Germany Mulls Measures to Contain Greek Default, Spiegel Says

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Johnny Oxygen's picture
Johnny Oxygen
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Germany Mulls Measures to Contain Greek Default, Spiegel Says

http://www.bloomberg.com/news/2011-09-11/germany-mulls-measures-to-conta...

The German Finance Ministry is considering measures to contain the impact from a potential Greek default on indebted euro-area countries and banks, Der Spiegel reported, without saying where it got the information.

Under the plan, the European rescue fund would provide bridge loans to indebted countries as well as give financing to banks affected by a possible restructuring of Greek debt, the magazine said in an article published in today’s edition.

The ministry is considering two scenarios under whichGreece could default, with one involving the country’s exit from monetary union, the magazine said. Both scenarios would involve a so-called haircut on Greek debt of 50 percent, according toDer Spiegel.

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Johnny Oxygen
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..and more

 

Mauldin: Prepare Now, This Could Easily Be 2008 All Over Again

 

http://www.businessinsider.com/prepare-now-there-is-so-much-that-could-p...

 

The Consequences of Austerity

The markets are pricing in an almost 100% certainty of a Greek default (OK, actually 91%), and the rumors in trading circles of a default this weekend by Greece are rampant. Bloomberg (and everyone else) reported that Germany is making contingency plans for the default. Of course, Greece has issued three denials today that I can count. I am reminded of that splendid quote from the British ’80s sitcom, Yes, Prime Minister: “Never believe anything until it’s been officially denied.”

 
dshields's picture
dshields
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Greeks

Have you looked at the numbers ?  Default or a truly massive bailout with free money (not borrowed) are the only two options I can see.  Since I do not see anyone showing up with an aircraft carrier of free money it looks like default.  It has always looked like default of one type or another.  The Greeks simply have more debt than their economy can support - just like America.  Default or some kind of massive restructuring is inevitable in America also for the same reasons.  Just like in Greece, the US Fed Gov is on a run away spending spree financed by debt.  We can not pay back what we owe already and the Fed Gov wants to borrow and spend even more.  One thing you can bet on, when the end of the spending spree comes it will be tragic.

 

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Johnny Oxygen
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German Economy Minister: "Greek Default Can't Be Ruled Out"

German Economy Minister: "Greek Default Can't Be Ruled Out" And "We Need A Bankruptcy Procedure For Countries"

http://www.zerohedge.com/news/german-economy-minister-greek-default-cant...

 

Greece may not file for bankruptcy this weekend... But its time is coming - it is a 100% certainty. And throwing just that little more fuel into the fire is Germany's Economy Minister Philipp Roesler who in an op-ed posted in Die Welt, is once again planting the seeds for the inevitable day when that perpetual transgressor Greece (which just announced yet more tax hikes, and as a result can now shut down its economy as the tsunami of 24 hour strike will be unprecedented) is finally kicked out of the union. The question then, as now, will be: what next?

From Bloomberg:

 
 

An “orderly insolvency” for Greece must not be ruled out for the sake of stabilizing the euro, Die Welt reported, citing German Economy Minister Philipp Roesler.

 

“To stabilize the euro there must be no taboos,” the newspaper quoted Roesler as saying in an article to be published in tomorrow’s edition. “If need be, that also includes an orderly insolvency of Greece, provided the instruments needed for that are available.”

 

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Johnny Oxygen
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...and still more

Germany May be Ready to Surrender Over Greece

http://www.bloomberg.com/news/2011-09-11/germany-readies-surrender-in-fi...

Germany may be getting ready to give up on Greece.

After almost two years of fighting to contain the region’s debt crisis and providing the biggest share of three European bailouts, Chancellor Angela Merkel is laying the ground for what markets say is almost a sure thing: a Greek default.

...Officials in Merkel’s government are debating how to shore up German banks in the event that Greece fails to meet the budget-cutting terms of its aid package and is unable to get a bailout-loan payment, three coalition officials said Sept. 9. The move capped a week of escalating German threats that Greece won’t get the money unless it meets fiscal targets and investors raising bets on a default.

 

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Johnny Oxygen
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Here's Who Gets Crushed If Greece Goes Bust

http://www.businessinsider.com/greece-default-contagion-2011-09#spanish-...

This is a list of who holds what and how much.

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Johnny Oxygen
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Greek Government To Hold Emergency Meeting Sunday

http://online.wsj.com/article/BT-CO-20110918-701541.html

ATHENS (Dow Jones)--Greece's government is scheduled to hold an emergency meeting Sunday afternoon after being warned by its euro-zone partners that it must take fresh austerity measures in exchange for fresh aid.

The meeting of cabinet ministers is scheduled for 3:30 p.m. local time (1230 GMT), according to a statement from the prime minister's office.

Pressure has been turned up on Athens after talks with visiting international inspectors were abruptly suspended earlier this month after it appeared Greece would overshoot its budget deficit for this year.

A week ago, Greece announced new property taxes to cover that shortfall, but euro-zone ministers doubt that the measure will be enough to cover the gap.

As the result they have asked for additional measures before releasing the next, EUR8-billion tranche of an EUR110-billion bailout that was provided to Greece in May 2010. Without that aid tranche, Greece will run out of money by mid-October.

"The meeting is being held to inform the cabinet on the results of the euro-group meeting and the climate it was held in," a Greek government official said.

"Things are very difficult. The introduction of further austerity measures is an option," he said.

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