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Thread: Greek bailout to cost Ireland €4m a year?

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    Politics.ie Member seabhcan's Avatar
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    Default Greek bailout to cost Ireland €4m a year?

    We'll have to lend Greece about 1 billion euro at the agreed interest rate of 5%. But we'll have to borrow this cash, and the best rate Ireland gets at the moment is 5.4%, meaning we will lend to Greece at a loss of about €4 million per year per billion we lend.

    Do I have my calculations right?

    Will this extra billion in borrowing add to our deficit? 1 Billion borrowed equals roughly 1% increase in our deficit.

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    Politics.ie Member hammer's Avatar
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    No, you dont.

    €1 billion is a €1,000 million
    10% is therefore €100 million
    5% is therefore €50 million

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    Quote Originally Posted by hammer View Post
    No, you dont.

    €1 billion is a €1,000 million
    10% is therefore €100 million
    5% is therefore €50 million
    We borrow this much (about) every 17 hours.

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    Contagion

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    GDPR Deleted
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    Quote Originally Posted by hammer View Post
    No, you dont.

    €1 billion is a €1,000 million
    10% is therefore €100 million
    5% is therefore €50 million
    Yes he is correct, but unlike you, he's not trying to make the worst of the situation, that probably fooled you into thinking he got it wrong.

    Still, he fooled you into thinking. Winners all around so.

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    Politics.ie Member Malbekh's Avatar
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    Quote Originally Posted by tonic View Post
    Yes he is correct, but unlike you, he's not trying to make the worst of the situation, that probably fooled you into thinking he got it wrong.

    Still, he fooled you into thinking. Winners all around so.
    No, that's not the worst situation. The worst situation is that we loan 1.3b and Greece defaults in 2011, paying us back 50% of the loan, subject to where the EU bond is placed interms of seniority.

    That would be the worst situation.
    Blessed be the threadmakers.

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    Politics.ie Member rockofcashel's Avatar
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    Quote Originally Posted by tonic View Post
    Yes he is correct, but unlike you, he's not trying to make the worst of the situation, that probably fooled you into thinking he got it wrong.

    Still, he fooled you into thinking. Winners all around so.
    Perhaps, but Hammer is correct it'll cost us 55 million, of which we theoretically should be getting 50 million of back from Greece

    Though then again, we were supposed to be getting money back for what we lent to re-capitalise banks too.. wonder what we'll get here... 5% ownership of the Acropolis ?
    1,197 people agree with me.. how many agree with you ?

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    Quote Originally Posted by Malbekh View Post
    No, that's not the worst situation. The worst situation is that we loan 1.3b and Greece defaults in 2011, paying us back 50% of the loan, subject to where the EU bond is placed interms of seniority.

    That would be the worst situation.
    And the most likely.

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    GDPR Deleted
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    Quote Originally Posted by Malbekh View Post
    No, that's not the worst situation. The worst situation is that we loan 1.3b and Greece defaults in 2011, paying us back 50% of the loan, subject to where the EU bond is placed interms of seniority.

    That would be the worst situation.
    Are you telling me that if a country defaults to bondholders that someone is at a loss for the money?

    I hadn't thought of that, but Jesus, if true, the bondholder would be very shy of buying bonds from that country again, wouldn’t they?

    I'd been led to believe that this defaulting business was a pain free process, but think again says you, fair enough so.

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    Politics.ie Member cyberianpan's Avatar
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    As Malbekh says the danger is on the default

    Also I expect that this show of strength, will in fact reduce our cost of borrowing... as the markets will realise that Germany will prop us up rather than let us default. Though PIS will have to behave, as they are too big for Germany to painlessly prop up.

    cYp
    "Yawn , am I alive yet ?"

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