"Lehman Weekend" Looms For Greece As Europe Readies "Emergency" Sunday Meeting

Tyler Durden's picture

Last week, Greek PM Alexis Tsipras submitted two three-page proposals that were ostensibly designed to close the gap with creditors. EU officials were incredulous, calling the drafts “not serious.”

Tsipras had effectively resubmitted Greece’s previous proposal (i.e. a proposal that did not include concessions on a VAT hike or pension cuts) only this time, he included a second document that outlined how Athens hoped to tap leftover bank recap funds from the EFSF and bailout money from the ESM. Greece took that same proposal to Brussels over the weekend and it didn’t fly there either, leaving Europe to wonder just how far Tsipras was willing to go with the brinksmanship.

The problem is simple and it’s been outlined in these pages extensively. The game of chicken can theoretically go on at the political level for some time. That’s because the bundled IMF payment isn’t due for another two weeks and even if it were missed, Christine Lagarde has quite a bit of discretion as it relates to sending an official failure to pay notice to the IMF board and triggering cross acceleration rights for Greece’s other creditors. In other words, a formal default is a matter of politics and it can be put off for at least 30 days past the end of this month.

What cannot be controlled at the political level is what happens on the ground in Greece. That is, the economy is bleeding jobs and businesses and the banking sector is hemorrhaging hundreds of millions of euros every day. If suppliers cut off credit to the Greek economy and deposit flight turns into a panicked bank run, the glacial pace of political logrolling will prove hopelessly inadequate to contain the situation, meaning the country could descend into chaos while both sides watch in horror from the negotiating table in Brussels. Yesterday, Germany's EU Commissioner Guenther Oettinger warned of exactly this and suggested that Europe plan for a “state of emergency” in Greece. 

And plan they did. Midway through US trading on Monday the German press reported that Europe was prepared to implement capital controls over the weekend should Greece fail to table a workable proposal at a meeting of EU finance ministers in Luxembourg on Thursday. We’ve outlined what capital controls could look like in Greece on a number of occasions (most notably here and here), but for those needing a quick reference, consider the following flowchart:

Here’s Open Europe summarizing the drama:

German daily Süddeutsche Zeitung reports that Eurozone countries have agreed on a contingency plan if no deal between Greece and its lenders is struck by this weekend. According to the paper, if this week’s Eurogroup meeting failed to yield an agreement, Eurozone leaders would hold an emergency summit – potentially as early as Friday evening. The contingency plan would involve imposing capital controls on Greek banks over the weekend.

As for the Eurogroup meeting and the rumored emergency summit, Greece contends it will not be submitting a new proposal and some EU officials are skeptical about the utility of holding a summit if no progress is made in Luxembourg. FT has more:

Eurozone officials are discussing holding an emergency summit on Sunday for leaders to tackle the crisis in Greece amid mounting fears a deal to break an ongoing impasse between Athens and its bailout creditors will not be reached at a high-stakes finance ministers meeting on Thursday.


According to two senior officials, the idea of holding a summit of eurozone heads of government was mooted in meetings among representatives of Greece’s creditors on Monday, a day after last-ditch negotiations to reach a deal to release €7.2bn in much-needed bailout aid collapsed.


They said that although the idea was discussed, there is considerable resistance to convening the summit among several creditors since technocratic issues like Greek pension reforms and tax rates are not normally the province of EU presidents and prime ministers.


“If there’s nothing to discuss among finance ministers, there wouldn’t be anything to discuss among heads,” said one official from a Greek creditor institution.


Yanis Varoufakis, Greece’s finance minister, said the country has no plans to present new proposals at the finance ministers meeting, signalling the country won’t make further concessions to unlock bailout funds needed to avoid default.


He told Germany’s Bild newspaper: “The eurogroup is not the forum for presenting positions and plans which have not previously been discussed and negotiated at a lower negotiating level.”


“The next and hopefully decisive step is the eurogroup [on] Thursday,” said the spokesman, Preben Aamann. “Any further steps will be decided in light of the eurogroup outcome. There should be no illusions that an agreement becomes easier or more advantageous over time.”


Alexis Tsipras, the Greek prime minister, has publicly insisted that he will not be presenting any new compromise proposals at the Thursday meeting, and officials said the discussion at the eurogroup of finance ministers on Greece could end up being perfunctory as a result.


In addition, some officials believe Athens’ decision to send Mr Varoufakis, the combative finance minister, to the eurogroup session could preclude a deal being worked on Thursday

Recall that the last time Varoufakis attended a meeting of EU finance ministers, he ended up eating dinner alone in Riga and tweeting out FDR quotes after his antics at the negotiating table prompted EU officials to phone Tsipras and plead with the PM to sideline his FinMin or risk throwing the entire process into disarray. Varoufakis was soon demoted on the negotiating team.

All signs thus point to the imposition of capital controls, setting up a potential "Lehman Weekend 2.0" unless all sides suddenly realize what they've wrought, convene an emergency meeting among heads of state, and strike some manner of hastily construed stopgap agreement. Whether or not that's feasible remains to be seen and it appears as though Sunday may be the day of reckoning.

For now, the official line is that Europe will only restart talks if Greece "submits something new", and if the last several weeks are any indication, "something new" is not forthcoming. 

Finally, Bild is reporting that Greece will seek to delay its June 30 IMF payment by six months.

Via Bloomberg, citing Bild:

The Greek government is seeking to delay a 1.55b euro payment to the IMF by six months. 


Greece has found technical option to delay IMF payment due at the end of June.

And because this is Europe, the Greek government has promptly denied the above:


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stocktivity's picture

It's all Bullshit!!!  Greece will get it's loan and the can will be booted again.

SickDollar's picture

You got that right , and most of us are tired of this shit show /Illusion.

 Simply put the west is broke and the system is dying period and on top of all this we are over populated with useless eaters and fat people



NoDebt's picture

"The Greek government is seeking to delay a 1.55b euro payment to the IMF by six months.  

Greece has found technical option to delay IMF payment due at the end of June."

You know, it was only out of extreme frustation I said they'd find some weird provision or loophole to keep delaying payment.  I thought it would only be 90 day, but hey, 6 months works, too.


J S Bach's picture

The only "meeting" the Greek people should be having is with the Icelanders - to learn about and emulate their techniques with handling their bankster enslavers.  The only debate should be over hanging or firing squad.  Then let the dominos fall the same way throughout the world.  Such is my fantasy.

nosam's picture
nosam (not verified) J S Bach Jun 16, 2015 7:30 AM

This is the biggest Lehman weekend after Lehman.

Haus-Targaryen's picture

Am I the only one still fully expecting one side to cave at the last possible moment? 

tc06rtw's picture

 “If there’s nothing to discuss among finance ministers, there wouldn’t be anything to discuss among heads”…

Unless, of course, a crisis occurs on Saturday from a surprise imposition of capital controls!

VinceFostersGhost's picture



I think someone needs to throw a tantrum right about now.

Oh regional Indian's picture

The game is nowhere near done yet.

All FALLS happen in Spetember/October.

Romans 10:13: All ye who take the name etc....

October 13th has been a tricky date in history. it is a SAVIOUR DATE.

Big beast collapses slowly. Most greeks that could get out/buy gold etc. have probably already done so, the rest are sheltering in place as the EURO boot comes down.

Russia is still the Joker in this pack.

So, we have many more weekends of such greek speculations my brothers, and sisters few ;-)

I wrote a song, rough cut, ZERO ONE...


Wolferl's picture

Throw those pathetic Greek deadbeats out of Europe already.

pretty bird's picture

Europe won't throw Greece out.  And Gree won't leave.  Same old story, same old song and dance.

Lore's picture

Re: "Russia is stil the joker in this pack."

Yeah. Why doesn't Varoufakis invite Russian representatives to sit in on all these emergency confabs?  The Russians are peddling deals, not debt. Isn't it about time for a solvent energy producer and exporter to build a pipeline and toss a royalty lifeline? 

weburke's picture

perfect for a june 22 masonic collapse start.

weburke's picture

greece gets billions from putin to allow pipeline, eu has a fit, gives greece boot, off to brics, ect ect.    https://www.youtube.com/watch?v=m3zoemPOPYs

Captain Debtcrash's picture
Captain Debtcrash (not verified) Haus-Targaryen Jun 16, 2015 8:03 AM

Sounds like a game of chicken, but the Greeks aren't playing the game.  I wonder if the rest of the EU will swerve.  Should be interesting.  Yellen may not even need to raise to get the crisis necessary to get the political cover to try some really crazy policies, banning cash, negative rates ect.

Haus-Targaryen's picture

This might be why its happening.  Giving the Fed cover to keep the juice going. 

Philo Beddoe's picture

First they got rid of the competing banks and now the competing currencies. 

curbjob's picture

The only caving will be by the  Greek serfs as they head to the hills above Athens looking for shelter.


Haus-Targaryen's picture

I don't think it will be that bad.  

curbjob's picture

Really ? A sovereign default by a EU member state ? 

This centennial dream of uniting Europe is failing ... let's hope that the body count is less than the last few attempts at unification.

Haus-Targaryen's picture

I agree with you completely there.  

I just don't think its going to be Road Warrior in Greece.  The Greeks have dealt with way worse than this.  I think it'll get bad, but then come back.  

But thank Christ this stupid "We Europeans are one people" nonsense is going to die.  I hope the body count is less.  I think if Germany switched sides from the English to the Russians, the power scale in Europe would become so lopsided no one would want to start anything.  

Whoa Dammit's picture

Greece will fold and admit that they are now a wholly owned subsidiary of Goldman.

Crash N. Burn's picture

"Greece will fold and admit that they are now a wholly owned subsidiary of Goldman."


Replace Greece and Goldman with any other country and corporations an you've just outlined our future unless we stop it. Americans think they dodged "fast tracking" the TPP. Not so much:

"According to senator Jeff Sessions, there is upcoming vote on Tuesday June 17th, for a bill called the TAA. Hidden in the TAA is a provision which would grant the president fast-track authority on any and all trade agreements for a period of six years. This would inherently include the TPP, TTIP and TISA."

EMERGENCY REPORT - 2nd TPP Sneak Attack Coming This Tuesday!


Terp's picture

No. Because for Mutti, caving to the demands of DB (however futile they may be) is alternativlos.

El Vaquero's picture

No, you're not.  But that's the way most of us will probably feel the day somebody finally decides or is unable to kick the can.  The day that it happens, most of us will see it and say "Holy Fuck!  OMGWTFBBQ!"

Freedom In Your Lifetime's picture

If they start fucking with our BBQ'a, that is the final god damned straw!!!

sandhillexit's picture

oh, for 2008 when everything that mattered had to happen on Sunday.  I wonder if the 2016 election season will be as exciting.  

dogbert8's picture

Except that, if Greece survives this Lehman weekend, the following weekend will be the biggest Lehman weekend after Lehman, and if Greece survives the next Lehman weekend, the following weekend will be the biggest Lehman weekend after Lehman, and if . . .

indygo55's picture

And at the end of six months do you think they will find another technical reason to kick the can? Of course they will. They can and will do this until something else forces the end of this theater. Maybe war in the Ukraine, mabe war with China, maybe a revolution in the US? Who knows but there is certainly enough danger in the world for a serious issue to occur. This is just unbelievable.



Oldwood's picture

Its not their money so they don't care if it is ever repaid. They simply don't want a declared default as it will trigger derivatives and damage their credibility to those who are relying on them to hold their assets.

If the EU can protect that "position" then they will gladly submit. Greece is just not going along. They have been doing so for years and continuously find themselves in a worse position. The EU is trying to assure them that if they just sign onto one more deal everything will be fine but the Greeks don't believe them.

Confidence is drying up everywhere. Even delusions require something to sustain them and those who have driven us to the edge of this cliff just can't imagine why it is still necessary to provide illusionary support, as we should all recognize by now that delusion is no longer a choice but a necessity.

secretargentman's picture

At some point when you go to kick the can, you trip over the can.

upWising's picture

At this point it seems that all our "leaders" are walking around with tin cans stuck on the end of their Gucci's and cant figure out how the cans got there, much less how to get the cans OFF their feet.


Carpenter1's picture

This time is not like the previous times, everything about it is screaming this to us. Both sides are taking very hard stances, maybe this would be seen as posturing a month ago, but not anymore. Greece has now missed two payments, and had numerous opportunities to "compromise."


But this isn't the most convincing proof.


Isn't it obvious that Greece is doing this because it has a better plan with Russia? The BRICs bank was designed for this, and will be Greece's safety net when it joins this weekend. No wonder Tspiras isn't worried, he knows he can default on all the debt, not just the recent payments, and with no consequences  because this is all about the breakup of the EU.


Wakey wakey people, this is the big move where Russia and China supercede the US. The EU will break up, and nations will fall into the arms of Russia and China via the AIIB and BRICs banks. Need more proof? Just look at the well timed events.

Thursday- EU leaders decide on capital controls

Friday- Greece joins BRICs bank. 


Yes, it will be a Lehman weekend, but not for average Greeks, they'll now be part of the new power axis of the world. The Lehman moment will be for any nation not part of the new axis, which would be....the US. 

rqb1's picture

Just bought my vix calls

RadioactiveRant's picture

Then buy the MTFD, FTASE down 13% this month. If a deals done it'll bounce.

in4mayshun's picture

Damn straight! If we've learned anything, it's that bankers always get their way. Expect DOW and SPX to be up 3% on Monday.

Veriton's picture

Greece will switch over to the BRICS. While they send their finance minister to the Eurogroup meeting, where will their Prime Minister be? In St. Petersburg, Russia: http://redefininggod.com/2015/06/information-about-the-june-18-scenario-...

Carpenter1's picture

Wow! Someone here gets it.

This board is so full of BTFD'ers and QE junkies they couldn't see a crisis coming if it did the maranga with a pineapple on its head.

ebworthen's picture

But it's an emergency!  An emergency usually means an out of control fire or a heart attack, no?

In Greece and elsewhere we are talking about unpayable debt, and they're going to talk about it.

Can you talk a fire out, or talk an artery clear?

Augustus's picture

ZH has forecast that every weekend since February will be the Greek Lehman Weekend.

No need to search for failed forecasters any longer.  Perhaps it will happen this weekend.  If not, ZH can re-write the forecast for the following weekend.

Tell us again about $10,000 / oz gold.  Have not had that re-write for a few days.

VinceFostersGhost's picture



Tell us again about $10,000 / oz gold


I've got the gold $1000 cap if you'd like to look at that.

andypaps28's picture

There is a solution. It starts by Tsipras asking by Troika  "Are you angry with me ? " 

3 minutes and 28 seconds later you have the agreement. Simple really.




Peribanu's picture

LOL, that sums it up perfectly. Northern capitalists always lose their investments in Greece, but end up seduced by the sun, sea, and ... dancing. Ouzo helps cure the headache unless you take too much of it.

BullyBearish's picture

Sure sounds like a lot of state sponsored terrorism going unchallenged...where are the defenders of FREEDOM?

Philo Beddoe's picture

A nice fusion of Edith Bunker going through airposrt security in Total Recall. 

tc06rtw's picture

 … she looks a  LOT  better in B&W !!

The Merovingian's picture

Nice, but I was kind of hoping for a Weekend at Lehman's theme ... cuz Tsipras is a dead man walking with Putin on one side of him and Draghi on the other ...