Mid-2009, in a draft report from IMF never reached the outside world.

Le FMI savait très bien depuis deux ans que la Grèce était insolvable, comme d’habitude, le pouvoir politique et le pouvoir financier ont fait abstraction de la réalité.

D'un pour maintenir une utopie «l'euro», et de l'autre pour faire de milliards de profit en spéculant sur le marché.

Et le peuple dans tout cela, entre temps, on transférera des milliards de dettes toxiques du privé sur votre dos, ah j’oubliais, vous êtres du simple bétail à consommer !

Extrait de : The Denials That Trapped Greece, By LANDON THOMAS Jr. and STEPHEN CASTLE, The New York Times, November 5, 2011

ATHENS —   The warning was clear: Greece was spiraling out of control.

The stock exchange in Athens. Since 2009, Europe's delays and denials let Greece's problems fester.

But the alarm, sounded in mid-2009, in a draft report from the International Monetary Fund, never reached the outside world.

Greek officials saw the draft and complained to the I.M.F. So the final report, while critical, played down the risks that Athens might one day default, an event that could have disastrous consequences for all of Europe.

What is so remarkable about this episode is that it was not so remarkable at all. The reversal at the I.M.F. was just one small piece of a broad pattern of denial that helped push Greece to the brink and now threatens to pull the euro apart. Politicians, policy makers, bankers — all underestimated dangers that seem clear enough in hindsight. Time and again over the past two years, many of those in charge offered solutions that, rather than fix the problems in Greece, simply let them fester.

Indeed, five months after the I.M.F. made that initial prognosis, Prime Minister George A. Papandreou of Greece disclosed that under the previous government, his country had essentially lied about the size of its deficit. The deficit, it turned out, amounted to an unsustainable 12 percent of the country’s annual economic output, not 6 percent, as the government had maintained.

Almost all of the endeavors to defuse this crisis have denied the overarching conclusion of that I.M.F. draft: that Greece could no longer pay its bills and needed to cut its debt drastically.

Until October, when European leaders conceded that point, the champion of the resistance was Jean-Claude Trichet, who stepped down last week as president of the European Central Bank. It was he who insisted that no European country could ever be allowed to go bankrupt.

 ‘‘There is simply no excuse for Trichet and Europe getting this so wrong,’’

said Willem H. Buiter, chief economist at Citigroup.

‘‘It is fine to make default a moral issue, but you also have to accept that outside of Western Europe, defaults have been a dime a dozen, even in the past few decades.’’

If leaders had agreed earlier to ease Greece’s debt burden and moved faster to protect countries like Italy and Spain — as U.S. officials had been urging since early 2010 — the worst might be behind Europe today, experts say.

Today, Greece’s problems have worsened so much that they threaten to rip apart the euro and the decade-old 17- country monetary union created within the European Union to manage the prized common currency. An endless series of crisis meetings has pushed Athens into imposing an increasingly strict program of austerity on the Greek public in return for the promise of two major bailouts from more credit-worthy European countries, along with the crucial support of the I.M.F. and the European Central Bank.

European leaders finally bowed to reality at a late-night meeting last month when Angela Merkel, the German chancellor, pushed private creditors to accept a 50 percent loss on their Greek bonds. Mr. Trichet had long opposed such an action, fearing that it could undermine the vulnerable European banking system and lead to a global meltdown like the one that followed the bankruptcy of the U.S. investment bank Lehman Brothers in September 2008.

But now, many view the latest rescue plan as too little, too late.

‘‘Because of all this denial and delay, Greece will need to write down as much
as 85 percent of its debt — 50 percent is not enough,’’

Mr. Buiter said.

It was never going to be easy to turn things around in Greece, particularly given European politics. In countries like Germany and the Netherlands, many people oppose bailing out their southern neighbors. Policy makers and, indeed, many financiers believed that they could buy enough time for Greece to solve its problems on its own.

‘‘It was quite obvious, by the spring of 2010, that Greek debt could not be paid off,’’ said Richard Portes, a European economics professor at London Business School.

‘‘But in good faith, policy makers felt that Greece could grow out of its debt problem. They were wrong.’’

Immediately after that bulletin, he produced another, more damning analysis, which concluded that if Greece were a company, it would be bankrupt. The net worth of the country, he concluded, was a negative 51 billion euros, or $70.4 billion at current exchange rates.

But because the Greek credit rating was high enough at that time, the country could keep borrowing money and skate by. Once again, the Greek government objected to the I.M.F. analysis, although this time, the report was not amended.

Attention has only recently been drawn to these early I.M.F. studies. The Brussels research group Bruegel, which did an analysis at the I.M.F.’s behest, concluded that the fund should have done more to draw attention to Greece’s troubles.

By early 2010, banks and bond investors were growing reluctant to lend Greece money. The Greek finance minister then, George Papaconstantinou, delivered a blistering message to his European partners.

‘‘I know we have German elections in May,’’

 he said, referring to a regional vote to be held that month that was being cited in part as a cause of German reluctance to sign off on a rescue package for Greece.

‘‘But I have a 9 billion euro bond maturing on May 9, and if we are not careful, this could blow up in our face before the election!’’

Despite that warning, Mrs. Merkel, angry about having been misled about Greek finances, stalled for time.

Greek officials were acknowledging privately that the country was out of money. No one wanted to say so publicly.

‘‘Any talk of restructuring was a total taboo,’’ said a senior Greek official, who spoke on condition of anonymity.

‘‘We never even brought it up. If we made this case to Europe, we would have been pariahs forever.’’

In February 2010, Yanis Varoufakis, a political economist with ties to Mr. Papandreou’s party, suggested publicly that Greece default. He was attacked by the Greek Finance Ministry for spreading what officials there viewed as treasonous notions.

He kept making his arguments, but a year later, after a debate on Greek public television with a government official, Mr. Varoufakis’s once-frequent invitations to speak on Greek state television started to dry up.

‘‘On one of my last appearances,’’ Mr. Varoufakis recalled, ‘‘my television interviewer said to me, ‘Please stop using the word default — it is getting me in lots of trouble.’’’

Personal Stake

From the beginning, Mr. Trichet of the European Central Bank privately warned Greek officials that the European Union would cut off funds to Greek banks unless the country agreed to austerity measures.

‘‘You are not getting any help unless you implement your cuts,’’ Mr. Trichet told them bluntly, according to a witness to the discussions.

With financial markets falling whenever the debate on Greece’s problems seemed to reach an impasse, European politicians were receptive to Mr. Trichet’s argument about the Lehman- like consequences of a Greek restructuring and the threat this might pose to larger countries like Italy and Spain. But Mr. Trichet’s resistance, like that of many people who had been present at the creation of the euro, was also more personal.

An architect of the common European currency, Mr. Trichet disclosed his deepest feeling at a June 2011 seminar in honor of Tommaso Padoa-Scioppa, a recently deceased Italian economist who was one of the intellectual fathers of the euro. Mr. Trichet departed from his prepared speech and lapsed into a tone that one person attending described as very emotional. Emerging economies may go bankrupt, Mr. Trichet swore, but richer countries like Greece do no.

At another speech this year, to bankers and government officials in Washington, Mr. Trichet said that the austerity measures were the key and that there was no need to reduce Greek debt. His assurances did little to ease the worries in the room.

 ‘‘People were raising questions,’’ said Charles H. Dallara, managing director of the Institute of International Finance, which was the host for the event.

‘‘But it was such a dramatic notion — having a European country default
— no one could accept it.’’

That pattern of thinking had begun much earlier. In April and May 2010, as European leaders scrambled to come together for their first rescue for Greece and to create a bailout fund for other countries using the euro, Timothy F. Geithner, the U.S. Treasury secretary, urged his European counterparts to ‘‘think big.’’

He called on them to produce a plan that might rival in size the $700 billion bank rescue that Washington devised in 2008.

At one point early in the talks, the team from Washington, headed by Mr. Geithner and Ben S. Bernanke, the chairman of the Federal Reserve, was told that the initial European proposal was for a bailout fund of about 60 billion euros.

The team was stunned. The American officials told the Europeans that they were off by an order of magnitude, meaning that Europe should be talking about at least 600 billion euros.

Markets were calmed briefly by the I.M.F.-backed plan for Greece and the 440 billion euro rescue facility that was eventually agreed upon. In October 2010, Mrs. Merkel and the French president, Nicolas Sarkozy, suggested requiring some sacrifice from banks and other euro zone creditors, though their idea was that this would not happen until 2013 and would not affect Greece.

But that declaration, agreed upon at a meeting in Deauville, France, set off more alarm bells in the markets. First, Ireland, then Portugal, had to seek bailouts. In breaking the taboo about contemplating private-sector losses but lacking an immediate plan for Greece or firewalls for other nations, the French- German statement set back prospects for tackling the mountain of Greek debt.

Athens’ failure to make good on its economic promises, meanwhile, including a 50 billion euro privatization program, turned attention to the deteriorating political situation in Greece.

Last April, the Dutch finance minister, Jan Kees de Jager, dared to raise the subject of Greek debt restructuring again, only to receive another blast from Mr. Trichet. By May, the Germans had concluded, long after most private economists said it was inevitable, that a restructuring was needed.

Instead of bolstering Athens’ finances, the austerity program in Greece was turning a recession into a near-depression. The issue was broached at a meeting in Luxembourg, which was convened in secret but which quickly leaked to the media. This time, Wolfgang Schäuble, the German finance minister, argued that Europe must face up to its Greek losses.

But by then Mr. Trichet’s objection was more than philosophical. The European Central Bank had acquired a lot of Greece’s debt as part of the effort to prevent its collapse and could suffer if it had to write off its Greek bonds at a huge loss.

He stormed out of the dinner in a huff. The result was more delay.

‘‘It is very difficult to stand up to the president of the E.C.B.,’’

said Guntram B. Wolff, an economist at the Bruegel institute.

‘‘This is the person with the best information in the world and he was saying a Greek restructuring would be the end of the world.’’

Banker’s Reality Check

By the spring, the realization in Greece that it would need another bailout was pushing Mr. Papandreou to consider all options — even the extreme step of leaving the euro, according to one banker who talked with him at the time. But the subject of reducing Greece’s debt, which was on course to swell to more than 180 percent of the annual Greek economic output, was still taboo.

In late June, Mr. Dallara, the banking representative, met in Athens with the prime minister and his newly appointed finance minister, Evangelos Venizelos. There would have to be a haircut for holders, on Greek debt, Mr. Dallara told them, meaning that creditors would have to accept less than full value on what was owed them.

Paradoxically, it was a representative of the banking industry, perhaps more in tune with the realities of the marketplace, who finally insisted that Greece could not borrow and cut its way out of the crisis without restructuring its debt.

‘‘There was shock and surprise on their faces,’’

Mr. Dallara recalled.

‘‘They could not believe it.’’

Even though work proceeded on a haircut plan, the Greeks were reluctant to participate. ‘‘They were being passive,’’ Mr. Dallara said.

‘‘I think they felt this was being driven by the European governments and they were not sure how to grab hold of the issue.’’

In July, Europe finally agreed on a 21 percent haircut for the banks as part of a broader 109 billion euro bailout for Greece. While presented as an example of civic mindedness, the agreement soon came to be seen as a sweetheart deal for the banks that did little to reduce the total Greek debt burden. Mr. Dallara concedes it is not the natural order of things to have the banks leading restructuring talks, but he disputes the view that their interest has been a narrow one. ‘‘We are trying to represent the broad interests of the system,’’ he said.

But Germany put its foot down, objecting that the cuts did not go far enough.

While the deal reached in late October will require bondholders to accept deeper losses, Europe, Greece and Mr. Dallara continue to insist that the transaction will be voluntary.

As a result, there will be no need to activate Greek credit-default swaps, which would add to the complexity and cost.

But in the eyes of many debt experts, this is simply another form of denial.

Cela crée un sérieux problème, si le monde financier ne peut utiliser leurs assurances contre un défault de paiement, à quel prix qu'ils seront prêts à emprunter à des pays qui sont au seuil de l'insolvabilité.

‘‘You have to have a coercive element to make it work,’’

said Mitu Gulati, a sovereign debt expert at Duke University Law School.

‘‘To not accept that means you are living in Alice in Wonderland.’

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    # by Anonyme - 15 novembre 2011 à 23 h 16

    Great article. Thank you to tell us more useful information. I am looking forward to reading more of your articles in the future.