Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit - page 18
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Greek parliament approves government bailout proposal - more
News wires report that the Greek parliament have voted in favour of the government's bailout proposalsAP, Reuters, Bloomberg all reporting a majority in favour
So, its on to Brussels on Saturday now for negotiation with creditors (finance ministers meet Saturday, EU leaders meet Sunday)
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In response to the approval vote in the Greek parliament, some Greek sources saying the government may fall. Other sources say, not.
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Added: Kathimerini report on the numbers ...
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I've got 251 for, 32 against and 8 abstain, but whatever .... a huge majority of parliamentarians in favor.
17 governing coalition MPs voted against.
source
EU leaders summit is cancelled as Eurogroup talks continue
EU's Donald Tusk earlier tweeted that the planned EU summit of leaders this afternoon to discuss the findings of the Eurogroup has been cancelled because, er, they haven't got any findings yet
Eurogroup Fails To Reach Deal, Gives Greece 24 Hours To Accept Draconian Terms
When earlier today we revealed the terms of the "leaked" Eurogroup statement, which as we also reported would fail to reach a deal for a Greek Bailout #3, we said "Germany and 5 other "northern" states want Greece out, but they generously offer Greece the opportunity to push the "Grexit" button itself (especially since it is only "temporary"). Unless, of course, Greece is willing to cede all of its sovereignty to Germany in which case it can generously stay."
That's pretty much what just happened when after a day-long meeting of the Eurogroup, the European FinMins were unable to reach a conclusion on the third Greek bailout and instead once again punted the revised term sheet, this time with absolutely draconian terms, back to Tsipras, and told him he has until tomorrow to agree to the terms, and until Wednesday to pass them into law, for talks to even begin!
More details from Bloomberg: "The decisive point is that Greece must decide as of tomorrow whether it accepts this statement,” Austrian Finance Minister Hans Joerg Schelling says. "When all these conditions are fulfilled, a further program will be negotiated. Not before."
As for Finnish Finance Minister Alexander Stubb, he said that the Greek parliament has to approve whole package before bailout talks can start. "We made a lot of progress and were able to draft I think a very ambitous proposal and report for the heads of state and government."
"It’s a document that has far-reaching conditionality on three accounts” -- laws by July 15, prior actions on labor reforms, VAT and taxes, four bullet points that are quite far reaching on privatization and other things.
“If there is to be an opening of ESM negotiations, all of these conditions have to be met and approved by both the Greek government and the parliament."
It is unclear just how the Greek temporary exit language, which was included in the final deal, will figure in the Greek negotiations.
As for the European summit, which is very much moot in the absense of a deal , and which is starting now, here is what will be discussed today via Maltese Prime Minister Joseph Muscat: "We were told that today’s summit was to discuss Plan B should no agreement be reached."
"This meeting, from what I can understand we are going to discuss all options" Talks on Greek situation will "see what could be done so Greece may be kept in the euro.... "But not at any cost. What was sufficient two weeks ago is no more as things have deteriorated."
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The comedy continues
I hope they are going to have a box match so we all can see how "smart" they are
Greek deal reached – EUR/USD doesn’t buy this “aGreekment”
After a 17 hour marathon, Greece has reached a deal with its European partners. The details of this agreement only to start negotiations do not look promising, and not only because of the horrible humiliation that preceded it. While the threat of a Grexit is currently off the table, the deal could certainly be recessionary.
EUR/USD leaped on the initial news but is now clearly reversing course and falling to support at 1.1050.
Some details:
Tsipras:
Merkel:
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IMF finally says what they think about Greece
IMF report on Greece seen by Reuters
IMF threat to pull out of Greek bailout challenges Germany
The International Monetary Fund's threat to pull out of bailouts for Greece unless European partners grant Athens massive debt relief poses a stark challenge to Germany, the biggest creditor, which insists on IMF involvement in any future rescue.
The global lender has made itself unpopular with both sides in the Greek debt saga by playing its role as a teller of inconvenient truths without excessive diplomacy.
Its latest intervention, saying in essence that Greece will never be able to repay its debt mountain, is bound to sharpen debate when the German parliament meets on Friday to decide whether to authorize negotiations on a third bailout for Greece since 2010 that could cost an extra 85 billion euros.
It sharpens an unadmitted rift between Chancellor Angela Merkel, who wants to hold the euro zone together, and Finance Minister Wolfgang Schaeuble, who thinks Greece needs to leave the currency area, at least temporarily.
Merkel can count on a big majority in favor of opening loan talks with Athens due to her grand coalition's near monopoly of seats, although she may face an embarrassing revolt among her own conservatives.
But the IMF's debt sustainability analysis may force her within months to choose between two far more unpalatable options: grant massive debt relief or see the IMF walk away.
The report's conclusion that Greece needs debt relief "on a scale that would need to go well beyond what has been under consideration to date" makes it harder for her to argue that Germany will ever get much of its 57 billion euro exposure back.
The IMF released its findings late on Tuesday after Reuters had reported exclusively the study showing Greek debt rising to 200 percent of economic output in the next two years and staying at "highly unsustainable" levels for decades.
To avoid big writedowns - "deep upfront haircuts" in IMF-speak - Greece would have to be given either a 30-year grace period before it starts servicing or repaying all European loans, present and future, or large fiscal transfers by the euro zone.
The European Commission issued its own, less stark forecast on Wednesday, which said the Greek debt-to-GDP ratio would be 165 percent in 2020 and 150 percent in 2022 if Athens made reforms.
It accepted that Greece needs "a very substantial re-profiling, such as a long extension of maturities of existing and new loans, interest deferral and financing at AAA rates", but gave no figures.
Commission Vice-President Valdis Dombrovskis, presenting the EU executive's study, said what mattered was not the size of the debt stock but the annual debt service cost, which is already lower in Greece than in most euro zone countries because of an existing 10-year holiday on most interest payments.
NO "CLASSIC HAIRCUT"
Germany is by no means alone in opposing any outright write-off of Greek debt to European governments. Countries like Spain, Portugal and Ireland that went through their own programs successfully and paid towards Greece's bailout do not want to take any loss.
Slovakia and the Baltic states, which carried out wrenching fiscal adjustments, are just as tough, as are the Netherlands and Finland under pressure from anti-bailout Euroskeptics.
Merkel has stated publicly that there cannot be a "classic haircut" because that would be illegal under the EU treaty.
By adding the adjective "classic", she may have been preparing Germans for a gradual acceptance of the inevitable - the money won't be coming home in her lifetime or theirs.
True to her "step by step" mantra, after Monday's last-ditch agreement with Greece in Brussels, the chancellor played down the euro zone's pledge to look at lengthening loan maturities, already extended to 30 years on most European loans.
The statement merely repeated a 2012 commitment by Eurogroup finance ministers, she said, and would be considered only once Greece passed a first quarterly review by bailout monitors of its compliance with a new program.
Her easiest course would be to salami-slice the issue, giving a little loan extension at a time in return for strict conditionality, so no one in Germany could spot the moment when a "Schuldenschnitt" (debt cut) actually happened.
But the IMF is signaling that more drastic debt relief is needed, and Merkel is desperate to keep the Fund involved, both to retain parliamentary confidence in the program and because she doesn't trust the Commission to be tough enough on Greece.
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EUR/USD falls as Greek parliament vote, Fed rate hike remain in focus
EUR/USD fell considerably extending recent losses, as fiery protests erupted in Athens on Wednesday outside Syntagma Square while Parliament debated critical measures that could seal a comprehensive third bailout from euro zone creditors.
EUR/USD traded between a low of 1.0930 on the session and a peak of 1.1036, before settling at 1.0949, down 0.55% or 0.0060. The currency pair, which has closed lower in three of the last four sessions, fell to its lowest level in more than a week. At the midway point of July, the Euro is down more than 1.65% against its American counterpart for the month.
On Wednesday night, peaceful anti-austerity demonstrations in Athens quickly spun out of control as protestors lobbed dozens of Petrol bombs and Molotov cocktails at police in riot gear, who responded by spraying tear gas in their direction in an effort to subdue unruly crowds.
Debate continued into early Thursday morning inside Parliament, as a Midnight deal imposed by creditors during Monday's landmark deal passed. The creditors required the Greek Parliament to ratify four measures related to tax, pension and budget reforms in order to trigger a vote from six other national parliaments throughout the euro zone. While Greece prime minister Alexis Tsipras will likely lose support from his leftist Syriza party after capitulating to euro zone creditors in Brussels, he is still expected to win enough votes needed to secure a three-year, EUR 86 billion bailout through the European Stability Mechanism (ESM).
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July 5: Greek Independence Day; July 15: Greek In Dependence Day
The Greek parliament just voted - by a landslide - in favor of the bailout-offer-you-cannot-refuse (as opposed to facing up to the pain imminently and suffering through a Grexit) implicitly giving up their sovereignty and sending their "No" voting citizenry what we are sure will only be a deeper economic depression.
Well this time they will be remembered - not by good