Lots of talk about the second bailout due later this year (none of it using the word “bailout” however). My favourite wording was the talk of “comfort finance” from the EC yesterday, making it sound like we don’t really need it to keep the lights on, it’s just there in case we get peckish in the evening and can’t find our ATM card to pay for pizza.
Most explicit talk today is about accepting a second IMF “conditional programme”
The “bank debt deal” thing is a bit of a red herring I would have thought – there’s no way enough of our bank debt if going to be removed to allow any sort of decent return to markets. This is just a way to turn it into someone else’s fault: “Can you believe those nasty Europeans wouldn’t do us a bank debt deal so we had to borrow from the IMF.”
Also…
So actual austerity might be coming… I’m sure this won’t affect house prices in SCD though
Yes, sometimes I think all this recession, bailout talk, property tax talk etc. Is specifically designed to affect house prices in SCD…but damn it they are not for budging, when are these people going to realise…sheesh
This “divide and conquer” strategy by the govt could work well, assuming the ECB and IMF are idiots and don’t have each other’s phone numbers. Or a phone book. It could also go horribly wrong if they talk and agree a common approach. In that case we’ve just pissed them off.
I don’t think it’s a bad strategy actually considering how the bad the government hand is currently. IMF and ECB don’t necessarily see eye-to-eye anyway. The ECB conditions - if any - are likely to be more politically palatable. The IMF is far more willing to take on actual debt write-offs, never mind payment restructuring (which is all the government is asking for) but will expect meaningful and swift deficit reduction (the most important thing to the country right now).
Essentially the government is threatening the ECB “don’t make us go to the IMF, we will you know, we will” … as to whether that threat is credible is another thing. The IMF may also be reluctant to extend a loan to an Eurozone country without ECB approval. Or it may not.
Rumour has it Geithner prevented the IMF from allowing Ireland to burn the senior bondholders. i.e. he made them toe the ECB line. Not sure how true that is as I can’t remember where I read it.
