Merkel Mocks Greece And The Referendum: There Is Money, But The Deal Is Much Harsher Now (And No Debt Haircut)

Another day came and went with no breakthrough in negotiations between Athens and Brussels as new Greek FinMin Euclid Tsakalotos reportedly showed up to Tuesday's Eurogroup with nothing to discuss. 

With the ECB tightening the screws on Greek banks and the German finance ministry as well as German lawmakers tightening the screws on Angela Merkel, the Chancellor is drawing a hard line toward the Greeks in the face of calls for debt writedowns from the IMF, Greek PM Alexis Tsipras and the Greek people. 

• MERKEL SAYS IF GREEK REFORM PROPOSALS ARE SATISFACTORY AND PRIOR  ACTIONS TAKEN, SHORT-TERM FINANCE CAN BE PROVIDED: RTRS
• MERKEL SAYS SHORT-TERM GREEK FIX HINGES ON LONG-TERM PROPOSALS
• MERKEL SAYS GREECE NEEDS MULTI-YEAR PROGRAM 
• MERKEL: GREEK PROPOSALS HAVE TO GO BEYOND WHAT BAILOUT INSTITUTIONS DEMANDED BEFORE REFERENDUM
• MERKEL SAYS GREECE WILL NEED STRONGER MEASURES TO PLUG FINANCING GAP BECAUSE OF ECONOMIC DETERIORATION
• MERKEL: EU TO DEAL WITH GREEK DEBT BURDEN AT END OF PROCESS
• MERKEL SAYS EURO LEADERS DIDN'T DISCUSS AID PACKAGE SIZE
• MERKEL SAYS SHE ISN'T 'ESPECIALLY OPTIMISTIC' ABOUT GREECE
• MERKEL RULES OUT DEBT 'HAIRCUT'
• MERKEL SAYS ECB BRIEFING SIGNALED GREECE NEEDS SUNDAY DECISION

More from Reuters: 

German Chancellor Angela Merkel said on Tuesday she hoped to have sufficient reform proposals from Greece this week to be able to ask the German parliament to approve negotiations on a new long-term aid programme for Athens.

She said all 28 European Union leaders would meet next Sunday to discuss support for Greece provided Prime Minister Alexis Tsipras put forward detailed reform proposals along with a loan request by Thursday that were considered satisfactory.

If the reform list was adequate and Greece took some prior actions to enact first measures, Merkel said she was sure that short-term finance could be provided to help Athens over its immediate funding needs.

In other words, Merkel just told the Greeks yes, there is some money, but forget debt haircut, and the new deal is far harsher than what was on the table because the Greek economy is now imploding. Also, the deal will be 2-3 years at least to start, so even more austerity is on the table. So to all those who voted "Oxi", if you want your deposits unlocked well... tough.

The headlines keep coming hot and heavy, in which we find that Europe now thinks it is Greece's god:

• MALTA'S MUSCAT SAYS `SUNDAY IS JUDGMENT DAY'

As Bloomberg reports, "Sunday now looms as the climax of a five-year battle to contain Greece’s debts, potentially splintering a currency that was meant to be irreversible and throwing more than a half-century of economic and political integration into reverse. “We have a Grexit scenario prepared in detail,” European Commission President Jean-Claude Juncker said, using the shorthand for expulsion from the now 19-nation currency area.

And just so it is clear who is calling the shots, here is Juncker explaining:

• JUNCKER: LAST MOMENT FOR GREEK GOVT WILL BE MONDAY MORNING

What happens then?

"Our inability to find agreement may lead to the bankruptcy of Greece and the insolvency of its banking system,” European Union President Donald Tusk said. “If someone has any illusions that it will not be so, they are naive."

And just in case Greece decides to disobey, Europe is ready to treat Greece as an African nation:

• JUNCKER: EU COMMISSION HAS HUMANITARIAN PLAN FOR GREECE IF NEED

The only good news for Greece, which was just clearly reduced to a vassal nation state of Europe, is that Merkel did not demand Tsipras' head on a silver platter. Then again, if he does indeed fold, it may be the Greek people themselves who ask for it instead...

Comments

[juppez]

So tsipras has two options: either give in to the austerity measures and go down in history as a traitor or leave the eu and euro and save his political career and give new beginning to greece.

[juppez]

So tsipras has two options: either give in to the austerity measures and go down in history as a traitor or leave the eu and euro and save his political career and give new beginning to greece.

[Majic]

There is nothing new under the sun.  This is all so much lather, rinse, repeat.  Tut,Tut!

[JPMorgan]

The EU is making it clear the Greek referendum meant nothing to them.

If you want the money here is what your going to do.

It's clear Tsipras has little options or flexibility available on the EU side, they are playing hard ball.

Saying that there is no precedent for kicking an country out of the EU, so he needs to play on that.
If you want us out then kick us out, but we are not going to agree to your terms or leave the Euro of our own free will.

While this is going on they need to get some form of money flowing by introducing an parallel currency, something the they can't easily devalue.
Tsipras needs to find a way to bypass the capital controls imposed by the ECB and improve the local situation.

IF the Greek people turn on Syriza it's game (theory) checkmate, and this is what the EU is betting on... regime change, that dumb shit Martin Schultz let that cat out of the bag.

An Technocrat government would agree to EVERYTHING to get that EU bailout.