The weekend’s European news could not be more extraordinary. A superb opinion piece by Yanis Varafoukas in The Guardian brought everything to a head: In 2010, the Greek state became insolvent. Two options consistent with continuing membership of the eurozone presented themselves: the sensible one, that any decent banker would recommend – restructuring the debt and reforming
Greek chaos has reached a whole new level this morning with the release of its proposed compromises with the Eurozone. Here is the text in full: Policy Commitments and Actions to be taken in consultation with EC/ECB/IMF staff: 1. 2015 supplementary budget and 2016-19 MTFS Adopt effective as of July 1, 2015 a supplementary 2015
Not much to report on Greece today except to say that not much has changed. The Greek Government is preparing a proposal that Germany is unlikely to accept. Here are a couple of useful flow charts, first from Deutsche via Zero Hedge on negotiations: Grexit looks the more likely to me. And from Bloomie on the key dates:
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
From the FT: Athens is to submit a new proposal to eurozone authorities for a third bailout by Wednesday morning after Greek negotiators stunned some eurozone finance ministers by arriving at their meeting without a revised economic reform proposal. Despite the apparently abortive start to what had been billed as a last-ditch effort to salvage
From the FT: Athens will be given a final chance to present a new reform plan to eurozone leaders on Tuesday night despite a hardening attitude to Greece in many capitals after the emphatic rejection of previous bailout terms in Sunday’s referendum. But eurozone officials said leaders were unlikely to agree to restart rescue talks
Fresh from the blog of Yanis Varoufakis: The referendum of 5th July will stay in history as a unique moment when a small European nation rose up against debt-bondage. Like all struggles for democratic rights, so too this historic rejection of the Eurogroup’s 25th June ultimatum comes with a large price tag attached. It is, therefore,
From Ambrose Evans-Pritchard: Top Syriza officials say they are considering drastic steps to boost liquidity and shore up the banking system, should the ECB refuse to give the country enough breathing room for a fresh talks. “If necessary, we will issue parallel liquidity and California-style IOU’s, in an electronic form. We should have done it
With 60% of the Greek referendum vote counted it appears to be over: Who could have known that a sovereign people would tell a foreign power with whom they were previously at war to shove their blackmail demands? Here is Deutsche with where we go from here: NO, Scenario #N1. Soft deal This, in our
It appears the Greek referendum that begins today is too close to call: From Credit Suisse via Forexlive here’s the scenarios: 1- “Victory of the “No” camp, would immediately cast markets in uncharted territory. The vote alone might not necessarily trigger a systemic reaction, but we would expect the increase in uncertainty to weigh on
The FT makes the Greek situation as clear as is possible: Greece’s prime minister accused Europe’s leaders of attempting to “blackmail” Greek voters, just hours after apparently holding out an olive branch to the country’s creditors by accepting most of the terms of the economic reform plan they had tabled last weekend. Eurozone officials said they
Breaking from Reuters: 01-Jul-2015 12:25:33 PM – GREEK BAILOUT REFERENDUM OPINION POLL (RESPONSES BEFORE BANK CLOSURE) – YES 30 PCT, NO 57 PCT, DON’T KNOW 13 PCT 01-Jul-2015 12:25:33 PM – GREEK BAILOUT REFERENDUM OPINION POLL (RESPONSES AFTER BANK CLOSURE) – YES 37 PCT, NO 46 PCT, DON’T KNOW 17 PCT Grexit!
From RT: International Monetary Fund has confirmed it didn’t receive €1.5 billion from Athens that were due by the end of June 30, Brussels time. Greece becomes the first developed country to default on its international obligations. IMF spokesman Gerry Rice said in a statement that Greece had asked for a repayment extension earlier on
All day I’ve been reading feel good pieces about Greece. At Dad’s Army first Alan Kohler and then old man Gotti, at Fairfax it’s Phil Baker, The Pascometer and even Chris Joye is into it this afternoon: If Greece votes to accept the troika’s deal there will likely be a prompt settlement given the collateral damage
Greece is set to default on its IMF loan: And from Yanis’ own blog The Eurogroup Meeting of 27th June 2015 will not go down as a proud moment in Europe’s history. Ministers turned down the Greek government’s request that the Greek people should be granted a single week during which to deliver a Yes or No answer
Courtesy of FTAlphaville comes more views on Greece. Beat Siegenthaler of UBS: According to media reports the ECB has issued a statement saying that ELA would be kept at current levels as of last Friday. This means that Greek banks may not have sufficient cash to open tomorrow Monday as normal. As a result, there
I’ve been waiting for some clarity after the winding up of the Greek Eurogroup emergency meeting before posting and it appears we the following from AP: Greece has accepted the principle of extending its current bailout programmewhich expires at the end of the month so as to keep it afloat while a long-term debt solution
From Goldman Sachs: Our central case that a deal will come only after (or thanks to) the introduction of capital controls, a technical default on the IMF and issuance of IOUs/and a further build-up of arreas. The logic is that it is only when the cash constraint is fully binding and associated economic and financial
So here we are again. D-day for Greece…. until the next one. Well maybe not this time. The Eurogroup has called meeting for 3pm Monday ahead of emergency EU leaders summit to be held 7pm. There is obviously further negotiating occurring in the lead up to that event in the hope of a last minute deal
I eventually expect Greece to exit from the eurozone. It is anybody’s guess when that will happen. It could be this week, this month, this year or this decade. It basically has no choice given that so long as it stays in the zone it’s economy will not recover. It needs a much lower real
Some Greek musings for you as Monday’s deadlines loom.
By John Browne, cross-posted from EuroPacific Capital Inc Based on the continued failure of the negotiating parties to make any substantive progress in the talks over Greek debt payments, the financial world is tied up in knots over a possible Greek exit from the European Union. The uncertainty has manifested in both high and low
by Chris Becker Talk of Grexit seems to be turning into reality as the days and hours go on towards the June 30 deadline. One of the major reforms enacted by Athens was to turn the large deficit into a surplus (admittedly, a surplus sans interest payments), but interestingly one area not touched in the
by Chris Becker For almost five years, MB has been calling for an inevitable default in Greece, not borne out of bearishness but the realpolitik of the situation that was at hand and has now unfolded. Delusional Economics wrote this earlier in the year as the new Syriza government was installed: Nearly 4 years ago I
From BofAML: The European proposal is asking three times more fiscal measures than what the former Greek government was willing to accept, despite a much lower primary surplus target. The Greek proposal is not specific enough on reforms, while insists on pre-election promises that we believe are unacceptable to the other side—reversing labor market reforms
China A cautionary tale from the muddy waters of Chinese business – FT.com Weak Chinese Demand Is Pummeling Mining Stocks Everywhere, Except in China – Bloomberg China pushing ‘build now, pay later’ model to emerging world – Bruegel Development Finance with Chinese Characteristics? – Project-Syndicate The Irresistible Rise of the Renminbi – Project-Syndicate China getting
Courtesy of James Shugg and Sean Callow at Westpac Global Economics: The Eurogroup of finance ministers and central bankers met in Riga last Friday amidst (accurate) speculation that little progress would be made towards reaching an agreement between the Greek government and its creditors on the measures Greece must (re)commit to in order that the long-delayed
From Mr Krugman: How easy will it be to explain that ‘victory’ to the Greek people?
Greece blinked first then: Eurogroup statement on Greece The Eurogroup reiterates its appreciation for the remarkable adjustment efforts undertaken by Greece and the Greek people over the last years. During the last few weeks, we have, together with the institutions, engaged in an intensive and constructive dialogue with the new Greek authorities and reached common
From the FT: …A high-stakes meeting of eurozone finance ministers over the future of Greece’s bailout unexpectedly broke down early in deliberations after Athens angrily objected to a proposal that it continue with the terms of its current €172bn bailout, calling it “absurd” and “unacceptable”. The draft text, obtained by the Financial Times, states that
