Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit - page 11
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
ECB Gives Greece Another Week to Make a Deal
Greece needs to show it’s serious about reaching an agreement with international creditors next week or risk tighter liquidity rules being imposed on its banks.
European Central Bank officials want progress at a meeting of euro-region finance ministers on May 11 or they will consider tightening Greek banks’ access to emergency liquidity they need to stay afloat, said two officials who spoke on condition of anonymity as the talks are private. One policy maker said they’re prepared to raise haircuts -- the discounts imposed on collateral pledged by Greek banks in return for funding -- to levels seen last year. The ECB declined to comment.
The move reflects growing frustration among top decision makers with the game of brinkmanship shown by Greek Prime Minister Alexis Tsipras’s government since it came to power 101 days ago. As talks drag on, Greek bank deposits are shriveling and ECB liquidity has become the country’s chief lifeline.
“Rarely have I seen Europe so united, except for one country, on the need to follow the rules,” ECB Executive Board Member Yves Mersch said in interview published on the ECB’s website. “Those countries wouldn’t like everything achieved in the past -- the effort made -- frustrated now that it is starting to bear fruit.”
Solvency Concerns
Euro-area central bankers are concerned about Greece’s solvency as debt repayments loom, and one official said next week’s decision will hinge on Greece making a transfer to the International Monetary Fund of about 743 million euros ($843 million). At the same time, they’re reluctant to act before politicians have a chance to salvage Greece’s 240 billion-euro bailout, which is being administered by the ECB, IMF and European Commission.
Tsipras spoke directly with European Commission President Jean-Claude Juncker Wednesday to discuss “progress made in the talks between Greece and its partners over the last days,” the EU said in a statement, adding that they talked about topics including pension reforms, competitiveness and job creation.
“One of the reasons why we haven’t managed to reach an agreement yet is because we focused too much on the mechanics of the next loan tranche and not sufficiently on the live issue which is how can we afford to regrow Greece,” Finance Minister Yanis Varoufakis said at an event in Brussels. “Of course we want to pay the IMF. We intend to pay every creditor.”
The Athens Stock Exchange Index gained 3 percent to 841.54 at the close of trading. Greek bonds also advanced, with the yield on the 10-year Greek government bond dropping 34 basis points to 10.9 percent.
read more
Greek PM forecasts 'happy end'; Eurogroup chief cites progress in talks
Greek Prime Minister Alexis Tsipras forecast a happy end soon to fraught negotiations with creditors on a cash-for-reform deal, and the chairman of euro zone finance ministers said talks were making progress, though not enough for a deal next Monday.
However, with Greece's cash reserves dwindling, EU officials said there was no breakthrough in talks with the International Monetary Fund, the European Commission and the European Central Bank on sticking points such as pension and labor market reforms and budget targets.
"The organization and structure of the talks has improved, compared to what it was before, but we are still quite some way away from a situation that you could describe as a final agreement being well in sight," a senior euro zone official said.
Greece's leftist-led government, which was elected earlier this year on promises to end austerity policies, has dragged its feet on accepting unpopular reforms promised by a previous government under the country's EU/IMF bailout program.
The country faces the risk of defaulting on debt repayments and being forced out of the euro zone, but negotiations have moved so slowly that the lenders have ruled out an agreement at next Monday's meeting of euro zone finance ministers.
Tsipras, who has taken personal charge of the negotiations, told parliament in Athens: "I am confident that we will soon have a happy ending and that despite the difficulties... we will carry out the agreement which will be concluded soon in Europe."
The leftist leader said his government was "doing whatever it should in order to reach ... an honest and mutually beneficial agreement with our partners", but gave no indication of yielding on the lenders' core demands for painful reforms.
The government has said its "red lines" are that it will not make further pension cuts or legislate to ease layoffs in the private sector. It has given some ground on privatizations and value-added tax but wide gaps remain.
Eurogroup chairman Jeroen Dijsselbloem said Monday's meeting would not be decisive, but negotiations were moving forward. Greece's partners would consider debt relief only once Athens committed to, and completed its current bailout program, he said.
EU officials said they are keen for the Eurogroup to send a positive message on Monday that a deal is in the works and avoid another clash with Greek Finance Minister Yanis Varoufakis like one at a meeting in Riga last month.
"I cannot exclude that ministers will issue a statement, but if it appears, it is likely to be anodyne, taking stock, etc," the senior euro zone official said.
That would not be enough to prompt the ECB to allow Greek banks on emergency liquidity support to buy more short-term treasury bills to ease the government's funding crunch.
The official said Athens has easily enough money left to pay a crucial 750 million euro debt installment to the IMF on Tuesday and meet other payment obligations in May.
Another EU official said it was essential to reach a deal by the end of May to allow time for some parliaments to approve the agreement and authorize disbursement of 7.2 billion euros left in Greece's existing bailout, which expires at the end of June.
read more
Greece Huddles With Creditors Ahead of ECB Test as Support Slips
Greek officials are huddling with their creditors to prepare for a finance ministers meeting Monday with the European Central Bank threatening to restrict the country’s emergency funding unless there’s progress toward a deal.
The so-called Brussels Group of officials from Greece, the euro area and the International Monetary Fund will hold discussions in Brussels over the weekend, a Greek official said. While both sides have declared progress in the last few days, Dutch Finance Minister Jeroen Dijsselbloem, who leads the euro-area finance ministers’, told Corriere della Sera Greece hasn’t yet done enough to earn more aid.
“We have made progress, but we are not very close to an agreement,” Dijsselbloem said. “It will surely not be reached at the Eurogroup meeting on Monday. We will need more time, but I don’t know how much.”
The ECB is seeking significant progress on an aid agreement to justify maintaining the emergency funding keeping Greece’s banking system afloat. The central bank reviews the liquidity provision each week and on May 6 policy makers said they would consider tightening access if Greece’s stalemate with its creditors drags on.
“European institutions plus the IMF and Greek authorities are trying to find a solution, but the solution is in the hands of Greek authorities,” European Commission Vice President Jyrki Katainen said.
Support Slips
As the four-month standoff derails Greece’s economy recovery amid fears the country could be forced out of the euro, support for Tsipras is ebbing. Fifty-four percent of Greeks back the government’s negotiating strategy, a Marc poll for Efimerida Ton Sintakton newspaper showed Saturday. That compares with 82 percent in February.
Tsipras’s Syriza party remains the most popular all the same, with 36 percent backing versus 21 percent for New Democracy, which headed the previous administration.
“The government has proved that it’s doing everything it can to reach an honest deal within the EU,” Tsipras told lawmakers in Athens on Friday. “There’s no technical issue anymore for reaching this deal, there’s only a matter of political will.”
Without clear signs of progress on Monday, or if there is any problem with a payment due to the IMF on Tuesday, the ECB could increase the haircut it imposes on the collateral Greek banks post when tapping the emergency funding facility.
read more
The way they are doing it, soon the Greeks will ask the government to step down. Instead of doing something, all they do is talk, and talk, and talks .... the same as EU
Greece Readies for Another Week of Deadlines
Warnings of an accidental default loom over debt-swamped Greece as Prime Minister Alexis Tsipras’ anti-austerity government heads for another confrontation with an increasingly testy German-led bloc of creditors.
Greece needs at least a symbolic show of progress at Monday’s meeting of euro-area finance ministers in Brussels to persuade the European Central Bank to keep emergency funds flowing to Greek banks at the current pace. The next hurdle comes just a day later, when Greece has to pay about 750 million euros ($840 million) to the International Monetary Fund.
Tsipras met with top cabinet ministers for several hours on Sunday to brief them on the negotiations. Athens expects the Eurogroup to officially acknowledge important progress, a Greek government official, speaking on the condition of anonymity as the talks were private, said after the meeting. Tsipras and his ministers confirmed the need for a mutually beneficial deal within the framework of the government’s mandate, the official said.
The meeting in Athens took place under mounting pressure to abandon election promises made just months ago for more generous retirement benefits and to recommit to selling government-held stakes in companies to raise cash. No one outside of Athens knows for sure how long the country can stay afloat.
Schaeuble’s Warning
“Experience elsewhere in the world has shown that a country can suddenly become unable to pay its bills,” German Finance Minister Wolfgang Schaeuble said in an interview with Frankfurter Allgemeine Sonntagszeitung published Saturday. Schaeuble said if Greece is forced out of the euro “it won’t be because of us.”
Tsipras’s determination to junk the budget cuts associated with Greece’s 240 billion-euro bailout -- and to tap creditors for more money after that -- has hammered Greek markets since he took power. Greek 10-year bonds now yield 10.67 percent, up from 8.41 percent on the eve of the Jan. 25 election. The yield touched 13.64 percent last month.
Strains are emerging in Tsipras’ Syriza party, a novice at governing. Tsipras took the job of dealing with creditors away from Finance Minister Yanis Varoufakis, who was accused by euro ministers following the last meeting on April 24 of lacking rigor and wasting time.
Agreement Elusive
The personnel change has improved the structure and organization of the negotiations, a European Union official said on Friday. While there has been a rapprochement with Greece in a number of areas, no final agreement is in sight, the official said on condition of anonymity under Brussels briefing rules.
Greece’s program runs until the end of June. The EU official said that while deadlines aren’t cast in stone, a technical agreement on a revised program needs to be struck by early June to allow time for approval by creditor governments.
An accord “will surely not be reached at the Eurogroup meeting on Monday,” Dutch Finance Minister Jeroen Dijsselbloem, the meeting’s chairman, told Italy’s Corriere della Sera newspaper. “We will need more time, but I don’t know how much.” The meeting starts at 3 p.m.
read more
For how many more months are they going to do this thing?
For how many more months are they going to do this thing?
They will never stop. They found a way to blame everything on one thing and they are going to use it as long as they can
They will never stop. They found a way to blame everything on one thing and they are going to use it as long as they can
You mean it will be like FED and their QE and rate hike?
:):)
Greece says must strike debt deal in May as money runs low
Greece needs to strike a deal with its creditors by the end of the month to stay afloat, the government said on Monday, as investors ditched Greek bonds in a sign of growing concern about possible bankruptcy.
Despite its precarious position, Athens said it would not abandon its "red lines" in talks with the International Monetary Fund and euro zone partners.
These include a debt restructuring, a lower target for the primary surplus to take in more than it spends apart from debt interest payments, and a pledge to make no further cuts to pensions or wages.
"We are not putting red lines because we have a fetish about these red lines," said Greek Government spokesman Gabriel Sakellaridis. "We think they are necessary elements of a deal so that we don't once again have the problems of the past."
But in a sign of the pressure facing Athens, Germany's central bank said the Greek government, which took office in January promising to roll back years of bitter austerity, needed to honour past reform pledges to stave off insolvency.
"A sustainable solution is not possible without substantial reform in Greece," the Bundesbank said.
Fearing the worst, investors sold off Greece's debt, with two-year bond yields GR2YT=TWEB rising 289 basis points to 23.99 percent - the largest daily raise in more than a month. Ten-year yields GR10YT=TWEB rose 76 bps to 11.54 percent.
Nevertheless, Athens' main stock index .ATG closed up 1.6 percent, reversing an earlier fall of 2 percent.
Sakellaridis said public sector salaries and pensions would be paid this month, but made clear cash was running out, with the state owing the International Monetary Fund some 1.5 billion euros ($1.70 billion) next month.
"There should be a solution in May so we can resolve our liquidity issues," he told a news conference.
read more
Greek Leaders Say Deal Is Within Reach Amid Doubts by Creditors
Greek leaders expressed optimism a deal to unlock bailout funds is within reach, in the face of continuing warnings by creditors that the country has yet to comply with the terms of its emergency loans.
“We are very close” to an agreement, Finance Minister Yanis Varoufakis said in an interview late Monday with Greece’s Star TV Channel. “I’d say it is a matter of one week.”
Earlier Monday, Prime Minister Alexis Tsipras had told Greek industrialists that “we are now at the final stretch before striking a mutually beneficial agreement, after long and painful negotiations.”
Greece’s anti-austerity government has repeatedly expressed confidence a deal was imminent, only to be rebuffed by creditors seeking more concrete actions in areas including labor market deregulation and pension-system overhaul.
Even though Greece has made some progress in meeting its bailout commitments, “we’re not there yet,” European Union Economic Affairs Commissioner Pierre Moscovici said, just a few hours before Tsipras’s and Varoufakis’s assurances that an agreement is close. The country’s liquidity situation is “obviously tense,” and the time left to reach an agreement is “very limited,” Moscovici told reporters in Berlin.
Greek bonds tumbled on Monday, pushing 10-year yields up by the most since January. Yields on two-year Greek notes jumped 308 basis points to 23.99 percent. Greek bonds remain the best-performing sovereign securities over the past month, according to Bloomberg’s World Bond Indexes. The Athens Stock Exchange rose 1.6 percent, following a report that the European Commission is trying to broker a compromise deal. An EU Commission spokeswoman said she wasn’t aware of such a proposal.
Cash Crunch
The four-month standoff between Europe’s most indebted state and its lenders has triggered an unprecedented liquidity squeeze, which pulled the Mediterranean nation’s economy into a double-dip recession. Record deposit withdrawals, and the state’s increasing difficulty in meeting debt payments have sparked renewed doubts about the country’s place in the euro area.
Adopting a new currency is not “on our radar,” Varoufakis said in his Star TV interview, which started at 11:30 p.m. and was still dragging on at about 2 in the morning, in Athens. Euro-area member states haven’t made proposals to the Greek government to leave the currency bloc, according to Varoufakis.
After months of brinkmanship, Varoufakis said Greece and its creditors still disagree on budget targets, labor market regulations and pension system reform. Negotiations continue, and Greece has suggested streamlining its sales tax by setting a 15 percent rate for most goods and a 6.5 percent rate for basic goods, according to Varoufakis.
read more