May 17 (Bloomberg) -- European finance ministers for the first time floated the idea of talks with bondholders over extending Greece’s debt-repayment schedule, saying that last year’s 110 billion-euro ($156 billion) rescue has failed to restore the country to financial health.Der Spiegel points out how they're doing everything they can to avoid facing the facts.
More than a year ago, they created a €110 billion ($157 billion) bailout fund for Greece. Since then, however, the likelihood of a government bankruptcy has only increased. The country's mountain of debts is growing, the economy is at risk of collapsing and the promised austerity programs are not progressing as planned ...Greece couldn't pay back its loans before the added loans from their "bailout" and they can't pay them back afterwards, either. Extending the life of the loans doesn't make it better, it just delays the inevitable. The Greeks are insolvent and that's a fact. If the EU wants to avoid a default, they're going to have to do what the Fed has done which is print money and hand it out at 0% interest. The other alternative is to blow up the EU entirely through a Greek restructuring.
"A restructuring of Greek debts is absolutely out of the question," says French Finance Minister Christine Lagarde, while Schäuble notes: "A debt restructuring is not under consideration and is completely speculative."
Instead, the European Commission intends to fight the crisis with new debts, even though government officials in European capitals are still denying this, as usual. There is talk of a €60-billion loan package, additional austerity programs and even tougher austerity.
As I understand it, these bailouts require unanimous consent by all EU members and the Finns, for one, won't stomach another. I can't see how a Greek default results in anything other than a break in the EU and that's why they're frantic to prevent it. They're like kayakers in rapids. They'll be able to control their path to some extent, but the end result is going to be going over the falls no mater what they do.
5 comments:
It's the Math Falls!
Thanks for the suggestion, hann, you parasite.
To be honest, I wasn't quite sure whether "hann" was a spammer or not. He could have just been pointing out that Greece is essentially trying to get by on the national equivalent of payday loans.
Tim, +1.
Globalism is equalizing of living standards across the planet. This is good for the poorest societies, but horrible for Greece. If the globalist path continues, the Greek future can be seen in the slums of India, a few amazing mansions surrounded by slums with millions of people living in home made from cow dung and cardboard boxes.
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