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Greek default looms as voluntary debt deal looks set to fail

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posted on Mar, 3 2012 @ 05:55 PM
UK Terrorgraph

European leaders are braced for the eurozone’s first ever sovereign default this week as Greece’s efforts to secure a €206bn (£172bn) “voluntary” bond swap looks increasingly unlikely.

Authorities in Athens are ready to enforce the controversial collective action clauses, or CACs, to impose the restructuring deal on all bondholders as the number of voluntary agreements look set to fall short of the required amount.

Credit rating agencies have warned they will declare Athens to be in default if the CACs are triggered which would be a dramatic culmination to a three-year rollercoaster ride for Athens, the eurozone and global markets.

While the markets have been ready for a Greek default for months, the move could leave Greece and its banks barred from funding from the European Central Bank (ECB). On Monday, Standard & Poor’s declared Greece to be in a state of “selective default” which led to the ECB announcing it would no longer accept Greek government bonds as security for new loans.

"What happens next is unknown territory.

"Greek banks will probably be barred from normal ECB funding and have to turn to the Emergency Liquidity Assistance [provided by the ECB] instead but for how long, we don’t know.”

Greece needs around 95pc of its private creditors to accept the deal by the deadline on Thursday in order to secure its €130bn international bail-out package and avert imminent bankruptcy.

So, what rabbit will they pull out of a hat this time? Anyone have any ideas? Guesses? Wild conspiratorial theories are completely acceptable in this instance. So feel free to speculate - whether they pull a rabbit or we see the country head toward inevitable default. Russia Today are....

Greeсe downgraded to bottom rung as default looms

The wave of downgrades follows the belief by some economists that the Greek rescue plan is bound to fail.

Even after deep austerity cuts that are intended to reduce government debt from 160 per cent to 120 per cent by 2020, Greece still spends more than it receives in tax revenues.

While more austerity could further impoverish Greece as it struggles to dig itself out of a debt abyss, financial analyst Karl Denninger told RT the writing is already on the wall.

“I think it’s inevitable that Greece is going to default. I don’t see how they can get out of this mess other than by defaulting. They have spent the money, they don’t have it, they can’t contract their government spending and economy enough to be able to pay it back, and so the obvious thing to do is to walk away and say ‘so sorry, so sad, we’re not going to pay you.’ The knock-on effects, again, depending on what other nations decide to go down the same road, could be incredibly severe.”

If Denninger’s assessment is correct, Greece very well may be on the path to being the first developed country to default since World War Two.

And if Athens reacts to a default by not paying interest on its bonds, its potential exit from the eurozone could threaten the future of the entire currency union.

Watch this space. I guess we're in for an interesting week.

posted on Mar, 3 2012 @ 06:38 PM
reply to post by surrealist

You have to admit the hilarious irony in the fact that in the past two currency unions now Greece has destroyed it.

They killed the Latin Monetary Union that was founded in the late 1800's by diluting the amount of Gold in their currency, helping collapse the entire monetary union.

But anyways.. it's not just Greece of course. Once Ireland runs out of it's IMF funds sometime in the next 2 years it will be in the same position. Portugal and Italy are in trouble as well ... and so is much of Eastern Europe.

The Euro is doomed to fail... unless a Federalist system takes Europe by the balls. In which case, I feel sorry for Europeans either way..

posted on Mar, 3 2012 @ 07:40 PM
this can't possibly be true, the mainstream media keeps telling me that the crisis is over!

Italy's Monti says Euro Crisis abating

Eu ro Crisis: The Worst is Over

Euro Debt Crisis Easing

Seriously, do they honestly believe us to swallow this crap?
Every day, it seems like more and more people from TPTB are telling us that everything is okay, that the crisis has been averted, that Greece is fine, Italy is okay, Ireland, Spain and Portugal are pretty much off the map in terms of financial drama... hell, even the US deficit isn't being talked about anymore.

Unfortunately pulling the blanket over your head and pretending that the problem doesn't exist doesn't actually make it go away, any more than throwing temporary bailouts at a nation that still, even in a perfect scenario, will be 20% over its GDP to debt ratio in another 8 years' time (and don't get me started on the math used to argue THAT scenario!!!). It's madness.

It's not even true to say that a Greek default "looms". Greece is already defaulting, as we speak... but even when the MSM is forced to report on the issue, they pad out the truth, put it gently, and try to keep people from realizing exactly what is happening here.

Goodbye, Greece... it was nice knowing you.

posted on Mar, 4 2012 @ 07:07 AM
They can always pull this rabbit : war.

Greece defaulting was inevitable since like...forever.But there is always a better option to "save" EU from the aftermath (possibly a very nasty one) of a greek default : start some s.hit in Syria and Iran.Because a s.hit started in Syria alone will not be enough.

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