The skinny on who owns Greek debt

No surprise here folks. It’s the banks.

I had heard that by far the largest holders of Greek debt were the Americans, of course, via JP Morgan but have not yet found confirmation. I had also heard that France was right up there too. This morning Le Figaro confirms that Credit Agricole is involved in Greek debt to the tune of E30Billion … that’s 20% of the rescue package that has been agreed by the IMF and the EU…

http://www.lefigaro.fr/societes/2010/05/06/04015-20100506ARTFIG00561-l-exposition-des-banques-francaises-a-la-dette-grecque.php

The relevant paragraph is this one:

Enfin, Crédit Agricole a racheté en 2006 une banque grecque, Emporiki, qui avait en portefeuille, à fin mars, 23 milliards d’euros de crédits aux particuliers et aux entreprises, et 3 milliards de créances sur d’autres banques.

The above says that other than being directly involved in Greek sovereign and a bunch of other varieties of debt, because it bought a Greek bank Credit Agricole now also owns E23Billion of debt to Greek consumers and industry and E3Billion of debt to other [presumably Greek] banks.

As stated in previous posts. The EU bailing out Greece is nothing of the sort. Our governments are once again bailing out the banks. Considering the state of the Greek and global economy, there is no way that this debt can ever be repaid by consumers nor, indeed, by industry.

It is uncertain if Europeans are aware of what is going on or if they prefer not to see what is going on. In this entirely avoidable mess, the only country that has conducted itself responsibly and with integrity so far is Iceland. Not only have the Icelanders told the banks to go fudge cake, but their president supported the decision of the people and, though in more formal terms, told the banks to stuff it.

The EU bailing out Greece is nothing of the sort. The EU, like the USA before it, is putting in place a safety net for the banks. The EU will follow in the footsteps of the US in devising and applying creative bailout arrangements aimed at supporting the banks under the guise of supporting a country and a people. For the handful of independent minds that might query the reason for supporting the banks, the authorities will defend their actions by invoking the old saw pertaining to fractional reserve banking whereby 1 Euro given to a bank will translate in 10 Euros circulating in the economy. But if you follow this blog, you will know that the credit dynamic is broken. It is broken because of excess debt as it is broken because of excess capacity. Therefore, the Keynesian multiplier effect is no longer a valid mechanism.

Do EU politicians know this or are they genuinely ignorant? I cannot answer that question because I don’t know. What I do know is that someone certainly knows because a whole bunch of other people and I know and are discussing this openly on the internet. Of course, this is not something that is being discussed on the main stream media. Nonetheless, some officials do know and their intent seems to be aimed at buying time.

The question is therefore remains: buying time for what?

If you consider the staggering amount of debt that is owned by European banks not only within Europe but, more importantly, in Eastern Europe, this E110Billion fund is not even remotely sufficient to cover the losses the banks are staring at. Credit Agricole by itself can eat 20% of the fund within a few months.

Prepare to be dazzled by some creative and convoluted accounting in coming weeks/months and expect scandal upon scandal to be aired in short order.

The count down to global war is accelerating.

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20 Responses to “The skinny on who owns Greek debt”

  1. newscentral Says:

    Επιτέλους βρήκα κάποιον που να αποσαφηνίζει
    σχετικά με το αυτό το άρθρο. Το έψαχνα τόσο καιρό.

  2. rouxismos Says:

    Επιτέλους βρήκα κάποιον που να αποσαφηνίζει σχετικά
    με το αυτό το άρθρο. Το έψαχνα τόσο καιρό.

  3. Αθλητικα νεα Says:

    Επιτέλους βρήκα κάποιον που να γράφει σχετικά με το αυτό
    το άρθρο. Το έψαχνα τόσο καιρό.

  4. athens local Says:

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  20. David W. Lincoln Says:

    Thanks for identifying which banks hold Greek Sovereign debt.

    I’ve been in there, amidst the flying fur in the comments section of columns by AEP, and I notice the Swiss were able to extricate themselves from Greek Sovereign debt.

    So, the question is, who holds Spain’s sovereign debt, as well as Portugal’s, Great Britain’s, Italy’s, the United States’, and anyone else whose bonds are on shaky ground.

    Thanks.

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