Germany Gives Greece One Final Ultimatum After Friday's "Optimistic" Talks Devolve Into Disagreement And Confusion

Tyler Durden's picture

On Friday, the main catalyst that launched the early ramp in the EURUSD, subsequently sending both the Dax over 12,000, and the US stock market soaring, was speculation and hope that the latest round of Greek talks on late Thursday night ahead of tomorrow key meeting between Tsipras and Merkel in Berlin, had gone well, and there was a reason to be optimistic about the near-term for a Greece which increasingly more see as on the verge of expulsion from the monetary union. We explained as much, although we added the provision that at this point it is likely too late to do much if anything about Greece in "German DAX Surges Over 12,000 On Greek Optimism, But The Money Has Run Out."

Now, courtesy of reporting by the FT, we can also rule out any of the so-called optimism in the aftermath of Thursday's talks because as Peter Spiegel reports, not only was there no real consensus, but the talks "ended in disarray", and even though "Greece’s prime minister and fellow Eurozone leaders emerged from a meeting early on Friday morning touting a breakthrough agreement to unlock much-needed bailout funds for Athens — only to fall into disagreement hours later about what it all meant."

Two days of intensive and occasionally heated negotiations at an EU summit in Brussels amounted to little more than a repeat of talks a month ago between eurozone finance ministers that officials then also hailed as the definitive agreement to get the final bailout review under way.

And the punchline, "so similar were the two deals that, much like the one finalised last month, leaders involved in the talks could not agree on what was agreed within 12 hours after a late-night meeting aimed at resolving all differences."

The underlying problem for Greece, as we have been writing ever since October, is that the country is not only out of money, but it is now almost $4 billion in the hole. It is, in effect, insolvent. Which is why Greece is now desperate to walk back on all of its election promises because having lost the one trump card it had, namely to default on its Eurosystem debt (precisely what the infamous Varoufakis "middle finger" speech was all about), or exist the Eurozone on its own terms, Greece is now scrambling to survive day to day, even as its bank run threatens to implode its banks at any given moment. More from the FT:

Angela Merkel, the German chancellor, made clear at a post-summit news conference that the starting point for Alexis Tsipras, Greek prime minister, was a December 10 inventory of incomplete reforms promised by the previous Greek government. “The Greek government has the opportunity to pick individual reforms that are still outstanding as of 10 December and replace them with other reforms if they . . . have the same effect,” Ms Merkel said.


It is a potentially incendiary demand since the document Ms Merkel referred to — a letter written by Greece’s then centre-right prime minister Antonis Samaras and his finance minister Gikas Hardouvelis — was the focus of particular scorn for Mr Tsipras’s far-left Syriza party on the campaign trail.


Mr Tsipras insisted at his own press conference that Ms Merkel was mistaken. “Forget the commitment of the former government. There are no austerity measures. There is no letter of Hardouvelis,” Mr Tsipras argued. “I asked [the other leaders]: do you expect me to . . . go through this evaluation and implement measures that Mr Samaras was not able to implement? The answer was no.”

No, Merkel is not mistaken as will be made abundnatly cleat tomorrow during the Berlin press conference after the Merkel-Tsipras meeting, which may well lead to the Euro losing all of its sharp gains achieved on Friday due to another dose of premature Greek optimism.

As a result the biggest problem for Syriza's government, which still has preserved its pre-election popularity, is that any minute now both Merkel and Tsipras will make the formal announcement that the hated Troika is coming back. That, together with the realization that the current government is nothing but a continuation of the Samaras regime, will likely lead to a new round of social unrest culminating perhaps with another general election.

According to people briefed on the talks, Mr Tsipras opened with demands for additional cash with few strings attached, acknowledging his government may not make it to the end of April without an injection of bailout funds. But his push lasted only the first 10 minutes before the other leaders convinced him it was unachievable. Instead, much of the session focused on logistical arrangements in Athens, where Greek officials have thrown up hurdles to international bailout monitors seeking to access data to evaluate the country’s reform efforts.


Mr Draghi was particularly incensed, telling Mr Tsipras he believed the inspectors — from the ECB, European Commission and International Monetary Fund — had been badly treated by their hosts. Mr Tsipras countered that allowing such access would be a violation of Greek sovereignty. But he relented after Ms Merkel noted all IMF members are subject to annual reviews involving access to a country’s books.


The Greek finance ministry, meanwhile, signalled it was adopting a new conciliatory stance, saying officials “look forward to receiving” requests from the inspectors and would respond “in the same constructive spirit”.

So yes, the Troika is on its way. As it the final final German ultimatum to Greece. Earlier today, Volker Kauder, head of Chancellor Angela Merkel’s party bloc in parliament, told Handelsblatt in an interview that Greece should use this “last chance” to stay in euro by presenting reform proposals that creditors can accept. Kauder also said that Greece can rule out a third bailout “under current circumstances" adding that the Greek government needs to step up efforts to raise taxes, scrap "nonsensical” tax privileges, including those for shipowners (for more on the latter read "Why Greek Shipping Billionaires Are Sweating").

As for tomorrow's critical, and potentially make or break, meeting between Tsipras and Merkel in Berlin, here is what Kathimerini said earlier:

In a statement to Sunday’s Kathimerini, Tsipras said the meeting was an opportunity for the two leaders to talk without pressure. The meeting “will not be pressurized by negotiations,” the premier said. “And this is very significant because we can both discuss the important issues that are burdening Europe as well as improving bilateral relations between the two countries.”


Tsipras highlighted a “unique opportunity to pursue changes which previous governments did not dare to attempt, either because they were committed to powerful interests or because they did not have popular support.”

What he really means is that tomorrow is when the lies and can kicking end, and either Tsipras capitulates fully, and irrevocably, in public, without a hint of any doubt as to who is calling the shots thereby burning all pre-election promise bridges, or Greece will be out of the Eurozone in a matter of days if not hours.

Indeed, the following caption we presented first on Friday is more relevant now than ever before.

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Abitdodgie's picture

Ths is all so yesterday.

kamakaze's picture

except for those people I see eating out of Garbage bins here in Greece

Groundhog Day's picture

Their is 99.99percent chance that Greece will make a deal before u s markets open sending spx futures higher

Why not 100 percent. I can dream can't I

kliguy38's picture

I mean it.......this is the very LAST chance.......really....I'm serious

Haus-Targaryen's picture

They'll make a deal at 11:59 with another minute left to do lines of blow off of Frau Merkel's ass.  

But I bet the next crisis summit will really fix the problem.  

Whoa Dammit's picture

Merkel is not mistaken as will be made abundnatly cleat tomorrow

Is that a global banker cleat as in Orwell's "Imagine a boot stomping on a human face-forever" ?

HardlyZero's picture

Coool typos make the reading more fun...was it meant to be a typo or was it a subliminal typo ?

Eye-candy time (2:56 minutes !)    Exciting times !!

Charming Merkel

ilion's picture

90-95% of people in any country are ignorant, they like to watch CSI Miami every evening, drink some beer and go to sleep as stupid as they were when they woke up. In democracy, these people choose the leaders. Remember Homobama?

We are pretty much f.cked with democracy. This system needs to and eventually it will collapse.

7.62x54r's picture

The shipowners have a tax break because of Aristotle Onassis's past actions.

Tax a shipping tycoon too hard, and, one day, when all of his ships are out of port, he renounces citizenship and changes the flags on all of his ships. The retards in the troika do not understand that this is the only way to collect ANY tax from them.

baldski's picture

The flags on the ships are already Liberian, Panamanian, or from Vanuatu.

7.62x54r's picture

Onassis's ships originally flew greek flags.

Yes, nowadays all ships that aren't taking some kind of home port advantage ( like American merchant marine coastal vessels ) are convenience flagged.

Same effect though, just faster these days. Billionaire packs bags, and makes sure none of his ships are in port in his soon to be former country.

nicxios's picture

It's so easy that a 3rd grader can understand it:


Tax a shipping tycoon too hard, and, one day, when all of his ships are out of port, he renounces citizenship and changes the flags on all of his ships. The retards in the troika do not understand that this is the only way to collect ANY tax from them.


So why insist on something that will drive out the shipowners and cause even more unemployment? Shipping is also such an important part of their balance of trade. It gives ammo to the people who believe that EU/Germany are out to make Greece a backwater colony.

Winston Churchill's picture

The cleat you tie off the hangmans rope to.

Pitiful's picture


Almost pissed my pants that was so funny.

agent default's picture

Yeah, this is unheard of in the US./sarc

Looney's picture

Debt makes you free – Schuld macht frei, just as in “Arbeit macht frei”? ;-)


7.62x54r's picture

Suprisingly, enough debt does make you free. A creditor with a huge loan out doesn't dare poke his debtor too hard.

loveyajimbo's picture

Easy call... if  Tsipras caves... he will be thrown out of office or murdered... if he works a deal with China and/or Russia, he wins big... what do YOU think he will choose?  BTW:  Grexit... Gold to $2000 in a month.

rubiconsolutions's picture

"No really, this time I'm really..really...really taking my ball home. I'm not joking this time!"

gatorengineer's picture

for those old enough to remember, Lucy and the football from Peanuts.....

game theory's picture

Gold to $2000? In what currency? Certainly not in USD.

SloMoe's picture

About the best description of a Clusterfuck I have ever seen...

Farqued Up's picture

They desparately need Homobama to demonstrate his schoolyard tactic of drawing lines in the dirt and double-dog daring the other kid to cross it.

This is all bluster, Greece cannot pay and the EU knows it, all bluster for the USA bankster controlled IMF to drink champagne and talk big to each other. The Shinola will hit the fan if any puppet starts giving away assets. That's all the Troika can "wish for in the one hand". I have to admire a people that do not allow a Judas Goat to lead them to the evil tax man to pay tribute to a bunch of low-life psychopaths. We Americans are pussies.

JustObserving's picture

The options for Greece get fewer and fewer with every passing hour and also more unpalatable.  This is going to end very badly for Greece in the short term with Greece leaving the EU and the economy shrinking by 20% or more for the next couple of years.

All Greek debt will have to be written off.  The derivatives dominoes will be crashing for quite a while.

Hughing's picture

If the derivatives could be paid off, Greece would have been allowed to crash and leave along time ago. And, why would China and Rusia want another money pit shithole like Cuba or North Korea? This is Europe's knife, let them catch it.

nicxios's picture

Wow, this is a key piece of information. Previous governments refused/put it off. Syriza put it off as well at the beginning.

Charlie M.'s picture

Bullshitzzz... The can kicking will go on and on and on and on... F@cking groundhog day... 

7.62x54r's picture

Can't go on forever. Sooner or later the hyperinflationary piper must be paid.

HonkyShogun's picture
HonkyShogun (not verified) Mar 22, 2015 12:25 PM

That's the nice thing about Western politians. Once they capitulate, they stay capitulated.

Elliptico's picture

Counterfeit Greek printed Euros, anyone?

WhyWait's picture

Greek economy isn't going to shrink 20% anyway?

Tsipras has no choice but defauld and turn to Russia and China. In medium term (a month) he can call a new election or a referendum to ask the Greek people for a mandate to separate from EU, but really the clock's run out on that.

What he has achieved is a clear demonstration to the Greek people that they have no choice but to fight, and never did. There will be a huge sigh of relief when Greece gets the boot, and then a mobilization for battle.

Winston Churchill's picture

Stockholm syndrome where both are captives.

John Wilmot's picture

Nothing is going to improve until the Greek economy undergoes major pro-market reforms (sell off state enterprises, deregulate private enterprise, cut government spending all around, gut the welfare state to give Greeks an incentive to work).

The Greek economy is so unproductive as a result of those restrictions on the market that it cannot sustain the current Greek standard of living - even given how much that has already dropped. The only thing keeping it going is foreign financial support. Sooner or late that is going to stop, and if the Greeks haven't made those structural reforms by then....?

...they're going to be looking back at the present as the good old days.

nicxios's picture

There isn't much to gut, at least compared to other countries. The long term unemployed (> 1 year) get nothing, not even health care benefits. The biggest chunk is pensions. They're going to have to cut to the bone there. Once upon a time it had actual funds in it, before they gutted it with haircuts and recent loan to pay IMF.


Promethean's picture

Or Greece ends up with a Military Coup.

John Wilmot's picture

If only...

It seems to me like the average Greek voter is too devoted to socialism for a reform government to ever get elected. A military coup may in fact be the only solution. It's happened before in Greece, I suppose it could happen again.


mog's picture

Go for it!
Go visit Mr Putin.
A nice military base in Greece.
Airforce and naval.
With two fingers up to NATO.
Huge numbers will applaud you right across the EUSSR.
Not least me.
And if you can bring down the EUSSR and/or NATO I promise to kiss your feet.

agent default's picture

If Greece is so important to the EU/US/NATO as some rumors have it, then any attempt to leave will cause a "revolution".  You know Arab Spring, Maidan Square job.

Herodotus's picture

The 23rd day of the month is traditionally a good date to sign a pact in Moscow.

tarabel's picture



Worked out well for Ribbentrop.

jtg's picture

Greece will bleed itself to death at the hands of the EU until the Greek people take control of their destiny.

Zero hour is coming: either accept the pain of becoming sovereign or submit and die as debt slaves.

HardlyZero's picture

"The underlying problem for Greece, as we have been writing ever since October, is that the country is not only out of money, but it is now almost $4 billion in the hole."


Is today or tomorrow, the next 24 hours, it ?

Won't the gravitational effects along with the dominos cause other PIIGS effects ?



Exciting down to the wire with plenty of eye-candy too !

Why Tsipras needs to turn on the charm with Merkel


3-ways to win:


Shorts *but short what?*

VXX (VIX) volatility


Perhaps wait for the dust to settle and all the money gets sucked out of EU and into "good and safe" investments...  will S&P500 go to the moon soon ?  but then later crash.

7.62x54r's picture

The S&P will go to fucking Alpha Centauri when all those US dollars fly home when the jig is up.

But that lightyears high stack of greenbacks still won't buy a cup of coffee.

AntiOligarch's picture

I couldn't have put it better myself!

There's only one way for Greeks.

Out of the EU NOW! If they can as I believe that Germany France UK won't allow them to.
The annexation of Greece has been in the works for awhile ...

“The Greek people are anarchic and difficult to tame. For this reason we must strike deep into their cultural roots: perhaps then we can force them to conform. I mean, of course, to strike at their language, their religion, their cultural and historical reserves, so that we can neutralize their ability to develop, to distinguish themselves, or to prevail; thereby removing them as an obstacle to our strategically vital plans in the Balkans, the Mediterranean, and the Middle East.”

~ ~ Henry Kissinger 1974

Colonel Klink's picture

Mark my words, Greece will cave and make a deal.

jldpc's picture

The Greeks always make deals - but never live up to them. They are the world's most accomplished liars, and tax cheats. They even lieand cheat each other. Give it up. They need to be taught a lesson - about 10 years of bone crushing poverty. Maybe then the younger ones will take over and start a "new" Greece; one with morals and a conscience.

Colonel Klink's picture

Agreed, but I see no reason to uphold one's moral obigation to pay their debts to a bank when the banks are bailed out by the very taxpayers who are expected to uphold their debt.

Banks (Central and otherwise) have caused their own problems by removing the moral hazard of having to live up to their actions.

At this point virtually everyone should just shirk their debt (worldwide) and finally show the banks who ultimately has the power.  No repayment means total collapse of the very enslavement the WORLD is under.

Just my opinion, YMMV.