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EU claims worst of Greek financial crisis is over

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We are now treated to simultaneous announcements by EU finance ministers that the worst of the Greek financial crisis has passed, but/and Greek banks need additional billions of capital injection to compensate for foreign swap losses.

The solution of liquidity and debt problems cannot co-exist with a need for more and more money. This is happy talk. Everything is OK now, but we just need a few more billion to settle everything down? The fact that banks were "expected" to suffer losses does nothing to lessen the impact of such events - or does it? Does EU still claim success if several major Greek banks are nationalized to hide the losses?


To us this seems madness on a planetary scale.


Perhaps our readers have other views?



Greek government blames tax evasion for economic collectors have quotas. Are tax quotas coming to the US?

Greek tax officials are under pressure to perform after international lenders told Athens it needs to improve its inefficient tax administration to receive further bailout funds.

The government said on Thursday it would replace several heads of local tax offices who did not meet their revenue targets.

But efforts to crack down on tax evasion have produced few results so far. Revenues have been trailing targets amid the country's severe, austerity-fuelled recession.



  Everything must be OK now in Greece?

"The government in Athens knows that it cannot financially overburden other eurozone countries. So they are pushing forward with the reforms," Schaeuble said....

"I am certain that France will fulfil its obligations," the German minister said. "The (Greek) government is very much aware of the fact that every country has to permanently pursue reforms to remain competitive."

The International Monetary Fund on Wednesday repeated concerns about France falling behind Spain and Italy, where market pressure has forced the governments to decrease labour costs and make deeper reforms.


The 50 billion euros earmarked for Greek banks in the country’s bailout program “is appropriate to cover the recapitalization and restructuring costs of the Greek banking sector,” the central bank said. “It is expected to remain adequate under reasonable levels of economic uncertainty.”


"The Greek banking sector was severely hit over the past few years by the combined effects of the restructuring of Greek sovereign debt and adverse economic conditions, both of which affected banking assets and deposits," the central bank's report explained.

Its assessment of the bank's recapitalisation needs over the 2012-2014 period was "conservative" it said. A key factor behind the needs was a restructuring of Greece's sovereign debt, it said, which hit Greek banks hard because they held large amounts of sovereign bonds.

The banks were also expected to suffer losses on both domestic and international loans.


At stake is whether National Bank (NBGr.AT), Eurobank (EFGr.AT), Alpha (ACBr.AT) and Piraeus (BOPr.AT) will remain privately run or end up nationalized.

Greece and its international lenders have earmarked 50 billion euros from the country's 130 billion euro bailout to recapitalize the four systemically important banks and wind down others deemed not viable.

Last modified on Saturday, 29 December 2012 22:50

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