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.
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.
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:
With less than 20 days left until the Greek general elections, bluffs, counterbluffs, speculation, and propaganda are running wild, all of which, however, can be reduced to the following simply question: who has the leverage?
Brussels responded with barely-contained fury Thursday to the IMF’s claim that it had sacrificed Greece to save the euro from debt crisis contagion.
European Economic and Monetary Commissioner Olli Rehn defended the handling of the debt crisis, accusing critics of dumping “dirty water” on its efforts.
Everything that exists, taught Aristotle, is the same as itself, and is different from everything else. During the hot years of the euro crisis, leaders of the most troubled economies sought desperately to remind investors of this eternal truth. Portugal, insisted its politicians, was not Greece.