According to Frankfurter Allgemeine Sonntagszeitung, the German finance ministry (aka Wolfgang Schäuble) has been circulating a document which lays out two possible (or impossible) courses of action for dealing with the Greek debt problem. Both actions are extreme and brutal.
The two options that Schäuble proposes…
Option 1: Athens transfer state assets worth 50 billion euros into a trust fund to pay down debt. In other words, the bankers seize 50 billion worth of Greek assets, you name it…energy, electricity, communications, transportation, Mykonos, Santorini, etc…
Option 2: To suspend Greece from the euro zone for five years during which some of its debt would be written off and a “humanitarian” aid program would be put into affect. The 5 year break will of course turn into a 50 year break and so on.
The €50 billion asset transfer suggested in the document was viewed by some EU officials as proof of Yanis Varoufakis’ contention that Germany is now simply trying its best to push Greece out of the euro.
As noted earlier, the Germans are not alone in their opposition to the Greek proposal and arguments discussions in Brussels have ended with no agreement. With the bailout figure now projected at €74 billion, and some rumors circulating that the final tally could be considerably higher, we’ll leave you with the following table which should tell you something about how difficult it will be to secure across-the-board support for an ESM package of that size:
The document, which was first reported by German weekly Frankfurter Allgemeine Sonntagszeitung, became public after the three institutions that oversee eurozone bailouts estimated the country would need an extra €74 billion ($82.55 billion) in rescue loans over the coming three years. That high figure, which includes €25 billion to recapitalize Greek banks, drew consternation from many finance ministers during Saturday’s meeting, according to two European officials.
“The mood [is] bad,” said one person describing the atmosphere in the room.
In the document, dated July 10, Germany takes a tough line on spending cuts and policy overhauls Greece submitted to its international creditors, the other eurozone countries and the International Monetary Fund late Thursday.
The people familiar with the document questioned the likelihood of either of the two options working. There is no process for a temporary exit from the eurozone and it is unclear where the country would get €50 billion in assets to secure the loan.
“The 50 billion [euros] are so unrealistic that it is clear that they want the Greeks out,” one of the people said.