Category Archives: bailout
“Without a credible threat to walk out of the single currency, Greece was eventually forced to cave in, and accept punishing terms from the rest of the European Union that will push its economy even deeper into recession.” – Market Watch
Greece’s Syriza Party Prime Minister Alexis Tsipras agreed to accept new conditions for a bail-out from Germany. The conditions are tougher than the ones Greek voters rejected in a referendum less than two weeks ago. The agreement also calls for a €50 billion investment fund to help Greece grow out of its mess. The fund is to endowed by the sale of Greek assets. Craigslist for Greeks.
The agreement requires approval of the Greek Parliament.
In a WSJ piece title “Another Greek Can-Kicking” Holman Jenkins thinks the deal will retard any return to health for Greece.
But if you still have money in Greek banks you might be willing, to sacrifice the economy’s return to long-term health to maximize your chance of reclaiming your life savings.
He also says the deal was less about Greece than preserving relations between France and Germany.
France stepped out as defender of Greece and promoter of fake plaudits… Germany likes to be seen deferring to France to quell any idea that Germany is becoming strident and imperialistic again.
It must be true – David Ignatius lays out the same notion in the Washington Post.
Surging socialist candidate Bernie Sanders applauds the Greeks for rejecting austerity from the Euro ruling class. Economics writer Stephen Moore says Greece needs less socialism and more privitization. The banks are shutting down and withdrawals are restricted. He says what’s happening in Greece is the usual outcome of socialism – economic collapse.
Roger Cohen in the NYT says the euro zone isn’t all that much into democracy anyway: “A vote cannot undo a debt or obscure colossal Greek irresponsibility.”
The IMF had demanded more taxes on Greek businesses. Moore says the country is already overtaxed. His solution is a Detroit style bankruptcy where pensioners and Wall Street investors all take a “haircut”.
Robert Samuelson says the Greek economy accounts for only 1.8% of the euro zone and its collapse might not have much effect on the rest of us. Greece only has a population of 11 million. Hell, we have 94 million out of work.
But this WSJ analysis says if Greece does leave the Eurozone the risk of contagion to more important economies is high.
Greece is in default. On Tuesday the government missed a payment deadline on its IMF debt. On Sunday Greeks will vote in a referendum to accept terms from the IMF for more loans. The terms include tax increases and pension cuts.
Prime Minister Alexis Tsipras says he’ll step down if the referendum passes. Holman Jenkins in the WSJ says Greece has put a gun to its head saying, “Pay us ransom or the idiot gets it.”