Latest Greek Negotiations Fall Apart; Risk Slides After Greece Says "Won't Take Orders On Bailout"
16
February, 2015
UPDATE:
*EU FINANCE MINISTERS' TALKS WITH GREECE OVER FOR TODAY, GREECE SAYS
WON'T TAKE ORDERS ON BAILOUT
EU
President Jeroen Dijsselbloem to explain just how far apart they are
now...
*
* *
Dijsselbloem
headlines:
- *DIJSSELBLOEM SAYS MINISTERS WERE DISAPPOINTED BY WEEKEND TALKS
- *DIJSSELBLOEM SAYS BEST WOULD BE EXTENSION FOR GREEK PROGRAM
- *DIJSSELBLOEM SAYS EXTENSION WOULD ALLOW FLEXIBILITY FOR GREECE
- *DIJSSELBLOEM SAYS EXTENSION WOULD INVOLVE COMMITMENTS
- *DIJSSELBLOEM SAYS WOULD NEED AGREEMENT TO ROLL BACK MEASURES
- *DIJSSELBLOEM SAYS WE STAND READY TO CONTINUE DISCUSSIONS
- *DIJSSELBLOEM SAYS IT'S UP TO GREECE TO DECIDE ON EXTENSION
- *DIJSSELBLOEM SAYS COULD BE EXTRA EUROGROUP ON FRIDAY
- *DIJSSELBLOEM SAYS WE HAVE THIS WEEK, BUT THAT'S ABOUT IT
So
the 10-day ultimatum was just extended by 40%? Clearly The EU is
worried.
*
* *
Well
that didn't last long. It seems - just as earlier in the week - the
ability for either side in this Euro-system death match game of
chicken to find any common ground to even start negotiations remains
lost:
- GREEK GOVT OFFICIAL SAYS THAT "IN THESE CIRCUMSTANCES, THERE CANNOT BE A DEAL TODAY"
- EUROGROUP DISCUSSED "UNREASONABLE", "UNACCEPTABLE" DRAFT TEXT INSISTING ON EXTENDING BAILOUT
Full
statement (and rejected phrase) (h/t
@EdConwaySky)
*
* *
The
reaction...
*
* *
EURUSD
is tumbling and S&P Futures are falling fast.
and
Greek Bank Bonds had been hinting at problems all day...
Further
comments:
- *GREEK GOVT OFFICIAL SAYS NO AGREEMENT POSSIBLE AT EUROGROUP
- *GREEK GOVT OFFICIAL SAYS EU PROPOSALS `ABSURD,' `UNACCEPTABLE'
Greek
govt official says in e-mailed note that Eurogroup Chairman Jeroen
Dijsselbloem’s proposals for the country to observe its existing
bailout commitments are “absurd,” “unacceptable.”
A Greek government official said that a draft text presented to euro zone finance ministers meeting in Brussels on Monday spoke of Greece extending its current bailout package and as such was "unreasonable" and would not be accepted.
Without specifying who put forward the text to the meeting chaired by Dutch Finance Minister Jeroen Dijsselbloem, the official said: "Some people's insistence on the Greek government implementing the bailout is unreasonable and cannot be accepted.
"Those who keep returning to this issue are wasting their time. Under such circumstances, there cannot be a deal today."
*
* *
So
this is the next key event:
Over in Frankfurt, the ECB Governing Council will meet on Wednesday.
Close attention will be paid to any decision the governors take on Greece and its lenders' access to central-bank liquidity. Already, Greek banks, which have been hurt by an outflow of deposits due to the country's political and financial uncertainty over the last two months, can no longer use their government's bonds to get liquidity from the ECB, depending instead on more expensive emergency funding from their own central bank.
But
of course that still leaves the uncomfortable post-Eurogroup press
conference and
statement which we suspect will be even more uncomfortable than last
week's for Dijsselbloem.
Zee
Germans are not happy and, as KeepTalkingGreece
reports, are
now suggesting Tsipras replace varoufakis at the negotiating table...
An SPD politician from Merkels’ social-democrat coalition suggested s that Prime Minister Alexis Tsipras should replaces Finance Minister Yanis Varoufakis as he apparently creates lots of confusion, German politicians cannot understand.
SPD executive board member, Joachim Poß, wrote in an e-mail for his party colleagues:
“Greek Finance Minister Varoufakis has best demonstrated with his performance until now, that he is not up to the demands of such an office. In the interest of the Greek people and in view of the difficult situation, Prime Minister Tsipras should consider to replace Mr Varoufakis with a political experienced, realistic-efficient person.”(Handelsblatt)
I suppose Varoufakis is an overwhelming challenge for some petty-minded politicians. He is much more than they can take. Or they just want a Yes-Man.
No deal: Greece-EU bailout talks break down, Athens given 1 week ultimatum
RT,
16
February, 2015
The
eurozone has given Greece an ultimatum of one week to request an
extension of its bailout deal, as Athens turned down the offer
dubbing it “absurd” and “unreasonable”. Greece’s finance
minister said they were ready to sign - but something different.
But
despite not reaching a deal, Greece Finance Minister Varoufakis
insisted Athens is "ready
and willing" to
reach a deal and that he is confident of reaching one in 2 days, he
said in statement after the talks.
"We
were offering to refrain effectively from implementing our own
program for a period of six months and all we were getting back was a
nebulous promise of some flexibility that was never
specified," Varoufakis
said.
Varoufakis
said that he was ready to agree a deal with creditors giving Athens
up to six months credit in return for putting major new budget
policies on hold.
But
this had been swapped for a different proposal from Jeroen
Dijsselbloem, the Eurogroup president, which he couldn’t sign
because it obliged Athens to extend its current bailout package. As
a result the talks, which had been expected to last well into the
night, broke down after just four hours.
"I
have no doubt that, within the next 48 hours Europe, is going to come
together and we shall find the phrasing that is necessary so that we
can submit it and move on to do the real work that is
necessary,"Varoufakis
told a news conference.
Germany
was maintaining a tough line throughout the talks. German finance
minister Wolfgang Schaeuble bluntly said that Greece had lived beyond
its means for too long and that Europe could not keep handing over
cash without guarantees from the Greeks.
“What
I have heard so far has not strengthened my optimism. It seems like
we have no results so far. I'm quite skeptical. The Greek government
has not moved, apparently,”
he said as he arrived for the talks.
The
source of the dispute lies in the government of radical left-wing
Alexis Tsipras, which was elected in January with a pledge to get rid
of the bailout and the crippling austerity measures that have gone
with it.
Yanis
Varoufakis said earlier that he was sick of being treated as a “debt
colony”
and being subjected to “the greatest austerity” for an economy
which has been reeling from crisis to crisis.
“Our
government is not asking our partners for a way out of repaying our
debts. We are asking for a few months of financial stability that
will allow us to embark upon the task of reforms that the broad Greek
population can own and support, so we can bring back growth and end
our inability to pay our dues,”
he said.
However, he insisted that Athens is "ready
and willing"
to reach deal
As
the talks finished early, sources in the Greek government slammed the
bailout terms as “unreasonable”
and “absurd”
to news agencies.
The
Eurogroup head said there was still time for Greece to agree an
extension.
“There
is time and ample room to agree on the terms of an extension. When I
listen to my Greek colleagues talking about a bridging loan and so on
– that's a different word for an extension,”
Jeroen Dijsselbloem told journalists.
Another
meeting was possible this Friday, he added, but said that it was “up
to the Greeks”.
There
is little time among Greeks for the troika of the European
Commission, the European Central Bank and the IMF, which ordinary
Greeks blame for their dire economic situation.
In
order to replace the bailout, which was agreed on three years ago,
Greece wants a “bridging
agreement”
worth 21 billion euros, which would allow the new government time to
implement radical economic reforms.
Greece
is also asking the eurozone to give it treasury bills guaranteed by
the European Central Bank (ECB) as well as requesting the freeing up
of bonds currently used as bank guarantees in the Hellenic Financial
Stability Fund to be used for public financing.
So
far Greece’s eurozone creditors have shown little appetite to give
Athens so much as an inch on the austerity measures that have been
demanded in return for a massive 240 billion euro loan to stave off
bankruptcy.
It
was not at all clear late Monday when the Eurogroup would meet next
to negotiate and reach a deal with the Greeks.
“It
depends on the decision of the Greek authorities. It was clearly
decided that if and once this request for an extension of the bailout
is there, if there are certain commitments from the Greek authorities
to stick to the program, then the chairman of the Eurogroup will
announce the next Eurogroup,”
European Commission Vice President Valdis Dombrovskis said after the
inconclusive meeting on Monday.
The
EU Economics Commissioner and former French finance minister Pierre
Moscovici that the only aim was to keep Greece in the Eurozone.
Although he also said that the EU has to take into account the
program that the Greek voters choose.
France
however, has showed signs that it will push for a compromise. French
Finance Minister, Michel Sapin, hinted that the eurozone may agree to
some of the Greek requests and also urged the Greeks to extend their
current deal to allow time for the talks to bear fruit.
As
long as Greece remains at the negotiating table the ECB has provided
emergency funding worth 65 billion euros, but unless a compromise can
be found, Greece will lose the emergency assistance at the end of the
month, which would result in certain financial collapse and the
country being unable to pay its debts. This in turn would leave
Greece with no choice but to leave the eurozone.
However,
there is skepticism among EU officials that 12 days do not give them
enough time to hammer out a deal and are already talking about an
extension of the existing measures.
The
Irish finance minister, Michael Noonan, criticized Greece for failing
to agree to an extension of the existing program and for failing to
provide the specifics of compromise with the eurozone.
“We
would certainly accede to a Greek request for an extension of the
program. If that were to happen, some of the roadblocks would fall
away and it would be possible to get down to specifics,”
he said.
But
even with an extension the road ahead will be tough. A deal, if
reached, must be acceptable to all 18 other members of the eurozone
and must be ratified by at least six national parliaments.
From the Guardian
Greece bailout talks break down after Athens rejects 'unacceptable' eurozone demands
Creditors
present ultimatum as finance minister insists other members must
water down austerity conditions if country is to reach ‘honourable
agreement
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