Did Greece's Time Just Run Out?

Tyler Durden's picture

Early last month, negotiations between Greece and creditors took a decisive turn the worst when the IMF broke from the rest of the troika on the feasibility of a third Greek bailout program. 

The split came when Poul Thomsen, head of the IMF’s European department told EU creditors that Greece is so far off track economically, the Fund was not only against a new bailout for Athens, but in fact was considering whether or not to withhold its portion of remaining funds under the existing program.

Thomsen said the fact that Greece was on track to run a deficit when it should be well on its way to running a budget surplus suggests to the IMF that EU creditors should be prepared to write down their Greek debt so as to make the country’s debt-to-GDP ratio more ‘sustainable.’ Unsurprisingly, Europe wasn't particularly enthusiastic about the idea.

Thomsen’s remarks — which were delivered to EU finance ministers at an April meeting in Riga — were followed up by reports that the IMF had informed the ECB and the European Commission that the Fund would not be participating in a third Greek bailout program. 

Earlier today, those reports were confirmed as the IMF has withdrawn its team and sent its lead negotiators back to Washington. Meanwhile, a meeting between Tsipras and European Commission President Jean-Claude Juncker was billed by one EU official as a "last attempt" to convey the urgency of the situation to the Greek PM. European Council President Donald Tusk (who met with Tsipras on Wednesday) has also voiced frustration at Athens' apparent belligerence in the face of economic oblivion. FT has more:

In a series of meeting in Brussels, Mr Tsipras was told his government must quickly decide whether to accede to a raft of economic reforms or face bankruptcy.


“We need decisions not negotiations now. It’s my opinion that the Greek government has to be, I think, a little more realistic,” said Donald Tusk, the European Council president, who met Mr Tsipras privately on Wednesday. 

The IMF was equally direct, announcing its lead negotiators had returned to Washington and citing “major differences” and a lack of progress in negotiations. “There are major differences between us in most key areas,” said Gerry Rice, the IMF spokesman. “There has been no progress in narrowing these differences recently.”


Officials believe that if no deal is struck by early next week, there will not be enough time for Greece and other eurozone parliaments to pass the needed legislation for Athens to access rescue funds before two big bills fall due: a €1.5bn loan repayment to the IMF on June 30, and a €3.5bn bond redemption on July 20.


Jean-Claude Juncker, the European Commission chief, met Mr Tsipras on Thursday in what one EU official characterised as a last-ditch effort to get the Greek leader to accept a deal. “If the process was working properly, the president would not have had to have a meeting with Tsipras today,” the official said.

Meanwhile, in Germany, lawmakers (who are increasingly defecting to the Schaueble camp as it relates to Greece) have apparently ruled out a third program for Athens. Here's Reuters:

The German government is against a third aid programme for Greece under any circumstances, even if there was an agreement between Athens and its international lenders on a cash-for-reforms deal, the German mass daily Bild reported on Thursday.


German Chancellor Angela Merkel is facing growing opposition among her ruling conservatives to granting Greece any further bailout funds.


Athens' unwillingness to accept further economic reforms is turning a growing minority of Merkel's own conservatives against the prospect of unlocking a final tranche of Greece's second bailout or agreeing to a third aid programme.

It now appears the only hope for Tsipras is to convince the ECB and the European Commission to tap existing EU bailout facilities. Here's Reuters again:

The current second aid programme could be extended and be broadened with funds from other programmes such as the 10.9 billion euros ($12.32 billion) that were originally designed to rescue Greek banks.

However, this could only happen if Athens was willing to implement substantial reforms, it added.


If Greece were to accept the plan, lenders would aim to unlock 10.9 billion euros in unused bank bailout funds that were returned to the European Financial Stability Fund. This would enable Greece to cover its financial needs through July and August, the sources have said. 

What happens after that is anyone’s guess because as we’ve shown, whether Greece kicks the can two months or two years it really doesn’t matter because if Athens opts to remain in the EMU, Greece is doomed to debt servitude for at least the next four decades.

Unsurprisingly (because this is Europe after all) German lawmakers now seem to be against an extension of Greece’s current program, which directly contradicts the 'solution' discussed above:


Through it all, Tsipras likely believes he can buy a bit more time in order to cement an agreement with Syriza party hardliners. Accepting a 'deal' without first ensuring it can pass the Greek parliament could be a political disaster and may be followed, in relatively short order, by social upheaval.

Whatever the case, creditors are prepared to pull the plug. Here's Donald Tusk to sum up the mood in Brussels: 

“There’s no more space for gambling, there’s no more time for gambling. The day is coming, I’m afraid, where someone says the game is over."


*  *  *

Here's Tsipras earlier today at the EU CELAC Summit. He does not appear to be having a good time.

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Groundhog Day's picture

We can't pay you 300 million today but through osmosis money will funnel into our accounts in 2 weeks and we will have all the 600 million in 2 weeks...double finger cross promise


now lets get ES up to 2200...mommy needs a pair of new shoes and an aston martin

two hoots's picture

Warning to all economies who's citizens want the government to provide for their every need.....read Greece. 

bbq on whitehouse lawn's picture

Warning to politicians sometimes its you who must sleep in the bed you make. Germans will be pissed but Greece will never be alowed to leave.
Thats what this is all about German politicans like merkel will just have to take the hits of doing the "right thing" for the greater EU. Sorry you know this was the game and the devil gets his do.
Its not about Greece its about Germany. Its Germany's time that is running out.

Looney's picture

Tsipras and Varufakis are either incredibly smart or incredibly stupid. Or both? ;-)


Mountainview's picture

Tsipras has actually a good time. His citizens and enterpreneurs have withdrawn all the cash from banks and hidden in their freezers or abroad. The banks balance sheets have been repared by ECB emergency fund and when the day of reckonings arrive, European Institutions, banks and the IMF will have their real bad time! I am waiting for the show! (down)

Wolferl's picture

Throw those pathetic Greek dead beats out of Europe already.

Bumpo's picture

Then what? The EU won't even get it's principal back, much less its interest. Plus, there is no mechanism for throwing out an EU member. I keep hearing how Greece's time is just about up. I'm sorry, seems to me the EU's will have much larger problem if Greece just walks away, and says 'Meh".

Wolferl's picture

1. If all the memers of the EU besides Greek decide that Greece is out, they are out.


2. If Greece is out, they still owe all their debt denominated in Euro. And the Greeks have enough assets to sell to pay back their debt.


3. Without the EU the Greeks will be nothing else than a third world country.

Bumpo's picture

1. It's not unanimous, obviously, without the Greek vote. So, yes, if Greece votes to leave it's unanimous.

2. They don't owe shit if they default on their debt

3. We will see ...

Wolferl's picture

1. Greece will have no vote on that.

2. Almost all of their debt is in Euro, which is a foreign currency for them and was put under "English law", not Greek, so they are simply not able to default on that.

3. Greece is a pathetic third world country already, so no one "will have to see".

Bumpo's picture

Im sure many will love to visit Greece when the new Drachma fetches 2 to the Euro. There's nothing the EU can do if Greece tells their creditors to pound sand. Their debt was based on fabricated creditworthiness by Golman Sachs, and can be argued null and void ...


Or better yet, read up on the old Zerohedge article on 'Odious Debt" ... http://www.zerohedge.com/news/2015-04-08/odious-debt-has-finally-arrived...

Wolferl's picture

Make that 2000 Drachmas to the Euro and i agree. Greece will be like a cheap bordello in the med, much like Thailand.


And that "odious debt" argument is just an invention of brain dead communist who just do not want to pay back what they owe. Just like every good dead beat on this planet.

Bay of Pigs's picture

Yeah, we get your point. Maybe just STFU already?

nemesis2012's picture

Hey you fuckin weasel. I'd like to see you squirm when the fuckin derivitaves explode in your ass!

nicxios's picture

Pay back your debt you deadbeat nazi. 

What's funny with Germans is hubris. They beg the world to knock the snot out of them and the world accepts.

rodocostarica's picture

2 to the Euro? Really? i would guess more like 20-25. May think of an island vacation in Greece at that point.

nemesis2012's picture

Fuck all of you mofo's- dont come to Greece-we dont your fuckin charity money. STICK IT WHERE THE SUN DONT SHINE!

Jaspergers's picture

You will get what you got last time you tried, malaka. And if this isn't odious debt I don't know what is.

tmosley's picture

That's like throwing someone who's on fire out of a burning building.  Not really helpful, but fun to watch from the other side of a large body of water.

LawsofPhysics's picture

If it saves the building, it could be useful, morevoer, are you suggesting that there is no value in entertainment?  I disagree.

wiser's picture

this is the storm before the deal.... buy greek paper

Sudden Debt's picture

Nonono... It reminds me of that cat I ran over last week...

First... I saw it about 50 meters in front of me...

it could still run to the left... or the right... and get away...

but it was thinking what to do...


accidents... karma... shit happens... 

So I felt bad and went for a look...

it was still alive...

And then I remembered there was a vet 2 streets away...


What did "they" ever do FOR ME??!!?

So I did the next best thing...

I picked up the cat...

and placed it in the middle of the road. Stood back and waited...


HE DIDN’T EVEN STOP!! that bastard... 

Like I did, not saying that I’m a hero but I DID STOP!!

Long story short, that man clearly killed the cat...


Now, some people will say "NO BIGGY! A CAT HAS 9 LIVES!!"

But... I think santa and the easter bunny already had a go at that fact because that cat wasn’t moving anymore.


So what I mean is this: Santa and the Easter bunny made sure Greecd won’t get up anymore...


You understand now?


walküre's picture

You're such a meany. I sentence you to 48 hours nonstop watching of "cute" cat videos!

After that, your real punishment starts. You have to watch the Women Soccer WC and the sound cranked so you can hear the bitches scream and moan even better!

tenpanhandle's picture

Beware of Greeks bearing paper.

julian_n's picture

unless it's toilet paper - in Venezuala

Mountainview's picture

At 40 cents a EURO, yes.

Abitdodgie's picture

Greece will never default , it is like saying we will have a cashless society how would you pay for the drug trade (800 billion) slave trade (500 billion ) and the counterfit trade (500/800 Billion) and all that control . Greece is part of the EU now shut the Frak up.

TwoHoot's picture

Imitation is the sincerest form of flattery.

i_fly_me's picture

"osmosis" ... good word choice.  Greek, right?  Very charitable.

Lady Jessica's picture

Isn't it the EU whose time is running short, what with the size of the ELA withdrawals nearly about to exceed the Greek banks' balance sheets?

Groundhog Day's picture

they'll just flip the balance sheet numbers.  problem solved.... fom negative to positive with a few keystrokes


es 2200 please

knukles's picture

Agreed.  The Greeks already got raped pillaged and burnt alive by the ubiquitous "Them". 
If the Greeks don't "Pay" "Them" with which they've not got (hint), it's "Them" that comes up short, so "They" (also known as Them) get to give the Greeks more money to give back to "them" and pretend that everything's all sooper dooper A-OK, great, wonderful and damn nice.

                   Look, a squirrel!

Winston Churchill's picture

Doesn't matter, the creditors have reached the"fuckit' moment that comes in all bankruptcies.

i'm going to buy some more PMs before my paper promises combust.

Killer the Buzzard's picture

Maybe Varoufakis is the Kwisatz Haderach?

Tarzan's picture

Let me correct this for you, ISN'T IT THE WORLD WHOSE TIME IS RUNNING SHORT.....

Pretend and extend, that's all they have, because corruption and phony numbers will never add up and when one falls we all fall. That's been the plan for 100 years, mutual destruction...

So, the game continues, on and on, as the algos predict the markets by the headlines, LMAO


Greece Feigned Deal Progress, Launched Rumors To Avert Bank Run

Did Greece's Time Just Run Out?

With Greece "Everything Must Go Right From Now On" To Avoid Market Shock

Greece: Out Of Cash, Out Of Time, Out Of Options

Eurogroup Gives Greece 10 Day Ultimatum: Apply For Bailout Or Grexit

ECB Pulls The Trigger: Blocks Funding To Greece Via Debt Collateral - Full Statement

Greece Faces Moment Of Truth: Troika To Present Final Offer On Wednesday

Greece, Troika Submit Conflicting Eleventh Hour Deal Proposals

Greece Admits It Will Not Make IMF Payment On Friday, No Deal Expected Wednesday

Sunday Deal Deadline Dies As Greece Prepares Desperate "Draft" Plan

Greece Will Default On June 5 Without Deal, IMF Leaks

Greece Effectively Defaults To IMF Using SDR Reserves To "Repay" Fund; 1 Month Countdown Begins

Tomorrow Greece Decides: Europe... Or Russia

ECB Threatens Athens With Bank Funding Cutoff If No Deal In One Month: February 28 Is Now D-Day For Greece

"Completely Absurd" To Think Greece Won't Default In May: Official

"We Have Come To The End Of The Road" - Greece Prepares For Default, FT Reports

After Greece Warns It May Get Funds From Russia Or China, Europe Said To Propose 6 Month Extension

Greece Faces D-Day On April 9, Will Default Within 30 Days Of Missed Payment, BofAML Says

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

Greek Deal Falls Apart After EU Says "No Way Forward", No Eurogroup Statement; Greece "Questions Merit" Of Bailout Extension

Greece Faces Cash Crunch This Friday Without "Plan A Or Plan B": What Happens Next

Greece Warns It May Default On IMF Loan As Soon As Next Week

Greece Requests Six Month Loan Agreement Extension, Denies It Requests "Memorandum" Extension

Greece Misses 1st Commitment: Delays Reform List Delivery Until Tuesday

Greece To Run Out Of Cash In Under One Week

Stocks Go Green, Euro Spikes On Report Greece To Ask Request Program Extension Tomorrow

"The Greek Endgame Is Here": Probability Of IMF Default Now 70%, Says Deutsche Bank

Greece Gambles On "Catastrophic Armageddon" For Europe, Warns It "Only Has Weeks Of Cash Left"

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

Dijsselbloem Crushes Greek Deal Optimism, Says Deal "Not Theoretically Possible" This Week

Here We Go Again: Greece Will Be In Default Within 15 Months, S&P Warns

Greek Deal On Monday "Not Possible" MNI Reports Despite Troika Attempt To Reconcile Differences

What Ordinary Greeks Think Of Friday's Deal: "We Went Through Two Months Of Agony To Realize We Are Still A Debt Colony"

Greek Government "Not Holding Out Much Hope" For Monday Even As Market Signals Deal Imminent

IMF Payment Sends Greek Yields Lower; Athens Warns "Next Month Is A Different Matter"

Eurogroup Meeting Delayed, Reportedly Due To Greeks "Sending Wrong Letter"

EU Official "Denies" Report Of "Greek Deal Pending" Rumor Which Sparked Stocks, Euro Surge

Ward no. 6's picture

today's  modern Diogenes of Sinope

oudinot's picture

Diogenes would never had  bothered himself with trivial commerce issues...

The guy lived in the equivalent of a cardboard box in Corinth and was happy as well as admired by many including Alexander the Great.....

Alexander was in Corinth and eveyr philosopher, sophist was there to 'suck up to him'; only Diogenes, a Stoic, more respected than any didn't bother to attend . Eventually, curious,  Alexander and his huge entourage went to find Diogenes - he was lying in the sun around his miserable hut.  Alexander the Great asked him what Diogenes wanted of him (Alexander was extraordinarily generous if he asked one  what one wanted,  one could have asked for anything): Diogenes, replied,'You are blocking  the Sun, can you please move? "  The entourage gasped.  Then Alexander put his head,  blonde hair back guffawing ,laughing, replying, "If I were not Alexander , I would be Diogenes."

Wolferl's picture

Blond hair? Typical Greek, me thinks.

oudinot's picture

Yes, most Macedonians at that time were blond and blue eyed-Aryans.

Ptolemy , one of Alexander's generals, another Macedonian, took Egypt as his Kingdom after Alexander died.

So Cleopatra was a Ptolemy 250 years later and was, like most Macedonians, blond, blue eyed as the Ptolemy family intermarried.

The Greeks today are nothing like their classical predeccessors.  They are Turkish,Bulgarian, Gypsy, a motley stew of other ethnic groups .

Bastiat's picture

Oh man!!  I remember that painting from when I was a kid and haven't seen it since.

The Delicate Genius's picture
The Delicate Genius (not verified) Jun 11, 2015 11:40 AM

Dear Greece:

Run, do not walk, from the EU and the Euro, into the loving arms of the BRICs which, along with Stanistan, is the future.

knukles's picture

Any everybody is forgetting just how the Natural Gas Pipeline (remember, that's the thing once again re-started the whole mess in the ME of late) deal that the Rooskies would like to cut is for Their (Russia's) pipeline to flow through Greece so that the Gulf's (America's "friends") doesn't.

Some really nice berthing waters right there in Athens, kiddies!

Just sayin', don't forget there's more to this then the EU/Troika?Greece affair, and I am damned certain (doesn't take a whole lot of imagination and a little bit of Fuck the EU) that the Vladster is the guy most focused on that dynamic.  You know, that silly NATO/Old Soviet Empire stuff.


FlacoGee's picture

You are aware that the EU killed the South Stream...  correct?

As long as Greece is in the EU, the EU will not allow any pipeline to run through its territory without approval.

Go ask Austria, Hungary, etc. 

Leaving the Euro Zone and dropping the Euro currency is one thing.   Leaving the EU is not a possibility.



The Delicate Genius's picture
The Delicate Genius (not verified) FlacoGee Jun 11, 2015 12:07 PM

Greece leaving the EU is not only a possibility, it is the best option.

Russia may build another pipeline through, they may not, Europe can switch dependencies from Russia to Qatar and/or Israel...

Russia is looking south and east.

A handful of chinese and russian war ships ought to dissuade nato from an outright attack, and as for a 'color revolution' - CIA agents would be beaten to death in the streets by Golden Dawn.

Vergeltung's picture

The BRICs don't want those dopes either. Who wants an insolvent socialist mess?

nemesis2012's picture


pods's picture

The math will not be different no matter how many ways you look at it.
Greece is fucked, the Euro is fucked, and so is the Eurozone.  

Nobody can let this debt be written off, and Greece cannot afford to carry it (interest).

Sorry fellas, no more fancy dinners and doublespeak.

The creditors are going to pull the plug?  That is a good one. Greece is on the hook for so much that the creditors are waking up at night with the sweats.

Wonder if this default will be called one per the CDS? :)


Groundhog Day's picture

The CDS premium Collectors don't believe this is a default... they promised to bundle a few payments

pods's picture

They still got it covered.

AIG is underwriting all of it.