When the facts change, I change my mind. What do you do? -- John Maynard Keynes

Saturday, February 25, 2012

The Greek Sustainability Report and Reaction & Analysis

Greek Sustainability Report

Greek debt sustainability analysis Report in full above--reaction and analysis of the Report below:

UPDATE 2-Greek debt could easily derail again - EU/IMF report | Reuters: "Greece's second bailout programme could easily go off the rails and send the nation's debt rocketing back to today's unmanageable levels, a confidential study by its international lenders shows. The 9-page debt sustainability analysis, on which euro zone finance ministers based their decision on Tuesday to approve a 130-billion-euro rescue programme, is anything but a vote of confidence in Athens' ability to put its public finances back on a sound footing. Indeed the report, dated Feb. 15 and first obtained by Reuters on Monday, describes in the disembodied prose of economic bureaucrats how uncertain Greece's recovery will remain for many years, and how Athens will likely need international aid for an indefinite period. Experts from the European Commission, the European Central Bank and the International Monetary Fund highlighted the risks and questioned the assumption that Greece will be able to return to capital markets in the coming years."

Eurozone finance ministers agree second bailout for Greece; Troika sustainability report says outlook is grim: "The FT says the troika report explains why European countries were so opposed to the new financing programme for Greece. In an article headlined "Greek debt nightmare laid bare", it said: A German-led group of creditor countries – including the Netherlands and Finland – has expressed extreme reluctance to go through with the deal since they received the report." 

Greek accounting cannot hide the urgency for growth - FT.com: "“The troika have had to do some arithmetic gymnastics in order to make the numbers add up but their optimistic assumptions are unlikely to hold,” said Sony Kapoor, managing director of Re-Define, an economic consultancy that has advised European officials. . . . the confidential debt sustainability report points out that even if Greece’s budget reaches a surplus of 2.5 per cent every year, not including debt interest payments, getting “stuck” at that level could prove disastrous: “Debt would be on an ever-increasing trajectory,” the report found. The urgency for growth comes even though European Union officials acknowledged on Tuesday that they would seek significant further austerity measures from Athens throughout the bail-out programme."

Eurozone's shocking prescription for Greece – Telegraph Blogs: "A "strictly confidential" 10-page debt sustainability report commissioned for yesterday's meeting of eurozone ministers concludes that the austerity measures being foisted on Greece as a quid pro quo for a second, €130bn bailout, are quite likely to prove self-defeating, in that the austerity, by further weakening the economy, may well cause the debt to GDP ratio to rise further. Furthermore, the debt "haircut" being required of private investors may prevent Greece from ever returning to private markets for borrowing, making the country indefinitely reliant on official support. After the bailouts, so much of Greek's debt will be held by official repositories, all of who will have preferential treatment as creditors, that no private sector investor would go anywhere near it, knowing he'd be last in the queue of creditors"

The Future Is Not What It Used To Be - NYTimes.com:
The Future Is Not What It Used To Be by Paul Krugman
I’ve been comparing the original IMF projections for Greece with the secret recent sustainability analysis that everyone has. . . . Of course, everyone thinks the latest is wildly overoptimistic."


The Big Picture

Financial Crisis - The Telegraph

JohnTheCrowd.com | The Sailing Website

Craig Newmark - craigconnects