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Mark Blyth: "Actually, what we're really doing is bailing out Commerzbank. How do you feel about that?"

claud_alexander's picture

[Full talk (very much worth it) here.]

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BruceMcF's picture
Submitted by BruceMcF on

The video is behind the Great Firewall of China, but if this is about the Greek bail-out, the tense is wrong ... the private holders of Greek debt have already been bailed out, what is being done now is to decide whether the bill for their bail out will be spread out among the beneficiary countries (Germany, France, etc.), or whether there will be an economically-effort to extract the bill to bail out the German banks from the tiny Greek economy, by pushing the Greek economy so deep down into depression that Greeks cannot afford to buy things, so they cannot afford to import things, so they have a trade surplus to be confiscated.

Submitted by lambert on

... and the EU countries have been left holding the bag. However, the issue is recognizing the losses. Payments can be spread out and interest rates jiggered with, but if losses are recognized (a "haircut") the EU taxpayers are on the hook for commitments the EU governments made in their name, and by EU rules, payments have to start when the losses are recognized. So it's a very ugly situation politically.