Grčka - enormni dug, protesti oko mera štednje

[Budja]

 

 

 

U vecini stvari mogu da se slozim, ali tamo gde nepovratno gubis nit je pragmaticna odbrana bankarskog bejlauta. 

 

Nakon toga cela tvoja (tacna) tirada o Dragiju i kompaniju ima nula uverljivost.

[Anduril]

U vecini stvari mogu da se slozim, ali tamo gde nepovratno gubis nit je pragmaticna odbrana bankarskog bejlauta. 

 

Nakon toga cela tvoja (tacna) tirada o Dragiju i kompaniju ima nula uverljivost.

 

Po obicaju, dosadan si sa svojim ideolosko-logickim cistunstvom jer nema mnogo veze sa realnom politikom ili istorijom.

Politicki a i ekonomski je prilicno jasno da bi posledice bile katastrofalne ali tebi je ideologija i logika u okviru nje vaznija.

 

Problem je u tome sto ideologija ne bi nahranila i sastavila Evropu posle takvog raspada.

Ideologije su korisne da bi odrzale balans politicko-ekonomskog diskursa demokratskog drustva i nisu same sebi svrha.

 

Pocetak primenjivanja striktnih libertarijanskih principa ima vise smisla na svim nivoima a ne samo na nivou bejlauta.

Ne mozes da trazis striktno primenjivanje kad treba prakticno unistiti bankarski sistem a istovremeno imas jos uvek globalno upravljanje centralnim bankama. Totalna ludost. Banke mozes da pustis da bankrotiraju kad prvo uklonis centralne banke i objasnis ljudima da banke mogu da bankrotiraju kao i svaka druga firma. Ne mozes prvo da imas desetinama godinama sistem koji garantuje banke a onda odjednom stedisama kazes - puj pike ne vazi, od sada primenjujemo novi princip. Valjda znas sta je vladavina prava i da pravila moraju da budu transparentna, predvidiva i da ne mogu da vaze retroaktivno.

 

Ono sto moze najvise da se zameri jeste sto ove banksterske seme koje su dovele do krize ne spadaju pod kriminalnu odgovornost i sto se corporate governanace pokazao kao totalni fail. Uz to, banke bi trebale da placaju ekstra porez i to globalno.

Edited July 19, 2015 by Anduril

[Budja]

Ovaj, neke banke su i bnakrotirale i kod nas, recimo, pa se nista strasno nije desilo. Cak je i u UK Northern Rock otisao niz vodu.

Problem je globalni push ka smanjenom broju banaka kada je svaka od njih too big to fail.

Dakle, too big too fail nije nuzno vezano sa centralnim bankarstvom.

 

Sto se tice real-politike vs. ideologije, budi dosledan. Ne moze bankarski bail-out biti win-win a tgrcki pokazna vezba gde je unistena jedna ekonomija a alternative su vidljive. Sta je u guranju Grcke u siromastvo bez izlaza real-poltiicki? Zapravo, u slucaju Grcke primenjujes taj ideoloski kriterijum koji ti je tako stran kod banaka. Flip-flopping ciji je zajednicki imenilac odbrana nemacke politike.

[Anduril]

Nothern Rock nije pusten niz vodu nego je nacionalizovan i niko nije izgubio deposite.

Kod kraha bankarskog sistema od 600 mijardi evra minimum to vise niko ne moze da nacionalizuje a centralno bankarstvo je tu kljuc jer daje privid poslednjeg garanta koji to zapravo nije.

 

Sto se tice real-politike, ona odavno ide i daje rezultate kod drugih drzava dok Grcka u evrozoni jednostavno nije real-politika.

Ne mozes postavitii ideolosku tezu da Grcka mora biti u evrozoni i da mora da ima standard vislji od istocne Evrope iako je produktivnost niska pa to nazvati real-politikom. To je prosto mitomanija koja ce pre ili kasnije zavrsiti u korekciji o kojoj smo vec govorili.

[vememah]

Pojavila se analiza koja kaže da MMF-ov metod procene održivosti grčkog duga i nije baš adekvatan.

 

None of the IMF’s standard DSA models seem to be appropriate for a case like Greece. The Hellenic Republic is a middle-income country that has highly concessionary financing conditions. This is a European (ESM, EFSF) innovation and thus the ESM should develop a new, appropriate DSA with relevant thresholds reflecting this special situation. DSA is the cornerstone of troika lending policies. But if the parties do not have a common understanding of the framework, communication may break down. Thus it would seem desirable to put more science into the discussion. In particular it would be important to agree on a common DSA model, and to make sure it is based on the relevant numbers.

 

 

 

Debt sustainability puzzles: Implications for Greece

 

Julian Schumacher, Beatrice Weder di Mauro 12 July 2015

 

The sustainability of Greek debt is central to the negotiations. To date the sustainability calculations have been based on the IMF’s standard models for calculating sustainability for countries with market access. This column argues that these are not appropriate for Greece – a middle-income country with highly concessionary financing. The ESM should develop a new, appropriate analytic tool to reflect Greece’s special situation.

Determining the level at which sovereign debt is sustainable is an art as well as a science.

• The science part is about estimating long-run repayment paths under varying economic variables.
• The art part is about judging the ‘feasibility’ of primary surpluses, which in turn depends on political variables and which can change quickly as just seen in Greece.

But even if we stick to the science side, a debt sustainability analysis (DSA) is not exactly a precise exercise.

 

Fortunately, the IMF is very transparent and its DSA programme can be conveniently downloaded from the web and then manipulated.[1] Moreover, the staff of the IMF has substantially enriched the framework over the last years and is asking for commentary and feedback from the profession. So it is a worthwhile learning exercise to take a look under the hood.

 

Different perspectives for DSA

 

The most important lesson is that the approach for DSA differs fundamentally depending on whether the country has market access or is a low-income country. For market-access countries the time horizon is short (five years), the focus is on nominal debt levels, gross financing needs, and the debt profile (IMF 2011, 2013a). For low-income countries, the framework is quite different.[2] It focuses on the long run (20 years), on policy-dependent debt thresholds, and on solvency and liquidity in present-value terms (IMF and World Bank 2004, 2005; IMF 2013b).

 

Why focus on debt in present value rather than gross terms? Because the majority of low-income countries’ external debt is owed to official creditors, at long maturities, and below market interest rates. In order to account for differences in the debt profiles across countries and time, the framework discounts the nominal debt into more sensibly comparable present values.

 

Applying the right framework to Greece

 

Does this sound familiar? That is because Greece’s debt profile matches this description closely.

• Overall, the Greek nominal debt stock amounts to €312.7bn, or the well-familiar 174% of Greek GDP (PDMA 2015).
• 79% of that is held by various public-sector bodies – the EFSF, the ECB and national central banks, the IMF, and Eurozone member states.[3]
• Only €64bn are held by private investors, of which about 3/4 are long-term bonds, and the remainder short-term money-market instruments presumably mostly bought by Greek banks.

But these nominal values ignore the fact that the bulk of the obligations are low-interest rate liabilities due far in the future – in fact, the average weighted maturity is 15.7 years, at an average interest rate of 2.7% (PDMA 2015). This compares to secondary market yields in excess of 10% on the 10-year bonds for the majority of the year. These numbers reflect the concessional nature of Greece’s official sector loans.

 

The European Stability Mechanism (ESM) has also argued that the nominal debt in Greece should be seen in the light of these concessional conditions, and calculated the net present value debt relief granted by the official creditors’ debt restructuring in November 2012 (ESM 2015). At the time, maturities of the bailout loans were stretched by 15 years, interest payments deferred by 10 years, and the interest rates lowered by 100 basis points. The ESM computes that this resulted in a present-value debt reduction of 49%, but does not look at the value of the remaining debt.

 

We therefore compute the net present value of total debt using the IMF and World Bank’s uniform discount rate of 5% for low-income countries (IMF 2013c). Due to the long average maturity of Greek public debt, the NPV debt/GDP ratio is only 93% - or the equivalent of almost one year of economic output less than the headline number.

 

Even using a lower discount rate equal to the average interest rate of 2.7% still results in an NPV debt/GDP ratio of less than 120%. A similar argument has been made by the analysts at a US hedge fund (Kazarian 2015). They suggest that when applying the European system of national and regional accounts (ESA), the gross debt amounts to only 69% of Greek GDP.[4]

 

Figure 1 shows the nominal and present value of the Greek debt profile. 50% of the loans by the EFSF and Eurozone member states are due after 2030, for which the present value is less than half of the nominal indebtedness. The significant back-loading of the repayment schedule has therefore resulted in a considerable NPV debt reduction.

 

Figure 1. Repayment profile in nominal and present value

Data: PDMA, Euronews (2015).

 

Granted, the numbers are still high. For advanced market-access economies the IMF threshold to determine the risk of debt distress is 85% of nominal debt/GDP. To evaluate the risk of debt distress in low-income country, the IMF and World Bank debt sustainability framework relies on a comparison of the NPV debt to a set of policy-dependent thresholds. These are derived based on a simple econometric Early Warning System of debt distress (IMF 2005, Kraay and Nehru 2004). Based on the model, the maximum values for various indicators of indebtedness are computed that imply a predicted probability of debt distress remains below circa 20%. These DSA thresholds for low-income countries in NPV debt/GDP terms lie even lower than the threshold for market-access countries, between 30% and 50% conditional on the strength of policy as measured by the World Bank’s Country Policy and Institutional Assessment (CPIA).

 

Greece breaks two out of three indicators for the debt stock (see Table 1). But with respect to the revenue dimension, the Greek fiscal stance looks less bleak than the current stand-off with its international creditors would suggest.

 

Table 1. Greece low-income country risk assessment

 

Conclusions

 

For the past five years, Greece has had almost no access to private capital markets, and its finances have been dependent on concessional official lending. Greek debt should thus be evaluated in NPV terms. This would also recognize the substantial official debt restructuring that has already happened.

 

None of the IMF’s standard DSA models seem to be appropriate for a case like Greece. The Hellenic Republic is a middle-income country that has highly concessionary financing conditions. This is a European (ESM, EFSF) innovation and thus the ESM should develop a new, appropriate DSA with relevant thresholds reflecting this special situation. DSA is the cornerstone of troika lending policies. But if the parties do not have a common understanding of the framework, communication may break down. Thus it would seem desirable to put more science into the discussion. In particular it would be important to agree on a common DSA model, and to make sure it is based on the relevant numbers.

 

References

 

ESM (2015), Annual Report 2014. Luxembourg.

Euronews (2015), This is how much Greece has to repay. 

IMF and World Bank (2004), Debt Sustainability in Low-Income Countries—Proposal for an Operational Framework and Policy Implications. Washington, D.C. 

IMF and World Bank (2005), Operational Framework for Debt Sustainability Assessments in Low-Income Countries—Further Considerations. Washington, D.C.

IMF (2011), Modernizing the Framework for Fiscal Policy and Public Debt Sustainability Analysis. Washington, D.C. 

IMF (2013a), Staff Guidance Note for Public Debt Sustainability Analysis in Market-Access Countries. Washington, D.C. Online available at .

IMF (2013b), Staff Guidance Note on the Application of the Joint Bank-Fund Debt Sustainability Framework for Low-Income Countries. Washington, D.C. 

IMF (2013c), Unification of Discount Rates Used in External Debt Analysis for Low-Income Countries. Washington, D.C.

Kazarian, P (2015), Greece Sovereign Debt: Asking the Right Questions. Lecture given at CESifo Munich, 9 July 2015. An earlier version is available online here.

Kraay, A, and V Nehru (2004), When is Debt Sustainable? World Bank Policy Research Working Paper No. 3200. Washington, D.C.

Public Debt Management Agency (2015), Hellenic Republic Public Debt Bulleting. Athens. 

Endnotes

[1] The template for market-access countries can be found at https://www.imf.org/external/pubs/ft/dsa/templ/dsatempl2.xlsm, and for low-income countries at https://www.imf.org/external/pubs/ft/dsa/templ/dsatemp.xls.

[2] Low-income countries are usually defined as countries eligible for the Poverty Reduction and Growth Trust (PRGT), with a PPP GDP per capita below USD 1,195 and limited market access.

[3] In a recent response to an inquiry by the Greek parliament (No. 160/30-4-2015), the Greek Public Debt Management Agency (PDMA) broke down the debt composition. See Euronews (2015) for an English translation.

[4] Applying the ESA would also imply to account for the financial assets under control of the Greek government, which have been valued at more than €90bn in 2013. The Greek net debt/GDP ratio is only 18%.

 

 

http://www.voxeu.org/article/debt-sustainability-puzzles-implications-greece

Edited July 19, 2015 by vememah

[MancMellow]

Sasvim zgodno, gospodja je clan ovog tela, Corporate Governance Commission of the German Government, a mladi gospodin je njen PhD student. Mozda ne bi bilo zgoreg nesto malo nezavisnije...

[MancMellow]

Nothern Rock nije pusten niz vodu nego je nacionalizovan i niko nije izgubio deposite.

Kod kraha bankarskog sistema od 600 mijardi evra minimum to vise niko ne moze da nacionalizuje a centralno bankarstvo je tu kljuc jer daje privid poslednjeg garanta koji to zapravo nije.

 

Sto se tice real-politike, ona odavno ide i daje rezultate kod drugih drzava dok Grcka u evrozoni jednostavno nije real-politika.

Ne mozes postavitii ideolosku tezu da Grcka mora biti u evrozoni i da mora da ima standard vislji od istocne Evrope iako je produktivnost niska pa to nazvati real-politikom. To je prosto mitomanija koja ce pre ili kasnije zavrsiti u korekciji o kojoj smo vec govorili.

 

 

Produktivnost je niska u odnosu tacno na sta tj koga? Grcka labour productivity per hour worked (20 evra) je skoro duplo veca od estonske (11 evra) i prilicno veca od slovacke (13 evra)

 

http://www.stat.ee/64454

Edited July 19, 2015 by MancMellow

[Аврам Гојић]

mislim da se taj podatak ponavlja, bez ikakvog uspeha, svakih 10 strana 

[namenski]

Tako to ide, ili - lesinari se okupljaju posto je lovac rasterao ostale:

 

Maersk Looks to Buy Greek Ports of Piraeus and Thessaloniki...

[Frank Pembleton]

Tako to ide, ili - lesinari se okupljaju posto je lovac rasterao ostale:

 

Maersk Looks to Buy Greek Ports of Piraeus and Thessaloniki...

Zar nisu kinezi bili u igri?

[vememah]

OECD-ovi podaci o produktivnosti (GDP per hour worked, nat'l currency, current prices, 2014) su drugačiji:

 

Slovenija 25,6
Grčka 22,5
Portugal 20,6
Slovačka 19,2
Estonija 17,3

 

http://stats.oecd.org/Index.aspx?DataSetCode=PDB_LV

Edited July 19, 2015 by vememah

[MancMellow]

pa opet, ne stoji ono sto je Anduril napisao

[hazard]

OECD-ovi podaci o produktivnosti (GDP per hour worked, nat'l currency, current prices, 2014) su drugačiji:

 

Nije mi jasno da li je u toj tabeli PPP GDP ili nominalni?

[namenski]

Zar nisu kinezi bili u igri?

Izgleda da su bas bili, vise nisu, ali je sad bolje nasi nego zuti...

 

Inace, cudno je da niko ne dira u grcku trgovacku mornaricu, oni su sad otprilike prva po velicini 'ozbiljna' zastava, mislim da su 8 na svetu, ispred su Paname, Singapuri, Liberije, broje oko 40 miliona GRT ili nesto preko 70 miliona DWT, veci su od Kine i jos par zemalja sa tvrdom politikom upisa u registre, obaska sto imaju jos najmanje toliko pod tralala zastavama.

Po broju jedinica iznad 500 tona ispred njih je jedino Japan, mada je struktura poprilicno drugacija jer u Japanu ima masa manjih plovila za obalsku plovidbu, tako da je Grcka najverovatnije svetski #1.

Edited July 19, 2015 by namenski

[hazard]

Ne mozes postavitii ideolosku tezu da Grcka mora biti u evrozoni i da mora da ima standard vislji od istocne Evrope iako je produktivnost niska pa to nazvati real-politikom. To je prosto mitomanija koja ce pre ili kasnije zavrsiti u korekciji o kojoj smo vec govorili.

 

Gledajuci podatke, pre ce biti da je ideoloska konstrukcija to da Grcka mora biti siromasna istocnoevropska zemlja.