Who owns Greece?

If you lend €87 billion to Greek banks backed by an insolvent state, and 110 billion to the Greek state you are no longer a creditor: you are the owner of Greece.

Greek Banks repo around 140bln of securities with the ECB. In return they get around 87bln of cash to fund their balance sheet.

Greece got a bailout out from the IMF and the EU of 110bln. So far around 55bln have been given and a further bailout of around 60bln is being discussed in order to carry Greece to 2013.

Bloomberg Presentation on Greece and Peripheral Debt Crisis

A comprehensive summary of the debt crisis in Greece and the peripherals can be found in this seminar given by ITCM on Bloomberg.
Just go to
www.intouchcapitalmarkets.com
and press the link on peripheral debt. It is a Flash presentation.

Greece, A modern failed state?

When one speaks of failed states, Iraq, or Afghanistan may come into mind. Yet there may be modern western equivalent to this notion of a failed state. One only has to look at the characteristics of a failed state in order to find analogues. Lets look at the case of the Greek state:

• Citizens/State relationship is on of distrust, denial and abhorrence
  
• Brain drain of professionals and educated workforce.
  
• Nationalistic or stereotypical political rhetoric.
  
• Sticky political memories. Parties invoke past deeds (historical) to justify their policies.
  Extensive corruption or institutionalized corruption.
  
• Sharp economic decline and flight of capital.
  
• Reliance of the state on debt or handouts. Bankruptcy of state finances.
  
• State responds with more authoritarian rules to cover their inability to govern.
  
• Tax collection which delimits the power and defines a state collapses.
  
• Inability to control crime and civil unrest.
  
• Racist or sectional violence.
  
• Ballooning expat communities.
  

Worryingly, most of these indicator boxes are ticked in the case of Greece to a greater or lesser degree. The problem is that they are worsening all the time. Maybe Greece has not reach the full indignation of a failed state status but certainly it is a failed EU state. In many ways, however, Greece had never reached the status of a modern state so to say that it has failed may be inaccurate. Unfortunately, the signs are that the country needs to go back to its drawing board to rethink and redesign the the whole venture.