Greece Locked out of Markets Until 2017 or even 2022
By Andy Dabilis on June 25, 2012 in Economy,


ATHENS After stiffing investors earlier this year with 74 percent losses and still wracked by a deep recession, $460 billion in debt, and unable to raise revenues or collect from tax evaders, Greece seems unlikely to win back trust from bond markets for at least five more years possibly even 10 years, a survey of financial leaders taken by the Bloomberg News agency has shown.

New Prime Minister Antonis Samaras uneasy coalition government, which includes the PASOK Socialists and tiny Democratic Left, also faces the huge challenge of trying to convince Greeces public lenders, the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) that is putting up $325 billion in two bailouts, to back off on more austerity measures. Samaras supported the conditions but during a fierce campaign leading up to the June 17 elections said he would try to renegotiate some of the most onerous terms, such as pay cuts, tax hikes, slashed pensions, and reducing the minimum wage.

Greece is surviving on a first rescue package of $152 billion and a second for $173 billion, about to start being released. These funds will run out in three years, at which time, unless Greece has returned to growth, it will need another bailout because private investors have lost trust in a government which forced losses on banks, funds and bondholders.

Three of 20 companies surveyed by Bloomberg that deal directly with sovereign bond issuers expect it to take at least a decade before Greece issues debt again. Ten say investors would lend money to the country no sooner than 2017, while five predict 2015 at the earliest. The median forecast was a minimum of five years. The challenges facing Greece remain extremely large, said Jamie Searle, a fixed-income strategist at Citigroup Inc. in London. It will be a long while before they can get back to the market.

Greece last sold bonds in March 2010 before the extra yield that investors demanded for holding its 10-year securities instead of German bonds ballooned to a new record for the Eurozone of 17 countries. That forced then Prime Minister George Papandreou, with Greece facing $10.7 billion of bond repayments, to start bailout talks with the Troika. The attached austerity measures led Greeks to protest, strike and riot for two years, forcing Papandreou out of office, but the lingering effects remain: 22.6 unemployment, a 6.5 percent shrinkage in Gross Domestic Product (GDP) and 1,000 businesses closing every week.

The only thing that will get investors trust back is to get something that looks like a fiscal union because Greece isnt going to grow out of the problem, John Wraith, a fixed-income strategist at Bank of America Merrill Lynch in London, told Bloomberg. Investors have given up on the concept of a union that doesnt have a fiscal transfer, but does have the interest rate and currency locked together.

The nations ratio of debt-to-GDP is projected to rise to 168 percent next year from 161 percent, according to the European Commissions report of May 11. The economy will contract 4.7 percent this year and show zero growth in 2013, the commission said. The country is still insolvent and there is little progress in the way of fiscal adjustment and growth, said Piero Ghezzi, the head of global economics at Barclays Capital in London. Investors will need to see what the end game for Greece is before they buy its bonds again. A country can borrow in the market only if there is demand for its debt. For Greece, that can be easily five years away.

Petros Christodoulou, former head of the Greek debt office, said that his nation is not even close to selling bonds and there may be common euro debt issuance by the time it returns to the markets. He also said Greece will remain a member of the Eurozone. Padhraic Garvey, head of developed market debt at ING in Amsterdam, said, Greece could return to the market quickly if leaders make the right policy decisions. But the risk that things could go in a very wrong direction, taking Greece much longer to return to the market, is greater than the other way around, he expressed.

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US Economist Paul Krugman: Forget About Greece, Its a Lost Cause
By Areti Kotseli on June 25, 2012

Nobel Prize-winning Princeton economics professor, New York Times columnist, and US economist Paul Krugman says, Forget about Greece, which is pretty much a lost cause; Spain is where the fate of Europe will be decided.

Referring to the example of the Austrian economic crisis back in 1931, he explains that Spain has troubled banks that desperately need more capital, but the Spanish government now, like Austrias government then, faces questions about its own solvency.

In his New York Times column he tries to answer the question, So what should European leaders who have an overwhelming interest in containing the Spanish crisis do? Using his economic knowledge he gives a trustworthy solution: It seems obvious that European creditor nations need, one way or another, to assume some of the financial risks facing Spanish banks. No, Germany wont like it but with the very survival of the euro at stake, a bit of financial risk should be a small consideration.

Explaining that Europes policy to lend money to Spanish banks and impose austerity to the country was a mistake, he gives the impression that Europe will be led to a 1931-kind of outcome. Paul Krugman sees Greece as a lost cause and finds the bank rescue as a major failure.

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German Finance Minister W. Schaeuble: Greece Has not Done Enough!
By Marianna Tsatsou on June 25, 2012



Once again, German Finance Minister Wolfgang Schaeuble is talking with austerity about austerity in Greece. In an interview with German TV channel ZDF, he stressed that our country has not yet fulfilled its promises made in exchange for bailout funds and has not tried hard enough to fight the causes of the debt crisis.

Schaeuble compared Greece to Ireland and Portugal saying that what caused crisis must be resolved. Ireland and Portugal are succeeding in this pretty well, while Greece isnt.

Greece should try more to succeed in this, otherwise it wont make it, he continued. According to the German Minister, it is obvious that Greece has not tried enough so far and thus, they have to make more reform efforts always with respect for the domestic political situation. He also added that no one believes that Greece has fulfilled its promises.

As for American President Barack Obama who criticized Germanys hard line on the Greek debt crisis, Schaeuble replied that the US President should pay more attention to reduce the American deficit which is even higher than that of the euro zone.



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Greeks are the masters of begging, they will find a way

Put a BMW motorcycle next to that ape and you have Kallimachos begging for gas to his can drive his boyfriend home after a night of loving.

can you put the source up please?

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I'm not like everybody else

What Greece did in March 2012 was an "orderly default". Soon a disorderly default will come, and Greece will suspend all debt payments.

The last time we did this was in 1932. When did we return to the markets? In 1964, after 32 years, and after the Greek Government agreed to pay a small part of the pre-war debt.

So, we will be out of the markets for no less than 30 years.We must wait till the present generation of bankers and stockbrokers dies or retires!

..



"The Turkish Cypriots looted, robbed and ravaged Greek Cypriot properties. They must start producing instead of being mere consumers. The Turkish Cypriots wanted to live without working!"

Major-General Bedrettin Demirel (1917-1988)
Commander of the Turkish Invasion Forces in 1974

This made my day.. and the rest of 5 years of my life!!!

Greeks should suffer for the things they did to us. The coming era is the punishment for that. That is why i don't sympathize.

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Next week in cinema: Hungry Dancing

^^^
What did the Greeks do to you ??? I mean, you guys started it.....right ?