Skip to comments.EU: Merkel's day of reckoning as taxpayer haircut on Greece looms
Posted on 11/18/2012 11:53:03 PM PST by bruinbirdman
Germany, Holland, and the creditor states of northern Europe have not lost a single cent on eurozone rescue packages, so far.
They have lent money, at a theoretical profit. They have issued a fistful of guarantees to Europes twin bail-out funds, covering Greece, Ireland, Portugal, Spain, and soon Cyprus. They have taken on opaque and potentially huge liabilities through the European Central Bank.
Yet little has disturbed the illusion that the euro is a free lunch for the surplus powers. An assumption persists that the creditors will be spared the consequences of flooding Southern Europe with excess capital.
All the losses in Greece until now have been concentrated on those pension funds, insurers, and banks that stayed to the bitter end, rewarded with 75pc haircuts for their loyalty.
We are at last nearing the awful moment when the curtain is ripped away. Greeces economy has contracted 7pc over the last year. Public debt will spiral to 190pc of GDP in 2013. Leaving aside the Gothic horror of youth unemployment at 58pc, Greeces debt trajectory is simply out of control.
The International Monetary Fund says the country cannot claw its way back to viability unless EU governments and bodies take their punishment. The Funds Board and the powers behind it - the US, China, Japan, Brazil - will withdraw if the current farce goes on.
Greece needs 100bn of debt forgiveness to get back on its feet, according to Barclays Capital. A lot of this is coming Germanys way. The creditor states can mask the damage for a while - siphoning off "frontloaded profits" on the ECBs holding off Greek bonds, and so on - but the overall sums are too large to cover up altogether.
Der Spiegel says the looming cost for Germany is over 17bn,
(Excerpt) Read more at telegraph.co.uk ...
Just raise taxes on “the rich”. That will solve everything and make socialism work, finally.
Coming soon to a nation near you. :D
The US is every bit as bad as the EU, except there's no group of nations large or prosperous to bail us out. We are a zombie nation full of zombie banks and zombie voters.
The Euro was just a complicated harebrained scheme to take money from the productive nations and pass it to the slackers. EVERYTHING with the left is about redistribution of wealth.
Anyone who thought that different countries with different languages, cultures, and WORK-ETHIC could pool their money and create a fictional “common currency” was stupid. What happened is what was always going to happen.
Kick Greece, Italy, Spain and Portugal out of the Euro. Don’t let any basket case countries into the Euro. Keep the bearded middle-easterners out of it!
Although this was unintended some German politicians have started to figure out the advantages it has conferred on Germany and this has begun to influence their policy decisions. As time passes, there will be increasing grounds for blaming Germany for the policies it is imposing on Europe, while the German public will feel unjustly blamed. This is truly a tragedy of historic significance. As in ancient Greek tragedies, misconceptions and the sheer lack of understanding have unintended but fateful consequences. In the long run a eurozone permanently divided between debtors and creditors is politically unacceptable. The debtors are bound to revolt sooner or later. If and when the euro breaks up in disarray it will also destroy the common market and the European Union. Europe will be worse off than it was when the effort to unite it began, because of a legacy of mutual mistrust and hostility. The later it happens, the worse the ultimate outcome. That is such a dismal prospect that it must be prevented if at all possible. It is time to consider alternatives that would have been inconceivable until recently. The euro must not be allowed to destroy the European Union.
George Soros - The Tragedy of the European Union - September 10, 2012
Just because the banks foolishly lent to bad risks does not mean that taxpayers must bail them out!
Since when did taxpers agree to THAT bad deal????
Delivering haircuts to a continent that is going bald.
crony corrupt euro nation A trying to push arround crony corrupt euro nation B.
It is just a question of insiders fighting over their present/potential komissarships.
writing a check to greece??
heck what could possibly go wrong??
Hard to believe germany being able to survive this.
Since the taxpayers elected commies, socialists and Democrats to plunder treasuries and printing presses.