Exclusive: Euro zone considers three bailout exit options for Greece

BY JAN STRUPCZEWSKI

BRUSSELS Thu Nov 6, 2014 12:24pm EST

(Reuters) - Euro zone finance ministers will consider three options on Thursday for what happens after Greece exits its bailout at the end of the year, seeking to balance the need to reassure investors with the demands of domestic Greek politics.

The Greek government has staked its survival on exiting the bailout a year early, a move that will please voters hammered by austerity measures imposed by the EU and the IMF, but which has already rattled markets, pushing up Greek bond yields.

Greek Bank Capital Needs at EU27.5 Billion, Bank of Greece Says

Bloomberg

By Marcus Bensasson & Christos Ziotis - Dec 27, 2012 7:34 PM GMT+0200

Greece’s four largest banks need to boost their capital by 27.5 billion euros ($36.3 billion) after taking losses from the country’s debt swap earlier this year, the largest sovereign restructuring in history.

As Summit Looms, Merkel Sees 'Controversial' Talks

The Wall Street Journal

BRUSSELS—European leaders embark on talks here Thursday over steps they hope will begin to lift doubts about the survival of the euro, amid skepticism in financial markets that they can achieve a breakthrough to stem the debt and banking crises.

EU Nears Confrontation Over Greek Rescue

Bloomberg

By James G. Neuger and Jonathan Stearns - Jan 31, 2012 10:50 AM GMT+0200

… Euro leaders left a Brussels summit late yesterday with no accord…

… Germany’s proposal for an EU-appointed overseer of the Greek budget prompted consternation in Athens…

… The permanent fund requires governments to put collective action clauses into new bond issues…

Greek Bailout in Peril

France, Germany Press Athens, Bondholders to Reduce Debt

The Wall Street Journal

… Greece's bailout loans from the euro zone and the International Monetary Fund are on hold until a deal is reached…

… concerns in financial markets that Greece's bailout program is in danger of unraveling…

… France and Germany have also failed so far to offer a convincing path back to economic growth…

… European Central Bank's overnight deposit facility reached a high on Friday…

… The chancellor also backed the French president's call for a financial-transaction tax…

Deeper Cuts Needed to Save Greece: Papademos

By Maria Petrakis and Natalie Weeks - Jan 5, 2012 11:51 AM GMT+0200

Bloomberg

… cuts in income are the only way to stay in the euro and get more financing…

… investors would take a 50 percent hit on the nominal value of 206 billion euros of privately owned debt…

… Greece has not much room for maneuver…

… Greece’s debt is forecast to balloon to almost double the size of its shrinking economy…

Merkel Calls for More 'Concrete' Union

The Wall Street Journal

By WILLIAM BOSTON and MARCUS WALKER

Ms. Merkel's first challenge, however, is to overcome her differences about the way forward with French President Nicolas Sarkozy…

… that euro members would have to accept a loss of national sovereignty, and that there is no quick fix to the crisis.

… they are prepared to sign a fiscal pact among the euro zone's 17 governments if the wider, 27-country EU won't agree…

…massive ECB intervention, …, if it doesn't work, could leave Europe staring into the abyss with no more cards to play…

…the potential for bondholder losses in future has helped to undermine investors' confidence…

Is this really the end?

Unless Germany and the ECB move quickly, the single currency’s collapse is looming

Nov 26th 2011 | from the print edition

The Economist

EVEN as the euro zone hurtles towards a crash, most people are assuming that, in the end, European leaders will do whatever it takes to save the single currency. That is because the consequences of the euro’s destruction are so catastrophic that no sensible policymaker could stand by and let it happen.

Insight: Euro has new politburo but no solution yet

(Reuters) - Europe has a new informal leadership directorate intent on finding a solution to the euro zone's debt crisis, but it has yet to prove its ability to come up with a lasting formula.

Forged in the fire of a bond market inferno, the shadowy so-called Frankfurt Group has grabbed the helm of the 17-nation currency area in a few short weeks.

EU Sets 50% Greek Writedown, $1.4T in Rescue Fund

Bloomberg

By James G. Neuger and Stephanie Bodoni - Oct 27, 2011 9:11 AM GMT+0300

European leaders persuaded bondholders to take 50 percent losses on Greek debt and boosted the firepower of the rescue fund to 1 trillion euros ($1.4 trillion), responding to global pressure to step up the fight against the financial crisis.

Statement for the EU agreement on debt crisis

'via Blog this'

A Greek Short Back and Sides

Would a 50% cut in the value of Greek debt be enough?

The wall street journal

That depends on who’s losing out.

If Greece’s obligations to the European Central Bank and International Monetary Fund are considered inviolable, while Greece at the same time uses existing resources to recapitalize its banks, a 50% default will result in only a quarter of Greece’s debt load being lifted, according to a recent UBS note.

EU Signals Fund Leverage Needs More Talks

Bloomberg

By Brian Parkin and Rainer Buergin - Oct 25, 2011 9:57 AM GMT+0300Boosting the effectiveness of Europe’s bailout fund will require further talks with investors as German lawmakers prepare to vote on its new powers tomorrow, a European Union document showed.

Germany, France Delay Euro Rescue Plan

Leaders of Currency Zone's Two Largest Economies, at Odds Over Rescue Plans, Say No Pact Possible by Sunday Deadline

The Wall Street Journal

BERLIN—Europe's efforts to deliver a comprehensive plan to resolve the euro-zone debt crisis were in danger of unraveling Thursday as disagreement between Germany and France over virtually every point forced the 27-nation bloc to concede a much-anticipated summit of European Union leaders on Sunday won't produce an agreement.

Merkel Tempers EU Summit Hopes

By TOM FAIRLESS And RIVA FROYMOVICH

The Wall Street Journal

As investors look toward a Sunday meeting of European leaders for a sweeping solution to Europe's debt crisis, a spokesman for German Chancellor Angela Merkel on Monday warned against hoping that all the euro-zone's debt woes would be resolved by then.

G-20 Gives EU One Week to Fix Debt Crisis

Bloomberg

By Simon Kennedy, Theophilos Argitis and James G. Neuger - Oct 17, 2011 5:58 AM GMT+0300

European leaders have one week to settle differences and flesh out a strategy to terminate their sovereign debt crisis as global finance chiefs warn failure to do so would endanger the world economy.

Here we go again

The Economist

The Europeans are pushing the global banking system to the edge

YOU know something bad is going to happen in a horror film when someone decides to take a late-night stroll in a forest. The equivalent in finance is a bank boss insisting that his institution is completely solid.

Greece loan talks advance, EU delays summit

(Reuters) - The European Union postponed a crucial summit to allow time for a broader solution to Greece's debt crisis on Monday after Athens said it had concluded talks with international lenders on an aid payment it needs to hold off default.

Dexia accepts rescue offer after marathon meeting

(Reuters) - Franco-Belgian bank Dexia agreed early on Monday to the nationalization of its Belgian banking division and secured state guarantees in a rescue that could pressure other euro zone governments to strengthen their banking sectors.

Europe Considers Wider Greek Write-Down

More Pain for Bondholders Seen as Part of Solution to Athens's Budget Gap

By CHARLES FORELLE, COSTAS PARIS and MARCUS WALKER

 The Wall Street Journal

LUXEMBOURG—The admission by top European officials that Greece's fiscal distress is deepening has increased the chance that a July deal to give Athens more cash could be revised to exact a greater toll on its private-sector creditors. At a two-day closed-door meeting here that ended Tuesday, European finance ministers debated what to do with their sickest patient. No decisions were made, but the notion of bigger losses for creditors was broached, people familiar with the matter said.