Greek debt crisis [update: 3rd Bailout deal reached]

[Thanas]

The cold hard truth - you dumb cunt - is that if Greece even changes to saints it will still be fucked if it continues with austerity. Stop lying.

You might just as well stop lying, considering your performance about the Reuters peace.

EDIT: BTW, how come every Government agrees that Greece is in the wrong here? What nefarious attitude do they have? Pro bono?

I'll repeat for the neutral observer since Thanas has clearly lost the plot; the IMF's own internal documents admit, without hesitation that if Greece did EVERY. SINGLE. THING. It was asked to do right now, it would STILL have an unmanageable debt; because what Greece needs more than anything else is debt relief and growth economics.

Once again, this is the IMF. Greece's creditor. Part of the Troika. Not some Noble winning economist (although plenty of them same the say thing), the actual fucking creditor is saying it internally.

And again, it doesn't mean squat considering the Reuters peace.

Simply not true; the Guardian quotes the document its self (seems to have been leaked from the German parliament of all places) and quotes the IMF in its own words; “significant concessions” would be needed under the baseline case to make the debt manageable. The Reuters article just has an analyst saying 'well we don't think that's necessary'. It doesn't change the fact that the IMF thinks it is.

Are you fucking blind? Reuters is quoting the document directly. Here, I'll even bold for you where they say that:

"It is clear that the policy slippages and uncertainties of the last months have made the achievement of the 2012 targets impossible under any scenario," the analysis, seen by Reuters, said.

"The main factors behind the deterioration of the Debt Sustainability Analysis are the worsening of economic growth, the revised primary balance path, the lower privatisation revenues and possible additional financial needs for the banking sector," it said.

Under the revised forecast and the most optimistic scenario that Athens implements all reforms, Greek is debt to fall to 124 percent only in 2022 from 172.8 pct in 2015.

If it implements the reforms only partially, Greek debt will fall only to 135 percent in 2022 from 174.3 pct in 2015.

In the worst case, which the International Monetary Fund sees as its "baseline", which means most likely, Greek debt would fall only to 142.2 percent in 2022 from 176.7 percent in 2015.

The analysis stresses however, that focusing on the debt-to-GDP ratio does not give an accurate picture of debt sustainability and that this is better reflected by gross financing needs of a country.

Measured like this, Greece has no sustainability problem in any scenario, but would require help to improve the sustainability, via for example an extension of maturities, under the third, least favourable option.

"This gross financing need metric points to no sustainability issues under the first two scenarios," the document said.

"The gross financing needs remain well below 15 percent threshold, a threshold mentioned in IMF guidance for this criterion. Under this scenario, significant reprofiling of the stock of debt and concessional lending terms would improve sustainability," it said.

"Reprofiling of payment flows does not imply nominal haircut or budgetary costs for creditors. This would also entail further NPV gains for Greece, and strengthen the sustainability of the Greek public debt in the long-run."

There is nothing in the Reuters piece that is not in the document itself. But apparently Reuters is lying now as well.

What he fails to mention (in between posting the Yes rally pictures) is that with the exception of the state run broadcaster (ERT) which Tsipras re-opened, every single one of the other broadcasters in Greece are owned by the said oligarchs who have been beating sky is falling and everyone should vote 'Yes' drum. What he has also failed to mention is that employers in Greece have told their staff to turn up to Yes rallies or face the sack.

Further, he quotes Juncker as some kind of honest broker. This is the man who was the Finance and then Prime Minster of Luxemburg for 18 years and systematically turned into the biggest corporate tax haven loop hole member state in the union. Then he was forced to resign for his own Watergate scandal (bugging offices of other politicians), but like a good slimeball landed into the European lap of failing upwards. During the possible French referendum on the EU he said "if the vote 'Yes' we continue, and if they vote 'No' we go on". And regarding debt negotiations earlier in the year he said "when it's serious, it's okay to lie".

But remember; it's Tsipras who we must not trust.

If it was just Juncker I would not trust him either. But every Government is in agreement on Greece. You think they are all liars and Tsipras is a white knight. How delusional are you?

[Thanas]

Well, the deadline has passed this minute. Greece now has joined the countries of Somalia, Sudan and Zimbabwe in the IMF's club of countries currently in arrears.

But I guess that was necessary to stop the humiliation. Indeed, Greece can feel ultra proud for joining this excellent list of financially proud countries.


EDIT: The bailout programme has expired this minute as well.

Edit: "Greece is the first developed country to default on an IMF loan". Well done, Syriza, making your country proud and sparing it further humiliation.

[Crown]

The cold hard truth - you dumb cunt - is that if Greece even changes to saints it will still be fucked if it continues with austerity. Stop lying.

You might just as well stop lying, considering your performance about the Reuters peace.

EDIT: BTW, how come every Government agrees that Greece is in the wrong here? What nefarious attitude do they have? Pro bono?

Are you too dumb to understand that there are vested interest in governments to continue this charade? Are you too god damned naive to understand that the ruling Spanish party (as one example) would be voted out of office if SYRIZA get any concessions? Really? REALLY?

And again, it doesn't mean squat considering the Reuters peace.

<snip>

Are you fucking blind? Reuters is quoting the document directly. Here, I'll even bold for you where they say that:

<snip>

There is nothing in the Reuters piece that is not in the document itself. But apparently Reuters is lying now as well.

There are SIX documents you fuck knuckle. The Guardian specifically quotes what it terms as 'the internal IMF document'. Reuters could be quoting any of the other five (one of which includes the document from the EC which you posted) which could be providing a different analysis, hence no contradiction. Get it?

If it was just Juncker I would not trust him either. But every Government is in agreement on Greece. You think they are all liars and Tsipras is a white knight. How delusional are you?

This goes back to the quote above; there are vested interests in seeing Tsipras fail. The Irish Times just eviscerated their Taoiseach for out right lying what was available to Greece vis-a-vis what Ireland had to do, they ripped him apart. Career politicians are about to look very, very fucking foolish if Greece 'wins'. I can't believe this needs to be explained to you, but here we are.

[Thanas]

Are you too dumb to understand that there are vested interest in governments to continue this charade?

No, I full well am aware (unlike you) that there are vested interests on both sides spouting their own version of events.

Are you too god damned naive to understand that the ruling Spanish party (as one example) would be voted out of office if SYRIZA get any concessions? Really? REALLY?

That is not a given, considering the last performance of Podemos at the elections and the improving economy. Nor does that explain why every Government on earth has colluded against the poor, insignificant Greeks.

There are SIX documents you fuck knuckle. The Guardian specifically quotes what it terms as 'the internal IMF document'. Reuters could be quoting any of the other five (one of which includes the document from the EC which you posted) which could be providing a different analysis, hence no contradiction. Get it?

Simply not true; the Guardian quotes the document its self (seems to have been leaked from the German parliament of all places) and quotes the IMF in its own words; “significant concessions” would be needed under the baseline case to make the debt manageable. The Reuters article just has an analyst saying 'well we don't think that's necessary'. It doesn't change the fact that the IMF thinks it is.

Uh-huh.

I call bullshit. There are six documents, but one dealing with the debt level analysis and projections, as the Guardian itself says. They mean the same document. The difference is that the Guardian - unlike Reuters - does not provide the full quotes. I can't find anything in the Sueddeutsche either.

[Thanas]

Here are highlights from Schäuble's press conference (which wasn't about Greece but about the German budget):

01-Jul-2015 11:20:27 - GERMANY’S SCHAEUBLE SAYS MUST REMEMBER THAT WE HAVE ALREADY GIVEN GREECE A DEBT HAIRCUT
01-Jul-2015 11:21:38 - GERMANY’S SCHAEUBLE SAYS GREEK INTEREST RATE BURDEN IS BELOW THAT OF GERMANY IN RELATIVE TERMS
01-Jul-2015 11:23:53 - GERMANY’S SCHAEUBLE SAYS BEFORE SUNDAY’S GREEK REFERENDUM, THERE IS NO POINT TO HAVE TALKS
01-Jul-2015 11:25:06 - GERMANY’S SCHAEUBLE SAYS I ALWAYS KEPT TO WHAT WE AGREED, TO OUR RULES, IF EVERYONE HAD DONE THE SAME, GREECE WOULD NOT BE IN SUCH A DESPERATE SITUATION
01-Jul-2015 11:26:23 - GERMANY’S SCHAEUBLE SAYS WE HAVE ALWAYS BEEN VERY FLEXIBLE BUT SITUATION HAS DETERIORATED
01-Jul-2015 11:26:56 - GERMANY’S SCHAEUBLE SAYS I FEEL SORRY FOR GREEK PEOPLE
01-Jul-2015 11:29:18 - GERMANY’S SCHAEUBLE SAYS I AM NOT GIVING ANY PREDICTIONS ABOUT WHAT WILL HAPPEN WITH GREECE, WE ARE OPEN TO ANYTHING
01-Jul-2015 11:30:08 - GERMANY’S SCHAEUBLE SAYS WE DON’T KNOW IF WE WILL MANAGE TO GET AN ESM PROGRAMME READY BY JULY 20 PAYMENT DEADLINE
01-Jul-2015 11:31:05 - GERMANY’S SCHAEUBLE SAYS ECONOMIC SITUATION IN GREECE IS GETTING WORSE

[Thanas]

I'm listening to Merkel and the debate in German Bundestag:

- says she feels empathy for Greek people and the hard times that are behind and ahead of them (uh oh, when Merkel feels empathy for you better call the coroner)
- Calling a referendum is a legitimate right of Greece to do on whatever issue they want and with whatever questions they want, it is also the right of all other 18 members of Europe to respond to such a referendum
- All other 18 members have a democratic mandate to and owe their constituents to respect them and their wishes
- Merkel says that there are no talks possible before the referendum. Merkel says that without a vote by the German Parliament no such talks can even be entered on as a constitutional matter
- Merkel: We can and must wait until after the referendum.
- Europe has taken steps to stabilize, will not feel many shock effects
- Merkel: Real issue should not be a few millions, but the people in Greece and their suffering. However, the most important thing is that Europe is based on compromise. Greece has to be willing to compromise. Compromise cannot be made for compromise sake alone.
- There cannot be a deal at any cost, stability of the Eurozone has to be important. Germany will oppose any plan to turn Europe into a transfer union. This may work for a few years, but not for 20 or 30.
- EU needs to be patient here so that it can defend itself against China, USA, India etc.
- Mistakes have been made when the Euro was first introduced in Europe, it is necessary to fix them

[Thanas]

For those who speak German, this is a good commentary by SZ:
http://www.sueddeutsche.de/wirtschaft/e ... -1.2544218

[Thanas]

I can't stand Gregor Gysi but he is excoriating Merkel and he is right in some aspects. His speech and banter in Parliament is impressive. Livestream: https://www.phoenix.de/livestream/

[Thanas]

Holy shit, Gabriel just destroyed Gysi.

[K. A. Pital]

Some more capitalist blah! Let the collapse happen already! There never will be a European superstate, and the more they tighten their grip, the more star systems will slip through their fingers. Given the massive divergence in living standards between South Europe and core countries, a currency union with equal unemployment pay, equal social benefits is infeasible, plain and simple, unless they want to make Germany the land of 500-Euro jobs...

[Thanas]

Some more capitalist blah! Let the collapse happen already! There never will be a European superstate, and the more they tighten their grip, the more star systems will slip through their fingers. Given the massive divergence in living standards between South Europe and core countries, a currency union with equal unemployment pay, equal social benefits is infeasible, plain and simple, unless they want to make Germany the land of 500-Euro jobs...

That is true, the only option to create equality would be a European Union (a true union). But nobody will want to vote for it, so....

**********************

Meanwhile, in Greece:

The head of the Council of Europe, Europe’s top human rights institution, says Greece’s referendum would fall short of international standards if held as planned on Sunday.

Council of Europe Secretary General Thorbjorn Jagland told The Associated Press that international standards recommend that a referendum be held with at least two weeks’ notice to allow sufficient time for discussion, with a clear question put to the people and with international observers monitoring the vote.

Greece’s referendum on whether to accept creditor demands in return for bailout funds was called Saturday, and there has been confusion as to whether the result of a “no” vote as the government recommends would lead the country out of the 19-nation eurozone.

The vote “has been called on such a short notice, that this in itself is a major problem,” Jagland said Wednesday by phone from Lisbon, Portugal. “And also the fact that the questions that are put to the people ... are not very clear.”

Great. The incompetence knows no bounds.

[Thanas]

NYT:

Some of the most resolute opponents of cutting Prime Minister Alexis Tsipras and his Syriza Party any slack, however, have been Europe’s most deprived nations, places like Bulgaria, the European Union’s poorest member, and Baltic States blighted by decades of Soviet-imposed penury.

“We are much poorer than the Greeks, but we have performed reforms,” Rosen Plevneliev, the president of Bulgaria, a northern neighbor of Greece, said in an interview. “When you have a problem, you have to address it and not shift it to Brussels or onto somebody else,” he said, deriding Syriza’s complaints that Europe had let Greece down.

[K. A. Pital]

They forgot to add that Bulgarian labour is the cheapest in the EU. Minimum wage stands at 170 EUR. Average income is 3,5 EUR per hour. "Reform" lol.

[Crown]

No, I full well am aware (unlike you) that there are vested interests on both sides spouting their own version of events.

Who says I'm not aware? I just happen to agree with the goals of Tsipras i.e. debt write down/negotiation + stimulus package in lieu of more austerity.

That is not a given, considering the last performance of Podemos at the elections and the improving economy. Nor does that explain why every Government on earth has colluded against the poor, insignificant Greeks.

That is already explained by the Irish Times article I posted earlier; they're not doing it against 'the poor, insignificant Greeks' because of any other reason than these 'poor, insignificant' people are having the gall to say; no more. If it were the Irish, then they would be doing it to the Irish. If it were the Portuguese, then they would be doing it to them.

Simply not true; the Guardian quotes the document its self (seems to have been leaked from the German parliament of all places) and quotes the IMF in its own words; “significant concessions” would be needed under the baseline case to make the debt manageable. The Reuters article just has an analyst saying 'well we don't think that's necessary'. It doesn't change the fact that the IMF thinks it is.

Uh-huh.

I call bullshit. There are six documents, but one dealing with the debt level analysis and projections, as the Guardian itself says. They mean the same document. The difference is that the Guardian - unlike Reuters - does not provide the full quotes. I can't find anything in the Sueddeutsche either.

Oh Jesus-titty-fucking-Christ. Lets make this easy; do you believe the Guardian is lying? If so go fucking here, make a complaint and demand a correction. Until such time, the article I linked last night (which was their Front Page leader this morning) is valid, and any dissonance between it and the Reuters piece can be easily explained away along the lines of what I did above (and kudos for pointing out my mistake in saying 'analyst' rather than 'analysis'). Because inside that Guardian article they are clearly saying that the IMF internally believes 'significant concessions' will still be needed even if Greece followed through the bailout plan.

[Crown]

Update from the Guardian;

IMF says Greece needs extra €50bn in funds and debt relief
International lender issues strong message to Europe by warning that Athens’ debts are unsustainable and it needs 20-year grace period on debt repayments

The International Monetary Fund has electrified the referendum debate in Greece after it conceded that the crisis-ridden country needs €50bn (£35bn or $55bn) of extra funds over the next three years and large-scale debt relief to create “a breathing space” and stabilise the economy.

With three days to go before a knife-edge referendum, the IMF revealed a deep split with Europe as it warned that Greece’s debts were “unsustainable”.

Fund officials said they would not be prepared to put a proposal for a third Greek bailout package to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.

According to the IMF, Greece should have a 20-year grace period before making any debt repayments and that final payments should not take place until 2055.

The IMF’s analysis will be seized upon by Alexis Tsipras, the Greek prime minister, who has been insisting that he will only agree to tough new austerity measures if Greece is granted debt relief.

In a strong message to European leaders, the IMF said they would need to find extra money for Greece following the marked deterioration in the state of the economy since Tsipras’s Syriza coalition took over at the start of the year.

“Very signficant changes in policies and in the outlook since early this year have resulted in a substantial increase in financing needs. Altogether, under the package proposed by the institutions to the Greek authorities, these needs are projected to reach about €50bn from October 2015 to the end of 2018, requiring new European money of at least €36bn over the three-year period.

The IMF said that even if Greece is offered generous terms, it is still likely to require a reduction in debt of around 30% of national income to bring it down to 117% of GDP, the uppermost limit of what the Fund considered sustainable at the time of the second Greek bailout in the autumn of 2012.

“Even with concessional financing through 2018, debt would remain very high for decades and highly vulnerable to shocks. Assuming official (concessional) financing through end–2018, the debt-to-GDP ratio is projected at about 150% in 2020, and close to 140% in 2022.

“Using the thresholds agreed in November 2012, a haircut that yields a reduction in debt of over 30% of GDP would be required to meet the November 2012 debt targets.”

The IMF added that if growth was lower than expected or if the Greek government failed to meet targets for running a surplus on its budget excluding interest payments, there would be “significant increases in debt and gross financing needs”.

The IMF said that is was releasing it preliminary draft debt sustainability analysis as a result of the leaks of documents reported in the Guardian earlier this week.

Significantly, it said its assessment had “not been agreed with the other parties in the policy discussions” – an admission that the Fund is at odds with its troika partners – the European commission and the European Central Bank – over the need for debt relief.

The Fund has traditionally viewed debt relief as an integral part of any package to improve the economic prospects of a country seeking help, but it has met resistance from European governments fearful that the cost would have to be met by their own taxpayers.

In response to criticism that the IMF has failed to tackle intransigence in European capitals against a further debt write-off, a senior IMF official said: “We are asking the Greeks to do very difficult things. We are also asking the Europeans to do something very difficult.

“The extension of maturities [by the EU] on Greek debt would be a dramatic move.”

He said that while “it was a fact that Europe has already provided considerable debt relief in GDP terms” to Greece, the current dire situation meant they needed to do more.

The official said he had refused to put forward plans for a further bailout of Greece to the IMF board without a comprehensive deal that included debt relief.

“We cannot go to our board with this report unless we have a credible programme that is sustainable and with a policy from the EU on debt relief. We want a comprehensive solution and cannot go to the IMF board without it.”

I never thought in my life I would be cheering on the IMF but ... GO MOTHERFUCKING IMF, GO! TURN THE SCREWS! TURN THEM!!!!!

[Crown]

Some reactions from Athens:

Over in Athens SKAI news is reporting that at least 22,000 people have poured into Syntagma square to attend tonight’s “yes” rally, reports our correspondent Helena Smith. The gathering is so large that protestors are now crushed and spilling out of ALL the streets that run into the Greek capital’s main square. No demonstration, quite as big, has been seen in the five years that I have covered the crisis.

The passion of those attending was evident in the speech that an uncharacterically angry mayor of Athens, George Kaminis, gave at the start of the rally. Thumping the lectern, Kaminis accused the leftist-led government of masterminding a referendum that now puts Greek voters in front of a false dilemma.

Some pictures from the pro-EU rally:




Video:
https://twitter.com/jimwaterson/status/ ... 60/video/1


https://www.indiegogo.com/projects/gree ... und#/story
Also, one can now donate to the Greek people directly.
I put in 10€. EDIT: Well, I tried. Site crashed.

Something I want to share with you Thanas on these issues, regarding the 'massive' NAI protests;


https://twitter.com/damomac/status/616355087020113920

The time under 29/06 indicates the amount of time the OXI protests were given coverage on Greek media, and the time under 30/06 indicates the amount of time the NAI protests were given coverage on Greek media. The ONLY media outlets that gave roughly 50/50 coverage? The national broadcaster ... the one Tsipras opened and the Troika howled about ... things that make you go hmmmmmm

Regarding the Indiegogo crowd sourcing campaign;


(but despite the above, I too have donated)

[K. A. Pital]

And the IMF announces any future bailout's gonna need debt relief, otherwise will not help. Tsipras is probably having a good day today.

[Crown]

The Irish Times report that Merkel knew (or suspected) that the Greek debt was 'unsustainable' back in 2011 from leaked NSA intercepts;

Merkel admitted in 2011 Greek debt unsustainable
Call intercepted by NSA and circulated by Wikileaks to media

German chancellor Angela Merkel admitted in a 2011 phone call that Greek debt would be unsustainable even after a second debt write-down, according to a phone call intercepted by the NSA.

A transcript of the call from October 9th 2011 suggested the German leader was “at a loss” as to whether another haircut (a debt write-down) - or a transfer union (between EU member states) would be best for addressing the Greek crisis.

According to the summary, part of a cache of NSA documents handed by Wikileaks to the German press, finance minister Wolfgang Schäuble was reportedly supportive of another haircut, “despite Merkel’s efforts to rein him in”.

The conversation, during the height of the euro crisis, suggests little has changed in the German leader’s thinking on Greece. In the current standoff with Athens, Dr Merkel has refused to entertain haircuts in public until promised reforms are implemented. Behind the scenes in Berlin, however, debt relief for Greece in the form of loan extensions is seen as an option.

“Merkel’s fear was that Athens would be unable to overcome its problems even with an additional haircut, since it would not be able to handle the remaining debt,” said a summary of the phone call, forwarded by the US to its “Five-Eyes” intelligence co-operation partners: the UK, Canada, Australia and New Zealand.

The document, published in today’s Süddeutsche Zeitung daily, suggested then European Commission president Jose Manuel Barroso was in favour of a “gentler approach” than debt relief, ex-ECB president Jean-Claude Trichet was “solidly opposed” and IMF managing director Christine Lagarde “undecided”.

No direct quotes are used to back up the assessments made in the phone call summary, believed to have taken place between Dr Merkel and an assistant during a trip to Vietnam in 2011.

In the conversation, the chancellor reportedly expressed the wish to finance the cost of the eurocrisis through a financial transaction tax (FTT) in the coming year.

“In that regard the Germans thought that pressure could be brought to bear on the US and British governments to help bring about an FTT,” the summary concludes.

After it emerged in 2013 that the NSA had tapped Angela Merkel’s mobile phone, the German leader said that “spying on friends is just no on”.

A subsequent investigation into the affair was dropped by German authorities, blaming a lack of co-operation by the US authorities.
Last month came similar revelations of widespread NSA spying on the communications of the French government, including three presidents.

The latest Wikileaks revelations in Germany show that, as well as eavesdropping on Dr Merkel’s phone, the NSA tapped the phone lines in the federal ministry of finance, back at least to the era of finance minister Oskar Lafontaine, who resigned in 1999.

When the Süddeutsche Zeitung dialed a phone number labelled “GE INT FINANCE MIN LAFONT” in the documents, they were linked to the personal office in Berlin of Wolfgang Schäuble.

Other documents suggest widespread tapping of phone lines in the economics and agriculture ministries as well as a Frankfurt number linked to the ECB’s member state oversight office.

Ooops

[FTeik]

Fund officials said they would not be prepared to put a proposal for a third Greek bailout package to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.

Good luck with that.

And fuck the IMF. Lagarde is probably afraid, that the Greeks not paying their loans back will reflect badly on her, so those cunts who went along with the austerity-policy for the last five years want to drop the problem onto the rest of the Troika.

Here is, what I would do. Free the Greeks for the next five years from paying for their debts (repayment and interest), while they make the necessary structural reforms you agreed upon before. Confirm after five years, that the reforms really have been done and that the Greeks haven't continued to do business as usual. And then you can negotiate about a debt-cut, once you know, that they are serious about getting their country in order.

[Crown]

Fund officials said they would not be prepared to put a proposal for a third Greek bailout package to the Washington-based organisation’s board unless it included both a commitment to economic reform and debt relief.

Good luck with that.

And fuck the IMF. Lagarde is probably afraid, that the Greeks not paying their loans back will reflect badly on her, so those cunts who went along with the austerity-policy for the last five years want to drop the problem onto the rest of the Troika.

To be fair to the IMF; they were against austerity from the start, they had to bend all their rules to 'play along' with this farce in the beginning, I'm not blaming them for dumping it on the Eurogroups dumb asses at all.

Here is, what I would do. Free the Greeks for the next five years from paying for their debts (repayment and interest), while they make the necessary structural reforms you agreed upon before. Confirm after five years, that the reforms really have been done and that the Greeks haven't continued to do business as usual. And then you can negotiate about a debt-cut, once you know, that they are serious about getting their country in order.

Riiiiiiiiiiiight.

So the IMF, who have crunched the numbers, says that assuming continued reform Greece will need €50 billion write down AND 20 year grace periods before making any debt repayments, but you think 5 years is 'long enough'.

You have of course done some calculations showing what Greece's debt is, what it's GDP is, and what it's debt repayment schedule will be (and at what interest rates) in your magical 5 year period to show what kind of GDP Greece will need to have to make these repayments? What am I saying, of course you have! Please, share with the rest of us ...

[Vendetta]

Here is, what I would do. Free the Greeks for the next five years from paying for their debts (repayment and interest), while they make the necessary structural reforms you agreed upon before. Confirm after five years, that the reforms really have been done and that the Greeks haven't continued to do business as usual. And then you can negotiate about a debt-cut, once you know, that they are serious about getting their country in order.

Structural reforms are useless unless paired with economic stimulus. There are simply no "reforms" that are going to make up the hole in Greece's finances without a massive focused effort on economic recovery because the "reforms" they've been pushed into making so far have slashed 25% off the value of the whole economy, which means more spending not less over the twenty years the IMF has cited as necessary, with that €50bn figure being emergency relief over the next three years.

[Simon_Jester]

I'm trying to stay mostly out of this, but looking at that 25% contraction of the Greek economy...

It occurs to me that even assuming the Greek economy started growing right now and continued to do so... it's unlikely to grow much faster than 1% or 2%, when measured in constant dollars. As far as I can recall from examples I've looked at, that's about as much real growth as you usually get in developed nations without massive external investment.

In which case, given that they just took a 25% hit in the past few years, it could easily take 10-20 years of growth just to put the Greek economy back where they were in 2010-11 when this pile of debt became unsustainable for them.

At which point, yes, they would still have an unsustainable debt level, just like they did in 2010.

Have I missed anything? This is a very naive analysis.

[madd0ct0r]

Greece may be able to grow at much faster the 1% initially, since they've been knocked back so far. There's a large untapped labour force for example.

[FTeik]

And fuck the IMF. Lagarde is probably afraid, that the Greeks not paying their loans back will reflect badly on her, so those cunts who went along with the austerity-policy for the last five years want to drop the problem onto the rest of the Troika.

To be fair to the IMF; they were against austerity from the start, they had to bend all their rules to 'play along' with this farce in the beginning, I'm not blaming them for dumping it on the Eurogroups dumb asses at all.

Funny, I seem to remember, that it was the IMF under Strauß-Kahn, that prevented the Greek State declaring bancrupty because they wanted to save the French Banks (and Germany went happily along with it).

Here is, what I would do. Free the Greeks for the next five years from paying for their debts (repayment and interest), while they make the necessary structural reforms you agreed upon before. Confirm after five years, that the reforms really have been done and that the Greeks haven't continued to do business as usual. And then you can negotiate about a debt-cut, once you know, that they are serious about getting their country in order.

Riiiiiiiiiiiight.

So the IMF, who have crunched the numbers, says that assuming continued reform Greece will need €50 billion write down AND 20 year grace periods before making any debt repayments, but you think 5 years is 'long enough'.

You have of course done some calculations showing what Greece's debt is, what it's GDP is, and what it's debt repayment schedule will be (and at what interest rates) in your magical 5 year period to show what kind of GDP Greece will need to have to make these repayments? What am I saying, of course you have! Please, share with the rest of us ...

Because the expertise and numbers-crunching of the IMF is suddenly so reliable now that it supports your POV?

This isn't about Greeks debt in relation to its GDP. This is a) to make sure Greek isn't burdened, while they undergo the necessary reforms and b) to make sure there are reforms actually undertaken.

Otherwise Tsipras or whoever will succeed him will just sign a nice sounding agreement on reforms, the Greece will get the money and debt-cut they want, while dragging their feet implementing reforms, if doing anything at all. Even if after those five years the reforms didn't worked as hoped you can at least confirm (or not), that the Greece put in an honest effort and look on how to go on from there.

What you and the IMF are proposing basically comes down to a blanco-cheque for the Greeks.

[K. A. Pital]

Can Greek economic growth exceed 3%? I think you can answer that question yourself without IMF help. The answer is not the one people want to hear.

Reforms are pointless talk. No reform is going to make a mature economy with a consolidated and full market grow at above 3%, maybe a bit more than that. Even that is very generous. Average OECD growth since the crisis has been pathetic.