Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit - page 3
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Merkel defeated in Hamburg – compromise with Greece coming today?
The second Eurogroup meeting about Greece happens today, and for the top figure in Europe, German Chancellor Angela Merkel, it comes on the background of state elections at home.
The actual result may matter less, but the fact that they are behind us now (as this was partially behind the tough stance), opens the road for compromises with Greece. Can EUR/USD continue higher?
Her CDU party had the worst defeat in generations in the state elections in Hamburg. The party received only 16% of the votes, clearly outvoted by the center left socialists (SPD). The anti-euro AfD party also made gains and managed to enter the state parliament.
The socialist SPD party won 58 seats and is set to form a coalition with the Green party that won 15 seats. Merkel’s CDU party won only 20 seats, down 8 from the last elections. The anti-euro AfD won 8 seats.
EUR/USD has moved higher last week, riding on USD weakness and despite a standstill at the first Eurogroup meeting on Wednesday.
As the clock ticks towards the end of the current Greek program and with the mutual interest that Greece stays in the euro-zone, a deal could be reached for the debt struck country.
In which way will the compromise go? It seems that Greece has more backwind from the public, with demonstrations in favor of the government in Greece in contrast to a defeat for Merkel.
While the market is not really afraid of a Grexit, a deal that would pout the topic off the agenda would be beneficiary for the common currency.
In addition to Greece, recent economic data has been positive from the euro-zone, especially from Germany.
On Wednesday, we have the FOMC meeting minutes in the US, which could give fresh energy to the US dollar, but in the meantime, a Greek deal could be euro-positive.
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Hunt for Red Lines Begins: Eurogroup Meeting
EU finance ministers have arrived for today’s Eurogroup meeting at the EU Council building in Brussels and it seems many of them will take a hard line with the debt-ridden's country financial requirements.
"We will discover the red lines today, nothing's been put on the table yet," said Pierre Gramegna, Finance Minister of Luxembourg upon his arrival at the talks.
Finland is known as one of the most ardent opponents to Greece's demands and Antti Rinne, the country's finance minister made his position clear when he appeared before the journalists.
"Finland isn't ready to discuss a new program. Current program is the basis for negotiations," Rinne said.
Another official who said Greece must comply with the rules of the bailout program is Spanish Finance Minister Luis de Guindos. As he noted, like Yanis Varoufakis, he also has a red line that can’t be broken; Greece must repay its debts.
"Our red line is that [Greek] loans must be paid back in full," he said.
Lithuania’s finance chief, Rimantas Šadžius, has arrived in positive spirits, hoping a deal can be reached between the parties directly involved in the negotiations.
"I'm in a positive mood," he said entering the EU Council building.
Greece expects to sign a six-month “bridge agreement” that would cover the government’s financial needs until a new debt pact is reached between Athens and its European partners.
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Eurozone offers Greece little leeway as talks begin
Eurozone finance ministers turned up the pressure on Greece ahead of a key meeting that began here on Monday, saying that little progress had been made in talks over the weekend and calling on Athens to ask for an extension of its unpopular bailout program.
The ministers said a deal with Greece’s new leftist government at Monday’s meeting is unlikely. And another meeting at the end of the week will probably be necessary, several said, though a deal even then isn’t guaranteed.
“The Greek government hasn’t moved at all,” German Finance Minister Wolfgang Schäuble said, as he arrived at the meeting.
Greece’s bailout program expires at the end of February. If Athens doesn’t ask for an extension, it will be left without financing just weeks before it must repay loans to the International Monetary Fund on March 15.
The government of Prime Minister Alexis Tsipras remains loathe to ask for an extension of the bailout program, after being swept to victory in last month’s elections on promises of negotiating a new one with Greece’s international creditors. He and Finance Minister Yanis Varoufakis have pushed for temporary financing that could replace the existing program until a new a bailout agreement is reached with the eurozone and, possibly, the IMF.
But that option faces stiff opposition from the other eurozone nations.
Earlier, Schäuble told Germany’s Deutschlandfunk radio: “The problem is that Greece lived above its means for a long time and no one wants to lend any more without guarantees.” Asked if Greece will exit the euro, he said, “You need to ask my Greek colleagues that. We don’t want it.”
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Rejected draft text said that Eurozone would make use of flexibility in current progr
Reuters with the scoop on the draft document
EUR/USD drops to 1.1352
More now from twitter saying that the meeting has been temporarily suspended.
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Good job Greece
Why in the hell would they agree to repay fiat money that they were stuffed to in order to buy things they do not need from the masters of the EU, and to pay interest rates for that fake money to those same masters? Come on : all they got was money which was based on good wishes of companies like Mercedes (that had parking lots in Germany filled with cars they could not sell before the EU was invented - and then, all of a sudden they could sell everywhere) and printed by Draghi and Tritchet as they were ordered to keep an ilusion of "yes you can buy whatever we tell you is good for you and we shall export that to your country duty free".
Take a look at the numbers who profits the most from the joint CB atrocity - all will be clear
Ultimatum!
Eurogroup President and Dutch Finance Minister Jeroen Dijsselbloem told reporters after the meeting of euro zone finance ministers, the European Central Bank president and the International Monetary Fund (IMF) chief that Athens had until Friday to ask for an extension, otherwise the current bailout program would expire at the end of February.
"The next step has to come from the Greek authorities; they have to make up their mind." He added that the Eurogroup was likely to meet on Friday, but this would be the last chance to forge a deal.
"Then, that’s it," Dijsselbloem said.
Even so, Greece's Finance Minister Yanis Varoufakis said separately that the Greek government would continue negotiations over the next couple of days, regardless of any ultimatums from its peers.
Varoufakis claimed that he had been shown a draft communique earlier in the day by European Economic and Monetary Affairs Commissioner Pierre Moscovici which the Greek side was satisfied with and prepared to sign "there and then." However, the Greek minister said the draft document was changed just minutes before the Eurogroup meeting. He said Greece could not accept the text of the second communique.
"In the history of the EU nothing good came out of ultimatum... (we) can't move on an ultimatum basis," the Greek minister claimed, adding that a crisis may eventually bring progress: "We're promoted from one crisis to another crisis."
No bluff, no games
Repeating some ideas from his column written for the New York Times, he insisted that he’s not playing games, rather simply presenting Greece’s position honestly.
"We do not bluff... We have no plan B and we do not have a right to play games... We will do everything in our power to honest deal in the coming days," Varoufakis declared.
Will Europe do "the usual trick"?
Nevertheless, he expressed confidence that the impasse could be overcome and an agreement could be reached soon, allowing Greece to retain its loan agreement over the next four months in return for certain conditions.
"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 said.
"We are ready and willing to reach an honourable agreement … no one has the right to work towards a dead end especially one that is mutually detrimental for all Europeans," the minister declared, while insisting that Greece should not be asked to impose recessionary measures on its population. "Democracy changes the facts on the ground and we are a government that has a critique of the current program."
"We are going to meet half way during the next couple of days," he added. "Europe will do the usual trick, it will pull a good agreement, an honourable agreement, out of what appears to be an impasse...In the following days every sense of ultimatum will be withdrawn."
IMF Managing Director Christine Lagarde said that "the general feeling in the Eurogroup is still that the best way forward would be for the Greek authorities to seek an extension of the program."
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Fantastic!
An ultimatum from a guy that thinks that solution for all Europe problems is to turn the printing machines on to the maximum (QE) and to flood the people with more worthless paper based on nothing - thin air. Angry little troll
Greek Lenders Ask For More Cash Amid Deposit Bleeding: Reports
Greek lenders are urging the central bank to look for additional emergency money, as deposit outflows markedly accelerate, Bloomberg reported on Tuesday, citing three people familiar with the situation.
According to the story, Greek central bank governor Yannis Stournaras meets his European Central Bank (ECB) Governing Council colleagues in Frankfurt on Wednesday, as lenders in the debt-ridden country exhaust their current allocation of cash in the so-called Emergency Liquidity Assistance (ELA).
The ELA pool, which currently stands at €65 billion, is extended to solvent lenders as a temporary measure to cover liquidity shortages.
A Bank of Greece spokesman approached by Bloomberg declined to comment on the story.
Increased outflows
Last week, Greek daily Kathimerini reported that deposit withdrawals in January and the beginning of February totaled €15 billion, indicating total deposits have dropped to €145 billion.
However, withdrawals markedly picked up after talks between Greece and its euro-area creditors on extending its bailout ended in tatters in Brussels Monday night, insiders said.
Lenders in the country have been kept afloat by the ELA instrument, as they have only limited holdings of investment-grade assets eligible as collateral for normal ECB financing operations.
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This could be a week that could go down in the history books as the beginning of the end for the EU.
ECB to Decide on ELA for Greece as Germany Sulks
The ECB is unlikely to lower the ceiling on emergency liquidity assistance for the Greek central bank at its non-monetary meeting on Wednesday, but a refusal to increase the amount would be bad news for Greek banks, which are nearing the limit of €65 billion granted so far.
The European Central Bank's (ECB) Governing Council will probably have to deal with resistance from Germany when deciding on any extra emergency liquidity assistance (ELA) for Greek banks on Wednesday. Germany's stance is seen as applying more pressure on Athens to agree with an extended bailout program.
The ELA facility was recently expanded to €65 billion from €60 billion as Greek depositors have withdrawn up to €20 billion from the banks since December and the trend has accelerated in recent days. Greek Kathimerini daily has reported that liquidity reserves of the Greek state will be depleted on February 24 according to current cashflow projections.
A senior Greek banker told Reuters that up to €500 million had been withdrawn from Greek bank accounts on both Thursday and Friday last week and deposit outflows picked up again on Tuesday after Monday's Eurogroup talks collapsed.
Bundesbank - Germany's central bank - chief Jens Weidmann has already warned against the misuse of the emergency lending to indirectly finance the Greek state, and is expected to stick with his position at the ECB meeting on Wednesday, while some of his peers may have similar reservations.
There are 25 ECB members to review whether Greek banks can continue to receive ELA and a two-thirds majority of them is needed to ban the emergency lending to Greek banks.
Although ECB policymakers are unlikely to stop the funding immediately, they will certainly continue monitoring talks between euro zone finance ministers and the Greek government.
"Weidmann's agenda will certainly be perceived as having political undertones, with the two sides remaining conflicted on whether the Greeks' next move will be the extension of the bailout demanded by Berlin, a "bridge loan" program favored by Athens, or (most likely) fall somewhere in the middle," Christophe Barraud, economist strategist at Market Securities, wrote in a note to clients on Wednesday morning.
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