Europe may be thousands of miles from New York, but wise real estate professionals know to keep an eye on European finances. As The Real Deal covered in its November issue, foreign buyers have been crucial to the city’s real estate market in recent years, but the disastrous Greek debt crisis had been hampering foreign activity the last few months.
European leaders reached an accord at the end of last month for a European bailout, but as the video above humorously explains, that could just be the beginning of the problem.
Banks agreed to take a 50 percent haircut on Greek debt, so that the Euro Zone would “not explode,” the video explains. In exchange, the banks are getting 20 billion euros of credit enhancements, or the equivalent of $27.5 billion, and an increased European Financial Stability Facility — a fund that bails out Euro Zone economies.
Of course, no one has the money to fill those coffers from the current 440 billion euros, to the promised one trillion euros, or $605 billion to $1.38 trillion. The hope is that China wants to invest the money in European economies as it moves away from investing in the dollar. But the European economies have already shown their vulnerability, and an inability repay debts. If China declines to invest, the cartoon characters say the European economy must pray for aliens.