Thursday, October 27, 2011

Let's make a deal: Deal Done!



It looks like the European version of let's make a deal has garnered a stop gap measure to rescue the lot. Hopefully. By saving Greece, the believe is that the rest will be saved from a similar fate.

A 50 pct cut, to reduce Greek debt by 100 bln euro
Oct 27 (Reuters) - Private owners of Greek bonds will accept a 50 percent writedown on their investment, enabling both a 100 billion euro cut in Greece's sovereign debts and allowing a new Greek programme of aid of 100 billion euros, German Chancellor Angela Merkel said on Thursday.
So, this is just like an American style 'structured bankruptcy, except for one thing. After writing off one billion in debt for the Greeks, Europe will turn right around and give them another billion. Now just remember, even with the forgiving of debt and the extra cash, Greece must pare down to the bone it's socialist system and its public and government unions. That hasn't sat well to date and it won't fare any better as this deal carries forth. And what of the other socialist cultures of Europe that are also staggering. What will be the solution for those? More forgiven debts and the injection of more money that they don't have? Sure sounds like it to me.

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