Greece to Sell Assets to Pay the Bankers

This is not much different from AIG having had to post a cash collateral to Goldman Sachs, isn't it?

(It was Goldman Sachs, as now widely known, who arranged the derivatives deal on Greek sovereign debt so that Greece could join the euro zone.)

It's a shakedown, and the bankers, particularly the large, multinational ones, always win partly because they have the central banks to backstop them, and partly because they hold (still-)sovereign nations hostage by exposing them to a huge potential liability by the sheer size of their balance sheet. Therefore, the governments scramble to come up with the bailout plans so that these bankers don't lose. Just like the US government did by effectively nationalizing AIG, Fannie and Freddie, and having the Federal Reserve print so much digital money to provide liquidity.

I don't blame if Greeks start a new wave of protests and riots. In fact, I would be surprised if they didn't. They are literally being sold down the river by their own government. It's not that 'privatization' itself is bad; the private sector generally runs things more efficiently and profitably than the pubic sector does. However, it should be done for that very purpose - to run them better. Greece is going to sell ('privatize') the assets in order to pay the bankers and receive the promised bailout money, which is also to be used to pay the bankers.

Greece to Sell Assets to Help Pay Down Deficit
(David Jolly, 6/2/2010 New York Times)

"Greece announced Wednesday its plans for a big sale of state-owned assets, as the struggling government moved to shrink its huge budget deficit and fulfill the terms of an international rescue package.

"The government will sell 49 percent of the state railroad, list ports and airports on the stock market, and privatize the country’s casinos, the Finance Ministry said after a cabinet meeting in Athens. The government will also sell minority stakes in water utilities serving Athens and Thessaloniki, sell 39 percent of the post office, and combine its vast real estate assets into a holding company to be listed on the stock market.

"The sales are intended to help raise 3 billion euros, or about $3.7 billion, from 2011 to 2013. The government agreed to raise a billion euros a year over that time as a condition of the 110 billion euro aid program it received from the European Union." [The article continues.]

I am just wondering when Chinese and Japanese start demanding part of the US debt they hold be actually repaid.

Never say never...

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