jeudi 19 mars 2015
Marc to Market: What Greek Officials are Missing: The Link between Sovereignty and Solvency
Posted on 12:07 by nice news
Technical talks between Greece and its official creditors have been bogged down. The purpose of the talks is for the creditors to have a better understanding of the true financial conditions of Greece in light of the disruption caused the election and the subsequent political uncertainty. Tax collection suffered. Economic activity slowed. Deposits have left the banks.
The creditors claim Greek officials have not been forthcoming. Instead, the Greek government is attempting another end-run. Prime Minister Tsipras is betting on a political solution coming from the EU Summit that begins today.
Tsipras is trying to put together a mini summit with Draghi, Juncker, Merkel, and Hollande. Tsipras seeks a political solution to the heightened financial crisis. Greece's debt servicing cots this month, including the payment due by the end of the week is around 2 bln euro. This is more than is due in April and May combined.
While the Greek government has been very slow to enact its pledges to its European partners, it has continued to press ahead with legislation of unclear fiscal impact without consultation. These include subsidizing electricity, food and housing for those in poverty. The Greek government has called this a humanitarian crisis.
The Troika's plan for Greece has failed. It was predicated on macro-economic assumptions that proved too optimistic. Until last summer, Greece had fulfilled its commitments sufficiently for the creditors to extend more assistance.
The observation the some countries, such as Italy, commit a greater share of GDP to debt servicing than Greece has been repeated ad nauseum. What is less appreciated is that sine 2009, spending cuts and tax increases in Greece have reached 45% of household disposable income. In Italy and Ireland, the comparable figure is 15%. The hit on Portugal's disposable income is less than half that of Greece while the comparable
The creditors claim Greek officials have not been forthcoming. Instead, the Greek government is attempting another end-run. Prime Minister Tsipras is betting on a political solution coming from the EU Summit that begins today.
Tsipras is trying to put together a mini summit with Draghi, Juncker, Merkel, and Hollande. Tsipras seeks a political solution to the heightened financial crisis. Greece's debt servicing cots this month, including the payment due by the end of the week is around 2 bln euro. This is more than is due in April and May combined.
While the Greek government has been very slow to enact its pledges to its European partners, it has continued to press ahead with legislation of unclear fiscal impact without consultation. These include subsidizing electricity, food and housing for those in poverty. The Greek government has called this a humanitarian crisis.
The Troika's plan for Greece has failed. It was predicated on macro-economic assumptions that proved too optimistic. Until last summer, Greece had fulfilled its commitments sufficiently for the creditors to extend more assistance.
The observation the some countries, such as Italy, commit a greater share of GDP to debt servicing than Greece has been repeated ad nauseum. What is less appreciated is that sine 2009, spending cuts and tax increases in Greece have reached 45% of household disposable income. In Italy and Ireland, the comparable figure is 15%. The hit on Portugal's disposable income is less than half that of Greece while the comparable
Marc to Market: What Greek Officials are Missing: The Link between Sovereignty and Solvency
Inscription à :
Publier les commentaires (Atom)
0 commentaires:
Enregistrer un commentaire