Merkel: 50 pct haircut to cut Greek debt by 100 bln euros

Reuters ^ | 10/27/2011 | Reuters

[risen_feenix]

So debtors have to eat a 100 billion euro loss, yet civil servants are required to make a "contribution towards private sector participation".

Wait for Ireland, Portugal and Spain to get in on these terms. The precedent has been set.

[silverleaf]

Yippee- $100 Billion euros the Greeks borrowed and don’t have to repay! Found money!

Next PIIIGS up to the trough?

[ken5050]

Also..it's NOT a haircut..because the remaining lesser debt hasn't been repaid, it's been "rolled over"..and they're giving Greece MORE $$. This nisjust smoke and mirrors on a continental scale, and no one is calling it for what it is..

Actually, to the Greek demonstraters/unions, they'll think they've won..the other side blinked first..

[EEGator]

Don’t forget the Italians.

[Moltke]

Another 100 billion on top of the 10s of billions already given? For a country with only 11 million people? How did they ever manage to burn through that much money?! (Rethorical question)

[kabar]

Entitlement programs, government pensions, etc. burn up lots of money. Our unfunded liability for SS and Medicare is over $60 trillion. We are no better than Greece.

[Uncle Hal]

What is going to happen when Italy, Spain, Portugal and others cannot meet their obligations? Is their debt going to be cut by 50%? This cannot go on. They are just delaying the crisis that is sure to come.

[tobyhill]

They will just cut their own hair.

[Anti-Bubba182]

...and the Spaniards.

[Eleutheria5]

Can’t the US just blame it on predatory lenders and take over Greece to save it?

[verity]

This will not end well!

[Pan_Yan]

...the remaining lesser debt hasn't been repaid, it's been "rolled over"..and they're giving Greece MORE $$.

You are correct. Greece has been tottering on the brink of complete financial collapse for a while now. They've never proposed anything resembling a balanced budget and aren't any closer to enacting one now. Yet the other countries tied to them through the EU and the Euro have no choice but to keep eating the cost. They just keep bailing in the desperate hope that somehow the problem will fix itself without them making any fundamental changes.

[GeronL]

In other words, they get another year or two of socialism

[monkeyshine]

They won’t get those terms unless they get into the same situation as Greece. So watch for them to start borrowing more and giving more to their unions. The precedent is set. Make your economy as bad as Greece.

[familyop]

To nearly all who've commented so far... "Debtors" don't have to "eat" the "loss." Bond holders (creditors) do. As for civil servants, there are too many taking too much. Without private sector product increases, there can be no real repayment. As for Ireland, Portugal and Spain, Merkel commented that Ireland has recently done well. Portugal, Spain and Italy haven't (socialist tourist traps).

It is indeed a "haircut." Bond holders will collectively lose 50% of their investments (writedown). Europe has effectively repudiated half of Greece's debt, so that Greece isn't doing so, itself.

[familyop]

To nearly all who've commented so far...

"Debtors" don't have to "eat" the "loss." Bond holders (creditors) do. As for civil servants, there are too many taking too much. Without private sector product increases, there can be no real repayment. As for Ireland, Portugal and Spain, Merkel commented that Ireland has recently done well. Portugal, Spain and Italy haven't (socialist tourist traps).

It is indeed a "haircut." Bond holders will collectively lose 50% of their investments (writedown). Europe has effectively repudiated half of Greece's debt, so that Greece isn't doing so, itself.

[Fishface]

While it is true that they have repudiated half of Greece’s debt, they also agreed to loan Greece $137 billion more euros.

It is a total wash. This is all a big PR game. Europe is doomed. A total collapse is coming.

[Pollster1]

I can’t wait to see them try to borrow more money from someone other than an EU government. What’s the going rate for countries that default on 50% of their debt? I wouldn’t buy their bonds in the next century.

[henkster]

Merkel should have decoupled from the Euro and left the rest of the parasite states on their own.

[az_gila]

I presume a lot of those Bond Holders are pension funds.
Is that correct? Will this cause another riot?