Tag Archives: Konkurs

Mer om Argentina og konkurser

Mark Weisbrot, Rebecca Ray, Juan A. Montecino og Sara Kozameh ved Center for Economic and Policy Research har en flott oppsummeringsartikkel om Argentina og lærdommene etter konkursen i 2001. For dere som ikke husker, årene 1999 – 2001 var tøffe for Argentina og det endte med mislighold av $100 milliarder og en kraftig devaluering. Grunnen til at mange kikker til Argentina er at det er den siste store konkursen. Det er uansett informativt å ta en titt, selv om ikke alle konkurser er like (last ned PDF fila og gjør klar gul-penn. Ikke mer enn 15 sider tekst og mange gode grafer.)

I vanlig stil, først graf, deretter tekst:
Screen shot 2011 11 21 at 22 25 47
Det er slik både dårlige og gode nyheter ser ut. Er det rart spanjoler flytter hjemlandet for tiden?

Fra artikkelen:

  • Argentina was trapped in a severe recession from mid-1998 to the end of 2001. Attempts to stabilize the economy and maintain the currency peg to the U.S. dollar, through monetary and fiscal tightening, led by the IMF and backed by tens of billions of dollars in lending, failed to arrest the economy’s downward spiral.
  • In December of 2001, the government defaulted on its debt, and a few weeks later it abandoned the currency peg to the dollar. The default and devaluation contributed to a severe financial crisis and a sharp economic contraction, with GDP shrinking by about 5 percent in the first quarter of 2002. However, recovery began after that one quarter of contraction, and continued until the world economic slowdown and recession of 2008-2009. The economy then rebounded, and the IMF now projects growth of 8 percent for 2011.
  • The country experienced this remarkable economic growth despite the default and difficulties borrowing from international financial markets over the past nine years, and relatively little Foreign Direct Investment (FDI).This should give pause to those who argue, as is quite common in the business press, that pursuing policies that please bond markets and international investors, as well as attracting FDI should be the most important policy priorities for any developing country government.
  • (Denne er interesant)
    Argentina’s rapid growth has often been dismissed as a “commodity boom” driven by high prices for its agricultural exports such as soybeans, but the data show that this is not true.
  • It is remarkable that Argentina has achieved its success in the face of adverse external circumstances, some of which continue to this day. Just one month ago the Obama administration, under pressure from “vulture funds” and their associated lobby groups, announced that it would oppose multilateral loans to Argentina.
  • Greece, which has been pursuing policies similar to those adopted by Argentina during its 1998- 2002 recession, is expected to need more than 9 years to reach its pre-crisis level of GDP. Unemployment, which is currently at 16 percent, could take even longer to reach normal levels. Trend level GDP is nowhere in sight.
  • Argentina’s experience also calls into question the popular myth that recessions caused by financial crises must involve a slow and painful recovery. Argentina’s financial crisis and collapse were as severe as that of almost any country in recent decades; and yet it took only one quarter after the default to embark on a rapid and sustained recovery. This is not only because of the devaluation and improved macroeconomic policies, but because the default freed the country from having to be continually hamstrung by a crippling debt burden and by pro-cyclical policies imposed by creditors.

Den siste er «går du konkurs, gå KONKURS» argumentet.

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Seks grunner Hellas burde gå konkurs. Av Michael Schuman.

Du har kanskje tenkt tanken? La seigpiningen stoppe, legg planer blant få byråkrater og annonser en styrt konkurs av Hellas (meg):

Six reasons why Greece should default – The Curious Capitalist – TIME.com: «As global stocks tank over rising fears of a double-dip recession, one country at the center of the storm has never exited the recession – Greece. Amid its increasingly severe debt crisis, the Greek economy is in its third consecutive year of contraction, and, under pressure to slash state spending and stabilize its national debt, there is little hope that the situation will turn around any time soon. The IMF doesn’t expect positive annual growth in the country until 2013! Earlier this week, the government approved yet another package of austerity measures, including cuts to pensions and public sector workers and a program to tax the poor. The measures are an attempt to appease Greece’s creditors in the euro zone, who are demanding even harsher steps in return for continuing a $150 billion bailout given to Athens last year. Without those rescue funds, Greece could default on its debt.

That default is something Europe has been struggling to avoid for a good 18 months. But more and more, I’m coming to believe Greece should default. Here’s why:

The prevailing wisdom concerning Greece is that a default on its $400 billion of sovereign debt would be a catastrophe for the world’s financial markets and help speed the global economy towards a renewed recession. We can’t rule out that possibility. European banks are already under pressure (watch for more on that in this space), and losses inflicted by a Greek default, though unlikely to topple European banks, could heighten concerns about the health of Europe’s financial sector, sending global markets into turmoil, worsening the euro debt crisis, and leading to something truly ugly. That would especially be the case if panicky investors fled the bonds of other indebted euro zone countries, like Italy and Spain, possibly causing the collapse of the monetary union. None of this is certain, of course, but we can’t predict how the global economy would react to a Greek default, especially with sentiment already so weak. The general thinking is: Why take the risk? Keep bailing out Greece.

The counter argument, though, is that we’d all be better off if Greece just defaulted. I’ve made the case before that a continued bailout of Greece was a bad idea, and the more I watch what’s happening in the Greek crisis, the more I think Athens needs to just throw in the towel, default, and start over.

First, a Greek default is inevitable. It is not a matter of if, but how. A default is built into the terms of the proposed second bailout package, in which private creditors are expected to swap or roll over their holdings of Greek bonds, taking a loss in the process. That would be an “orderly” default, perhaps, through which the process could be carefully controlled to minimize the impact on financial markets compared to a “disorderly” default, in which Greece just says: “We won’t pay!” But it is still a default.

Second, because of that reality, investors are already assuming Greece will default, and are preparing for it. I’ve argued in the past the Greece is not Lehman Brothers, and its default would not have the same disastrous effect on the global economy, to a great degree because there would be no shock value from a Greek default, as there was with Lehman. Greece has been on an obvious downward spiral for nearly two years now. Its one-year bonds are trading at a yield well over 100% — a clear indication investors believe a default is coming. Since the markets are already anticipating a default, there isn’t as much downside in actually having one.

Third, the reason everyone assumes a default will happen is that the bailout program is not working. It has been 17 months since the first bailout of Greece in May 2010, and the situation in the country has only worsened. Its debt level is not under control, contagion hasn’t been squashed, and there is no hope that Greece can return to private capital markets for funding at any point in the foreseeable future. There is a high probability that the EU is simply throwing good money after bad by continuing the current strategy.

Fourth, the main reason the bailout is failing is that no one believes that Greece can fix its finances and reform its economy under the austerity program imposed by the terms of the rescue. Greece is already missing its budget deficit targets, even with all of the cutting and tax hikes. That’s because the adjustment demanded is simply not politically, socially, or even mathematically possible. Since the austerity program is causing the economy to shrink, reducing debt and deficits is just that much more difficult. You end up like a dog chasing its tail. Due to the contraction of GDP in the first half of the year, economist Ken Courtis points out that to keep its government debt to GDP ratio flat, Greece would have had to reduce its debt by an (annualized) 8.3%. “In most languages this would be called impossible,” Courtis comments. Increasingly, it appears the only way out is through a true debt restructuring – the type of process triggered by a default.

Fifth, in light of all of this, we can argue that the euro zone would do more good by using the Greek bailout money elsewhere. The leaders of the zone could, for example, utilize the funds to support Spain and Italy, the crises in which are the real threat to the future of the euro. Or maybe it’s best to use the Greek bailout funds to recapitalize and shore up the European banking sector, which would minimize the impact of a Greek default. What I’m saying here is that the hundreds of billions being tossed at Greece might do a better job of ending the debt crisis if employed in ways that could truly bolster investor confidence in the monetary union and its financial system. Economist Nouriel Roubini recently made this point:

Illiquid but potentially solvent economies, such as Italy and Spain, will need support from Europe regardless of whether Greece exits (the euro zone); indeed, a self-fulfilling run on Italy and Spain’s public debt at this point is almost certain, if this liquidity support is not provided. The substantial official resources currently being wasted bailing out Greece’s private creditors could also then be used to ringfence these countries, and banks elsewhere in the periphery.

Sixth, the bailout program is pushing Greece towards complete economic and social turmoil. The economy is practically in free fall – GDP shrank 7.3% in the second quarter, after an 8.1% contraction in the first. Protesters are regularly out on the streets. Unemployment stands at 16%. And there is no light at the end of the tunnel. Yes, the Greeks made a mess of their economy, and now they have to pay the price of fixing it. But at the same time, almost the entire process of adjustment has been imposed onto the Greeks. There has been an attempt on the part of the euro zone leadership to protect Greece’s creditors as much as possible, mainly to hold off bailouts of the banks themselves. Though private sector creditors will absorb losses as part of the second bailout program (assuming it happens), Greece in the end is getting very minimal debt reduction in the process. Roubini calls the deal “a rip-off” because the amount of reduction is “close to zero.” So the current strategy is cruel, and in my opinion, simply unsustainable.

So the Greeks should just stop paying their debts and force a restructuring that will allow the country to return to true economic health. If necessary, Greece should leave the euro zone and use its own currency, giving the country the ability to print money, pay its bills, and inflate the economy. Such a process will be painful for everyone. The Greeks will still have to undergo an excruciating process of reform. The EU will have to act immediately to shore up European banks and protect Spain and Italy from contagion. But like pulling off a bandage quickly, the pain will be sharp, but brief, and we can then all move on. At least to the next crisis.»

(Via The Curious Capitalist.)

Bare å lese grunn nummer 6 er en grøsser.

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Spiegel Online har en tredelt serie om tyske planer for Hellas. Verdt noen minutters lesing.

Spiegel Online, del 1, side 1:

Euro-Zone Exit Scenarios: Germany Plans for Possible Greek Default – SPIEGEL ONLINE – News – International: «The rest of the euro zone is losing patience with Greece. German Finance Minister Wolfgang Schäuble is no longer convinced that Athens can be saved from bankruptcy. His experts at the Finance Ministry have been working on scenarios exploring what would happen if Greece left the euro zone. By SPIEGEL Staff.

Herman Van Rompuy is an influential man in Europe. He is already president of the European Council, the assembly of the European Union’s heads of state and government. Soon he will also serve as the chief representative of the euro zone, if all goes according to plan.

Van Rompuy’s new role as «Mr. Euro» is a highly prestigious position. German Chancellor Angela Merkel thinks highly of the unassuming Belgian politician, who conceals a propensity for toughness and efficiency behind his seemingly humble appearance.
One of Merkel’s European counterparts felt the brunt of Van Rompuy’s unconventional charm last Monday, when he took Greek Prime Minister Georgios Papandreou to task in a telephone conversation. The representatives of the European Commission, the European Central Bank (ECB) and the International Monetary Fund (IMF), known as the troika, had left the crisis-ridden country in protest a few days earlier, because the Greek government had, once again, circumvented agreements it had made.

We have a problem, Van Rompuy said at the beginning of the conversation. Unless Greece delivers, he told Papandreou, the next tranche of aid would not be paid. Papandreou understood immediately: Van Rompuy was telling him the Europeans were on the verge of cutting off funding to his country.

A lot of people in Europe are displeased with Greece at the moment. «We cannot be satisfied with the latest reports from Greece,» an irritated Chancellor Merkel said last week. «The troika mission must be continued and brought to a positive conclusion,» said German Minister Wolfgang Schäuble. Even Euro Group President Jean-Claude Juncker, normally not one to engage in fearmongering, took Greece’s prime minister to task on the phone. «Things are not moving at the right pace in Greece,» he said after the conversation. «There are no results.»

Losing Patience

The tougher talk is much more than show. The rest of Europe is losing patience with Athens. And after 18 months of crisis in the country, there is still no improvement in sight. Key economic figures are worsening, and there are growing doubts over whether the Greek government truly understands how serious the situation is.

In European capitals and at the European Commission, some are beginning to wonder whether the efforts of the last year-and-a-half were in vain. The partner countries have already provided Greece with €110 billion ($152 billion), and a second bailout has already been agreed upon. But Europeans are now beginning to realize that they have spent a lot of money for nothing.

The disappointment runs particularly deep in Berlin, where the government’s crisis-management policy has clearly been going around in circles. In the beginning, the chancellor said that the Greeks ought to help themselves out of their own crisis. Then came the first and subsequently the second aid package. The new approach, the government said, was to rescue Greece so that the other debtor nations would be spared.

Now the Germans have come full circle, and the prevailing emotion is fear of a never-ending debacle in Athens. «Enough is enough,» says one senior government official, adding that Berlin has lost patience with the Greeks. With a mixture of resignation and fatalism, Merkel and Schäuble are facing up to the inevitable and thinking the previously unthinkable: Greece is going bankrupt, and not even its withdrawal from the monetary union can be ruled out anymore.

Between Desperate and Hopeless

The planning for the day of reckoning is already underway, in departments at the Finance Ministry in Berlin as well as in task forces at the EU in Brussels. German Finance Ministry officials hope that a Greek bankruptcy would be manageable, as long as European politicians keep their cool and the bailout funds are increased as planned.

The motivation here is to send a signal, not only to Berlin’s European partners, but also to skeptical politicians in Germany’s coalition government. The message is that Europe also has an alternative to helping: If necessary, it can also withdraw its help.

The subject was discussed at a dinner last Tuesday at the German Finance Ministry, to which Finance Minister Schäuble had invited his counterparts Finnish Finance Minister Jutta Urpilainen and Dutch Finance Minister Jan Kees de Jager.

Officially, the ministers were there to discuss the collateral the Finns want to receive from the Greeks in return for further aid. But the real issue was the escalating crisis in Athens. The attendees were all aware that the situation in Greece is now fluctuating between desperate and hopeless, and that bankruptcy is probably unavoidable. The only differences of opinion were over the consequences.

Schäuble argued that the Greeks should remain in the monetary union, even after a so-called haircut. De Jager, however, was not opposed to their leaving the euro zone. The attendees did agree that the ultimate consequences are up to the Greeks themselves: The other members of the euro zone do not have the option of ejecting them from the monetary union.

Calculating the Consequences

Schäuble is convinced that things cannot continue as they are. He shared his concerns and conclusions in several conversations with close associates last week. Each time, his message was that he no longer believes that the Greeks will be able to fulfill the stipulated conditions, and that they are likely to run out of money as early as October.

Finance Ministry officials have already calculated the consequences. Last week, an envoy from Berlin presented the results to Germany’s partners in Brussels.

There are basically two possibilities for a Greek bankruptcy, the German official said: Either the country remains in the monetary union, or it withdraws.

Either option would involve a haircut, meaning that Greece would only service a certain share of its debt, such as 50 percent. This would translate into significant losses for Athens’ creditors, like the European Central Bank (ECB), other European Union countries and banks, insurance companies and financial institutions throughout Europe. Schäuble’s envoy presented his Brussels audience with the results of the German Finance Ministry’s simulations, and said that the goal should be to contain the damage caused by these losses.

The European Financial Stability Facility (EFSF) plays a key role in their considerations. The Finance Ministry wants the Luxembourg-based facility, headed by German economist Klaus Regling, to be provided as quickly as possible with the new competencies that were agreed upon at the crisis summit in late July. Once that happens, there will be a good chance of protecting the rest of the euro zone from the disruptions emanating from a Greek default.

Preventive Credit

The German plans focus on two instruments. First, Schäuble’s officials advocate the use of preventive credit lines, which would involve the EFSF issuing bridge loans to financially weak countries. Second, they want to provide financial injections for banks to stop them getting into difficulties.

Entire countries and their banking sectors could be protected with the two instruments, Schäuble’s man in Brussels argued. The loans would help Italy and Spain, but also small countries like Cyprus, who could find themselves unable to borrow money from fearful investors following a Greek bankruptcy.
Banks in many euro-zone countries could eventually find themselves dependent on the billions from Luxembourg, because they would have to write down their holdings of Greek government bonds. Greek banks would suffer the most from the consequences of a national bankruptcy. For this reason, German officials argue, it is quite conceivable that Greek banks could still receive aid even after the Greek government itself had been cut off from EFSF assistance. As the financial crisis showed, banks are deeply interconnected across national borders. If one major bank fails, others can easily be dragged down with it.

Such consequences are to be expected regardless of whether Greece keeps the euro or withdraws from the euro zone. In reality, Athens would have no choice: The government could only hope to boost its languishing economy if Greece reintroduced its own currency and sharply devalued the new currency against the euro.»

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Hvordan statlig konkurs, fattigdom og vekst ser ut: Argentina utgave

Argentina
(Kilder: IMF, WDI)
Argentina gikk konkurs i 2001 og slikt skal man virkelig prøve å unngå. Still deg i 1990 og tegn en imaginær trendlinje for BNP. I årene mellom 1997 og 2008 kan du virkelig fargelegge ut rommet under kurven.

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