The game playing in Greece gets curiouser and curiouser.
German finance minister Wolfgang Schäuble went on TV saying the only way Greece can get a haircut is if it leaves the Eurozone.
The IMF reiterated that Greece will not be able to make its payments.
Greece insists the IMF is wrong, yet it wants credit relief.
The Financial Times reports Greeks Escalate Bailout Divisions by Lashing out at ‘Misleading’ IMF Report.
Greece’s finance minister has lashed out at the International Monetary Fund’s “misleading” analysis of the country’s economic health and debt trajectory, intensifying a rift between Athens and the Fund over its involvement in the country’s three-year bailout programme.
Responding to the IMF’s 91-page healthcheck of the Greek economy, Syriza’s Euclid Tsakalotos said the analysis gave an unfair and “insufficient” account of reform efforts undertaken by the left-wing government since the summer of 2015.
Mr Tsakalotos said the “overly pessimistic” account led the Fund to a wrong-headed assessment of the country’s debt dynamics, which the report says could reach “explosive” proportions above 200 per cent of GDP without major debt relief or bolder spending cuts and reforms.
Greece wants the IMF out of the troika so why does it insist its debt is sustainable? It makes no sense. If its debt was sustainable, the IMF would stay in.
I discussed this previously as a blame game scenario, with each party wanting to blame the others, but things have gotten so silly now I find it difficult to twist this pretzel in a way that fits.
Meanwhile, Greek unemployment is a “mere” 23%, despite the alleged Greek recovery.
Greece vs. US Great Depression
The IMF provided this comparison of Greece vs. the Great Depression.
Greece does not want the IMF in the troika but if the IMF leaves, Germany is set to pull the plug. There is obviously some sort of game here, but it is logically impossible for Greece to hold the conflicting positions it has.
The IMF is due to deliver a major decision on whether it will contribute to the country’s €86bn bailout when finance ministers meet in Brussels later this month.
Had Greece warmed up to the IMF, it could have blamed Germany and the IMF. Logically all it can do now is blame itself.
Enough of this nonsense, I repeat Dear IMF, Please Put Greece Out of Its Misery.
Mike “Mish” Shedlock
Pssst!……Hey Germany…..I haz a sekret….
There’s a teenager living in your basement…..and after you go to work each day, it gets up and drinks all your good beer!
I thought alcohol was forbidden under Islam?
Many muslims get blind drunk during evenings and nights in northern europe and when I have asked about muslims not supposedly being allowed to drink alcohol by Allah from muslims themselves the answer has been that “Allah can not see in the dark so drinking alcohol (and apparently everything else forbidden by quran) is OK during evenings and nights.
Maybe Greece can just be a nonpaying “honorary” member so no one has to go through the embarrassment of a public divorce. Everyone has known the debt was NEVER going to be repaid for ten years. This is all a game to prevent an actual declared DEFAULT that would trigger derivatives and the much anticipated and dreaded “first Domino”.
Greece is simply holding a gun to its own head and threatening to shoot. They understand what it means to everyone if they default and everyone is getting damned pissed about being blackmailed. You can bet every individual involved has been calculating how THEY will manage to escape this massacre while witnessing everyone falling. All are deluded but not insane. German banks have to be scared.
The demographic chart is 1960 to present, the first big drop was 70’s Europewide, the second 2008 . The image links out to a complete set of country facts.
As you say ” You can bet that what pain there is will be felt by the least deserving .”
i would respectfully disagree. German banks have been getting a big fat CREDITORS’ BAILOUT years ago. They are sitting pretty, while governments and the souveraign (taxpayers of certain EU states) will be as long-suffering as the Greek youth.
What will it taake for the MSM to wake up and call the politicians damn liars? Even in debates, finance ministers have avoided being frank and honest.
Add to that murky and opaque mess the ECB’s role as regulator and lender. (Are they accepting used toilet paper yet as collateral?)
The perpetually changing “rules” (see how Italy was allowed to bail out the oldest bank) reminds those who read “1984” or Orwellian times.
BLAME GAMES now, next real wars? Anything to camouflage the unbelievable mess the EU has been in.
The rotten heart of Europe beats in Frankfurt. Enormous transfer payments are the shocking reality nobody wants to acknowledge. The imbalances are just to big. Alas, the silly “one-size-fits-all (EURO member states) will one day lead to the empress’ in Berlin’s public nudity.
IMF participation is the fig leaf used to get parliament to agree to keep up the fun and games. Pssst, not one whisper about the “overlooked” TARGET 2 imbalances. We can’t have facts interfere with a political goal, can we?
Shut up, pay up or sit and wait to have the rulers press the giant reset button and confiscate your wealth.
When will Mish get banned as purveyor of fake news? No more trips to the EU? I wouldn’t be surprised. We can’t have unauthorized interpretation of such events. Mish, stop confusing the people. Murksel knows best. Under hitler, his fans shouted “Führer befiehl – wir folgen”. Leader, you rule and we will follow.
It’s time for an EU controlled ratings agency :—-)
There are lots of “non-paying” members (net recipients) honorary or not. That is the problem.
The EU nannycrats are crapping themselves because the second largest net contributor has had enough (thank goodness!)
You always must pay a debt that you owe. Would you pay a debt that is not yours or UNauthorized by you ?
Debts can be invalidated in bankruptcy or by agreement outside of bankruptcy
Greece is basically trying to perpetuate a fraud against Germany and the EU. Greece pretends to believe it can repay enough of its debt and change enough of its laws to satisfy the EU and IMF. If Greece were to leave the EU, it would have a more difficult time getting financing to support its lifestyle. Lashing out at the IMF is Greece’s way of saying, “SHHH, Don’t give away our strategy.”
What Greece could do is to borrow from the EU to repay the IMF. At least that would keep the IMF quiet. The IMF is showing a riff with the EU by proclaiming Greece is insolvent, and no more funds should be lent. Greece can play the EU off of the IMF. If Greece repays enough IMF debt with EU debt, then the IMF might be more willing to lend to Greece after Greece defaults.
So you blame the debtor before the creditor?
You will find that does not balance.
Carl R. said:
Of course. It’s kind of a modern fad to blame the creditor, but the debtor always has the ultimate responsibility. They were the ones that borrowed the money, and used it irresponsibly, and no longer have it to pay it back.
So, if a neighbor comes to you and says “Crys”, I’m really down on my luck, can you loan me $100 till next payday, and you give it to him, then he uses it to buy booze, and goes on a bender and gets fired, it’s your fault he lost his job?
So you are saying I blame the creditor before the debtor ?
Responsibility for what and before who ?
To each their own.
It’s called due diligence. Equally at fault might be bad semantics, but I think it is fair to say both share equal responsibility. That’s why there needs to be consequence written into contract, to protect the creditor, if that wasn’t done. Too bad.
Is the fraud perpetrated by the borrower who knows he cannot repay, or the lender who knows exactly the same?
Delusion is always the excuse that only adds to the pretension of responsibility. Everyone involved KNEW what they were doing….and still does. The game is “something for nothing” and everyone is in on it….only playing musical chairs to see who will get stuck with the pain when the music stops. You can bet that what pain there is will be felt by the least deserving…..THAT IS the game.
Fraud in this situation could be both as you point out “everyone involved KNEW what they were doing”.
The thing is that the transaction was a winner for all sides. The borrower gets free money that the lender is loaning out, but it is NOT the lender’s money, now is it? So the lender gets their fees for making the loan and the debt…the RISK, is someone esle’s. It used to be that a bank retained a responsibility for the debt to its investors or stock holders. Modern debt however seeks to dissolve any direct responsibility between the lender (the loan originator)and the actual owner of the financial instrument, be it a stand alone loan or something blended into a financial “product” that no longer directly represents the asset or its liability. We find instances where home owners cannot determine exactly WHO owns their note. It’s insanity with a purpose. The money that supposedly is loaned out is always someone else’s that no one even seems to care who. All of the money is in the “transaction” and so regardless of how messed up or insolvent any instrument might be, it can always be transmitted, transacted, transferred or even simply identified, and find it has just had another FEE generated.
What would be interesting to know is how much of Greece’s debt is actually money they borrowed and spent, and how much of it is accrued fees, interest, transactions, rollovers or any other number of things that have been incurred due to the continual “handling” of it. Germany transfers a billion or so to a Greek bank that it immediately uses to pay off a German loan owed by Greece. How many fees were generated in this one transaction?
Well one way of looking at it is public debt to gdp. When a country has own fiat it effectively owns its own debt, with the Euro foreign banks and countries own the debt also. So in a sense the interest payments are not that relevant when you compare both routes EXCEPT that the EU and ECB set the borrowing conditions, not the Greek national bank, and they do so according to an EU agenda and according to EU banking and financial interests, not Greek ones. Greece is just supposed to fit in to this under Maastricht and everything will be ‘good’.
Obviously not though. If you look at the debt to GDP graph from 1981 to last year it shows basically that Greek debt vs. GDP is arranged in a gently increasing slope. It flattened in the 90’s as it adjusted policy to suit Euro entry, then jumped right up to where it would have been were it to have simply carried on as before Euro.
In other words it could be said that all Euro did was boom and bust the country, with Greece now at the mercy of foreign creditors. Very destructive. If it had continued with own currency almost certainly the adaptation to increasing debt to GDP levels would have been much smoother for the country, or at the very least, it would have had full national control over the management of the circumstance, which normally spells adaptation to and closer responsibility to local demands. For now it is just a show around what creditors demand etc.
So really what is going on is whether Greece wants to return to the old management or whether it will continue to trust Euro management of the country, and obviously that is a personal choice of Greek people , and if they are actually allowed to collectively decide on it by their own politicians.
lets be clear here, 92% of all debt refinanced over the past 5 years was to repay loans outstanding with pension funds, Eruopean banks and European insurance company. Only about 8% was actually “new” money to Greece. What Europe has done is socialize Greece’s debt so its no longer the risk of the bank shareholder but that of every European…
Greece’s bailout has basically been the bailout of Europe’s undercapitalized banks that screwed up (buying high yielding Greek debt) and selling on the risk, at par, to the ECB. I say: Well done!
Yes Frozen.. that seems to be the case. Banks will not suffer and all that is required is more money creation. So why all the shuffling – maybe Greece does not want to leave because inflation will cripple it. Maybe they are playing for time to await a total Sthn Europe and French exit – who knows. Germany might want an early Greece exit and devastating inflation to scare the others so that it can maintain the cheap Euro (vs a high Deutsch mark).
For most Greece is just a blip but not if politics causes mayhem.
Well, there will be welfare losses following a weakened currency. Moreover, this stimulus only works that long until the people will get hurt.
As a child going on holidays to Italy, 2.50 Marks used to be 1,000 Lira. Later, the Lira was about 1 Mark. The MSM has been bleeting “a low Euro is good, a high Euro is bad”. Isn’t it wonderful how simple things are when one adopts the official “party line”?
Professor Sinn wrote a book, bearing all regarding these desastrous policies.
One day, it will all blow up without fail.
Personally, I wonder when the ECB will need to get recapitaliyed? The Bundesbank failing will just a matter of time and accounting honesty. (NO COLLATERAL on “Target 2” saldi. What a wonderful system. Sarcasm off.
If you lend to drunken sailors then you should not complain that they pi$$ed away your money.
They should never have been included. If they had defaulted long ago it would have been better.
Remember, the bailout money goes to the banks not the Greeks for the very large part.
Well, I see mutual fraud. Of a past 240 bn € “bailout”, about 200 bn € went to the private creditors. While the MSM spread falsehood (“Greek was baileld out bla bla”).
The Greeks have been burdened with those 200 bn € and French 6 German banks etc. are loving it.
Just look how this works by looking at Ireland. The ECB plays many roles. Blackmailer of last resort? The Irish got to pay off the creditors’ bailout, too. the only difference is that they have partially succeeded doing that. Which is impossible for the Greeks.
Finnish and German taxpayers are getting antsy.
Yeah, let the ESF Something fund buy up the IMF’s debt at 110% and make it stay involved with 99.95 €. Big relief in Berlin: “look, the IMF is still participating (so all is well)”
All Euro countries should leave back to their own FLOATING currencies with their value decided by MARKETS with functioning PRICING OF RISK and each INDEPENDENT central bank deciding how to fund their own private banks and what the interest rates for this funding should be.
The Euro should be left to Germany with the European Central Bank offices in Frankfurt renamed to German central bank.
Euro was economic idiocy and hubris from the start.
The greeks and italians could have NOT got into so much debt that it destroys them without ECB policy decision that greek government debt should be considered as safe as german government debt because it is in euros and put into bank balance sheets at 100% of it’s nominal value.
agree that the euro was economic idiocy from the start, but wouldn’t it be better for the greeks to convert to the dollar (they wouldn’t need our permission after all) and just renounce the debt load that CANNOT be repaid.
All euro accounts could be converted to dollars.
Wouldn’t that be a better short term solution?
What am I missing?
Stuki Moi said:
Governments, like everyone else if they had the option, prefer to be able to make promises of largess, in a currency they can then render rather worthless before they have to actually pony up something.
Why any subject keeps falling for the scam over and over,, is almost unfathomable. And the greatest testament to the “success” of “democracy” and “public education” one could possibly wish for.
How is Northern Cyprus doing? In Winter, they attract budget tourists with incredibly low prices. The government saves on unemployment and sponsors the operation instead.
Greek goods and services would become competitive overnight.
Just look at the mess Germany created, destroying a pretty good operation in the GDR through its silly 1:1 exchange rate folly. Chancellor Kohl’s “blossoming meadows” cost trillions and lead to hardship and despair to this day.
The MSM has been complicit in the massive deception.
Seriously, “fake news” like this blog is a danger to the system. When will the taxpayers wake up and smell the Facism?
The IMF should never have been there in the first place. Only when Greece actually has it’s own currency should it get involved. Would the IMF ever bail out Illinois or California?
Just wait until the media tries to blame it on Trump, for strong arming the IMF to no longer remain involved.
Good analogy. All part of the IMF love affair.
How much due to the head being French?
It’s just a lifestyle thing:
Forbes: ‘Greece has defaulted on its external sovereign debt obligations at least five previous times in the modern era (1826, 1843, 1860, 1894 and 1932)…. [totalling] 90 years, or approximately 50% of the total period that the country has been independent.’
The EU has deprived Greece of its regular recreational activity. The Greeks are getting twitchy.
It’s ludicrous calling 1932 and earlier part of the “modern era.”
Colonial history said:
1826: there was no Greece yet, the revolutionaries were in the middle of the war of independence
1843 and 1860: Greece was governed by Otto Friedrich Ludwig of Bavaria (1843 was actually a revolution against him.)
1894: Greece was governed by Christian Vilhelm Ferdinand Adolf Georg of Schleswig-Holstein-Sonderburg-Glücksburg
1932: Greece’s economy collapsed after Germany stopped paying its debts.
2010-… Greece’s economy is effectively run by the EU (read Wolfgang Schäuble)
Yes, Greece has had the curious habit of accepting Germanic overlords for the past 200 years, and they invariably run the economy into the ground. This is a truly shameful lifestyle.
Next 4 years will be interesting..Watch Greece default and pill out of the EU.
Makes full sense. Greece wants IMF out, if its debt is sustainable no need for IMF, if EU does not give credit relief then the debt is not sustainable, if debt is not sustainable then IMF will get involved, because Greek debt is not sustainable the IMF will demand EU credit relief before it participates, once EU gives credit relief no need for IMF.
It is very simple.
Greece wants to have their cake and eat it too.
As does DE/IMF/ECB.
The EU pulled in weak states like Greece by design. The Greeks NEVER had a chance once inside the Euro construct… their fate was sealed DECADES ago.
The Euro & EU are structurally flawed. Greece is a predictable symptom, not a cause/exception.
Yes mpower and lets not forget that Goldman Sachs has (is) gaming away and spreading tentacles but probably smirking in the background.
Article is lacking so much info that without investigation I have no idea why such strong comments.
Greece’s strategy is very damaging to the euro and the EU. Eurocrats cannot claim that their project is about prosperity. Look at Greece? If Greece would have left the euro, It could have served as a discipline to other countries. That’s what Germany wanted. Now It is a nightmare. How can you say that EU is about solidarity and hepling refugees that arrive in Greece and paying their rent with German money when at the same time Greek homes get foreclosed. It is a mess and the eurocrats have no idea how to fix it.
You can’t have a functioning society if its components do not share a common goal, value system or purpose. Simply putting a legal fence around them is not enough. Europe experimented with redrawing borders around the world without respect to these issues, and it resulted and still results in endless wars within those boundaries. They have done the same to themselves.
The progressive dream that we can IMPOSE one set of values on every living soul is insane. We should not interfere with the natural associations of people. Let France be France and Greece be Greece.
A catalogue of errors from allowing Greece in to start with under false pretences to the IMF becoming too embroiled and overstepping. Many in between.
A good example of why not addressing fundamental problems early on only increases the pain later for everyone.
Under this there is a global financial institution that helped facilitate it and who now has tentacles in the upper EU echelons. Probably making money out of it some how.
Anyone any idea on depth of protests in Romania, is USR colour rev., labelled as progressive http://www.independent.co.uk/news/world/europe/romania-protests-bucharest-parliament-victory-palace-government-collapse-no-confidence-vote-a7571296.html
Following this #justicepourtheo which is quite all round insane in France… not been on Anglo msm much/at all.
Lou Gubrious said:
Greece has 23% unemployment? Maybe they can consult with the US Dept of Labor to get the “headline number” down to 4-point-something percent. Unexpectedly.
Greece was already a basket case when they fraudulently became EU member and will remain a basket case for a long time – EU will muddle through with the help of Germany which will transfer some monies to the South to keep things alive.
All true, but expecting Europe to “muddle through” is wishful thinking. The problems are structural, and there has been ZERO appetite in Europe to address the fundamental problems with the EU construct.
IOW, muddling through is not an viable option… rather, it is merely the slow path to failure.