May 10, 2015
Today, more the euro zone finance ministers again about the debt crisis in Athens. The path of Greece in the period crisis began with the bailout of 2010. Our author Stephan Kaufmann stands out for there.
The opinion was short and sweet: “EU Commission, European Central Bank and International Monetary Fund share the common goal of supporting Greece this, financial stability and growth to achieve”, shared with the institutions last Wednesday. All three institutions worked hard “to achieve concrete progress.” At the Euro Group meeting this Monday
occasion of this demonstration of unity were media reports according to which the Commission, ECB and IMF are by no means unanimous. The IMF urge a haircut, the others were against it, they said. That would not be surprising.
Just five years ago, when the Greek crisis erupted, IMF officials favored a haircut as a condition for loans. But he has not been granted. With consequences: “Today is a broad consensus among economists that Greece’s debt would much sooner have to be restructured,” said the US journalist Paul Blustein. “The interests of the Greek people probably sacrificed” and saved – instead, but were creditors Athens – the banks.
In a study for the Canadian Institute Cigi Blustein traces the series of official and secret meetings from March to May 2010, which led to the first loan package for Athens exactly five years ago – a package , with each party pursued their own goals and prepared the ground for Greece’s crisis, which continues to this day
. 11th December 2010, Brussels: special summit to combat the crisis
The EU leaders meet at a special summit in Brussels. For weeks Greece is under pressure from the financial markets. The country’s debt reached 120 percent of its economic output. Investors are demanding higher interest rates from Athens. Thus Greece is facing insolvency. It is feared that a collapse could trigger a “Lehman moment” – ie a crash of the financial markets, as happened after the collapse of US investment bank Lehman Brothers in 2008. This could threaten the stability of the entire euro zone.
This brings the EU in a dilemma, since the countries themselves can not help according to current contracts. The EU Member States therefore agree in Brussels first principle on giving Greece support. Specific financial assistance but still refused and instead urged Athens to comply with “ambitious” savings goals. European Commission and European Central Bank (ECB) should closely monitor the efforts. Yet on 24 March 2010 emphasized the German Economics Minister Rainer Brüderle (FDP), aid to Greece was “the wrong signal”
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25th In March 2010, Brussels: loan package decided
The Greek crisis intensified rapidly and threatens to spill over into other euro countries. The European Union therefore agrees in Brussels to provide loans for Greece, with which it can make its debt service at the banks. French President Nicolas Sarkozy urges the EU to offer a large sum in order to reassure the financial markets.
The German government holds them, however little. At the end of Berlin prevails: Athens only gets a smaller package – 20 billion euros – and that only in an absolute emergency and under the condition that the Greek crisis threatens the stability of the euro area
In addition, brought on board at German request of the International Monetary Fund (IMF). Lange had parts of the ECB and the French government resisted to avoid giving the impression that Europe can not solve its problems. But the federal government insists on the participation of the IMF, as it has experience in debt-ridden countries. In addition, the IMF applies – unlike the European Commission – as a politically neutral and can be hard to occur towards the government in Athens
. 20th April 2010. Athens: Troika in Athens for the first time
The infamous Troika meets for the first time in Athens: The Dane Poul Thomsen represents the IMF, the European Commission sent the Belgian economist Servaas Deroose that ECB Germans Klaus Masuch. The Troika should make the Greek government austerity and reform guidelines and monitor their compliance. The IMF is in this case in an unusual situation: Normally it may prescribe a crisis country’s policy. In particular, he says the Central Bank of the country, what she has to do. In Athens, however, Thomsen sits side by side with the ECB and other lenders who have their own ideas.
So they argue for tougher austerity measures for Athens as the IMF. But outside the Troika preserves its unity until today. The IMF accepted his junior status of self-interest: Between 2003 and 2008, the global economy ran smoothly, the fund ran out of crisis situations, and in the US voices were raised to abolish him. The Greece-loans are an opportunity to show its importance to the IMF. Here to be left out, would be for the Fund was “fatal” admitted IMF chief Dominique Strauss-Kahn said US journalists Blustein.
On 20 April 2010, the Troika for the first time in Athens. Photo: RTR / icon image
24th April 2010. Washington: No haircut
The Greek Finance Minister Giorgos Papaconstantinou flies to Washington, where he meets the men who hold the fate of his country in his hands: the head of the International Monetary Fund (IMF ), Dominique Strauss-Kahn, ECB chief Jean-Claude Trichet and EU Monetary Affairs Commissioner Olli Rehn.
You may point out that Athens is to be supported. At the same time, however, clarified: A haircut is excluded. Although there are within the IMF loud voices that hold the debt of Greece, much too high and a prior reduction necessary. But especially from Trichet defends.
feared is that investors lose in the financial markets through a waiver confidence not only in the creditworthiness of Athens, but to the whole euro zone. One reason for this is that among the major creditors Athens are many banks in the euro zone – French Institute have 60 billion euros in the fire, German 35 billion. In 2013, an IMF paper notes: “A debt restructuring would have been better for Greece, but was not acceptable for the euro partners.”
26th April 2010. Athens: Controversial austerity
Greek Finance Minister Papaconstantinou flying back to Athens to negotiate with the IMF, ECB and European Commission. The Troika issues to the exterior continue to be closed. Internally, however, there is considerable disagreement about the requirements to be met by Greece in return for the planned loans. The ECB and the Commission demand – also under pressure from the federal government – from Athens the toughest austerity program that has ever undertaken an industrial country. In addition, labor market flexibility and the emasculation of the unions to reduce wages to a competitive level.
Although would leave these measures shrink in 2010 and 2011 the Greek economy. After that, however, the adoption of the ECB and the Commission, the growth return again, because declining debt and wages are said to have a “trust effect” to the investors. The question the economists at the IMF, however. They plead for less stringent requirements on Greece, fearing that the austerity program can break the demand in Hellas and the program thus makes itself
.. 9 May 2010, Washington: IMF changed statutes
In Washington to meet the IMF’s directors to discuss the Greece package. There are resistance: Because of the fund’s share of the package of 30 billion euros is unusually high – so high that according to the IMF Statutes must be “very high probability” one that the credit of Greece ‘sustainable’ debt makes. However, this is doubtful, partly because the is no previous debt restructuring. The assumptions of the Troika were “overly friendly”, criticizes the Swiss Rene Weber, and the Argentines Pablo Pereira warns Greece could “worse off” at the end.
But the IMF directors from Europe keep it. At the end of the Fund changed surreptitiously his statutes, which he had given to the Argentine bankruptcy in 2001 and that should avoid that the IMF a country borrows money, which can not repay. According to the report of the IMF in May 2010, the sustainability of the Greek debt is indeed only given “broadly”. Nevertheless, “the support of the Fund at the proposed level is justified in view of the high risk of contagion in the international system”
. 10th May 2010, Brussels: rescue stretched
On May 1 will be announced the loan program for Greece of around 110 billion euros. But that’s not enough – Euro group chief Jean-Claude Juncker speaks of a “globally organized attack against the euro”. The EU calls therefore once more for a special summit on Saturday May 8 To user uploads opening on Monday the agreement will be announced: In addition to Greece loans to protect the monetary union speculative attacks, a European rescue package of 500 billion euros.
But even that is not enough: In the following months, Ireland, Portugal, Spain and Italy come under pressure, until 2012, the ECB calmed the situation with a comprehensive warranty. The euro rescue is for the time being successful. At the end of the calculations of the creditors in Greece do not go on. While under the use of 230 billion euros a default of the country will be avoided.
2012, a haircut is granted, but it comes too late. Instead of a short recession Greece experienced a four-year crash, its economic output falls to 2014 by one quarter, the unemployment rate rises to 28 percent, the debts are now at 180 percent of economic output.
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reasons for this disaster are the one in Greece, but also in the refusal of an early debt restructuring. “Greece was the first rescue case,” said Wolfgang Piccoli by the US consulting company Teneo in the Greek newspaper Kathimerini. Thus the country was the “guinea pigs” become that had to pay for all his mistakes inexperienced supervisors.
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