Greece Gets Three-Day Ultimatum From Europe To Fix Itself, Or Else

Tyler Durden's picture

Yesterday it was the Egyptian military giving president Morsi a two day ultimatum before things "deteriorate", now it is the Eurozone giving Greece a three day ultimatum to "deliver on the conditions attached to its international bailout in order to receive the next tranche of aid" or else.

 This links back to the FT report from June 20 that the IMF told Greece it has until the end of July to plug its budget holes, or else. In other words, simple escalation. Of course, maybe it should have been made apparent to Greece back in May 2010 at the time of the first (of many) bailouts that all those tens of billions in sunk costs are actually supposed to lead to economic reforms instead of perpetuating a broken and corrupt political system in which all in efficiencies and failures are blamed on evil (f)austerity.

From Reuters:

Greece has three days to reassure Europe and the International Monetary Fund it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid, four euro zone officials said on Tuesday.


The lenders are unhappy with progress Greece has made towards reforming its public sector, a senior euro zone official involved in the negotiations said, while another said they might suspend an inspection visit they resumed on Monday.


Athens, which has about 2.2 billion euros of bonds to redeem in August, needs the talks to conclude successfully. If they fail, the International Monetary Fund might have to withdraw from the 240-billion-euro bailout to avoid violating its own rules, which require a borrower to be financed a year ahead.


That would heighten the risk that concerted efforts by policymakers over the past nine months to keep a lid on the euro zone crisis could unravel, at a time when tensions are rising in other countries on the region's periphery.


Portugal's Finance Minister Vitor Gaspar, the architect of its austerity drive under an EU/IMF bailout, resigned on Monday in a potential blow to his country's planned exit from an EU-IMF rescue program.


Political tension has also increased in Italy, where Prime Minister Enrico Letta called a government meeting after a coalition partner threatened to withdraw.


Athens and its creditors resumed talks on Monday to unlock 8.1 billion euros ($10.6 billion) of rescue loans, after a two-week break during which the government almost collapsed over redundancies at state broadcaster ERT.


"All agreed that Greece has to deliver (pledges) before the Eurogroup on Monday. That's why they must present again on Friday," a second source told Reuters.


Euro zone finance ministers are scheduled to meet on July 8 and discuss the situation in Greece, which is in its sixth year of recession and has seen unemployment surge to record highs.

It almost appears as if the Troika is actually set on being serious this time:

"It is a very difficult negotiation," a senior Greek official participating in the talks said. "We're moving fast to wrap up as many issues as possible a soon as possible."


But Greece's financial overseers - the IMF, the euro zone and the European Central Bank - were unlikely to be able to conclude their review in July and might need to suspend the visit and resume it in September, a senior euro zone official said on condition of anonymity.


Representatives of the EU-IMF-ECB "troika" have been holding serial meetings with government ministers in Athens, struggling to agree on a host of outstanding issues.


If talks are not concluded by the middle of month, Athens risked missing the installment, the Greek official added.


Athens has missed a June deadline to place 12,500 state workers into a "mobility scheme", under which they are transferred or dismissed within a year.

If indeed the Troika is set on purging Greece, it can only mean one thing: Cyprus part 2, and this time it will be Greek depositors who are to be impaired (since there is no more deleveraging that can be executed in the sovereign realm, either via a PSI or OSI). And with the Cyprus bail-in failing to lead to epic chaos and a financial collapse, the Troika's confidence appears raised that what worked in Cyprus can work just as well in Greece, as the depositor confiscation "template" moves one step ever closer to its ultimate goals: Spain and, finally, Italy.

If we were Greek depositors, we would make prudent use of the 'mattress alternative' right about now...

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GetZeeGold's picture



Lots of ultimatums being thrown around all of a sudden.


It's moments like this when I just count to 10. Doesn't always work however.

GVB's picture

Greece Gets Three-Day Ultimatum From Europe To Fix Itself, Or Else


PLAN B of course!




Sudden Debt's picture

I plug holes in 2 to 5 minutes...

In a good day... I can plug 3 holes in a hour.

overmedicatedundersexed's picture

no honor among no rule of law..nothing can be fixed when there is no real law. fake money for pretend reform, getting tired of this ruse.

stocktivity's picture

Or else we will...or else we....or ....oh, ok, we will give you just one more bailout. But this is really really the last one!!!

Sudden Debt's picture

well... 3 days because... after those 3 days.... IT'S WEEKEND!! NO MORE WORK!! WHOEHOEEEE!!!!




B2u's picture

We are giving you 3 days to fix your problems....OR ELSE WE ARE GOING TO BE serious.  REALLY...we mean it this time. 


If you are really serious we can schedule a meeting in 2014 and delay any need for fixes.

YuropeanImbecille's picture

I call election time bullshit!

Sudden Debt's picture

that's cruel...

you can vote for Goldman Devision 1 or Goldman Devision 2...

if you don't like democracy you should just say so...

Sudden Debt's picture



Go Tribe's picture

Yep. The IMF isn't going to pull out early. They like what they are giving Greece.

jubber's picture

EU Commission says it has not yet given Greece a three-day deadline (Less ...)  Instant analysis 11:13 - Says deadline report is something for nothing.  Analysis details: - Follows reports Greece has been given three-day deadline to prove it can meet austerity requirements, in order to receive its next tranche of bailout payments.

Smegley Wanxalot's picture

Or else .... we'll have to say "or else" again.

caribbeanbarry's picture

+1000  It reminds me of a Robin Williams stand up comedy routine from the '80's.  He is describing the unarmed British police.  "Stop, or I'll say stop again"...

Ghordius's picture

you mean that unarmed police that somehow has so few homicides to go after? ;-)

Rubicon's picture

I saw a British Bobby on a bicycle stop a speeding car by holding his hand up as it went past him.

Ghordius's picture

knowing Old Blighty a bit I would not be astonished at all that it worked - it's a gentle realm

Rubicon's picture

And there was cricket being played on the green - and people in front of the pub drinking funny looking stuff... in the distance a fox barked...

Debugas's picture

rumours are "german" euro is underway

GetZeeGold's picture



Take away the word euro......and I'm sold.

Sudden Debt's picture




Non Passaran's picture

Says who? Internet articles from 2010?

hugovanderbubble's picture



Non Passaran's picture

Belgium and Luxembourg in B... Yeah right

Ghordius's picture

"If indeed the Troika is set on purging Greece..." groan, again I have the urge to "defend" the Troika here? please, some balance. The Greek government wants something, and agreed to do something else for it. It's called a deal

Greece spends moar than it makes (collects in taxes) - that's the real starting point of the whole thing, and a good reminder for everyone

bash away

Ghordius's picture

thanks, but no, thanks, than I don't think that those engines are defective. your deal sounds a bit like the US offering Greece annexation as a new State, or the UK offering Dominion status, perhaps together with Cyprus

I somehow doubt those offers would ever be made, and even more that they would be accepted

In my experience, most Greeks not living in diaspora were hoping since long that their nation would get a "clean-up". This one is particularly ugly, yes - not one of the IMF deals was ever "sweet". The trick would be to never need the "loving attentions of the IMF"

And yet most Greeks want to stay in this process... and keep using the EUR. And this is a fact. do you have an explanation for that?

Ghordius's picture

what is unsustainable about balanced budgets? because that's "the plan". I know it might sound foreign, but hey, perhaps because it is

it takes a while, it might not work, but it is the way it is

Debugas's picture

deficit spending allows for poor to stay alive. If we were balancing budgets for the last 30 years many would have died of hunger like in africa.

Bobbyrib's picture

"what is unsustainable about balanced budgets?"

Give it up buddy. Germany is the main benefactor in the EU. Germany produces the best quality products and the currency is pegged across the whole region, so there is no currency disadvantage (currency is not too strong). As an American I can tell you long term trade imbalances are definitely UNSUSTAINABLE.

Acet's picture

I can't talk about Greece but I can talk about Portugal:

A lot of the budget deficit is the result of corruption or public over-indebtness to buy votes or pay for large infrastructure projects from where politicians could skim a cut. Both the corruption and the over-indebtness were always enabled and often even incentivised by foreign lenders.

For example, in Portugal a big hole just came to light as result of state owned companies making really bad interest rate swap trades with several international investment banks. Now, either everybody in positions of responsability at those companies were spectacularly incompetent (there are knockoff clausules in those swaps that mean the other side always wins) or somebody got paid.

Similarly, one of the authonomous regions (which is just a small island in the Atlantic) has managed to run up multi billion euro debts which they were legally not allowed to do. They used the money to pay for huge infrastructure works, which have allowed the guy that heads that region to keep getting re-elected for 30 years.


In all this, the Portuguese government (in reality, the taxpayers) was pushed to take responsability for paying that money to large international financial institutions.


Why should a soverign state pay external creditors for debt which was taken against the law or by people that did not have the authority to do it? Isn't the responsability of the lenders to do due diligence before they lend the money?

Now consider that the Portuguese State now actually has a Primary Surplus (i.e. if they didn't have to pay interest on the debt, the state would have a surplus), which means that the budget is balanced if the nation was not being forced to pay for "fishy" debt. Why exactly would a sovereign nation with a primary surplus not just tell creditors that "We're not paying. You took a risk, you lost. You should've done your due diligence"?

DeadFred's picture

Why should the sovereign state take on the debts the regions owe to the international banks? Because the NSA has recordings of their cell phones and internet usage. If the leaders didn't want to pay those debts they shouldn't have called those 15yr old male hookers (that the NSA sent their way) in the first place. 

i-dog's picture


"do you have an explanation for that?"

Collective insanity? Fluoride in the water? Sunstroke? Stockholm syndrome?

Ghordius's picture

weak but persistent sense of nationhood? Greek is a language, it's a culture, and a quite unique nation-state (with the exception of Cyprus)

couple that with a similar sense of europeanhood. note, for example, the general Greek demand for a national TV. the same demand is much weaker for English-speaking folk, than many countries have many English-speaking media. It's easy to exchange foreign with insane, you know that

btw, I have a fable for you... and you figure in it

shovelhead's picture

The BeeGees called it "Stayin Alive".

NidStyles's picture

I don't think that is going to work out how thye think it will. Then again it's likely that this all merely theater for the plebes to keep entertained by.

fonzannoon's picture

Today is Tuesday. So they give them till Friday. Then they throw Greece out of the Euro, spark a derivative waterfall that cascades all over Europe. Bank holiday monday and all assets are confiscated from every bank. Riots ensue and the European oligarchs are marched out on the street and hung from lamp posts. 2 week celebration follows and then Europe becomes the first continent to reset their system and begin anew, sparking the same thing to happen in America.


They give them a few more bucks to keep the bullshit going.

NoDebt's picture

Oh, they'll give them the money.  Just that there will be a bail-in as part of it.


From the movie "The Rock":  You were asked by a friend.  You were ordered by a superior officer.  Now you are being given your last chance by a man with a gun in his hand.


Ghordius's picture

lol, you know that preaching Greeks to watch out for their personal money is a bit like trying to teach your grandmother how to suck eggs?

Greeks are many things, except stupid 

disabledvet's picture

well they did wind up in the EU. how's that Growth and Stability Pact looking now! the template is now on....Greece is just a larger "test case." there are bigger one's coming.

Ghordius's picture

well, the Squid swore to them that it was a free-for-all buffet - and indeed it was a feast. now they want to stay in the "restaurant" and are haggling for the "revised bill". haggling is a honoured way of life, in some parts of this world. that's a fact

Ghordius's picture

fonz, the eurozone does not work that way. since you go after an hypothetical case:

a country like Greece could declare bankruptcy - or partial bankruptcy - and still stay in the EuroSystem. there is no way to "throw them out"

but of course this would freak our American cousins out of their minds, so it's "to be avoided, if possible"

fonzannoon's picture

Thanks Ghordius, I knew they had the option to stay after bankruptcy. I always appreciate your insight and viewpoint on the topic. 

whether it's greece or japan or the U.S at this point, the regurgitated headlines make it difficult to know what year it is anymore. it's starting to drive me crazy.

Ghordius's picture

;-) it's 2013, and a good mentor of mine always told me that any serious plans for the future should always contemplate also the all-important and likely scenario of "another seven years of the same shit"

Ghordius's picture

a friend of mine would inquire at this stage if this includes your womenfolk

NidStyles's picture

Nah, those you trade up for a newer model.

Ghordius's picture

after a careful cost-benefit analysis, I presume ;-)

fonzannoon's picture

that mentor was a realist.

Non Passaran's picture

Of course there is a way to throw them out.
The ECB can simply decide that due to a violation of some important rule (eg the fuckers go bankrupt and can't return some ECB loans) they won't process the Greek CB's transactions.
Game over. Then what's left is to make the official announcement to the unsuspecting public.

Dugald's picture


I really like your first scenario, its long overdue.....but fear your second scene will be enacted....pity.......

Piranha's picture

Was not Greece on the right track not long ago?