Greek Deal In Limbo After "Serious Disagreement" Between EU, IMF

Tyler Durden's picture

On Monday afternoon, news broke that the IMF looked to be splintering from the rest of the Troika over just what conditions must be met in order for Greece to receive a €7.2 billion tranche of aid the country desperately needs to pay salaries, pensions and, ironically, the IMF. According to FT, Christine Lagarde and company are set to demand that Athens’ European creditors write-off enough of their Greek debt to bring the country’s debt-to-GDP ratio down to a ‘sustainable’ (whatever that means in the Greek context) level over the next several years. Otherwise, the organization argues, disbursing aid to Athens is equivalent to throwing money into a black hole, as the country’s fiscal situation is still in dire need of reform.

Of course much of what Greece owes in May is due to the IMF itself and so, as we remarked yesterday, “Greeks are expected to smile and nod knowingly at this latest hollow IMF threat, in which it is now unclear if Lagarde is the Troika's good cop (demands a debt haircut) or bad cop (refuses to pay Greece any more).”

Today, we get yet another indication that negotiations are now not only complicated by Greece’s unwillingness to cross Syriza’s “red line” campaign promises, but by friction between the country’s creditors who, in an irony of ironies, now appear to be at odds over their own set of "red lines." 

More via Bloomberg:

EU, IMF failing to coordinate means compromise in Greek talks not possible, a Greek govt official says in e-mail. 


EU, IMF have different red lines: IMF insists on pension system overhaul, labor market deregulation; EU Commission insists on primary deficit: Official


Serious disagreement between EU, IMF creates deadlock in negotiations

This means it's now Greece's turn to blame creditors for the intractability of the negotiations:

"Serious" policy differences between Greece's two major lenders - the European Union and the International Monetary Fund - are preventing the country from reaching a compromise with lenders, a Greek government official said on Tuesday.


"The result is that the institutions have red lines everywhere: pension, labour (IMF), and primary surplus (Commission). Against this background there cannot be a compromise. The responsibility belongs exclusively to the institutions and their weakness in coordinating"...


The Greek official said the IMF was being insistent on pension and labour reforms that Athens opposes, while the European Commission was more leninent. The Europeans, on the other hand, were being strict on the target for a primary budget surplus while the IMF was less worried about that, the official said.


The IMF also wants Greek debt to made viable through a writeoff of debt, while the European Commission is against such debt relief, the official said.

Meanwhile, Tsipras is said to have spoken with both Lagarde and Angela Merkel over the phone even as Germany unleashed the Schaeuble who promptly threw still more cold water on any remaining hope for an imminent breakthrough: 

Greece may not be able complete the preparatory work needed for an agreement on financial aid before euro-area finance ministers meet in Brussels next week, German Finance Minister Wolfgang Schaeuble said.


“The Eurogroup will take up these matters only on the basis of the comprehensive report by the institutions,” Schaeuble said at a press conference in Berlin Tuesday, referring to the European Commission, the European Central Bank and the IMF. “I’m rather skeptical that we can get there by Monday, but I’m not ruling it out.”

As a reminder, Monday is D-Day, as Athens must make a €780 million payment to the IMF and unless the IMF agrees to effectively pay itself by loaning Greece more money, that payment will be missed at which point "all bets are off."

And Greek bonds not happy:

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Haus-Targaryen's picture

Some kiddie-pony ride, different circus.  You get tied to a pole and drug around in circles while the animal you are riding is chasing a carrot it can never catch.  

Someone will step in last minute and save the day.  You any of us think that this will go away without Yellen printing some more Yellenbucks to paper over this you'Re fooling yourself.  

Soul Glow's picture

The diminishing returns of funny money printing will reach escape velocity little grasshopper, don't you worry.  There will be an inciting event that will light this tinderbox of fiat paper debt bullshit into flames.  And when it goes, be ready for anything.


Just read your bio -

It is a foregone conclusion the current monetary system is running on borrowed time. It will collapse, slowly at first, and then quite quickly thereafter. This is not scary, as those who are in "the know" can prepare for it, and make a ton of "money" when it does collapse based off of everyone else's stupidity. What is to follow is what scares me.

Don't be scerd.  The meek will inherit the earth.

Haus-Targaryen's picture

So the kid riding the pony ride pony tries to shove his popsicle up its ass?  This kind of tinderbox ending?  

knukles's picture

Ey!   Eff ah youse a give a me more ah moneeee then we a pays a you, ho kay?

Latina Lover's picture

I suspect that the Greeks are expecting vasoline and a kiss before they get it good and hard from the EU.  Welcome to the real world.

TeamDepends's picture

Limbo is the perfect metaphor: How far can you bend over?

Wolferl's picture

Throw those pathetic Greeks out of Europe already.

Poundsand's picture

Just change "IMF red line" to "Obama red line" and I think you will understand how the Greeks look at it a little better.

whotookmyalias's picture

Nothing like a little foreign dept controversy to commemorate The Battle of Puebla (Cinco de Mayo for you margartia drinkers).

old naughty's picture

soon Russia and US will join...five ring circus.

Olympia !

mvsjcl's picture

"IMF insists on pension system overhaul, labor market deregulation; EU Commission insists on primary deficit: Official



Pension System Overhaul = less money for pensioners.

Labor Market Deregulation = less money for laborers.

Primary Deficit [Reduction] = less money for everyone [except bankers]




insanelysane's picture

During the boom the Greeks did not have any fiscal responsibility.  They fudged the numbers to get in the EU and even then the EU had to "relax" the qualifications for joining.  Obviously the Russians wanted too much so the Greeks went back to their comrades in the EU.

MonetaryApostate's picture

What makes you people think the elite give a flying rats ass about some banks or bankers?

NO, they are going to sacrifice those false gods so they can retain their wealth & power...

TheGreatRecovery's picture

Some people say, "well, that's how African Americans speak".  But who TAUGHT THEM to speak English that way?  The southerners, in Florida, Georgia, Alabama, Missisippi, South Carolina, Virginia.  The African Americans didn't speak English before they crossed the Atlantic to the USA.  So that way of speaking is CRACKER speak.  And there's nothing prettier to me than an Alabama drawl.

"Ah lacks to get theah, fustest, with the mostest."

Meremortal's picture

Preparing for mon-ageddon is wise. As long as you also prepare for muddle-through, which is more likely.

One should always prepare for all likely and even most unlikely contingencies. 




Oh regional Indian's picture

Bodhisattvas, yes they do indeed.

KnuckleDragger-X's picture

As long as Greece keeps playing the EU will hold the whip...and use it. It's time to walk away and the difference for Greece is whether they are badly wounded or dead.....

Mountainview's picture

The EURO Greece farce has reached a new top. But it's like Kabuchi theater it lasts and lasts..

FlipFlop's picture

If you read ZH, Greece should have left EZ already 2010, and thereafter more or less regularly every 4 weeks. And you blame meme for lacking credibility...well, waiting for the end of the world makes more interesting reading. Sure, besserwisser crowd :)

Now. Pls down-vote me to satisfy your impulses.

i_call_you_my_base's picture

"and thereafter more or less regularly every 4 weeks."

This statement lacks credibility. There was a lull for years.

Oh regional Indian's picture

The digital money thing has really gone too far, I just realized.

The money the IMF "lent" to Greece was created from nothing.

The money the banks lent to greece were created from NOTHING.

And yet, they are willing to push a nation to default, starve it's people, sicken them....for a ponzi mirage?

Please do a search and watch an old documentary about Jamaica and the IMF called Life and Debt. Eye popping.

The money noose is tightening all around in the western world and set to ease here in the Eastern world I think. We are still paying 14% on average for Mortgages in India.

Think what that implies.....huge things....moves...

Meanwhile, Sequence 14...Spaced out...

Luckhasit's picture

That's the whole idea behind development banks my man.  You loan out more money than can be repayed. 

Unless your South Korea, but they are a vassal so the rules is excluded from them.

Oh regional Indian's picture

"You loan out more money than can be repayed"...

Exactly, good old loan-sharking but in italian suits and gulfstreams.

TheGreatRecovery's picture

Amen.  Then, when the loans can't be repaid, you sanction.  And then, when the natives get hungry enough, you back native politicians who will invite in your hedge fund brethren to "rescue" any businesses of value, by taking them away from the natives and giving them to you and them.  What a great game to play, if you happen to be a sociopath.  Always bright futures for sociopaths.

TheGreatRecovery's picture

Sociopaths "doing God's work". Which God NEEDS His sociopaths to do, because after He created 100 billion galaxies, with an average of 100 billion stars each, which works out to 10 thousand billion billion stars, He obviously got Himself in way over His head with so much infrastructure and could no longer afford the time to actively run His 1,546,388,090,422-th favorite planet.  So He needed His sociopaths to run it, by making sure that His sociopaths got all the coke and hookers and jet airplanes and yachts and castles and photographs taken at red carpet gala and Mercedes Benz's and Color TVs and Nights on the Town.  What I haven't figured out is, WHY does He love sociopaths?  Is it because He is a sociopath?  And if He is, then is that because of His upbringing or just because of His genes?  I mean, are sociopaths humanity's evolutionary destiny, and in the future, will Homo Sapiens evolve into Homo Sociopath?  Watch out, Borg, you ain't seen NOTHIN yet!

HopefulCynical's picture

And yet, they are willing to push a nation to default, starve it's people, sicken them....for a ponzi mirage?

Psychopathic, parasitic, nationless Pharisees. They're not just willing - they're EAGER to do so.

Soul Glow's picture

Naw and the Greeks aren't even getting a reach around while the IMF's all up in their Grexit hole!


kb0oxt's picture

they will not let the greeks go under. hype

mcbond's picture

bancruptcy imment

 Investors shed Greek bonds and stocks on Tuesday on reports that the International Monetary Fund may cut a funding lifeline to Greece unless its European partners accept more debt writedowns.

Greek officials ask key creditors for swift loan release as debt repayment deadlines loom



Dollarmedes's picture

I would thank the IMF for bringing this to a close, but how many times has this football been yanked away before? I'll believe a Greek default when I see one.

Oh regional Indian's picture

Unless Syzria has 1,000 pound steel balls and are ready to change the course of human history, I think we'll see a compromise.

2017.75 ain't here yet...

chubbar's picture

FYI, but I think Martin Armstrong (whom I believe you are referencing) called it for 2015.75, and THAT DATE IS almost here.

SDShack's picture

Yep, I'll believe it when I see it too. I seriously suspect a last minute bail-in like Cyprus. But I've always said watch out when sociopaths start feeding on each other. IMF vs EU is an example of what I am talking about. If true, then it might be a tell that the bankers are actually starting to lose control of the Ponzi and are willing to sacrifice each other in a desperate attempt for one to be the last man standing. No matter what, Greece is fucked.

Kirk2NCC1701's picture

EU/ECB and IMF -- Greece caught in the "STRAIT OF MALAKA"

(Not to be confused with Strait of Malacca)

Burt Gummer's picture

Fuck it man, fuck the EU, just invest all your money in North Korea like Jim Rogers.....

Dr. Engali's picture

Greeks? They're still here? When does Ebola enter the scare cycle again?

froze25's picture

There is a Ebola Czar for that now, so just like the anti war left it evaporated into oblivion.

Soul Glow's picture

Americans think greeks - Know how to make great food, are lazy, live in paradise (deservedly is in question due to percieved laziness), have a blue and white flag, and have old buildings.

Other than that Americans don't care.  

Long live the National Debt!


thatthingcanfly's picture

Fukushima fish infected with Ebola crossed the Bosphorus straits this morning to invade Ukraine and eat schwarmas...

HamRove's picture

It's coming up. They're on carzy ISIS guy in Texas right now. Ebola will be back next season on an all new episode.

HopefulCynical's picture

Ebola will be back next season on an all new episode.