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It may be that the US/ IMF strategy is to undermine the euro as it will be us$ positive
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Greece ... owes its official lenders 242.8 billion euros ($271 billion), according to a Reuters calculation based on official data, with Germany by far the largest creditor.
That figure includes loans made under two bailouts from European governments and the IMF since 2010 -- worth a nominal 220 billion euros so far, of which some has been repaid -- as well as Greek government bonds held by the European Central Bank and national central banks in the euro zone.
Private investors hold 38.7 billion euros of Greek government bonds following a major write-down and debt swap in 2012 that reduced the Greek debt stock by 107 billion euros and the value of private holdings by an estimated 75 percent.
The Greek government has also issued 15 billion euros in short-term Treasury bills, mostly to Greek banks.
Here is a breakdown of the country's foreign debt stock:
IMF - Greece was promised a total of 48.1 billion euros by the IMF, of which 16.3 billion was still to come by March 2016 if Athens successfully completed the second economic adjustment program. It had serviced and repaid loans on time up to this month, when it used an obscure IMF provision to bundle together four payments totaling 1.6 billion euros for payment by the end of June. The older IMF loans carry an interest rate of 3.5 percent, higher than the euro zone rescue fund charges.
ECB - The ECB owns roughly 18 billion euros of Greek bonds, which would probably be worth a fraction of their face value should the country leave the euro zone, with 6.7 billion euros maturing in July and August.
Beyond a default on Greece's national debt, any exit of Greece from the euro zone would lumber the European Central Bank with a huge bill for lost credit. ECB President Mario Draghi recently said that Greek banks had tapped 118 billion euros of central bank liquidity. That includes 89 billion in what is known as Emergency Liquidity Assistance (ELA). That remains the responsibility of the country's central bank but only if Greece stays in the euro. Were it to leave, the bill would rebound on other euro countries, including Germany.
In addition about 45 billion euros of banknotes in Greece represents another liability, being a claim that the wider Eurosystem of central banks would be obliged to honor.
THE EURO ZONE - Euro zone governments gave Greece 52.9 billion euros in bilateral loans under the first bailout agreed in 2010, known as the Greek Loan Facility. Under the second bailout agreed in 2012 Athens has so far received 141.8 billion euros from the euro zone's financial rescue fund. It had been due a further 1.8 billion euros by June 30 if it met conditions but barring major surprises that is off the table.
Of the biggest euro zone members, Germany's exposure for the two bailouts totals 57.23 billion euros, France's is 42.98 billion, Italy's is 37.76 billion and Spain's 25.1 billion. That is in addition to their contributions to the IMF loans, commensurate with their respective quotas in the global lender.
Euro zone countries have already extended the maturities of their loans to Greece from 15 to 30 years and reduced the interest rates on some to just 0.5 basis points above their borrowing cost. They also granted Greece a 10-year moratorium on interest payments on the second bailout loan from the euro zone rescue fund.
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Yanis Varoufakis said:Germany won’t spare Greek pain – it has an interest in breaking us
Debt restructuring has always been our aim in negotiations – but for some eurozone leaders Grexit is the goal
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... as law and order breaks down as soon as it becomes apparent the trough is gone.
So, Greek Parliament voted yes on the EU deal. Young people in Greece feel betrayed by the older generation. It's a recipe ripe for revolution (though I don't think they are quite angry or organized enough for that yet).
Once again the IMF is back in the news in regards to Greece.
The IMF staff told the board of directors Greece Disqualified from New IMF Program.
Yet, Germany insists IMF be a part of the program. The reason for the latter is Germany will have to pony up lots more money if the IMF is not involved. The staff presented this message to the board this week, along with the message eurozone bailout lenders first need to agree on "debt relief".
From the above link (Financial Times) ......The International Monetary Fund’s board has been told Athens’ high debt levels and poor record of implementing reforms disqualify Greece from a third IMF bailout of the country, raising new questions over whether the fund will join the EU’s latest financial rescue.
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... Greece and its creditors have agreed to the terms of the country’s third bailout program. Here are the details, via Bloomberg:
- Greece’s deal with creditors provides funding of ~EU85b over next 3 years ensuring ability to meet payment of debt obligations, Athens-based Press Ministry says in e-mailed statement.
- Deal sees 2015 primary deficit of 0.25% of GDP, primary surpluses of 0.5% in 2016, 1.75% in 2017, 3.5% in 2018
- Govt will take initiatives in coming months to settle issue of bad loans that stand at ~EU95b, consultation group on issue to be set up with creditors, govt won’t allow sale of bad loans
- Greek power grid operator Admie to remain public asset, there will be no break up of Public Power Corp, natural gas market to be liberalized
Over the weekend, FAZ reported that creditors had drafted an MOU which would need to be discussed with the Greek finance ministry before it could be passed to EU member countries and the Greek parliament for final approval. Generally speaking, today was the deadline to produce a mutually "acceptable" draft agreement, as Athens must make a €3.2 billion bond payment to the ECB next week in order to ensure that the Greek banking sector retains access to ELA. Now, it looks like Europe will get to pay itself back after all, assuming there are no unexpected political problems later on in the week. ...
... Germany which, according to Bild (citing EU sources) has now determined that the new bailout plan is "insufficient." ...
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But as the German finance ministry made clear on Tuesday, this can’t "just be about Aug. 20 and an installment payment, but really about how, together with the Greeks, we can have a lasting solution for Greece."
Of course any “lasting solution” will have to include debt writedowns and the IMF has wavered on whether the Fund will be willing to participate in the absence of debt relief. ...
... the Greek parliament ... gave its approval for the third Greek bailout ...
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In terms of numbers, the rebel faction within Syriza is now up to 42, with 43 being seen as the threshold beyond which Tsipras has no choice but to call elections. In other words the Tsipras government now hangs in the fate of just one person.
According to other sources, Tsipras may no longer even have the required minimum support to pass a confidence vote, suggesting snap elections are imminent:
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