Eurozone agrees €130 billion of new loans for Greece
Greek Finance Minister Evangelos Venizelos (L) and Greek Prime Ministers Lucas Papademaos (R) arrive for a joint press after their Eurogroup Council meeting
Eurozone governments finally came to the rescue of Greece early today, approving a second massive bail-out after months of wrangling and a last round of more than 12 hours of talks in Brussels.
Haggling over figures, financial targets and Greek government belt-tightening pledges went on through the night in a last-ditch attempt to rally markets and put crisis-hit Athens back on the path to economic recovery.
But the deal is based on long-range forecasts of Greek's best-case-scenario debt reduction chances over the next eight years, with some pundits instantly dismissing the deal as undeliverable.
In return for the latest 130bn euro bail-out and a private creditor debt write-off worth about another 100bn euros, the Greek government is pledged to implement fully a severe austerity package of pay, pension and jobs cuts, as well as finding savings of 325m euros in this year's national budget.
The deal nearly came unstuck over a requirement on Athens to get the Greek projected debt level down to around 120% of national wealth by 2020.
Extra hours of financial juggling brought eurozone negotiators close - at least on paper - by massaging the figures to deliver a theoretical 121% GDP level by 2020.
Greece had only offered 129%, which was rejected as inadequate, although nothing like as bad as the current unsustainable 160% of GDP Greece is grappling with.
Pundits predicted short-term rallying of markets followed by a fall-back when the continuing massive scale of the debt mountain Greece has to climb becomes clear.
The Greek economy received a 110bn euro (£91bn) bail out from the EU and IMF in 2010 but it was not enough to lift Greece out of crisis.
Ahead of the overnight talks some critics were warning against "throwing good money after bad", but the price of letting Greece default and be forced out of the euro currency was seen as a worse option.
Instead the talks concentrated on tying Greece as tightly as possible to austerity measures which will chip away at its debt and deficit levels.
Political parties on all sides were even pressed to promise no easing of the austerity package in forthcoming Greek elections.
GREEK PREMIER 'VERY HAPPY'
Greek Prime Minister Lucas Papademos pronounced himself "very happy" wih the bailout.
"We're very happy," Papademos said after 14 hours of determined talks in Brussels that saw him shuttle between finance ministers and banks' negotiators, saying a debt write-down by private creditors expected to net 107 billion euros would "pave the way" for up to 130 billion euros in loans from public partners.
Papademos, a former European Central Bank No. 2 backed by European Union partners to lead an emergency coalition government in Athens, acknowledged that full delivery of the deal depends on Greece delivering on a string of conditions in "a timely and effective manner."
However, he maintained: "I'm convinced that the government after (an April general) election will also be committed to implement the programme fully... because it is in the interests of the Greek people."
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Emma Xerri
Feb 22nd, 15:51
€130 billion of new loans for Greece.
This is how it works.
The ECB prints paper money. They "loan" the fake money to the banks for peanuts, the bank loan that money to the government for real interest. ( both the Federal Reserve in the US and ECB are private organization owned by the banks and the IMF is likewise composed of private banks)
Remember, you must pay back all that money that was created out of thin air plus interest. Can't create money out of thin air for the interest? Then you have to pay back something real like gold, property, or your first-born. Yes. Eventually banks will control everything of real value and they will accomplish this through the greatest racket of all - the financial industry. Ordinary people will be controlled with paper money or even worse-an electronic card with so called "funds" programmed into them.
The wolves are in charge of the sheep farm.
Jonathan Camilleri
Apr 12th, 09:21
Well yes that is how money supply works. The pigs get fatter, and, the pockets of the common persons get leaner as they pay interest. It is a fair world isn't it?
MALCOLM SEYCHELL
Feb 21st, 15:15
Greece should go bankrupt and solve its own problems.
Peter Seebohm
Feb 21st, 17:58
Unfortunately: Your are right
Luke Scicluna
Mar 27th, 21:01
Do you have the slightest idea what would happen to the eurozone if Greece were to default? France, the UK, Germany - these countries are all owed billions in debt by Greece. Default = those obligations are forgone, and Greece is forced to exit the eurozone, and those billions cease to exist, dragging down the rest of Europe with it.
The problems of the eurozone are starting to emerge.
Jonathan Camilleri
Apr 12th, 09:22
Well, I see your point, but I have friends in Greece, they go through hard times. In any case Malta should be more "protectionist" and less "fanfarist"...
S.M. Cuschieri
Feb 21st, 15:00
I would not like to be a hair in the head of the greek PM! He is saying thank you but he still has to pay back the loan! it is not gratis! But it is nice to see the EU countries help each other out. I just pray to god we do not end up in that state.
s grima
Feb 21st, 13:55
nixtiq inkun naf jekk din ix ta l ahhar darba li ha natuhom il flus. tajdli qalbi bye bye 70m li tajnhom
carmel muscat
Feb 21st, 13:36
oqodu morru il bamek meta il gvern johrog lis stocks ghal bejh imbat oqodu ejjew hawn ibku bhal ma ghamlu hafna investituri dan lahhar meta marru hazin fl investiment li ghamlu ma wiehed mil banek lokali halli infakarkom ftit ghal min ghandu memorja qasira li dan lahhar it talba ghal xirri ta stocks kienet id dobju biex taraw kemm hawn imhuh maluqijn miskien il haddiem ghax jaghmel bhan naghg ta bendu li kif jara lil xi hadt jinvesti u imur jaghmel bhallu b ghajnejh maluqa ghax ghandkom tkunu tafu li hafna mil linvestituri haddiema ikunu - - - -- - - - -
George Cauchi
Feb 21st, 13:30
While the EU is going through AIr Malta's rescue plans with tooth and comb here we are dishing out billions to a country who brought financial ruin with its own hands. Thats is fair.
Mr Edward Caruana Galizia
Feb 21st, 13:07
The point of the EU is to stick by one another during the hard times and I am proud that all the countries of Europe, despite their past, have stood by one another during these hard times.
The EU gave us Maltese not just money, but also opportunities that are priceless, so I don't t understand why so many people are objecting to this bail out as if they even know what percentage of their taxes will be going towards it, if any.
Yes it is a lot of money, but what would you prefer? What other great alternative would you suggest?
Charles Cremona
Feb 21st, 17:17
What the EU and Germany are going to give us is a very deep recession or even a depression for the rest of this decade. every country in the Eurozone has now gone into recession with all the austerity imposed by the EU, a very bleak future indeed.
Francis Attard
Feb 21st, 11:49
Is it possible that we are benefiting from the misery of other countries in the EU?
William Calleja
Feb 21st, 12:13
Quite the contrary, the tax money of the common citizenry is being burnt out in these bailouts, the only people benefitting are the same banking institutions that brought about the economic collapse.
Dominic Chircop
Feb 21st, 11:26
Most of the above comments betray two things. It is easy to determine on what side of the political divide the writer is. Then, one is immediately struck by the unchristian remarks of the faċċoli kattoliċi Maltese. It is true that Greece squandered billions on the Olympics in the past, but most of those who are now flogging the country to death through the savage austerity measures said nothing at the time. Indeed we still remember the bevy of Brussels bureaucrats strutting like peacocks during the opening ceremony. It is true that most of the Greek crisis was homemade, but one cannot not mention the indecent haste with which the eurozone was set up. Now even Jacques Delors is stating that the EMU and ERM mechanisms were flawed from the outset. This was in order to appease the dreamers of the European Superstate ! And the eurozone crisis will be hard to solve, as long as more practically destitute countries join the EU.
mark borg
Feb 21st, 11:08
greek premier very happy ....Hekk jonqos wkoll ma jkunx ! Ara vera qieghedin sew Vapur Mgherreq li rikbuna fuqu ! tinsewx lil Mal Grecja hemm mil anqas sitt pajjizi ohra mifqghujn bid djun ...biex ma nsemmux l Ewropew tal Lvant kollha gol EU !Altru mil Genna ta art li wieghedu ! GHAXXAQTUNA E !
E. Azzopardi
Feb 21st, 10:41
This should never had happened in the first place. The financial wizards, calling themselves, accountants, financial controllers etc should have seen this (and Spain, Portugal, Ireland, Italy and the next ones) coming, but they did not. I am sure that the EU ministers know what they are doing . The Greek people have not realized or they do not want to realize the disaster they are in, and that is the main problem. You have to recognize that you have a problem to solve it, because they would not be protesting they way the are. This is money down the drain and in a few months time they will come for more. And the whole of Europe will suffer.
I Bugeja
Feb 21st, 11:24
While Greece has become a liability for the EU, you cannot blame the Greeks who are protesting. They trusted their governments in managing a country but instead ruined it. Would you like to bear the brunt of other's mistakes after contributing to your country throughout your life and ending up with lower income, higher taxes and a lower standard of living. I think not.
Peter Seebohm
Feb 21st, 16:09
A few big facts are never mentioned.
Greece has the biggest military budget in Europe. About 56% of the national income.
Oversized, but absolute ineffective bureaucracy. About 60% of all civil servants appearing 1 time per month. To collect their paycheques.
They have no real taxsystem - except VAT -, no cadastral register:
No registration of address office. Due this lack they pay pensions for dead people - best result 120 years.
Unfortunately the real honest people are touched very hard by the austerity procedures.
Nevertehless, I do really believe: The loudest of the protesters are those who´re loosing their sinecures for doing nothing, but helped running the country to ground.
You can´t blame the EU for this maladministration.
Franco Abela
Feb 21st, 10:33
Il-Gvern grieg ghal dawn l-ahhar 10 snin dejjem qal li mhemmx problemi u nefaq u nefaq ez ghamel l-Olympic Games li kienu over budget, etc. etc. Meta gie ghas SI u n-NO fittex u ma sabx u ma setax ihallas id-dejn.
Issa jkollu jhallas il-poplu. Hemm nies li kellhom jobs tajba u issa qedin fil-kju ghal community kitchen! Iktar min 150,000 business falla!
Jien nispera li meta l-Gvern Malti qal li naffordjaw certu infieq li nistghu nghaddu minghajru bhal per ezempju l-projett tal-Belt ikun vera naffordjawh u ma jkunx qed jaghmel bhal Gvern grieg li jissellef u jissellef u xi darba taqa l-bomba fuqna!
Charles Cremona
Feb 21st, 10:07
This second bailout that the Greeks will never pay back will not last long. After they have an election in April they will be back because there is no way the Greek people will accept the austerity and loss of democracy being demanded by the EU, it is humiliating and will not work, the loan was granted to pay back German and French banks not to improve the Greek economy. What Greece needs is help to get its economy on track not more cuts which are plunging the country into poverty. The policies being persued by the Eurozone at present are going to plunge Europe into a deep depression that will last for years. This will have adverse effects on Malta because whoever wins the next election will have his hands tied and will have to do what the EU says.
Roderick Camilleri
Feb 21st, 10:05
Could we have some approximate figures on what is Malta forking out for these bail outs? Further more could someone explain to the general public how much money are we spending in these bonds of debt ridden countries? When I look back at 2003 at the time of Referendum and remeber what were we promised and the picture we were given of the EU, I sincerly wonder if we were that stupid to beleive in all that, we got it all wrong and were fooled by people who knew exactly what was going on.
A Spiteri
Feb 21st, 09:48
don't worry...we will make a profit out of this. that's what our Finance Minister claimed!
Mr ALBERT LEONE GANADO
Feb 21st, 11:35
I know that your statement meant to be ironic . However don't be surprised if by a bit of creative magic , on paper at least the money our central bank lent Greece will after this agreement appear to make a profit. While the investment banks and private lenders will have to accept a crew cut which will see their bonds losing 70% of their worth it seems that lending made by central banks like the Maltese one will be spared the barber's chair. It seems that the our only knock will be that we will not get any interest till 2020 on the money we lent Greece. Of course this is just a creative ploy and conjuring trick not to raise the ire of the taxpayers like us or make us lose faith in buying the sovereign bonds of our country. On paper at least our bonds can as some minister will probably now tells us be worth more. Of course there is no way we can get them immediately back to invest on worthy local projects but theoretically they are still there without showing a loss.
Mr ALBERT LEONE GANADO
Feb 21st, 09:01
Time will show that it was a big mistake to bail out the Greek economy. The country should have been allowed to go bankrupt in a managed way and then support be given to build itself up and economically reconstruct itself from scratch. Just as what happened in the eastern economies after the collapse of the Soviet Union a new political and economic beginning with a new breed of leaders would have given the opportunity for the young and enterprising to rebuild the country based on sound political structures and modern financial discipline principles. Where are the jobs and growth going to come from in a country racked by impossible austerity measures and burdens where the rich will simply spirit their wealth abroad and the middle classes and poor will bear the brunt and fall in angry despair if not also in revolutionary antagonism. We seem to have forgotten that the impossible reparations schedule imposed on germany after the first world war was a main cause for the consequent rise of the Nazi regime.
Francis Attard
Feb 21st, 08:47
And, by the way, the Greek government is already infringing the "Golden Rule" isn't it?
pat muscat
Feb 21st, 08:33
The Greeks too thought that 'money was no problem'', that the' hofra' did not exist, that their kids will pay their debt. The last 'People's Party' cooked the budget books continuously until the EU found out! Now, only God knows how many generations the Greeks will have to sacrifice in order to get out of the mess. To contract new debt is not the way forward to pay old debt!
Adrian Attard
Feb 21st, 09:02
Pat
It's not only the Greeks that will have to sacrifice but all of us within the Eu region.
N. Agius
Feb 21st, 08:32
The Greeks' situation proves that EU does not have appropriate mechanisms to know exactly what's going on in the countries' economies. If it had then they would not be in this misery. So basically the question is this... are there any other countries that are subtly doing what Greece did?
Franco Abela
Feb 21st, 10:34
HOPE WE ARE NOT!
Lawrence Fenech
Feb 21st, 08:28
Greek prime minister very happy with the bail out, ofcourse getting money which europe will never see again.
He will continue his good living while the Greeks starve and 20% jobless and who knows how many more.
What was the sum given (not loan) to the Mr. Prime Minister?l
Merkel who has no euro problem is happy too.
Anthony A. Mifsud
Feb 21st, 08:27
Well done to 27 nations, who would bail us out (Malta) should the finantial get any worse
Toni
Francis Attard
Feb 21st, 08:23
I assume that when Greece decided to join the European Union, its intentions were to improve its economy, so why, on earth, has the EU let it finish in this humiliating state?
Andreas Moser
Feb 21st, 08:19
The Greek Finance Minister says "thank you": http://andreasmoser.wordpress.com/2012/01/24/evangelos_venizelos/
A Cardona
Feb 21st, 08:00
So if i have many loans that i cannot pay back and i am given another loan to pay back these old loan, i should be happy? For me this is a farce or could be that i am not smart enough to understand the logic behind it.
d. attard
Feb 21st, 07:52
Wht a complete waste of time money and energy. The Greek bankruptcy has its own genesis and is complete as it is deep. If the old reactions to its geopolitical situation have mutated to better grounds than the solution has to be found on different and new foundations. This bail out stuff will only make problems bigger for Greece and the rest in the medium term. It makes no sense as it takes on more debt as cuts make its economy contract. Lose lose. Start afresh in respect to the history of Greece that has in recent times been governed by a military dectatoriship in the interest of other powers as its polititians acted as if Greece was a much bigger nation. Get real or the problems will get seriously out of hand.
Eve Axiaq
Feb 21st, 07:50
A delayed default.
F. Pisani
Feb 21st, 07:23
is it fair to pay for other people mistakes?