Angela Calling Update

Well, it seems the EU leadership have finally been able to take a decision on what to lend and what to charge (see original post here). According to initial press reports the German government has decided in principal to participate in loans to Greece at below-market interest rates, dropping its original opposition to the idea. The loans – which are said to total 30 billion euros from the Eurogroup countries at an interest rate of around 5% – will still be priced above the rate charged by the International Monetary Fund, which will also participate in the rescue, and will lend an additional, as yet unspecified, sum, although according to Olli Rehn, EU monetary affairs Commissioner, the IMF contribution is likely to be around 10%. Rehn also said the funds will be available if and when Greece makes a formal request for financial assistance, something it has yet to do.

So now we know how this begins. We have yet to see where and how it will end.

This entry was posted in A Fistful Of Euros, Economics and demography, Economics: Country briefings, Economics: Currencies by Edward Hugh. Bookmark the permalink.

About Edward Hugh

Edward 'the bonobo is a Catalan economist of British extraction. After being born, brought-up and educated in the United Kingdom, Edward subsequently settled in Barcelona where he has now lived for over 15 years. As a consequence Edward considers himself to be "Catalan by adoption". He has also to some extent been "adopted by Catalonia", since throughout the current economic crisis he has been a constant voice on TV, radio and in the press arguing in favor of the need for some kind of internal devaluation if Spain wants to stay inside the Euro. By inclination he is a macro economist, but his obsession with trying to understand the economic impact of demographic changes has often taken him far from home, off and away from the more tranquil and placid pastures of the dismal science, into the bracken and thicket of demography, anthropology, biology, sociology and systems theory. All of which has lead him to ask himself whether Thomas Wolfe was not in fact right when he asserted that the fact of the matter is "you can never go home again".

6 thoughts on “Angela Calling Update

  1. An interesting clause in the statement:

    Financial support for the following years will be decided upon the agreement of the joint programme

    30 billion this year and 30 billion next year, and pretty soon you’re talking about real money.

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  3. The popular blog Zerohedge reports that a Greek official is now saying that Greece will require 80 billion in loans over three years. While Zerohedge, like all blogs (or news sources) is not always spot on, they are usually accurate. How does this affect Germany’s willingness to start down the road of subsidized loans? If the amount doubles already (30 billion from ECU and 10 billion from IMF–now 80 billion) how much will it eventually cost? How much will the German public stand? Don’t know German politics very well(I’m an American)but maybe a German gov’t can be as disdainful of public opinion on an important issue as current US gov’t and get away with it.

  4. Gary Poteat says,

    “The popular blog Zerohedge reports that a Greek official is now saying that Greece will require 80 billion in loans over three years.”

    Huh? The director of the Greek Public Debt Management Agency (bless his heart) said a week or so ago that the borrowing needs were approximately:
    2010: 55 billion euros (total)
    2011: 60-65 billion euros
    2012: 60 billion euros

    The existing debt and interest payments for 2010-2012 are in the order of 40 billion euros per year.

    Perhaps the official meant the needs were 180 billion euros.

    yiannis

  5. They used to say:
    2 Greeks, 3 opinions
    now this becomes:
    2 macroeconomists, 30 opinions

    Bullshit. Everything you hear about the Greek crisis is bullshit. There is an everyday worldwide media war of conflicting interests. Some are trying to sell their debt, others to get their capitals and interests back and others to sell more loans.

    The 21st century. The century that everybody will get broke. The bullshit century.

    Every country in the world have huge debts. In essence the whole world oughs money. To whom?

    To the extraterrestrials?

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