Despite "Austerity" Greek Debt Is Rising At Its Fastest Rate Since March 2010
The total amount of Greek government debt outstanding has grown so much over the last 15 months that it has retraced over 60% of the 'haircut'-based reduction and has jumped a stunning 14.5% in that period. AsKeepTalkingGreece notes, this is despite three years of strict austerity measures, incredible taxes and a debt haircut of 53% (~100billion euros in March 2012). As To Vima reports, Greek debt stands at EUR 321 billion, which is considerably higher than the pre-crisis levels of 2009. Is it any wonder that Merkel and Schaeuble have been forced to admit that a new bailout will be required? And how long before a 'new template' will be enforced?
The current debt data corresponds to 180% of GDP and thus despite having achieved a primary surplus. the debt is still burdened with the amount of loan interests.Finance Ministrer Yiannis Stournaras and his economic team try to find ways on how to deal with the issue.The big question remains: is the debt sustainable? Could a new haircut solve the problem of always increasing debt?New bailoutWhile German finance minister Wolfgang Schaeuble revealed last week that Greece will need a new bailout package, EU commissioner European Union Commissioner Guenther Oettinger estimated the new bailout package to be slightly higher than 10 billion euro, Greek media reported on Saturday. Oettinger reiterated that there will be no new debt haircut.Speaking to German media, Oettinger expects the new aid package for Greece to be much smaller than previous programs but said a debt write-down for the country can’t be ruled out definitively, even as the German government continues to reject it.Mr. Oettinger, who is EU energy commissioner, said he expects new aid covering the period from 2014 to 2016 would involve a “small two-digit billion” euro sum, according to the interview.Greece’s first bailout plan in 2010 brought the country loans of 73 billion euros ($97.67 billion). But as Greece’s economy deteriorated, that had to be supplemented with a new package valued at about EUR173 billion in 2012. ((WSJ)Samaras want to get rid of the TroikaAccording to exclusive information, Prime Minister Antonis Samaras is determined to apply three strategic steps to get rid of the austerity loan agreements.Samaras will seek primary surplus, radical adjustment of debt and exit to the markets in 2014. The political negotiation will aim to avoid a third Memorandum of Understanding (loan agreement) with the Troika that will bring new austerity measures.“I want to disengage from the memoranda, do away with the troika and the country to move to the next day,” Antonis Samaras allegedly told his interlocutors.The prime minister will seek a solution near to a new haircut. Samaras campaign will start in October – after the German elections.We conclude our Greek debt Sunday report with a “joke”FinMin Yiannis Stournaras told Proto Thema that a new bailout doesn’t definitely mean ‘new austerity measures.’“If Greece would need further support, this would be around 10 billion euros, ie a very small amount compared to previous memoranda. And we are not talking about new MoU, but about a financial support package, without new conditions. Furthermore, the targets – our obligations – have been set until 2015 set therefore no other measures can bee required, not other goals can be set. “
Driving On Portugal's Ghost Roads: Traffic Crashes By 68% In First Quarter
Submitted by Tyler Durden on 08/26/2013 - 19:16
While Portuguese bond spreads suggest all-is-well, stocks rally, and the nation's leaders proclaim the worst is over, there is a hard-to-manipulate statistic that should shock many about the truly dismal state of the troubled nation. As The FT reports in the brief clip, Portuguese road-traffic fell 50% in 2012, and a stunning 68% in Q1 2013... and the detail are even worse.Italian Bonds Plunge To Worst Day In 9 Weeks
Submitted by Tyler Durden on 08/26/2013 - 11:56
With the UK on holiday (vacation), European markets were relatively quiet - apart from Italy... The Berlusconi debacle rolls on and sparked the worst sell-off in Italian sovereign bonds in 9 weeks and pushed the spread on BTPs over Bunds to its highest in 3 weeks. Most European equity markets closed mildly lower (with Germany's DAX unch - recovering from its EUREX-halting drop earlier in the day. Italian stocks were the big underperformer (down 2.2%). For the 3rd day in a row, Europe's VIX was smashed lower from an opening high print to close at its lows. The UK and its 'credit police' will be back tomorrow.Spanish Bad Loans Re-Spike To 50-Year High
The surge in Spanish (in fact broadly European) equity and bond markets of the last few weeks has been suspiciously one-way and based (seemingly) on the hopes-and-dreams of the world's liquidity-based marginal investor finding another new normal momentum 'clean shirt' to pile into. However, despite the uptick in some data in Europe, the structural problems remain entirely unfixed and nowhere is that more evident than in the chart below. As European stock and bond markets suffer their worst 2 days in 2 months, Spanish bad loans (after a very brief pause in the exponential surge that also provided hope that the worst was over) have re-surged to a new all-time record high. At 11.61% of total lending, bad loans are now at their highest since records began in 1962.
of course, there has been some 'celebration' among Rajoy and his cohorts-in-scandal that the unemployment rate dropped most recently...
You decide who you think is lying?
Good morning Fred,
ReplyDeleteAs you said, still no flight to the safety of PM's though Bitcoin is catching a bid this morning up to 129. Man the Greeks must feel stupid, they should have just gone bankrupt.
Really good Syria updates, though I disagree with the one guy who said Iran will fall by October, they may attack Iran by then but I see Iran giving the bankers a run for their money. I think that years of sanctions and watching other countries get leveled has made them more inventive.
Morning Kev - Seeing gold catching a bid today , still not much of a reaction from oil though it is up about 1.5 percent this morn ! Emerging markets feeling quite the brunt of the turmoil as major selloffs ongoing / bonds and currencies hit as well ! Not much reaction from treasuries though - just several bps on the ten year so far.
ReplyDeleteLooks like Obama looking at maybe a two day cruise missile or bombing run campaign - not sure that is going to be a game changer - syrian troops have been ordered out of their barracks and will disperse. Would we truly strike chemical weapons storehouses without knowing what will occur ( will such strikes release chemical weapons that have been mixed in anticipation of missile strikes ? What happens after the missile strikes , what then ? And let' not forget , there is the question of whether the US - by striking unilaterally ( without UN authorization ) and apparently without congressional authority to start another War , will our actions be not just illegal , but War Crimes ?
The piece on Reichstag was interesting - if a false flag is used ( October has been identified as a timeframe when " something " could happen , might explain the rush to degrade Syria now , might give a supportive narrative as to why a false flag attack ( to be pinned on Iran ) could be run out .... just something to ponder. One has to ask - at what point do we see China and / or russia say " Enough ! "
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