The US doesn’t want a Grexit, from the FT:
US Treasury secretary Jack Lew has raised the pressure on European leaders to grant some debt relief to Greece to help avoid its exit from the eurozone and what Washington sees as an unnecessary hit to the global economy.
Warning that a Greek meltdown would cause hundreds of billions of dollars of economic damage, Jack Lew issued the Obama administration’s loudest call yet for compromise on Wednesday.
The IMF doesn’t want a Grexit, from Zero Hedge:
- IMF’S LAGARDE SAYS DEBT RESTRUCTURING NEEDED IN GREECE
- IMF’S LAGARDE SAYS FUND REMAINS ‘FULLY ENGAGED’ WITH GREECE
- IMF’S LAGARDE SAYS IMF CANNOT GIVE GREECE SPECIAL TREATMENT
Greek PM Alexis Tsipras doesn’t want a Grexit, from the FT:
Alexis Tsipras, the Greek prime minister, promised EU lawmakers he would seek a compromise with Athens’ bailout creditors before the end of the week, but warned any agreement must not add to his country’s economic hardship.
Just hours after being given five days to reach a deal with its creditors or face exit from the eurozone, Mr Tsipras told the European Parliament both sides in negotiations have been “called upon to produce a fair compromise”. But he argued a deal without public backing inside Greece was futile.
“My country has been transformed to an austerity laboratory. This experiment has not been a success,” Mr Tsipras said. “We demand an agreement with our neighbours, one that gives us a sign we are exiting from the crisis which will demonstrate light at end of [the] tunnel.”
But Germany does, from Reuters comes the German finance ministry:
“At the moment and in principle we see, as the chancellor said expressly in her press conference in Brussels, no occasion at all to discuss this issue – there is no leverage or basis for that,” Martin Jaeger said at a news conference.
“That refers to a haircut in the classic sense but I explicitly add we also take that to mean measures that aim to bring about a reduction in the cash value of debt – those are things that you hear in discussions under profiling, restructuring and similar things”
And so, Grexit approaches, from Mohammed El-Erian:
This sequence is smart politics. It gives time for all parties involved in this tricky and protracted negotiation to reflect on the dramatic developments of the past few days and calmly respond to them…But this good politics is bad economics.
…Every day that goes by intensifies the Greek economy’s economic and financial implosion. With the banks shut for more than a week now, economic activity is grinding to a halt. Tax revenues are collapsing. Tourist trips are being cancelled. Unpaid government, corporate and household bills are mounting. ATMs are running out of cash. Pensions and salaries are paid only partly, if at all. Whatever capital is still mobile is looking to flee the country. And already alarming unemployment and poverty are on the rise.
It could well be that European leaders have come to the realisation that, even if they were willing to give Greece another chance, the crisis has now slipped beyond their ability to control events and act effectively. And, since none of them wish to go down in the history books as having “decided” the first exit from the single currency, their most practical option could well be to maintain the negotiating pretence until the situation on the ground forces the Grexit that most now deem inevitable in any case.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.