Greece Gets $146 Billion Rescue on EU, IMF Austerity Package

Greece Gets $146 Billion Rescue on EU, IMF Austerity Package

www.bloomberg.com

May 3 (Bloomberg) -- Euro-region ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency’s 11-year history from spreading through the rest of the bloc.

The first payment will be made before Greece’s next bond redemption on May 19, said Jean-Claude Juncker after chairing a meeting of euro-region finance ministers in Brussels yesterday. The 16-nation bloc will pay 80 billion euros at a rate of around 5 percen

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Policy makers agreed to the unprecedented bailout after investors’ concerns about a potential Greek default sparked a rout in Portuguese and Spanish bonds last week and sent stock markets tumbling.

“The EU can afford to bail-out Greece and even Portugal, but it cannot afford bailing out Spain,”

Germany will provide 28 percent of the euro region’s overall contribution.

And what does Greece promise to do to insure success?

Greece agreed to measures that the ADEDY civil servants union called “savage.” Greece will cut wages and freeze pensions for three years as well as increase the main sales tax to 23 percent from 21 percent. Progress will be monitored quarterly

Greek Prime Minister George Papandreou is likely to face his own difficulties.

Fifty-six percent of Germans oppose giving Greece aid, calling such support “wrong,”

The Greek bailout marks an end to nearly three months of debate among EU leaders on whether and how to rescue a euro region nation teetering on the brink of default.



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What needs to be addressed.

Speculators. Something needs to be done, because while the conditions for this crisis were created by Greek governments, the crisis was brought upon and intensified by speculators in the market.


Government corruption. This is one of the major reasons the conditions for this crisis existed to begin with.


Public sector. It is massive. Greece has as many public servants as France.
Not all of the public sector is to blame. But a large part of it is inefficient and costing the country billions. They need to be cut off completely.


Tax evasion. Company and payroll taxes that weren't paid last year, amounted to just over 30 billion Euros. Thats 30 billion Euros the government did not have to spend, which would have actually created a budget surplus rather then deficit. This has been going on for way too long. It's time something was done, either with EU/IMF help or without. One way or another, this needs to be eradicated.


It's interesting to note that the private sector is competitive. It may not be as large as it should be, but what's there, is competitive, and on the global market quite a lot.

If the above issues are addressed properly and promptly, then the situation will sort it self out.
Debt, including the bailout package, is what, between 400 and 500 billion now? Let's say 500 billion for arguments sake. If by next year, they reign in tax evasion, and are able to devote 10 billion to debt repayment, within ten years, that's 100 billion paid off. Assuming that due to the increase in revenue there wont be any more massive borrowing, that's a 20% reduction in debt. By 2030, you would think close to 50% would be paid off, and debt to gdp would be around 60-70%. Rough estimations so don't hang me.

I don't think that they don't know this already.
What Greece needs is a leader who can capture the peoples hearts and minds, and will be able to push through reforms that are necessary and implement tougher measures.
Because the only way to get out of this hole that corrupt government after corrupt government has put the country in, is to make massive sacrifices.
The country has been through worse, people have had to make bigger sacrifices then what is required today.
I believe the people are ready and willing, don't mind what you see on your news about protests and anger, that is all stemming from a minority of the population who belong to the extreme far left wing and union factions. A few thousand people protesting, while the majority millions understand the measures taken are necessary.

Pity that the worlds media can't focus on the ordinary person, instead they show a few retarded selfish people doing all they know how, riot.

From what I saw of a German on TV yesterday they make out the Greeks to be basically lazy! Too much time on the beach lol. Do they really retire at fifty? Maybe he was going a bit too far

They are just delaying the inevitable, truly they are. This 110 billion dollar euro financing is just what Portugal will want and for others of the PIIGS seeing this they will think that they can go to the IMF and EU and get a good deal. Also if you think those austerity plans will be implemented in Greece, think again. Remember, this country is notorious for being tax dodgers and the like.

and to Iceland and tried to ask for help
it seems that the volcano took hope it toas
But Greece still has chance
the economy does not

Ouch! Greece had a chance to pull a bigger Iceland. They could have nationalized the banks like Sweden did in the early 90s and even clapped a few execs in chains, for example.

Instead they decided to go the IMF bailout-austerity route. This is a very bad sign for the developed world because you know what it means, folks? In the old days, the Austerity™ brand of toxic snake-oil was peddled almost exclusively for use in enslaving the third world. But now they are going after tastier slabs of prime meat, now that they've discovered the developed world will put up with far more than they thought possible!

The newest chapeter to the great World Bank/IMF/Central Bank/Elite milk-em-and-hang-em-out-to-dry saga is coming to a backyard near you! They have decided that they no longer have to restrict their financial slaughterhouses to faraway shores...as long as they build the gates on their own mansions tall enough, they are betting they can get away with setting up slaughtger pens in the neighborhood now! The smell of a slaughterhouse in the neighborhood is never pretty, but sure is a convenient commute, isn't it?

To be completely fair, and all snarkiness aside, I think BLV12's post above is a pretty good laundry-list. The public sectors in many places need reform as well and many other aspects, and its never as simple as just pointing the finger at the IMF. But I still see this as an ominous development for Eurozone and the developed world in general.


[edit on 5/3/10 by silent thunder]

Euro, stocks tumble on doubts over Greek bailout

www.channelnewsasia.com...

Already having doubts.

reply to post by BLV12

Tax evasion. Company and payroll taxes that weren't paid last year, amounted to just over 30 billion Euros. Thats 30 billion Euros the government did not have to spend, which would have actually created a budget surplus rather then deficit. This has been going on for way too long.

Hehe! Or how about those rich pool owners!

ATHENS — In the wealthy, northern suburbs of this city, where summer temperatures often hit the high 90s, just 324 residents checked the box on their tax returns admitting that they owned pools.
So tax investigators studied satellite photos of the area — a sprawling collection of expensive villas tucked behind tall gates — and came back with a decidedly different number: 16,974 pools

Those lousy pool owners need to pay up big time! Hehe!

And how do Greeks avoid paying taxes?

To get more attentive care in the country’s national health system, Greeks routinely pay doctors cash on the side, a practice known as “fakelaki,” Greek for little envelope. And bribing government officials to grease the wheels of bureaucracy is so standard that people know the rates. They say, for instance, that 300 euros, about $400, will get you an emission inspection sticker.

Some of the most aggressive tax evaders, experts say, are the self-employed, a huge pool of people in this country of small businesses. It includes not just taxi drivers, restaurant owners and electricians, but engineers, architects, lawyers and doctors.

In other words, Greeks, like everyone else, avoid paying taxes by paying Under the table! What a novel concept developed back in the Roman empire by enterprising Roman citizens avoiding onerous taxes!

The cheating is often quite bold. When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had claimed an income of less than $40,000. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all.

But we should really put the blame where it belongs, on the producers of society, the corporations! Not on the tax evaders!

Also the blame goes to Germany because they have big nasty banks that charge interest, and on the English that do the same thing, and last but not least the Americans that probably cause the whole thing because of Fanny Mae and Freddy, credit default swaps, Bush, and CRA!

What a great world when we can always blame someone else for our problems!

Lol there's a rate ? It's not even a bailout.
Greece is doomed, they'll get in even mroe debt :
www.zerohedge.com...

reply to post by ickylevel

Here's your Projected Greek Economic Metrics per Bailout Plan:




Indications are that the plan will not succeed!