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’The preferred, puzzling, ESM
Eurozone states signed the final version of the treaty establishing the European Stabilisation Mechanism on February 2.
(Click the image for the full document)
The ESM treaty now heads for ratification by 17 states,
Bilaterally — yours?
The FT’s James Mackintosh recently pointed out an interesting provision in the loan agreement Greece has with its bilateral official creditors – its fellow eurozone states.
They are entitled to require Greece to pay the whole loan back immediately if the country defaults on private bondholders.
There are official creditors, and there are “official” creditors
The unstoppable force…
“If the level of Greece’s privately held debt is not sufficiently renegotiated, then public creditors, holders of Greek debt, will also have to participate in the financial effort,” Lagarde told journalists in Paris.
IMF: “Global Recovery Stalls, Downside Risks Intensify”
Well, this is cheery.
Let’s start with a graph. An AV-esque graph.
You can cut to the webcast, underway at pixel time here.
Or take the news away in portable document format.
Either way,
Oh, it’s all funny money anyway
*IMF SAID TO PROPOSE BOOSTING ITS LENDING RESOURCES BY $1 TRLN
*CORRECT: IMF SAID TO SEEK RAISING LENDING RESOURCES BY $500 BLN
RTRS-IMF ESTIMATES IT NEEDS TO RAISE UP TO $600 BILLION IN NEW RESOURCES – IMF SOURCES IN BOARD DISCUSSION
(But seriously,
Hungary for junk?
Gosh, Hungary divides sentiment. (It has also, just as we went to pixels, been stripped of its last investment-grade rating by Fitch.)
Despite our saying not once but twice that Hungary isn’t running out of money in its current crisis,
Hungary — the good, the bad, and the conditionality
Hungary — still in basket-case mode earlier on Thursday… (a snapshot courtesy of Bloomberg):
The government sold 35 billion forint ($140 million) of one-year bills, 10 billion forint less than targeted,
The IMF’s Greek sunk cost
Chart of the week — from Gabriel Sterne of Exotix:
Bit of a wonkish one, we know, but bear with us.
It more or less sums up this week’s IMF review of the Greek bailout — the fifth such review,
The IMF on a coercive Greek debt restructuring
We think the IMF just might be trying to say something to those who are still looking for a “voluntary” Greek bond write-down.
Interesting set of quotes dotted around the Fifth Review:
With near-universal participation in a debt exchange targeting a 50 percent face value haircut and offering a low coupon,
Not a lot of cash in the Attic
There’s so much to read in the IMF’s latest report into Greece’s bailout, released on Tuesday…
Although firstly we just want to point out what the Fund says about an increasing lack of cash inside the Greek state.
Procrastination kills, Greek debt edition
FT Alphaville is still confused by eurozone bigwigs’ promise that they’ll follow “IMF principles” to be friendly to bondholders in sovereign debt bailouts. Versus, say, being nasty about making them write down debt.
The IMF as the ECB’s unsecured borrower of last resort
News that the Bundesbank is fast approaching a zero domestic asset balance-sheet situation from a eurozone Target2 payment perspective has caused a bit of a stir in the financial commentariat space.
Critics suggest it’s largely unimportant,
Whose PSI is it anyway?
As regards private-sector involvement, we have made a major change in our doctrine: from now on we will strictly adhere to the IMF principles and doctrines… Or, to put it more bluntly, our first approach to PSI,
The gap between summit rhetoric and reality
Judging by markets’ immediate responses to the EU summit, Gavyn Davies’ summary of the new reality seems spot on:
My initial take on the deal is that it will be sufficient to dampen the acute phase of the crisis,
The problems with the ECB-IMF switcheroo
It’s been the subject of more rumours than Kim Kardashian but the ECB-IMF switcheroo is increasingly likely, at least according to reports from Bloomberg and Reuters.
One would think the involvement of the credible-again IMF would be good news.
Draghi’s fiscal compact
Mario Draghi’s speech to the European parliament on Thursday wasn’t just notable for what he had to say about the scarcity of eligible collateral and the impaired transmission mechanism for monetary policy.
EFSF expansion agreed (to be inadequate)
The European Financial Stability Facility announced that eurozone finance ministers have agreed measures already discussed to boost the fund’s firepower – the 20 to 30 per cent guarantee on sovereign bonds,
What lies beneath the IMF’s (liquid) blanket
At first blush, it looks like a damp squib but probably better than nothing: the G20 agreement managed to foster one agreement of sorts — a new liquidity line (new special drawing rights, so-called SDRs).
Cash in the attic, IMF edition
Fortifications at the ready! Given Merkel’s nein, Draghi’s pff and China’s err no to commit yet-more capital to the EFSF by process of elimination the only option left is…… the IMF.
Why not just beef up the policy lender to prop up the eurozone currency countries.
Kicking the Can(nes)
Under-promise then under-deliver. Then watch markets tank. That’s the prognosis for the G20 summit, courtesy of Capital Economics’ crystal ball.
After poo-pooing suggestions Bric nations will ride to the eurozone’s rescue or take constructive measures to resolve global imbalances,
Step away from the Greek political risk
If you’re trying to price political risk perfectly… you’re doing it wrong, we’d submit. The Greek referendum’s a case in point.
The referendum came out of the blue. It might not even go ahead, pending a government collapse or early elections. So,
It-never-ends-um [updated]
…The President of the Republic shall by decree proclaim a referendum on crucial national matters following a resolution voted by an absolute majority of the total number of Members of Parliament, taken upon proposal of the Cabinet.
Who wants to be a Greek bond holdout?
Depends on what the “holdout” position is, maybe.
First though, we just can’t resist peeking at the latest in the Greek restructuring (re)negotiations.
Rumours about the new Greek private bondholder haircut are changing seemingly minute by minute at pixel time,
Eurozone running out of knights
Knights in shining armour that is.
The recently-floated plan for the big emerging markets to send money to Europe via an IMF-led SPV, which could be used alongside the EFSF to buy sovereign debt, is getting the lead balloon treatment.
The price of pathological procrastination
Pathological procrastination by the sovereign debtor in acknowledging the severity of its problem and commencing the necessary workout process can make the ultimate resolution of the crisis far more costly for all concerned—the sovereign debtor,
Greek haircuts and Greek myths — the details
European leaders on Friday received some interesting weekend reading.
FT Alphaville has also taken a look at “Greece: Debt Sustainability Analysis”, an assessment prepared by European Commission economists for discussion on Friday among European finance ministers.
US to Brics: thanks, but Europe needs to save itself
Not quite, but near enough, according to reports on Friday afternoon from the FT and Reuters.
The pink paper revealed on Thursday that Bric countries were looking at ways to support the eurozone, such as via a unicorn SPV,
The translated Troika
11 October 2011 – Statement by the European Commission, the ECB and IMF on the Fifth Review Mission to Greece
Staff teams from the European Commission (EC), European Central Bank (ECB), and International Monetary Fund (IMF) have concluded their fifth review mission to Greece to discuss recent economic developments.
IMF SPV — splatted
IMF European director Antonio Borges sallies forth to fix Europe’s sovereign debt crisis once mo — oh, hang on, oops:
Let me be clear about some earlier comments I made
The rest of it… is quite painful: