Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit - page 20

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Troika says Cyprus review is going well

The Troika aren't just into Greece, they've also got Cyprus to deal withReuters reports that they have reached a staff level agreement on policies that could aid the completion of the review

  • Says Financial situation of Cypriot banks is gradually improving
  • Seeing tentative evidence that the slow pace of debt restructuring is picking up
  • Increasing the pace of reform will be essential
  • Addressing the levels of non-performing loans remains the number one priority

If you're looking for contagion from Greece then Cyprus is where you should turn your gaze to

source

 

German Economic Council Backs Exit For "Uncooperative" Eurozone Members

Now more than ever, the world is raising serious concerns about the long-term viability of the EMU. The crisis in Greece and the deep divisions between Athens and its creditors regarding the viability of fiscal “adjustments” have laid bare the currency bloc’s weaknesses and have underscored the difficulties inherent in managing a common currency in the absence of political and fiscal unity.

Reservations about the "experiment" recently caused the likes of Poland and the Czech Republic to express their reluctance to adopt the common currency with Polish central bank chief Marek Belka hilariously characterizing the EMU as a "burning building." "You shouldn’t rush when there is still smoke coming from a house that was burning. It is simply not safe to do so. As long as the eurozone has problems with some of its own members, don’t expect us to be enthusiastic about joining," he said.

Indeed.

Of course once the house burns down and the former occupants (those that made it out anyway) are standing around outside surveying the still-smoldering ashes, no one wants to be labeled an arsonist, which is presumably why Germany’s five economic "wisemen" decided that now might be a good time to pen a "special report" (press release, executive summary) on crisis response in the euro area.

Unsurprisingly, the "independent" assessment of the German Council of Economic Experts concludes austerity programs in Spain, Ireland, and Portugal were "successful" and as for Greece, well, they don’t know what happened there but it’s certainly not entirely the fault of misguided crisis management and if anything, it simply means that member countries should turn over more of their fiscal autonomy to Berlin Brussels.

"The situation in Greece should not be taken as proof of failure of the rescue policy as such. Firstly, the crisis response averted a systemic crisis and thus maintained the cohesion of Monetary Union. Secondly, the time was used to implement reforms to make Monetary Union more resilient against economic crises. Thirdly, the economic situation in Ireland, Portugal, and Spain has improved markedly," the council says, before adding that "it has become evident in the past years that the euro area member countries are overwhelmingly unwilling to give up national budget autonomy."

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Oh shock, there might be problems with the 20 August Greek bailout deadline

Would you believe it?

There may be a big delay in Greece getting their third bailout by 20th August. Surprisingly the delay won't be the fault of the Greeks but due to Germany

Focus magazine reports that the German parliament meeting that was scheduled for mid-august (18th I think it was) may have to be postponed. Unnamed officials speaking to Focus said that the EC's timetable for talks is much too tight and so may cause the Germans to put off their vote in parliament

So far the German government has declined to comment (well it is Saturday). If it does get put back that will give Greece a big headache as, among other things, they have to pay €3.2bn to the ECB by the 20th

In other news, Greece's economy minister, George Stathakis, has said in a Greek newspaper interview that Greece will get 30 years to pay back the third bailout. He also says;

  • Long term loan from ESM will constitute mini restructuring of Greek debt, replacing short term IMF & ECB loans
  • Greece latest deal with lenders is economically viable
  • Deal opens prospect of significant restructuring of debt, as per IMF request
  • Creation of new political party that wants a return to Drachma would fail
  • Exit from Euro wouldn't ensure against internal devaluation
  • Capital controls to be kept in place until banking system is fully stabilised
  • Government will make sure that primary residences are protected in any legislation that covers bad loans

That last comment perhaps gives some idea of what terms are being put forward in the negotiations. Watch out if you have a second home and you owe money on it

source

 

German Govt Doubts 3rd Greek Deal Can Be Reached by Aug 20: Bild

Bloomberg with the headlines from German press Bild article:Additional bridge financing anticipated since talks with Greek government won't be completed in time, Bild reports, citing unidentified government officials

  • Many questions in the reform package need to be clarified
  • Then, the agreement needs to be approved by the national parliaments of 6 euro countries
  • Greek government seeking to delay decision on reforms to Autumn
 

Greek negotiators on track for Tuesday deal - report

Reuters reports that negotiators are optimistic

  • EU told Greek bailout negotiators are on track for potential draft deal Tuesday
  • Eurogroup could meet Aug 14 to approve third bailout
  • Greek govt will be asked to approve bailout deal between next Tues and Thurs
  • Greek parliament expected to enact further legislation before Aug 20
  • No major conflict remains, but some countries pressing for more long-term details

It would be just lovely to get Greece off the front (and back) pages by the end of August.

 

White Smoke in Athens: Greek Bailout Deal Reached

After long overnight talks, Greece and its international creditors were able to successfully conclude their negotiations on Tuesday morning and reached a €86 billion deal which will keep the country in the euro zone and save the debt-stricken nation from bankruptcy.

"An agreement has been reached. Some minor details are being discussed right now," a Finance Ministry official told reporters on Tuesday morning.

"Negotiations have been completed. There are some details left," government spokesperson, Theodoras Mihopoulos, tweeted at the same time.

The Greek parliament will have to vote on the bailout program and approve the deal.

The Eurogroup, euro zone finance ministers, will also have to review a Memorandum of Understanding, the detailed terms of the bailout.

All parliamentary and other procedures both in Greece as well as in some national parliaments in Europe have to be concluded and funds disbursed by August 20, when Greece has to make a €3.5 billion bond payment to the European Central Bank.

The agreement marks the end of tortuous months of negotiations and unnerving meetings and summits for the Prime Minister Alexis Tsipras led government, which fought against tough austerity measures demanded by the country's international lenders since February.

source

 

German Chancellor Merkel says she expect IMF will take part in new Greek bailout

German Chancellor Angela Merkel, speaking with ZDF TV on the weekend:

  • Said she expects the IMF will be a part of the next Greek bailout
  • "Mrs. Lagarde, the chief of the IMF, made very clear that if these conditions are met, then she will recommend to the IMF board that the IMF takes part in the program from October"
  • "I have no doubts that what Mrs. Lagarde said will become reality"

via Reuters

Merkel is trying to rally support for the vote in Germany's parliament on Wednesday on the86 billion euro bailout package for Greece.

 

The annotated Greek MOU -- by Yanis Varoufakis

Former Greek finance minister Yanis Varoufakis annotates the entire Memorandum of Understanding for the three-year ESM programme

Yanis Varoufakis is certainly the world's most interesting politician. He's a firebrand who doesn't care what anyone thinks, pushed his country to the brink of leaving the Eurozone and stands behind his convictions.

Since resigning his position, he's been on a campaign of criticism of Greece, the Eurozone and the Troika. His latest missive is a full, critical annotation of the 62-page MOU on the Greek deal.

It's filled with gems like this:

"The authorities will continue to pursue technical assistance with the European Commission SRSS in the fields of anti-corruption where it was already provided. [Corruption is rampant in Greece. It comes in two forms. Micro-corruption and macro-corruption. The former concerns small sums and involves individuated officials, small business proprietors etc. Macro-corruption centres upon the Triangle of Sin: Banking, Procurement and the Media. For five years the troika has not targeted Macro-corruption while the key players involved in Macro-corruption were cheerleaders of the troika program. Indeed, they have been central in assisting the troika, from within Greece, to defeat out government. Only by a miracle will the troika now turn against Macro-corruption!]"

Download the pdf here.source

 

Another Black Swan? Syriza Outcasts Form New Political Party, Will Push For Grexit

Once upon a time, Panagiotis Lafazanis had a plan to save Greece.

On July 14, just two days after Prime Minister Alexis Tsipras sold out the Greek referendum "no" vote by agreeing to a shockingly punitive bailout deal in Brussels, Lafazanis convened a meeting of Syriza party "rebels" at a hotel in Athens. There, he allegedly attempted to convince his fellow lawmakers to storm the Greek mint, seize the country’s reserves, and arrest central bank governor Yannis Stournaras. "Obviously, it was a moment of high tension,"one activist who attended the secret meeting later told FT.

Yes, "obviously." Equally obvious once news of the meeting leaked was that Lafazanis would not be Energy Minister for much longer and sure enough, he was sacked by Tsipras as the premier sought to pave the way for a series of votes in parliament on bailout prior actions.

Earlier this month, as rumors started to circulate that Tsipras might not have the support to survive a confidence vote, Lafazanis announced he was forming his own political party, which was funny right up until Thursday when Tsipras resigned, setting off a series of events that will see Greeks head back to the polls in September. Now, Lafazanis has seized the opportunity to convince 28 other Greek lawmakers to join him and his new party which will be called "Popular Unity," an ironic choice, given that it grew out of the desire to split with a party leader who had become decisively unpopular among Syriza’s Left Platform.

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They are not going to do anything

They are not owners of their own banks - no way that they can do anything now without asking the bosses. They have been sold

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