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Thursday, August 22, 2013

Greece almost as worried about a third bailout as Germany...

As a follow up to our earlier post on the German reaction to the revelation of a third Greek bailout, we thought that it was also worth noting that there has been a fairly strong reaction in Greece as well.

As we suggested yesterday, the outrage over a third Greek bailout was unlikely to be confined to Germany, with the Greek themselves coming round to the cold realisation that this could mean many more years under tough bailout conditions. Many of the papers ran headlines expressing as much, with some including some rather ominous pictures of Schäuble…

“Schaueble is threatening us with new help.” (Sytakton, 21.08.13)

“Greece in German urns.” (Ta Nea, 21.08.13)

“Chains with new credit and saving programmes.” (Syriza, opposition party, 21.08.13)

How much more austerity Greece is willing and able to stomach will surely be a big factor in any discussion on future aid. The one saving grace may be that this bailout, whatever form it takes, is likely to be significantly smaller than the previous two, potentially allowing for more flexibility.

That said, as long as Greek debt continues to look inherently unsustainable any easing of conditions may be just a pipe dream. With both sides already expressing concerns over the project, expect another fiery set of negotiations towards the end of this year.


Anonymous said...

In addition to a lack of tax collection (that is a willingness to pay and a willingness to collect) and the requirement for Greek sovereign bondholders to take a drastic haircut, the free movement of people within the EU has meant that many of the monied and rich have already left.

And why would corporations base themselves there when the bottom is still not in sight, the possibility of another Black Swan event happening is rising and the chances of a shock to the tax and social security systems is high?

Nothing has really been managed and nothing has really improved since 2008.

Even the recent IMF report states that the EU sacrificed Greece and Cyprus for the the Euro.

Welcome to the Mananazone.

UK out before it ruins us.

Rik said...

@Anonymous 2.53
Good point, why would anybody be willing to pay half of his income as tax for a dysfunctional state that doesnot get its house in order. In get hardly anything in return for that (only red tape).

Interesting point that some people try to suggest to pay Greece 4.0 (or is it 3.2) out of the EU budget. Point to watch.

Anonymous said...

Further to my comment at 2.53pm, if I was Greek I would leave Greece and head for another EU country, perhaps Germany, and then rely on their social benefits system.

It is a double-whammy as Greece loses its tax base and other EU countries pick up the bill.

All of this leads only to discontent.