Grexident Looming: Eurogroup Meeting Ends Prematurely With No Deal

Tyler Durden's picture

Update: The latest from Brussels appears to be that the meeting of EU FinMins has now broken up with little progress.

EU leaders will now convene for a two-day summit, which means the back-and-forth won't likely end soon. Additionally, Christine Lagarde has indicated she may not be willing to exercise her discretion and delay delivery of a formal failure to pay notice to the IMF board, setting up the possibility that accelerated payment rights for Greece's other creditors could be triggered on July 1.

  • ASKED ABOUT GREECE'S JUNE 30 REPAYMENT, IMF SPOKESMAN SAYS DOES NOT EXTEND DEADLINES AS MATTER OF POLICY
  • IMF SPOKESMAN SAYS EXPECT MANAGING DIRECTOR TO INFORM BOARD 'PROMPTLY' IF GREECE MISSES REPAYMENT DEADLINE 
  • SENIOR U.S. OFFICIAL SAYS ALL NATIONS IN IRAN NUCLEAR TALKS COMMITTED TO JUNE 30 DEADLINE BUT IT COULD BE MISSED BY A BIT
  • EUROGROUP'S DIJSSELBLOEM SAYS DOOR IS STILL OPEN FOR GREEKS TO ACCEPT CREDITORS PROPOSALS
  • DIJSSELBLOEM SAYS EUROGROUP IS OVER FOR NOW, HE WILL INFORM EU LEADERS OF STATE OF TALKS

*  *  *

For a couple of hours on Tuesday, it appeared as though Greece had managed to sneak a debt deal proposal by the troika that, while hitting some of the mandated fiscal targets, did not include the pension cuts and VAT concessions that had previously constituted creditors’ “red lines.”

Then, on Tuesday evening, the IMF apparently decided to read the terms of the “deal” and Christine Lagarde did not like what she saw.

A few hours later, we were back to square one and Greek PM Alexis Tsipras was calling the IMF’s stance “weird” although in reality, the Fund was simply reiterating what it’s been saying since May, when Lagarde lost patience with the situation following Athens’ move to make a €750 million payment out of its SDR reserves.

Following meetings with EU officials and then with Lagarde and ECB chief Mario Draghi on Wednesday evening, Tsipras is back at it on Thursday, in a frantic attempt to win over EU finance chiefs (who are collectively losing their will to keep Greece in the currency bloc) and the IMF as the EU summit kicks off in Brussels. Here’s Bloomberg summing up:

As the pressure grew, Tsipras met with International Monetary Fund chief Christine Lagarde, European Central Bank President Mario Draghi and European Commission President Jean-Claude Juncker after concluding hours of discussions Wednesday that yielded no breakthrough. Euro-area finance chiefs are also in Brussels trying to find a way to broker an agreement that will satisfy all sides ahead of a two-day summit of European Union leaders that begins later Thursday.

The contradictory headlines are coming fast and furious Thursday morning as confusion reigns. 

  • GREEK OFFICIAL SAYS GOVT SUBMITTED PROPOSALS TO INSTITUTIONS
  • GREECE DOCUMENTS CAN BE BASIS FOR A DEAL: EU OFFICIAL
  • INSTITUTIONS UNANIMOUSLY AGREED ON GREECE PAPERS: EU OFFICIAL
  • GREEK GOVT REMAINED FIRM IN ITS POSITIONS, OFFICIAL SAYS
  • INSTITUTION DOCUMENTS NOT ACCEPTED BY GREEKS: EU OFFICIAL
  • DIFFERENCES BETWEEN GREEK, INSTITUTIONS BAILOUT DOCUMENTS 'NOT THAT BIG"--OFFICIALS

It now appears the Greeks have missed a deadline to present a counter proposal ahead of the finance ministers' meeting, meaning the troika's proposal will be discussed instead, even though the Greeks rejected that proposal yesterday.

  • GREECE, CREDITORS FAIL TO REACH AGREEMENT AHEAD OF EUROGROUP

And now that meeting has been delayed, presumably because it's pointless to discuss a proposal that one side has already rejected.

  • EUROGROUP MEETING DELAYED BY 30 MINUTES TO 1:30 PM IN BRUSSELS

Here's Austrian Finance Minister Hans Joerg Schelling attempting to explain where things stand:

“I believe that it still is possible to come to an agreement. This is no longer about days; it’s about hours. We have been commissioned by the summit to present a compromise by 4 p.m. Negotiations took the entire night. The Greeks are rejecting every compromise, constantly present new wishes. We are prepared to make an agreement, to help Greece as finance ministers, but the responsibility lies solely with Greece to accept these compromises.”

While Wolfgang Schaueble says if anything, the divide between Athens and Brussels is growing:

  • GERMAN FINMIN SAYS: WE HAVE NOT MADE PROGRESS; 
  • GREEKS HAVE MOVED BACKWARDS RATHER THAN FOREWARDS
  • SCHAEUBLE: THE DIFFERENCE HAS BECOME BIGGER
  • GUINDOS SAYS GREECE REJECTED INSTITUTIONS' PROPOSAL

Ahead of the meeting, finance ministers were given a so-called "feasibility blueprint," which appears to be a largely unchanged version of what was tabled by the troika on Wednesday (document embedded below). Here are some highlights from FT:

The first place to look is page three of the nine-page document, where the section on pension reforms begins. This has become the major sticking point between the two sides and, while it makes some concessions to the Greek government, it is very much in keeping with creditor demands that early retirement schemes be curtailed and the effective retirement age be raised very quickly.

 

Under the plan sent to finance ministers, Athens would ensure the retirement age is moved to 67 by 2022, significantly faster that Alexis Tsipras, the Greek prime minister, had sought. Originally, Athens was pushing for 2036, but Mr Tsipras’ compromise plan submitted on Monday moved that to 2025.

 

There is an important creditor concession in the pension reforms, too, though. Creditors have been trying to get rid of a “solidarity grant” programme that provides a top-up bonus to poorer pensioners, know by the Greek acronym EKAS, by 2017 at the latest. Athens had offered 2020. The new plan splits the difference and goes with December 2019.

 

The other major sticking point between the two sides has been an overhaul of Greece’s value-added tax scheme. Here, too, the plan makes some compromises to the Greek plan. Creditors had originally sought a simplified two-tier system with most goods taxed at the top 23 per cent rate. Creditors have now gone along with a Greek idea of a three-tier system, including a “super-reduced” rate of 6 per cent for pharmaceuticals, books and the theatre.

 

Importantly, the creditors have conceded on keeping electricity in a middle 13 per cent VAT rate, something Athens has long demanded. “Basic food” also goes into the middle rate, but it appears all other kinds of foods – including restaurants and processed foods – goes at the higher 23 per cent rate. Athens has attempted to keep process foods at the reduced middle rate.

 

Another blow to Athens: the creditors plan would strip out VAT exemptions for Greek islands. This is particularly sensitive for Mr Tsipras’s coalition partner, the Independent Greeks, who have argued it was unfair for some of Greece’s most remote islands to pay the same kind of taxes that mainlanders do.

 


Meanwhile, the ECB has reportedly not raised the ELA ceiling on Thursday as of yet, but stands ready to lift the cap if the situation deteriorates, which certainly seems to be the case. "ECB stands ready to review Greek ELA ceiling in next 24 hours, if that is needed," a Greek official told Bloomberg. Notably, there are also reports that some ECB governing council members are running low on patience regarding Greek banks' dependence on emergency funding. More specifically, Bundesbank chief Jens Weidmann is out reiterating his concern that the ECB is effectively financing the Greek government. Via Reuters

The Eurosystem of central banks should not provide bridge financing to Greece, the head of the Bundesbank said on Thursday, warning that Greek lenders' reliance on emergency funding raised questions over their solidity.

 

In his strongest criticism yet of the provision of Emergency Liquidity Assistance (ELA) to Greek banks, Jens Weidmann said those banks should not continue to buy the short-term debt of their government.

 

"The Eurosystem must not provide bridge financing to Greece even in anticipation of later disbursements," said Weidmann, who also sits on the European Central Bank's Governing Council, which approves such funding to Greece.

 

"When banks without access to the markets buy debt of a sovereign which is likewise locked out of the market, taking recourse to ELA raises serious monetary financing concerns," he said in a speech to be delivered at a conference in Frankfurt. 

And now this:

*  *  *

Proposal reportedly under discussion at Thursday's Eurogroup meeting:

Feasibility Agreement

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NewThor's picture

Yawn?

 

No Deal.

The ECB warns of a Fat Tailed EMP 

(extreme market pressure)

Putin says "Russia isn't threatening anyone."

I'm looking 100 leagues above Earth

and, I seem to remember

Earth's Magnetosphere is getting pounded

by Coronal Mass Ejections.

and, we just had another

Earth Facing Solar Blast this morning.

Or whatever. Nevermind. 

 

God Bless Everyone,

 

T

 

I vote for a 100 year Earth Truce, Global Jubilee & 1000 years of Peace. 

 

ShorTed's picture

but no rainbows or unicorns?  C'mon!

tc06rtw's picture

 … speaking of promises:

 Where are the  Live Updates ?

NoDebt's picture

Just read yesterday's articles and pretend they were just written this morning.  You won't be able to tell the difference.

VinceFostersGhost's picture

 

 

Now "Moving Backwards"

 

That's brilliant....why didn't we think about that sooner?

agstacks's picture

"Oh, we're moving alright, backwards!!"

Haus-Targaryen's picture

If Tsipras resigns then ND gets back in, and Greece get rake fucked with the wrong end.  

 

fiddy pence haff pound's picture

Usually the Vichy-type governments have power thrust upon them.

the ND leader is in Brussels, prolly talking up another coup de troika.

HamRove's picture

Oh man, I got that reference. 

How obscure.

Antifaschistische's picture

welcome to Hotel Eurifornia.   You can check in....but you can never leave.   and Greece will not be allowed to leave.

saints51's picture

NoDebt, sad but very true. It is the same regurgitated jargon every single day. I am bored.

secretargentman's picture

Additionally, you can just read yesterday's comments, and pretend they were written this morning. That works too!

NewThor's picture

It's been a Rainbows & Unicorns Economy since 2008.

 

stocktivity's picture

Groundhog Day # 1026.  It's all Bullshit!!!

yogibear's picture

All have their scripts. 

Leading to the climax before the Eurocrats say everything is fixed again and continue to kick the can for the 1026th time.

NewThor's picture

This time it's DIFFERENT!

BITCHEZ!

Handful of Dust's picture

Just pass the Deal. Everyone can always read it later ... like Congress does all the time here.

VinceFostersGhost's picture

 

 

Let's sort this out once and for all.....it's time for Thunderdome.

 

This nailgun crap is taking too much time.

NoDebt's picture

Look, I'm the guy doing the best he can to fix this situation.  You must be the other guy.

Resorting to personal attacks on my work is not helpful and won't get things done any faster than they already are.  So just, like, back off and give me some room to work here.

Bearwagon's picture

He has no technigal knowledge of the difficulties you have to overcome. If I look at your avatar, it seems that you are already using compressed air instead of combustible gas. That's definitely the fastest way to operate a nailgun - and it has to be acknowledged that you have to get along with that annoying flexible tube ...   ;)

XAU XAG's picture

What's 5 more months 5 more weeks or 5 more days........................when it's been going on for 5+years

 

And if they come up with a fix now....................they will need to fix it again in ????

 

reminds me of the FIAT Cars

 

Fix

I

Again

Tomorrow

 

Commodore64's picture

Haha, thats funny, all bankers should drive Fiat :)

XAU XAG's picture

It's all a game of CHICKEN

 

Chase

Higher

Indices

Cause

Keeps

Economy

Never ending


Undutchable73's picture

fasten your seatbelts now

XAU XAG's picture

fastening seat belts is what got the world into this mess

 

LOW WINDOWSCREEN ( WINSHIELD) SALES

Bearwagon's picture

Just a few thoughts from the Bearwagon (thar live bears):
While a next round of meetings is announced to be held soon, the controversy about who will be the winner and who has to play the role of the loser already commences. Mainly conservative german politicians, like Wolfgang Bosbach (CDU) are maneuvering themselves into position. The discussion about greece is, at least in germany, dominated by domestic policies. Politicians from the CDU as well as those from SPD would like to present themselves as particular representatives of german interests (pun intended).
The Greece-bashing also is sort of an answer to the efforts of the greek government, to remind germany of it's liabilities from the NS era. It has become all too clear, that anyone who is not willing to rule off german racketeering during said times, shall be punished for such an insubordination.
This desire for punishment is shown by the explicit reference to an allegedly communistic government in Athens. That's indeed nonsense. The actual government can not honestly be called communistic. At best, one can say that Syriza has sort of a communistic wing. On the other hand, it were mainly communistic underground movements who fought against the nazis. By calling the actual government falsely communistic, the battles of yesterday shall be fought again. This shows us, that at least parts of the discussion in germany are not influenced by the real actual situation, but the german past.
Meanwhile economic shills even regard it as success of the greek government, that the questions of financial aid shall be answered by politics, and not be regarded as nothing more than technical problems. They are already warning, that other countries of the european periphery could act likewise. Which clarifies, how important it is for them to regard economic relationships as sheer technical correlations, which have nothing to do with politics whatsoever.
If it gets widely known that these apparently inherent necessities are indeed results of political decisions, and that the asserted lack of alternatives only consists of the fact that nobody shall ever be allowed to question capitalism itself, because it wouldn't be politically opportune, this could in fact be an important step towards another position.
People in greece as well as people at other places have noticed that the bail outs and the attached sacrifices for great parts of the population are political decisions.
It is possible that Tsipras will give in to neoliberal austerity dictations. In that case, the left wing of Syriza would separate itself. That could lead to elections quite soon. Tsipras could possibly form a coalition with "To Patami" (leftwing liberals) and win such an election (again). The middle and all the more the left wing of Syriza would then be silenced, Greece would get new Euros from the ECB and austerity measures would be perpetuated.
Such a scenario could be regarded as a setback for all political movements in europe, demanding an alternative to indefinite austerity-policies.
Tsipras would have a very hard time to sell such a subjugation as continuation of left policies. The middle and left wing of Syriza are both to strong and would oppose such a decision. It would be important, how left movements would position themselves, following a possible break up of Syriza.
It would be equally important for the critics of austerity-policies in whole europe to learn from the struggle of the greek government, that political relationships have to be altered in order to reach fundamental changes. The resistance from Athens could prove as a good assistance to those forces. If that would happen, we would not have seen the last resistance before the ultimate defeat, but rather an attempt to realize another policy, which could be continued by other states with other means.

ANestIOS's picture

Thanks for the interesting perspective Bearwagon

COSMOS's picture
I totally agree fuck Brussels Individual countries should make the political decisions Brussels should be economic union only. like the whole immigrant drama. who is brussels to set quotes If i dont want fucking immigrants in my country I dont want them. give them to the fuckers who want the ghettoes in their countries If Hungary wants to stay a white christian country that is their right. 6:21amThey dont have to have a bunch of fucking obamas running around
ANestIOS's picture

Tylers reading your coverage I thought that the greek government had already capitulated

ramgold2206's picture

AHHHHHHHHHH ...... FFS I'm so fed up with all this bullshit...Ireland took the opposite direction to Greece yet the problems remain (just under the surface). The euro project is doomed but it will limp on for years crisis after crisis dragging everyone down with it.  

BUT ITS NOT JUST THE EURO... ITS ALL FIAT CURRENCY.. ITS REACHED THE END OF THE ROAD...

 

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If you find yourself in the same position as me and you're willing to try your hand at network marketing, you could use the commissions earned to acquire gold bullion from Karatbars. Its not for everybody and I'm not pushing it on anyone it's just another option for you guys. All I can do is testify that its working for me - There is no reason why we can't make it work for all of us..

 

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new game's picture

copy paste you ass to the dust bin...

VinceFostersGhost's picture

 

 

It was pretty creative spam.

 

Send him over to HuffPo....he'll kill over there.

NoDecaf's picture

Let's see, you paid off 6months worth of debt working from your moms basement on laptop making 7k a month? Damn what the fuck did you buy that put you in such a hole?

jarana's picture

A watched pot never boils

Bemused Observer's picture

Actually, that isn't true. A watched pot does indeed come to a boil, just as fast as an unwatched pot. It just SEEMS to take longer.

new game's picture

only logical solution is default on debt that is impossable to repay. does anyone sitting in their HIGH  chair know math? greece does not want the silver spoon taken away-duh; and the silver spoon is over, unless the three kings horsemen want to keep their charade alive for 3 moar months whilst the imf payments bring them right back to this juncture. drag queen- whatever it takes with germanies full compliance, of course, ha...

goldman, rothchild dynasty must go on...

f16hoser's picture

It's time for a "Big Fat Greek Divorce"

disabledvet's picture

Pound sand Euroacracy.

 

You clowns ain't got shit.

 

That's the only "confusion."

LawsofPhysics's picture

if only we could tell the Eurocracy to pound sand, The Fed has been stealing from the U.S. taxpayer to support europe for years fool.

Racer's picture

12m12 minutes ago

DIJSSELBLOEM: THERE ISN'T SUFFICIENT PROGRESS

 

Anybody else's twitter feed being delayed by at least 10mins?

yogibear's picture

Oh the theater..

Buckle in Eurocrats, we know you'll print all you'll need like true counterfeiting banksters want.

Peter Pan's picture

In the past five years there has been an increased propensity by Greeks not to make mortgage repayments, for employers not to pay wages when due, for factories and shops to close, for governments not to make payments to service and product suppliers, for taxpayers not to pay taxes and for car owners to take their cars off the road. In other words all the components of the Greek economy have already defaulted vis a vis each other thanks to both internal bad management and bureaucracy and also to external snake oil cures.

So how can Greece not default when all of its internal participants have already done so to one extent or another and when the further demands by the TROIKA would amount to nothing more than economic genocide?

Freezing the debt, stopping all interest payments and making no further loans to Greece is the only way to force internal change otherwise they will just have to live within their present woes.

 

ANestIOS's picture

"Freezing the debt, stopping all interest payments and making no further loans to Greece is the only way to force internal change otherwise they will just have to live within their present woes."

This is exactly the Varoufakis mantra (that led to the attempt to marginalise him in the negotiations)

Peter Pan's picture

Possibly but my mantra predates the Varoufakis mantra and is on the public record both written and televised.

Peter Pan's picture

By the way, I think Varoufakis is the only one with enough balls and integrity to deal with Europe. 

skistroni's picture

Varoufakis doesn't really give a fuck about this. In 5 months he has secured his career, fame and Twitter followers for the next 30 years. Mission accomplished. 

Bioscale's picture

He has secured his career years ago as corporate finance pro. I doubt he needs twitter assholes and similar stuff.