Stournaras Says Troika Will Pay Up



Ever the optimist,  finance chief Yannis Stournaras says Greece will keep getting loans to survive
Ever the optimist, finance chief Yannis Stournaras (C) says Greece will keep getting loans to survive

Greek Finance Minister Yannis Stournaras said the country’s international lenders are on the verge of giving up demands for more austerity measures in return for continued aid and will come through with the money anyway, including a pending one billion euro ($1.37 billion) installment that had been held up while the two sides negotiated how to close a looming gap of as much as 2.9 billion euros in the 2014 budget.

“Views are converging,” Stournaras told reporters in Brussels after a meeting of Eurozone finance ministers. “We differ on some matters. Whatever hole there is in the budget will be filled with measures of a structural nature that have budget benefits. I am confident,” he said.

That was a sharp contradiction to an earlier report that envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) believed they were “miles apart, billions apart,” on reaching agreement.

Greek Prime Minister Antonis Samaras is anxious to avoid breaking his promise not to impose any more pay cuts, tax hikes and slashed pensions which could be necessary unless the country, locked in a deep recession, can find ways to raise enough revenues to fill the gap which the government puts at only 500 million euros.

Since early 2010, Greece has been receiving two rescues totaling 240 billion euros ($323 billion) in return for bringing public spending under control.

“It’s important the review is finalized as quickly as possible,” Dutch Finance Minister Jeroen Dijsselbloem, also the Eurozone chief told reporters after the meeting in Brussels. “There’s political urgency, urgency of commitment,” he added.

Samaras’ coalition government, made up of his New Democracy Conservatives and his partner the PASOK Socialists, easily survived a no-confidence vote brought by the major opposition Coalition of the Radical Left (SYRIZA) party which was left in some disarray by the defeat with infighting against its leader, Alexis Tsipras.

But PASOK leader Evangelos Venizelos, who gave up his opposition to the firing of public workers and was rewarded with the titles of Deputy Prime Minister/Foreign Minister, booted out one of his members for backing the Leftists on the vote, cutting the government’s majority in the 300-seat Parliament to only four seats.

Greece said it would to speed up structural reforms and continue fiscal consolidation and privatization to unblock more of the international loans that keep it afloat, a frequent promise it has always broken.

Still, Dijsselbloem said, “A lot of progress has been made, also at social and political costs for the Greek society, and I think we fully acknowledge that. Yet the only way forward to strengthen economic perspectives, to strengthen competitiveness, is to follow up on what we agreed, on the commitments that we made to each other.”

Troika envoys have been in Athens this month to check the books and the pace of reforms but made virtually no progress in the tough talks. A senior Eurozone official said earlier in the week that the only deadline for Greece would be the date the country runs out of cash to pay back creditors and keep the state functioning.


43 COMMENTS

  1. When will the world realize that Greece cannot emerge from its ‘crisis’ because all sections of its society are corrupt beyond belief? There are no innocents. Even at this late stage, they must be ejected from the EU and not just the Eurozone

  2. Ted, I agree with you they must be ejected from the euro zone but not the EU. They need protection from Turkey because these filthy animals can and will attack at any opportunity they can. Greece needs the protection of the EU. No matter what we say, they will not exit nor will they allow them to do so. Banks in USA and Europe are all interconnected. Billions of loans and variables are in common all tied up with Greece and hundreds of banks worldwide. They let Greece go under and it will collapse the euro. Germany and the EU will not allow that to prevent the biggest embarrassment in history. The break up of the EU – euro.

  3. USA and Europe can recapitalize their banks and let Greece sink,it will be good example for the other greedy PIIGS like Spain and Italy to back down on their demands for continuous EU cash.If they want to live the Dolce Vita-hey,spend your money,not ours!

  4. I wouldn’t go criticizing the Greek economy when your own parasitic economy is on the verge of either hyperinflation or default American Tedi. And that will be a far worse situation than these problems of Greece can ever be.

  5. An American accusing all Greeks of being corrupt? You are obviously too much of a hypocrite and an idiot to even understand the irony of your false statements.

  6. Greece could actually do better without the depraved European Union. In fact a lot of the problems with the Greek economy are caused by the E.U.’s central bank usury schemes.

  7. Hyperinflation, yes. But no default. We have the Federal Reserve that prints and prints and prints money. Besides, interest rates will remain near zero for the next 4 years supposedly. Horrible if you ask me.
    Anonymous lets be honest if Greece exits and defaults or they continue to stay with these brutal measures, it’s a no win situation either way. They should have defaulted 3 years ago, and by now they might have been competitve. Staying in the euro killed them. Germany wants their money and with interest and foreign nations want the Aegean oil gas energy. Gamiseta a daunting situation.

  8. American has 17 trillion in debt and 650 trillion in other liabilities. China is sick of paying TediUSA’s bills while TediUSA and her husband live the Dolce Vita eating lobster spending Chinese tax payers money as well as spending the money of other Americans.
    TediUSA should be kicked out of America to teach a lesson to others using her logic.

  9. You are 100% correct.On top of this, things are only going to get uglier in Greece because they decided to stick with the euro.The internal devaluation is far from completed and they had not reach rock bottom yet.Euro or Not,Greece is a basket case-they are half a trillion in debt and nave no economy/except tourism,not nearly enough/ to ever pay this back.They will be debt slaves for generations to come.

  10. Default is the best choice because it’s better in the long run, even though it seems painful in the short run. It’s like when a drug addict quits using drugs and has withdrawal symptoms, the withdrawal isn’t enjoyable but at least it saves your life.

    Both Greece and the USA should default. US economy is actually very comparable to Greece except that the US can get away with more wrongdoing because it’s still able to ride on its former superpower status.

  11. Americans seem to already to be mostly debt slaves. If they saved as much as they borrowed for frivolous purposes they might have been able to take over the world by now.

    I don’t condone or agree with the actions of the idiot majorities of people of Greece and the US who are responsible for the problems of the countries.

    Greece should leave the E.U. and use its own debt-free currency, if it had a good government.

  12. USA can never Default,because we print our own currency that happens to be the World Reserve Currency.Greece doesn not. America’s debt is 100% of its GDP /75% of which is held internally /,that means we spend what we earn and pay our bills on time ,unlike Greece.Greece’s debt is near half a trillion/almost triple its GDP/ in hard currency that it has no control of.Only a brainwashed Greek can compare an significant Balkan bankrupt country like Greece to the world’s mightiest economy.And America is still every inch the Global Superpower,don’t be mislead.

  13. China owns insignificant part of our debt,1.5 trillion.Most of America’s debt is held by the US itself in a Global Currency the US prints.That’s means that the US is effectively the only country in the world that can print as much as it needs to cover its obligations, and we can export the ensuing inflation to the rest of the World.Who is going to kick me out of my own country?

  14. You ignore the 650 trillion in other liabilities. Your derivatives liabilities are in the hundreds of trillions.
    Only a brain washed imbecile [your words] with Bulgarian logic like you would try to single out Greece when the problem is structural and fraud related to all of banking in the western world. Problems related to fractional banking reserve and other fraud such as LIBOR and expanding
    derivatives did not start in Greece. I apply the same Bulgarian logic you apply to all of Greece right back at your Bulgarian self. In which case the Chinese are paying for tediusa’s debt while she and her husband
    live the Dolce Vita living off Chinese tax payers and other Americans. Your fellow American’s would be more than happy to kick you out when they see your support of the banking cartel.
    TediUSA being TediUSA nothing new here.

  15. No problem,we will print,baby,print and live off you.Something that I bet Greece could do,but it can not.I am not Bulgarian ,I am an American,sweetie.Have a Good Night and don’t worry too much about America.We will be just fine,trust me.If I was you,I would nbe more worried about bankrupt Greece and that is has nowhere to get cash from.

  16. The EU knew that Greek society was corrupt to begin with. They knew politicians were corrupt to begin with as well. Call me nuts, but this was a set up by the EU Germans 12-13 years ago before Greece joins the euro. Why do I say that ? Follow carefully. A sponge absorbs water and they knew the Greeks would absorb ever amount of loan euro they can get their hands on whether it be legitimately or not. They knew the Greeks would be like sponges to absorb massive loans, credit and feed their corruption ie – politicians with deals etc…….this is what they wanted. The banks on top of that gave out loans left and right feeding the corruption which the Germans knew way in advance the Greeks would never be able to pay that back. Call me nuts anonymous, but this was a SET UP! Greeceshould never have joined. When you feed corruption you first have to know who the. Corrupt are. Hence, the Greeks got suckered into it. Again like a sponge absorbs water they absorbed everything and hence. 500 billion in debt.
    Do I male sense? Yes I do!

  17. I doubt it was an intentional set up.Germany simply knew how corrupt and greedy the Greeks are and they used cash to turn them into debt slaves for generations to come.Germany now effectively owns Greece.The Greek government is a Façade for the Greek electorate,German marionette, they have no power and will do what Germany wants.Privatizattions,lays off,you name it.The proud Greeks sold their own country.

  18. China can’t dump that debt, and they already lost 50% on their US dollar holdings. China dumps that debt their currency will double or triple against the dollar, and no more Chinese exports to the US, then their banks would collapse. In the meantime, others will be picking up those dollar holdings at an alarming rate that the Chinese sold off, at a discounted rate. The Chinese are painted into a corner, buy US dollar holdings to trade with the US, don’t and well, exports to US dry up and Chinese banking system implodes.

    Would be the biggest idiotic mistake in financial history if China actually called in the US debt by selling off their dollar holdings, a huge loss for them, that would transform into a financial catastrophy.

  19. The German Empire also printed its own currency before it lost World War 1. It was a great power, the third most powerful economy in the world (behind the U.S. and Great Britain). Yet it had hyperinflation in its currency during the war and when it lost the war it had to default.

    Then the Empire was overthrown and replaced by the regime of the German Republic (so-called “Weimar Germany”). The old Mark currency of Germany also became trash and was replaced by a new version of the Mark. The Republic was so in debt that it had hyperinflation and possibly the worst economy a country has ever had. The economic problems were solved by Hitler when he took over the Republic, refused to pay the debt owed to foreigners, defaulted and created a new version of the Mark.

    Germany had been a mess during the years of the Republic before Hitler but Hitler repaired the economy and Germany became the second most powerful country in the world by the time of World War II. But Germany lost the war and again became a shambles, having to default again and having to get a new currency again.

    The point is that just because you print your own currency and have a powerful country it means nothing. It can be all thrown away by warmongering and bad policies. Any country can default or have hyperinflation. It doesn’t matter how powerful a country is, how big its ego is, or if the country’s name is “Germany” or “America”.

    It’s also possible to print yourself into hyperinflation to pay for bad welfare policies, which is what the country of Zimbabwe did when it completely ruined its formerly good economy.

    GDP is a worthless economic measurement, I never use it. It includes things such as government spending and taxation as economic production when they’re obviously not. Also has some other problems which I can’t recall off the top of my head anymore.

    Owing money to yourself is called a scam.

    Never paying back your debt and lowering the interest rates to avoid paying the interest of the deficit isn’t called paying your bills on time.

    The USA is so deep in debt that it cannot pay back the principal of the debt and even paying back the interest on the debt at a rate of 0.1%-1% takes up something like 6% of the US budget, if the US had to pay a 20% rate of interest on the debt again (like it used to for some time) its economy would collapse overnight.

    America is the world’s most overrated great power. It’s no longer a superpower, even though it wastes money on its overly large military trying to scare other countries into thinking so.

  20. It’s under $100t in questionable unfunded liabilities for the US, over a period of about 78yrs. Get a grip on yourself, you ate the propaganda, not Tedi.

  21. How the hell is the US going to go into hyperinflation when the trade imbalance is decreasing with the onstream domestic oil increase the past few years and dropping trade gap?

  22. US is too deep in debt because of bad economic policies of President Bush and completely terrible policies of Osama. It can’t pay back any of the principle of the debt and it has trouble paying back the interest (deficit) of the debt even at a 0.1%-1% rate of interest. When the Federal Reserve fraud of buying back its own treasury debts fails and the interest rates raise to what they should be, the US will either have to hyperinflate to pay back the debt or it will have to default.

    Even if there has been some insignificant improvement of the trade balance due to domestic oil, the US will need to do a lot better and get a trade surplus instead of a trade deficit. Trade deficits are a sign of a poor economy and the US has had a terrible trade deficit. Communist China has a bad economy but the US economy is doing so bad that it makes the Chinese look good because the only trade surplus China has is with the US.

  23. They were saying the same in the 80’s, the Soviet Union and Japan are going to crush the US, now its China and India. Something tells me the Soviet Union and Japan had a better chance, and you see how that worked in the end?

  24. I appreciate all the comments and exchange of ideas from all of you- Ted, anonymous, Wally, 68040. Good debate going on. I might not agree with all of you on everything all the time but I respect your comments especially on this article-debate.

  25. Well said! The proud Greeks sold off their country and DESTROYED the beautiful country called Greece. Don’t get me wrong, I love Greece; my ancestral land. What has happened is a disgrace historically. Like I said it before, Greece will rebound back in 2033. Twenty years from now after a generation plus.
    IMO, the Greek government will collapse hopefully within months. I don’t care give it to SYRIZA (the commie) and let them default and exit!

  26. US economy was doing MUCH better in the 80s then it’s now. I believe it had interest rates on treasuries of 5%-20% back then about that time. If today’s treasury interest rates for the US went back up to what they were in the 1980s, it would ruin the US economy. US also had better policies, e.g. no Obamacare and less wars and occupations draining taxpayer and borrowed money.

    So the US economy of today isn’t really comparable to that of the 80s.

    I would not say that China and India will “crush” the U.S. I don’t have a very good view of Communist China, it’s comparable to the Soviet Union in many ways in my eyes. It’s only really doing well compared to the U.S., it has trade deficits with the other Asian countries it trades with. Indian economy I don’t really know much about. India and Pakistan shooting at each other doesn’t seem good for India.

    I suspect that if Saudi Arabia drops the dollar (if it hasn’t already? I’m not sure) and when Obamacare goes into full effect, that would be the beginning of the end of the U.S. I’d say wars with Syria or Iran maybe also might be the straws that will break the camel’s back.

  27. What are you talking about? We had the cold war with the Soviet Union at the time. You know, the arms race with Russia? The cold war costs run into the trillions.

    The US economy took a kick and a half under President Carter, go look at the misery index, took a while to recover from President Peanut Picking Clown.

    Rates go up and down historically, the 20% was due to massive inflation in 1980 thanks to Carter. Rates are going up as we speak, slowly, as they have historically.

    http://media.zenfs.com/en-US/blogs/talking-numbers/Louise-Yamadas-chart-of-222-years-of-interest-rates.jpg

    Here’s a nice chart US vs. EU gdp growth, doesn’t look like the US is the one whose back is going to be broke:

    marketrealist.com/wp-content/uploads/cache/2013/08/USA-VERSUS-EU-GROSS-DOMESTIC-PRODUCT-GROWTH-RATE-2013-09-12/1482758924.jpg

    I say maybe also isn’t probably possibly suspect might be.

  28. TediUSA do you have an anti Greek agenda or are simply a hypocrite? Your comments are always negative to the extreme and very general to assume all Greeks are at fault of their crisis. Since you are of the USA do you not criticize America’s 2008 crisis that left millions of Americans in default, losing their jobs and causing a global crisis? Even to date America has a debt that can never be managed, thinking about paying it off is out of the question. But America has leverage and global economic power to carry as much debt as it sees fit. Greece is a victim of its political class, nepotism, and an EU that really is evolving and was solely interested in growth. No one in the 90’s or early 2000’s would think a crisis like 2008 or even an EU crisis could ever happen. Ignorance is bliss and hedge funds and banks are the ones to make these problems and take advantage of them. Why blame individual regular middle class citizens?

  29. Ah the Cold War (which could be more accurately called the Fake War). Sure I suppose it did cost trillions, blame the US government. Still just the recent Iraq war alone cost the US trillions. And that was one war.

    President Carter was an idiot of a president, I agree. But US hasn’t had any presidents in recent history I would call good.

    According to CNN money current US treasury bond yields are 0.07% for 3 month maturity, 1.35% for 5 year, 2.71% for 10 year and 3.80% for 30 year. That’s very low interest rates compared to what the US had in the 80s.

    By the way I really don’t like the way that graph jumps from 0 to 2 to 5 to 10. It should go 0 to 1 to 2 to 3 to 4 etc. I feel like whoever made that graph was trying to lie with statistics.

    Like I said, I couldn’t care much less about GDP. It’s a bogus measurement.

    All you really need to do is compare the strength of the US dollar with the Euro. The Euro is stronger than the dollar. So therefor the U.S. has a worse economy than Europe, it’s really that simple.

    I know that some delusional people claim that prices rising (inflation) is good and that it’s just great to have a weak dollar and a trade deficit, but these people are just insane. I think one of them would have the common sense to find their way out of a paper bag.

    The facts are that Europe currently has a stronger economy than the U.S., this has been the situation for at least the last couple years. It doesn’t matter how loud some delusional U.S. super-patriots scream about how the U.S. is doing better than Europe, it doesn’t make it so.

  30. The cold war was the fake war? That’s why Greece was part of NATO and just about the rest of Europe that could join did so, cause yea, the cold war was a fake war.

    And Europe had great leaders? Like Schroeder? Chirac? Simitis? Andreas Papandreou? Blair? Give me a break.

    US rates gradually change, low points and high points, they’re gradually increasing coming out of a very low point.

    GDP is a bogus measurement, but you use trade deficit figures, cherry picking to say the least.

    The EURO is overvalued, Germany likes a strong Euro, inflating it while just about everyone else in the EU pays for it and suffers. Look how well a strong Euro worked out for Greece.

    Throughout history the US ran up debts, inflation, then paid them down, its a historical fact. Again you don’t like to look at gdp data and look at historic debt to gdp rates of the US. You just cherry pick and try to make your point, avoiding facts and figures you don’t like.

    I’m not a US super patriot, give me a break, there are just some delusional people who avoid facts and avoid certain data like GDP figures.

    When the US produces double the amount of oil it does now, we’ll see a complete turn around, it’ll happen in the coming years, just keep following the uptick and forecasts. Oh maybe you don’t like forecasts either?

  31. The US trade deficit to GDP is -3, it has been cut in half since 2006. Get real already. The US has on average over 3% gdp growth for the last few years, the EU has been flat. Those are the facts, deal with them.

    Government debt-to-GDP ratio was 92.2% in the eurozone at the end of the first quarter of 2013, compared with 90.6% at the end of the fourth quarter of 2012. In the EU27, the ratio ratio increased from 85.2% to 85.9%.

  32. Greece defaults and then how will they pay for imports of say oil and pharmaceuticals, never mind for food? It’ll be cash upfront, with the drachma. You’ll see prices double and triple for the end consumer in Greece.

    It’s already hard to borrow money in Greece at a reasonable rate, businesses are suffering, the consumer is paying for it, that’s why a few companies registered outside of Greece, easier access to borrowing. Greece defaults, and it’s game over for everyone, businesses and the people, end prices for the consumer will double and triple. Have fun when you’re paying about 3e for a litre of gasoline with the drachma and crying about it. Maybe Greece can produce enough to feed itself too right? Keep dreaming.

  33. Greece is NOT only tourism, think shipping, freighters tankers, it’s the one reason why the EU let Greece in so easily in the first place, a country of 10mil where some of its nationals control 18% or hold an interest in 22% of the worlds merchant marine fleet, by capacity or vessel number. The Greek merchant marine is the largest in the world, and they’re just 10mil people.

  34. Greece needs to default. If it doesn’t default prices will go even higher in the long run and then when it absolutely must default, the default will be much more painful.

    Default is needed to wipe the slate clean. Then Greece can start having a real economy and make a Greek currency which doesn’t rely on the extortion of international bankers.

    What is your point about borrowing money? Who cares? In a good economy the money wouldn’t be loaned into circulation by the government and central banks as it’s now in the totally corrupt international fractional reserve system. It would be granted into circulation for free, no interest or need to be paid back. It could be granted evenly to everyone in the country or the government could even decide to grant more to people who meet certain criteria, such as people starting a business or to White Greek families having a lot of children.

    If Greece created a new Drachma the new currency could be kept very strong compared to the Euro. A Drachma could be worth 10 or even 50 times more than the Euro if it’s managed properly and not allowed to be inflated. I would recommend a gold and/or silver standard for the Drachma to keep the currency in check.

    I believe that Mexico and Argentina defaulted before when they needed to and they’ve survived (although their handling of their economies after the defaults left much to be desired, to say the least).

    Not sure why I’m attempting to have a rational discussion with you when you’ve been spouting a bunch of obvious nonsense. But at least I can refute it.

  35. GDP is a worthless measurement, you’re the one who should get real. The US GDP has been increasing because the government has been spending more and taking in more money from borrowing, and the US dollar has been inflated. I couldn’t care much less about the idiotic GDP.

  36. Some of the European countries were forced to join NATO and didn’t really get any choice in the matter because they were created as puppet states of the victorious World War II western allies. These puppet countries were West Germany (aka Germany), and Italy etc. The other NATO countries were either part of the former allies of World War II, they were afraid of being invaded by NATO or the USSR, or they saw other advantages to joining the NATO alliance.

    So just because there was the NATO alliance doesn’t prove that the so-called Cold War should really be called a war.

    If Europe has bad leaders how does that make US leaders such as Obama and Bush good? That doesn’t follow.

    What’s your point about US rates? The US rates are barely increasing because the Federal Reserve has been suppressing the rates through its treasury bond buy-back scam.

    Not cherry picking, the GDP is useless but that doesn’t necessarily mean the trade figures are. You should prove that the trade figures are useless by their own lack of merit.

    Euro is overvalued? No the US dollar is overvalued if anything. How could a currency be “overvalued” anyway? No such thing is possible. Would you say the Swiss Franc has been overvalued? It’s a good thing to be “overvalued”.

    If Greece used US dollars instead of Euros the Greek economy would be doing even worse from higher prices caused by the overinflated US dollar so therefor your whole point about the Euro being worse for Greece than the Dollar is moot.

    Can you name anytime in recent history the US government paid off all of its debt? What’s your point?

    Delusional people use the GDP figures, not avoid them.

    US produces double the oil? Maybe if Obama gets impeached tomorrow and the US gets a really good president in there somehow who will get rid of all the stupid laws, abolish the Federal Reserve etc.; but I cannot see such things happening personally. This seems like just some over-optimism from you.

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