In bankruptcy, putting someone into administration means assigning them a guardian who makes financial decisions on that person's behalf. It's a final step when you admit that the person who is bankrupt is incapable of doing it personally. Assets are sold, income set aside for debt repayment, and in some cases, a portion of the debt is forgiven. That has nothing to do with administration per se, but the heightened sense of trust in the administrator's handling of the bankrupt individual's financial affairs makes such deals possible if they are wanted.
This morning, the Financial Times reported that Europe is considering a proposal to couple the sale of state assets with an administrative panel that would do two things: ensure that the sales actually take place; and ensure that the proceeds are used to pay down the debt. The sales will take place on state-owned companies, such as utilities and ports. Ironically, the sales will cut further into the revenues of the Greek state looking into the future, but that is a challenge that all European countries face. It is a separate question of whether privatisation of utilities is a good thing to do (indeed its merit is debatable in principle, regardless of the country involved), but Athens has precious few options left.
Somewhere in the last while I came across a proposal from a global institution I will not name until I find the reference which proposed establishing a formalised bankruptcy procedure for countries. Someone within the EU has clearly suggested such a thing on an ad hoc basis for Greece. But Portugal is certainly up next.
If this proposal bears fruit, Greece may be declared bankrupt in some official way soon, setting a pattern for other countries. They will avoid using that name. Going into administration sounds so much more neutral. But the reality is the same.
This morning, the Financial Times reported that Europe is considering a proposal to couple the sale of state assets with an administrative panel that would do two things: ensure that the sales actually take place; and ensure that the proceeds are used to pay down the debt. The sales will take place on state-owned companies, such as utilities and ports. Ironically, the sales will cut further into the revenues of the Greek state looking into the future, but that is a challenge that all European countries face. It is a separate question of whether privatisation of utilities is a good thing to do (indeed its merit is debatable in principle, regardless of the country involved), but Athens has precious few options left.
Somewhere in the last while I came across a proposal from a global institution I will not name until I find the reference which proposed establishing a formalised bankruptcy procedure for countries. Someone within the EU has clearly suggested such a thing on an ad hoc basis for Greece. But Portugal is certainly up next.
If this proposal bears fruit, Greece may be declared bankrupt in some official way soon, setting a pattern for other countries. They will avoid using that name. Going into administration sounds so much more neutral. But the reality is the same.
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