Hardcopy of Central Banking

8/20/2019 Hardcopy of Central Banking

1/24

.If there are images in this attachment, they will not bedisplayed. Download the original attachment

GREECE DEBT CRISIS(Central banking)

PROJECT SUBMITTED TO PROF. VINIT

SUB- CENTRAL BANKING

CLASS- T.Y.B.B.I

COLLEGE- SYDENHAM COLLEGE OF COMMERCE &

ECONOMICS

DATE- 31.1.2014.

I! "#$%$$ !'( )*+, ,/()(! (("#!( & %*$($ , "(! %#$#$5 !'( ($%( )(*$($

!'*! '*$ %,)( ,) /*#,$ $,%($ #%6"# IMF # "(!*#67

G, M()($

RIMSHA MASANI 42

https://mail-attachment.googleusercontent.com/attachment/?view=att&th=143de1bd4e5e6458&attid=0.1&disp=attd&saduie=AG9B_P8eOr4oy5kcW8JtkhdOy5d9&zwhttps://mail-attachment.googleusercontent.com/attachment/?view=att&th=143de1bd4e5e6458&attid=0.1&disp=attd&saduie=AG9B_P8eOr4oy5kcW8JtkhdOy5d9&zw


2/24

ANKITA SINGH 57

DEA! BRAHMBHATT "2

SH#ETA CHA$RASIA 7%

&''A K$MARI 7

&RITI ADIAREKAR *2

ACKNO8LEDGEMENT


3/24

#e t+e ,t-.ent, /0 T11B1B1I /0 S3.en+a C/llege /-l. like t/ 6lae a +eart 0ille.gratit-.e t/ &r/01 init $6a.+3a 0/r gi8ing -, t+e a,e ,t-.3 /0 Greee n t+ereb3en+aning /-r kn/le.ge1

GREEK GOVERNMENT-DEBT CRISIS

INTRODUCTION

T+e G((9 ,/()(!-"(! %#$#$ i, /ne /0 a n-ber /0 -rrent E-r/6ean

,/8ereign9.ebt ri,e,: +i+ a, triggere. b3 t+e arri8al /0 t+e gl/bal e/n/i

ree,,i/n in 't/ber 2**%: an. i, belie8e. t/ +a8e been .iretl3 a-,e. b3 a

/binati/n /0 ,tr-t-ral eakne,,e, /0 t+e Greek e/n/3 al/ng it+ a .ea.e l/ng

6re9e;i,tene /0 /8erl3 +ig+ ,tr-t-ral .e0iit, an. .ebt9t/9GD& le8el, /n 6-bli

a/-nt,1 In late 2**/ne: /,t i6/rtantl3

Geran31

T+e ./ngra.ing /0 Greek g/8ernent .ebt t/ ?-nk b/n. ,tat-, in A6ril 2*"* reate.

alar in 0inanial arket,: it+ b/n. 3iel., ri,ing ,/ +ig+: t+at 6ri8ate a6ital

arket, ere 6ratiall3 n/ l/nger a8ailable 0/r Greee a, a 0-n.ing ,/-re1 'n 2

Ma3 2*"*: t+e E-r/>/ne /-ntrie, an. t+e Internati/nal M/netar3 @-n. (IM@) agree.

/n a ""* billi/n bail/-t l/an 0/r Greee: /n.iti/nal /n /6liane it+ t+e

0/ll/ing t+ree ke3 6/int,

"1 I6leentati/n /0 a-,terit3 ea,-re,: t/ re,t/re t+e 0i,al balane1

21 &ri8ati>ati/n /0 g/8ernent a,,et, /rt+ 5*bn b3 t+e en. /0 2*"5: t/ kee6

t+e .ebt 6ile ,-,tainable1

1 I6leentati/n /0 /-tline. ,tr-t-ral re0/r,: t/ i6r/8e /6etiti8ene,, an.gr/t+ 6r/,6et,1

T+e 6a3ent /0 t+e bail/-t a, ,+e.-le. t/ +a66en in ,e8eral .i,b-r,eent, 0r/

Ma3 2*"* -ntil -ne 2*"1 D-e t/ a /r,ene. ree,,i/n an. t+e 0at t+at Greee +a.

/rke. ,l/er t+an e;6ete. t/ /6l3 it+ 6/int 2 an. ab/8e: t+ere a, a nee.

/ne 3ear later t/ /00er Greee b/t+ /re tie an. /ne3 in t+e atte6t t/ re,t/re t+e

e/n/31 In 't/ber 2*"": E-r/ >/ne lea.er, /n,e-entl3 agree. t/ /00er a

,e/n. "* billi/n bail/-t l/an 0/r Greee: /n.iti/nal n/t /nl3 t+e i6leentati/n

/0 an/t+er a-,terit3 6akage (/bine. it+ t+e /ntin-e. .ean., 0/r 6ri8ati>ati/nan. ,tr-t-ral re0/r, /-tline. in t+e 0ir,t 6r/grae): b-t al,/ t+at all 6ri8ate

http://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/Great_Recessionhttp://en.wikipedia.org/wiki/Great_Recessionhttp://en.wikipedia.org/wiki/Economy_of_Greecehttp://en.wikipedia.org/wiki/Structural_deficithttp://en.wikipedia.org/wiki/Debt-to-GDP_ratiohttp://en.wikipedia.org/wiki/Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Investorshttp://en.wikipedia.org/wiki/Government_debthttp://en.wikipedia.org/wiki/Government_debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Credit_default_swaphttp://en.wikipedia.org/wiki/Credit_default_swaphttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Junk_bondhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Austerityhttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/European_sovereign-debt_crisishttp://en.wikipedia.org/wiki/Great_Recessionhttp://en.wikipedia.org/wiki/Great_Recessionhttp://en.wikipedia.org/wiki/Economy_of_Greecehttp://en.wikipedia.org/wiki/Structural_deficithttp://en.wikipedia.org/wiki/Debt-to-GDP_ratiohttp://en.wikipedia.org/wiki/Sovereign_debt_crisishttp://en.wikipedia.org/wiki/Investorshttp://en.wikipedia.org/wiki/Government_debthttp://en.wikipedia.org/wiki/Bond_(finance)http://en.wikipedia.org/wiki/Yield_spreadhttp://en.wikipedia.org/wiki/Credit_default_swaphttp://en.wikipedia.org/wiki/Credit_default_swaphttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/Junk_bondhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Austerity


4/24

re.it/r, +/l.ing Greek g/8ernent b/n., ,+/-l. ,ign a .eal ae6ting l/er intere,t

rate, an. a 515 0ae 8al-e l/,,1

T+i, 6r/6/,e. re,tr-t-re /0 all Greek 6-bli .ebt +el. b3 6ri8ate re.it/r,: +i+ at

t+at 6/int /0 tie /n,tit-te. a 5% ,+are /0 t+e t/tal Greek 6-bli .ebt: /-l.a/r.ing t/ t+e bail/-t 6lan re.-e t+e /8erall 6-bli .ebt b-r.en it+ r/-g+l3 ""*

billi/n1 A .ebt relie0 e-al t/ a l/ering /0 t+e .ebt9t/9GD& rati/ 0r/ a 0/rea,t

"/ne1 T+e 6/tential e;it beae kn/n a, Gre;it an. ,tarte. t/ a00et internati/nal

arket be+a8i/r1 A ,e/n. eleti/n in i.9-ne: en.e. it+ t+e 0/rati/n /0 a ne

g/8ernent ,-66/rting a /ntin-e. a.+erene t/ t+e ain 6rini6le, /-tline. b3 t+e

,igne. bail/-t 6lan1 T+e ne g/8ernent +/e8er ie.iatel3 a,ke. it, re.it/r,:

.-e t/ a .ela3e. re0/r ,+e.-le an. a /r,ene. e/n/i ree,,i/n: t/ be grante.

an e;ten.e. .ea.line 0r/ 2*"5 t/ 2*"7 be0/re being re-ire. t/ re,t/re t+e b-.get

int/ a ,el090inane. ,it-ati/nF +i+ in e00et a, e-al t/ a re-e,t 0/r t+e Tr/ika t/

6a3 t/ /re 3ear, /0 a..iti/nal 0-n., in t+e 0/r /0 a t+ir. bail/-t 6akage 0/r

2*"59" (/r alternati8el3 a,king 6ri8ate re.it/r, t/ ae6t riting /00 ne a..iti/nal

a/-nt, /0 .ebt)1 In -l3 2*"2: t+e Tr/ika ,tarte. t/ e;aine t+i, re-e,t in t+e lig+t

/0 an -6.ate. an. real-late. ,-,tainabilit3 anal3,i, /0 t+e Greek e/n/3: an. ere

at 0ir,t e;6ete. alrea.3 t/ 6-bli,+ a re6/rt it+ t+eir 0in.ing, b3 t+e en. /0 A-g-,t

2*"21

http://en.wikipedia.org/wiki/Debt-to-GDP_ratiohttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozonehttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozonehttp://en.wikipedia.org/wiki/Debt-to-GDP_ratiohttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozonehttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozone


5/24

A, initial 0in.ing, in.iate. t+e bail/-t 6r/gra a, i.el3 /00 trak: t+e Tr/ika

.ei.e. t/ it++/l. t+e ,+e.-le. "15bn bail/-t .i,b-r,eent 0/r A-g-,t 2*"2F

it+ t+e e,,age t+at t+e tran,0er aaite. rea,,-rane b3 t+e ,-r8eillane re6/rt

t+at Greee +a. anage. t/ 6-t t+e bail/-t 6lan bak /n trak an. ,till ere

/itte. t/ 0/ll/ t+e agree. 6at+ t/ re,t/re an. re0/r t+e e/n/31 T+e

,-b,e-ent t+ree /nt+, ere -,e. b3 t+e Greek g/8ernent t/ neg/tiate it+ t+e

Tr/ika ab/-t t+e e;at /ntent /0 t+e /n.iti/nal "Labor market

reform" an. "Midterm fiscal plan 2013-16" : in /r.er t/ 6-t t+e bail/-t 6lan bak /n

trak1 T+e t/ a?/r bill, 0eat-re. all t/get+er a-,terit3 ea,-re, /rt+ "%1%bn: /0

+i+ t+e 0ir,t


6/24

In an-ar3 2*"* t+e Greek Mini,tr3 /0 @inane +ig+lig+te. in t+eir $tability and

Gro%t& 'rogram 2010 t+e,e 0i8e ain a-,e, 0/r t+e ,igni0iantl3 .eteri/rate.

e/n/i re,-lt, re/r.e. in 2**< (/6are. t/ t+e 6-bli,+e. b-.get 0ig-re, a+ea. /0

t+e 3ear)

GDP ,:!' *!($; A0ter 2**%: GD& gr/t+ rate, ere l/er t+an t+e Greek

nati/nal ,tati,tial agen3 +a. antii6ate.1 In t+e /00iial re6/rt: t+e Greek

ini,tr3 /0 0inane re6/rt, t+e nee. 0/r i6leenting e/n/i re0/r, t/

i6r/8e /6etiti8ene,,: a/ng /t+er, b3 re.-ing ,alarie, an.

b-rea-ra3 : an. t+e nee. t/ re.iret -+ /0 it, -rrent g/8ernental ,6en.ing

0r/ n/n9gr/t+ ,et/r, (e1g1 ilitar3) int/ gr/t+ ,ti-lating ,et/r,1

• G,/()(! "(#%#!; H-ge 0i,al ibalane, .e8el/6e. .-ring t+e 6a,t ,i;3ear, 0r/ 2**4 t/ 2**e: be0/re t+e re,-lt, /0 ,-+ re0/r, ere a+ie8e.1

T+e re6/rt +ig+lig+t, t+e -rgen3 t/ i6leent b/t+ 6eranent an.te6/rar3 a-,terit3 ea,-re, t+at 9 in /binati/n it+ an e;6ete. ret-rn

/0 6/,iti8e GD& gr/t+ rate, in 2*"" 9 /-l. re,-lt in t+e ba,eline .e0iit

.erea,ing 0r/ *1 billi/n in 2**< t/ /nl3 517 billi/n in 2*": 0inall3

aking it 6/,,ible t/ ,tabili>e t+e .ebt9le8el relati8e t/ GD& at "2* in 2*"*

an. 2*"": 0/ll/e. b3 a ./nar. tren. in 2*"2 an. 2*"1

• B"(! %,)6#*%(; B-.get /6liane a, akn/le.ge. t/ be in ,tr/ng

nee. /0 0-t-re i6r/8eent: an. 0/r 2**< it a, e8en 0/-n. t/ be A l/t

/r,e t+an n/ral: .-e t/ e/n/i /ntr/l being /re la; in a 3ear it+ 6/litial eleti/n,1 In /r.er t/ i6r/8e t+e le8el /0 b-.get /6liane 0/r

http://en.wikipedia.org/wiki/Ministry_of_Finance_(Greece)http://en.wikipedia.org/wiki/Hellenic_Statistical_Authorityhttp://en.wikipedia.org/wiki/Hellenic_Statistical_Authorityhttp://en.wikipedia.org/wiki/Ministry_of_Finance_(Greece)http://en.wikipedia.org/wiki/Hellenic_Statistical_Authorityhttp://en.wikipedia.org/wiki/Hellenic_Statistical_Authority


7/24

-6/ing 3ear,: t+e Greek g/8ernent ante. t/ i6leent a ne re0/r t/

,trengt+en t+e /nit/ring ,3,te in 2*"*: aking it 6/,,ible t/ kee6 better

trak /n t+e 0-t-re .e8el/6ent, /0 re8en-e, an. e;6en,e,: b/t+ at t+e

g/8ernental an. l/al le8el1

• S!*!#$!#%*6 %("##6#!/ne 0r/ 2*** t/

2**7F .-ring t+i, 6eri/. it gre at an ann-al rate /0 412: a, 0/reign a6ital 0l//.e.

t+e /-ntr31J De,6ite t+at: t+e /-ntr3 /ntin-e. t/ re/r. +ig+ b-.get .e0iit, ea+

3ear1

@inanial ,tati,ti, re8eal ,/li. b-.get ,-r6l-,e, e;i,te. in "


8/24

,6en.er a/ng t+e 27 NAT' /-ntrie, a0ter t+e $nite. State,: a/r.ing t/ NAT'

,tati,ti,1 T+e $S i, t+e a?/r bene0iiar3 /0 Greek ilitar3 e;6en.it-re: it+ t+e

Aerian, ,-66l3ing 42 6er ent /0 it, ar,1 In ,e/n. an. t+ir. 6lae are Geran3:

it+ 2217 6er ent: an. t+en @rane: it+ "215 6er ent1

T+e l/ng 6eri/. it+ +ig+ 3earl3 b-.get .e0iit, a-,e. a ,it-ati/n +ere: 0r/ "


9/24

6a3ent, b3 t+e g/8ernent, in8/l8e.F in t-rn: t+e liabilitie, /0 t+e in8/l8e.

/-ntrie, ere ke6t /00 t+e b//k,1

A/r.ing t/ ,er $piegel re.it, gi8en t/ E-r/6ean g/8ernent, ere .i,g-i,e. a,

,a6, an. /n,e-entl3 .i. n/t get regi,tere. a, .ebt bea-,e E-r/ ,tate at t+e tieign/re. ,tati,ti, in8/l8ing 0inanial .eri8ati8e,1 A Geran .eri8ati8e, .ealer +a.

/ente. t/ ,er $piegel t+at T+e Maa,tri+t r-le, an be ir-8ente. -ite

legall3 t+r/-g+ ,a6,: an. In 6re8i/-, 3ear,: Ital3 -,e. a ,iilar trik t/ a,k it,

tr-e .ebt it+ t+e +el6 /0 a .i00erent $S bank1L T+e,e /n.iti/n, +a. enable. Greek

a, ell a, an3 /t+er E-r/6ean g/8ernent, t/ ,6en. be3/n. t+eir ean,: +ile

eeting t+e .e0iit target, /0 t+e E-r/6ean $ni/n1 In Ma3 2*"*: t+e Greek

g/8ernent .e0iit a, again re8i,e. an. e,tiate. t/ be "1 +i+ a, t+e

,e/n. +ig+e,t in t+e /rl. relati8e t/ GD& it+ Ielan. in 0ir,t 6lae at "517

an. Great Britain t+ir. it+ "211 &-bli .ebt a, 0/rea,t: a/r.ing t/ ,/e

e,tiate,: t/ +it "2* /0 GD& .-ring 2*"*1

T/ kee6 it+in t+e /netar3 -ni/n g-i.eline,: t+e g/8ernent /0 Greee +a. al,/ 0/r

an3 3ear, i,re6/rte. t+e /-ntr3=, /00iial e/n/i ,tati,ti, a, .i. an3 /t+er

E-r/6ean g/8ernent,1 At t+e beginning /0 2*"*: it a, .i,/8ere. t+at Greee +a.

6ai. G/l.an Sa+, an. /t+er bank, +-n.re., /0 illi/n, /0 ./llar, in 0ee, ,ine

2**": 0/r arranging tran,ati/n, t+at +i. t+e at-al le8el /0 b/rr/ing1 M/,t n/table i,

a r/,, -rren3 ,a6: +ere billi/n, /rt+ /0 Greek .ebt, an. l/an, ere /n8erte.

int/ en an. D/llar, at a 0ititi/-, e;+ange rate b3 G/l.an Sa+,: t+-, +i.ing t+e

tr-e e;tent /0 Greek l/an,1

T+e 6-r6/,e /0 t+e,e .eal, a.e b3 ,e8eral ,-e,,i8e Greek g/8ernent,: a, t/

enable t+e t/ /ntin-e ,6en.ing: +ile +i.ing t+e at-al .e0iit 0r/ t+e E$: +i+:

at t+e tie: a, a //n 6ratie a/ng,t an3 E-r/6ean g/8ernent,1 T+e

re8i,e. ,tati,ti, re8eale. t+at Greee at all 3ear, 0r/ 2***92*"* +a. e;ee.e. t+e

E-r/ >/ne ,tabilit3 riteria: it+ t+e 3earl3 .e0iit, e;ee.ing t+e re/en.e.

a;i- liit at 1* /0 GD&: an. it+ t+e .ebt le8el ,igni0iantl3 ab/8e t+e

re/en.e. liit /0 * /0 GD&1

DEBT LEVELS REVEALED 20107

In @ebr-ar3 2*"*: t+e ne g/8ernent /0 Ge/rge &a6an.re/- (elete. in 't/ber 2**


10/24

"217 /0 GD&1 In A6ril 2*"*: t+e re6/rte. 2**< .e0iit a, 0-rt+er inrea,e. t/

"1:an. at t+e tie /0 t+e 0inal re8i,e. al-lati/n b3 E-r/ ,tat it en.e. at "51

/0 GD& (alt+/-g+ t+e et+/./l/g3 -,e. 0/r t+e 0inal re8i,i/n, +a, been -e,ti/ne. ):

+i+ 6r/8e. t/ be t+e +ig+e,t .e0iit 0/r an3 E$ /-ntr3 in 2**


11/24

Intere,t rate /0 reek t/93ear g/8ernent b/n., tra.e. in t+e ,e/n.ar3 arket

re0leting t+e arket,O a,,e,,ent /0 in8e,tent ri,k1 #it+/-t a bail/-t agreeent:

t+ere a, a 6/,,ibilit3 t+at Greee /-l. 6re0er t/ .e0a-lt /n ,/e /0 it, .ebt1 T+e

6rei-, /n reek .ebt +a. ri,en t/ a le8el t+at re0lete. a +ane /0 a .e0a-lt /r

re,tr-t-ring1 Anal3,t, ga8e a i.e range /0 .e0a-lt 6r/babilitie,: e,tiating a 25 t/


12/24

b3 t+e Greek g/8ernent: regar.le,, /0 t+e nati/n=, re.it rating: in /r.er t/ aintain

bank,= li-i.it31

T+e ne a-,terit3 6akage a, et it+ great anger b3 t+e Greek 6-bli: lea.ing

t/ a,,i8e 6r/te,t,: ri/t, an. ,/ial -nre,t t+r/-g+/-t Greee1 'n 5 Ma3 2*"*: anati/nal ,trike a, +el. in /66/,iti/n t/ t+e 6lanne. ,6en.ing -t, an. ta; inrea,e,1

In At+en, ,/e 6r/te,t, t-rne. 8i/lent: killing t+ree 6e/6le1 "**:*** 6e/6le 6r/te,t

again,t t+e a-,terit3 ea,-re, in 0r/nt /0 6arliaent b-il.ing in At+en, (2< Ma3

2*"")1@/rer &rie Mini,ter Ge/rge &a6an.re/- an. E-r/6ean C/i,,i/n

&re,i.ent /,Q Man-el Barr/,/ a0ter t+eir eeting in Br-,,el, /n 2* -ne

2*""1Interi 6rie ini,ter !-a, &a6a.e/, .e0en., t+e a-,terit3 ea,-re, in

6arliaent (N/8eber 2*"")1

Still t+e ,it-ati/n .i. n/t i6r/8e1 It a, /riginall3 +/6e. t+at GreeeO, 0ir,ta.?-,tent 6lan t/get+er it+ t+e ""* billi/n ,-66/rt 6akage /-l. ree,tabli,+

Greek ae,, t/ 6ri8ate a6ital arket, b3 t+e en. /0 2*"21 H/e8er it a, ,//n

0/-n. t+at t+i, 6r/e,, /-l. take -+ l/nger1 T+e N/8eber 2*"* re8i,i/n, /0

2**< .e0iit an. .ebt le8el, a.e t+e 2*"* target, e8en +ar.er t/ rea+: an.

in.iati/n, ,ignale. a ree,,i/n +ar,+er t+an 0/rea,t1 In Ma3 2*"" it beae e8i.ent

t+at .-e t/ t+e ,e8ere e/n/i ri,i, ta; re8en-e, ere l/er t+an e;6ete.: aking

it e8en +ar.er 0/r Greee t/ eet it, 0i,al g/al,1

A0ter t+e 0in.ing, /0 a bilateral E$9IM@ a-.it in -ne: +i+ alle. 0/r 0-rt+er a-,terit3 ea,-re,: Stan.ar. an. &//r=, ./ngra.e. Greee=, ,/8ereign .ebt rating t/

CCC: t+e l/e,t in t+e /rl.1 T+e a?/r 6/litial 6artie, 0aile. t/ rea+ /n,en,-, /n

t+e nee,,ar3 ea,-re, t/ -ali03 0/r a 0-rt+er bail/-t 6akage: an. ai.,t ri/t, an. a

general ,trike: &rie Mini,ter Ge/rge &a6an.re/- 6r/6/,e. a re9,+-00le. abinet: an.

a 8/te /0 /n0i.ene in t+e 6arliaent1

T+e ri,i, ,ent ri66le, ar/-n. t+e /rl. an. a?/r ,t/k e;+ange, ab,/rbe.

l/,,e,1 T/ en,-re t+e relea,e /0 t+e ne;t "2 billi/n e-r/, 0r/ t+e e-r/ >/ne bail9/-t

6akage (it+/-t +i+ Greee /-l. +a8e +a. t/ .e0a-lt /n l/an re6a3ent, in i.9-l3): t+e g/8ernent 6r/6/,e. a..iti/nal ,6en.ing -t, /rt+ 2% billi/n /8er 0i8e

3ear,

'n 27 -ne 2*"" t+e tra.e -ni/n, began a 0/rt39eig+t +/-r lab/r ,trike inten.e. t/

0/re 6arliaent eber, int/ 8/ting again,t t+e a-,terit3 6akageF t+e 0ir,t ,-+

,trike in Greee ,ine "


13/24

a66r/8e. /n 2< -ne 2*"": it+ "55 /-t /0 ** eber, /0 6arliaent 8/ting in

0a8/r1

RESCUE PACKAGES PROVIDED BY THE EU AND IMF

F#$! ($%( *%9*( M*< 20107

Ha8ing +a. t+e re.it rating agenie, 0-rt+er ./ngra.e. Greee=, abilit3 t/ a+ie8e

an. t+e ri,k 6rei-, /n l/ng9ter Greek g/8ernent b/n., 0ir,t re/r. le8el,: t+e

Greek g/8ernent re-e,te. /n 2 A6ril 2*"* /00iial 0inanial a,,i,tane1

T+e E-r/6ean $ni/n (E$): E-r/6ean Central Bank (ECB) an. Internati/nal M/netar3

@-n. (IM@) agree. /n "2 Ma3 2*"* it+ t+e Greek g/8ernent t/ a t+ree93ear 0inanial ai. 6r/grae (l/an /itent,) t/taling ""* billi/n1 T+e Greek .ebt in

e;+ange 0/r +/-,e+/l. ,+/-l. be /n,/li.ate. it+in t+ree 3ear,: ,/ t+at t+e b-.get

.e0iit ,+/-l. be re.-e. b3 2*"4 t/ bel/ 6erent1

'0 t+e ""* billi/n 6r/i,e. b3 t+e IM@ t//k *bn: t+e E-r/ >/ne %*bn (a,

bilateral l/an /itent,)1 In,tr-ental in .eterining t+e rate, /0 t+e in.i8i.-al

e-r/ area /-ntrie, in t+e %*bn /0 t+e E-r/ >/ne a, t+e re,6eti8e e-it3 intere,t in

t+e a6ital /0 t+e ECB: +i+ in t-rn i, .eterine. e8er3 0i8e 3ear, a0ter t+e 6r/rate.

,+are /0 a /-ntr3 in t+e t/tal 6/6-lati/n an. e/n/i /-t6-t in t+e E$1 T+e Geran,+are /0 t+e %*bn a, 2%: /r ab/-t 2214bn in t+ree 3ear, +ile @rane 6ai.

"1%bn1 'nl3 Sl/8akia (/0 t+e e-r/ >/ne /-ntrie,) ab,taine. 0r/ 6r/8i.ing t+e

bilateral l/an,1

In Ma3 2*"* Greee reei8e. t+e 0ir,t tran+e /0 t+e bail/-t /ne3 t/taling 2*bn1 '0

t+i, t/tal: 515 billi/n ae 0r/ t+e IM@ an. "415 billi/n /0 E-r/ ,tate,

'n " Se6teber t+e ,e/n. tran+e /0 15bn a, .i,b-r,e.1 T+e r. tran+e /0 t+e

,ae a/-nt a, 6ai. /n "< an-ar3 2*""1 'n " Mar+: 4t+ tran+e in t+e a/-nt

/0 "*1< billi/n a, 6ai. /-t: 0/ll/e. b3 t+e 5t+ in,tallent /n 2 -l31 T+e t+

tran+e /0 %bn a, 6ai. /-t a0ter /nt+, /0 .ela3 in earl3 Deeber1 '0 t+i,

a/-nt: t+e IM@ t//k /8er 212bn1

S(%," ($%( *%9*( J6< 2011 - F(*< 20127

E*6< /($#, - J6< 2011

http://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Eurozonehttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/Eurozone


14/24

Sine t+e 0ir,t re,-e 6akage 6r/8e. in,-00iient: t+e "7 lea.er, /0 E-r/ /-ntrie,

a66r/8e. a (6reliinar3) ,e/n. re,-e 6akage at an E$ ,-it /n 2" -l3 2*""1 It

a, agree. t+at t+e ai. 6akage +a, a 8/l-e /0 "** billi/n: 6r/8i.e. b3 t+e nel3

reate. E-r/6ean @inanial Stabilit3 @ailit31 T+e re6a3ent 6eri/. a, e;ten.e.

0r/ ,e8en t/ "5 3ear, an. t+e intere,t rate a, l/ere. t/ 151

@/r t+e 0ir,t tie: t+i, al,/ inl-.e. a 6ri8ate ,et/r in8/l8eent: eaning t+at t+e

6ri8ate 0inanial ,et/r ae6te. a 8/l-ntar3 -t1 It a, agree. t+at t+e net

/ntrib-ti/n /0 bank, an. in,-rane /6anie, t/ ,-66/rt Greee /-l. inl-.e an

a..iti/nal 7 billi/n in 2*"41 T+e 6lanne. 6-r+a,e /0 Greek b/n., 0r/ 6ri8ate

re.it/r, b3 t+e e-r/ re,-e 0-n. at t+eir 0ae 8al-e ill b-r.en t+e 6ri8ate ,et/r it+

at lea,t an/t+er "21 billi/n1

It a, al,/ ann/-ne. at t+e E$ ,-it: a re/n,tr-ti/n 6lan 0/r Greee in /r.er t/ 6r//te e/n/i gr/t+1 T+e E-r/6ean C/i,,i/n e,tabli,+e. a Ta,k @/re 0/r

Greee1L

EU $))#! - 2= O%!,( 2011

'n t+e nig+t /0 2 t/ 27 't/ber at t+e E$ ,-it: t+e 6/litiian, a.e t/

i6/rtant .ei,i/n, t/ re.-e t+e ri,k /0 a 6/,,ible /ntagi/n t/ /t+er /-ntrie,: in t+e

a,e /0 a Greek .e0a-lt1 T+e 0ir,t .ei,i/n a, t/ re-ire all E-r/6ean bank, t/

a+ie8e ati/n: t/ ake t+e ,tr/ng en/-g+ t/ it+,tan. t+/,e 0inanial

l/,,e, t+at 6/tentiall3 /-l. er-6t 0r/ a Greek .e0a-lt1 T+e ,e/n. .ei,i/n a,

t/ le8erage t+e E@S@ 0r/ 5**bn t/ " trilli/n: a, a 0ireall t/ 6r/tet 0inanial

,tabilit3 in /t+er E-r/>/ne /-ntrie, it+ a l//ing .ebt ri,i,1 T+e le8erage +a.

6re8i/-,l3 been ritii>e. 0r/ an3 ,i.e,:J bea-,e it i, ,/et+ing ta;6a3er,

-ltiatel3 ri,k t/ 6a3 0/r: .-e t/ t+e ,igni0iantl3 inrea,e. ri,k, a,,-e. b3 t+e

E@S@1

@-rt+er/re: t+e E-r/ /-ntrie, agree. /n a 6lan t/ -t t+e .ebt /0 Greee 0r/

t/.a3=, "* t/ "2* /0 GD& b3 2*2*1 A, 6art /0 t+at 6lan: it a, 6r/6/,e. t+at all

/ner, /0 Greek g/8ernental b/n., ,+/-l. 8/l-ntaril3 ae6t a 5* +air-t /0

t+eir b/n., (re,-lting in a .ebt re.-ti/n /rt+ "**bn): an. /re/8er ae6t intere,t

rate, being re.-e. t/ /nl3 151 At t+e tie /0 t+e ,-it: t+i, a, at 0ir,t 0/rall3

ae6te. b3 t+e g/8ernent bank, in E-r/6e1 T+e ta,k t/ neg/tiate a 0inal .eal: al,/

inl-.ing t+e 6ri8ate re.it/r,: a, +an.e. /8er t/ t+e Greek 6/litiian,1

In 8ie /0 t+e -nertaint3 /0 t+e ./e,ti 6/litial .e8el/6ent in Greee: t+e 0ir,t

.i,b-r,eent a, ,-,6en.e. a0ter &rie Mini,ter Ge/rge &a6an.re/- ann/-ne. /n

http://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/Financial_contagionhttp://en.wikipedia.org/wiki/Capital_requirementhttp://en.wikipedia.org/wiki/Leverage_(finance)http://en.wikipedia.org/wiki/Leverage_(finance)http://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/Financial_contagionhttp://en.wikipedia.org/wiki/Capital_requirementhttp://en.wikipedia.org/wiki/Leverage_(finance)http://en.wikipedia.org/wiki/European_Financial_Stability_Facility


15/24

" N/8eber 2*"" t+at +e ante. t/ +/l. a re0eren.- /n t+e .ei,i/n, /0 t+e E-r/

,-it1 A0ter t/ .a3, /0 inten,e 6re,,-re: 6arti-larl3 0r/ Geran3 an. @rane: +e

0inall3 ga8e -6 /n t+e i.ea1 'n "" N/8eber 2*"" +e a, ,-ee.e. a, 6rie

ini,ter b3 !/-ka, &a6a.i/,: +/ lea., a ne tran,iti/nal g/8ernent1 T+e /,t

i6/rtant ta,k /0 t+i, interi g/8ernent a, t/ 0inali>e t+e +air-t .eal 0/r Greek

g/8ernental b/n., an. 6a,, a ne a-,terit3 6akage: t/ /6l3 it+ t+e Tr/ika

re-ireent, 0/r reei8ing t+e ,e/n. bail/-t l/an /rt+ "*bn (en+ane. 0r/ t+e

6re8i/-,l3 /00ere. a/-nt at "*e. t+e ,e/n. bail/-t 6akage1 In a

t+irteen9+/-r arat+/n eeting in Br-,,el,: E$ Meber State, agree. t/ a ne "**

billi/n l/an an. a retr/ati8e l/ering /0 t+e bail/-t intere,t rate, t/ a le8el /0 ?-,t

"5* ba,i, 6/int, ab/8e t+e E-rib/r 1 T+e IM@ ill 6r/8i.e a ,igni0iant /ntrib-ti/n

t/ t+at l/an b-t ill /nl3 .ei.e in t+e ,e/n. eek /0 Mar+ +/ -+ t+at ill be1E$ Meber State, ill al,/ 6a,, /n t/ Greee all 6r/0it, +i+ t+eir entral

bank, a.e b3 b-3ing Greek b/n., at a .eba,e. rate -ntil 2*2*1 &ri8ate in8e,t/r,

ae6te. a ,lig+tl3 bigger +air-t /0 515 /0 t+e 0ae 8al-e /0 Greek g/8ernental

b/n.,: t+e e-i8alent t/ an /8erall l/,, /0 ar/-n. 751T+e .eal i6lie, t+at 6re8i/-,

Greek b/n. +/l.er, are being gi8en: 0/r "*** /0 6re8i/-, n/ti/nal: "5* in P&SI

6a3ent n/te,L i,,-e. b3 t+e E@S@ an. "5 in PNe Greek B/n.,L i,,-e. b3 t+e

Helleni Re6-bli: inl-.ing a PGD&9linke. ,e-rit3L1 T+e latter re6re,ent, a

arginal /-6/n en+aneent in a,e t+e Greek gr/t+ eet, ertain /n.iti/n,1#+ile t+e arket 6rie /0 t+e 6/rt0/li/ 6r/6/,e. in t+e e;+ange i, /0 t+e /r.er /0

http://en.wikipedia.org/wiki/Referendumhttp://en.wikipedia.org/wiki/Loukas_Papadimoshttp://en.wikipedia.org/wiki/Basis_pointshttp://en.wikipedia.org/wiki/Euriborhttp://en.wikipedia.org/wiki/European_System_of_Central_Bankshttp://en.wikipedia.org/wiki/European_System_of_Central_Bankshttp://en.wikipedia.org/wiki/Face_valuehttp://en.wikipedia.org/wiki/Coupon_(bond)http://en.wikipedia.org/wiki/Coupon_(bond)http://en.wikipedia.org/wiki/Referendumhttp://en.wikipedia.org/wiki/Loukas_Papadimoshttp://en.wikipedia.org/wiki/Basis_pointshttp://en.wikipedia.org/wiki/Euriborhttp://en.wikipedia.org/wiki/European_System_of_Central_Bankshttp://en.wikipedia.org/wiki/European_System_of_Central_Bankshttp://en.wikipedia.org/wiki/Face_valuehttp://en.wikipedia.org/wiki/Coupon_(bond)


16/24

2" /0 t+e /riginal 0ae 8al-e ("5 0/r t+e t/ E@S@ &SI n/te, " an. 2 3ear, an.

0/r t+e Ne Greek B/n., "" t/ * 3ear,): t+e .-rati/n /0 t+e ,et /0 Ne Greek

B/n., i, ,lig+tl3 bel/ "* 3ear,1J"7

'n < Mar+ 2*"2 t+e Internati/nal Sa6, an. Deri8ati8e, A,,/iati/n (ISDA) i,,-e.a /-ni-Q alling t+e .ebt re,tr-t-ring .eal it+ it, 6ri8ate ,et/r in8/l8eent

(&SI) a Re,tr-t-ring Cre.it E8ent +i+ ill trigger 6a3ent /0 re.it .e0a-lt

,a6,1 A/r.ing t/ @/rbe, aga>ine GreeeO, re,tr-t-ring re6re,ent, a .e0a-lt1 It i,

t+e /rl.=, bigge,t .ebt re,tr-t-ring .eal: a00eting ,/e 2*bn /0 b/n.,1 T+e

re.it/r, are in8ite. t/ ,a6 t+eir -rrent Greek b/n., int/ ne b/n., it+ a at-rit3

/0 beteen "" an. * 3ear, an. l/er a8erage 3iel., /0 15 (2 0/r t+e 0ir,t t+ree

3ear,: 0/r t+e ne;t 0i8e 3ear,: an. 412 t+erea0ter): t+-, 0ailitating a "**bn .ebt

re.-ti/n 0/r Greee1 E-r/9area Meber State, +a8e 6le.ge. t/ /ntrib-te *bn 0/r

6ri8ate ,et/r 6artii6ati/n1 In a,e n/t en/-g+ b/n.+/l.er, agree t/ a 8/l-ntar3 b/n.

,a6: t+e Greek g/8ernent +a, t+reatene. t/ retr/ati8el3 intr/.-e a /lleti8e

ati/n la-,e t/ en0/re 6artii6ati/n

T+e a,+ ill be +an.e. /8er a0ter it i, lear t+at 6ri8ate9,et/r b/n.+/l.er, ./ in.ee.

?/in in t+e +air-t: an. a0ter Greee gi8e, e8i.ene /0 t+e legal 0rae/rk t+at it ill

6-t in 6lae t/ i6leent ./>en, /0 6ri/r ati/n, 9 0r/ ,aking -n.er6er0/ring

ta; /llet/r, t/ 6a,,ing legi,lati/n t/ liberali>e t+e /-ntr3=, l/,e. 6r/0e,,i/n,:

tig+tening r-le, again,t briber3 an. rea.3ing at lea,t t/ large ,tate9/ntr/lle.

/6anie, 0/r ,ale b3 -ne1 In ret-rn 0/r t+e bail/-t /ne3 Greee ae6t, an

en+ane. an. 6eranent 6re,ene /n t+e gr/-n. /0 E-r/6ean /nit/r,1 It ill al,/

+a8e t/ ,er8ie it, .ebt, 0r/ a ,6eial: ,e6arate e,r/ a/-nt: .e6/,iting ,-, in

a.8ane t/ eet 6a3ent, t+at 0all .-e in t+e 0/ll/ing t+ree /nt+,1 T+i, /6erati/n

ill be ,-6er8i,e. b3 t+e tr/ika t+e Internati/nal M/netar3 @-n.: t+e E-r/6ean

$ni/n an. t+e E-r/6ean Central Bank1

'n Mar+ 2*"2: T+e In,tit-te /0 Internati/nal @inane ,ai. tel8e /0 it, ,teering

/ittee /-l. ,a6 t+eir b/n., an. ae6t a l/,, /0 -6 t/ 751 #+en all

ae6tane, +a. been /-nte. at Mar+


17/24

+air-t /0 t+e 0ae 8al-e: ,/ t+at t+e Greek .ebt 6ile /8erall ill .erea,e 0r/ it,

-rrent le8el at 5* billi/n: t/ a /re ,-,tainable le8el ar/-n. 25* billi/n1

S(%6*!#, *,! * !'#" ($%( *%9*(

A Financial )imes e.it/rial /n 22 @ebr-ar3 2*"2 arg-e. lea.er, +a. 6r/8e.

t+e,el8e, -nable t/ ,ettle /n a ,/l-ti/n t+at ill n/t nee. t/ be re8i,ite. 3et again:

t+at at be,t t+e .eal /-l. /nl3 +/6e t/ ree.3 /ne 6art /0 t+e Greek .i,a,ter: nael3

t+e /-ntr3=, .ebilitate. 6-bli 0inane,: t+/-g+ it /-l. n/t likel3 e8en ./ t+at T+e

e-r/>/ne=, late,t 6lan .i.: at lea,t: e8ine /n,i,ten3 it+ t+e -rren3 bl/k=,

6re8i/-, be+a8i/-r

0r/ t+e ,tart: it, a66r/a+ +a, been a +al0a3 +/-,e /0 re,i,ting a ,/8ereign .e0a-lt

b-t n/t ./ing en/-g+ t/ re/8e t+e ri,k alt/get+er1 T+e rea,/n i, /b8i/-, /re

g/8ernent, 0in. it 6/litiall3 i6/,,ible t/ 6-t -6 /re /ne31 S/ it i,

-n0at+/able t+at t+e3 .i. n/t .ean. /re 0r/ 6ri8ate re.it/r,1 T+e .ebt

re,tr-t-ring lea8e, Greee an. it, +el6er, it+ "**bn /0 .ebt t+at /-l. +a8e been

ritten ./n entirel3 an. le0t 0-n., t/ a..re,, 0-t-re ai.ent, it+/-t re,/rting t/

a t+ir. re,-e1 I0 t+ere i, an/t+er ,+/./n it+ Greee it ill +a8e been a-,e. b3

t+i,1

T+e Geran 0inane ini,ter #/l0gang S+-ble an. E-r/ Gr/-6 6re,i.ent ean9

Cla-.e -nker ,+are. t+e ,ke6tii,: an. .i. n/t r-le /-t a t+ir. bail/-t1 A/r.ing

t/ a leake. /00iial re6/rt 0r/ t+e E-r/6ean C/i,,i/n: E-r/6ean Central Bank

an. t+e Internati/nal M/netar3 @-n.: Greee a3 nee. an/t+er 5* billi/n (bn)

0r/ 2*"5 t/ 2*2*1

In i.9Ma3 2*"2 t+e ri,i, an. i6/,,ibilit3 t/ 0/r a ne /aliti/n g/8ernent

a0ter eleti/n, le. t/ ,tr/ng ,6e-lati/n Greee /-l. +a8e t/ lea8e t+e E-r/ >/ne1

T+e 6/tential e;it beae kn/n a, Gre;it an. ,tarte. t/ a00et internati/nal arket

be+a8i/-r: a, ell a, a-,ing an aelerate. .erea,e /0 bank .e6/,it, in Greek bank,

(//nl3 re0erre. t/ a, a bank9r-n)1

A ,e/n. eleti/n in i.9-ne: en.e. it+ t+e 0/rati/n /0 a ne g/8ernent

,-66/rting a /ntin-e. a.+erene t/ t+e ain 6rini6le, /-tline. b3 t+e ,igne. bail/-t

6lan1 T+e ne g/8ernent +/e8er ie.iatel3 a,ke. it, re.it/r, t/ be grante. 2

e;tra 3ear,: e;ten.ing t+e .ea.line 0r/ 2*"5 t/ 2*"7 be0/re being re-ire. t/ be

,el090inane.: it+ in/r b-.get .e0iit, 0-ll3 /8ere. b3 e;tra/r.inar3 in/e 0r/

t+e 6ri8ati>ati/n 6r/gra1

COUNTERMEASURES TAKEN BY THE GREEK GOVERNMENT

http://en.wikipedia.org/wiki/Wolfgang_Sch%C3%A4ublehttp://en.wikipedia.org/wiki/Euro_Grouphttp://en.wikipedia.org/wiki/Jean-Claude_Junckerhttp://en.wikipedia.org/wiki/Jean-Claude_Junckerhttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozonehttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozonehttp://en.wikipedia.org/wiki/Wolfgang_Sch%C3%A4ublehttp://en.wikipedia.org/wiki/Euro_Grouphttp://en.wikipedia.org/wiki/Jean-Claude_Junckerhttp://en.wikipedia.org/wiki/Jean-Claude_Junckerhttp://en.wikipedia.org/wiki/Greece_withdrawal_from_the_eurozone


18/24

C/-nterea,-re, taken b3 t+e Greek g/8ernent in8/l8e. 0ig+ting again,t /rr-6ti/n

an. ta; e8a,i/n: a, ell a, a-,terit3 6akage, an. re0/r,1

I!(*!#,*6 R*)##%*!#,$

O!6,,9 # M*< 2010

Greee re6re,ent, /nl3 215 /0 t+e e-r/ >/ne e/n/31 De,6ite it, ,i>e: t+e .anger i,

t+at a .e0a-lt b3 Greee a3 a-,e in8e,t/r, t/ l/,e 0ait+ in /t+er e-r/ >/ne /-ntrie,1

T+i, /nern i, 0/-,e. /n &/rt-gal an. Irelan.: b/t+ /0 +/ +a8e +ig+ .ebt an.

.e0iit i,,-e,1 Ital3 al,/ +a, a +ig+ .ebt: b-t it, b-.get 6/,iti/n i, better t+an t+e

E-r/6ean a8erage: an. it i, n/t /n,i.ere. a/ng t+e /-ntrie, /,t at ri,k1 Reent

r-/r, rai,e. b3 ,6e-lat/r, ab/-t a S6ani,+ bail9/-t ere .i,i,,e. b3 S6ani,+

&rie Mini,ter /,Q !-i, R/.rg-e> a6ater/ a, /6lete in,anit3 an.

int/lerable1

S6ain +a, a /6arati8el3 l/ .ebt a/ng a.8ane. e/n/ie,: at /nl3 5 /0 GD&

in 2*"*: /re t+an 2* 6/int, le,, t+an Geran3: @rane /r t+e $S: an. /re t+an *

6/int, le,, t+an Ital3: Irelan. /r Greee: an. a/r.ing t/ Stan.ar. U &//r=, it ./e,

n/t ri,k a .e0a-lt1 S6ain an. Ital3 are 0ar larger an. /re entral e/n/ie, t+an

GreeeF b/t+ /-ntrie, +a8e /,t /0 t+eir .ebt /ntr/lle. internall3: an. are in a better

0i,al ,it-ati/n t+an Greee an. &/rt-gal: aking a .e0a-lt -nlikel3 -nle,, t+e

,it-ati/n get, 0ar /re ,e8ere1

O!6,,9 # O%!,( 2012

T+e /ntagi/n ri,k 0/r /t+er e-r/ >/ne /-ntrie, in t+e e8ent /0 an -n/ntr/lle. Greek

.e0a-lt: +a, greatl3 .iini,+e. in t+e la,t /-6le /0 3ear,1 T+i, i, ainl3 .-e t/ a

,-e,,0-l 0i,al /n,/li.ati/n an. i6leentati/n /0 ,tr-t-ral re0/r, in t+e

/-ntrie, being /,t at ri,k: +i+ ,igni0iantl3 i6r/8e. t+eir 0inanial ,tabilit31

E,tabli,+ent /0 an a66r/6riate an. 6eranent 0inanial ,tabilit3 ,-66/rt e+ani,0/r t+e e-r/ >/ne (ESM):al/ng it+ g-arantee, b3 ECB t/ /00er a..iti/nal 0inanial

,-66/rt in t+e 0/r /0 ,/e 3iel.9l/ering b/n. 6-r+a,e, ('MT) 0/r all e-r/ >/ne

/-ntrie, in8/l8e. in a ,/8ereign ,tate bail/-t 6r/gra 0r/ E@S@ESM (at t+e 6/int

/0 tie +ere t+e /-ntr3 regain6/,,e,, a /6lete arket ae,,):al,/ greatl3

+el6e. t/ .iini,+ t+e /ntagi/n ri,k1

I0 S6ain ,ign, a neg/tiate. Me/ran.- /0 $n.er,tan.ing it+ t+e Tr/ika

(EC: ECB an. IM@) /-tlining ESM ,+all /00er a 6rea-ti/nar3 6r/grae it+ re.it

line, 0/r t+e S6ani,+ g/8ernent t/ 6/tentiall3 .ra /n i0 nee.e. (be,i.e /0 t+e bank

rea6itali>ati/n 6akage t+e3 alrea.3 a66lie. 0/r): t+i, /-l. -ali03 S6ain al,/ t/

http://en.wikipedia.org/wiki/European_Stability_Mechanismhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Outright_Monetary_Transactionshttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Stability_Mechanismhttp://en.wikipedia.org/wiki/Memorandum_of_Understandinghttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/International_Monetary_Fundhttp://en.wikipedia.org/wiki/European_Stability_Mechanismhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/Outright_Monetary_Transactionshttp://en.wikipedia.org/wiki/European_Financial_Stability_Facilityhttp://en.wikipedia.org/wiki/European_Stability_Mechanismhttp://en.wikipedia.org/wiki/Memorandum_of_Understandinghttp://en.wikipedia.org/wiki/European_Commissionhttp://en.wikipedia.org/wiki/European_Central_Bankhttp://en.wikipedia.org/wiki/International_Monetary_Fund


19/24

reei8e t+e 'MT ,-66/rt 0r/ ECB: a, t+e ,/8ereign ,tate /-l. ,till /ntin-e t/

/6erate it+ a /6lete arket ae,, it+ t+e 6rea-ti/nar3 /n.iti/ne. re.it line1

In regar., /0 Irelan.: &/rt-gal an. Greee t+e3 /n t+e /t+er +an. +a8e n/t 3et

regaine. /6lete arket ae,,: an. t+-, ./ n/t 3et -ali03 0/r 'MT ,-66/rt1

&r/8i.e. t+e,e /-ntrie, /ntin-e t/ a.+ere t/ t+e 6r/grae /n.iti/n, /-tline. in

t+eir ,igne. Me/ran.- /0 $n.er,tan.ing: t+e3 ill -ali03 t/ reei8e 'MT at t+e

/ent t+e3 regain /6lete arket ae,,1

At t+e -rrent e/n/i liate: it+ t+e l/ng ter "*93ear g/8ernent b/n. rate

./n at "15 in Geran3: 0inanial arket, a, a r-le /0 t+-b /nl3 in.iate a

/ntin-e. e;i,tene /0 ,igni0iant /ntagi/n ri,k,: 0/r t+/,e /-ntrie, ,till +a8ing a

,iilar g/8ernent b/n. rate ab/8e t+e liit1 !//king at t+e a8erage 8al-e, 0/r

't/ber 2*"2: /nl3 t+e 0/ll/ing /-t /0 "7 e-r/ >/ne /-ntrie, ,till battle. it+

l/ng ter intere,t rate, +ig+er t+an 1

• C36r-, V 71* N/t reg-late. b3 t+e arket ,ine Se612*""F I0 tra.e. 0reel3 it

a, e;6ete. t/ be ,igni0iantl3 +ig+er in 't12*"2)

• &/rt-gal V %12

• Greee V "%1*

Geran3 +a, 6la3e. a a?/r r/le in .i,-,,i/n /nerning Greee=, .ebt ri,i,:

t+/-g+ t+at i, +ar.l3 ,-r6ri,ing gi8en t+at it a, Geran bank, +/ +el. t+e large,t

a/-nt /0 Helleni .ebt1 Criti, +a8e a-,e. t+e Geran g/8ernent /0 +36/ri,3F

/0 6-r,-ing it, /n nati/nal intere,t, 8ia an -nillingne,, t/ a.?-,t 0i,al 6/li3 in a

a3 t+at /-l. +el6 re,/l8e t+e e-r/ >/ne ri,i,F /0 -,ing t+e ECB t/ ,er8e t+eir

/-ntr3=, nati/nal intere,t,F an. +a8e ritii>e. t+e nat-re /0 t+e a-,terit3 an. .ebt9

relie0 6r/grae Greee +a, 0/ll/e. a, 6art /0 t+e /n.iti/n, atta+e. t/ it,

bail/-t,1

A*6


20/24

A 3t+ i, .e8el/6ing t+at 6ri8ate re.it/r, +a8e ae6te. ,igni0iant l/,,e, in t+e

re,tr-t-ring /0 Greee=, .ebt: +ile t+e /00iial ,et/r get, /00 ,/t 0ree1 JW T+e

realit3 i, t+at 6ri8ate re.it/r, g/t a 8er3 ,eet .eal +ile /,t at-al an. 0-t-re

l/,,e, +a8e been tran,0erre. t/ t+e /00iial re.it/r,1

Greee=, 6-bli .ebt ill reain -n,-,tainable at l/,e t/ "4* 6er ent /0 gr/,,

./e,ti 6r/.-t at be,t: it ill 0all t/ "2* 6er ent b3 2*2* an. /-l. ri,e a, +ig+ a,

"* 6er ent /0 GD&1 #+3X A +air-t /0 ""*bn /n 6ri8atel3 +el. b/n., i, at+e.

b3 an inrea,e /0 "*bn in t+e .ebt Greee /e, t/ /00iial re.it/r,1 A ,igni0iant

6art /0 t+i, inrea,e in GreeeO, /00iial .ebt g/e, t/ bail /-t 6ri8ate re.it/r, *bn

0/r -60r/nt a,+ ,eetener, /n t+e ne b/n., t+at e00eti8el3 g-arantee -+ /0 t+eir

0ae 8al-e1 An3 0-t-re 0-rt+er +air-t, t/ ake Greek .ebt ,-,tainable ill t+ere0/re

0all .i,6r/6/rti/natel3 /n t+e gr/ing lai, /0 t+e /00iial ,et/r1 !/an, /0 at lea,t

25bn 0r/ t+e E-r/6ean @inanial Stabilit3 @ailit3 t/ t+e Greek g/8ernent ill g/

t/ar., rea6itali>ing bank, in a ,+ee t+at ill kee6 t+/,e bank, in 6ri8ate +an.,

an. all/ ,+are+/l.er, t/ b-3 bak an3 6-bli a6ital in?eti/n it+ ,eetl3 6rie.

arrant,1 T+e ne b/n., ill al,/ be ,-b?et t/ Engli,+ la: +ere t+e /l. b/n., 0ell

-n.er Greek ?-ri,.iti/n1 S/ i0 Greee ere t/ lea8e t+e e-r/ >/ne: it /-l. n/ l/nger

6a,, legi,lati/n t/ /n8ert e-r/9.en/inate. .ebt int/ ne .ra+a .ebt1 T+i, i, an

aa>ing ,eetener 0/r re.it/r,1

T+e realit3 i, t+at /,t /0 t+e gain, in g//. tie, ere 6ri8ati>e. +ile /,t /0 t+e

l/,,e, +a8e been n/ ,/iali>e.1 Ta;6a3er, /0 Greee=, /00iial re.it/r,: n/t 6ri8ate

b/n.+/l.er,: ill en. -6 6a3ing 0/r /,t /0 t+e l/,,e, .eri8ing 0r/ Greee=, 6a,t:

-rrent an. 0-t-re in,/l8en31

'ne e,tiate i, t+at Greee at-all3 ,-b,ribe. t/ "5bn /rt+ /0 ne .ebt in /r.er

t/ get 2*bn /rt+ /0 /l. .ebt t/ be ritten /00: eaning t+e tr-6ete. rite9./n

/0 ""*bn b3 t+e bank, an. /t+er, i, /re t+an ./-ble t+e tr-e 0ig-re /0 5*bn t+at

a, tr-l3 ritten /001 Ta;6a3er, are n/ liable 0/r /re t+an %* /0 Greee=, .ebt1

ae, Makint/,+: In8e,tent E.it/r at t+e @inanial Tie,: n/te. a &M/rgan

C+a,e e,tiate t+at /nl3 "5bn /0 4"*bn t/tal =ai.= t/ Greee at-all3 ent int/ t+e

/-ntr3=, e/n/3: t+e re,t +a8ing been +an.e. /8er t/ it, re.it/r,1 N/ /n.er t+e3

are r/,,: ,ai. Makint/,+ /0 t+e Greek,1 'ne ?/-rnali,t 0/r ,er $piegel n/te. t+at

t+e ,e/n. bail/-t a, n/t geare. t/ t+e re-ireent, /0 t+e 6e/6le /0 Greee b-t t/

t+e nee., /0 t+e internati/nal 0inanial arket,: eaning t+e bank,1 H/ el,e an /ne

e;6lain t+e 0at t+at ar/-n. a -arter /0 t+e 6akage /n=t e8en arri8e in At+en, b-t

ill 0l/ .iretl3 t/ t+e /-ntr3=, internati/nal re.it/r,X He a-,e. t+e bank, /0

le8erl3 ani6-lating t+e 0ear t+at a Greek bankr-6t3 /-l. trigger a 0atal +ain

reati/n in /r.er t/ get 6ai.1 A/r.ing t/ R/bert Rei+: in t+e bakgr/-n. /0 t+e

http://en.wikipedia.org/wiki/JPMorgan_Chasehttp://en.wikipedia.org/wiki/JPMorgan_Chasehttp://en.wikipedia.org/wiki/Der_Spiegelhttp://en.wikipedia.org/wiki/Robert_Reichhttp://en.wikipedia.org/wiki/Robert_Reichhttp://en.wikipedia.org/wiki/JPMorgan_Chasehttp://en.wikipedia.org/wiki/JPMorgan_Chasehttp://en.wikipedia.org/wiki/Der_Spiegelhttp://en.wikipedia.org/wiki/Robert_Reich


21/24

Greek bail/-t, an. .ebt re,tr-t-ring l-rk, #all Street1 #+ile $S bank, are /e.

/nl3 ab/-t 5bn b3 Greee: t+e3 +a8e /re ,igni0iant e;6/,-re t/ t+e ,it-ati/n 8ia

Geran an. @ren+ bank,: +/ ere ,igni0iantl3 e;6/,e. t/ Greek .ebt1 Ma,,i8el3

re.-ing t+e liabilitie, /0 Geran an. @ren+ bank, it+ regar., t/ Greee t+-, al,/

,er8e, t/ 6r/tet $S bank,

'n a ,+/larl3 riti-e /0 t+e E$ anageent /0 t+e .ebt ri,i,: &a6a./6/-l/,

/ent,

T+e e-r/ >/ne ri,i, anageent +a, been .i,a,tr/-, 0r/ it, 8er3 beginning in

2**


22/24

.e0a-lt an. a e-r/ e;it /-l. en.anger Greee=, /ntin-e. eber,+i6 /0 t+e E$1

M/re i6/rtantl3: t+/-g+: t+ere i, a ,tr/ng eleent /0 nati/nal 6ri.e1 @/r Greee t/

lea8e t+e e-r/ /-l. ,ee like a nati/nal +-iliati/n1 Min. 3/-: -ite +/ agreeing

t/ .ea.e, /0 i,er3 -n.er Geran ,-b?-gati/n all/, Greek, t/ +/l. t+eir +ea.,

+ig+ .e0eat, e1 N/net+ele,,: /t+er 6/ll, +a8e ,+/n t+at al/,t +al0 (4%) /0

Greek, are in 0a8/-r /0 .e0a-lt: in /ntra,t it+ a in/rit3 (%) +/ are n/t1

SPECULATION ABOUT EURO E>IT

T+e e-r/ ,+/-l. n/ be re/gni>e. a, an e;6erient t+at 0aile.: r/te Martin

@el.,tein in 2*"21J"2 E/n/i,t,: /,tl3 0r/ /-t,i.e E-r/6e: an. a,,/iate.

it+ M/.ern M/netar3 T+e/r3 an. /t+er 6/,t9Ke3ne,ian ,+//l,: /n.ene. t+e

.e,ign /0 t+e E-r/ -rren3 ,3,te 0r/ t+e beginning: an. +a8e ,ine beena.8/ating t+at Greee (an. t+e /t+er .ebt/r nati/n,) -nilaterall3 lea8e t+e E-r/ >/ne:

+i+ /-l. all/ Greee t/ it+.ra ,i-ltane/-,l3 0r/ t+e E-r/ >/ne an.

reintr/.-e it, nati/nal -rren3 t+e .ra+a at a .eba,e. rate1

E/n/i,t, like T3ler C/en +/ 0a8/r t+i, ra.ial a66r/a+ t/ ,/l8e t+e Greek .ebt

ri,i, t36iall3 arg-e t+at an /r.erl3 .e0a-lt i, -na8/i.able 0/r Greee at t+e l/ng

ter: an. t+at a .ela3 in /rgani>ing an /r.erl3 .e0a-lt (b3 len.ing Greee /re

/ne3 t+r/-g+/-t a 0e /re 3ear,): /-l. ?-,t in. -6 +-rting E$ len.er, an.

neig+b/ring E-r/6ean /-ntrie, e8en /re1 @i,al a-,terit3 /r a e-r/ e;it i, t+e

alternati8e t/ ae6ting .i00erentiate. g/8ernent b/n. 3iel., it+in t+e E-r/ Area1

I0 Greee reain, in t+e e-r/ +ile ae6ting +ig+er b/n. 3iel.,: re0leting it, +ig+

g/8ernent .e0iit: t+en +ig+ intere,t rate, /-l. .a6en .ean.: rai,e ,a8ing, an.

,l/ t+e e/n/31 An i6r/8e. tra.e 6er0/rane an. le,, reliane /n 0/reign

a6ital /-l. be t+e re,-lt1

't+er, arg-e t+at a Greek e;it 0r/ t+e e-r/ >/ne /-l. re,-lt in a?/r a6ital 0lig+t

an. ,igni0iant in0lati/n t+at /-l. .e,tr/3 ,a8ing, an. ake i6/rt, 8er3 e;6en,i8e

0/r Greek,1 A Greek .e6art-re 0r/ t+e e-r/ >/ne ig+t: /re/8er: 6rei6itate a

larger /ntrati/n /0 t+e e-r/ >/ne: a, a re,-lt /0 t+e /re arginal ,/-t+ern

e/n/ie, lea8ing1 T+e .e6art-re /0 a?/r e-r/ >/ne e/n/ie, ,-+ a, S6ain an.

Ital3 /-l. be a a?/r bl/ t/ t+e ,tabilit3 /0 t+e e-r/ an. ig+t e8en lea. t/ it,

e8ent-al /lla6,e1

@-rt+er/re: Geran C+anell/r Angela Merkel an. 0/rer @ren+ &re,i.ent Ni/la,

Sark/>3 ,ai. /n n-er/-, /a,i/n, t+at t+e3 /-l. n/t all/ t+e e-r/ >/ne t/

.i,integrate an. +a8e linke. t+e ,-r8i8al /0 t+e E-r/ it+ t+at /0 t+e entire E-r/6ean

$ni/n1

http://en.wikipedia.org/wiki/Martin_Feldsteinhttp://en.wikipedia.org/wiki/Martin_Feldsteinhttp://en.wikipedia.org/wiki/Greek_government-debt_crisis#cite_note-312http://en.wikipedia.org/wiki/Modern_Monetary_Theoryhttp://en.wikipedia.org/wiki/Modern_Monetary_Theoryhttp://en.wikipedia.org/wiki/Post-Keynesianhttp://en.wikipedia.org/wiki/Tyler_Cowenhttp://en.wikipedia.org/wiki/Tyler_Cowenhttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/Nicolas_Sarkozyhttp://en.wikipedia.org/wiki/Nicolas_Sarkozyhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/Martin_Feldsteinhttp://en.wikipedia.org/wiki/Martin_Feldsteinhttp://en.wikipedia.org/wiki/Greek_government-debt_crisis#cite_note-312http://en.wikipedia.org/wiki/Modern_Monetary_Theoryhttp://en.wikipedia.org/wiki/Post-Keynesianhttp://en.wikipedia.org/wiki/Tyler_Cowenhttp://en.wikipedia.org/wiki/Angela_Merkelhttp://en.wikipedia.org/wiki/Nicolas_Sarkozyhttp://en.wikipedia.org/wiki/Nicolas_Sarkozyhttp://en.wikipedia.org/wiki/European_Unionhttp://en.wikipedia.org/wiki/European_Union


23/24

IMPACT OF GREECE CRISIS IN INDIA@-rt+er: t+e ?/b l/,,e,: b-.get -t, an. /t+er a-,terit3 ea,-re, ill al,/ i6at.ean.1 T+i, ill al,/ +a8e an a.8er,e i6at /n t+e /-ntr3=, in.-,trial 6r/.-ti/n1A, a ,l/./n ill a00et e;6/rt,: it an lea. t/ an inrea,e in t+e alrea.3 +ig+-rrent a/-nt .e0iit1 Hig+ C-rrent A/-nt De0iit ean, t+at i6/rt, are -++ig+er t+an t+e e;6/rt, +i+ ill -ltiatel3 .e6reiate t+e R-6ee 0-rt+er ,trengt+ening t+e in0lati/nar3 0/re, in t+e /-ntr31

T+e ,t/k arket, in .e8el/6ing /-ntrie, an itne,, a ,l/./n in 0-n., 0r/E-r/6e a, t+e 0/reign in,tit-ti/nal in8e,t/r, (@II,) an. E-r/6ean bank, ill nee.0-n., t/ eet t+eir /n re-ireent, /0 a6ital a.e-a3: -rrent /bligati/n, an../e,ti nee.,: an. ill n/t be able t/ ,6are -+ 0/r in8e,tent, in /8er,ea,arket,1

CONCLUSION

• A, e .i,-,,e. .-e t/ /8er 6-bli e;6en.it-re an. /8er9b/rr/e.1

N/ Greee i, in a 8erge /0 .e0a-lt1

• N/ Greee g/8t1 i, taking tig+t a-,terit3 ea,-re, t/ bring ./n

b-.get .e0iit t/ *1


24/24

• T+/-g+ t+e3 are 6-6ing /ne3 in Greee: t+e3 are n/t ,-re ab/-t t+e

0-t-re /0 Greee E/n/31

• N/ t+e /n.iti/n i, in a .ilea +ere t+e Greee /r let it g/

.e0a-lt1

Hardcopy of Central Banking

Documents