Greece Calls Europe's Bluff Again, Gets More Money

Tyler Durden's picture

Five days ago the latest episode of the endless "Europe pays Greece to pay Europe" charade played out when the Eurozone gave Greece its latest three-day "ultimatum" to fix itself or else. Obviously, Greece did not fix itself, but since the three day ultimatum ran out two days ago, and since the BBG ticker for the Greek currency is still not XGD, one can assume that the latest European bluff, especially one coming 2 months before Merkel's reelection when nothing is allowed to disturb the precarious European house of insolvent cards, was just that: a bluff.

Indeed it was, and today we just got the details of how Greece, so aptly explained by Mr. Panos, once again fooled Europe into bailing it out: well into the 3rd year of what is now obviously an endless bailout cycle from which there is simply no escape. From Reuters: "Greece secured a 6.8 billion euro ($8.7 billion) lifeline from the euro zone on Monday, officials told Reuters, but was told it must keep its promises on cutting public sector jobs and other reforms in order to get all the cash."

The problem is that the latest bailout, like so many before it, will come in a staggered way to "assure" the angry German taxpayer that the Greek politicians are at least doing stuff in exchange for German (and in the case of IMF handouts, American) taxpayer money. So the details from Reuters:

Under the terms of the deal, euro zone finance ministers agreed to make staggered payments of aid to Greece starting with a 2.5 billion euro installment from euro zone countries in July, said officials close to the talks. The agreement foresees a further payment from euro zone countries of 500 million euros in October.


Central banks in the Eurosystem will contribute 1.5 billion euros in July and 500 million euros in October, the officials said. The International Monetary Fund will give 1.8 billion euros in August.


"That's the way it will be done," said one of the officials.

Spoken like a true Indian.

So here is the math: Greece has gotten €2.5 billion + €1.5 billion, from the Eurogroup and the ECB, to last it through October, or three months.  The IMF may or may not hand over another €1.8 billion, but if history is any indication, the IMF will delay its portion as it has in the past, because it will be mysteriously uncovered some time late in the summer that instead of "reforming", the Greek political elite spent what little money it got, to pay for summer vacations in the Cyclades.

Speaking of "what little money" there is, consider that there is €2.2 billion in Greek bond maturities in August. So netting that outflow, means Greece has really gotten €1.8 billion to last it until August, although realistically, through October. So three months. Which means a miserable €600 million per month.

And this is somehow supposed to lead to an improvement in the economic conditions of the country, of fill the "mysterious" €1.2 billion hole that recently materialized in the budget of the country's healthcare system?

That's ok though: we are confident that should the Greek money run out once again, as it will, then Europe will once again threaten to punish Greece, should it prove incapable of meeting its one condition which is to fog a mirror, with giving it even more bailouts.

Remember: the only thing that matters in Europe this summer is the smooth sailing into Merkel's September election.

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ThunderingTurd's picture

Ahhhhh.  The the culprit for the ramp in all of the banks.  Just when my MS 23 puts were looking wonderful.  I got "greeced".

gjp's picture

yeah, and a great reason to by AMZN at all-time highs too!  Greece is saved, green light to day traders.  America, fuck yeah!

youngman's picture

Yes..nothing bad to happen until after the elections....If I was Greece i would ask for more now...before the would come fast and furious...go Greeks go..

ThunderingTurd's picture

Agree!  They should just say we need open lines of credit "or else".  They are wearing the pants for all of Europe!

MS7's picture

I wish that were true. But since Greek politicians care only for themselves and nothing for their country, they won't try to get anything extra for their country in return for a calm pre-election period for Merkel. (The money they are getting just goes to the banks.) Maybe they'll ask for a nice German car for themselves or something but they would never do anything for their country. Greece is a total disaster because of the idiots who have governed for the past decades. When Greek voters finally put on the pants, they will get rid of them once and for all.

Cursive's picture


CrashisOptimistic's picture

"Remember: the only thing that matters in Europe this summer is the smooth sailing into Merkel's September election."


Not quite, Tyler.

The only thing that matters in Europe is essentially ALL the remaining bond holders of Greek bonds are now official sector, aka, ECB, EZ and IMF.  No more significant bank holders.  So if the Troika doesn't flow money to service the loans and keep them current, they have to explain to people why they loaned money that is not being paid back.

But, in your context, that would be a particularly hard explanation for Merkel to make in her campaign debates.

SDShack's picture

In other words, "To infinity, and beyond!" This EU farce will never end until the Germans say "Nein". If by some miracle, an anti EU party or coalitioin would defeat Merkel, it will start the great unraveling. I have no hope of that happening because there just isn't enough pain yet for the Germans to make the switch. Besides, the TPTB will never allow it. The same is true for the USA. 

BlueStreet's picture

You can't bluff a bluffer.  Fuck this world. 

Devotional's picture

CTRL-P to infinity man!!!! Print to oblivion assholes!!!

JJ McApe's picture

a bottomless pit, just push greece out of the euro. this is ridiculous

yogibear's picture

The EU will never admit a failure. Don't expect the freeloaders to be ousted.

101 years and counting's picture

"Remember: the only thing that matters in Europe this summer is the smooth sailing into Merkel's September election."

isnt that what the "markets" thought with 2 months prior to the 2008 election?  and then Ben pulled the plug on LEH.

yogibear's picture

Greece always gets their bailout. It's a PIIGS bailout forever. Just promise in public you'll be good and the bailout money keeps on coming.

Germany and the rest of Europe will just have to pay for the Club-Med crowd.

Greece and the rest have fun while Germany pays. Fair enough.

gjp's picture

and the banks / kleptocrats over here always get their bailout too while asia and the rest of the world in general pays for bread and circuses US 21st Century edition.  It's no different.

timbo_em's picture

I wonder what happens in October when the newly elected members of the Bundestag find out that one of their first deeds will be the approval of a new bailout package for Greece. Because from my point of view only a few know that Greece will run out of money way before the end of the current program in 09/2014.

TrustWho's picture

What a f7654ing charade. How can ECB be so stupid with these bluffs and everyone accept Draghi's bluff. Make mone while you can......seems to be the answer as nobody believes this financial system can be saved.

HardlyZero's picture

Angela Merkel may be the Whore of Babylon ?  and this is the way of the 9th gate ?   Never know these days.  I guess we just 'give it away' to everyone until we can't anymore ?  How far does this go ?

limit_less's picture

HardlyZero - How far does this go? Until there is a collapse. What we are looking at is a huge game of chess where the end game for the ECB and the EU is a massive power grap. Problem Reation (and the Total Centralised Control) Solution. My only question is why Germany got involved to begin with, the Bundesbank is the only resistance to the total EU and ECB takeover of the European economies so why are they digging their own grave by bank rolling the Greek government?

CrashisOptimistic's picture

"How can ECB be so stupid with these bluffs"

BECAUSE NOTHING IS FIXED.  IT'S ALL BULLSHIT.  They have reached the point where getting something off the headlines is "fixed".

There are no more banksters in this game.  It's all "official sector" money, now.  The EU already forced haircuts on all the privately held bonds.  The only Greek bonds left are OFFICIALLY HELD, eg, by the ECB, EU and IMF.  Those bondholders will NOT ALLOW any maneuver that forces a haircut on them.

They will insist that money flow to Greece to service their bondholdings.  They will not under any circumstances take a loss on those.  They will rape and pillage before they take a loss.


Yen Cross's picture

    LMFAO chart of the day >  12:00       USD             Consumer Credit    [ 19.60B]     12.50B     10.90B revised lower from 11.10b

   Extend and pretend is always good for triple digit DoW gains. The Greeks got their cash and the U.S. consumer is spending like drunken sailors on shore leave.

OneTinSoldier66's picture

"the U.S. consumer is spending like drunken sailors on shore leave."


I'm a US consumer. What am I doing? I buy GOLD... and put it away. Why? Because I believe it's a 21st Century Savings Account and when I look back on my life at this point, I realize that I never really believed in paper money. I always had this feeling something wasn't quite right with the world.

Mototard at Large's picture

As a fomrer druken sailor, I resent your your drunken sailor analogy.  We only spent the money we actually had and it was our money, not borrowed money. 

Drunken sailors the world over are disgusted by the spending habits of the credit and debit card equipped back pack carrying consumers searching the mall for the lastest I-crap stuff that they have no real need for.

We, on the other hand, actually needed the dark rum!


Yen Cross's picture


And the prophylactics. ;-)
bluskyes's picture

You have to wonder who is really in charge here.

It's like the old saying. If you owe your bank $1,000 and you can't pay, then you're in trouble. If you owe your bank $1,000,000 and you can't pay, then the bank is in trouble.

astoriajoe's picture

Mr. Panos wins again!

I guess its really just going from Europe to some bank anyway, so Mr. Panos probably no longer gives a shit, he's looking for something to eat.

DeliciousSteak's picture

If Greece didn't want the money, they'd be forced to take it. Germany and France still have a few billion left to recycle through Greece to their banks. They have covered 90+% of their potential "losses" though, so it's pretty much done. German election coming soon and they'll pull a rabbit out of the hat afterward.

Clever Name's picture

That scenario makes as much sense as anything else I've heard, but that implies that Frau Merkels election is somehow very important in this big chess game and that shes not just a pawn, no?

As long as this games gonna continue, why cant the EU and everyone else see this for what it is? Greece (Spain, Portugal, etc) are the welfare leeches, the 'takers' as it were, to the 'makers' of, well, Germany and the Netherlands? They will exploit the system as long as they can, making the assumption that the average citizen/subject actually gets something out of it.

Yes I realize I put it in the Faux News vernacular, but it makes the point.

goldenbuddha454's picture

I guess the Troika figures they can't Cyprus the Greeks because there's nothing there to Bail-in.

falak pema's picture

hey 90% of the money that goes to Greece GOES straight to the pockets of the BANKSTAS...its just a conduit of BAIL oUTs.

As opposed to Cyprus and Bail INS.

That whats the world is reduced to in this Oligarchy scam; BAIL OUTS or BAIL INS! 

The latter has the advantage of creaming the corporates; just like a collapse would. But in the case of the collapse, like in the case of bail ins the PEOPLE FALL; where as in bail outs, they fall after the oligarchs lose 50%.


sterling effort's picture

In order to qualify for the latest tranch the Greeks were required to reduce the number of people on the Govt tit.

They did this in one fell swoop by eliminateing the Ministry of Truth (MOT), aka Greek public broadcaster. As the MOT is the main shill for the EU in Greece (Think NPR on steriods for any and all left PC twaddle) they were quietly allowed to arrange a court ruling overturning the decision.

They will all be rehired after the cheque clears.

Extraordinarily well played Mr Panos.

Kirk2NCC1701's picture

If I were a German taxpayer -- and 85% of them are -- I'd be either very pissed, or demand a free fucking* Greek summer vacation!

Otherwise, it's the Unemployment Line for Angela Merkel after the Sept. election.

* Figuratively or literally.

Meremortal's picture

Greece told its pace of financial reform is too slow, secures a further 6.8 billion euros of bailout funds- BBCNews

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