Eurozone 'agreement' on Greece debt

[SheungWan]

Best thing Tsipras can do after they have voted for the reforms is call a general election because after failing his "single policy" election manifesto and the referendum fiasco the Greeks do no trust him, nor does Europe or the rest of the world.

Calling now an election would not be surprising. Then Syriza could split and the 'harder left' can repudiate any current agreement. We have been here before, but next time round Euroland would just turn their backs and let the fools get on with it.

The BBC are saying it's not quite a done deal as the conditions are strict and the Greek PM is facing problems with the far left of his party and sections of the public that consider he sold out.

I do think the ' lack of trust ' aspect that was widely held in Europe is justified and i wonder how long it will take for Greece to be back asking for more ?

Let's not worry for now whether Greece will be back asking for more, but yes, the traditional Greek 'play' is to repudiate whatever deal is on the table and requires implementation on their behalf. Having the the statistical office declared independent from government interference (ie blocked from fiddling the figures) was probably the final straw. Dumping Tsipras to make the block not beyond Syriza which is a hotch potch of squabbling left organisations. They will fight to keep their restrictive practices and state non-jobs. Let's see if they pull the trigger and go for broke. Would we be shocked?

[NeverSure]

Isn't finance crazy. All this debate about who is and isn't "printing" money. From what I've seen in documentries with economics professors, government finance ministers, world bank employees and so on, they all seem to agree that most countries including the US have been making money out of thin air whether by printing or borrowing. It seems that most banks can do it legally. It doesn't even need to be a central bank.

If all the money in the world was created by banks and lent out at interest then surely there can never be enough money in the world to pay off the debt and the interest.

The EU and the UK have been doing that. They have been creating debt bonds and then buying their own issued bonds with thin air. The UK is the one to watch because its debt is getting to be about as big as that of the US as a percentage of GDP but without the assets and economic engine to back it.

The US issues debt bonds (treasuries) and sells them to the marketplace, actually borrowing the money instead of - poof.

If you borrow money from someone else you don't create new money. You transfer who has control of it. Your financial statement shows a new liability - the debt. The lender's financial statement shows a new asset - accounts receivable - money loaned but payable.

Before the loan the lender had the same amount of assets but it might have been cash in the freezer or money in the bank. It's the borrower who has the change in the bottom line - total assets and liabilities. The borrower now has money or what it bought - an asset, and a loan payable - a liability to offset it. The lender has less money but it's offset by the loan and his asset totals don't change. The bottom lines of both parties still balance.

We can only imagine where the EU is getting all of this money after it absorbed so many loan losses. Or will absorb. Who knows.

Cheers.

[MW72]

Isn't finance crazy. All this debate about who is and isn't "printing" money. From what I've seen in documentries with economics professors, government finance ministers, world bank employees and so on, they all seem to agree that most countries including the US have been making money out of thin air whether by printing or borrowing. It seems that most banks can do it legally. It doesn't even need to be a central bank.

If all the money in the world was created by banks and lent out at interest then surely there can never be enough money in the world to pay off the debt and the interest.

The EU and the UK have been doing that. They have been creating debt bonds and then buying their own issued bonds with thin air. The UK is the one to watch because its debt is getting to be about as big as that of the US as a percentage of GDP but without the assets and economic engine to back it.

The US issues debt bonds (treasuries) and sells them to the marketplace, actually borrowing the money instead of - poof.

If you borrow money from someone else you don't create new money. You transfer who has control of it. Your financial statement shows a new liability - the debt. The lender's financial statement shows a new asset - accounts receivable - money loaned but payable.

Before the loan the lender had the same amount of assets but it might have been cash in the freezer or money in the bank. It's the borrower who has the change in the bottom line - total assets and liabilities. The borrower now has money or what it bought - an asset, and a loan payable - a liability to offset it. The lender has less money but it's offset by the loan and his asset totals don't change. The bottom lines of both parties still balance.

We can only imagine where the EU is getting all of this money after it absorbed so many loan losses. Or will absorb. Who knows.

Cheers.

The UK has some serious problems. Even after 5 years of "austerity" we are in more debt than ever. That's only government debt. Let's not forget personal and corporate debt. With no manufacturing base and a mainly service based economy there is little scope to pay off the debt quickly.

I'm not sure how many realise that when Greece, Portugal and Spain were going down the pan that the UK was expected to be the next domino to fall. Some kid themselves that we are ok because we didn't join the Euro but we are in a bad way.

[NeverSure]

All western governments have promised their people more than they can pay out of current income. It's one thing to say that "all people are entitled to" or "X is a human right", but when it comes down to paying for it...

Cheers.

[metisdead]

Topic is about Greece and the Eurozone, not about China or the US debt to China. Keep going in this direction and posts will disappear.

[MAJIC]

83 Billion Euros Bail out, and the 3rd Bail out in a row,Bankrupt Greece are still protesting that they have had another raw deal,but who in their right mind would lend them anything? and set up a repayment program,here goes another 83 Billion Euros down the tubes,and let's meet again when the cash injection has been used up!

Here's to Bail out number 4!

[MAJIC]

Unless the government cuts spending which means a lot of the promised benefits they will never get out of debt.

I think that there is going to be a lot to hate if you are a greek but if you think you realize that you have to curb what you are doing.

This is a lesson that a lot of countries like the U.S. and U.K need to heed.

The US is close to being in the same place as Greeece the only benefit they have is that they can print their own money.

We (the UK) would have been in this mess had we elected a socialist government five years ago who thought the answer was to spend their way out of the mess we were in.

Yes the last five years have been tough but we in the UK have built strong foundations for a brighter future.

Are you sure? How much of UK belongs to foreign investors or banks like HSBC?

You would need to ask the Tory party for the figures on sell off's, on previous assets! owned by the people!

[NeverSure]

The Eurozone doesn't have any money. It has paper it created out of nothing and continues to create. There is no sovereign country backing it, just a "group" with disparate ideas about how to run things. It has a bank with no money. No one funds that bank with real money. It's all a charade.

Even if Germany pulled out, Germany would have to print its own money out of nothing because - where would it buy this money to make it valuable? I agree that the full faith and credit of Germany has value, but what about the other countries in the Eurozone? Who would want their sovereign money? No one even wants China's or Russia's money and they have to trade with foreign reserves. They both have to hold USD to back their international trades.

I suspect that most would accept the GBP if it weren't for the details of converting it to what the other party wanted, but there aren't enough GBP to meet worldwide needs in any event. Great Britain is right now running deficits and paying for them with debt bonds it first issues and then buys itself. This is a definition of creating money. I owe myself money so I write myself an IOU and call it money.

I think that Greece is being given so much time, money, and so much slack because the other members of the Eurozone are very frightened at an unwinding of the currency as more countries leave i.e. Greece 2.0, 3.0... Greece is having bank failures denominated in Euros and people in Greece are trying to get out of Euros and into other currencies as we speak. Greek bank deposit = Euros = no good right now.

[danmarnj]

Hmmmm....keep loaning Greece money they have no intention or ability to repay. Then Greece becomes angry at the lender......Didn't I see this on an episode of Judge Judy, except that the defendant lived in a trailer park?

[micmichd]

So, Greece is getting "privatized".

ie. the banks take the profit, the taxpayers take the risk.

Once again.

Edited July 14, 2015 by micmichd

[ggold]

 

The point is the Euro is dead, this whole fiasco has shown the Euro is not here for ever.

You who knows everything, especially the future, can you explain to us why Euro is dead ? funny to see all these American TV members here who bury euro ; are you afraid ?

you are like all of us : you know nothing ! see you in two years, may be you are right, may be you are wrong

 

I'm not American. What is there to be afraid of? What is the point of your post?

[micmichd]

There's been much chatting about trust and reliability in the last days.

Now British PM reminded EU that they promised the EFSM program would end up in 2010, and UK would notify pay for Greece in case of a revival of EFSM. UK trusted and relied on EU promises. And of course he can, because (as we all know) EU is an honourable gang

Edited July 14, 2015 by micmichd

[Basil B]

There's been much chatting about trust and reliability in the last days.

Now British PM reminded EU that they promised the EFSM program would end up in 2010, and UK would notify pay for Greece in case of a revival of EFSM. UK trusted and relied on EU promises. And of course he can, because (as we all know) EU is an honorable gang

Chancellor George Osborne has moved to block any attempt to use British taxpayers' money as part of the Greek bailout, Treasury sources have said.

Mr Osborne is said to have told other ministers that using EU-wide cash for a bridging loan was a "non-starter".

Doing so would breach an agreement that an EU-wide emergency fund would not be used to underwrite bailouts, he is expected to tell eurozone colleagues.

Finance ministers from 28 EU countries are due to meet in Brussels later.

http://www.bbc.co.uk/news/uk-33517457

[SheungWan]

83 Billion Euros Bail out, and the 3rd Bail out in a row,Bankrupt Greece are still protesting that they have had another raw deal,but who in their right mind would lend them anything? and set up a repayment program,here goes another 83 Billion Euros down the tubes,and let's meet again when the cash injection has been used up!

Here's to Bail out number 4!

Actually, you will find that this deal doesn't pay out a jackpot on signing. It is monitored. And the EU is getting better at it now that the Greek government and state institutions have telegraphed that they will try to subvert any deal whether through reversals, foot dragging or statistical falsification. The Greek side know that their room for post-agreement evasion is closing up so the focus now is not what they will do post-agreement as business as usual is being progressively withdrawn from the menu. No, the nutters in Syriza (patron saint ex-finance minister Varoufakis) want to go all-in with the traditional manoeuvre of rejecting the agreement with a parliamentary vote, general election, whatever, and keep the main objective of threatening suicide and in their delirium taking out the EU with them. There is a parliamentary vote this week/next week. The fat lady hasn't sung yet, but these guys are looking for the exit and don't realise that the alternative promised land of a new Drachma is a new hell for them.

[micmichd]

83 Billion Euros Bail out, and the 3rd Bail out in a row,Bankrupt Greece are still protesting that they have had another raw deal,but who in their right mind would lend them anything? and set up a repayment program,here goes another 83 Billion Euros down the tubes,and let's meet again when the cash injection has been used up!

Here's to Bail out number 4!

Actually, you will find that this deal doesn't pay out a jackpot on signing. It is monitored. And the EU is getting better at it now that the Greek government and state institutions have telegraphed that they will try to subvert any deal whether through reversals, foot dragging or statistical falsification. The Greek side know that their room for post-agreement evasion is closing up so the focus now is not what they will do post-agreement as business as usual is being progressively withdrawn from the menu. No, the nutters in Syriza (patron saint ex-finance minister Varoufakis) want to go all-in with the traditional manoeuvre of rejecting the agreement with a parliamentary vote, general election, whatever, and keep the main objective of threatening suicide and in their delirium taking out the EU with them. There is a parliamentary vote this week/next week. The fat lady hasn't sung yet, but these guys are looking for the exit and don't realise that the alternative promised land of a new Drachma is a new hell for them.

What is a delirium?

[TheAppletons]

83 Billion Euros Bail out, and the 3rd Bail out in a row,Bankrupt Greece are still protesting that they have had another raw deal,but who in their right mind would lend them anything? and set up a repayment program,here goes another 83 Billion Euros down the tubes,and let's meet again when the cash injection has been used up!

Here's to Bail out number 4!

Actually, you will find that this deal doesn't pay out a jackpot on signing. It is monitored. And the EU is getting better at it now that the Greek government and state institutions have telegraphed that they will try to subvert any deal whether through reversals, foot dragging or statistical falsification. The Greek side know that their room for post-agreement evasion is closing up so the focus now is not what they will do post-agreement as business as usual is being progressively withdrawn from the menu. No, the nutters in Syriza (patron saint ex-finance minister Varoufakis) want to go all-in with the traditional manoeuvre of rejecting the agreement with a parliamentary vote, general election, whatever, and keep the main objective of threatening suicide and in their delirium taking out the EU with them. There is a parliamentary vote this week/next week. The fat lady hasn't sung yet, but these guys are looking for the exit and don't realise that the alternative promised land of a new Drachma is a new hell for them.

What is a delirium?

It's that car in Back to the Future, used to be built by John Delirium....oh, wait, that's not right.

Here's a link to the definition of delirium since you apparently tried to save a few bucks by buying a computer that doesn't have Google:

http://www.mayoclinic.org/diseases-conditions/delirium/basics/definition/con-20033982

Edited July 14, 2015 by TheAppletons

[micmichd]

Thank you for helping me to save money for a Google computer

I still don't understand.

According to the link you provided, a delirium is a bunch of symptoms shown by individuals.

How can a whole country, part of a country, or a political party have such symptoms?

SheungWan, do you know?

Edited July 14, 2015 by micmichd

[BuaBS]

Funny video about the Greek deal :

https://www.youtube.com/watch?v=WpE_xMRiCLE

[micmichd]

http://www.theguardian.com/business/live/2015/jul/14/greek-crisis-tsipras-political-backlash-bailout-osborne-uk-live

Guess that's a realistic view.

Why don't they make a conditional haircut, allowing Greece to pay back instalments, and then give them an incentive to pay back these instalments in time?

Edited July 14, 2015 by micmichd

[wabothai]

It is not banks running things !!!!

They are the people running the banks running things.

Pointing fingers at institutions is useless. Point fingers at their leaders, and they have names.

Too much hiding going on.