On the Secret Committee to Save the Euro, a Dangerous Divide

Discussion in 'Wall St. News' started by ASusilovic, Sep 26, 2010.

  1. BRUSSELS—Two months after Lehman Brothers collapsed in the fall of 2008, a small group of European leaders set up a secret task force—one so secret that they dubbed it "the group that doesn't exist."

    Its mission: Devise a plan to head off a default by a country in the 16-nation euro zone.

    When Greece ran into trouble a year later, the conclave, whose existence has never before been reported, had yet to agree on a strategy. In a prelude to a cantankerous public debate that would later delay Europe's response to the euro-zone debt crisis until the eleventh hour, the task force struggled to surmount broad disagreement over whether and how the euro zone should rescue one of its own. It never found the answer.

    A Wall Street Journal investigation, based on dozens of interviews with officials from around the EU, reveals that the divisions that bedeviled the task force pushed the currency union perilously close to collapse. In early May, just hours before Germany and France broke their stalemate and agreed to endorse a trillion-dollar fund to rescue troubled euro-zone members, French Finance Minister Christine Lagarde told her delegation the euro zone was on the verge of breaking apart, according to people familiar with the matter.


    Now, there is not only a PPT but an EuroPPT, too. :D
  2. Good post. I follow your postings, they are very good. But don't be fooled...

    All this secret group is trying to do is to figure out is quick ways of converting most of the unsecure bonds issues by Greece and other troubled members to collateralized loans with court jurisdiction in England. The trick is the following: each time bonds mature and those states have no money to pay the principle amounts, then the group comes in, with the help of IMF's expertise, and loans to them money to repay the amounts. Automatically, the unsecure bonds are converted into loans with unspecified collateral. Greece's new Prime Minister fell into the trap and accepted the offer, which is nothing else than - I give you more money so I will make sure I get a good chunk of my money back.

    Actually, what saved the Euro was the willingness of Greece politicians to accept such a plan instead of declaring default. The plan actually translates into slavery for Greek citizens because they will have to replay about 110 Bln Euros with a 5% interest from raised taxes in the face of a depression! This means that in 5 years Greece will be a third world nation, the European Banks will have more than half the money they have put into Greek bonds back and in case they do not get loan repayments they will be able to liquidate Greek assets, including but not limited to sovereign real-estate.

    In my dictionary, the Greek government has committed treason, what do you think?
  3. Not really. De facto they are surreptitiously "restructuring" a lot of that debt.
    Those Greek politicians ain't that stupid. We are talking folks on the Mediterranean here; they've only been doing deals along the shores of that sea for the past 5000 years after all.
  4. I think that I will short EUR/USD Sunday night after being long mostly since start of June :)