AP - Europe's bailout fund has enough money to cover potential rescues of both Portugal and much larger Spain, while Greece doesn't need a debt restructuring as some investors fear, the head of the fund insisted Thursday.
LONDON — Cyprus’ bailout deal is the fifth agreed on so far in the 17-strong group of European Union countries that use the euro since the debt crisis began in late 2009.
Here’s a look at the rescue programs:
EU and IMF rescue auditors launched a new probe in Greece on Tuesday amid a rising eurozone crisis over talk of debt restructuring and a second bailout.Experts from the European Union and International Monetary Fund will decide if Greece merits a critical new slice of rescue funding, just as a top official at the European Central Bank (ECB) warned that debt default or restructuring would hit the entire eurozone.A restructuring of debt would put Greece's banking system "on its knees", the head of the Italian central bank Lorenzo Bini Smaghi told Italian daily La Stampa.
By Peter Boone and Simon Johnson. This is a long post, about 3,500 words.
In 2003 the International Monetary Fund published yet another internal review with an impressively dull title “The IMF and Argentina, 1991-2001”. But hidden in that text is explosive language and great clarity of thought – in essence, the IMF staff belatedly recognized that their decision to repeatedly bailout Argentina from the mid-1990s through 2002 was wrong:
Brussels (AFP) - Fresh talk of a third international bailout for debt-hit Greece spread through European capitals on Tuesday, despite Brussels insisting it was far too soon to start discussing any new rescue package.
Will Greece Burst the Bond Bubble? For over 30 years, sovereign nations, particularly in the West have been buying votes by offering social payments in the form of welfare, Medicare, social security, and the like. When actual bills came due to fund this stuff, Governments quickly discovered that current tax revenues couldn’t cover it (see the image below)… so they issued sovereign debt to make up the difference. And so the global bond bubble was created.
The big news out of Europe is whether or not Cyprus will be a template for future bailouts. Having seen that issues like personal property, rule of law, and democracy got thrown out of the window in Cyprus as soon as things got hairy, investors and depositors throughout Europe are panicked as to whether they will be targeted next when the next European Domino starts to fall.
At long last the ISDA has agreed that Greece in in default, and that default constitutes a "credit event".
Bloomberg reports Greece Deal Triggers $3B in Default Swaps.
Greece’s use of collective action clauses forcing investors to take losses under the nation’s debt restructuring will trigger payouts on $3 billion of default insurance, the International Swaps & Derivatives Association said.