The bondholder
Μπαίνω σ’ αεροπλάνο αλλά ήθελα να στείλω αυτό το άρθρο νωρίς. Συγγνώμη για τα αγγλικά. Έτσι μόνο μια περίληψη στα ελληνικά.
Αν άκουγες τα παπαγαλάκια χθες ήταν μια μεγάλη επιτυχία. Για κάποιους που ξέρουν είναι άλλη μια προσπάθεια να κλωτσήσουν το πρόβλημα στο μέλλον.
Περίληψη
Το σχέδιο επαναγοράς των ομολόγων «βλακωδώς ήταν γνωστό από πριν»- κάποιοι έκαναν πολλά λεφτά και εμείς θα το πληρώσουμε
Οι αριθμοί «άλλα λέει η Τρόικα» – διπλό παιχνίδι με τους αριθμούς.
«Ιδιωτικοποιήσεις – εδώ γελάμε»
«Το σχέδιο δεν είναι αξιόπιστο»
«Δυστυχώς το πρόβλημα της Ελλάδος θα έρθει ξανά και ξανά και ξανά…» και θα μας βασανίζουν και θα μας εκβιάζουν ξανά και ξανά και ξανά
Καλημέρα.
The EZ/IMF reached a “deal” on Greece late last night. They have reduced interest rates on bail out funds, suspended interest payments, extended maturities on the loans and the ECB has given up its “profits” on Greek bonds owned by it. The EZ/IMF has also suggested a debt buy back which they emphasized. Stupidly a debt buy back has been leaked for some time, which has resulted in a near doubling in the price of Greek bonds. I must say, I had thought that Greek bonds were a risky investment at current levels. However, by emphasizing the need for a successful buy back, in particular by Mrs Lagarde of the IMF – indeed she has made it a condition for the IMF participating in a future bail out for Greece – the EZ/IMF has strengthened the position of debt holders – a completely stupid plan, as it will now cost more to buy back the bonds. The plan is to buy bonds at around 35 cents on the Euro – the EZ/IMF statement reported that the buy back would be concluded at a price no higher than that on 23rd November. The EZ is to disperse funds on 13th December, once the debt buy back (full details are not available) has been completed. Will the buy back be successful? I suppose that Greek banks will be lent on. However, do other bond holders really want to own an asset which clearly is worth much, much less?
Details of the deal are as follows. Greece will get E44bn, with the 1st installment of E34.4bn to be released on 13th December, though the rest of the funds will be disbursed in 3 subsequent stages in Q1 2013, as Greece meets certain conditions. The IMF’s element of the bail out funds will only be paid over once the debt buy back is successfully completed – once again strengthening the position of bond holders. Interest rates on official loans will be reduced to just 50bps over Euribor, from the current 150bps, once Greece achieves a primary surplus of +4.5% (expected in 2016, from 2014 previously), with maturities of existing loans extended to 30 years rather than 15. The Greeks will be given a 10 year interest rate deferral. Some E11bn of “profits” derived from purchases of bonds by the ECB will be handed back to Greece. The plan is to reduce Greek debt by E40bn and cutting it to 124% of GDP by 2020 and “significantly below” 110% in 2022. Privatisation proceeds (oh yeah) will be paid into a segregated account to cover debt financing, as will 30% of the excess primary surplus.
I can go on and on, but THIS PLAN IS NOT CREDIBLE. The forecasts are, I would argue, total fiction. Indeed, the Troika report (also prepared with rose tinted spectacles) suggests that Greek debt to GDP would amount to 126.6% in 2020 and 115% in 2022. The real intent of this “cunning plan” is to kick this particularly smelly can down the road an until Mrs Merkel’s general elections next September. Indeed, the EZ has advised that “other measures” may well have to be taken. Interestingly, Mr Schaeuble stated that Greek debt will have to be written down in 2016 – why not now, as everyone knows its not going to be repaid, Mr Schaeuble – Oops, sorry, nearly forgot about the German general elections in September next year. However, I’m far from convinced as to whether these measures will result in stability until after the German elections.
The deal has to be approved by the Parliaments of a number of EZ countries including Germany, Finland and Holland. German authorities report that they expect Parliamentary approval on 29th November and my clued up German friends report that the Greens and the SPD will support the plan, which will counter some opposition from members of the CDU/CSU.
The Euro, which rose to just over US$1.30 on the news has declined – currently US$1.2952 as the market digested the grand plan. Tells you that everything is not kosher. Unfortunately, Greece will come back, again and again and…..;
Kiron Sarkar
Sarkar Global macro Πρωτοσελιδα – Ειδήσεις