Banks and Huge Powerful Corporations Get Slapped Down By Euro Governments

[InTheLight]

A staple of conspiracy theorists is this idea that international bankers and huge corporations control the strings of government. So what happened in the Greek debt crisis? Led by the German and French governments the European Union essentially told banks that they are going to lose 50% on their investments in Greek bonds PLUS told them to make new loans of up to 106 Billion Euros by June 2012.

So who, really, is more powerful?

 

[Borneol]

Not a conspiracy, but I'd say the bond holders have a great deal of power over governments that want to live beyond their means. Here is what I read went down with the latest announcement - fine print mentioned.

European leaders are now asking Chinese to invest their hard earned money in greater amounts into deeply in debt European countries. Doubt it will happen. But if so guess it will purchase even more influence for them.

"Reality Check in the Eurozone"

http://blogs.the-american-interest.com/wrm/2011/10/27/reality-check-in-the-eurozone/

excerpt:

The bondholders, of course, are playing hardball — and why wouldn’t they? They want as much of their money back as they possibly can get. What appears to be going on now is a classic European fudge: Angela Merkel needs a deal that looks tough on bondholders and the ‘private sector’ while she isn’t willing to push Europe over the cliff — which a genuinely tough debt write down might do, for the reasons cited above.
The ‘solution’ seems to be that there will be a big headline cut of 5o percent in the nominal value of Greek debt, but there will be various sweeteners attached so that in reality the bondholders won’t lose much more than they had already accepted back in July (when Europe made its most recent “grand bargain” advertised as solving the problem), but everyone hopes the taxpayers won’t read the fine print. The nature of those sweeteners will be worked out in negotiations between bondholders and governments; presumably the European leadership hopes that by then the German, Dutch and Finnish publics will be so distracted by other news that they won’t pay attention.
Viewed from one angle, this is an elegant solution to an intractable problem. Merkel gets a headline, France gets the money, the bondholders don’t walk away from the table and everyone moves on. And it did get the world economy through another rough week.