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Juncker calls for 'soft restructuring' of Greece's debt | EurActiv

Jean-Claude Juncker, Luxembourg prime minister and Eurogroup chair, called yesterday (17 May) for a "soft restructuring" of Greece's debt provided that the country would put in practice deep reforms and a privatisation "exceeding the imagination".

Juncker said that the case of Greece was "beyond comparison" with Ireland and Portugal, the two other eurozone countries to have benefited from an EU/IMF bailout.

Speaking only hours after chairing a eurozone meeting which approved a three-year, 78-billion-euro emergency loan programme for Portugal, Juncker admitted that a large part of the ministerial meeting had been in fact dedicated to discussing the situation in Greece.

Juncker was speaking at the inauguration of a new Brussels think-tank, the Government of the Future Centre, led by former Bulgarian Commissioner Meglena Kuneva. The think-tank is supported by Accenture, a global management consulting company, the College of Europe and the Lisbon Council, an economic think-tank and policy network.

by afew (afew(a in a circle)eurotrib_dot_com) on Tue May 17th, 2011 at 03:20:59 PM EST
[ Parent ]
I cannot believe the EU is trying to turn Greece into a failed state before our eyes.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Tue May 17th, 2011 at 04:36:59 PM EST
[ Parent ]
Failed, yes.

The road of excess leads to the palace of wisdom - William Blake
by talos (mihalis at gmail dot com) on Tue May 17th, 2011 at 10:15:37 PM EST
[ Parent ]
NYTimes: Money Troubles Take Personal Toll in Greece (via Google)
These struggles have again made Greece an urgent matter for the 17-nation euro zone, whose finance ministers are to meet on Monday to discuss Greece and the debt crisis that has defied Europe's yearlong efforts to contain it. On the table will be whether Greece, which is now projected to miss its deficit target by as much as two percentage points of G.D.P. this year, will be granted another round of loans totaling as much as 60 billion euros, and what further budget cuts would be required in return.

But there is serious debate about whether this kind of prescription -- subjecting Greece to more cuts and sacrifice in order to justify a second installment of funds from a reluctant Europe -- is the right one.

This form of remedy violates two basic economic principles, according to Yanis Varoufakis, an economics professor and blogger at the University of Athens. "You do not lend money at high interest rates to the insolvent and you do not introduce austerity into a recession," he said. "It's pretty simple: the debt is going up and G.D.P. is going down. Have we not learned the lesson of 1929?"

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Wed May 18th, 2011 at 02:37:21 AM EST
[ Parent ]
Have we not learned the lesson of 1929?"

Yes, they have. This time they have eliminated the Keynesians from the debate entirely

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Wed May 18th, 2011 at 07:03:14 AM EST
[ Parent ]
To be fair: What won the debate for Keynes was the war. It made the argument that mass unemployment was a fact of life untenable.
by generic on Wed May 18th, 2011 at 07:23:09 AM EST
[ Parent ]
Eurointelligence Daily Briefing: Juncker is confusing everybody with his loose talk on "reprofiling"
Reprofiling - the exchange of short-term debt for long-term debt - has emerged at the catchphrase in the Greek crisis resolution; Jean-Claude Juncker makes reprofiling conditions on a successful Greek privatisation programme; Ecofin does not address the question that a reprofiling would constitute a credit event, and would land Greece with a C-rating, and its banks with no access to ECB collateralised lending; Christine Lagarde opposes reprofiling, as does the ECB; Reuters reports that the word reprofiling does not exist in finance, but it is a well known alternative term for a nose job; El Pais says the idea of a restructuring is now becoming accepted among the EU policy makers; EU insists on cross-party consensus in Greek debt talks; Bild Zeitung reports that the privatisation of land in Greece is hard, considering the absence of a land registry; Martin Wolf pays tribute to DSK, and says the new IMF chief, probably a European, will face a very tough job in keeping the lid on the eurozone crisis; Wall Street Journal reports that Timothy Geithner effectively called for DSK's resignation; Bild reports that Angela Merkel is looking for a German candidate; we think it is going to be Lagarde;Sarkozy's electoral fortunes are improving in the wake of the DSK affair; Ireland asked the European Commission to extend its bank guarantee scheme; the French media welcome Mario Draghi's nomination to the ECB, while the Germans remain cautiously sceptical; King Albert of Belgium, meanwhile, has asked the French-speaking Socialist leader Elio di Rupo, to try to form a government.
(Google link)

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Wed May 18th, 2011 at 02:24:30 AM EST
[ Parent ]
Recall: Straight Talk From Juncker by afew on February 12th, 2010.

Economics is politics by other means
by Migeru (migeru at eurotrib dot com) on Wed May 18th, 2011 at 02:26:11 AM EST
[ Parent ]


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