Breaking: Euro Zone Leaders Clinch Rescue Plan for Greece

[Mira]

Euro Zone Leaders Clinch Rescue Plan for Greece
By STEPHEN CASTLE

BRUSSELS — After weeks of uncertainty that revived fears about the foundations of the euro, European leaders on Thursday clinched a new rescue plan for Greece that could push the country into default on some of its debt for a short period but would also give Europe’s bailout fund sweeping new powers to shore up struggling economies.
At a press conference late Thursday, German Chancellor Angela Merkel confirmed the 109-billion-euro aid package for Greece. According to drafts of a statement that was being discussed earlier in the evening by the 17 euro zone heads of government, banks have agreed to take part in several programs to reduce Greece’s debt, including plans that would mean exchanging existing bonds for new bonds with lower interest rates and longer maturities.
The outlines of the plan seemed particularly bold, dealing with the economic problems of bailed-out Ireland and Portugal as well as Greece, and calling for nothing short of a “European Marshall Plan” to get Greece itself on a road to recovery. The underlying economies of those countries — and others — remain remarkably frail, however, and the plan itself had many hurdles to overcome.

for all of it :

http://www.nytimes.com/2011/07/22/business/global/European-Union-Summit-Meeting-on-Greek-Debt.html?hp=&pagewanted=print

[sinkingfeeling]

1. Maybe we should call them to fix ours.

[golfguru]

2. The "deal" simply means more belt tightening for Greece

There is only one way out for Greece...reduce spending!
There is no magic wand to wave and make your debt disappear.
What this deal will do is postpone bankruptcy for Greece.
Greece can undergo severe belt tightening and avoid bankruptcy ---or---
they can refuse to cut spending and go bankrupt. There is no 3rd option.

[tortoise1956]

6. Here's a link to information about Greece from the OECD

"Organization for Economic Co-operation and Development". It appears to be a relatively apolitical group, as far as I have seen so far.

Anyway, the link contains data from 2009. No wonder the country is going belly-up - the government expenditures are approximately 45% of the GDP, and were for the 5 year period ending in 2009. That is just insane, as well as being unsustainable in the long run. I hope that these loans have a whole bunch of strings attached...

http://www.oecd.org/dataoecd/5/52/44125050.pdf

I can't really talk to most of the data and graphs, my economic savvy is pretty basic. how about some analysis by the real economists on this thread?

[bemildred]

3. Well, I think it would be better if it were just admitted that the debt will never be fully paid. nt

[jschurchin]

4. Lets see if I understand this.

Greece is going to take on more debt to get out of debt. Is that pretty much it in a nutshell?

And if it is, how does that help anyone but the banksters?

[bossy22]

5. simple

it allows greece to finance its operations and not have to do as many layoffs and service cuts to its citizens

[golfguru]

7. Taking on more debt to avoid immediate bankruptcy

and if they do not accompany that with severe spending cuts, Greece will fall into deeper abyss, guaranteed.

Have you heard of any individual, who has maxed out their credit card, then takes on another credit card and spend more, to improve their credit rating or their financial situation? Hah!