Things More Worrisome than AGW: “Bailout” Takeovers

Source: Financial Times

Greece set for severe bail-out conditions

By Peter Spiegel in Brussels, Quentin Peel in Berlin and Ralph Atkins in Frankfurt

European leaders are negotiating a deal that would lead to unprecedented outside intervention in the Greek economy, including international involvement in tax collection and privatisation of state assets, in exchange for new bail-out loans for Athens. [SPPI note: See book quote below]

People involved in the talks said the package would also include incentives for private holders of Greek debt voluntarily to extend Athens? repayment schedule, as well as another round of austerity measures.

Officials hope that as much as half of the ?60bn-?70bn ($86bn-$100bn) in new financing needed by Athens until the end of 2013 could be accounted for without new loans. Under a plan advocated by some, much of that would be covered by the sale of state assets and the change in repayment terms for private debtholders.

Eurozone countries and the International Monetary Fund would then need to lend an additional ?30bn-?35bn on top of the ?110bn already promised as part of the bail-out programme agreed last year.

Officials warned, however, that almost every element of the new package faced significant opposition from at least one of the governments and institutions involved in the current negotiations and a deal could still unravel.

In the latest setback, the Greek government failed on Friday to win cross-party agreement on the new austerity measures, which European Union lenders have insisted is a prerequisite to another bail-out.

In addition, the European Central Bank remains opposed to any restructuring of Greek debt that could be considered a ?credit event? ? a change in terms that could technically be ruled a default.

One senior European official involved in the talks, however, said ECB objections could be overcome if the rescheduling was structured properly.

Despite the hurdles, pressure is building to have a deal done within three weeks because of an IMF threat to withhold its portion of June?s ?12bn bail-out payment unless Athens can show it can meet all its financing requirements for the next 12 months.

Officials think Greece will be unable to return to the financial markets to raise money on its own in March ? as originally planned in the current ?110bn package ? meaning that the IMF is now forbidden from distributing any additional cash. Without the IMF funds, eurozone governments would either be forced to fill the gap or Athens could default.

To bring the IMF back in, the new deal must be reached by a scheduled meeting of EU finance ministers on June 20.

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SPPI Note:

Excerpt from The Creature from Jekyll Island by G. Edward Griffin:

“Another dimension to the [bailout] game…is the conscious and deliberate evolution of the IMF/World Bank into a world central bank with the power to issue a world fiat currency. And that is an important step in an even larger plan to build a true world government within the framework of the United Nations.

“Economically strong nations are not candidates for surrendering their sovereignty to a world government.  Therefore, through “loans” that will never be paid back, the IMF/World Bank directs the massive transfer of wealth from the industrialized nations to the less developed nations.  This ongoing process eventually drains their economies to the point where they also will be in need of assistance.  No longer capable of independent action, they will accept the loss of sovereignty in return for international aid.”  (pp. 131-132)

You decide…