Greece Secures $170B Bailout in Round 2

By | February 21, 2012

The E/U plutocracy also known as “The Troika” has approved a second round of bailouts for Greece early Tuesday in Brussels. The details include supposedly bringing down the Greek debt to GDP ratio to 120.5% by the year 2020 by asking private creditors to take substantially bigger losses on their Greek debt holdings in the form of a 53.5% loss on the face value of their bonds. Greece is also given a break on the interest they were required to pay on the first round of bailouts, as euro-zone countries agreed to lower the interest rates to 1.5%, down from 2 to 3 points currently,  in a move the E/U says will cut the Greek debt load and thus lower the need for future bailouts. Many European economists reject the seemingly bloated projections about the latest bailout package, and believe that Greece will in fact require another bailout, and that these projections will fall far short of the stated goal of reducing Greece’s debt to GDP ratio to 120.5 % by 2020.

From The Guardian we see the following statements concerning the viability of the Greek bailout package 2.0:

Michael Hewson, senior market analyst at CMC Markets: “After hours of tortuous negotiations Greece was finally granted its second bailout in the early hours of this morning and thus now will be able to meet the €14.5bn bond payment in March, and  avert a messy default. It has come at a cost though, after an IMF/Troika report laid bare the problems facing the Greek economy, and it now rests on whether markets think the programme is even remotely credible, or achievable for that matter, as Greece seeks to rebuild its broken economy. While the package may buy more time it remains highly debatable whether it will achieve the measures it is designed to, given the magnitude of the problems in the country.”

Once again the appearance of reaching a deal to solve Greece’s debt-load problems is seen by many as just another episode of “kicking the can down the road” instead of any real solutions being enacted. While the latest Greek bailouts do buy the E/U more time to try to help Greece dig out from under decades of big government debt-spending, some economists believe this bailout package will fall far short of it’s stated projections.

Sony Kapoor, managing director of economic think-tank Re-Define: “Based on what we have seen today, Greece will almost certainly need another bailout. The Troika have had to do some arithmetic gymnastics in order to make the numbers add up but their optimistic assumptions are unlikely to hold. The mechanism for the contribution of profits on central bank holdings of Greek bonds is unnecessarily complicated and creates additional uncertainty and future potential disagreements. If haircuts had been imposed to private holdings of Greek bonds when debt restructuring was first discussed in 2010, the situation for Greece would undoubtedly have looked significantly better now. One can’t help but get the feeling that everyone involved is going through the motions, doing what they feel they have to do, rather than what they want to or what they believe in. Confidence in the success of what has been agreed is rather low.”

Of course the “strictly confidential” debt sustainability report drawn up by the E/U also paints a completely different picture of whether or not the latest bailout package will actually lower the Greek debt to GDP ratio, as Gary Jenkins of Swordfish Research exposes: “The Troika has agreed to lower the bailout loan rates, the private sector bondholders have agreed to take a larger write-down than was previously agreed (53.5% of face value rather than 50%) and the ECB has agreed to give up its profits in order to reduce the debt/GDP figure to 120.5% by 2020. The figures are the EU’s baseline numbers but according to a ‘strictly confidential’ debt sustainability report, under a slightly more pessimistic ‘tailored downside scenario’ debt/GDP will only fall to 160% by 2020 and Greece would need considerably more bailout cash. Obviously other risks are that the Greek people turn against the austerity measures and that at some stage the Greek politicians decide that a default is the only option.”

Notably absent from the recent “successful Greek bailout package 2.0,” announcements are just what added austerity measures will be forced onto the people of Greece, such as further tax increases, cuts to public sector workers who have been taught that they have a “right” to unsustainable salary and benefits packages, and any viable proposed solutions to Greece’s current 20%+ unemployment rate problem. Much to the chagrin of the E/U plutocracy media managers, this “deal” appears to do nothing more than shuffle the Greek debt around in a never-ending charade of protectionism against any E/U country actually ponying up the cash needed to move Greece’s economy forward. While the UN ramps up it’s call for global income equality and more power to impose worldwide wealth redistribution, the Globalists at the UN  were eerily silent about demanding help for the poor and middle Greek citizens that are being crushed under the weight of the E/U plotocrat’s austerity measures.  Apparently their “hypocrisy knows no bounds’ as the late Doc Holliday once proclaimed after gunning down Johnny Ringo while wearing a sherrif’s badge in the all-time great movie Tombstone.

For a more thorough understanding of what caused the Greek debt crisis please see, http://conservativedailynews.com/2011/11/greek-debt-crisis-steeped-in-social-mania-style-hope-and-change-politics/.

 

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