Greek Debt Debate: Same Shit, Different Day

Posted by in Economy

The horror scenarios reach from debt restructure up to 50% to debt remission (Citi group) and even default. In the foreign press the pressure for restructure is immense. The government hesitates to take radical measures to combat tax evasion and strict cuts in public spending. The citizens are at the verge of nervous breakdown. Unemployment hit historic record with 15,1% in January. Amid all this mess, Finance Minister George Papaconstantinou gives an interview to Financial Times admitting the uncertainty about Greece’s return of the country to the markets.

George Papaconstantinou has often forecast end of 2011, beginning of 2012 the latest as the time of Greece’s returning to the markets for borrowing. And Now, uncertainty?

Reuters’s ‘interpretation’ (?) and report on Papaconstantinou interview added more oil to the debt scenarios, forcing the Athens Stock Exchange down ( General Index – 2.83%/ Banks -4,9%. at 1,487 points) and the CDS high at 1.164 bp – Bloomberg evaluated yesterday’s Greek CDS drive at 1.054 bp as “a 60% possibility that Greece will default in the next 5 years.”

We, here in Greece, have seen this happening before in the 10 months under IMF ‘aid’, in the 10 months I have been keeping this blog. It’s either some awkward statements of the Prime Minister or some truths spoken by the Finance Minister that cause incredible turbulences in the flight route of the Greek Debt, the spreads and the CDS and who ever is involved.  No few are the Greeks claiming the PriMin and the FinMin should better show political will,  hunt tax evaders and kick asses of the hydrocephalus state instead of speaking – specifically to foreign press. Maybe they are right…

Reuters/Papaconstantinou story via Capital.gr:

Greek Finance Minister Giorgos Papakonstantinou said that it is unclear when Grece would be able to return to the financial markets for funding, according to Reuters. 
The news agency refers to a Papakonstantinou interview with the Financial Times, noting that the timetable would become clearer when an EU/IMF deal for Portugal is complete.
“Yes, we need more time. There is no question about that… But more time, not in terms of a new program but to convince”, Papakonstantinou commented.
Reuters stated that Germany acknowledged for the first time on Wednesday that Greece may need to restructure (German FinMin Wolfgang Schaeuble), but Papaconstantinou reiterated that the government did not intend to restructure its debt.

Greek Finance Ministry officials, however, stated that text of Minister’s interview said that Giorgos Papakonstantinou admits that the country might not be able to access the markets. Officials clarified that this was a journalist’s conclusion, not words of the Minister. Giorgos Papakonstantinou spoke of the government’s intention to return to the markets as soon as possible, even at the end of 2011, said the Ministry in a statement.

Even my grandma knows that if you can’t convince, you’ve lost the game…

Another nice story about Greek economic progress you can read by British The Guardian Greece faces new debt crisis amid fears of default