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I'm sure the hard working Germans will consider it an honor to bust their a** providing subsidized loans to these freeloading countries. The IMF is smarter as they're not directly telling Americans that their money is also on the line. Make sure a Greek thanks you for bailing them out.
I thought all that free stuff everybody got in that Europe was a good thing?
it is a good thing, but they just can't pay for it.
as one poster put it in market ticker:
it is simply beyond the ability of the US or anyone to prop up Europe. They are far too large a economic/population block. What is becoming totally idiotic over there is that the PIIG countries are expected to raise money they don't have at market rates to provide low cost loans to Greece! Portugal's two year bonds yield over 5% and rising. Ditto Ireland. Yet these two broke nations are being asked to raise between them Ä1,250 to loan to a bankrupt Greece at 5%.
Worse still, the EU loan will not be senior to Greece's other debt so the chances of Portugal and Ireland being repaid are not good. This kind of financial legerdemain just cannot continue. Spain, with unemployment rates in excess of 20% now is being asked to loan over Ä3.5 billion to Greece ( unemploynment rate of 10%). The is officially sanctioned beggar thy neighbor policy and it is being done to save Greece but to save overleveraged, undercapitalized banks. Worse still, the US, through the IMF, is being put on the hook for this nonsense as well.
We have hundreds of thousands of people in this country who cannot find jobs and whose unemployment benefits have expired. There is no plan to give them anymore. They are not bums or drug addicts just people who lost their jobs and cannot find work yet, in our governments priorities, they rank below Greek pensioners and Eurobanks.
The essay states that the current situation could lead to a restructuring of the PIIGS economy, and more specifically it is focused on Greeces plight.
Delusianne if this is congruent with your opinion of the future for PIIGS if they don't act quickly, then this is definitely a topic i proudly agree with you on.
however, the 45 Billion Euro bailout was not the way they should have done it in my opinion. the only reason our bailout "worked" here in america is because of the sheer size of it, 1 trillion dollars and counting. ratioed to greeces' GDP, 45 Billion Euros is just not enough to keep their system limping along, they NEED to restructure sooner rather than later, and i don't mean change governments i mean cut spending in areas that may be less than ideal. they can restore spending when their economy is doing better.
In the US we need to cut tax breaks for everyone rich and poor, we need to cut federal bailouts, we need to cut these "supplements" before our government can supplement no more and goes belly up.
keep watching greece, our economy is heading to a similar fate, except for us, the bigger they are the harder they fall...
today's news:
Greece gets junked, Portugal downgraded.
Ratings agency S&P cut Greece to junk status and lowered its long-term sovereign credit rating to BB+ with a negative outlook. The cut sent Greece's bond yields and insurance costs to new records, with S&P suggesting that bondholders may recover as little as 30% of their investments if Greece restructures its debt. S&P also downgraded Portugal on "amplified fiscal risks," cutting the country's rating two notches to A- with a negative outlook. The news exacerbated fears of a debt contagion and raised the possibility that policymakers may need to widen a bailout package beyond Greece. European markets went into a tailspin yesterday, with the euro falling to a new one-year low against the dollar. European markets are still taking a beating today (7:00 ET): London -0.7%. Paris -2.5%. Frankfurt -1.6%.
lies get uncovered eventually.
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