Greek Bailout

T

The_Banker

Registered User
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Apparently Greece is €290 Billion in debt and needs to borrow a further €53 Billion this year to keep the wolf from the door.
The EU has agreed to bail out the Greek economy.

In much the same way as banks in the US were bailed out until Lehman Brothers went under are the EU not creating further problems for themselves as Spain & Portugal will now be asking themselves why they should behave in a financially responsible manner as they will be bailed out also?

Is the EU not storing up trouble for itself further down the line? The Greek government don't seem to want (or can't, under threat of civil unrest) to take the decisions that Ireland has taken, with regard to cuts.

Could this be the start of countries economies failing in much the same way that banks failed in the USA in 2008?

Personally, I don't believe the EU should be bailing out the Greeks.
 
Is this an IMF-style bailout i.e. massive cuts in public spending in return for the money?

Only at the weekend I read one economist that was praising the greek plan as it is was much more radical than the Irish one. What does this mean for us?
 
As far as I can see, there is no money changing hands. Yet! They are simply making their support explicit.
I can see the arguments for letting Greece default and restructure while remaining in the EURO but I can also understand the difficulties including the knock on effect to other Countries and the amount of Greek debt held by financial institutions that would have to be written down. I think there are too many unknowns to risk it. The EU's problem is that they can probably afford to resuce Greece, Ireland and Portugal. Spain is a diffferent story. It would take about 2-3% of EU GDP to rescue Spain. That's where the real worry is.

I see that labour's Joan Bruton said Ireland should support weaker countries in the European Union. So she obviously feels that bailing out irresponsible banks is morally wrong but bailing out irresponsible Countries is acceptable. Stange!!
 
Sunny said:
I see that labour's Joan Bruton said Ireland should support weaker countries in the European Union. So she obviously feels that bailing out irresponsible banks is morally wrong but bailing out irresponsible Countries is acceptable. Stange!!
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In fairness, we're in no position to say other countries shouldn't be bailed out, no point in burning our bridges in case we're in the place as the Greeks in 6 months times
 
Mpsox said:
In fairness, we're in no position to say other countries shouldn't be bailed out, no point in burning our bridges in case we're in the place as the Greeks in 6 months times
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I agree but countries like Ireland and Greece acted just as badly as the banks. Ireland based its public finances on the property bubble just like the banks. Why does Joan Burton think it is acceptable for the German taxpayer to bail out Ireland but it is morally wrong for the Irish taxpayer to bail out the Irish banks.
 
Sunny said:
I see that labour's Joan Bruton said Ireland should support weaker countries in the European Union. So she obviously feels that bailing out irresponsible banks is morally wrong but bailing out irresponsible Countries is acceptable. Stange!!
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Perhaps the fact that it is a socialist government is swaying her. On balance though, the Greek people are behind the government. In a recent poll, 64% agree that it is "neceassry". The PM has a 55% approval rating.

Then again, it is only a 4% pay cut. Perhaps the government won't be as popular when the knives come out next time around.

I had to laugh when I saw the IMF saying they are ready to ride to the rescue. Talk about having the 4 horsemen approaching!!!
 
Can someone advise where the IMF get the money.. is this just printers printing out money or do they physically have the moula to hand over?

All I hear is countries in debt worldwide.. if this is the case, then what country has all the cash?
 
chlipps said:
Can someone advise where the IMF get the money.. is this just printers printing out money or do they physically have the moula to hand over?

All I hear is countries in debt worldwide.. if this is the case, then what country has all the cash?
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Every member Country of the IMF pays money into it. The size of the amount depends on the size of the Country. The USA is the biggest member and therefore pays the most.
 
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