Here’s What the Greek Deal Entails
So, what does the new deal entail? Well, to begin with, a lot of money.The bankers have made it so this can happen everywhere. You know globally?!
Greece’s creditors figure the country needs between €82 billion and €86 billion in rescue funds. Immediate financing needs amount to €7 billion by July 20 and an additional €5 billion by mid-August, in large part to help Greece clear arrears to the International Monetary Fund and pay back other loans falling due.
That might sound a lot, but it’s only around a third of what Greece has already received in the first two bailout programs–it already owes an estimated €230 billion to the International Monetary Fund, the European Central Bank and other European governments. Although much of the focus has been on German resistance to stumping up ever more cash to the Greeks, smaller eurozone countries that were given much smaller lifelines on strict terms during the crisis were also unhappy at the prospect of forking endless amounts of money to the Greeks.
As for Greek banks, they’re still in big trouble. Greece’s creditors figure they need a buffer of between €10 billion and €25 billion for recapitalization and resolution costs, of which €10 billion would be made available immediately.
That’s a broad range of estimates for how much money the banking sector needs. Maybe because the question of who takes a hit has yet to be resolved. By July 22, the Greek government will have to adopt the European Union’s Bank Recovery and Resolution Directive (BRRD). The BRRD outlines how creditors take the hit in a bank insolvency. In other words, it suggests Greek depositors could be subject to bail-ins, i.e. losses on deposits above certain guaranteed minimums, as happened in Cyprus in 2013, during its banking crisis.
Overhaul of the Greek justice system?
So what does Greece have to do to get hold of the money? Value-added tax will be streamlined and go up. The pension system will undergo major reforms. The Greek statistics agency is to be made independent and reliable. A system of quasi-automatic spending cuts are to be implemented if Greece deviates from ambitious surplus targets. These have to be adopted by Wednesday.
Then, besides the adoption of the BRRD, the Greek civil justice system will have to be overhauled by July 22.
And then there’s a raft of other market reforms, including recommendations on Sunday trade, sales periods, pharmacy ownership, milk and bakeries and the opening of macro-critical closed professions like ferry transportation. The electric grid system will have to be privatized or subject to competition. The labor market is to be made more flexible. And the financial sector is to be strengthened.
On top of all that, Greece has to set up a €50 billion privatization fund half of which will pay for bank recapitalization
The Syriza government will have to reinstate policies on pension reforms agreed under previous rescue plans. Basically, the Syriza government has had to back down on almost all fronts relative to what it promised when seeking election in January. And the new bailout plan includes the IMF, a situaton Mr. Tsipras fought against in the talks overnight, but a battle he ultimately lost.
Greece is being prepped for complete plunder. In every way, shape and form.
The Perils of Greece’s Privatization Efforts
In 2010, when Greece got its first bailout, creditors demanded that Athens raise €50 billion by the end of 2015 by selling off state assets including banks, airports, ports, an electrical utility and land, including beaches and even islands. Since the economy was in a recession, this seemed like the best bet to raise cash fast.
But in the last five years, Greece has sold only a paltry €3.2 billion of assets, about 94 percent below the target. The choicest assets were bought at discounts by wealthy Greek businessmen.
Choicest assets bought at discount prices by wealthy Greek Oligarchs.. Sound familiar?
I notice a media trend of demonizing Germany and Merkel. Why? Greece’s indebtedness falls on the shoulders of private debt based banking, the entire ponzi scheme and corrupt politicians practising crony capitalism So, why blame Germany?
No mercy for Greece in Angela Merkel's Europe
Greek crisis strains Franco-German relationship
Germany Flexes Its Muscles in Talks With Bailout Ultimatum
The weekend’s power play also highlights the cracks among Greece’s creditors—especially Germany and the International Monetary Fund—as the cost of keeping Greece in the euro spirals out of control. The IMF has urged Europe to give Greece some debt relief, something Berlin has opposed. Part of the reason for Germany’s hard line now is that maximally tough austerity in Greece could reduce IMF pressure to write off Greek loans.Berlin is opposing the IMF endorsed write downs. I believe Germany has a very good reason for this.
Greek debt crisis: 'Who will trust Germany after this?' asks Paul Krugman
Paul Krugman- Go away
I do believe Germany slowed down the so called European project. In the best interest of the nation of Germany. Hence the demonization. Of course, I have a theory! I'll share ASAP.The Nobel prize-winning economist Paul Krugman has said the EU's demands of Greece are madness and accused Germany of killing the European project.
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