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More likely, the senior status accorded to the Bank's loans just means that the country will have to pay higher rates on all its other borrowing.When Englishman John Maynard Keynes and American Harry Dexter White first designed the Bank, one might have forgiven them for thinking that an official loan window would deal with what economists call a missing market.
The Hornets had named seven loan players in their squad for the match, but only Nathaniel Chalobah, on a temporary deal from Chelsea, counted towards their official loan quota.
Despite Iceland's fulfillment of official loan conditions, the next disbursements of IMF and related Nordic loans are now at risk of falling through, following Icelandic President Olafur Grimsson's veto of the the so-called Icesave bill.
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Official loans on that scale would amount to 95% of Cypriot GDP.
The interest rates on new official loans might also be made contingent on growth rates.
Now the fund is inconvenient: reducing Greece's debt credibly requires a write-off of official loans.
America's Congress is unlikely to provide official loans to pay off private bondholders, as the Europeans did for Greece.
"Policy makers have to recognize the impossibility of the trilemma of no additional funding, no restructuring of official loans, and no default and exit from the euro".
Even on optimistic assumptions, we reckon Greece will need €67 billion or more of long-term official loans in the next few years.
It will surely need more help—either an open-ended rollover of the official loans or some kind of debt rescheduling.This is the contradiction in the rescue plan.
The additional exposure through official loans would be bearable because the other four bail-outs were individually much smaller than Greece's.
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