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SamuelRSmith on 22 February 2012
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Mr Khan said:
SamuelRSmith said:
Mr Khan said:
SamuelRSmith said:
How can you call "writing down 107 billion Euros" not a default? They've just defaulted on 107 billion Euros (for all intents and purposes). This is the second time this has happened, too.

In legal terms it works similarly to negotiating away credit card debt (not negotiating completely away, but lumping your payments and reducing some of the load outright). The idea is that if both parties agree, it isn't a default, because this allows them to choose which debts to annul, rather than a disorderly default where no-one would have any idea of what would and wouldn't end up actually getting paid.

Which is why I mean "for all intents and purposes". The idea is that, if they didn't have the write down, they would have had to default. Creditors lose out either way.

Yes, but creditors lose less in this scenario than in the other.

Though really it seems like everyone is losing in this. Some corporations in Europe might be happy (weak Euro makes their exports competitive), but pretty much no-one else

Yeah, I understand that.

How many European corporations actually produce stuff that gets exported outside of the EU? I'm sure most stuff that goes in the international markets is probably produced in South-East Asia. Cars/Planes might be an exception... but I'm sure that they mainly get built in the regions in which they're sold.

The only people who really benefit from this are the Eurocrats... the precedents that these deals are setting, in terms of the EU controlling state budgets, is ridiculous. If the EU/Eurozone survive this crisis... democracy/state sovereignty in the region ain't gonna look pretty.