What the ECB's Move on Greek Government Debt Is Really All About - page 3
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Tsipras Moves From Predator to Prey at Euro 'Torture' Summit
The latest save-the-euro summit turned into open season on Greek Prime Minister Alexis Tsipras.
Leaders from German Chancellor Angela Merkel on down fretted about the “trust” shattered by Tsipras during more than five months in power, which was the European way of saying that the anti-austerity populist has got to go.
Creditor governments essentially ordered Tsipras, once a Communist youth activist, to convert to unquestioned capitalism to earn aid of as much as 86 billion euros ($95 billion) and keep Greece in the euro.
“The Greek government has accepted practically everything,” Prime Minister Joseph Muscat of Malta said in an interview after the overnight marathon. “It accepted all the crucial and important points.”
Two officials who observed Tsipras at the Brussels showdown independently described him as a “beaten dog” whose only remaining option was to submit to the creditors’ will, carving out a concession here and there. Tsipras fretted privately about the reception that awaits him in Athens.
Under fire at home, Tsipras pulled off minor tactical victories, notably by retaining a measure of Greek control over a privatization fund that would raise up to 50 billion euros by selling state assets -- a target that proved unreachable in prior bailouts.
Tsipras juggled the face-to-face confrontations with phone calls to Syriza party faithful back home, telling the European leaders that he intended to take action against anyone who rebels against his sudden decision to bow to the outside economic forces.
Unity Coalition
The question in Athens will be whether Tsipras brings Greece’s mainstream parties into a national unity coalition and stays on to run it, or quits to escape the political blame for enacting the drastic budget cuts he denounced for so long.
Two officials who observed Tsipras at the Brussels showdown independently described him as a “beaten dog”
Whatever his personal fate, Greece has to pass a range of previously unpalatable measures by Wednesday to maintain the prospect of more financing. Tsipras’s other option would be to keep the current government lineup, stonewall the creditors and head for the euro exit.
“Trust has to be rebuilt, the Greek authorities have to take on responsibility for what they agreed to politically here,” German Chancellor Angela Merkel said.
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There is already a list of islands that Greece will have to sell : prices range from 3 million to 35 million Euro. Bargain (some EU officials are going to buy an island from the commission they got for last 6 month nonsense blabbing)
There is already a list of islands that Greece will have to sell : prices range from 3 million to 35 million Euro. Bargain (some EU officials are going to buy an island from the commission they got for last 6 month nonsense blabbing)
One single man have put a leftist parties in Greece in grave for good. A job well done (his bosses are going to be very pleased)
Merkel says Greece must act fast as banks prepare to reopen
Greece will reopen its banks on Monday for the first time in three weeks, but with restrictions on withdrawals still in place, German Chancellor Angela Merkel said the government would have to move fast on any new bailout terms.
The cautious reopening of the banks, and an increase in value added tax on restaurant food and public transport from Monday, are aimed at restoring trust inside and outside Greece after an aid-for-reforms deal last week averted bankruptcy.
Greeks will be able to withdraw 420 euros a week at once instead of just 60 euros a day but capital controls will remain.
"That's not a normal life so we have to negotiate quickly," Merkel said in extracts from an interview with German public broadcaster ARD.
Greek Prime Minister Alexis Tsipras is trying to turn a corner after he reluctantly agreed to negotiate a third bailout, allowing the European Central Bank to top up emergency credit lines but prompting a rebellion in his leftist Syriza party.
The head of Greece's banking association Louka Katseli urged Greeks to do the opposite of what they have done for months and put cash back on their bank accounts rather than withdraw more.
"Tomorrow when the banks reopen and normality is restored, let's all help our economy. If we take our money out of chests and from our homes - where they are not safe in any case - and we deposit them in the banks, we will strengthen the liquidity of the economy," she told Skai television on Sunday.
Merkel said it would be possible to talk about changing the maturities of Greece's debt or reducing the interest Athens has to pay after the first successful review of the new bailout package to be negotiated.
Berlin, the biggest contributor to eurozone bailouts, would do all it could to bring talks to a successful conclusion but would "negotiate hard" to ensure Athens stuck to agreements, she said.
"That certainly won't be easy because there are things that we have discussed with all of the Greek governments since 2010 that have never been done but that have been done in other countries like Portugal and Ireland," she said.
Greece Said to Order Creditor Payments as Banks Reopen
Greece gave the order to repay 6.8 billion euros ($7.4 billion) to creditors after last week’s tentative bailout deal, the Finance Ministry said, as Greek banks reopened three weeks after closing to prevent economic collapse.
The payments ordered Monday by the Greek government include money owed to the European Central Bank, the International Monetary Fund and Greece’s central bank, said a Finance Ministry official who asked not to be identified in line with government policy. Greek financial markets remain closed, the country’s market regulator said in an e-mailed statement.
As withdrawal limits and restrictions on transfers remain in place, people in Athens lined up at banks for basic services such as payment orders and check deposits. While Greeks are seeing the first signs of stabilization, talks on the aid program lie ahead and German Chancellor Angela Merkel said any debt relief has to wait until Greece meets the terms of the first round of the new bailout.
“When the first successful assessment of the program being negotiated now is completed, exactly this question will be discussed,” Merkel said Sunday in an interview on German television. “Not now, but then.”
While the bailout agreed upon last weekend has split the government of Prime Minister Alexis Tsipras, it also cleared the ECB to inject more funds into Greece’s financial system. Banks can now replace the daily cash withdrawal limit of 60 euros with a weekly limit of 420 euros, though transfers abroad from Greek accounts remain banned.
Greece’s financial strain eased after the ECB approved emergency financing and the European Union completed plans for a bridge loan. The stopgap funding will shore up the Greek economy during talks on a full three-year rescue program worth as much as 86 billion euros.
Merkel said bailout talks need to move swiftly. She pledged to do “everything” to reach an agreement, though her government would act “firmly” to ensure Greece carries out reforms.
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Greeks Laugh As Bankers Implore Depositors Return Money - "Banks Are Trustworthy"
President of Greek Banks Association Louka Katseli appealed at the citizens to return their money to the banks. “Banks are absolutely trustworthy,”Katseli told Mega TV, “Let’s all help our economy...If you take your money out of your chests and houses – which are not safe in any case – and deposit at banks, this will enhance liquidity.” Katseli’s appeal triggered laughter among Greeks with one exclaiming “Ah sure! Banks will never see my money again, I prefer to buy tonnes of peanuts with it.”read more
Greece Has Nothing But Hell to Look Forward to: Citi
Tossing yet another bucket of dark projections for Greece, Citi estimated that the debt-ridden country will face massive hyperinflation, economic depression, high unemployment and a swelling debt mountain, even if it stays in the euro area.
In its latest economic projections for Greece released on Tuesday, the investment bank estimated that Greece's HICP (harmonized index of consumer prices) will hit an astonishing 22.5% in 2017.
Other forecasts are dark, too. The nation's government debt to GDP ratio will climb further to the stratosphere, if the country doesn't get a substantial hair cut, Citi warned, offering its predictions: 192% until year-end, 211.9% next year, 235.8% in 2017 and 238% in 2018.
Hell is coming
Citi - among others - has multiple times said that should Greece have any hope of surviving, it needs a massive debt haircut - the bigger, the better. The bank even came up with a proposal to bin as much as €130 billion in Greek debt.
The economy, meanwhile, is set to contract by at least 2.4% year-on-year this year, considerably more than a 0.2% fall projected in June. The recession is likely to continue slapping the nation at least until the first quarter iof 2016, the bank said.
This, combined with staggering unemployment levels, may lead to some nasty consequences. "Failure by the Greek authorities to lift capital controls in a meaningful way and a further increase in unemployment (we forecast that the jobless rate will rise from 27% in 2015 to 29% in 2016) could also increase social tensions, in our view," the bank said in the report.
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Greece will decide next week when to open Athens stock exchange
Greek government official on the wires
Looking forward to tomorrow when headline tennis starts up again
Greek bailout talks to start on Monday after delay
Talks between Greece and its international creditors over a new bailout package should go ahead on Monday after logistical issues that delayed meetings this week are resolved, a Greek official said on Saturday.
The meetings with officials from the European Commission, European Central Bank and International Monetary Fund had been expected to start on Friday but were delayed by organizational issues including the location of talks and security.
The finance ministry official said talks were now expected to get underway formally on Monday after the logistical issues were resolved. The official, who spoke on condition of anonymity, denied that the government was trying to keep the lenders' team away from government departments.
"We don't have any problem with them visiting the General Accounting Office," the official said.
Greeks have viewed inspections visits by the lenders in Athens as a violation of the country's sovereignty and six-months of acrimonious negotiations with EU partners took place in Brussels at the government's request.
Asked if the government would now allow EU, IMF and ECB mission chiefs to visit Athens for talks on a new loan, State Minister Alekos Flabouraris said: "If the agreement says that they should visit a ministry, we have to accept that."
The confusion around the expected start to the talks on Friday underlined the challenges ahead if negotiations are to be wrapped up in time for a bailout worth up to 86 billion euros to be approved in parliament by Aug. 20, as Greece intends.
Already, Prime Minister Alexis Tsipras is struggling to contain a rebellion in his leftwing Syriza party that made his government dependent on votes from pro-European opposition parties to get the tough bailout terms approved in parliament.
One of Tsipras' closest aides warned that the understanding with the opposition parties could not last long and a "clear" solution was needed, underlining widespread expectations that new elections may come as soon as September or October.
"The country cannot go on with a minority government for long. We need clear, strong solutions," State Minister Nikos Pappas told the weekly Ependysi in an interview published on Saturday.
ECB Coeure: Greece Debt Relief Need No Longer Debated
European Central Bank Executive Board member Benoit Coeure said Monday that Greek debt relief is no longer a subject of debate and the question is now how best to do it to help the Greek economy.
In excerpts from an interview in Le Monde published on the newspaper's Web site, Coeure said the subject of debt relief for Greece is "no longer debated" and that "European leaders have expressed willingness to discuss it."
Coeure said "the question is not whether to restructure Greek debt but in what manner to do it for it to be truly useful to the economy."
He said it was therefore important that any restructuring be conditioned on "the application of measures that will strengthen the economy and ensure the sustainability of Greek public finances."