Tag Archives: memorandum

Greek NPL’s: Is there light at the end of the tunnel?

Dr. Periklis Gogas Associate Professor

 

Dimitrios Karagiozis

Ph.D. Candidate

Department of Economics Democritus University of Thrace, Greece

——————————————————————————–

The year 2018 is a milestone for Greece, as it moves towards to the completion of the third economic adjustment program. That means that after the official end of the program in August 2018, Greece must take fate into its own hands, and try to borrow from the markets to meet its future debt obligations. As the country leaves behind the 8-year long memorandum era, the two main concerns for the Greek government and the banking sector are: a) a decision on the debt relief measures that should follow and b) a solution to the Non-Performing Loans (NPL’s) problem.

The International Monetary Fund openly declares what anyone with basic training in economics can see: Greece requires substantial debt relief from its European partners to restore debt sustainability. The main issue here is that the resolution of this problem mainly depends on political decisions from Greece’s EU partners that are hard to sell to their voters-tax payers. This is of outmost importance for the medium to long term stability of the Greek economy. On the other hand, the NPL’s problem is urgent and imperative.

Continue reading Greek NPL’s: Is there light at the end of the tunnel?

Greece Missed Chance for a Better Memorandum: (Kathimerini, June 29, 2011)

This is a letter sent to the executive editor of Kathimerini, Athens Greece.It was published on the date sent, June 29, 2011. ( http://bit.ly/mBDPec )Dear Mr Papachelas,
I have been following the Greek financial/economic crisis and events very closely these past 24 months.
Briefly, both Mr [Costas] Karamanlis and Mr [George] Papandreou lost several opportunities to negotiate with the lenders a better agreement than the current Memorandum and the new one, now under debate in Parliament.
There is still time to negotiate better terms. In my estimate there is a window of six to 12 months to do so.
They both lost the opportunity do go to the market and borrow 40+ billion euros to hedge the payments that were coming and thus strengthen their hand in negotiating the Memorandum. The market in the summer and fall of 2009 was very favorable to Greek bonds (interest payment-wise) if I recall correctly.
Currently the debt problems of Ireland, Portugal, Spain and Italy are interwoven with the Greek debt issue. I believe that the Europeans will work out a financial defense strategy and system to separate the Greek debt from impacting the debt of the others. If they do that it will weaken Greece’s position severely. Therefore, this is the time to negotiate better deals while the Europeans are afraid of a domino effect. Later they will not be.
Continue reading Greece Missed Chance for a Better Memorandum: (Kathimerini, June 29, 2011)