Voices from Russia

Sunday, 15 February 2015

“Grexit” Could Cause EU Collapse

Barbara-Marie Drezhlo. Euroised Greece. 2012

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American economist Barry Eichengreen warned that the consequences of a Greek exit from the Eurozone could be devastating, and that the governments of the monetary union are taking the possible repercussions too lightly. In an interview with Die Welt am Sonntag, Eichengreen, UC Berkeley Professor of Economics, said that the consequences “would spread to other countries. When a Portuguese family or Spanish businessperson sees that Euros have been converted into drachmas, they’ll take their money out of their accounts. That could lead to a run on the banks”. Eichengreen continued that this scenario would snowball, “investors would speculate on the next candidate to leave the Eurozone”, thus endangering the entire Euro project. He also thinks that financial markets are also guilty of miscalculation, with share prices giving an overly positive picture. “My experience as an economic historian has taught me that markets always look relaxed, until suddenly… they aren’t. From the banking crisis of 2008 to the emerging markets crises of the 1990s, anybody can take their favourite financial crisis and discover that markets are really not a good crisis indicator. In the run-up to the crash, the players were always too relaxed for too long, and then later fell into a complete panic”. Eichengreen believed that the new Greek government should be given more time, “They should be given some breathing space, which is also in the interests of their creditors. I’d be in favour of tying interest payments on the borrowing to economic growth. Only when the Greek economy grows, should the country pay interest, otherwise the payments will simply be deferred. The Euro is of great symbolic and geostrategic worth for Europe”. He added that such an eventuality on the economic front would also have consequences for the West in terms of the European geostrategic situation. He observed, “The West hardly wants Russia to be able to position itself as a saviour, and become involved”, adding that this would have “dramatic consequences” for NATO.

15 February 2015

Sputnik International

http://sputniknews.com/europe/20150215/1018299307.html

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Saturday, 10 January 2015

Russia Might Require Kiev to Pony Up 3 Billion USD to Pay Off Debt Earlier

empty pockets no money

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A Russian government source told us, “The situation emerging in the Ukrainian economy and financial outlook suggests that a number of parameters used to grant the Ukraine a Russian bond issue are now moot. In these circumstances, it’s likely that Russia would demand an early repayment of the 3 billion USD (188.7 billion Roubles. 18.64 billion Renminbi. 189.62 billion INR. 3.54 billion CAD. 3.72 billion AUD. 2.54 billion Euros. 1.98 billion UK Pounds) debt owed us from the Ukraine in the near future”. Earlier, sources familiar with negotiations on economic assistance to the Ukraine said that Russia could offer to defer the repayment of Ukrainian Eurobonds for 3 billion USD from the end of 2015 until at least the end of International Monetary Fund (IMF) programme, which would last several years. Otherwise, international financial institutions might be reluctant to allow the Ukraine to make new loans. As one source familiar with the negotiations between Kiev and the IMF told us, in 2015, the Ukraine has to pay out 6.5 billion USD (408.86 billion Roubles. 40.38 billion Renminbi. 410.84 billion INR. 7.68 billion CAD. 8.04 billion AUD. 5.48 billion Euros. 4.3 billion UK Pounds), of which almost half represents debt to the Russian Federation. Only 1.5 billion USD (94.35 billion Roubles. 9.32 billion Renminbi. 94.81 billion INR. 1.77 billion CAD. 1.86 billion AUD. 1.27 billion Euros. 990 million UK Pounds) of it represents payments to the IMF. It turns out that if financial institutions in Europe and America raise funds for the Ukraine, the lion’s share of such government money from these countries would have to go to Russia to repay earlier loans.

The Ukraine has a serious political crisis that affects its economy and the public sector, in fact, the country is on the verge of default. The authorities want to improve their situation in re foreign borrowing. The IMF started a two-year credit programme for the Ukraine of 17.1 billion USD (1.076 trillion Roubles. 106.24 billion Renminbi. 1.08 trillion INR. 20.22 billion CAD. 21.16 billion AUD. 14.42 billion Euros. 11.3 billion UK Pounds). Of this amount, Kiev received 4.6 billion USD (289.36 billion Roubles. 28.58 billion Renminbi. 290.74 billion INR. 5.44 billion CAD. 5.7 billion AUD. 3.88 billion Euros. 3.04 billion UK Pounds) in 2014; the remaining funds should come in 2015. Kiev also got financial assistance from the World Bank, EBRD, the European Investment Bank, and a number of foreign sources. Overall, in 2014, the Ukraine received financial assistance amounting to about 9 billion USD (566.1 billion Roubles. 55.92 billion Renminbi. 568.86 billion INR. 10.62 billion CAD. 11.16 billion AUD. 7.62 billion Euros. 5.94 billion UK Pounds). In this case, the total national debt in 11 months amounted to 69.3 billion USD (4.36 trillion Roubles. 430.54 billion Renminbi. 4.38 trillion INR. 81.92 billion CAD. 85.74 billion AUD. 58.48 billion Euros. 45.84 billion UK Pounds).

In 2013, Russia decided to invest up to 15 billion USD (943.5 billion Roubles. 93.2 billion Renminbi. 948.1 billion INR. 17.7 billion CAD. 18.6 billion AUD. 12.7 billion Euros. 9.9 billion UK Pounds) in Eurobonds for the Ukraine. Russia sent the initial tranche of 3 billion USD, with a maturity of two years (coupon rate of 5 percent per annum coupon, with payments every six months). However, the Ukraine didn’t receive the remaining 12 billion USD (754.8 billion Roubles. 74.56 billion Renminbi. 758.46 billion INR. 14.16 billion CAD. 14.88 billion AUD. 10.16 billion Euros. 7.92 billion UK Pounds), as the Russian government judged that the change of government in the Ukraine was illegitimate.

10 January 2015

Rossiya Segodnya

http://ria.ru/economy/20150110/1041946693.html

Sunday, 7 October 2012

Greek leader Warns “We’re Going to Run Out of Money Next Month”

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Yesterday, Greek Prime Minister Antonis Samaras warned that his country’s coffers would run dry by November unless international lenders disbursed a vital 31.5 billion euro (1.28 trillion Roubles. 41 billion USD. 25.5 billion UK Pounds) loan instalment soon. Samaras invoked a comparison with the Weimar Republic in Germany before the Second World War, warning of “chaos” in Greece if his coalition government failed and democracy collapsed. Mr Samaras told reporters, “The government’s giving a fight on all sides for the credibility and salvation of this country so the people’s sacrifices don’t go to waste”.

Athens and its debt inspectors are still trying to hash out new spending cuts to help speed up the release of the next round of bailout funds. Amid this uncertainty, Mr Samaras highlighted the consequences of a Greek exit from the euro, warning it would be “a total disaster” and could prove “very destabilising” for Europe, saying that once one member country left, the international markets would probably target the next “weakest link”. Samaras pointed up that this would prove “painful for everybody and could prove fatal for many”. Athens is grappling with the worst financial crisis of its modern history with one in four people out of a job and the country’s recession predicted to continue for a sixth year. In Athens, international lenders continue to delay the release of the loans. Gerry Rice, a spokesman from the IMF, said the lending organisation would not hand out its portion of cash unless it gauged the viability of Greece’s debt as being sustainable or other lenders filled a financing gap in the bailout.

In an interview published yesterday with the German newspaper Handelsblatt, Mr Samaras warned that the cohesion of Greek society was being “endangered by rising unemployment, as was Germany towards the end of the Weimar Republic”. Such grim conditions are fertile ground for the rise of extremism. Support for the extreme-right Golden Dawn party has soared, and the Prime Minister warned in the interview that Greek democracy is “facing perhaps its greatest challenge”. Society, he went on, was threatened by extreme left-wing populists and “the rise of a right-wing extremist, one might say fascist, neo-Nazi party. People know that this government means Greece’s last chance. We’ll make it. If we fail, chaos awaits us”. He also outlined solutions, including the recapitalisation of Greece’s banks directly from a European fund to avoid further debt piling onto the country, noting, “The European Central Bank, which owns Greek government debt, could declare itself happy with lower interest… or agree to a rollover when these bonds are due”. So far, EU officials have adamantly rejected this.

A German government spokesman announced yesterday that Chancellor Angela Merkel would go to Athens on Monday to show support for reform efforts. However, many Greeks blame Germany’s insistence on austerity for their hardship, and the left-wing SYRIZA party urged unions to protest against the German leader. Union leaders said, “Workers, pensioners and unemployed people can take no more of the EU’s punitive policies”. Nevertheless, a German statement stressed that it wants Greece to stay in the euro bloc, albeit while pushing ahead with painful reforms. Since Greece received its first bailout in May 2010, it’s repeatedly slashed incomes, increased taxes, and raised retirement ages.

6 October 2012

Nathalie Savaricas

Independent (London UK)

http://www.independent.co.uk/news/world/europe/were-going-to-run-out-of-money-next-month-warns-greek-leader-8200184.html

Editor’s Note:

“Reform” means pain (and downright penury) for working people and retirees so that the McMansion filth can party on without a care. That’s the policy of the US Republican Party, too… it intends to slam its boot-heel hard into the faces of the most vulnerable Americans so that the Affluent Effluent can profit whilst kids starve. That’s objectively evil… a vote for the Republican Party (or any of its foreign analogues) is a vote for undisguised greed, malevolence, and wickedness. The Republicans worship Almighty Mammon… and God did say, “Thou shalt have no other gods before me”. If you shill for the GOP, you’re my enemy… full stop… I’ll do whatever I can to defeat your criminal ideology and stop its malicious grasping any way that I can. Yes… our immortal souls DO depend on it…

BMD 

Friday, 1 June 2012

1 June 2012. RIA-Novosti Infographics. National Debt Loads by Country

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30 May 2012

RIA-Novosti

http://en.rian.ru/infographics/20120530/173751483.html

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