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On July 15 2015 04:47 c0ldfusion wrote:Latest on the situation: Show nested quote +The International Monetary Fund has set off a political earthquake in Europe, warning that Greece may need a total moratorium on debt payments for 30 years and perhaps even long-term subsidies to claw its way out of depression. Show nested quote +The decision by the European Central Bank to force the closure of the Greek banks two weeks ago by freezing emergency liquidity assistance (ELA), appears to have cost European taxpayers very large sums of money. source
Latest news: The IMF, which was expected to take part in the new bailout, has just officially released its leaked report on debt sustainability, stating Greek debt is "highly unsustainable" and needs to be addressed by any bailout, with either massive debt forgiveness or a 30yr grace period on Greece's repayments. As you may know, the IMF is forbidden by its own rules to participate in any bailouts that do not meet its debt sustainability criteria. Considering the IMF was originally brought in by Angela Merkel to bring economic credibility and expertise to the Greek crisis negotiations, the IMF has just dealt a massive, if not lethal blow, to the latest Greek bailout deal.
In plain English: the IMF has basically just identified the German/northern European position for what it is: an economic fantasy.
link: http://www.imf.org/external/pubs/ft/scr/2015/cr15186.pdf?hootPostID=2cd94f17236d717acd9949448d794045
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Was about to post the same thing as Evil_Sheep;
The so called "leaked document" is actually a tool for IMF to force a long term change of the current proposal reason being they strongly believe they will lose most, if not all, of the investment and receive a heavy money loss if Greece defaults which would be the case would this current proposal run its course.
Source: The Financial Times: IMF signals it could walk away from Greek bailout deal
This took a rather strange turn didn't it?
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Not really... This was already discussed on Sunday, I even posted it here. There is nothing new in that.
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Strange, but on the other hand, completely predictable. The laws of economics can no more be ignored than the law of gravity. It is far better for the IMF to be saying this now than years down the line after another failed bailout and wasted billions, and people's livelihoods.
For the first time there is light at the end of the tunnel for this crisis. The IMF is providing the cover for Angela Merkel to make an economically sensible deal and put Europe and Greece on the path out of this crisis. I hope she has the sense to accept it. I will also note that at this point, the IMF is saying the exact same thing Syriza and Varoufakis has been saying since they were elected, and that many of the world's top economists have been saying since the Greek crisis began in 2009. Far too much time, and billions, have already been wasted.
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I'm not surprised actually that it is IMF that publicized the document though since they were the ones who first officially came out and said that the austerity measures back in 2009 also were to harsh and overall damaged the Greek economy instead of helping it.
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It's better to get back 50c on the Dollar, than wipe out the entire thing.
I just hope this doesn't take the same path as the French "loan" forced on Haiti, that took 120 years to pay off.
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Getting back 50 cents on the dollar 30 years from now is not better if you're needed to pay 15 cents right now.
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So how do you guys think this IMF report will affect the votes of the national parliaments about the newest deal?
It certainly does not help convincing the members of parliament to vote in favor of the deal.
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On July 15 2015 15:30 Elizar wrote:
So how do you guys think this IMF report will affect the votes of the national parliaments about the newest deal?
It certainly does not help convincing the members of parliament to vote in favor of the deal.
The thing about IMF is that their main policy is not to make deals that they foresee could cause a overall loss and they take this incredible seriously, which is why they published this report. What will happen next is that the other two parties, ECB and EU either will try to adjust the proposal or IMF will bail the first chance they get, probably by next quarter.
And how the parliament voters will feel about this situation... I have no clue.
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On July 15 2015 08:15 Evil_Sheep wrote:
I hope she has the sense to accept it. I will also note that at this point, the IMF is saying the exact same thing Syriza and Varoufakis has been saying since they were elected, and that many of the world's top economists have been saying since the Greek crisis began in 2009.
The IMF relates this to the capital controls and the bank closures though, which were both not in place when Syriza was elected.
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GRE should leave the EU, get a complete debt write off, and this 3rd help-programm with 35billion€ and then do what ever they wish. They could reduce their currency to 1/5 € then the 35billion could last a long time.
The only thing I care about is that I don't have to deal with Gre's problem as a Ger, no matter what it costs us. Give us some peace of this non stop 7 year long ongoing issue..
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On July 15 2015 16:14 Trurl wrote:Show nested quote +On July 15 2015 08:15 Evil_Sheep wrote:
I hope she has the sense to accept it. I will also note that at this point, the IMF is saying the exact same thing Syriza and Varoufakis has been saying since they were elected, and that many of the world's top economists have been saying since the Greek crisis began in 2009. The IMF relates this to the capital controls and the bank closures though, which were both not in place when Syriza was elected.
It has taken the IMF a long time to arrive at this realization...far too long. I would note though that this is not the first time the IMF has stated that Greece needs debt restructuring/writeoffs. The IMF even stated recently that they made a mistake and broke their own rules by not insisting on debt restructuring during the last bailout in 2012. Now I think even the German and EU governments will finally be forced to accept this ugly but true reality.
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What a shit storm heh...
I wonder if they are disguising a debt relief as a "debt restructuring" to avoid the political mess that it would ensue
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On July 15 2015 15:30 Elizar wrote:
So how do you guys think this IMF report will affect the votes of the national parliaments about the newest deal?
It certainly does not help convincing the members of parliament to vote in favor of the deal.
I don't really see how the current deal can pass all the national parliaments it needs to pass now that the IMF has totally destroyed its credibility. So it seems the current deal may be dead and, haha, new negotiations may need to take place. Or everyone will just say fuck it and let Greece and the EU burn.
Obviously everyone is tired to death of negotiations but I hope they don't give up now. The IMF programme represents a realistic path to save Greece and the EU...the only realistic path. Every other path will be incredibly destructive for all of Europe.
The obvious huge problem is the German government has gone so far down the current path it seems almost impossible for it to back down now. Yet that is what must happen to save Greece and the EU. Given that Merkel, and her party, has gone all-in on austerity and no to debt restructuring, there is surely no way for her to back down now without coming at the cost of her career and reputation. So will a politician's pride come before the good of all of Europe? I have no idea what the outcome will be as things have become incredibly chaotic and fucked up. The events of the past few weeks have been shocking and they will be writing about it for decades and longer.
All I can say is that I think the IMF has just dealt the death blow to Merkel's career. Maybe it was not their intention but they have just stabbed Merkel in the back, and whether it comes now or in a few years, her career is over. And probably in ruins.
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On July 15 2015 17:26 Evil_Sheep wrote:Show nested quote +On July 15 2015 16:14 Trurl wrote:On July 15 2015 08:15 Evil_Sheep wrote:
I hope she has the sense to accept it. I will also note that at this point, the IMF is saying the exact same thing Syriza and Varoufakis has been saying since they were elected, and that many of the world's top economists have been saying since the Greek crisis began in 2009. The IMF relates this to the capital controls and the bank closures though, which were both not in place when Syriza was elected. It has taken the IMF a long time to arrive at this realization...far too long. I would note though that this is not the first time the IMF has stated that Greece needs debt restructuring/writeoffs. The IMF even stated recently that they made a mistake and broke their own rules by not insisting on debt restructuring during the last bailout in 2012. Now I think even the German and EU governments will finally be forced to accept this ugly but true reality.
yeah, it's obvious to all that GRE can't be kept in the EU anymore. The new plan will not succeed, and instead plans about the Grexit will be made again..
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On July 15 2015 18:00 Evil_Sheep wrote:Show nested quote +On July 15 2015 15:30 Elizar wrote:
So how do you guys think this IMF report will affect the votes of the national parliaments about the newest deal?
It certainly does not help convincing the members of parliament to vote in favor of the deal. I don't really see how the current deal can pass all the national parliaments it needs to pass now that the IMF has totally destroyed its credibility. So it seems the current deal may be dead and, haha, new negotiations may need to take place. Or everyone will just say fuck it and let Greece and the EU burn. Obviously everyone is tired to death of negotiations but I hope they don't give up now. The IMF programme represents a realistic path to save Greece and the EU...the only realistic path. Every other path will be incredibly destructive for all of Europe. The obvious huge problem is the German government has gone so far down the current path it seems almost impossible for it to back down now. Yet that is what must happen to save Greece and the EU. Given that Merkel, and her party, has gone all-in on austerity and no to debt restructuring, there is surely no way for her to back down now without coming at the cost of her career and reputation. So will a politician's pride come before the good of all of Europe? I have no idea what the outcome will be as things have become incredibly chaotic and fucked up. The events of the past few weeks have been shocking and they will be writing about it for decades and longer. All I can say is that I think the IMF has just dealt the death blow to Merkel's career. Maybe it was not their intention but they have just stabbed Merkel in the back, and whether it comes now or in a few years, her career is over. And probably in ruins.
Merkel is since 10 years chancellor of germany... you don't have to worry about her career :p
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Zurich15366 Posts
And she might well be to stay for another 4 - if the conservatives don't get their shit together by next year. Her career might play out on the international European scene, but it's decided at home.
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I think a negative perspective from outlanders on a President often results in the a contray view in the inland. For example Tsipras and Putin.
If she would go for the Grexit, I doubt that it would harm her career, perhaps even strengthen her position.
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On July 15 2015 18:05 unsaeglich wrote:Show nested quote +On July 15 2015 18:00 Evil_Sheep wrote:On July 15 2015 15:30 Elizar wrote:
So how do you guys think this IMF report will affect the votes of the national parliaments about the newest deal?
It certainly does not help convincing the members of parliament to vote in favor of the deal. I don't really see how the current deal can pass all the national parliaments it needs to pass now that the IMF has totally destroyed its credibility. So it seems the current deal may be dead and, haha, new negotiations may need to take place. Or everyone will just say fuck it and let Greece and the EU burn. Obviously everyone is tired to death of negotiations but I hope they don't give up now. The IMF programme represents a realistic path to save Greece and the EU...the only realistic path. Every other path will be incredibly destructive for all of Europe. The obvious huge problem is the German government has gone so far down the current path it seems almost impossible for it to back down now. Yet that is what must happen to save Greece and the EU. Given that Merkel, and her party, has gone all-in on austerity and no to debt restructuring, there is surely no way for her to back down now without coming at the cost of her career and reputation. So will a politician's pride come before the good of all of Europe? I have no idea what the outcome will be as things have become incredibly chaotic and fucked up. The events of the past few weeks have been shocking and they will be writing about it for decades and longer. All I can say is that I think the IMF has just dealt the death blow to Merkel's career. Maybe it was not their intention but they have just stabbed Merkel in the back, and whether it comes now or in a few years, her career is over. And probably in ruins. Merkel is since 10 years chancellor of germany... you don't have to worry about her career :p
I'm not worried about her career. I used to think like everyone else: Merkel is a wise and fair leader. My illusions have been shattered. Her career has been a disaster, her decisions have been reckless and dangerous. 10 years means nothing.
The reason I said that her career is over, is now either Greece and the EU burns which is a disaster for her, or the debt is restructured and Greece is saved, which is also a disaster for her. She can kick the can down the road some more but eventually one of those two things will happen. I have a very hard time imagining there is any other possibility for her but the destruction of her career. Also a close and important ally for her, the IMF, the ones she brought in to be credible and responsible: have turned on her and savaged the credibility of her plan, and therefore, her own credibility. I don't think she has much left after this weekend.
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I think you're way overstating the severity of the situation. She's chancellor of Germany, the most important thing for her continued career is how people in Germany are doing.
Foreign policy is only one aspect of that.
Also, the EU won't burn.
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EPT
