we also did not disagree that Greece will eventually have a fallout and that Europe did not lose much as a lot of the funding was used to repay ECB and EU private an public credits. The rest was emotionally loaded posts that you put up here that accused Germany and the rest of Europe of crime-like behavior.
I didn't accuse anyone of crime like behavior. I said, and still maintain, that loans were given to Greece with two possibilities: 1. The Troika knew these loans could never be repaid and gave them anyway (either to buy time, bailout their own banks, or for some "unspoken" reason). 2. The Troika thought the loans could be repaid and were guilty of simply not doing their due diligence, making them guilty of incompetence. Either 1 or 2 is true.
So nothing. But the Troika was either complicit in deception or incompetent. But there's not going to be any debt tribunal or anything. That's all I've been saying.
There is another alternative which is the creditors knew full well most of the money would go to pay off creditors and so did the Greek government and so did the Greek people. Everything was 100% transparent. Debt repayment schedules are in public domain, no secrets. The money was most likely intended as a life line to bridge liquidity short falls but obviously from the beginning the intent was that creditors that are owed money would be repaid. That Greece has done virtually nothing during the long time it was provided with liquidity to structurally change should never be the responsibility of creditors. It was the free choice of Greeks to not get to work. But it seems you refuse to even accept this alternative intent exists which I find kind of bizarre give everyone knew how much Greece owes and when it has to service debt and interest payments. You kind of lead your own arguments ad absurdum.
Transparent to whom? The public didn't get that as the media never trumpeted it. I'll grant you that anyone who had an IQ over 120 should have seen it, but that doesn't include most of the population. You can take my words, twist them around and say the same thing, and then tell me I never mentioned it, I suppose. Doesn't change the fact that it was billed as one thing, activated as another. Same principle.
Base Case Becomes Grexit; Contagion? At long last the deniers have thrown in the towel. Grexit is now the base case as Europe Braces for Messy Greek Endgame. It’s still possible that Greece can remain in the eurozone—though that is no longer the base case for many policy makers. At the very least, most fear the situation is going to get much, worse before it gets any better. No one now expects a deal to unlock Greek bailout funding at this week’s meeting of eurozone finance ministers in Riga—originally set as the final deadline for a deal. The new final, final deadline is now said to be a summit on May 11. But among European politicians and officials gathered in Washington DC last week for the International Monetary Fund’s Spring Meetings, there was little optimism that a deal will be agreed by then. The two sides are no closer to an agreement than when the Greek government took office almost three months ago. “Nothing, literally nothing has been achieved,” says an official. In fact, it is worse than that: so far, the bulk of Athens’s reform plans would actually cost money or reduce government revenues, according to eurozone officials. They say that when you add up all the government’s proposals, the budget surplus required under the current program turns into a 10-15% deficit while debt soars far above the 120% of GDP targeted for 2022. There is no way that the eurozone—let alone the IMF—could disburse funds on the basis of such fantastical numbers. The bottom line is that Athens won’t get any money unless it can reach a deal that satisfies the IMF that Greek debt is on a sustainable path and that it has a medium-term funding plan in place. The eurozone won’t disburse its own bailout funds without a deal that carries this IMF seal of approval. Likely Scenario The likely scenario is exactly the same as it was in 2010, 2011, 2012, 2013, and 2014: default. Various can-kicking exercises simply lasted that long. So why now? The election of Syriza ECB belief that Grexit will not cause contagion. Bear in mind, Grexit could cause a very messy breakup for the eurozone. That doesn't matter. What matters is belief. As long as the ECB thinks it has the "tools" to prevent major problems, then it will be prepared to let Greece go. Greece's Varoufakis Warns of Grexit Contagion Reuters reports Greece's Varoufakis Warns of Grexit Contagion. Greece's Finance Minister Yanis "Some claim that the rest of Europe has been ring-fenced from Greece and that the ECB has tools at its disposal to amputate Greece, if need be, cauterize the wound and allow the rest of euro zone to carry on." "I very much doubt that that is the case. Not just because of Greece but for any part of the union," he said, speaking in English. "Once the idea enters peoples' minds that monetary union is not forever, speculation begins ... who's next? That question is the solvent of any monetary union. Sooner or later it's going to start raising interest rates, political tensions, capital flight." His comments were recorded before those of Mario Draghi, the European Central Bank's president, who this weekend said the euro zone was better equipped than it had been in the past to deal with a new Greek crisis but warned of uncharted waters if the situation deteriorates. said in an interview broadcast on Sunday that if Greece were to leave the euro zone, there would be an inevitable contagion effect. Contagion? One problem for Varoufakis is that no one believes him. They believe Draghi. Will there be contagion? It's not a given but it's likely eventually, arguably later than sooner. For example, if Greece exits the eurozone, then gets its act together on reforms, its economy will recover must faster that if it stayed in the eurozone. Shedding of debt obligations will do wonders, if handled properly. In such a scenario, a choir of voices in Spain, in Italy, in Portugal, and perhaps even France will seek the same opportunity. The eurozone fear should not be that Greece blows up, but rather that it doesn't. That will take some time to sort out. Grexit will be no overnight miracle for Greece, so no exit contagion, but there will be other problems for the eurozone effective immediately, including shared responsibility percentages for Greek debt. Shared Liabilities in Billions of Euros click on chart for sharper image Liabilities from http://www.cesifo-group.de/ifoHome.html Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot
Please, iq does not matter in this story it really does not. And for the matter of this discussion it could not matter less whether Greek local media reported on Greek debt or not. Just because not every American knows about treasury debt servicing schedules does not change a thing that Treasury has an obligation to service it's debt. You seem to come up with more and more bizarre arguments to support your thought process which I am sure I am not the only one who lost track of by now. I simply made a very valid point and most likely an accurate point that there was zero deception at play nor was Troika stupid. I am not sure why you have such vested interest to make Troika look stupid. I do not see any supporting facts to build such argument. Repayment schedules were 100% transparent and accessible by everyone and should have been well known by virtually every single last decision maker In this equation. Maybe you just have a hard time swallowing the fact that Europe as a whole took into account future potential credit issues but stepped in nonetheless to a) ensure Greece's non sovereign creditors get paid and b) to prevent contagion at the most critical time. I accept you refuse to bend your opinion in the slightest. It just makes for a very bad argument on your end. But perhaps that's why your existence at ET seems to be limited to posting news...like a Robin Hood for poor day traders. I am sure those, addressed, appreciate your valuable service. Just wanted to present a much more likely rational for why the EU and Troika stepped in and why they did it in the way they did. I never tried to change your own thoughts ...those are something you need to reconcile with yourself. Instead I presented those thought to others. Good Day.