I'm sure that in this forum there are many smart people and that they have some good idea how to resolve the "Greek Problem".
In my view the actual situation is the following:
1. Greece has debts of about 117% of there GDP
2. This year they will increase there depts of another 13,6% of there GDP
3. In the moment there bonds have an inverse termin structural line (the 2 year bonds have a yield of 10% and the 10 yr bonds "only" of 7%- so the markets expects a bankruptcy of the greek state in the near-time)
4. The IMF and the EU has constructed an aid-package if about 45 bln €, from wich the IMF will borrow 15 bln € and the other EU countries will borrow the remaining 30 bln €.
In my view the aid package will only delay a bankruptcy, because I don't think that the greeks a realy able to decrease there debts and so I expect that in 3 yrs there debts will rise to about 130 % of there GDP-and so they have to declare bankruptcy in 3 yrs (of course than the EU will not let fail Greece so they will borrow them more money). So in my view the aid-package will NOT resolve the greek debt problems.
I think, that it would be better when the Greece state now makes a debt restructuring for decreasing there debts.
The consequences of a debt restructuring would be the following:
1. The creditors lose much money - maybe about 150 bln € (as I know german banks have about 30 bln in greece bonds and when the lose 50% of that, they will lose together 15 bln €, I think that the banks in the last months made enough money to manage this loss- and overall I'm sure that it would be better for Germany to help their banks, if really necessary, after a bankruptcy of greece with 8 bln (the remaining 7 bln should really not be a problem for the banks to manage it), than to help greece now with 8,4 bln and maybe another 20 bln in the next yrs).
2. Greece would reduce there debts of about 60 % of there GDP
3. Greece could make a serious restart.
4. The international investors would new evaluate the risk of a national bankruptcy and the yields of Portugal, Spain and Ireland would increase.
Of course the risk of a domino effect, and so the pressure to other states would increase, but I'm sure that it's necessary that the investors have to re-evaluate this risks. The aid-package of the EU is manipulating the risk-aversion of the investors and so the risks of a new financial crises, in the next years, rises (I think, that the financial crises of the last years was intensified by a wrong risk-aversion of the investors/banks- the meant that there were no risks...).
What means that for the markets?
I think, that on the fx markets the eur would fall another 10-20% - but this will help the other EU countries with there exports.
The yields on the bond markets will rise and so the refinancing of the debts gets expensive and so other states have to build some cost-cutting-programms and under that pressure they will do reall much to reduce the debts.
The international stock markets will fall initially, but the will not crash.
What do you think of these scenario, maybe someone has another idea to manage the greek problem.
Any idea is welcome.
In my view the actual situation is the following:
1. Greece has debts of about 117% of there GDP
2. This year they will increase there depts of another 13,6% of there GDP
3. In the moment there bonds have an inverse termin structural line (the 2 year bonds have a yield of 10% and the 10 yr bonds "only" of 7%- so the markets expects a bankruptcy of the greek state in the near-time)
4. The IMF and the EU has constructed an aid-package if about 45 bln €, from wich the IMF will borrow 15 bln € and the other EU countries will borrow the remaining 30 bln €.
In my view the aid package will only delay a bankruptcy, because I don't think that the greeks a realy able to decrease there debts and so I expect that in 3 yrs there debts will rise to about 130 % of there GDP-and so they have to declare bankruptcy in 3 yrs (of course than the EU will not let fail Greece so they will borrow them more money). So in my view the aid-package will NOT resolve the greek debt problems.
I think, that it would be better when the Greece state now makes a debt restructuring for decreasing there debts.
The consequences of a debt restructuring would be the following:
1. The creditors lose much money - maybe about 150 bln € (as I know german banks have about 30 bln in greece bonds and when the lose 50% of that, they will lose together 15 bln €, I think that the banks in the last months made enough money to manage this loss- and overall I'm sure that it would be better for Germany to help their banks, if really necessary, after a bankruptcy of greece with 8 bln (the remaining 7 bln should really not be a problem for the banks to manage it), than to help greece now with 8,4 bln and maybe another 20 bln in the next yrs).
2. Greece would reduce there debts of about 60 % of there GDP
3. Greece could make a serious restart.
4. The international investors would new evaluate the risk of a national bankruptcy and the yields of Portugal, Spain and Ireland would increase.
Of course the risk of a domino effect, and so the pressure to other states would increase, but I'm sure that it's necessary that the investors have to re-evaluate this risks. The aid-package of the EU is manipulating the risk-aversion of the investors and so the risks of a new financial crises, in the next years, rises (I think, that the financial crises of the last years was intensified by a wrong risk-aversion of the investors/banks- the meant that there were no risks...).
What means that for the markets?
I think, that on the fx markets the eur would fall another 10-20% - but this will help the other EU countries with there exports.
The yields on the bond markets will rise and so the refinancing of the debts gets expensive and so other states have to build some cost-cutting-programms and under that pressure they will do reall much to reduce the debts.
The international stock markets will fall initially, but the will not crash.
What do you think of these scenario, maybe someone has another idea to manage the greek problem.
Any idea is welcome.
Pecunia non olet
