Spiegel Greek Hit Piece #2: Bailout Troika Finds "Greece Missed All Fiscal Targets" - Next Steps: Game Over?

Tyler Durden's picture

Germany's Der Spiegel seems hell bent on getting sued to hell and back by Greece. After a few weeks ago it "broke" the news of a secret meeting that would consider the expulsion of the country from the Eurozone, it is once again stirring passions with an article claiming that Greece has missed all fiscal targets agreed under its bailout plan, according to a mission from an international inspection team, putting further funding for Athens at risk, Reuters summarizes. "The troika (aka the International Monetary Fund, the European Commission and the European Central Bank) asserts in its report to be presented next week that Greece had missed all its agreed fiscal targets," weekly Spiegel magazine reported in a prerelease. In other words, this could be the political game over for Greece, whose fate as has been disclosed recently, is intimately tied with the perception that it is following the troika's demands for fiscal change. If the three key bailout institutions are already leaking that Greece is done, next week could well be the beginning of the end for the €. In about 48 hours, even as America is enjoying a Monday off (or precisely because to that, to avoid a market panic), the European market could be digesting a very bitter pill of testing just how well pre-provisioned all those German, French and Dutch banks really are.

From Reuters:

The mission will be holding meetings next week before an expected finalisation of the report.

"The deficit in the public budget was higher than expected," the magazine said, referring to the report's findings.

"The reason is that the Greek government still spends more than agreed in the aid programme. On top of that tax income is still lower than demanded."

The IMF has already said it cannot release its part of a 12 billion euro aid tranche to Greece next month if fiscal conditions underpinning the bailout are not met and the European Commission's top economic official was quoted as saying the EU was setting the same conditions.

"We Europeans have the same conditions as the IMF," EU Economic Affairs Commissioner Olli Rehn was quoted as saying in the same prerelease for Monday's Spiegel magazine.

"We will decide on the next tranche after the troika's report. The situation is very serious," Rehn added.

There is, however, one possible last ditch rescue: a firesale, pardon privatization, of Greek assets.

EU officials have asked Athens to step up
privatisations urgently and suggested setting up a trustee institution
to help oversee the process, similar to the body that privatised East
German companies after the fall of communism. Spiegel magazine also
said the troika's experts estimated Greece had assets worth 300 billion
euros, which it could sell off to meet its targets.

That said, good luck selling the idea that Greece has to sell the Cyclades only to provide another year or so of banker bail outs, now that virtually everyone knows who the only benefactors from the can kicking exercise are.

And not even an hour has passed since the article that Greece has already had to issue a formal lie:

Greek Finance Minister George Papaconstantinou on Saturday denied a German magazine report that an international inspection team had concluded Greece had missed all its fiscal targets.

"Reports such as the one in Spiegel have no relation to reality. Negotiations continue and will be completed in the next few days. We have every reason to believe the report will be positive for the country," he told Greek Mega TV.

Wrong again. And confirming that it is basically game over should the troika wash its hands, is the latest note from Goldman's Dirk Schumacher:

Eurogroup head Juncker said yesterday that the IMF would probably not be able to make the next disbursement disbursement, as the re-financing of Greece over the next 12 months is not secured (the €26.7 billion Greece was supposed to get from private investors in 2012). By August 20 the Greek government has to redeem €7 billion in debt falling due, though there are of course other payments the Greek government has to make, implying that Euro-zone governments need to come up with a solution fast.

There are two issues Euro-zone governments have to deal with. First, whether (and how) to bridge the funding hole that will open up over the next couple of months if the IMF does not disburse its tranche. Second, what to do about 2012, ie, should there be a second package and under what conditions?

There are in principle several options available for how to replace the IMF money for the next tranche if governments were to deem the risk for the financial system of any early debt restructuring too big – the ECB has been vocal over the last couple of weeks with respect to these risks. Stepping up the current bilateral loans would be one option, though politically difficult as this would need to be approved by parliaments, at least in some cases. Also, several countries will find it rather unattractive to fund these loans right now in the market. Tapping either the EFSF or the EFSM to replace the missing IMF money would be easier, as – with the exception of Finland – parliaments would not need to be asked. One open question, however, is whether an end of IMF money flows, even temporarily, means that access to EFSF money also needs to be declined, as the EFSF should only provide money together with the IMF.

Whichever option is chosen, this will create some noise in several countries and the official explanation for why the IMF is no longer funding will be crucial in that respect. If it is indeed only the question of guaranteed funding over the next twelve months, Euro-zone governments may argue that the IMF will return once an agreement has been found over the second package. However, if the troika’s assessment states that debt sustainability is not given and/or the slippage in terms of implementing the reforms has been too big, it will be difficult even to come up with bridge financing for the next months.

With respect to the second package, a necessary, though not sufficient, condition, seems to be that the troika will still conclude that Greece can “make it” in principle and the slippage has not been too big – and that the Greek government will intensify its efforts. The question in that case, however, is still what the second package should look like, i.e. to what extent should the private sector participate? It is noteworthy in that respect that the German finance minister has backpedalled from his earlier calls for a soft-restructuring in conjunction with a second program for Greece, stressing the risks associated with this, though he also said that once the ESM is in place, private sector participation will be necessary.

It is difficult to say at this stage how important it will be to have the participation of the private sector in order to overcome public resistance in some creditor countries to another aid package. In any case, without more credible efforts from the Greek government to reform/privatise, this hurdle could be too high to overcome, and there might be not a second package.

The first task at hand for Euro-zone governments is to find a replacement for the IMF money if the IMF does decide it is not in a position to disburse the next tranche.

Otherwise, we may get a Greek debt restructuring much faster than previously thought.

Conclusion: for those who did not sell in May, selling in June may be the next best option, or at least until Jon Hilsenrath reports QE3 is imminent (October/November).

P.S. we continue to hold our breath for Handelsblatt to issue an apology for fooling millions of its readers into buying Greek bonds.

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takeaction's picture

So many countries are going down the tube.  I hope people here on ZH are ready. Look at this video from Spain yesterday. (Graphic Violence)

Vuvuzela's picture

Did you notice how well fit those fags beating on peoples are.

I dont think they are the regular police, but some specila military forces incorporated in the police force

what says you ?


CH1's picture

Police employees picked for this job.

Re-Discovery's picture

Spain has more surviving self-identified Fascists than any other European country.

tiger7905's picture

Don Coxe touches on Spain in his latest Basic Point for May 2011. Says Spanish debt will soar when local government financial fudging is revealed.

For Highlights see here:

IdioTsincracY's picture

Until people realize that they are being raped by Bankers who have their tentacles wrapped around politicians, this will not go anywhere.

They are protesting the wrong entities .... pillage the banks ... and then will talk!!

Michael's picture

What Europeans fear the most about a Greek debt default and no more bailouts is a severe depression in Greece that drives down the prices of real estate and other asset classes, making Greece the most reasonably affordable place in Europe to live. Greece will become the 1st ultra competitive country and best place to do business leaving the rest of Europe to envy them. At the same time it will lead to a depression in real estate prices throughout the rest of Europe in time.

Dismal Scientist's picture

You are assuming that the Greeks will be allowed the luxury of exiting the Euro, devaluing hugely and then becoming competitive. This is not going to happen, until the northern Europeans and their bankers have looted the place properly. As for Greece becoming 'the best place in Europe to do business', have you lost your mind ? Corruption is endemic, the population are livid and the government is desperate. No company would do business in such an environment; and we haven't even discussed capital controls yet.

Not buying your thesis at all.

Danielvr's picture

Regular police in riot dress. Don't feel too sorry for those student protesters, they're mostly bored privileged kids looking for a day of comradery and excitement while their less well-off peers are working hard to make ends meet and pull their nation out of the crisis.

topcallingtroll's picture

So perhaps not every european is living better than the americans, eh?

Rodent Freikorps's picture

Maybe the pics of Sicily I saw were not representative of normal, but those pics looked more like Tijuana than San Diego.

Danielvr's picture

No, in the PIGS nations youth in particular is suffering from high unemployment. But at least they're not $100K in debt (American students should consider going to college/university in Europe - all sorts of courses are available in English, tuition is only $8K/Yr or so, you'll get a decent education, see a bit of the world, and your resume will stand out).

Bay of Pigs's picture

Yeah, beating on defenseless civilians. Sounds great dude. Glad to see you come down on the side of police brutality. Those police are a bunch of meatheads abusing their authority.

No need for any of that kind of violence, but apparently you think it's okay.

Rodent Freikorps's picture

I do have to admit seeing socialist parasites get whacked with a stick by the employees of socialists, because they demand to be saved from socialism by even more socialism, did amuse me greatly.

NOTaREALmerican's picture

> whacked with a stick by the employees of socialists

Country First!

Danielvr's picture

Boo-hoo. Look, as a former activist I'm not very impressed by the level of angst and violence in that vid, OK? I didn't see any bricks and molotov cocktails flying, I saw no tanks, no tear gas, no cops on horseback trampling the protesters -- just a few patient officers giving a few 'protesting' youth a few mild punches so they'd get on their feet and clear the street. If you think this was a riot, let alone police brutality, you aren't used to much. Just wait till the livelyhoods of large groups of people are actually at stake -- then you'll see what riots are, and what police brutality is.

Bay of Pigs's picture

I never said it was a riot. These people had no weapons. They were not a threat to anything. I said it was wrong of the police to beat on them. What the fuck is wrong with you anyway?

You certainly talk a big game as a "former activist". 

breezer1's picture

you must be right . what are these shifty lazy citizens doing? don't they have jobs to go to. they are probably on their lunch break just trying to make trouble for those hard working policemen. did you see that one hippy bastard hitting the policemans baton with his head. he should be thrown in jail with all those other criminals who break the law.

i can't go on with this......  you are one fucked up asshole.

Danielvr's picture

Pity, you were on a roll. Again, these are basically bored, self-important privileged kids who enjoy playing 'Gutmensch' for a day and feel all warm and fuzzy about themselves for being so progressive and caring about their suffering fellow humans. I know because I was just like them 20 years ago. And twenty years from now, many of those same kids will be running the Wall Streets of this world. Fuck them and their faux bourgeois social engagement.

desgust's picture

Fuck you, asshole!

Where do you want to know that from?

Triplefuck every hole!

Danielvr's picture

Sounds good to me, let me have it! :-b..

lawrence1's picture

¨Bored priveleged kids ... ¨  Think you´re wrong.  Unemployed kids who know they cant find work and no longer believe that voting counts.  Hear Gerald Celentes recent interview on king world news, his prediction of riots throughout Europe this summer.

OldPhart's picture

I saw quite a few geezers in the mix.  One of them looked a hell of a lot like me.

topcallingtroll's picture

Obviously many who junk you have never seen a real protest, not the scared pussies who run when they get hit a couple of times by the baton. And yes most of them are bored priviliged kids. They may not have a job but they dont need one to have food on the table and a little running around money from mom and dad.

CrashisOptimistic's picture

Until gunfire starts administering headshots, it's just a bunch of people sitting meaninglessly in the street.  If they aren't willing to kill, then they don't really have any commitment to their concerns.

downwiththebanks's picture

... says the Keyboard Cowboy.  Yours are the tactics of the agent provocateaur.  

Revolutions never start with murders.  They start with the masses taking the streets and succeed or fail depending on whether the military (and police in some cases) will switch sides.

The easiest way to guarantee it doesn't happen is to attack violently the very people you're trying to turn.

Sudden Debt's picture

Not more dangerous like a peacefull protest. Can't have that right?

If they would have fought back on 1 cop, they would have had the right to shoot on the crowds with rubber and use more force.

But yes... the police had to. They wanted to organise a Fifa open air football spectacle for the tourists.

And all they did was provocing every youngster in Spain.



I think I need to buy a gun's picture

thanks for posting because i haven't seen this in mainstream media

downwiththebanks's picture

Countries are only going "down the tube" if they insist on remaining slaves to the Banker-Gangsters rather than fighting them.  

The obvious question, when faced with a hit-piece from a Banker-Gangster vessel, is "we're in debt to whom."  

Why does a 5'8" 155 lb.  weasel that shines shoes for a living and can't butter bread get to determine the fate of nations?

Troy Ounce's picture


Yeah, firesale

Yeah, balance sheets

Yeah, bankruptcies

Yeah, derivatives

Yeah, dominos

Yeah, entitlements

Yeah, burning parliaments

Yeah, PM

Yeah, TV, beer & chips

Yeah, Stone Street Advisors explaining this shit ;>(

Parth's picture

I am keen to see how the Germans and French collect from Greece. If the black swan was Middle East Jasmine revolution and the tsuname; the mother of all black swans is a resurgent Germany starting forced collections in Europe. In other words the real WW3 starts again in Europe. Of course we shall liberate them again. And so the great game continues, and oddly America wins again.

cosmictrainwreck's picture

agree, conditionally. having to really rub my eyes to see how "America wins". USA is ripe for it's own shit-storm

margaris's picture

Yes, but this time, the main driver of WW I and WW II, being PETROLEUM has peaked and is declining.

Maybe I hope that you cannot start and maintain WorldWars for a long time without CHEAP ENERGY?


Ok, sad part is: All nuclear missiles are filled up and ready.

Ben Dover's picture

Here's something that will help you sleep well -,0,260684.story?track=rss

Don't let the bed bugs bite.

Ag1761's picture

Wow, I just bought 100 Baird and Co Monarch of the Glen Rounds, they look like phantom ray drones when you angle them up to the light

cosmictrainwreck's picture

wow...that's sooo awwwsum I just shit myself. when's the video game come out? /sarc

Danielvr's picture

Hahahaha! I don't know if I should be amazed or amused by some of those outlandish American comments on the crisis in Europe. Germany is just about the most war-averse nation on Earth. They won't "collect". But they're damn right to squeeze the thumb screws tighter on the Greeks, who haven't even begun to curb their government spending, get rid of the nepotism and corruption, or restructure their economy to bring it more in line with what they actually can afford.

Anyway, most Europeans are still living from summer vacation to winter ski trip while Americans are living from paycheck to paycheck or foodstamp to foodstamp. I wonder what inspires you to get so excited about Europe - it's not like you own a couple of trillions in EU debt, so, maybe it's just Schadenfreud, or a welcome diversion from the problems at home.

margaris's picture

greece is and always was a poor country with not much to give. So , this thumb screwing you are talking about.... is this simply to inflict pain? Or do you really believe greece has something else to give then their freedom and land ???

Danielvr's picture

You're almost right, Margaris. Greece should be a poor country because it isn't producing much of value and it is consuming much more than that. Thanks to fraud and cheap credit, many Greeks are leading lives of wealth and abundance. The older generations and government workers in particular have taken very good care of themselves -- but they have left their own children very deep in debt. It's time those people took some responsibility instead of expecting their children and the rest of Europe to pay for their privileged lifestyles.

margaris's picture

No one of my greek relatives is near wealth and/or abundance. All working for a shitty wage or recieving an abysmal pension.

All of which has been cut severely again and again....

Okay, they have land, ... land they inherited from their parents etc... not much more..

So again, cant you people just understand that all money/wealth/excesses went to the banks (best friends of greek politicians scum)... and were done by the banks.

And that now that the greeks have nothing left then a little land those said Bankers are trying to steal even this last piece of remaining wealth?


How is it allowed for foreigners to steal native homeland anyway? I predict that many greeks (if not nearly ALL) ... will go THIS IS SPARTA -Style on those bankster asses....

downwiththebanks's picture

"Wealth and abundance"!  HA.  So little concern for unemployment.  So much little concern that an economic system in terminal decay cannot provide for the needs of anyone in the world, save a select few partying with high-priced hookers.

And yet, so much concern over debt.  So much interest in making sure Banker-Gangsters get paid.  So much concern over austerity - just not for those who need it most.

lawrence1's picture

Agree that the US elite-media use Europes problems to divert attention from the US which is clearly more serious.  Sounds like a bit of Schadenfreude coming from you..Enjoy your summer vacation... but be careful where you go... black swans have been seen circling Europe too.

Question ... Do you think that, since gold constitutes a major portion of the backing for the Euro, that the authorities might make use of that? 



Ag1761's picture

I really love those Kalamata Olives, reckon I could collect a couple of acres soon for a monster box, well if they are talking of a sell off.....

topcallingtroll's picture

Then the greeks will tax the shit out of you so you always lose money. They will fine you for wage and labor violations until you cant stand it and sell at a fifty percent loss.

Ag1761's picture

Yeah, didn't think of that, and there will probably be hoardes of rampaging starving zombies trying to  get in to my fields. I'd probably run out of ammo at some point.

I think a total world wide default and reset is on the cards in a couple of years after the asset stripping.


TK7936's picture

Atleast you acknowledge the parasitic nature of the american eco model. For a while there it seemed americans actually believe there ww2 participation was altruistic.Nazi Germany was the only black swan to rise against Banking Rule -the only. And it wont happen again cause Germany is now a bank too.

ATM's picture

Perhaps it is the Greeks that really hold the cards. If they go belly up the rest of the Euro banks go belly up too. They have a gun to their own heads and Europe should be quaking.

Coke and Hookers's picture

Quite right. Greeks do hold the cards. However, there's not a single government anywhere that's not held by the balls by someone else - i.e. the banksters and their EU enforcers. Even the Icelandic government has been busy handing the country over to hedge funds while trying to hand over public property to the EU. Everybody is either working for the EU/banksters (and against their own people) or being invaded or coerced one way or another (Lybia, Syria, Iran, Thailand etc.). Globalism has gained enough strenght to either outright own more or less all governments or force them do do their bidding. Seems they even have a military force now to clean up stragglers like Gaddafi.

Urban Redneck's picture

The ECB & IMF might try to fire-wall Greece and burn it, then turn to direct bailouts of the very institutions they are trying indirectly to bailout through the Greek government and then QEeuro the cost (sort of like the Bernanke OpEx murder only far more vicious).