Friday, July 22, 2011

The Deal II

FT Alphaville has a go at interpreting the terms of the Greek debt settlement. Although it appears to be written in English, it might as well have been written in Greek--or Chinese. For instance:

Now, Greece itself funds the purchasing of the collateral. This is a highly significant point. Nomura’s Nick Firoozye calculated on Friday that around €38bn of collateral will be needed, and thus added to Greek gross debt. There are features in the offer which also reduce gross debt, in the discount bonds we’re about to get on to, and a separate bond buyback. But not by enough.

OOOK ... the Greek debt burden is alleviated by adding 38 billion to the Greek debt burden. Right. By comparison, the US debt ceiling negotiations look almost transparent.

UPDATE: Jean Quatremer, eschewing the financial intricacies, takes the optimistic view that a major political step has been taken toward a more federal EU. I'm not at all sure that this is correct, but only time will tell.

2 comments:

FrédéricLN said...

"OOOK ... the Greek debt burden is alleviated by adding 38 billion to the Greek debt burden. Right. By comparison, the US debt ceiling negotiations look almost transparent."

I guess YOU are the one who has understood most of it.

Our leaders are still hiding behind their finger. (well, how would you translate "se cachent derrière leur petit doigt" ?).

Indeed, the US debt issue is different, and I'm not much more optimistic for the US than for the eurozone.

FrédéricLN said...

On the same issue " the Greek debt burden is alleviated by adding 38 billion to the Greek debt burden."

You will appreciate Georges Ugeux's "Sauvetage européen : la perfusion ne résout rien, mais coutera cher." http://finance.blog.lemonde.fr/2011/07/23/sauvetage-europeen-la-perfusion-ne-resoud-rien-mais-coutera-cher/

(It's Belgian policies, but on Le Monde's website, France is in the scope!).