IMF: austerity measures would still leave Greece with unsustainable debt

[friendly_iconoclast]

Source: Guardian(UK)

Greece would face an unsustainable level of debt by 2030 even if it signs up to the full package of tax and spending reforms demanded of it, according to unpublished documents compiled by its three main creditors.

The documents, drawn up by the so-called troika of lenders, support Greece’s argument that it needs substantial debt relief for a lasting economic recovery. They show that, even after 15 years of sustained strong growth, the country would face a level of debt that the International Monetary Fund deems unsustainable.

The documents show that the IMF’s baseline estimate – the most likely outcome – is that Greece’s debt would still be 118% of GDP in 2030, even if it signs up to the package of tax and spending reforms demanded. That is well above the 110% the IMF regards as sustainable given Greece’s debt profile, a level set in 2012. The country’s debt level is currently 175% and likely to go higher because of its recent slide back into recession.

The documents admit that under the baseline scenario “significant concessions” are necessary to improve Greece’s chances of ridding itself permanently of its debt financing woes.

Read more: http://www.theguardian.com/business/2015/jun/30/greek-debt-troika-analysis-says-significant-concessions-still-needed

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Grexit seems inevitable

[msongs]

1. the TPP crowd will not be happy til it has strangled every human on the planet nt

[jalan48]

3. A TPP taste of things to come.

[magical thyme]

2. well effing duh.

It took them how many years to figure out that "austerity" kills GDP and economies faster than you can pay off debt? Asshats.

[Erich Bloodaxe BSN]

4. But notice that last sentence. They think the solution is to demand even MORE concessions

on top of austerity. They haven't figured out squat.

[magical thyme]

5. I think they're saying that concessions would have to be made by the Troika

if you read everything up to the last sentence, they're saying that even with strong growth, the debt would be unsustainable.

It is the Troika that has refused to make concessions.

[JDPriestly]

6. As I recall, Angela Merkel grew up in East Germany before the wall came down.

I think that explains her failure to understand the economic strangle that austerity imposes on a country like Greece.

Greece needs to figure out how to make its sunshine work for it.

Because sunshine and lots of Mediterranean around it, ancient historic sites and wonderful people are about all it can rely on to pull it out of its mess.

But there is one more thing that Greece has: a strategic geographical location that has more than once been very valuable in times of conflict. Of course, an impoverished Greece from which young people have emigrated to find work and a decent standard of living is very vulnerable to what some would call invasion and others might call immigration. Northern Europe is being very stupid.

[cstanleytech]

8. Sure austerity sucks JD but I am not sure if they have many options here

except to make some cuts especially if they literally don't have the money to even pay their workers and their location is not as strategically important I suspect.

[JDPriestly]

10. Their creditors need to forgive their debts.

Watch his video, please, please.

http://www.democraticunderground.com/1017275598#post1

Greece can just go bankrupt and tell the bankers and Northern Europe to deal with their losses because they took the risks. That's what Greece can do.

The creditors would be wiser to make a deal and save what they can from their investments. One of the creditors at one time was Carlos Slim one of the richest people in the world. France was at one time one of the creditors. The story is about a bunch of slimeballs giving loans that they should have known could not be paid back. It is the story of corruption of the sleaziest kind at the top of the oligarchy.

[Wernothelpless]

11. They need to forgive most of the debt ...

If they end up with .25 on the dollar it will be a more realistic number ....

[JDPriestly]

12. Yes.

This video explains it.

http://www.democraticunderground.com/1017275598#post1

The way the debt has been passed around from creditor to creditor reminds me of the children's game "Hot Potato." Finally, that potato will be dropped. It's all a matter of who is going to be caught with burned fingers.

[Wernothelpless]

13. Spent many years doing business with developers ...

bankers, contractors ...

Eventually it's the lender who takes the bath ...

The body is worth more alive than dead and .25 cents on the dollar is probably all they realistically should
have made to begin with ...

same song, next verse ... come on, boys ... play ball ...

[JDPriestly]

14. Yes, and more yes. That's what they teach you in school. And that's how it works.

Let the lenders beware. When you lend money, you become a sort of a partner or shareholder in whatever or whomever you lend it to. You take too big a risk, you lose along with the borrower.

[Wernothelpless]

19. They know that going in ...

And if they make more money on their bad deal than that's fine too ... less and they'll cry and scream and act like they're getting robbed when they know they're the ones who set the project up to fail so they could either take it over for resell or refinance ...

They usually control the middlemen as well, who are working with them, so they control the outcome ...

All this drama is a waste of time and everybody knows it ..

Well, except the poor people on the bottom who always get squeezed, because the banksters also own the politicians ..

There are no consequences for their behavior ... A tall tree and a short rope would make many banksters sit up and take notice ... at least long enough to put on a clean shirt before being strung up ...

A couple hundred years ago our forefathers would have hung the carpetbaggers (like Jamie Dimon) and long ago moved on to a picnic and barn dance ... these days we talk everything to death ...

Organized crime rules ... ok, I'll grab my pipe and go back to my rocking chair ...

[cstanleytech]

15. Forgive or arrange for one long ass repayment plan with zero interest rate.

[JDPriestly]

16. Also an alternative.

But extreme austerity does not work, not even in a country that relies for some of its income on tourism from rich countries.

[cstanleytech]

17. True to a degree but they also keep spending more money than they are taking in either, there comes

a point when cuts to things are needed.
Perfect example here in the US is our military spending is way overboard and its needs a major haircut.

[appalachiablue]

9. Good points esp. the history and people. The geography is tricky and agree that it could attract

people that No. Europe might become annoyed about. Then again they have to realize this possibility, look at southern Mediterranean France, not to mention Spain prior to 1492. Bizarre.

[cstanleytech]

7. Translation the lenders will be losing some money.

Sucks but it is what it is and the lenders need to face up to the fact that they won't be getting all their money back and they need to bite the bullet and take the hit.
After all lending money comes with risks one of which is that the party might not be able to repay all the money.

[Recursion]

20. The private lenders have all lost their money already

The question now is whether European taxpayers are going to lose money from the ECB loans.

[cstanleytech]

21. I would say its a good bet that they are going to atleast lose some of it.

[Blue_Tires]

18. How to explain in one gif, why the loans never helped the Greek people

https://twitter.com/alepouda/status/614451083004485634