Skip to comments.Greece may need 60 percent bond writedown; EU at odds
Posted on 10/22/2011 1:42:28 PM PDT by yoe
Private holders of Greek debt may need to accept losses of up to 60 percent on their investments if Greece's debt mountain is to be made more sustainable in the long-term, a downbeat analysis by the EU and IMF showed on Friday.
Euro zone finance ministers threw Greece a lifeline on Friday by agreeing to approve an 8 billion euro loan tranche that Athens needs next month to pay its bills.
But the European Commission, European Central Bank and International Monetary Fund -- the so-called troika -- issued a gloomy report on Greece's ability to pay its debts.
Among three scenarios it examined, the only one that would reduce Greece's debt pile to 110 percent of GDP -- a level still regarded as high -- was one in which private bond holders agreed to a 60 percent haircut.
"To reduce debt below 110 percent of GDP by 2020 would require a face value reduction of at least 60 percent and/or more concessional official sector financing terms," the debt sustainability report, obtained by Reuters, showed.
(Excerpt) Read more at ca.news.yahoo.com ...
If true this looks like the beginning of the end.
It’s the suspense that kills me. Everyone knows this charade cannot continue. It’s just a question of when the game of musical chairs ends.
And what kind of system will exist when the music stops.
Hey, that's a better deal than GM investors got.
Somebody over there makes an unsubstantiated PR release that a deal is in the making and our stock market goes up by 250. Then a day or two later reality strikes and bammo, down again. I honestly believe the stock market is in some way being supported by much of the so-called stimulus funds that nobody can locate, except for bankrupt green companies and they have no idea where the money went.
Elite's continuing the charade until they are out of the picture and distanced from it.
“Is there a similarity here between the Greeks and California’s citizens who refuse to give up government perks and other welfare to help balance their budget?”
Yes, but it’s a worse situation for California. We now have cap and trade to deal with as well.
A few numbers that stick in my head when sovereign debt is discussed: I read somewhere that the entire GDP of the world for the year 2008 was 58 trillion dollars.
Some put our current unfunded liability for SS, Medicare and Medicaid at 130 trillion.
Of course some countries are worse off, some are better off, but there will never be enough wealth to cover all this debt.
The answer is, of course, the rank and file Germans can't possibly condone this.
So, bailouts from Germany must be to protect those who have investments in Greece. This should almost certainly result in big changes in leadership as the rank-and-file voters in Germany realize they're getting the short end of the stick while the status quo is being protected.
Let me know when it's serious enough to cut spending.... /MS
You sound like my sister and I speaking yesterday. The suspense of it ALL is killing us!
Why do we continue to put up with this kind of flimflamery?
I love Snoopy!
Me too! But that graphic is so sad and lonely. LOL
Lol, no it isn’t!!!! It’s Snoopy being Snoopy (doing the Snoopy dance)!!
Look on the bright side - those bonds are just going to money heaven!