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Ukraine fails to secure debt write-off at US talks
Ukraine fails to secure debt write-off at US talks
Ukraine failed to convince its biggest creditors to significantly reduce its debt obligations during a ‘last chance’ two-day negotiation in San Francisco, California. The delegation from Kiev hoped to restructure some $19 billion in debt.
The Ukrainian delegation was headed up by Illinois-born Finance Minister Natalie Jaresko. Meanwhile, the creditors were represented by Franklin Templeton Investments, which holds about $8.9 billion worth of Ukrainian debt in the form of bonds.
The two sides said they had conducted “detailed discussions” in the city, but no progress has reportedly been achieved.
READ MORE: Creditors offer Ukraine 5% debt write-down – media
Even though there have been no official statements concerning the negotiations, Ukraine had previously asked for a 40 percent debt write-off, Bloomberg cited sources as saying. Reportedly, Franklin Templeton Investments was only willing to offer a 5 percent reduction to bond principal conditional on economic performance.
Ukraine described the talks near Templeton’s headquarters as the “final opportunity” to agree on something prior to next month’s due date for $500 million worth of bonds.
Even lobbying by influential US hedge fund billionaire George Soros, who recently had an article published in the Wall Street Journal titled ‘Ukraine Deserves Debt Relief,’ did not seem to make an impact.
In the piece, Soros argued that investors should stand behind Ukraine in its request for debt relief, which would help the country save some $15.3 billion in debt-servicing costs over the next four years as well as lower debt to below 71 percent of GDP by 2020. Ukraine must achieve those milestones if it hopes to take advantage of a proposed IMF bailout program.
The country’s GDP is expected to shrink 9 percent this year, with annual inflation expected to jump to 46 percent, the IMF has warned. The debt will hit 95 percent of GDP this year, according to the National Bank of Ukraine.
…click on the above link to read the rest of the article…
The ‘Greek Debt Deal’ Is Already Starting To Fall Apart
The ‘Greek Debt Deal’ Is Already Starting To Fall Apart
The “deal that was designed to fail” has already begun to unravel. The IMF, which was expected to provide a big chunk of the financing, has indicated that it may walk away from the deal unless Greece is granted extensive debt relief. This is something that the Germans and their allies have resolutely refused to do. Meanwhile, outrage is pouring in from all over Europe regarding what the Greek government is being forced to do to their own people. Most of this anger is being directed at the Germans, but the truth is that without German money the Greek banking system and the Greek economy will completely and utterly collapse. So even though Greek Prime Minister Alex Tsipras admits that this is a deal that he does not believe in, he is attempting to get it pushed through the Greek parliament, and we should know on Wednesday whether he was successful or not. But even if the Greek parliament approves it, we could still see either the German or the Finnish parliaments reject it. It seems as though nobody is really happy with this deal, and these negotiations have exposed very deep divisions within Europe. Could this be the beginning of the end for the eurozone?
The Germans appear to believe that they can push the Greeks out of the eurozone and that everything will be okay somehow. This is something that I wrote about extensively yesterday, and it turns out that a lot of other prominent voices agree with me. For example, just consider what Paul Krugman of the New York Times had to say about this. I am kind of amazed that he finally got something right…
Suppose you consider Tsipras an incompetent twerp. Suppose you dearly want to see Syriza out of power. Suppose, even, that you welcome the prospect of pushing those annoying Greeks out of the euro.
…click on the above link to read the rest of the article…
IMF Declares War On Germany: In “Secret” Report Lagarde Says Greece Will Need Massive Debt Relief
IMF Declares War On Germany: In “Secret” Report Lagarde Says Greece Will Need Massive Debt Relief
A divide between the IMF and Europe (read: Germany), regarding writedowns on Greece’s debt to the EU has been brewing for quite some time and recently returned to the international spotlight when, a few months back, the Fund indicated debt relief was a precondition for its participation in any further aid for Athens.
More recently, the IMF released a report on Greece’s debt sustainability just prior to the referendum. The timing appeared to be strategic and may have helped secure the “no” vote for Tsipras.
Unfortunately, the IMF didn’t appear to anticipate the PM’s complete capitulation and now, the subject of debt relief has again been put off, this time until Greece officially passes the new “deal” through parliament and legislates its terms.
Now, another “secret” IMF document on the sustainability of Greece’s debt burden has surfaced and not surprisingly, the Fund is once again pounding the table on a haircut. One is certainly left to wonder if the US (and its veto power) are pulling the strings behind the scenes and orchestrating “leaks” at opportune times. Here’s more from Reuters:
Greece will need debt relief far beyond what euro zone partners have been prepared to consider due to the devastation of its economy and banks in the last two weeks, a confidential study by the International Monetary Fund seen by Reuters shows.
The updated debt sustainability analysis was sent to euro zone governments late on Monday, hours after Athens and its 18 partners agreed in principle to open negotiations on a third bailout programme of up to 86 billion euros in return for tougher austerity measures and structural reforms.
…click on the above link to read the rest of the article…
The Kicking of the Can
The Kicking of the Can
Hello, Mr. Tusk … New Orders
Yesterday it emerged that the normally hardline European Council president Donald Tusk (the former prime minister of Poland), suddenly felt “debt relief” for Greece was needed after all. While he is undoubtedly correct, it seems to us that he likely received a stern phone call from Washington.
Donald Tusk, the life-like android currently presiding over the EU council, here photographed in hardline mode
Photo credit: Radek Pietruszka / PAP
It is also unlikely to be a coincidence that the IMF released its debt sustainability analysis last week, in what appeared to be a case of especially ill-chosen timing, at least from the perspective of the euro-group. Note here that the IMF only wants the EU to provide debt relief to Greece – the IMF itself intends to get back every cent of its Greek loans.
Politicians in neo-con infested Washington no doubt don’t want to let slip Greece away into the arms of its Russian Orthodox co-religionists, which would almost certainly happen after a Grexit. Such strategic considerations are certainly exercising the NATO bureaucracy and very likely the EU’s movers and shakers as well. A Grexit would also be a victory of the Marxist wing of Syriza (a Pyrrhic victory though it may be), which would over time throw Greece’s continued NATO membership into doubt.
According to press reports from this morning:
“The White House has been putting its immense diplomatic weight behind a debt restructuring for Greece. Treasury secretary Jack Lew made an intervention earlier this week, and seems cautiously optimistic that Greece’s current proposals should be enough to satisfy creditors, and gain some crucial debt concessions in return.
…click on the above link to read the rest of the article…
Germany Crushes All Hope Of Greece Getting Debt Relief
Germany Crushes All Hope Of Greece Getting Debt Relief
As the Grexit debate is falling into the background a new, far more powerful conflict emerges: one between Germany on one side, and the IMF, France, Italy, and perhaps even the US, when it comes to the all important issue of debt relief.
As a reminder, it was the unexpected release of the IMF’s debt (un)sustainability draft late last week (with US support over the vocal objections of Europe) that not only gave Tsipras a Greferendum win (he did not desire), but showed clearly that without a debt haircut of at least 30%, any Greek deal will merely lead to another, even more violent Greek default down the line.
Then, overnight, the Telegraph showed that the “debt-haircut” axis has even more supporters in Europe:
French leaders are working in concert with the White House. Washington is bringing its immense diplomatic power to bear, calling openly on the EU to put “Greece on a path toward debt sustainability” and sort out the festering problem once and for all.The Franco-American push is backed by Italy’s Matteo Renzi, who said the eurozone has to go back to the drawing board and rethink its whole austerity doctrine after the democratic revolt in Greece. He too now backs debt relief for Greece.
Finally, it was none other than Tsipras who piggybacked on the IMF’s imlicit recommendation who following the “victorious” referendum made a clear demand of Europe:
- TSIPRAS ASKS FOR 30 PERCENT DEBT HAIRCUT
Fast forward to this morning when shortly after the latest Greek capitulation, when in Tsipras’ official request for ESM bailout he said timidly that “as part of a broader discussion to be held, Greece welcomes the opportunity to explore potential measures to be taken so that its official sector related debt becomes both sustainable and viable over the long term” Germany made it very clear whether there will be any debt haircuts, or reprofiling in the coming years.
Nein.
…click on the above link to read the rest of the article…
The Troika Turns Europe Into A Warzone
The Troika Turns Europe Into A Warzone
So now they do it. Now the IMF comes out with a report that says Greece needs hefty debt restructuring.
Mind you, their numbers are still way off the mark, in the end it’s going to be easily double what they claim. Not even a Yanis Varoufakis haircut will do the trick.
But at least they now have preliminary numbers out. The reason why they have is inevitably linked to the press leak I wrote about earlier this week in Troika Documents Say Greece Needs Huge Debt Relief. If that hadn’t come out, I’m betting they would still not have said a thing.
It’s even been clear for many years to the IMF that debt restructuring for Greece is badly needed, but Lagarde and her troops have come to the Athens talks with an agenda, and stonewalled their own researchers.
Which makes you wonder, why would any economist still want to work at the Fund? What is it about your work being completely ignored by your superiors that tickles your fancy? How about your conscience?
Why go through 5 months of ‘negotiations’ with Greece in which you refuse any and all restructuring, only to come up with a paper that says they desperately need restructuring, mere days after they explicitly say they won’t sign any deal that doesn’t include debt restructuring?
By now I have to start channeling my anger about the whole thing. This is getting beyond stupid. And I did too have an ouzo at the foot of the Acropolis, but I’m not sure whether that channels my anger up or down. The whole shebang is just getting too crazy.
For five whole months the troika refuses to talk debt relief, and mere days after the talks break off they come with this? What then was their intention going into the talks? Certainly not to negotiate, that much is clear, or the IMF would have spoken up a long time ago.
…click on the above link to read the rest of the article…
Troika Documents Say Greece Needs Huge Debt Relief
Troika Documents Say Greece Needs Huge Debt Relief
Just when you think things can’t get any crazier, they always do. The Guardian reports on unpublished Troika documents that show Greece is only too right in asking for debt relief. That for the Syriza government to sign what the Troika wants to force them to sign would see Tsipras et al plunge their country into a financial hell hole.
What’s potentially even weirder is that all German MPs have received the documents, because a vote on them was supposed to take place, but none have said a thing about them. Good thing one at least was awake enough to send them to the press.
So they have these docs, and then yesterday Merkel says no more talks until after the referendum, and total silence follows. Boy, has she fallen from her pedestal. We know the Troika are composed of lackeys to the banking system -and this proves it once and for all-, but Merkel is worse. And she has the entire Bundestag wrapped around her finger. Some democracy, that Germany.
But the documents were also part of a package that was sent to Greece and everyone else. But still debt relief remained off the table? What am I missing here? How could Tsipras have signed off on this? He could see the Troika’s own numbers, and still they refused to take them into account and make them part of the deal?!
The Guardian gives the write up a half-ass title, but the contents are clear enough.
IMF: Austerity Measures Would Still Leave Greece With Unsustainable Debt
Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors. The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery.
…click on the above link to read the rest of the article…
Troika Documents Say Greece Needs Huge Debt Relief
Troika Documents Say Greece Needs Huge Debt Relief
Just when you think things can’t get any crazier, they always do. The Guardian reports on unpublished Troika documents that show Greece is only too right in asking for debt relief. That for the Syriza government to sign what the Troika wants to force them to sign would see Tsipras et al plunge their country into a financial hell hole.
What’s potentially even weirder is that all German MPs have received the documents, because a vote on them was supposed to take place, but none have said a thing about them. Good thing one at least was awake enough to send them to the press.
So they have these docs, and then yesterday Merkel says no more talks until after the referendum, and total silence follows. Boy, has she fallen from her pedestal. We know the Troika are composed of lackeys to the banking system -and this proves it once and for all-, but Merkel is worse. And she has the entire Bundestag wrapped around her finger. Some democracy, that Germany.
But the documents were also part of a package that was sent to Greece and everyone else. But still debt relief remained off the table? What am I missing here? How could Tsipras have signed off on this? He could see the Troika’s own numbers, and still they refused to take them into account and make them part of the deal?!
The Guardian gives the write up a half-ass title, but the contents are clear enough.
IMF: Austerity Measures Would Still Leave Greece With Unsustainable Debt
Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors. The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery.
…click on the above link to read the rest of the article…
