Posts tagged 'Greece'

I find your lack of payment culture disturbing

We think this means the ECB doesn’t want Greece to end up defaulting.

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Dear Eurogroup

From the pen of Yanis Varoufakis, do click through for the full thing.

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Greek funny money: no thanks

Does money have value because the state says it’s money, or because the population trusts that it’s money?

It’s a great, perennial question. It’s also really not one Greece wants to find the answer to right now.

The question comes up reading yet another proposal for Greece to use a parallel currency so it can fight with its creditors without leaving the euro. So, coming fresh after Wolfgang Munchau’s appeal for Greek IOU issuance last week, Paul Mason has resuscitated “future tax coin”Read more

Yes, yes, we know. It’s time to talk about capital controls again

So on Wednesday, we got this from the ECB as the Battle of the Drafts between the Eurogroup and Greece rumbles on — it’s in the FT’s words (we still can’t find a press release):

On Wednesday evening ECB policy makers approved a €3.3bn increase in ELA to the Greek banking system. Lenders will now have access to up to €68.3bn of emergency loans from the Bank of Greece, after members of the ECB’s governing council sanctioned the increase, from €65bn, at its regular fortnightly meeting.

The Bank of Greece had asked for more emergency funding, according to a person familiar with the matter. The approval is for a two-week period.

And this… Read more

The unwitting euro enforcer…

Peter Doyle, an economist and former IMF staffer, argues that for Greece continued emergency lending assistance is a necessity.

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Greek games in theory and practice

You may have heard Yanis Varafoukis, Greek finance minister, is also a professor of game theory.

However you’ve also probably heard negotiations over Greek debt are like a game of chicken, where both players try to convince the other they really will go ahead and crash the car.

This is the wrong analogy. It looks more like a bargaining game where two players have to find agreement to avoid an unpleasant outcome where neither side gets what they want. In practical terms, an agreement over an extension loan for Greece can be reached, it just depends on whether it benefits the troika or the Greek government more, while no agreement is bad for all concerned.

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Your updated Greek calendar

From Deutsche (click to enlarge):

As Deutsche say, beyond the preferences of the Eurogroup and how/ whether Greece chooses to extend the current program or apply for a new one, the binding dates for Greece have become more apparent: Read more

Of Greek deposits and quiet weekends

This from Dan Davies is worth a bit of your time — supposedly four minutes of your time according to Medium’s time-thingy.

It makes the very good point that the lack of Greece-dominated headlines over the weekend is most probably good news. As Dan says, we haven’t had stories of deposit flight and bank runs, there haven’t been anymore leaked documents, the ECB hasn’t piled on any more pressure and there has been no grandstanding of note — from Greek or German politicians.

From Davies: Read more

Rebranding Troikas, then and now

While we patiently wait for Wednesday’s late-night Eurogroup meeting to decide nothing about Greece…

Surveillance – the ECB’s role in the Troika has recently been questioned by the ECJ, and so some “rebranding” of the monitoring has looked likely. But the basic structure of program targets and reviews will remain in place. Read more

Greece and the ECB: the first cut

On the day Yanis Varoufakis declared “I’m the finance minister of a bankrupt country”: Read more

Guy, who lost billions on music, can’t count Greece’s GDP

Terra Firma’s Guy Hands engaging in some macro tourism today:

It is true Greek gross domestic product has fallen by 25 percent since 2009 — an almost unprecedented reduction for a developed economy. But GDP remains close to twice the level it was when Greece adopted the euro in 2002. Read more

The many faces of Jeroen Dijsselbloem

It’s Friday. You probably can’t wait for the weekend after a tough week.

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Greek austerity after Syriza

A brief collection of reaction to Sunday’s election in Greece follows. Before we hear from the professional financial crowd, however, a word from Eric LeCompte, executive director of Jubilee USA…

This election was a referendum on austerity and debt policies. The people of Greece voted and said no to austerity and yes to renegotiating Greece’s debt.

Austerity programs can be likened to trying to help a patient on life support by punching them.

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European sovereign debt hypocrisy

Speaking at Davos this morning, Angela Merkel and Alexander Stubb argued that European creditors should not be held responsible for their poor lending decisions.

Well, that’s not exactly how they phrased it: Read more

Just in case Grexit were to happen…

Eric Dor of the IESEG School of Management in Lille has a handy table. Click to enlarge…

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Syriza in the bond market

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What’s “catch a falling knife” in Greek?

A snap presidential election — and the chances of Syriza coming into power if the government fails to win enough support to push its candidate through — are all it took to push the ASE down over 10 per cent on Tuesday.

Which makes it a 27 per cent drop for the Athens bourse this year. Only the Portuguese, Nigerian, Russian (in US dollars), and Ukrainian stock markets have done worse in 2014. Read more

Sovereign debt reprofiling, take two — from the IMF

The IMF has picked its week to publish another paper on changing its sovereign debt restructuring policy…

Although the paper released on Friday — which follows an initial review last year — isn’t about Argentina, pari passu, and holdout issues. It’s about Greece. Read more

When you can’t print, fly

From the Bank of Greece’s Chronicle of the Great Crisis (h/t Faisal Islam), or at least the English extract released so far, here’s confirmation of the euros that were flown into Greece during 2010/ 11. Just the €5.3bn:

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Tax doesn’t have to be taxing, except when it’s a Greek bond tax [updated]

“R-r-r-r-retroactive?”*

We can imagine that’s something of a trigger word for Greek bondholders with long memories. Read more

Taking the red pill, Greece edition

Here’s where another €2bn or so of freshly-issued Greek bonds would go. Chart via Citi:

And that’s after the largest sovereign debt restructuring in history. Bracing isn’t it?

And yet maybe Greece is better off paying up to issue a bond to private bondholders on Thursday. In the long run, it could well beat taking ‘free’ money from the Troika.
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That new Greek bond — the terms

Coupon not fixed yet. But note a) that they’ve hired lots of banks to sell this and b) the law… Read more

Guest post: The IMF approach to sovereign debt restructuring

This year’s IMF-World Bank Spring Meeting is likely to include discussion of proposals to change the fund’s policy on sovereign debt restructuring. Gabriel Sterne, senior economist at Exotix with IMF experience, and Charles Blitzer, Principal at Blitzer Consulting and a former IMF staff member, argue in favour of a case-by-case approach.

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Dear Dromeus Capital investor…

One-year total return of the Athens stock index, to the end of October 2013: +50%

One-year return of the Bloomberg Greece Sovereign Bond Index, same period: +134%

One-year net return of Dromeus Capital’s Greek Advantage Fund: +107%

Yep — FT Alphaville hears that the first-year performance of Dromeus Capital’s Greece-focused fund would make it one of 2013′s best-performing, having already made a strong start at the beginning of the year.

It’s another indicator of how much both Greek equities, and the sovereign’s restructured debt, have recovered this year… Read more

A Finnish collateral coda

Months after the Finnish government was made to open up its Greek bailout ‘collateral’ deal to public scrutiny, one of the weirder episodes of official secrecy in the eurozone crisis …

Finland’s Chancellor of Justice, Jaakko Jonkka, has criticised the decision to keep the Greek transaction under wraps in the first place: Read more

Europe’s not so secret liquidity. Not any more.

FT Alphaville began writing in detail about emergency liquidity assistance in the eurozone — that is, national central banks lending to stricken, but supposedly solvent banks on highly secretive terms, against collateral not accepted at the ECB — some two and a half years ago.

Throughout that period, the ECB’s precise oversight of this liquidity assistance remained in the dark. Despite the risk being taken by taxpayers, and despite the fact ELA effectively stopped the Greek, Irish and Cypriot banking systems from going under at various points. And despite procedures having been in place since 1999 for the ECB to restrict ELA by a national central bank if it endangers the rules of the euro (as used in Cyprus). Read more

Wealth-taxing, redux

Sign of the times perhaps, though in any case easy to overlook (as we did)…

That’s a box on “one-off capital levies” — or wealth taxes — burrowed away on page 49 of the IMF’s latest Fiscal Monitor. Click to enlarge. Hat-tip to Societe Generale’s rates strategists.

Just in case you thought the Cypriot precedent had been forgotten. Read more

The sovereign ceiling, redux

Is this hundreds of basis points safer than the Greek government?

You might well ask. Read more

Caption contest! When Tsipras met Asmussen edition

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A Greek bond offer hangs around even longer

Did you forget that Japonica’s offer to buy up a huge chunk of the Greek bond market still exists?

It might be easy to. They’ve just extended the deadline again by another month.

For holders tendering at a 15 percent to 20 percent large block illiquidity discount to observed bid-ask midpoint prices, the Acquirer reserved the right to reimburse up to 50 percent of the cost of independent fairness opinions. These fairness opinions specify the range of the double discount in the current market and are an industry best practice. The double discount includes the discounts for large blocks of fixed income securities and for highly illiquid fixed income securities.

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