Futures Fizzle After Greece "Hammered" In Riga, Varoufakis Accused Of Being "A Time-Waster, Gambler, Amateur"

Tyler Durden's picture

Even though no rational person expected that the Greek situation would be resolved at today's talks in Riga, Latvia, apparently the algos were so caught up in spoofing each other to new record highs that futures, after surging once more overnight following the latest Google miss which sent the company and the Nasdaq soaring, actually dipped modestly into the red following headlines that the latest Greek talks have broken down after a "hostile" Troika "hammered" the Greek finmin, who was accused by European finmins of "being a time-waster, a gambler and an amateur."

It appears Europe is not a fan of game theory.

Bloomberg has the best summary of the latest Greek "negotiation" farce, all of which at this point serves only to kick the can not by months but by weeks until Greece runs out of confiscated money and is forced to either fold completely to Troika demands, leading to new elections or a referendum or conclude its pivot to Russia, setting off the next phase of the second cold war:

Greek Finance Minister Yanis Varoufakis was heavily criticized by his euro-area colleagues amid mounting frustration at his refusal to deliver measures to fix his country’s economy and release financial aid, according to three people familiar with the talks.


Euro-area finance chiefs said Varoufakis’s handling of the talks was irresponsible and accused him of being a time-waster, a gambler and an amateur, one of the people said. Another said the Greek complained of the hostile atmosphere in the meeting, as he was criticized from all sides. A Greek official in Riga, Latvia, for the meeting wasn’t able to comment on the talks when reached by phone.


Going into the talks, the 19-nation bloc’s finance ministers voiced their frustration over Greek Prime Minister Alexis Tsipras’s attempt to bypass their veto on financial aid with an appeal to Angela Merkel. “I demand very urgently that we get results on the table,” Austrian Finance Minister Hans Joerg Schelling said before sitting down for talks. “If you follow the media of the past days you hear time and again that ‘Tsipras says’ and ‘Tsipras thinks’, so apparently this has been moved to leaders’ level.”


With Greece running out of money and stalling over commitments to reform, euro-zone finance chiefs said the country’s authorities still haven’t shown sufficient progress on plans to revamp the economy to justify a loan payout.


Tsipras sought to circumvent the finance ministers’ authority less than 24 hours earlier, pleading his case with the German Chancellor and French President Francois Hollande on the sidelines of a summit on immigration in Brussels. Under euro-area procedures, it’s the finance ministers who have to sign off on any aid disbursement and Merkel said last month she’s not prepared to override those controls.

It could have been worse: someone could have literally beaten up VaroufakisL


End result of today's meeting?


Even the "apolitical" ECB hinted that stories leaked earlier of a surge in the collateral haircut may come true in the coming days:


So with Greece again achieving nothing, and not securing any new funds (aside from the cash it confiscated from its mayors), expect another round of pivoting toward Russia, which will promise much in exchange for the Turkish Stream deal being concluded and assuring that European energy needs are "met" courtesy of Gazprom for the next decade while leaving Ukraine in gas transit limbo.

Expect the brief bout of Greek euphoria which sent Greek banks surging, i.e., Piraeus Bank: +16.6%, AlphaBank: +9.2%, National Bank of Greece: +9.6%, to promptly fizzle following this latest disappointment. The Euro is already feeling the brunt of the algo disappointment, and after surging over 1.08 on another stop hunt just before the Europen open, the EURUSD has pared nearly all its gains.

Elsewhere in Europe, on a stock specific basis, HSBC (+3.2%) has also been in the spotlight with the Co. contemplating whether it should move its headquarters away from the UK, with China a touted possibility. AstraZeneca (-3.1%) announced their earnings pre-market and have traded lower throughout the session as profits were negatively impacted as two of the Co.’s bestselling drug patents are due to expire and competition from generic sales.

Today’s pre market US earnings include: LyondellBasell (LYB), with results expected to show an increase in profits as a consequence of capacity expansion and management comments on potential buybacks and M&A deals; Biogen (BIIB), as investors eye Q1 financials after the drug maker reported positive updates in Alzheimer's and MS and American Airlines (AAL), where focus will fall on PRASM outlook for Q2 to see if the airline will continue to experience improving margins.

In fixed income markets, Bunds (159.02) are underperforming USTs amid the strength in equity markets, while the GR/GE 10yr spread is tighter by around 10bps today ahead of the aforementioned European Finance Minister meeting.

Asian equities mostly rose with Chinese bourses at the forefront, in the wake of further disappointing Chinese data. Chinese HSBC flash Mfg PMI fell tumbled to a 12-month low at 49.2 vs. Exp. 49.6, the 4th consecutive month of contraction. Shanghai Comp (-0.5%) and Hang Seng (-0.2%) traded higher, the latter posting a fresh 7yr high, as the data supports the case for more government easing, before falling from their best levels towards the close to end the session in negative territory. Nikkei 225 (-0.5%) originally rose higher than yesterday’s 15yr peak after finishing yesterday’s session above 20,000 for the first time since Apr’00, before falling in tandem with the Shanghai Comp and Hang Seng prior to the close.

The energy complex sees Brent crude futures outperform their WTI counterparts and trade above the USD 65.00 handle, bolstered by ongoing Saudi strikes in Yemen, with the ongoing conflict inciting fears that supply from the region could be affected. Elsewhere, in the metals complex, copper is the best performer today as May’15 futures contracts broke above their overnight range of USD 2.70, while iron ore is on track to rise for the third consecutive week. UK miners Anglo American (+2.1%) and BHP Billiton (+1.8%) have outperformed on the back of commodity strength,  with the latter announcing BHP Billiton announced they are curbing plans to expand.

In Summary: European shares remain higher, though off intraday highs, with the bank and telco sectors outperforming and insurance, media underperforming. German IFO above estimates. HSBC starts review over where to be headquartered. Euro-zone finance ministers meet in Latvia today. Greek finance minister heavily criticized by his euro-area colleagues, according to three people familiar with the talks. The Spanish and Italian markets are the best-performing larger bourses, Swiss the worst. The euro is stronger against the dollar. Japanese 10yr bond yields fall; Portuguese yields decline. Commodities gain, with corn , WTI crude underperforming and nickel outperforming. U.S. durable goods orders, capital goods orders due later.

Market Wrap

  • S&P 500 futures up 0.1% to 2108.5
  • Stoxx 600 up 0.5% to 409.1
  • US 10Yr yield little changed at 1.96%
  • German 10Yr yield down 0bps to 0.16%
  • MSCI Asia Pacific up 0.3% to 155.7
  • Gold spot down 0.2% to $1191.6/oz
  • Eurostoxx 50 +0.7%, FTSE 100 +0.5%, CAC 40 +0.6%, DAX +0.8%, IBEX +1.4%, FTSEMIB +1.3%, SMI +0.2%
  • Asian stocks rise with the ASX outperforming and the Sensex underperforming.
  • MSCI Asia Pacific up 0.3% to 155.7; Nikkei 225 down 0.8%, Hang Seng up 0.8%, Kospi down 0.6%, Shanghai Composite down 0.5%, ASX up 1.5%, Sensex down 1.1%
  • Euro up 0.28% to $1.0854
  • Dollar Index down 0.2% to 97.08
  • Italian 10Yr yield up 1bps to 1.41%
  • Spanish 10Yr yield little changed at 1.37%
  • French 10Yr yield little changed at 0.42%
    S&P GSCI Index up 0.2% to 435.9
  • Brent Futures up 0.8% to $65.3/bbl, WTI Futures down 0.4% to $57.5/bbl
  • LME 3m Copper up 1.2% to $6014/MT
  • LME 3m Nickel up 1.7% to $12925/MT
  • Wheat futures down 0% to 501.3 USd/bu

Bulletin Headline summary from Bloomberg and RanSquawk

  • USD (-0.4%) has been the notable mover of the session so far, with the greenback paring all overnight gains to the benefit of major pairs, despite the USD moving off its worst levels later in the session.
  • EUR saw strength this morning after positive German IFO and a relatively conciliatory tone ahead of today’s Eurogroup Finance Minister meeting, however comments heading into the North American crossover have been less optimistic and EUR gains have been capped by the large option at 1.0900 (713mln) set to expire at today’s NY cut
  • Looking ahead, today sees US Durable Goods Orders (1330BST/0730CDT), comments from BoC’s Poloz and developments from the European Finance Minister meeting
  • Treasuries steady overnight, head for weekly decline; market focus on Fed meeting next week, 2Y/5Y/7Y note auctions.
  • Euro-area finance chiefs said Greek FinMin Varoufakis’s handling of talks was irresponsible and accused him of being a time-waster, a gambler and an amateur, according to people familiar
  • Another said the Greek complained of the hostile atmosphere in the meeting, as he was criticized from all sides
  • Eurogroup head Dijsselbloem says no chance of aid without comprehensive deal; Draghi says ELA will continue as long as Greek banks are solvent
  • HSBC Holdings Plc is reviewing whether to move its headquarters out of Britain after more than two decades because of rising tax and regulatory costs
  • Germany’s Ifo institute business climate index rose for a sixth month to 108.6 from 107.9 in March. The median estimate was for an increase to 108.4, according to a Bloomberg survey of 36 economists
  • BoJ policy makers are likely to forecast that inflation will reach 2% and hold that level for two straight years from the year starting in April 2016, said people familiar with central bank’s discussions’’
  • Meiji Yasuda Life, Japan’s third-largest life insurer. plans  to boost unhedged foreign bonds by over JPY1t in FY2015, it says in outline of investment for the year started April 1
  • A slew of negative stories raised yet more questions over donations to the Clinton Foundation and hefty speaking fees paid to Bill Clinton during his wife’s tenure as secretary of state, a steady rumbling that could prove detrimental to her presidential aspirations
  • Sovereign bond yields mostly higher. Asian stocks mostly lower, European stocks, U.S. equity-index futures gain. Crude oil mixed, gold lower, copper higher

US Event Calendar

  • 8:30am: Durable Goods Orders, March, est. 0.6% (prior -1.4%)
  • Durables Ex-Transportation, March, est. 0.3% (prior -0.4%, revised -0.6%)
  • Cap Goods Orders Non-def Ex Air, March, est. 0.3% (prior -1.4%, revised -1.1%)
  • Cap Goods Ship Non-def Ex Air, March, est. 0.3% (prior 0.2%, revised 0.3%)

DB's Jim Reid completes the overnight recap

Despite risk assets shrugging it off, it was hard to ignore the softer data coming out of the US yesterday. The flash manufacturing PMI print of 54.2 fell 1.5 points from the March reading and was also below market expectations of 55.7. New home sales for March attracted plenty of attention as the -11.4% mom (vs. -4.5% expected) was the single largest monthly decline since July 2013. The oil-sensitive Kansas City Fed manufacturing activity index for April declined for the fourth consecutive month to a lower than expected -7 (vs. -2 expected) and the lowest since May 2009. Employment data was the lone bright spot yesterday with initial jobless printing another sub 300k print (295k), keeping the four-week average at 285k. Yesterday’s weaker data in fact means that the Bloomberg US economic surprise index has struck a fresh 6-year low after a modest rebound earlier in the month. The big release today is the often volatile durable goods orders and it’ll be interesting to see what we get as analysts firm up their Q1 GDP expectations ahead of next Wednesday. Just on that, it’s interesting to take an early look at expectations for the reading. With median estimates currently running at an annualized +1.0%, it’s the range that’s fairly impressive with analyst expectations anywhere from +0.1% to +1.7%. With the Atlanta Fed GDPNow model running at +0.1%, it’ll be an important release given the now data dependent Fed.

Moving on and in terms of earnings yesterday, it was a relatively mixed session as investors digested results out of Caterpillar (beat), Proctor and Gamble (miss), 3M (miss), PepsiCo (beat) and Dow Chemical (beat) in particular. There were some encouraging signs from earnings reports after the bell however as Microsoft and Amazon in particular reported above market, while Google rose 4% in after-market trading. We’ve highlighted the stronger Dollar effect this reporting period which again was highlighted in a lot of the management calls after, however it was also interesting to hear both PepsiCo and Caterpillar highlight weaker demand out of emerging markets, with both noting the instability in Brazil as a cause for concern. Caterpillar in fact also cautioned for a somewhat bleaker outlook for the remainder of the year, suggesting that demand in the remaining three quarters this year will be lower than Q1, with the impact from the downturn in oil markets potentially being felt more in the next quarter.

Having coming close to testing the 2% level intraday, Treasuries eventually ended 2.1bps tighter at 1.958%. The Dollar was a notable decliner meanwhile as the DXY finished 0.67% weaker for its second consecutive day of declines. CDX IG (-0.23bps) was a touch tighter but the main news in credit came post US close when AT&T announced that they had sold $17.5bn of debt in the third largest corporate bond offering on record and second biggest this year.

Elsewhere, a bounce yesterday in oil markets certainly aided energy stocks (+0.62%) as both WTI (+2.81%) and Brent (+3.38%) finished higher – the latter reaching a new YTD high. The news yesterday that a Saudi Arabia led coalition has resumed airstrikes on Houthi rebels in Yemen – after previous reports that they were halting the strikes – probably contributed with reports on Reuters suggesting that forces would continue to target the movements of the rebels.

Closer to home yesterday, the damper tone was largely as a result of some disappointing PMI indicators for the region. For the Euro-area a 0.3pts fall in the manufacturing print and 0.5pt fall in the services print caused to the composite to fall to 53.5 (vs. 54.4 expected). Regionally, it was a similar story as Germany’s composite fell 1.2pt to 54.2 (vs. 55.6 expected) and France’s composite reading dropped 1.3pts to 50.2 (vs. 51.8 expected). Our colleagues in Europe noted, however, that although the fall was disappointing, the Euro levels generally remained above their Q1 averages and are about in line with their GDP forecasts for Q1 (+0.5% qoq) and Q2 (+0.4% qoq). They also noted that the relative resilience of the Euro area PMIs compared to Germany and France, suggest that economics outside of the ‘big two’ performed well on average in April. Wrapping up the data, UK retail sales were slightly disappointing with both the headline (-0.5% mom vs. +0.4% expected) and ex-autos (+0.2% mom vs. +0.5% expected) coming in below market.

Continuing the theme of late, Greece remained firmly in the headlight yesterday. Ahead of today’s Eurogroup, headlines on the wires suggesting that Greek PM Tsipras is urging an acceleration of talks with creditors and claiming that ‘a big part of the distance has been covered’ in particular attracted some attention, however we still remain cautious around these sorts of headlines with comments from Euro officials conflicting. European Commission Vice President Dombrovskis said yesterday that ‘progress is not good’ and that ‘it will apparently take more time’ while another EC member, Katainen, noted that ‘you cannot negotiate if you don’t trust’. With the Eurogroup meeting today however, it’ll be interesting to see where talks currently stand.

Despite the fall most European equity markets yesterday, Greek equities (+2.39%) closed higher with the headlines yesterday while 3y (-242bps), 5y (-139bps) and 10y (-52bps) yields all rallied in hope. The Euro was also a beneficiary, finishing 0.92% higher. Elsewhere, bond markets took something of a breather in Europe after the huge moves on Wednesday as 10y yields in both Germany and France closed unchanged at 0.163% and 0.412% respectively. Peripherals were a tad more mixed as Portugal (-3.0bps) and Spain (-0.6bps) closed tighter, while Italy (+1.5bps) widened.

Taking a look at today’s calendar, the only notable release in the European session this morning is the German IFO survey for April. The Eurogroup meeting in Riga and the associated commentary surrounding Greece will require a lot of attention meanwhile. The aforementioned durable goods orders in the US this afternoon will be of much focus, we’ll also get capital goods orders at the same time. Earnings wise it’s the turn of American Airlines and Xerox.

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Arius.'s picture
Arius. (not verified) Headbanger Apr 24, 2015 6:17 AM

Diesselbloom hopefully understand the consequences of derivatives being unleashed ...


on a more substantive comment: until August Greek loans were being paid by new loans, that way the original 2.5 billion borrowed from Goldman to enter into EU become 400-500 billion today. 

From August on, the loans have been paid by Greek taxpayers and real money collected ... by now, they have collected all money from local government etc. etc. have turned greece upside down looking for pennies ... now it seems is time for game over.... my bet is that it has been a plan all along affecting matters much bigger than Greece....


as they used to say in ancient rome ... let the games begin ... to spice it we got all kind of other crisis coming up anywhere ... you pick the place

Haus-Targaryen's picture

So discussions are improving ... 

Manthong's picture

 They will eat themselves sooner or later.

That’s what parasites do.

Wolferl's picture

Throw those pathetic Greeks out of Europe already. It´s a worthless third world country and the Greeks are notorious liars and cheaters alltogether. They just don´t belong to Europe.

GMadScientist's picture

Okay, but don't cry to us when half the banks in Europe go mammaries dorsal.

Wolferl's picture

I don´t care about banks. And Germany´s economy is not dependent on financial services at all.

Headbanger's picture

Just say "tango uniform", OK?

TwoShortPlanks's picture

Varoufuckaduckis will probably hang from a rope

old naughty's picture

a time-waster, check,

a gambler, check 2,

and an amateur ? Do they mean he wasn't trained by the squid?

GMadScientist's picture

Fine: "Tits Up!"

Or, in this nutters case, "On the Fritz!"

GMadScientist's picture

You, sir, are a boon to the hashish industry, and thus a taxpayer, and thus on the hook for bailing out your financial services sector, whether you need them or not.

Wolferl's picture

Really? Now, let´s see what is happening in that case.

Crtrvlt's picture

"And Germany´s economy is not dependent on financial services at all."


keep telling yourself that




but they are dependent on exports, particularly to the rest of Europe

Nussi34's picture

Less and less so. Who cares about export that aren´t paid?

HowdyDoody's picture

The plug on Cyprus (aka bail-in) was pulled only after fixed term bonds held by German and French banks had been paid back.

Wolferl's picture

Step one. A wall around Greece. Step two. For the rest: 8 * 57 Infantrie, spitz.

Niall Of The Nine Hostages's picture

A wall could get very expensive, especially given most of Greece's boundaries are water. And eventually you'll run out of people with wealthy relatives who can pay EUR100,000 for an exit visa. It didn't solve the Soviet Zone's money problems by a long shot.

I don't suppose you've considered gas? I hear it works wonders. Might make a perfect solution to the Greek problem. 

Mountainview's picture

Under normal circumstances Grexit would be imminent. But what is normal in todays finances?

Michail Barmpas's picture

Your hate and racial discrimitation against Greece and the people of Greece will not save you. History will decide who is the liar and cheater. Cheaters are SIEMENS and Eldorado Gold Inc, who have evaded billions of tax in Greece of their Greek operations with the blessings of the FM ministers of their respective countries, Germany and The Netherlands, at the same time that they force Greek people to pay all their taxes !! How ironic? You are certainly giving the best example !!! . Liars are BILD who abstain to tell the public about the rate of interest of capital imposed on the Greek loans. Only Germany has made a profit of 80 bn EUR in the last 5 years by lending Greece with 35% interest (!!!), not to say about the Credit Loan the NAZI Germany took for the Bank of Greece and never returned !! UP TO NOW GREECE HAS PAID ALL OBLIGATIONS TO IMF, ECB, AND EC UNINTERAPTEDLY !! Not even 1 installment delayed ! Anyways, I will not spend more time to deal with you, we have a saying in Greece and you are ...fool of it. :)

Wolferl's picture

Lol, i don´t hate Greeks, i just don´t like their general attitude and lifestyle. And you´re giving a pretty good example of the notorious lying Greeks usually do. After they are out of the EU and the Euro i couldn´t care less what they are doing. Join the Turks, or the Russians or apply for membership to the African Union. Just get out of my EU, the Greeks have no clue how to act and behave in a union of western states and never will.  

Michail Barmpas's picture

Your hate and racial discrimitation against Greece and the people of Greece will not save you. History will decide who is the liar and cheater. Cheaters are SIEMENS and Eldorado Gold Inc, who have evaded billions of tax in Greece of their Greek operations with the blessings of the FM ministers of their respective countries, Germany and The Netherlands, at the same time that they force Greek people to pay all their taxes !! How ironic? You are certainly giving the best example !!! . Liars are BILD who abstain to tell the public about the rate of interest of capital imposed on the Greek loans. Only Germany has made a profit of 80 bn EUR in the last 5 years by lending Greece with 35% interest (!!!), not to say about the Credit Loan the NAZI Germany took for the Bank of Greece and never returned !! UP TO NOW GREECE HAS PAID ALL OBLIGATIONS TO IMF, ECB, AND EC UNINTERAPTEDLY !! Not even 1 installment delayed ! Anyways, I will not spend more time to deal with you, we have a saying in Greece and you are ...fool of it. :)

SDShack's picture

Derivatives and CDS are only important if you still naively believe that the rule of law will be followed. The fact is the rule of law was officially killed in 2008 with TARP and the boondoggle that allowed the bailouts of AIG, GE Capital, Government Motors, Fannie & Freddie, etc. This was doubled down on the world stage with the bail ins for Cyprus. The rule of law is dead. These motherfuckers will never execute Derivatives and CDS because they know that will destroy their Ponzi. So they will just violate the law by dictating to their minions the politicians to write new laws that bail them out. A never ending kick the can scenario. TBTF is global and there is no stopping it until there is revolution because people are starving in the streets.

entendance's picture

«A stupid person is a person who causes losses to another person or to a group of persons while himself deriving  no gain and even possibly incurring losses.»

more at

escapeefromOZ's picture

While criminals people are the ones that think that fixing a country problem means throwing more  citizens  out of work and force more IMF loans on a country unable to pay . Not only criminals in the EU but also reckless thieves .

DavidC's picture

For God's sake Varoufakis, grow some balls.


Smegley Wanxalot's picture

He's got at least one ball ... atop his neck.

macroeconomist's picture

Just because he refuses to bow down to the demands of the bankers and sign a death deal for this people, he is being called names now. 

Exactly why SYRIZA should simply get out, default on 100% of the debt and tell the bankers to go fuck themselves, creating total mayhem all over global markets. 

Ghordius's picture

completely disagree. particularly on "the demands of bankers", where you should note that it's countries, not banks that hold the vast majority of the Greek Sovereign Debt

and those same countries aren't asking for any interest on this debt until 2023, which makes Varoufakis trying to solve Greece's future problems instead of the present problems, imo

is he putting the Greek Finance Ministry in order? is he making sure Greeks have fair taxes, and that those taxes are collected? he is, after all, the Greek Chief TaxMan, besides being an EuroCrat among enraged EuroCrat collegues

Haus-Targaryen's picture

Varoufakis should tell all the countries that lent Greece more money at "gun-point"  to solve a DEBT problem (albeit at 0% interest) to fuck themselves.  

Default on 100% of it and play some Kamakazie Economics.  

Huge El oh EL at your "fair taxes" comment.  

Fair taxes would be spending tax money in your home jurisdiction.  Currently Greece is shipping a ton of its tax revenue North in the form of interest payments, and the North is shipping a ton of cash South in the form of bailouts.  Both peoples are getting butt-fucked and the only people benefitting are the assclowns in Brussels & the Bankers in FFM, London & New York.  

Ghordius's picture

which North? just asking if you did the math of who is paying what to whom. but again, does V have the authority of reneging any debt? no

Haus-Targaryen's picture

He is the Finance Minister.  In the Parlimentary System, the Prime Minister is just the "first of equals."  Technically, within Greece's Parlimentary system, the Finance Minister is the head of the Government's finances, and is held to account by the government through the Parliment.  Thus, it is his peragotive to renig on the debt or not to, and if the Parliment doesn't like it, they can replace him with someone else who will.  


Ghordius's picture

that's a huge misunderstanding you have on the "prerogatives" of the Executive Power. The Executive follows and applies the law. Debt, particularly sovereign debt, is written in law . In other words, it's legitimate

so no, he has no authority on reneging any sovereign debt. That's purely a matter for the Legislative

perhaps your misunderstanding stems in the use of the word "Government". in the US, it means all three branches. in Europe, we use it for the "Administration" only

Haus-Targaryen's picture

I completely understand how the term "Government" in Rainbowland and in the USSA differs.

He is part of the Greek ekecutive branch.  He is not the executive, there is no "the" executive in a Parlimentary system.  While Greece's parliment agreed to the reforms required to secure financing through the bailouts, the terms of the Greek bills control.  

The order sent through Parliment contained the terms "are to be repaid" referring to the obligations of the Greek state.  You are 100% correct.  However, Pensions and salaries are also, per various other acts of Parliment "are to be repaid."  So if you have $200 in obligations and $150 in cash, in a parlimentary system, and the executive is compelled by the parliment to pay both -- this is where executive perogative comes in.  

He can either choose which one gets paid, or he can go to the Parliment and ask for their advice through legislation as to the payment priority between the two obligations which he is already required to repay.  

E.g., in a Parlimentary system when the executive is required to act in two mutually exclusive ways stemming from Parliment, is exactly what the perogative is for.  We aren't talking about delegation or even secondary legislation, but the executive is chared with executing the laws of the land in a Parlimentary system.   

Memedada's picture

I agree on all your above comments. Just one little correction.

Yes, there is ‘an executive’ in a parliamentary system. It’s the elected parliament itself – those who makes the rules/the laws that the ministries implements. Minister actually means servant of the people – the one who carry out the orders of the parliament (the “executive”).

"The executive" = "The majority" (in a parliamentary system).

Chump's picture

You should remember that all sovereign lending is unsecured regardless of the sovereign-in-question's government structure.  Per your comment, all Greece's legislature has to do is pass a law making said debt illegitimate, and it therefore is.  

No, Varoufakis does not personally have the power to do this, but in this case that seems to be a distinction with very little difference.  All my humble opinion, I know very little about various government forms in Europe and I stand to be corrected.

macroeconomist's picture

Targaryen, you wrote exactly what I'd have written, thnx. At the moment, Greece owes to Troika, not the banks, but that is because the Troika paid the banks with the bailout money, and now they want Greeks to pay them. If Greece says fuck off, they'd have bailed out their own banks, which is not Greece's problem at this point. 

Ghordius's picture

and all this hides a lot of the IMF's doings under the umbrella of "The Troika", and forgets one little thing: was anyone... forced?

but even more important: what is the state of the Greek banking system?

so again: Varoufakis stated job is to care about tax collection, setting up a budget, caring for the financial state of Greece in general, including it's banking system

is he doing all that? or does he and his cabinet minister collegues prefer to grandstand on something that would have time until 2023? just asking

of course, if the whole purpose of the commentariat is to cheer for something to go "WHAM!", then Varoufakis is doing a terrific job

macroeconomist's picture

Whether or not anyone was forced is NOT the problem here. What V needs to do in Greece regarding tax collection, and budget is NOT the issue either, you are distorting the discussion. V CANNOT fix Greek economy before the impossible debt burden is removed, whatever he does. If I knew as a Greek that my taxes would be used to pay the Troika, I would not pay a penny.

Posted above, but once again: 


"Whatever anyone might say about the responsibility of prior governments for the initial recession (one that the United States and almost all of Europe shared), it was the troika (the ECB, European Commission, and IMF) that turned it into a Great Depression for Greece. They really should accept some responsibility for the current situation, instead of simply insisting that the Greek government continue with a failed program as if there had been no election."


This is the whole point Ghordius. 

Ghordius's picture

"V CANNOT fix Greek economy before the impossible debt burden is removed"

first, is his job to fix the economy? second, is debt without interest a burden?

yes, there has been an election. but no, I do not see a Greek law passed about that debt. I'd like to see a draft budget, nevertheless

macroeconomist's picture

"second, is debt without interest a burden?"

Come on Ghordo, you are better than this. Would you have a burden if you owed 180% of your annual income with 0% interest? (Not that the Greek debt has 0% on it anyway)

Joe A's picture

"that it's countries, not banks that hold the vast majority of the Greek Sovereign Debt"

Yeah Ghordius. That is because EU countries and EU taxpayers bailed out German and French banks that made bad investments in Greece. Did you ever get bailed out by your country after you made a bad investment? I didn't.

Sounds like rogue capitalism to me. You know, the one that privatizes profit and socializes debt.

Ghordius's picture

your comment has some merit. Ireland was a case in point, imho. That damn Anglo-Irish Bank should have be let to default

nevertheless, rogue or not, capitalism starts with respecting contracts, doesn't it? but again, my point here is that the Greek Finance Minister has a job, and that job, in regard to defaulting on sovereign debt, consists in advising the Greek Parliament, not deciding it

meanwhile, is he doing the main part of his job as descripted?

Haus-Targaryen's picture

Ghordo, I've directly asked you this question a few times before, and you have yet to ever answer it without a question in reply.  (Aka lacking basic humanity 101)

If Greece leaves the EUR, and blows up the whole system, will you come back on here and admit you were wrong, or will you just never come back?

Ghordius's picture

yes, I'll be back (Terminator voice) in such a case. or anyway. though the thing I'm missing is the "blows up the whole system". which system? there are several ones, and some are in competition with each other

as I wrote elsewhere, Greece could find itself with a Drachma backed 1:1 with USD, as Hong Kong. how would the esteemed commentariat judge such a case?

Haus-Targaryen's picture

I would love to watch the Greek central bank try and maintain a 1:1 peg against the USD. 

Ghordius's picture

the way Hong Kong does it it's easy and straightforward. take in one dollar, issue one HKD

nevertheless, my question is still there: would it be better or worse?

Ghordius's picture

a handshake and a transactions are contracts, too. sustainability of contracts is not a legal matter