[vqIo7X2U]

After it was the subject of heated debates for weeks, the leaders of the Eurozone nations have agreed on a new bailout package for Greece, worth 159 billion Euros. Initially it was a franco-german compromise that the other countries finally agreed to. The banks will share the pain with 50 billion Euros ( topic very important to the Germans) and the IMF is on board as well. The package also includes lowering the interests Greece has to pay on Eurozone loans, the Eurozones crisis fund will be expanded, gets more competences and will be turned into a "european monetary fund" ( Nicholas Sarkozy).
Rating agencies have already announced they would rate the new measures as a greek default, but that is apparently taken into account.
Counted together the package may not be perfect but is more than previously expected and was welcomed by the markets......

New deal to shave ?26 billion off Greek debt load by 2014 - FINANCE - FRANCE 24

[beckercpa]

I think this, sadly, won't change the eventual total default on the part of Greece. It will only delay it.

The most important thing, I think, and the point that the markets have responded to, is that the Eurozone countries say they will support any threatened countries for as long as it takes. Whether or not they will be able to, or if the populations of certain countries will let them, hasn't really been addressed.

Here are a couple interesting break-downs of the deal:

A Stab at Clarity on the Euro-Zone's Big Greek Bailout - Real Time Brussels - WSJ

Is the Big Greek Deal Really Big? - Real Time Brussels - WSJ

[Vemnagelignc]

More importantly, what is Greece going to do.

[vqIo7X2U]

I think this, sadly, won't change the eventual total default on the part of Greece. It will only delay it.

The most important thing, I think, and the point that the markets have responded to, is that the Eurozone countries say they will support any threatened countries for as long as it takes. Whether or not they will be able to, or if the populations of certain countries will let them, hasn't really been addressed.

Here are a couple interesting break-downs of the deal:

A Stab at Clarity on the Euro-Zone's Big Greek Bailout - Real Time Brussels - WSJ

Is the Big Greek Deal Really Big? - Real Time Brussels - WSJ

Well, as the WSJ comments itself :

"These are rough estimates based on an incomplete picture of what’s on the table".


What is getting lost is the political dimension. The countries of the Eurozone have not only effectively created an EMF ( European monetary fund), what is even more important is that they have very much reduced the incentives to speculate on further defaults after Greece. To do so is under the present circumstances a quite risky business for speculators and that is what the markets have ( among other things) responded to.
That Greece would be already defaulted without its EU lifebelt is clear without saying. That is also why the deal amounts to showing the rating agencies the midle finger (that have threatened to officially declare Greece bancrupt if the private sector is involved in debt reduction as is the case now)
We will see how that plays out. But the countries of the Eurozone have made a step forward, have confirmed that market speculation will not destroy the common currency and the Eurozone and have made a huge step towards correcting the construction errors in the common currency zone. While the deal is not perfect it is better than recent quarrels allowed to expect.

[Lyikmcmb]

After it was the subject of heated debates for weeks, the leaders of the Eurozone nations have agreed on a new bailout package for Greece, worth 159 billion Euros.

Too little, too late. Here's what Nobel-prize winning economist Paul Krugman wrote about it:

The Telegraph has a leaked draft of the eurozone rescue plan for Greece. The financial engineering is Rube Goldbergish and unconvincing. But here’s what leaped out at me:

9. All euro area Member States will adhere strictly to the agreed fiscal targets, improve competitiveness and address macro-economic imbalances. Deficits in all countries except those under a programme will be brought below 3% by 2013 at the latest.

OK, so we’re going to demand harsh austerity in the debt-crisis countries; and meanwhile, we’re also going to have austerity in the non-debt-crisis countries.
Plus, the ECB is raising rates.
So demand will be depressed in both crisis and non-crisis economies; this will lead to a vigorous recovery through … what?
The Serious People are determined to destroy all the advanced economies in the name of prudence.

[StizePypemype]

How fucking stupid....If it didnt work every other time they did it what makes them think it will now? This is a socialist mindset that you can throw money at a problem and it will get fixed. Let Greece default. Fact is Europe you are all looking at your future when you see Greece. Hell the USA as well unless some commonsense things are done. Shit it hurts me to say this but we should look at what Canada is doing. They are cutting spending.

[vqIo7X2U]

How fucking stupid....If it didnt work every other time they did it what makes them think it will now? This is a socialist mindset that you can throw money at a problem and it will get fixed. Let Greece default. Fact is Europe you are all looking at your future when you see Greece. Hell the USA as well unless some commonsense things are done. Shit it hurts me to say this but we should look at what Canada is doing. They are cutting spending.

Well, first of all I suggest you actually read the source about the content and structure of the new aid package. Secondly it is absolutely ridiculous to throw the booming nations of middle and northern Europe in the same pot as Greece.
And thirdly Europeans are a lot further down the road to austerity and actually work on consolidating their budgets than the US ( where you can´t even agree on raising your debt ceiling, good luck with real reforms).
I finally I will put it in very simple words for you : Europe is community of nations with various economic models and strengths. The strong countries with sucessful export economies (like Germany) do a huge chunk of their foreign trade with fellow countries in the Eurozone and the EU ( which are not the same things). While Greece alone stands for about 2,5 % of Europes economy ( or about 0,5 % of Germanys exports) and therefore even a default would hardly have dramatic consequences, Germany and other net payer nations have a vital interest in ensuring the stability of the Eurozone, even if that means to throw money at the problem. Since an "infection" of larger chunks of their own export markets and trade partners through speculation could have much worse consequences for their own businesses and trade partners. But compared to the profits that for example Germanys export industries bring home the loans to Greece are still neglectible. Obviously that would change if Italy or Spain would be knocking on the door and thus the efforts to contain the problem. For example through a european monetary fund.

[StizePypemype]

Well, first of all I suggest you actually read the source about the content and structure of the new aid package. Secondly it is absolutely ridiculous to throw the booming nations of middle and northern Europe in the same pot as Greece.
And thirdly Europeans are a lot further down the road to austerity and actually work on consolidating their budgets than the US ( where you can´t even agree on raising your debt ceiling, good luck with real reforms).
I finally I will put it in very simple words for you : Europe is community of nations with various economic models and strengths. The strong countries with sucessful export economies (like Germany) do a huge chunk of their foreign trade with fellow countries in the Eurozone and the EU ( which are not the same things). While Greece alone stands for about 2,5 % of Europes economy ( or about 0,5 % of Germanys exports) and therefore even a default would hardly have dramatic consequences, Germany and other net payer nations have a vital interest in ensuring the stability of the Eurozone, even if that means to throw money at the problem. Since an "infection" of larger chunks of their own export markets and trade partners through speculation could have much worse consequences for their own businesses and trade partners. But compared to the profits that for example Germanys export industries bring home the loans to Greece are still neglectible. Obviously that would change if Italy or Spain would be knocking on the door and thus the efforts to contain the problem. For example through a european monetary fund.

The same policies that brought Greece down in like a infection all through the world. Thats fact as history and your own eyes show us. The same stupid shit over and over is not gonna help. Only an insane person thinks doing the same thing will get different results.

[Gozmand]

Europe is already making rather large cuts to essential services and raising taxes so I'm unsure what else you expect us to do? If the people of Greece started paying tax it might help but as has been said just claiming Europe is doomed is wrong.
Europe has been through crisis before and survived and we will come through this.

[StizePypemype]

Europe is already making rather large cuts to essential services and raising taxes so I'm unsure what else you expect us to do? If the people of Greece started paying tax it might help but as has been said just claiming Europe is doomed is wrong.
Europe has been through crisis before and survived and we will come through this.

Cut spending cut taxes and give them liberty ............ That dhould do it.

[vqIo7X2U]

Cut spending cut taxes and give them liberty ............ That dhould do it.

Which is precisely what Europeans are doing ( except that most countries rather cut spending than taxes since to pay off debt revenues are necessary).
And good luck in solving your own debt mess. The Europeans at least have taken significant steps to tackle the problem ( although most countries are less indebted than the US). While you focus on raising the debt ceiling.

[StizePypemype]

Which is precisely what Europeans are doing ( except that most countries rather cut spending than taxes since to pay off debt revenues are necessary).
And good luck in solving your own debt mess. The Europeans at least have taken significant steps to tackle the problem ( although most countries are less indebted than the US). While you focus on raising the debt ceiling.

They have to give them liberty. That means get out of their lives and allow them to run it themselves. They have to live with the fact that All are created equal with certain indelible rights like we do.

It isnt just money that made us strong. It was freedom. the rest of the world is not as free as the US.

[Gozmand]

I don't know where you get the idea that I'm not free because I don't live in the US. I'm free to travel anywhere and do anything I like within the law so I'm not sure how I'm being constrained? What am I supposed to be fighting for freedom from?
I honestly don't understand when some Americans claim that American freedom is the only true freedom.
The only thing we have asked of Greece is that they pay back money they have borrowed which doesn't seem all that unfair.

[duminyricky]

Well, as the WSJ comments itself :

"These are rough estimates based on an incomplete picture of what’s on the table".


What is getting lost is the political dimension. The countries of the Eurozone have not only effectively created an EMF ( European monetary fund), what is even more important is that they have very much reduced the incentives to speculate on further defaults after Greece. To do so is under the present circumstances a quite risky business for speculators and that is what the markets have ( among other things) responded to.
That Greece would be already defaulted without its EU lifebelt is clear without saying. That is also why the deal amounts to showing the rating agencies the midle finger (that have threatened to officially declare Greece bancrupt if the private sector is involved in debt reduction as is the case now)
We will see how that plays out. But the countries of the Eurozone have made a step forward, have confirmed that market speculation will not destroy the common currency and the Eurozone and have made a huge step towards correcting the construction errors in the common currency zone. While the deal is not perfect it is better than recent quarrels allowed to expect.

No country, nor group of countries, can vote to repeal the laws of economics.

If the numbers don't work for Ireland, Portugal, Spain, and Italy, then investors will lose money investing in their bonds, and other investors will profit from their demise. Trying to demonize those other investors by calling them "speculators" doesn't change the laws of economics any more than voting does.

[Lyikmcmb]

Which is precisely what Europeans are doing ( except that most countries rather cut spending than taxes since to pay off debt revenues are necessary).
And good luck in solving your own debt mess. The Europeans at least have taken significant steps to tackle the problem ( although most countries are less indebted than the US). While you focus on raising the debt ceiling.

Unfortunately they are taking either the wrong steps or inadequate steps. The wrong steps are to try to follow austerity measures while in an economic downturn. That just makes things worse. Look at the US in 1937. Just doesn't work.

Meanwhile, the better off nations in Europe have to eventually accept that much of the debt of Greece et. al. won't ever be collected. The sooner they accept that the better.

Here are two strong signs that last week's plan was insufficient, again:
ITALY 10 - GERMANY 10 SPREAD (.ITAGER10:IND) Index Performance - Bloomberg
SPAIN 10 YEAR - GERMAN 10 YEAR (.SPAGER10:IND) Index Performance - Bloomberg

It's tragic what's happening to Greece and it looks like Portugal will soon follow. Let's hope not Italy or Spain...

[Lyikmcmb]

I don't know where you get the idea that I'm not free because I don't live in the US. I'm free to travel anywhere and do anything I like within the law so I'm not sure how I'm being constrained? What am I supposed to be fighting for freedom from?
I honestly don't understand when some Americans claim that American freedom is the only true freedom.
The only thing we have asked of Greece is that they pay back money they have borrowed which doesn't seem all that unfair.

Many Americans don't buy the crap that some of my fellow American posters are writing here. I find their provincialism embarrassing.
Their definition of freedom is basically the freedom of the rich and the lucky and the powerful to run roughshod over everyone and everything that gets in their way.
I lived in Germany for two years and saw for myself what admirable societies have been built in Europe. People there are much freer from the economic traps and nightmares that plague Americans who run into bad luck--like getting sick, for example.
We need to be more like Europe in a number of ways, including their ethic of social responsibility, rather than narrow self-interest (which conservatives refer to as "freedom.")

[StizePypemype]

Many Americans don't buy the crap that some of my fellow American posters are writing here. I find their provincialism embarrassing.
Their definition of freedom is basically the freedom of the rich and the lucky and the powerful to run roughshod over everyone and everything that gets in their way.
I lived in Germany for two years and saw for myself what admirable societies have been built in Europe. People there are much freer from the economic traps and nightmares that plague Americans who run into bad luck--like getting sick, for example.
We need to be more like Europe in a number of ways, including their ethic of social responsibility, rather than narrow self-interest (which conservatives refer to as "freedom.")

Most Americans understand freedom.....You apparently don't.

[vqIo7X2U]

No country, nor group of countries, can vote to repeal the laws of economics.

If the numbers don't work for Ireland, Portugal, Spain, and Italy, then investors will lose money investing in their bonds, and other investors will profit from their demise. Trying to demonize those other investors by calling them "speculators" doesn't change the laws of economics any more than voting does.

As far as I am informed one of the rules of the free market is that gains are mine as well as losses. Ergo I have to take losses into account if I flush my money down the toilet and throw it at unsolid offers like the greek promise for high interest revenues. The point is that banks and "speculators" have been doing precisely the opposite. Trying to keep their gains while firstly raising interest rates on Greece to the point of governements having to become involved and then whine loud enough to put the burden for the mess they helped creating on the european taxpayer( along with their willing, incompetent, greedy and corrupt helpers in the ruling greek business elites and governement. Forcing the private sector to become involved is re-applying the normal rules of an orderly economy. If banks invest in risky businesses that go bancrupt they have to write off losses as well in the US I assume.
The rating agency Moodys does not share your opinion as well by the way. While it has downgraded Greece it sees the overall impact and the outlook for Greece as better now :

Moody's downgrades Greece to near-default - FINANCE - FRANCE 24

[vqIo7X2U]

Unfortunately they are taking either the wrong steps or inadequate steps. The wrong steps are to try to follow austerity measures while in an economic downturn. That just makes things worse. Look at the US in 1937. Just doesn't work.

Meanwhile, the better off nations in Europe have to eventually accept that much of the debt of Greece et. al. won't ever be collected. The sooner they accept that the better.

Here are two strong signs that last week's plan was insufficient, again:
ITALY 10 - GERMANY 10 SPREAD (.ITAGER10:IND) Index Performance - Bloomberg
SPAIN 10 YEAR - GERMAN 10 YEAR (.SPAGER10:IND) Index Performance - Bloomberg

It's tragic what's happening to Greece and it looks like Portugal will soon follow. Let's hope not Italy or Spain...

Well, Germany is certainly not in an economic downturn ( the opposite is the case, it has shown record growth for years, the economy is flourishing and unemployment has never been as low in decades). And to compare modern Europe to the recession of 1929 ( by the way) is rather ridiculous. Greece by the way is a country that stands for about 2,5 % of the EUs economy and will under no circumstances sink the european ship even in case of a complete default. The concern is more about the fear of contagion. Which hopefully is sucessfully averted for now which is too early to tell. The rating agencies judgement ( while downgrading Greece) wasn´t totally negative by the way :

Quote : / The rescue raised the chances that Greece could stabilise and reduce its debt burden, and it helped the eurozone by "containing the severe near-term contagion risk that would have followed a disorderly payment default."

But "Greece will still face medium-term solvency challenges: its stock of debt will still be well in excess of 100 percent of gross domestic product for many years."

The agency also noted that Ireland and Portugal, which are also being rescued by the European Union and International Monetary Fund, would benefit from reduced loan rates. But, "despite statements to the contrary, the support package sets a precedent for future restructurings."



Moody's downgrades Greece to near-default - FINANCE - FRANCE 24
Finally Graphs without text aren´t "strong signs" either".

[duminyricky]

As far as I am informed one of the rules of the free market is that gains are mine as well as losses. Ergo I have to take losses into account if I flush my money down the toilet and throw it at unsolid offers like the greek promise for high interest revenues. The point is that banks and "speculators" have been doing precisely the opposite. Trying to keep their gains while firstly raising interest rates on Greece to the point of governements having to become involved and then whine loud enough to put the burden for the mess they helped creating on the european taxpayer( along with their willing, incompetent, greedy and corrupt helpers in the ruling greek business elites and governement. Forcing the private sector to become involved is re-applying the normal rules of an orderly economy. If banks invest in risky businesses that go bancrupt they have to write off losses as well in the US I assume.

I'm not exactly sure what it is that you are trying to say.

Who are you calling "speculators"? Those that have purchased Greek bonds, or those who have been selling Greek bonds?

The rating agency Moodys does not share your opinion as well by the way. While it has downgraded Greece it sees the overall impact and the outlook for Greece as better now :

Moody's downgrades Greece to near-default - FINANCE - FRANCE 24

That is excellent news: The purveyors of the obvious - Moody's - have reassured us all that now that Greek is about to default, there is not much further room to downgrade their debt.