At the end of May, Argentina had not paid interest claims amounting to 503 million dollars and thus slipped into a limited default. Source: ntv.de, agr / dpa “Venezuela is the most oil-rich country in the world. (Photo: imago / Christian Ditsch) To again To become solvent, Venezuela officially introduces a new cryptocurrency.
The ESM will be a long-term partner for Greece, “” promises ESM boss Regling. For Greece this is both a blessing and a curse: Even without a loan program, the EU budget controllers will continue to travel to Greece every three months to take stock. Athens creditors are chained to the fate of the country for better or for worse. The ESM holds more than half of all Greek national debt: “” Our interests are identical to those of Greece, “” says Regling.
The other euro countries would not only lose a lot of money if they went bankrupt in Athens. The euro could also falter. So you probably won’t turn off the money in Greece in the future either, but it may not last forever. What if the political wind turns not in Greece but in the rest of Europe? What if populist governments in Italy or France no longer go along with them in the future, should Greece need fresh loans again to repay its old debts?
What if a possible German government with AfD participation loses patience and wants its money back earlier than planned? Greece would then be on the verge of bankruptcy again. Because of the overwhelming debt burden, any political crisis in the country or among its financiers automatically turns into a payment crisis. And the other way round, every little doubt investors have about Athens’ solvency will shake the Greek government.
Greece has to hold out this dangerous balancing act between markets and politics for decades, even though there is more than enough panic potential. In addition to the mountain of government debt and the country’s structural problems, the banks are also sitting on a pile of bad loans. According to statistics from the Greek central bank, almost every second loan is at risk of default – around ten times the European average. If Greece’s banks were to falter again in the coming years, the government would have to bail them out.
And then could probably throw all savings plans overboard. By then, at the latest, the debate about a haircut for Athens should flare up again. Source: ntv.de “The Argentine government is sticking to its last offer. (Photo: picture alliance / dpa) Argentina is on the verge of the next major bankruptcy. The government has been arguing for months and private creditors for a possible haircut. The latest offer from investors has met with rejection. In a dispute that has been going on for months over a huge debt relief, the Argentine government has rejected the latest counter offer from creditors. The new demands could not be met, said the Buenos Aires Ministry of Economic Affairs Aires with. “” That would not only be irresponsible, it would also be unjust, “” it said in a statement. “” While 50 percent of children in Argentina live in poverty, we cannot increase the short-term profits of our creditors. “” The national debt According to experts, the second largest economy in South America is based on the a current conditions no longer sustainable.biology essay help service
Argentina is therefore demanding that its private creditors waive part of their claims amounting to around 66 billion US dollars (around 59 billion euros). If no agreement is reached, the country is threatened with bankruptcy again. It would be the ninth default in Argentine history, most recently the lenders demanding higher interest rates on government bonds and changes to some contractual clauses. However, the Argentine government is sticking to its last offer and is not prepared to make any further concessions. Argentina is in a serious financial and economic crisis.
The inflation rate was recently more than 50 percent. The coronavirus pandemic makes economic activities even more difficult. Foreign demand is falling, and large parts of the population have had to live with massive restrictions since March. For the current year, experts are predicting a decline in Argentina’s economic power of around ten percent. At the end of May Argentina had not paid interest claims amounting to 503 million dollars and thus slipped into a limited default. Source: ntv.de, agr / dpa “Venezuela is the most oil-rich country in the world. (Photo: imago / Christian Ditsch) To again To become solvent, Venezuela officially introduces a new cryptocurrency.
Head of State Maduro has now ordered that the Petro will be secured with the country’s oil reserves. Whether this can avert the bankruptcy is at least questionable. The Venezuelan government wants to secure the new crypto currency Petro with the country’s huge oil reserves. President Nicolás Maduro has signed a decree that initially identifies five billion barrels of oil (159 liters each) as security for the Petro.
According to its own information, the world’s most oil-rich country has reserves of 267 billion barrels. In the future, gold and diamond deposits are also to be certified as security for the cryptocurrency. In the face of galloping inflation and an impending bankruptcy, Maduro announced the introduction of the Petro at the beginning of December. The government apparently wants to regain access to international payments. Bitcoin is the world’s most famous crypto currency. The digital currency has risen sharply this year, but is also suffering from massive fluctuations in exchange rates. With the security through mineral resources, the Venezuelan Petro is actually not a classic crypto currency, according to the economist Luis Oliveros, but rather a simple bond that is secured by the oil reserves. Source: ntv.de, fhe / dpa “The descent of the Argentine peso to The dollar prompted Buenos Aires to call for help to the IMF. (Photo: picture alliance / Laura Cano / te) The central bank is fighting the peso crash with dollar sales and interest rates of 40 percent: Argentina is afraid of another total collapse.
Now the country is even asking the hated IMF for money again. These are dramatic words to a traumatized country: “” We are taking the only possible way to prevent a major economic crisis that would harm us all. “” In the face of an impending economic disaster the Argentine government is resorting to a means that has long seemed unthinkable. President Mauricio Macri has announced that he will be negotiating financial aid with the International Monetary Fund (IMF). Finance Minister Nicolás Dujovne has already traveled to New York for this.
According to media reports, Argentina could apply for up to $ 30 billion, and Macris’ appeal to the IMF is an oath of disclosure. Before it went bankrupt in 2001, the fund supported Argentina with a series of billion-dollar aid packages. They didn’t help. Instead, the Fund’s tough reform requirements plunged millions of Argentines into poverty. The left-wing president Néstor Kirchner repaid all debts to the IMF in one fell swoop and broke off relations.
Argentina did not work with the Monetary Fund until 2015. The fact that Buenos Aires is knocking again in Washington shows how serious the situation is. 17 years after the loss of around 100 billion dollars, the largest national bankruptcy in history at the time, Argentina is again facing the same abyss as it was then: inflation does not stop , The currency is on the decline as Argentina’s financiers have increasing doubts as to whether the country can service its debts. The Argentine peso lost ten percent against the US dollar within two weeks and the economy of the South American country lurched. The Argentine central bank is fighting the crash with all its might. In the past week, it sold around $ 4.3 billion to prop up its own currency.
When that didn’t help, she resorted to even more drastic means and raised the key interest rate to 40 percent within a few days. The peso crash now seems to be slowed. But if the dollar gets even stronger or the US Federal Reserve itself raises interest rates, investors could pull even more money out of the country. There was also a run on the dollar in Mexico, Brazil, Chile and Colombia, but nowhere was capital flight as strong as in Argentina. The reserves of the central bank in Buenos Aires have now shrunk to around 50 billion dollars as a result of constant sales. “” As president, nothing would be easier than stopping inflation “”, President Macri said in the 2015 election campaign when the peso fell below inflation the previous left government was at least 25 percent.
But in the second year of his tenure, that hardly changed: According to figures from the state statistics institute Indec, the peso lost a quarter of its value against the dollar in 2017. The devaluation should be slowed to 16 percent this year, but it is already around 17 percent. Argentines are getting less and less for their money, especially energy prices are skyrocketing. For years the country has been spending more than it is earning. Contrary to what was promised, Macri has not changed this so far.
Last year, the budget deficit including interest payments was 7 percent and thus in the Latin American ranking behind Venezuela (21.2 percent), Trinidad and Tobago (10.1 percent) and Brazil (8.2 percent). This year it could rise to 7.9 percent, so Argentina is trying to lure more badly than right foreign investors into the country and is also issuing bonds to get money. But the demand for the bonds is stalling: The 100-year bond for $ 2.75 billion issued in June with much fanfare has lost more than 15 percent of its value since the beginning of the year.
The same goes for the $ 4.25 billion 10-year bond issued in January, which has since lost 8 percent. The country’s economy is still geared towards exporting agricultural products. But the third largest economy in South America has suffered one of the largest droughts in decades, soy and corn harvests are narrower than usual, and the important livestock industry is also struggling. The new turmoil is fueling fears of a return to the darkest times after the bankruptcy. At the time, 20 people died in looting and protests against the IMF requirements.
The peso lost 70 percent of its value and banks froze accounts. Within two weeks, five different presidents stepped in. Many Argentinians still hold the IMF partly responsible for the traumatic crisis. The planned new financial aid from Washington is correspondingly unpopular: 75 percent of Argentines consider them the wrong means, only 2 percent are in favor without reservation. More than half of the supporters of Macri’s government alliance “” Cambiemos “” are against money lending.
Finance Minister Dujovne tries to allay the worries: “” The IMF is very different from the one we knew 20 years ago, “he says. “” He learned from the past. “” Source: ntv.de “Greece now has to prove itself financially and economically. (Photo: dpa) For years Greece was kept alive fiscally. An FDP politician sees Greece on” “training wheels” “Released from the loan program. The BDI is optimistic and hopes for positive signals for the German economy. According to the FDP politician Alexander Graf Lambsdorff, Greece is still not finally over the mountain even after the third aid program of its European partners has expired.
When asked whether the euro zone was now rid of the Greece problem, the member of the Bundestag replied on the ARD: “” No, it is definitely not. “” Greece is “” out on parole “” and is now facing a financial policy Rehabilitation. If the country operates solidly, things can go well. For Greece, however, the three rescue programs of the euro partners and the IMF would have been worthwhile, because the alternative would have been national bankruptcy. Lambsdorff pointed out that Greece would not have to start repaying the loans it received until 2032.
The question of whether the country will need a haircut at some point therefore only arises after this point in time. The German finance minister is one of the winners of the Hellas aid with the interest income from the Greek loans. According to the euro rescue fund ESM, its largest creditor, Greece has a total of 288.7 billion euros in the fight against the debt crisis between 2010 and 2018 received from its European partners and the IMF. The numbers quoted by the EU are slightly lower, with the most recent aid program ending on Monday. With this third program, Greece received another 61.9 billion euros, 24.1 billion euros less than the financial framework included. “For the first time since the spring of 2010, Greece can stand on its own two feet again,” said Eurogroup boss Mario Centeno on the occasion of the end of the program. According to the Federal Association of German Industry (BDI), Greece will be back after the end of the support program gain in attractiveness for German companies. “The good end of the European aid programs is a positive signal for Greece itself and the EU as a whole,” said BDI Managing Director Joachim Lang of the “Rheinische Post” “. Thanks to European solidarity, Greece can now stand on its own two feet again. In addition, structural reforms have stimulated economic growth, Lang said. “As a result, we in the industry are convinced that the Greek market will become more attractive again for German companies.” “However, the government in Athens must now” “focus on deficits in administration, justice, and the labor and product markets” ” In 2017, Greece recorded slight economic growth of 1.4 percent. The government of the left Syriza alliance of Prime Minister Alexis Tsipras and the right-wing populist party of the Independent Greeks (Anel) sees a ray of hope in this.
However, the heavily indebted country will remain under strict observation for years. Greece has been released from the loan program “” on training wheels, “FDP parliamentary deputy Christian Dürr told the SWR. The Greek economy continues to have fundamental weaknesses, which can be seen above all in falling productivity, declining foreign investment and the increasing number of loans at risk of default, Dürr also stated in a press release. For the government in Athens, structural reforms and debt reduction should have top priority, while Greece had to implement painful reforms in return.