50% of Greece's Debt written off

blackwhite

Michael Lewis' new book Boomerang has a very interesting chapter on Greece, an extract is on the link below:

http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010


It was included in Sunday Times magazine a few weeks back.

.....Add it all up and you got about $1.2 trillion, or more than a quarter-million dollars for every working Greek. Against $1.2 trillion in debts, a $145 billion bailout was clearly more of a gesture than a solution. And those were just the official numbers; the truth is surely worse. “Our people went in and couldn’t believe what they found,” a senior I.M.F. official told me, not long after he’d returned from the I.M.F.’s first Greek mission. “The way they were keeping track of their finances—they knew how much they had agreed to spend, but no one was keeping track of what he had actually spent. It wasn’t even what you would call an emerging economy. It was a Third World country.”.....

hightower1

Ah ffs. This thread equates to .....

"How come yer mans getting the dole, pffft, free money each week for not working"
... Yeah, your not getting a hand out cause you work? No , your not getting a hand out cause your better off.


Isnt that the entire point of the EU? The stong help the weak in times of need so in the end we all end up with a fairer and better average quality of life? It doesnt negate who is to blame for the current issues but whinging about someone getting more than us when ultimatly we ARE better off than them just bangs of tight arses whinging "want want want gimme gomme gimme"

V_Moth

"Living beyond your means" - a wonderful propaganda phrase beloved of those who want to insinuate that the entire population is to blame. So who in Greece is responsible? A large chunk of blame has to go to Goldman Sachs who colluded with the Greek government in hiding the true extent of budget deficits.

Certainly the EU must shoulder some blame as well for not checking the Greek budget and allowing its entry into the Eurozone. Similarly for allowing ECB to give stupidly low interest rates.

But I suppose it is always easier to blame the population as a whole, especially if you do not know the country or its (recent) history.

I am pie

Freddie59 wrote: »

Look at the posts above you. There is a description of Greece as 'living beyond its means' and 'widespread tax evasion'. Is ireland any different?

For living beyond your means write an €18Bn deficit - something which everyone is ignoring. We need the same budgetary measures as Greece. And they WILL happen - despite the protestations of the Left.

The difference will be that Greece will have had its debt slashed by 50% - but Ireland won't.

Tax avoidance in Ireland is nowhere close to Greece. Have a quick google, you'll be convinced of that after a very cursory review of your findings. Similarly so for the budget cuts required. All of that is academic in terms of the OP.

The budget cuts are not a result of rioting. We can't gurn and rock-throw our way to a default. If we were stupid / ill informed we could decide to but the benefit of paying off 50% of our debt would be absolutely dwarfed by the issues caused by defaulting.

Ireland needs credit to function, none would be forthcoming. Ireland would no longer be able to function.

DoneDL

So the Greeks lied about their economy to gain entry to the Euro, got lots of money, spunked it and now don`t have to pay it all back. Trojan horse please.

leonidas83

mikom wrote: »

Was in Athens about 3 weeks ago.
Absolute shithole, grubby, graffiti daubed, not a cut of work in most of the moped driving leather jacket wearing posers over there, others living under motorway underpasses, stinks to high heaven, dogs flat on footpaths..... I could go on....
They are lucky they have history as they have fuck all else that appeals to me.
Give me Ireland any day

Please do, im interested to see why the whole EU could now be ****ed for a long time

Chucky the tree

If Greece has it so lucky you should really consider moving over there then OP.

Thrill

blackwhite wrote: »

Michael Lewis' new book Boomerang has a very interesting chapter on Greece, an extract is on the link below:

http://www.vanityfair.com/business/features/2010/10/greeks-bearing-bonds-201010


It was included in Sunday Times magazine a few weeks back.

It's a long, long article. Was worth reading though.

The national railroad has annual revenues of 100 million euros against an annual wage bill of 400 million, plus 300 million euros in other expenses.

The average state railroad employee earns 65,000 euros a year. Twenty years ago a successful businessman turned minister of finance named Stefanos Manos pointed out that it would be cheaper to put all Greece’s rail passengers into taxicabs: it’s still true.

“We have a railroad company which is bankrupt beyond comprehension,” Manos put it to me. “And yet there isn’t a single private company in Greece with that kind of average pay.”

Oddly enough, the financiers in Greece remain more or less beyond reproach. They never ceased to be anything but sleepy old commercial bankers.

Virtually alone among Europe’s bankers, they did not buy U.S. subprime-backed bonds, or leverage themselves to the hilt, or pay themselves huge sums of money. The biggest problem the banks had was that they had lent roughly 30 billion euros to the Greek government—where it was stolen or squandered.

In Greece the banks didn’t sink the country. The country sank the banks.

The scale of Greek tax cheating was at least as incredible as its scope: an estimated two-thirds of Greek doctors reported incomes under 12,000 euros a year—which meant, because incomes below that amount weren’t taxable, that even plastic surgeons making millions a year paid no tax at all.

The problem wasn’t the law—there was a law on the books that made it a jailable offense to cheat the government out of more than 150,000 euros—but its enforcement. “If the law was enforced,” the tax collector said, “every doctor in Greece would be in jail.”


I laughed, and he gave me a stare. “I am completely serious.” One reason no one is ever prosecuted—apart from the fact that prosecution would seem arbitrary, as everyone is doing it—is that the Greek courts take up to 15 years to resolve tax cases. “The one who does not want to pay, and who gets caught, just goes to court,” he says.

mikom

mikom wrote: »

Was in Athens about 3 weeks ago.
Absolute shithole, grubby, graffiti daubed, not a cut of work in most of the moped driving leather jacket wearing posers over there, others living under motorway underpasses, stinks to high heaven, dogs flat on footpaths..... I could go on....
They are lucky they have history as they have fuck all else that appeals to me.
Give me Ireland any day

leonidas83 wrote: »

Please do, im interested to see why the whole EU could now be ****ed for a long time

A few "highlights" from the trip..... http://oi40.tinypic.com/xoksjk.jpg

ebbsy

At least we can sit back and wallow in the knowledge that there is a country more f**ked than us.

monkeybutter

Yakult wrote: »

I smell a protest comi................. Ah never mind, forgot this was Ireland. We'll just sit back and take it up the ass without any lube.

Seriously, that's why I voted for Norris, he could at least teach us how to make it more comfortable.

K-9

Mr. Incognito wrote: »

Whatever way you look at this the Euro zone is fooked.

To the man on the street it looks like the Greeks have gotten off scott free.

However,

There was no HOPE of recovering this debt. It was structured around money owed that was not substantiated by collateral. i.e Greek property and valuation collapse. So basically once the collateral is gone, its not forgiveness, its a write down to accept the basic fact that you owe us X- they were never going to get that from a defunct Greece so they have said you owe us a more manageable X that we might actually be able to milk out of you.

They'll be lucky to get half imo.

Same with Ireland- you can bandy about figures all you want but they underlying assets are not there to support the loans that were taken out from Germany. The Germans and the Politicians want to go on believing that they will make some sort of return but they won't. They will have to write down a whole chunk of debts in every Euro zone country and take the hit to the Euro which will destroy German export values but will make Euro able to compete for international manufacturing.

The problem is, ultimately we owe all this Money to China ........... **** gonna hit the fan me thinks.

I don't think Greece or for that matter Portugal had a property bubble or banking crisis anywhere near ours, there problem was endemic high spending and tax evasion.

Ours was as you say a property bubble. A write down of our debt is inevitable as well, €3-4 Billion of cuts to come in this budget and the next and more tax rises. There will be zero to little growth in the next few years and what little growth there is will be exports, which don't create that much employment.

EDIT: The cut is actually about 20%, not 50% as reported!

Liam Byrne

I am pie wrote: »

Yeah, right, the EU, the IMF and the ECB all looked at a few thousands Greeks throwing rocks and decided they had better give them 50 % of their bank loans.

FFS.

Greece are being allowed to enter into a managed default. Nothing at all to do with protesting on the street and everything to do with the banks realising that 50% is better than 0%. This won't be a free lunch.

And yet in this country we (the taxpayer) get to pay twice as much as necessary for the banks' assets and then pay the bondholders off in full ?

If 50% is better than 0%, then why did we end up paying EXTRA ?

Freddie59

humanji wrote: »

You're underestimating how corrupt Greece is. It makes Ireland look honest. We are not even close to being in the same position as them. They can't pay their debts and get a 50% reduction. But they still can't pay their debts and are screwed for decades. We can pay our debts, but it'll be painful for a hell of a lot less time.

Can you please explain how a country the size of Ireland can ever pay back what is estimated to a a total debt of some €250 Bn by 2014? And how we can continue to fund SW/PS by borrowing €18Bn a year on top of that?

Freddie59

blackwhite wrote: »

The Greek deficit is primarily due to the Government spending well above what it was taking in, and not due to bank debts.
The Greek government spent the best part of the past decade hiding it's debts, and under-reporting its expenditure. The Greek people have been living off the benefits of this state-conducted fraud.
One of the factors that lead to the Greek deficit was large-scale and widespread tax evasion, coupled with the government showing little interest in enforcing its tax laws. Ordinary Greeks not paying their taxes was a large part of the problem.
The Greek have shown an amazing ability to blame everyone but themselves for their own problems, and their protests are because they are now being asked to actually foot some of the bill for their own excesses.

So, essentially, what you are saying is that the Greek Government overspent and are given a 50% reduction on their debt - in Ireland the Banks overspent and over-committed themselves; and the taxpayer foots the bill to the tune of 100%. FFS this is becoming more surreal as time passes.

Freddie59

I am pie wrote: »

Tax avoidance in Ireland is nowhere close to Greece. Have a quick google, you'll be convinced of that after a very cursory review of your findings. Similarly so for the budget cuts required. All of that is academic in terms of the OP.

The budget cuts are not a result of rioting. We can't gurn and rock-throw our way to a default. If we were stupid / ill informed we could decide to but the benefit of paying off 50% of our debt would be absolutely dwarfed by the issues caused by defaulting.

Ireland needs credit to function, none would be forthcoming. Ireland would no longer be able to function.

This is my third time asking this:

How long can this country continue to borrow €18Bn per year to fund SW, Health, and PS wages?

Freddie59

Liam Byrne wrote: »

And yet in this country we (the taxpayer) get to pay twice as much as necessary for the banks' assets and then pay the bondholders off in full ?

If 50% is better than 0%, then why did we end up paying EXTRA ?

Got it in one. Fora all the economic BS and propaganda, nothing changes the cold fact that the Irish Government and people did not borrow this money - banks and speculators did. They owe it - we don't.

sensibleken

Freddie59 wrote: »

Got it in one. Fora all the economic BS and propaganda, nothing changes the cold fact that the Irish Government and people did not borrow this money - banks and speculators did. They owe it - we don't.

yeah but they..... i mean ...... consequesnces of inaction are.........we've turned a corner ok!

runs

Freddie59

Freddie59 wrote: »

Got it in one. Fora all the economic BS and propaganda, nothing changes the cold fact that the Irish Government and people did not borrow this money - banks and speculators did. They owe it - we don't.

Irish people did borrow the money...nobody was forced into a ridiculous mortgage..

Chips Lovell

Explain to me why you think a Greek default is better than our current situation.

Freddie59

AdamD wrote: »

Irish people did borrow the money...nobody was forced into a ridiculous mortgage..

Irish people were LOANED the money. If the banks had behaved properly they couldn't have accessed the funding in the first place. So please - do us all a favour and call it for what it is.

Mismanagement on a monumentally stupid scale of the banks. With the taxpayer (myself included) who didn't borrow ANY money footing the bill. A fcuking farce.

Freddie59

Freddie59 wrote: »

Irish people were LOANED the money. If the banks had behaved properly they couldn't have accessed the funding in the first place. So please - do us all a favour and call it for what it is.

Mismanagement on a monumentally stupid scale of the banks. With the taxpayer (myself included) who didn't borrow ANY money footing the bill. A fcuking farce.

Its a two way street.

Idiot banker: 'You earn 30,000 a year, Ill loan you 500,000.'
Idiot looking for a loan: 'Ok'.

moceri

Why are our politicians so docile and compliant when it comes to dealing with the TROIKA. Senior Bondholders at Anglo Irish bank are due to be paid back this month, with an Interest rate as high as 13% , which was presumably the risk premium. But no, the Irish Tax Payer stepped in to prop them up. The CEO of anglo-Irish is still being paid 500K for running a zombie bank.

One of the biggest Snr. Bondholders , ironically, is a Greek, tax exiled, shipping magnate.

MAKES MY STOMACH SICK

4leto

I don't think this is enough, I still think more is needed. But its good enough for now.

But it will lead to further economic integration and then we can kiss our low corpo tax goodbye.

humanji

Freddie59 wrote: »

Can you please explain how a country the size of Ireland can ever pay back what is estimated to a a total debt of some €250 Bn by 2014? And how we can continue to fund SW/PS by borrowing €18Bn a year on top of that?

I don't remember saying it would be paid off in 2 years.

And you're missing the point that Greece is in a completely different situation to Ireland.

K-9

Freddie59 wrote: »

This is my third time asking this:

How long can this country continue to borrow €18Bn per year to fund SW, Health, and PS wages?

Cuts have been and will be made to SW, Health and PS wages, the increased interest bill just eats into the saving.

orangebud

The agreement also contains ten measures to improve euro zone governance

A The governance structure of the euro zone is to be strengthened and the economic union is to be enhanced to make it commensurate with the monetary union

At least two euro summit meetings per year to define “strategic orientations for the conduct of economic policies”

B The president of the euro summit will be designated by the heads of state of the euro area

C The president of the euro summit will keep non euro area member state informed.

D The euro group will ensure closer co-ordination of economic policies and seek to promote financial stability. It will also seek to strengthen surveillance of member states' economic and fiscal policies

E A decision will be whether the euro group president is full-time

F The president of the euro summit, the president of the commission and the president of the euro group will meet, at least once a month

G The euro group working group will provide preparatory level work for euro group meetings

H The euro group working group will be chaired by a full-time Brussels-based president

I Existing administrative structures ( the Council General Secretariat and the EFC Secretariat) will be strengthened to provide adequate support to the euro summit president

J Rules and mechanisms will be set up to improve communication and ensure more consistent messages from the euro group

this sounds like more power to the EU turning Ireland into a state

RATM

When all is said and done Ireland is €220 billion in debt. That is shared on a population of 4.3 million people.

It doesn't take long to figure out that 4.3 million people cannot pay a debt of €220 billion, it is just impossible to comprehend.

We will be defaulting just like Greece, as will Portugal. Don't mind the FG mantra of 'keep yer head down, we can get out of this'. It's just not possible, not in a million years. There isn't a single sane economist in the world who believes it possible, even Nobel prize winning economist Paul Krugman has written as much.


So the IMF/EU/FG/Labour keep us believing it is so they can get more money out of us before the default. We're about to pay unsecured Anglo bondholders €770 million in the 6 days time- paying these guys off as much as possible for as long as possible is part of the IMF/EU strategy. And then when we can't pay we'll default, it's as simple as that.

And the reason why we don't just go ahead and get it over and done with is because FG/Lab have no balls.

But it will happen, mark my words, and the sooner the better for all concerned (bar the bondholders, politicans and bankers that is)

melekalikimaka

blame bankers/blame ff/blame eu - its all good, the moment someone tries to place some blame on the numptys and their numpty loans and mortgages, hands fly up in hissy fits, maybe its just me, i'm doing grand, no loans, steady job, i wonder how many outside the central bank can clim inpartial to this whole thing, not out of work or under financial burden... or down right marxist...

Dyr

Irish: Oh the holy mortifying shame of it, for gods sake, say nothing and don't make a show of us in front of the neighbours..what will people think

greeks: no way, not happening.. f**k you pal, no seriously F**CK you pal

The squeaky wheel got the grease

Bobby Baccala

Bambi wrote: »

Irish: Oh the holy mortifying shame of it, for gods sake, say nothing and don't make a show of us in front of the neighbours..what will people think

greeks: no way, not happening.. f**k you pal, no seriously F**CK you pal

The squeaky wheel got the grease

You know why your boards name is bambi?

The Waltzing Consumer

P4DDY2K11 wrote: »

You know why your boards name is bambi?

Because he/she is very young and naive in their views?

123balltv

like Jimmy Rabbitte said 'The Irish are the blacks of Europe'

Bobby Baccala

The Waltzing Consumer wrote: »

Because he/she is very young and naive in their views?

no because i just murdered his/her mother.

Dyr

P4DDY2K11 wrote: »

no because i just murdered his/her mother.

My mothers been dead for some time buddy, but do carry on.

Bobby Baccala

Bambi wrote: »

My mothers been dead for some time buddy, but do carry on.

oh well now i feel like a gimp.
Sozzys

K-9

Bambi wrote: »

Irish: Oh the holy mortifying shame of it, for gods sake, say nothing and don't make a show of us in front of the neighbours..what will people think

greeks: no way, not happening.. f**k you pal, no seriously F**CK you pal

The squeaky wheel got the grease

I suppose the Greeks have a recent history of military juntas, so are quite the excitable bunch!

They should never have been let in, same with a few other countries, probably including Ireland. Problem in letting them go now is the market sharks will feed on us and Portugal and probably a few others.

The Left Hand Of God

It is actually 28%?

Taken from ZH

• Greece has €350 billion in total debt including about €70 billion in Troika "post-petition" loans; these are untouched.
• Of the €280 billion, roughly €75 billion is held by the ECB: this, like the Troika loans, will be untouched.
• This leaves just ~€200 billion in actual debt to undergo a haircut.
• Apply a 50% haircut to this debt (ignoring the fact that of this about €35 billion is held by Greek pension funds, and once the realization that Greek pensions have been cut in half dawns upon the population, the result will be the biggest riots ever seen in Athens yet).
• Total debt to be cut: just about €100 billion.
• Hence, of the total €350 billion, just €100 billion is eliminated, most of it used to backstop and service Greek pension and retirement obligations
• €250, or the residual, of €350, the original, means 72%, or a 28% haircut.
  
• Greek GDP was €230 billion on December 31, 2010 and declining fast

The whole pension thing is funny in a bad way.

smash

They seem very grateful for the help...

http://www.dailymail.co.uk/news/article-2054406/Furious-Greeks-lampoon-German-overlords-Nazis-picture-Merkel-dressed-SS-guard.html

4leto

smash wrote: »

They seem very grateful for the help...

http://www.dailymail.co.uk/news/article-2054406/Furious-Greeks-lampoon-German-overlords-Nazis-picture-Merkel-dressed-SS-guard.html

Unbelievable, so it looks like the greek default was just postponed again.

Freddie59

humanji wrote: »

I don't remember saying it would be paid off in 2 years.

And you're missing the point that Greece is in a completely different situation to Ireland.

So are you. It is estimated that our debt will be 250 Bn by 2014. How do you believe that we can pay this off - EVER?
Oh it's a different situation alright - their Government squandered the money. Over here the banks and developers did it - and we're expected to foot the bill for these pricks?

Freddie59

melekalikimaka wrote: »

blame bankers/blame ff/blame eu - its all good, the moment someone tries to place some blame on the numptys and their numpty loans and mortgages, hands fly up in hissy fits, maybe its just me, i'm doing grand, no loans, steady job, i wonder how many outside the central bank can clim inpartial to this whole thing, not out of work or under financial burden... or down right marxist...

Well, yes and no. The 'numpties' could not have borrowed the monies in the first instance if recless ledning had not prevailed. If the money hadn't been loaned recklessly, property prices could not have risen as they did, etc, etc.

Freddie59

The Waltzing Consumer wrote: »

Because he/she is very young and naive SPOT ON in their views?

FYP.:)

Chips Lovell

There's no doubt we're in a bad way, but thinking that Greece somehow got a sweet deal and we didn't is very misinformed.

parrai

They haven't a notion of paying... In my opinion, they realise that the Euros' demise in inevitable. This is just throwing money into a metaphorical hole...

Freddie59

Vladimir Kurtains wrote: »

There's no doubt we're in a bad way, but thinking that Greece somehow got a sweet deal and we didn't is very misinformed.

Who's saying they got a sweet deal? They're getting it up the ass with no lubricant as well. All people are asking is how debt can be written off for a country which got itself into that mess (Greece) and not written off for a country whose banks got themselves into the mess and that country (Ireland) is expected to pay? In all fairness - WTF??!!

Anita Blow

Freddie59 wrote: »

Who's saying they got a sweet deal? They're getting it up the ass with no lubricant as well. All people are asking is how debt can be written off for a country which got itself into that mess (Greece) and not written off for a country whose banks got themselves into the mess and that country (Ireland) is expected to pay? In all fairness - WTF??!!

I'd say that the bank debt in the future will probably be cut at least partially. With the way the markets are at the moment, it'd be unwise to announce orderly defaults for 2 countries in the eurozone. Maybe when things settle down in the future and stability has returned then they'll talk about a haircut on the bank debt we've taken on.

Our debt is big but it is manageable. Greece's is not. It'll peak at around 110% of GDP I think which isn't too crazy. I mean Japan's debt is around 200% of GDP, Belgium's is 101%, Italy's 120% and Iceland is around 150%. None of those countries are imploding under the debt burden. We don't need to pay off 250 billion, we just need to reduce it to a more manageable level.

This pisses me off no end. The Greeks spent the last 10 years borrowing money and throwing it about the place. Spending on military toys to flex their collective muscle to the Turkish.

Borrowing money so they can avoid paying tax, retiring at 59, awarding themselves with public sector jobs to keep the supporters sweet.

Now, when it comes to paying it off, the baby throws all the toys from the pram and is waiting for it to be just written off and forgotten about.

They should be made pay back every penny and learn to do earn their keep.

Freddie59

Anita Blow wrote: »

I'd say that the bank debt in the future will probably be cut at least partially. With the way the markets are at the moment, it'd be unwise to announce orderly defaults for 2 countries in the eurozone. Maybe when things settle down in the future and stability has returned then they'll talk about a haircut on the bank debt we've taken on.

Our debt is big but it is manageable. Greece's is not. It'll peak at around 110% of GDP I think which isn't too crazy. I mean Japan's debt is around 200% of GDP, Belgium's is 101%, Italy's 120% and Iceland is around 150%. None of those countries are imploding under the debt burden. We don't need to pay off 250 billion, we just need to reduce it to a more manageable level.

This is not Ireland's debt. The majority of it is debt owed to a private institution (a bank) by another private institution (another bank). It is completely ludicrous.

Chuck Stone

So can someone tell me who loses out with the 50% write down?

Is it bond holders? Tax payers?

Who?