Greek tragedy continues: March 27 voluntary default

At long last a new agreement has been reached where Greece will be able not pay its debt and gets a fresh € 130B when they behave prodigiously (so lots of new debts where IMF.ECB and ESM will be senior to other bond investors, trashing their hopes to get anything when Greece defaults). The private sector writes down 53% immediately, the interest rates go down and the maturities up resulting in losses of 75%. Even the ECB pays a bit, but unbelievable little thanks to Super Mario.
The agreed haircuts will apply on the redemptions of March 20 and with a delay of seven days you will get the voluntary default on March 27.
The official default will be later. First 95% of the private sector must agree and the hedge funds have too much fun on battling this kind of agreement to agree soon, so 95% should be elusive. When you don’t get that 95% everything can happen again. Delay, more or less haircuts, still CDS triggered, an official default.

Meanwhile the elections in Greece will complicate things. The extreme parties will win and they will not agree with the current agreements and renegotiate things, while support for the euro in Greece is going down fast (still a majority wants the euro).

The scrooges from the north will continue to do difficult about new tranches for Greece when new scenarios point to a base scenario of government debt/ GDP of 140%+ instead of 120.5% in 2020.

The market can be relieved again for some time: we kicked the can down the road. But Greece will remain the naughty boy.

It is not necessary to exaggerate the importance of Greece: O"Neil of Goldman Sachs tells China creates every quarter a total extra economy as big of Greece. The world is not so dependent of Greece for economic growth [but rebranding of Greece into Hellas will do no harm]

(pictures before photoshop: Agence France- Press / Getty images;Lagarde and Papademos; and picture from Economist with Venizoulos, Papademos (together a resistance pose like the Dutch parody war hero’s the brothers Temmes that pointed the Germans in the wrong direction), Schäuble and the finance minister of France)

Schäuble loses confidence in Greek government (especially after the election)

Not only in the Netherlands (an opinion poll in newspaper De Telegraaf showed 92% did not support new bail outs for Greece) but also in Germany the support for helping Greece is dwindling.
Athens burned Sunday because of approving of new austerity by the current government under pressure of core Europe.
But the New Democrats, after the elections probably the biggest party (31% in the polls), told almost immediately after the vote that the results of Sunday had to be renegotiated by the new government after April.
Those elections will not produce a majority for the friends of European forced austerity. The labour party PASOK that has now a majority in parliament will get about 8% of the votes if they are lucky. Some parties already have indicated they don’t want to rule and they will become big because they oppose more austerity measures (and that is what a lot of people want).

The German minister of finance Schäuble no longer wants to kick the can down the road because Greece will turn in an uncontrollable political ruin after the elections. Now asking from the current government to support current measures after the elections is naive because the will have no votes or are persuaded by the force of the dark side to forgo more austerity.
So it will become very difficult for Greece to remain in the Euro zone because they can no longer force more austerity. The patience of Germany and the Greek people is exhausted.
Schäuble thinks the banks are now much better prepared than two years ago and can take the losses of a Greek default. Europe has bought enough time and this was (maybe for the banks) a success, including the help of the ECB the banking system outside Greece can survive well. Day X (of Greek default) has lost a lot of horror Roessler told at German TV.