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Turkish prayers do not come true: Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

May 26 2012 at 1:23 PM
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  (Login cretegeorge)
Group General

Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

The cost of Greece exiting the euro would be unmanageable and probably exceed the 1 trillion euros ($1.25 trillion) previously estimated by the Institute of International Finance, the groups managing director said.

The Washington-based IIFs projection from earlier this year is a bit dated now and probably on the low side, Charles Dallara said in an interview in Rome yesterday. Those who think that Europe, and more broadly the global economy, are really prepared for a Greek exit should think again.
The European Central Banks exposure to Greek liabilities is more than twice as big as the ECBs capital, said Dallara, who represented banks in their negotiations with the Greek government on its debt restructuring. As a result, he predicted the bank would be unable to provide liquidity and stabilize the euro-area financial sector.

The ECB will be insolvent if Greece were to exit the euro, Dallara said. Europe would have to first and foremost recapitalize its central bank.

Concern about Europes crisis has erased about $4 trillion from global equity values, as policy makers continue to argue over how to stabilize the 17-nation euro area and limit regional contagion. European Union President Herman Van Rompuy said yesterday that contingency planning for Greece leaving the euro isnt a priority, while Morgan Stanley economist Elga Bartsch has said Greece has a 1-in-3 chance of a euro exit.

Previous Estimate

In February, the IIF estimated that Greeces liabilities, in the event of a euro exit, could be crippling. It is hard to see how they would not exceed 1 trillion euros, the group said in an internal Feb. 18 report that hasnt been made public.

Spain, Italy and the already-bailed out Ireland and Portugal remain quite vulnerable to changes in market sentiment as Europes sovereign debt crisis continues, Dallara said. He urged policy makers to remember the shockwave caused by the failure of Lehman Brothers Holding Inc., and that what appears to be a containable event may in fact bring on financial meltdown.

For Greece, in its fifth year of recession, it may be more effective to offer extra money to help its battered economy recover, Dallara said. Because Greeces economy has shrunk so much faster than expected, it may need more time to meet its budget targets and repay its international loans, he said.

Aiding Economy

Greeces shrinking economy could be aided at a cost of an additional 10 billion euros. Were talking about very modest sums compared to whats already on the table, he said.

A small olive branch here carefully defined, nuanced in its presentation, not as an alternative to fundamental reform but a recognition that some elements of this program were not that well designed, would be a wise thing and I would do it sooner rather than later, Dallara said.

Its not clear whether Spain will need a bailout as it seeks to help its banks weather the euro crisis, he said. A planned audit of bank loan books is likely to show that the Spanish banking sectors woes are manageable overall, Dallara predicted.

Spain is grappling with how to handle Bankia SA, which was nationalized earlier this month, and other problems in the savings-bank sector. Dallara said the systemic risk posed by Bankia has been somewhat exaggerated and that independent inquiries will provide an outside assessment of Spains financial condition.

Substantial Headway

If it is of manageable proportions, then I think it is the decision of the Spanish government to decide whether to pursue outside aid, Dallara said.

The magnitude remains to be determined and I think we should exercise a bit of patience and allow this process to run its course and realize that as it is, Spain is making substantial headway in budget reduction, Dallara said.

In the long run, the euro area will need to address the fundamental structural flaw of sharing a currency while allowing national governments to control fiscal policy, he said. He urged Germany to drop its opposition to shared debt and instead seek a system where joint euro bonds could be an incentive to fiscal restraint and structural reform.

The only way to help markets see past that obscurity is to remove the cloud of uncertainties of national fiscal position and move toward unification, Dallara said.
http://www.bloomberg.com/news/2012-05-25/dallara-says-greek-euro-exit-may-exceeed-1-trillion-euros.html

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Turkish planing of indigenous projects [linked image]

[linked image]

April/21/2012
Turkey is not like China. Turkey is, just like Italy, Greece, Spain and Portugal.
www.hurriyetdailynews.com

 
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(Login cretegeorge)
Group General

Re: Turkish prayers do not come true: Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

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May 26 2012, 1:29 PM 

So with other words the Europeans have to think more effective to help Greece with growth, instead to struggle the economy and the people to pay more and more her loans.

[linked image]


Turkish planing of indigenous projects [linked image]

[linked image]

April/21/2012
Turkey is not like China. Turkey is, just like Italy, Greece, Spain and Portugal.
www.hurriyetdailynews.com



 
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(Login theBLUEwolf)
The Conquerors (Turkey)

Re: Turkish prayers do not come true: Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

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May 26 2012, 1:40 PM 

First of all we do not pray for anything about Greece ... (rather i dont pray at all)

Secondly you are bankrupt all the way ...weather you exit Euro or not . On the other hand i have been telling the exact same to the clowns in here babbling about exiting Euro.creating industry with Drachma ...However no one understood .

Crete believes EU will look after Greece and pay her debts while they lay their lazy azz .... again with the broken bankrupt mind of a Greek emerges...it all in you Crete ...you are the exact picture of the problem in Greece...

Germans will suck the sh*t out of your lands until you pay double the amount of that dept ... You on the other hand ... will keep sitting on your lazy azz copy pasting news that you find about Turkiye. While adding 2 sentences of comments with your completely broken English(i mean i rather thought my english was broken but you are on another dimension)



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(Login Aietuss)
Elite WAFF Vet Club

Re: Turkish prayers do not come true: Dallara Says Greek Euro Exit May Exceed 1 Trillion Euros

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May 26 2012, 2:03 PM 

governments around the world have been spending the tax payers money bailing them out for years.
this has consistently been a WRONG MOVE!
the usa gave away 700 billion PLUS 4 trillion(little mentioned) for what?to keep the cycle going?
they the banks conspire and concoct using fear and intimidation to rip the people off!
the central banks are not government institutions they are privately owned.they finance wars,environmental destruction,slavery,imoral legislations and their own agendas which are very different than what the constituents really want and need.

so who cares about them and their greed?

LET THEM FALL AND FAIL!if they are allowed to continue ,then nothing but the horsemen of the apocalypse will be all that humanity will have to show for their fear and complacency in not stoping them now.

 
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