Kal Korff

Greek Financial Bail-out Chaos Continues

by Kal K. Korff
Internationally Syndicated Copyright 2012 by Kal K. Korff - ALL RIGHTS RESERVED.

The debt crisis which caused the fall of the previous Greek government is showing signs of possibly being resolved amicably as protesters ratchet up their acts of deance over what they consider to be onerous debt relief terms, while the countrys opportunist politicians continue to nitpick ne details of restructuring deals while blaming each other. As the clock winds down, Greeces parliament is set to pass a series of sweeping bills over this weekend which will enforce deep budget cuts and trigger debt swaps in exchange for access to 35 billion Euros from the EU bailout nd which France, Germany and the Netherlands have largely steered. Greeces grand plans call for an expedited increase in privatizations of government assets and properties. Greece expects to raise some 15 billion Euros from these handovers to private interests, prompting critics of the government to say that measures like these could and should have been undertaken years earlier to help stave off or lessen their current crises. The government is also expected to announce steep reductions in medical reimbursements for workers, especially concerning the area of medicines. The cutbacks mean that Greek citizens will have to pay more for pharmaceuticals and basic medical services. While the Greek parliament is expected to pass these and other measures during their special weekend working session, the 35 billion Euro round of emergency funding is deemed critical to stave off defaulting.

Already, Greek banks have suffered a 66% write down on many of their loans. Despite the losses and restructuring, nancial stability is still years away, despite massive help from the European Unions Financial Stability Fund. The EUFSF is a monetary entity designed to stave off or help correct any economic problems for its seventeen member nations which use the Euro. Financed to the tune of 440 billion Euros, Greece, Spain and Portugal have recently received assistance from it, in addition to help from the International Monetary Fund. Once the new laws are passed, some 100 billion Euros worth of Greeces debts will be written off, dealing a further blow to the EUFSF and the reputation of Eurozone countries to responsibly manage their own nancial affairs. Thousands of workers are also expected to be red from government payrolls, reducing Greeces liabilities still further. Under the new debt package expected to become law, the Greek government plans to release to investors some 70 billion Euros worth of what is described as new bonds. While these bonds are certainly new, investors wishing to purchase them will be required to turn in and exchange their older previous bonds. Once these older notes are back in the Greek governments possession, their value will be reduced by 50% in what is called a debt swap. In addition to these measures, taxes on everything from cars to luxury items are also being increased. These new measures are being passed so that the Greek government can tap into as much as 130 billion in new loans from the EUFSF to help stave off an impeding default. In March, the government of Greece must pay to private banks and nanciers over 14 billion Euros. Without passing new debt restructuring legislation, it will go into default. 1.0v1 February 12, 2012 Kal K. Korff is an officially accredited internationally known author, columnist and investigative journalist.

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