Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit - page 7

 

And in the end all is as it used to be. Usual political games

 

Germany Slams Greece: The New Government Has "Destroyed All The Trust That Had Been Rebuilt"

In his fiercest rhetoric yet, Germany's angry Finance Minister Wolfgang Schaeuble unloaded:

  • SCHAEUBLE SAYS DOESN'T KNOW WHAT TO DO WITH GREECE NOW
  • SCHAEUBLE SAYS NEW GREEK GOVERNMENT HAS DESTROYED ALL THE TRUST
  • THAT HAD BEEN REBUILT

    He went on to explain that "no one I talk to sees how Greek approach can work," which perhaps explains why Greek 3Y bond yields spiked back above 20% for the first time since the election today.

    Some additional headlines:

  • *SCHAEUBLE SAYS GREEK T-BILL AUCTION DESTROYED CONFIDENCE
  • *NO FOREIGN INVESTOR WANTED TO BUY GREEK T-BILLS, SCHAEUBLE SAYS
  • *SCHAEUBLE: NO ONE I TALK TO SEES HOW GREEK APPROACH CAN WORK

And GGB yields are exploding...

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Is anybody listening to any other opinion other than German in the EU?

 

'EU Won't Keep Greece in Euro Zone at Any Price': EU's Moscovici

Greece's exit from the euro zone would inflict great political damage, however the European Union won't keep the debt-ridden country in the 19-nation bloc at all costs, according to European Commission (EC) Financial Affairs Commissioner Pierre Moscovici.

A future agreement between the European Union and Greece must be guided by strict conditions acceptable for both sides.

"The Eurogroup has an overwhelming will to keep Greece in the euro zone. Financial accidents can happen. Our task, however, is not to organize this but to prevent it," Pierre Moscovici told German daily Die Welt.

However, he stressed the European Union is not ready to make any sacrifice just to keep Greece in the single currency bloc.

"We won't keep Greece in the euro zone at any price, but under strict conditions which are acceptable for both sides," Moscovici said.

He also added that any possible third aid package must look different to previous ones.

Moscovici also noted the 19-nation bloc was in a better position than two years ago but warned that Greece's exit from the single currency would still inflict great political damage.

"Everyone would ask, which member state is next?" he said.

According to the latest news, Greek Prime Minister Alexis Tsipras wants to meet top European leaders at this week's EU summit as tensions between the two sides have recently intensified, with German Finance Minister Wolfgang Schaeuble saying that Athens' failure to implement necessary economic reforms could result in the so-called "Grexident", an accidental series of events which could lead to Greece leaving the euro.

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Germany Gives Greece One Final Ultimatum

Germany Gives Greece One Final Ultimatum After Friday's "Optimistic" Talks Devolve Into Disagreement And Confusion

On Friday, the main catalyst that launched the early ramp in the EURUSD, subsequently sending both the Dax over 12,000, and the US stock market soaring, was speculation and hope that the latest round of Greek talks on late Thursday night ahead of tomorrow key meeting between Tsipras and Merkel in Berlin, had gone well, and there was a reason to be optimistic about the near-term for a Greece which increasingly more see as on the verge of expulsion from the monetary union. We explained as much, although we added the provision that at this point it is likely too late to do much if anything about Greece in "German DAX Surges Over 12,000 On Greek Optimism, But The Money Has Run Out."

Now, courtesy of reporting by the FT, we can also rule out any of the so-called optimism in the aftermath of Thursday's talks because as Peter Spiegel reports, not only was there no real consensus, but the talks "ended in disarray", and even though "Greece’s prime minister and fellow Eurozone leaders emerged from a meeting early on Friday morning touting a breakthrough agreement to unlock much-needed bailout funds for Athens — only to fall into disagreement hours later about what it all meant."

Two days of intensive and occasionally heated negotiations at an EU summit in Brussels amounted to little more than a repeat of talks a month ago between eurozone finance ministers that officials then also hailed as the definitive agreement to get the final bailout review under way.

And the punchline, "so similar were the two deals that, much like the one finalised last month, leaders involved in the talks could not agree on what was agreed within 12 hours after a late-night meeting aimed at resolving all differences."

The underlying problem for Greece, as we have been writing ever since October, is that the country is not only out of money, but it is now almost $4 billion in the hole. It is, in effect, insolvent. Which is why Greece is now desperate to walk back on all of its election promises because having lost the one trump card it had, namely to default on its Eurosystem debt (precisely what the infamous Varoufakis "middle finger" speech was all about), or exist the Eurozone on its own terms, Greece is now scrambling to survive day to day, even as its bank run threatens to implode its banks at any given moment. More from the FT:

Angela Merkel, the German chancellor, made clear at a post-summit news conference that the starting point for Alexis Tsipras, Greek prime minister, was a December 10 inventory of incomplete reforms promised by the previous Greek government. “The Greek government has the opportunity to pick individual reforms that are still outstanding as of 10 December and replace them with other reforms if they . . . have the same effect,” Ms Merkel said.

It is a potentially incendiary demand since the document Ms Merkel referred to — a letter written by Greece’s then centre-right prime minister Antonis Samaras and his finance minister Gikas Hardouvelis — was the focus of particular scorn for Mr Tsipras’s far-left Syriza party on the campaign trail.

Mr Tsipras insisted at his own press conference that Ms Merkel was mistaken. “Forget the commitment of the former government. There are no austerity measures. There is no letter of Hardouvelis,” Mr Tsipras argued. “I asked [the other leaders]: do you expect me to . . . go through this evaluation and implement measures that Mr Samaras was not able to implement? The answer was no.”

No, Merkel is not mistaken as will be made abundnatly cleat tomorrow during the Berlin press conference after the Merkel-Tsipras meeting, which may well lead to the Euro losing all of its sharp gains achieved on Friday due to another dose of premature Greek optimism.

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Merkel ally says Greece should take 'last chance' to keep euro

Volker Kauder is a key ally of German Chancellor Merkel.He is interviewed in Handelsblatt and says Greece should take 'last chance' to Keep euro

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Handelsblatt is a German business newspaper.

Headline via Bloomberg

 
theNews:
Volker Kauder is a key ally of German Chancellor Merkel.He is interviewed in Handelsblatt and says Greece should take 'last chance' to Keep euro

-

Handelsblatt is a German business newspaper.

Headline via Bloomberg

Why should they keep the Euro?

 

UK Osborne: 'Grexit' Risks Are on Rise

The risk of Greece leaving the euro is rising, the UK's Chancellor of the Exchequer, George Osborne, warned on Tuesday.

"Once you have established the fact that a pegged currency can be broken…the markets and others will seek to test that," Osborne told the Treasury committee.

"Greece is not the only weak economy in the euro zone."

'Palpable ill will'

Speaking further, he said that the “ill will” around the table at recent EU meetings has been palpable.

At the same time, he warned of such a scenario, linking it to the so-called 'Black Wednesday' when Britain was driven out of the European Exchange Rate Mechanism.

Ironically, his comments came on the same day as the man behind the 'Black Wednesday' - iconic investor George Soros said he saw a 50:50 chance that Greece will leave the euro area.

“It’s now a lose-lose game and the best that can happen is actually muddling through...Greece is a long-festering problem that was mishandled from the beginning by all parties," Soros told Bloomberg TV in an interview.

Following the high-profile Tsipras-Merkel meeting late on Monday, Greece will present a new reform program to its creditors by next Monday, potentially unlocking bailout funds and averting the risk of bankruptcy, a government spokesperson said on Tuesday.

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Screws Tighten: ECB Forbids Greek Banks From Buying More Debt

The European Central Bank (ECB) has instructed Greece’s biggest lenders to refrain from increasing their exposure to Greek government debt, people familiar with the matter told the Wall Street Journal late on Tuesday.

According to the story, the new restriction - approved by the central bank’s Governing Council - was sent to Athens in a letter on Tuesday.

The Frankfurt-based bank has already restricted the amount of funding the Greek government can obtain by selling Treasury bills, setting a cap to €3.5 billion.

Grinding Athens

The decision - not yet confirmed by officials - raises pressure on the cash-strapped government in Athens to seal a deal with its international creditors to unlock billions of euros in bailout funds.

It comes as the government faces several major debt repayments in early April - another loan repayment to the IMF due April 9 , and two additional T-bill repayments will come mid-month.

So far, Athens has been able to repay maturing T-bills by selling new ones. However, with the ceiling - and more and more scarce foreign investors - Greek banks cannot buy all, meaning the stock of outstanding T-bills will decline. Thus, the government will need another source of cash to repay them.

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opes Crushed: Greece Won't Get Quick €1.2B Cash Shot

Greece had no legal claim to €1.2 billion linked to a scheme for recapitalizing banks, euro area officials said Wednesday, dashing the hopes of the cash-stripped government in Athens for a quick financial shot in the arm.

"There was agreement that, legally, there was no overpayment from the HFSF (Hellenic Financial Stability Facility) to the EFSF (European Financial Stability Facility). The EWG (European Working Group) will consider how to move forward on this issue in due course," an EFSF spokesman said.

At the same time, however, policymakers at the EWG said they would consider further how to deal with the issue in the future.

Complicated story

The story behind it is rather complicated and goes back to the period between 2012 and 2014. Back then, the bank-saving Hellenic Financial Stability Facility (HFSF) received €48.2 billion from the euro zone bailout body EFSF. While the money it received from the EFSF was in the form of bonds, Greece also used €1.2 billion in cash reserves from its own bailout fund to recapitalize its banks.

By February, when the new Syriza-led government signed an agreement extending the country’s bailout for four months, the fund had €10.9 billion left - which it agreed to hand back to the EFSF. However, Athens is now demanding the aforementioned €1.2 billion out of the €10.9 billion it returned, since that money didn’t originate with the EFSF.

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