Tag: Greece

It was announced that the International Monetary Fund has appointed French Finance Minister Christine Lagarde its first female head. With the backing of China, Russia and, today, the United States, Ms. Lagarde has some very tough tasks set out for her the most important being the economic crisis in Greece:

Greek Strike Overshadows Budget Vote

Greek police fired tear gas to disperse protesters in the center of Athens as labor unions shut down government services before a vote on austerity measures that may determine if the nation can avoid a default. . . . .

Papandreou faces his second survival test in a week tomorrow when lawmakers vote on the package that’s needed before the cash-strapped nation can tap a fifth loan payment from last year’s 110 billion-euro ($157 billion) rescue. Failure to pass the government’s 78 billion-euro plan may lead to the euro area’s first sovereign default. . . .

Asset Sales

State-asset sales are the “first pillar” in any new financing package for Greece and an important factor for its European Union and International Monetary Fund partners, who are supplying the aid, Finance Minister Evangelos Venizelos said in parliament today. He spoke as a debate on the second bill, the so-called Implementation Law, began under a fast-track process, to make a June 30 deadline.

The “Shock Doctrine” in full play and the Greek people are not happy

What Atrios said:

The people who run the world agree that ordinary people need to suffer so that the banksters don’t lose on their bets.

The people who run the world are awful people.

Shitpile is an understatement.

BERLIN (AP) — German Chancellor Angela Merkel is warning that a full-scale restructuring of Greek debt would have “completely uncontrollable”consequences on the financial markets.

Merkel said Wednesday that imposing a so-called haircut on Greek debt – reducing the amount to be repaid – would not only endanger banks and other creditors who hold Greek bonds, but also institutions that sold insurance policies against a default.

Merkel told a parliamentary committee that those credit default swaps have a higher face value than the debt itself.

But protect those bankers they no matter that they’ve destroyed Greece’s economy by the skin of the average Greeks’ teeth

ATHENS – Prime Minister George Papandreou of Greece won a crucial vote of confidence early Wednesday, with all 155 lawmakers of the Socialist Party expressing their support for his beleaguered government, above the absolute majority of 151 votes required by Greece’s 300-seat Parliament. . . .

He defended the country’s foreign creditors, who have become a lightning rod for popular fury, saying, “They are giving us a helping hand in difficult times.”

But tens of thousands of people gathered outside Parliament, many voicing rage at foreign lenders, whom they see as a kind of occupying power, and at a government they blame for Greece’s financial crisis.

“They destroyed the country,” said Terpsichore Theofili, 23, a history student, as she stood in the crowd in Syntagma Square outside Parliament. “They should pay, not us,” she added.

David Dayen said it,

No, they’re saving their creditors.

In other words, a Greek default event would break the banks and the financial wizards who sold default insurance. This is all about protecting them, not the Greek people. . . .

Mohamed El-Erian of Pimco still thinks Greece will default. And maybe they will. Maybe the Parliament will succumb to the pressure of the street and refuse to institute more pain and suffering. Maybe this latest plan will just kick the can down the road, and default will be an inevitable future event. But Greece should have the power to set the terms here. It’s like the old joke: “If I lend you $100 and you don’t pay it back, you have a problem. If I lend you $1 trillion and you don’t pay it back, I have a problem.” Greece could hold that over their creditors, but so far their political leadership has been cowed.