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Eurointelligence Daily Briefing: A deal that would turn Greece in a eurozone colony (17.02.2012)
An outline plan for a Greek package has now been agreed at technical level Greece would have to complete a list of 24 ,,prior actions", the Financial Times reports, before it can get access to the funds. There will be an escrow fund that holds debt payments for nine-to-twelves months, and the troika will have a permanent representation. The problem is that with the latest austerity measures, the debt sustainability calculations suggest that Greece is headed for a debt of 128% of GDP by 2020, missing the 120% target. In order to get to the 120%, the bailout total would have to go up to €136bn. Reuters says ideas also include the euro zone cutting the interest rate on its existing bilateral loans to Greece, and asking private investors to agree to bigger losses.  A further option is for the ECB to forego profits on Greek bonds it holds in its portfolio and to re-sell them to the EFSF. The FT's article also said that there is pressure on Athens to form a grand coalition after the elections.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Fri Feb 17th, 2012 at 02:41:16 AM EST

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