Business

Greece bailed out again

RELIEF at Greece's fresh bailout package, which has averted the threat of a catastrophic default by Athens next month, was undermined yesterday by growing doubts about the sustainability of the agreement.

The Greek Prime Minister, Lucas Papademos, called it an "historic day" after the AU$130 billion deal was concluded early on Tuesday.

European finance ministers said in a statement that it provides a "comprehensive blueprint" for putting Athens' public finances on a sustainable footing by reducing the country's debt to GDP ratio to 120.5 per cent by 2020. But some financial analysts have already suggested that the deal will unravel long before then.

"Greece is caught up in a full-blown debt spiral and no one has any certainty over what happens to GDP growth a quarter from now, let alone a decade out," said David Owen of the US investment bank, Jefferies.

"More likely than not, and not necessarily of its own making, at some point, events will blow the country off course."

That pessimistic view was reinforced by a confidential document on Greece, compiled by European and International Monetary Fund economic analysts, that was leaked on Monday night.

The secret report showed that Greece's debt burden could easily still stagnate at an unsustainable 160 per cent of GDP at the end of the decade if the economy does not return to growth quickly.

Analysts also expressed doubts over whether the Greek government would be capable of delivering the austerity measures that have been demanded by Greece's European creditors in exchange for the new bailout funds.

Chris Towner from currency specialist HiFX said: "The reality of spending cuts will not go away for decades. The Greek people may take their destiny into their own hands through the democratic process."

Greece is due to hold new parliamentary elections in April

Support for the two main parties in the coalition that have backed the austerity measures - New Democracy and Pasok - hit an all-time low this week.

The deal signing off on Greece's new bailout was agreed after 14 hours of intense negotiations between finance ministers. The country's private sector bondholders will take a larger than expected 53 per cent write down on the value of the investments, giving Athens around AU$107 billion in debt relief.

The European Central Bank will forgo the profits on its holdings of Greek bonds and send them to Athens, which should ease Greece's debt burden by around AU$15 billion. National central banks will also make a contribution through sending any profits on their own holdings of Greek bonds to Athens. The interest rate that Greece pays on its loans from the European bailout fund, the European Financial Stability Facility, will also be cut.

For its part, Athens will push through further spending cuts of AU$3.3 billion in 2012, amounting to 1.5 per cent of annual GDP. Greece will also be required to establish a special account, which will set aside the funds that the country needs to pay its creditors every three months. The country has also pledged to create a new law that will prioritise repayments to creditors above spending on social services.

Greece will also accept an "enhanced and permanent" presence on the ground of European Commission inspectors, who will monitor whether the government is delivering on its fiscal commitments.

Deal still needs to be ratified by national parliaments

A key test will be the German parliament, which is expected to vote on the package next week. Another hurdle is the agreement of private sector bondholders. It remains to be seen what proportion of them will accept the "voluntary" bond swap negotiated on their behalf by the banking lobby group, the Institute of International Finance.

Topics:  bailout contagion greece greek debt crisis sovereign debt crisis



Science Festival seriously awesome

CALLING everyone who wants to see, hear and be a part of something totally cool: this is where you need to be this March.

Drink where the cool kids do this summer

There are a bunch of new bars open in Brisbane, make sure you're there!

CHECK out these new funky bars.

Discover Brisbane’s laneway gems

Brisbane's laneways will surprise you.

NOT all of Brisbane City is as it seems…

Top five things to experience this summer in Brisbane

Tangalooma is amazing if you're keen for a dive, kayak or swim.

THIS summer get out and explore your capital city.

Don’t go chasing waterfalls…find them on these drives!

The Scenic Rim is just one place nearby that you'll love.

BRISBANE isn’t all bright lights and city slickers.

Your boots are made for walking these tours

Brisbane Greeters tours are a great way to learn the local history of the city.

YOU don’t need a bike or bus for a seriously good tour of Brisbane.

Is Brisbane the new arts and culture capital?

Check out GOMA's latest exhibition - it's all about hair! GOMA 10 Ambassador Patience Hodgson visits Nervescape V 2016 by Icelandic artist Hrafnhildur Arnardóttir (aka Shoplifter), commissioned for ‘Sugar Spin: you, me, art and everything’ at the Gallery of Modern Art, Brisbane. 
Photograph: Natasha Harth, QAGOMA

THE rest of the world should be envious of this line-up!

Unregistered, uninsured and unlicensed

BIG FINE: A man has been fined more than $1000 for driving unlicensed in an unregistered and uninsured vehicle.

Gympie man fined more than $1000 for triple driving breach

Magistrates alarm over disqualified drivers

A Gympie magistrate has expressed alarm at the number of disqualified driving offences coming before the court.

Disqualified drivers alarm magistrate

Dog attack costs owner $1500

ATTACK: A man has been fined over a dog attack at Inskip Point.

Man ordered to pay mroe than $1500 over an Inskip Point dog attack

Local Partners

Startups get a leg up in Gympie region

ENTREPRENEURS and innovators in the Gympie region will benefit from an innovative program being launched next Wednesday at the Gympie RSL from 7am.


How Stay at Home Mum blogger Jody Allen struck it big

Jody Allen and Walt Collins will co-host the Seven Network's Stay at Home Mum television series from April.

Jody Allen's star continues to rise at incredible speed

Big effort by volunteers at little Widgee

MANY HANDS: They're always helping with something out Widgee way. Volunteers braved last weekend's heatwave to help get the showgrounds ready for the April campdraft and, on Wednesday, yet more community-minded folk headed off to Widgee Craft Group to get things under way for the group's morning tea for cancer later this year. Among them were (from left) Judy Houben, Christine Schulz and Lynlie Cross who were snapped working on their Australia's Biggest Morning Tea quilt.

Volunteers get showgrounds into shape for campdraft

Tensions high at pointy end of MKR's round two

WHEN an ex-vegan pacifist says "I think people that score strategically need a kick in the shins”, the MKR gloves are off.

Jungle Jay sent packing from I'm a Celebrity

I'm A Celebrity ... Get Me Out Here! contestant Jay Laga'aia with Keira.

BIG friendly giant Jay Laga'aia has been eliminated from I'm A Celeb

Carson Kressley brings 'camp' to I'm a Celebrity jungle

"I am not all Park Avenue and daffodils” ... Carson Kressley.

Meet the "campest” campmate to star on I'm a Celebrity.

Star Wars: The Last Jedi mystery already solved

FILE- This undated file photo provided by Disney shows Daisey Ridley as Rey, left, and John Boyega as Finn, in a scene from the film, \"Star Wars: The Force Awakens.\" Hasbro said it is changing its Star Wars Monopoly set after an 8-year-old girl became upset that Rey, the movie's female heroine, was not included as a figure along with Darth Vader and Kylo Ren. (Disney/Lucasfilm via AP, File) MANDATORY CREDIT

A key mystery surrounding the title of episode eight has been solved

Kids' game "full of f**king paedophiles" according to dad

A mortified dad has expressed serious concerns over an online game

Lisa Marie Presley's ex caught with child pics: court

Lisa Marie Presley, at right, and her husband, Michael Lockwood back in 2010. FILE

Lisa Marie, 49, claimed she was left “sick to her stomach”

Robert Irwin introduces Jimmy Fallon to wild guests

Robert Irwin introduces Tonight Show host Jimmy Fallon to a cuddly sloth.

ROBERT Irwin continues Steve's legacy.

What $11.9m can get you on Coast's most exclusive street

29-31 Wyuna Drive Noosaville Qld 4566

This is what a cool $11.9m can get you

How a first home buyer built house with no deposit

NEARLY THERE: Construction on the first house to home orphans at Umoja began in January.



Photo Contributed

His home will be completed later this year.

$6.3 billion project to drive population boom

BIG IDEAS: Artist's impression of the new 10,000-unit complex to be constructed at Springfield Central.

Driverless trains could take thousands to and fro from Springfield

Company collapse: Boss goes to Vegas, staff lose thousands

Last chance for staff to lodge their claims

Mining giant execs could sun themselves on region's island

OFFERS INVITED: Potential buyers are showing interest in Camp Island, off the coast of Bowen.

The vendors are hoping for at least $2m for the island.

Ready to SELL your property?

Post Your Ad Here!