Bankruptcy

Euro Countries Argue Over Greek Bail Out Terms

By mcbride

Greece needs more bail out money to service its debts. Rich European governments, read Germany, agreed despite discontent from their population.  Now German Chancellor Angela Merkel wants to discuss the banks who loaned large amounts of money to Greece (was that ever a wise thing?) taking a small haircut since they are now guaranteed payment as per the bail out.  (Note that this was the kind of discussion which never occurred here in the US as the government bailed out, for example, Goldman Sachs?s approximately 10 billion dollar direct bail out plus the $12.9 billion indirect bailout which AIG paid to Goldman Sachs — where then Treasury Secretary Henry Paulson was previously CEO.)   Yet a restructure of the debt is being discouraged by some at the European Commission. 

 ?French and German banks lent most to Greek borrowers and were owed $120 billion, according to Bank for International Settlements data released last week.

In Germany, public opinion strongly opposes using taxpayers’ money to bail out Greece.

A European Commission spokesman said a restructuring was not on the agenda in the international bailout talks.

“Let me be very clear - there is not going to be debt restructuring as part of the program. This has been one of the problems that have created uncertainty in the markets,” said Marco Buti, director-general of the commission’s economic and monetary affairs department.

Buti said the talks should be finished in early May. That could permit Greece to obtain as much as 45 billion Euros in emergency loans from euro zone governments and the IMF this year, helping it over a funding hump on May 19, when Athens will need to refinance a maturing 8.5 billion euro bond.?

Here is a link: http://www.reuters.com/article/idUSLDE63P0LU20100427?type=usDollarRpt

Michael

Full post as published by Texas Lawyer Blog on April 27, 2010 (boomark / email).