are now entering reality time in this nonsense although there is always the possibility that the EU will decde to bail Greece out for a few more weeks because they can using other peoples money as ever, throwing away even more Bilions of Euros in the process. Interestingly Mr Juncker has suggested that Tsiparis has not in fact produced the proposals needed and that time is getting extremely short for any agreement to be effected to enable Greece to continue within the EU. He may well be sounding the death knell for Greece in its current form I think?

See: http://www.bbc.co.uk/news/business-33039360

[davepoth]

I think DJRC's point is that the EU's rescue plan has worked quite successfully - it's just that the rescue plan wasn't to rescue Greece.

[DJRC]

Sort of Dave, but - and again Ive said this throughout - we need to stop saying "the EU this, the EU that". Barroso and Draghi always have been, always will be and always are nobodies. The *only* and I emphasise again the word *only*, people who matter and have mattered throughout this lark with regards to the money have been the German banking industry as represented by Wolfgang, the German domestic slush fund as represented by Mutti and their partners in crime the SNB, otherwise better known as the Swiss National Bank. Yes, yes I know some of you are still wedded to this idea that the Swiss took a beating over the peg etc but again - I need to emphasise this - they really really didn't. The Swiss have been the German Banks and the ECBs bank of last resort the entire time. They have underlined the Euro, time and time again. When the peg was tested they swamped the market instantly with funds, i.e. the peg was tested for a matter of seconds before the SNB deployed the financial nukes. They didn't fk about at Easter 2012, they hit the switched marked "billions" instantly and the hedge funds legged it. Out the back door the SNB were trading their purchased Euros so barely even keeping them luke warm let alone holding them. In the meantime they (and this is something you don't realise unless you lived there at the time) bought critical time for their own domestic exporting industry. Switzerland had its biggest financial crisis in 70 yrs in June/July 2011 and it was utterly unreported by anybody, but you could argue it underpinned the entire European economy. Swiss industry couldn't export beyond Dec 2011, the forward exchange deals covered the next 6 months and forecasts had it as BELOW 1 - 1 against the Pound. It started 2011 around 1.5 I think. Nobody could deal with that, so the SNB brought the peg in to save its own exporting industry because without that Swiss industry was dead and and as Europes Bank of last resort and the strongest currency in the world, Europe was arguably a lot closer to being v v fked.

So where does this all leave us? German Banks and French Banks are happy. The Swiss are happy. Merkel saw off Mr Bruni and got the Europe's worst premier instead (I don't think she has finished laughing yet) and kept CMD on side to the extent that she now sees a political path to make the next stage of European development/rule an Anglo-German direction, not a French aligned one.

Im a good political analyst. If Id actually stayed inside the game instead of realising v quickly back at Uni that everyone in the game was a complete , then I may have become a very good political analyst. There is no power nor knowledge in the world however that could enable me, even on my very best day I could possibly ever have, to get even remotely close to Mutti's level of political ability on her worst day, when she was blind drunk, crapping on the toilet from food poisoning and after just being rodgered up the arse by a Kauto Star & Frankel tag team.