A long, hard bailout ahead for Greece. Ignore the markets rebounding overnight and today because there’s “a deal” with Greece. It’s a relief rally and nothing more. In fact, there is a growing realisation that whatever happens in the current round of the crisis, Greece will need years of financial support from the International Monetary Fund and/or the European Central Bank and the rest of the eurozone and EU. The figures tell the story: the country’s banks are broke and on life support from the ECB. Even if the 30 billion euros and more of Greek money were repatriated back to the country overnight, that wouldn’t even halve the amount of financial support being paid each day to the banks from the ECB, which is above 80 billion euros. This is on top of other, earlier support. The Financial Times reports this morning:
“The inescapable reality is that for Greece to get back on its feet it is likely to need the IMF’s help far beyond the current four-year, $30bn bailout. And the same truth, they contend, applies to its European creditors. Even in the event of a Greek default, the country’s creditors would not be off the hook.
“The European Commission has begun doing the groundwork for a multibillion euro ‘balance of payments’ assistance programme, according to people briefed on the preparations. Such a facility would allow Athens to request loans backed by the EU budget, which is funded by its 28 member states, to help navigate its way through any payments crunch.”
That’s the reality. Transfer payments of varying types and amounts every month, every year for years to come, from the IMF, Europe and the ECB — one long, permanent bailout as far as the eye can see. A conga line of bailout payments. The European Central Bank holds another meeting later today, Sydney time, to assess the size of the now daily bailout for Greek’s banks. — Glenn Dyer
Taylor Swift rules, OK!? Pop singer Taylor Swift has proved she’s the master of the world’s biggest company — Apple. Less than 24 hours after she told Apple she wouldn’t put her latest album, 1989, on the new Apple Music streaming service, the world’s biggest company had backed down. In a letter released on Sunday, Swift had said she would not put her music on the new service because Apple was not paying artists for the three-month trial service now available to all potential subscribers. She bagged Apple’s move as “shocking” and “disappointing”. Apple responded less than a day later calling an end to the brief stand-off by changing tack and confirming it would pay artists a small fee during the three-month trial for new streaming subscribers. That news was delivered on Twitter, and Swift responded via Twitter, saying she was “elated and relieved”. But there’s still no word on whether 1989 will be placed on Apple Music. She’s one tough artist. She took 1989 and other music off the Spotify streaming service last year in protest against the low level of royalties being paid by the company. — Glenn Dyer
Nutella to you, Thorntons! Italian sweets giant Ferrero has pounced on British chockie maker Thorntons, snapping up a 29.9% stake, which is usually the first move in a takeover. Thorntons has been troubled by a slowly weakening performance and management instability, with the CEO walking out recently because of a failed strategy change. For years Thontons has been a staple of UK high streets and shopping malls with a chain of standalone shops selling its products. But the former CEO Jonathan Hart changed that and tried to remake the company into a consumer products group, selling chocolates and other products through supermarkets (where there’s a battle royal between the established players such as Tesco and Sainsbury’s, and the German discounters, Aldi and Lidl). But the price wars crunched suppliers like Thorntons, leading to two profit downgrades as the giants retailers have cut orders. UK media reports say Ferrero snared its 29.9% from share holders including a former Thorntons chairman and an activist investment fund.
The existing Thorntons board seems happy to hand the controls to Ferrero. The raid resulted in Thorntons’ existing board throwing in the towel, inviting the privately owned Italian giant on board. So a new brand falls into the Nutella maw to go with Kinder Surprise, Ferrero Rocher and Tic Tacs. Thorntons has a big factory in Derbyshire and 240 stores across the UK. It is yet another big UK chocolate group (it has been going for more than a century) to fall under foreign control. Cadbury was snapped up by Kraft in 2009 (it’s now in a company called Mondelez) and Rowntree (Kit Kat) was grabbed by Nestle back in 1988. — Glenn Dyer
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