Schauble Proposes "5 Year Grexit With Humanitarian Support"

Tyler Durden's picture

As we await the verdict on whether Greece will be in or out, here are the earlier comments from the Eurozone finance ministers and others attending the Eurogroup meeting, via Reuters:

  • "We will have exceptionally difficult negotiations."
  • "The problem is that that there was a situation at the end of the year that was very hopeful, despite all the scepticism of previous years, and that this was destroyed in an incredible way in the last months and hours.
  • "We are dealing with financing gaps which exceed everything we have dealt with in the past."
  • "We are talking about a completely new three-year programme."


  • "We, as Luxembourg, because we hold the EU presidency right now, are definitely ready to discuss debt restructuring, finalising is another issue."


  • "I see a huge problem with DSA (debt sustainability analysis), so long-term sustainability of the Greek debt. So now we will see what the institutions will bring on the table, what kind of finances and we have to assess it... This package would be appropriate for the completion of the second programme, but I'm afraid this is not enough for the third programme, for the ESM programme."


  • "We are still far away. It looks quite complicated. On both content and the more complicated question of trust, even if it's all good on paper the question is whether it will get off the ground and will it happen. So I think we are facing a difficult negotiation."
  • Will you talk about debt relief?
  • "I don't know we will get to that."
  • "There is still a lot of criticism on the proposal, reform side, fiscal side, and there is of course a major issue of trust. Can the Greek government be trusted to do what they are promising, to actually implement in coming weeks, months and years. I think those are the key issues that will be addressed today."
  • (For Greeks to regain trust) "Well, they will have to listen to the ministers and the institutions first and see what improvements are needed. And they will have to show very very strong commitments to rebuild that trust."


  • "Confidence has been ruined by every Greek government over many years which have sometimes made promises without making good on them at all. Today we need to have confidence again, to have certainty that decisions which are spoken of are decisions which are actually taken by the Greek government.
  • On debt restructuring: "France has always said there is no taboo about the debt. We have the right to talk about the debt."
  • We don't want there to be reduction in the nominal value of the debt because that is a red line for many of the member states in the Eurogroup.
  • "France ... is a link, and we will play this linking role to the very end."


  • "I expect a long finance ministers meeting on Greece. It is not very easy but we will do all we can."
  • "The purpose of this meeting is to kick off negotiations on ESM which is a medium-term, very demanding programme and we are all here with open minds to reach an OK, a green light to start negotiations. The government, the Greek Parliament and the Greek people are positive towards starting what is the beginning of a negotiation. It is not about striking a deal tonight."


  • "This (Greek issue) has to be solved today because it is a question of coming up with this framework which gives assurance to the finance ministers."


  • "The Greek paper was silent on banking. Obviously the Greek banks are in difficulty now and it's going to be hard to put them back on an even keel, so we need a full briefing on that. Secondly I said we needed a medium term sustainable programme. Sustainability depends a lot on whether the programme is sufficient to cause the Greek economy to grow and to create jobs... It is very hard to stimulate an economy when on the demand you are doing corrective work so they need more supply side initiatives which effectively means a lot of reform which doesn't seem to be built into the programme."
  • "I think the trust is now being rebuilt in the relationship with Greece. I would hope that trust would continue to be rebuilt today. That's pretty important also."


  • "It must be said that we are clearly making progress and the Greek government's proposal actually is pretty much along the lines of what the institutions' proposal was before the referendum. So clearly we see there is a willingness of the Greek to reach an agreement and also the vote in parliament showed that there is a parliamentary majority to move ahead with this programme."
  • "What we should be discussing today is basically about giving a mandate to the European Commission in liaison with the ECB and in close cooperation with the IMF to start negotiations about this ESM programme."


  • Asked about whether he was positive on a deal: "Yes and no. Of course it is a step ahead that Greece has finally delivered, surprisingly what was already agreed before and surprisingly after the referendum. What is missing are the details. The biggest item we have to talk about is what guarantees Greece can give to implement what has been agreed. We have seen for five years now that such lists are sent, but the implementing measures never happen."


  • "The Greeks have clearly made a step forward but at the same time we see that the institutions are critical of the plan, the missing specificities and they see that the plan is weaker in some areas than it should be. It is their suggestion to only start negotiations when these conditions are further filled in.
  • At the same time, many governments, mine too, have serious concerns about the commitment of the Greek government and also the power of the implementation. That has been the weak point because after all, we are discussing a proposal from the Greek government that was fiercely rejected a week ago, and that is a serious concern.
  • (On what the Greeks can do further) we have to discuss that. Clearly there has to be made a step that enables trust with all the financing parties. (What happens if there is no agreement tonight) That is basically up to the Greek government."


  • "I think we are here to make a lot more progress."


"Since the start, the European Commission had the objective, that of the integrity of the euro. It was to keep a reformed Greece in the euro zone."
"I note that the Greek government has made significant gestures."
"We (the creditors) have said the Greek reform programme could constitute a basis for a new programme."
"Our general sentiment is that there need to be reforms, solid reforms, reforms appropriate to the Greek authorities and reforms that are implemented as soon as possible."

* * *

And here are the punchlines:

First the Finns:

  • Finnish Parliament Committee Opposes Greek Aid Talks
  • Greek proposals don’t warrant negotiations on new bailout, public broadcaster YLE says, citing unnamed sources.
  • Finnish parliament’s Grand Committee adopted position regarding Greek bailout request on Saturday; stance won’t be published ahead of Eurogroup debate in Brussels, state secretary Olli-Pekka Heinonen told local media
  • MP Paavo Arhinmaki, head of Left Alliance, told Helsingin Sanomat newspaper he left dissenting opinion at Grand Committee meeting; said Greek govt proposals “could be basis to start talks”

And now, Greek nemesis #1, Schauble via Bloomberg:


More from German Focus, google translated:

The German Finance Ministry has communicated its negative assessment of the Greek proposals to other Euro countries on Saturday. "These proposals are missing centrally important areas of reform to modernize the country and to advance on the long term economic growth and sustainable development," it said in the one-sided position paper, which was present at the Frankfurter Allgemeine Sonntagszeitung (FAS). Therefore they could "not be the basis for a completely new, three-year ESM program".


Instead, the Treasury took two paths in the eye that remained.


One way: Greece improved its proposals quickly and comprehensively, with the full support of Parliament. The Ministry suggested among other things that Greece shall transfer assets amounting to 50 billion euros to a trust fund, which it sells and thus removes debt.


Way two: With Athens is negotiating a "time out". It leaves the euro zone for at least five years and restructures its debt. However, it remains the EU Member and receives further "growth-enhancing, humanitarian and technical assistance," says the "FAS".

And here's Reuters:

Germany's Finance Ministry believes Greece's latest reform proposals do not go far enough and has suggested two alternative courses for Athens including a "timeout" from the euro zone, the Frankfurter Allgemeine Sonntagszeitung (FAS) reported.


"These proposals miss out important central reform areas to modernise the country and to bring economic growth and sustainable development over the long term," the FAS quoted the ministry as writing in a position paper.


Instead, the ministry set out two alternative courses for Greece. Under the first, Athens would improve its proposals quickly and transfer assets worth 50 billion euros ($56 billion) to a fund in order to pay down its debt.


Under the second scenario, Greece would take a "timeout" from the euro zone of at least five years and restructure its debt, while remaining a member of the European Union.

In other words, Germany just said kick Greece out, conditionally, for 5 years (it is not quite clear what Greece would use for currency in the meantime), quarantine it, and treat it as a third-world country until 2020. Somehow we doubt global stocks expected this outcome when they soared on Friday.

As expected, Greece quickly denied this:


And at least one member of the anti-German/austerity axis chimed in as well:

  • The idea of giving Greece a sabbatical from the euro area cannot be taken seriously, an EU official says in Brussels.
  • It is legally not feasible, makes no economic sense and is not in line with political reality, official says
  • It is time now for a serious discussion and solutions, not for reactivating academic, non-practical ideas, official says
  • Official says euro suspension is old idea floated by German academic Hans-Werner Sinn

But with Germany making its semi-officially position known, and with the reality that Greece would essentially have to abdicate sovereignty to assure Europe that it will comply with any additional bailout conditions and further spending cut demands (of which there will be plenty), just what is the other "serious solution" alternative here?

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One And Only's picture

Why is everyone so hyperbolic about Greece exiting the Euro? OMG it's going to be a third world country!, hyperinflation!, Venezuela! Ebola is going to spread and everyone is going to get A.I.D.S!

Greece has been around for a few thousand years and it's full of white people. It'll probably be crazy for a little while as it reintroduces it's currency but it'll be fine, in fact it will be better off.

EscapeKey's picture

it will definitely be better off in the long run.

kaiserhoff's picture

Way too generous.  Spain and Italy will want and probably get better terms than Greece does.

This is a multi-period game of begger thy neighbor.

Publicus's picture

Greece should just start printing Euro with the X serial numbers on them.

knukles's picture

Brussels, we have a problem.


Great background music .... we have liftoff 4,3,2,1 .....
 ...... while we ponder that the first Act has Just Begun ....
                .... Fat Lady's Nowhere in Sight, Yet ....

Captain Debtcrash's picture
Captain Debtcrash (not verified) knukles Jul 11, 2015 12:03 PM

Wow I didn’t see Varoufakis’s “conspiracy theory” bring proven correct so quickly.

Pinto Currency's picture



Greece is on first.

Next up Spain and Italy is on deck.

The Euro is finished.  It will take time but it is finished.

Paul Gambles said it very well last week:

None of the peripheral countries operate in a way that they fit within the Euro.

Now the pain begins as it is doubtful the Tsipras has any coordinated plan for exit as it appears it was always his plan to capitulate to the Eurozone.

r00t61's picture

So, in other words, Greece will be placed on Super Secret Double Euro probation.

daveO's picture

Yea, they already agreed to bump up their value added tax to 23% from 13% and start taxing their beach businesses. So, the banksters definitely want to keep them on the plantation. Oh, and they also raised the retirement age to 67 and lowered aged 62 yr old pensions by 15%, last I read.

RazorForex's picture

Greece will obtain a G14 Classified status.

two hoots's picture

Greek debt crisis: Goldman Sachs could be sued for helping hide debts when it joined euro.  (The Independent, 11 Jul 2015, today)


Conspiracy zombi theory:  The US Gov used Goldman to sabotage the EU via Greece.  Seen it (EU) as too powerful, threatening $ hegemony and NATO?

daveO's picture

Quite possibly. There was more than one commentator who didn't give it 10 years. Of course, there was no QE back then.

rccalhoun's picture

unpaid debt is EVERYWHERE

petkovplamen's picture

totally agree with you, I think that was the plan from the very begining. USA cannot have a competitor in the form of strong Europe.

ChargingHandle's picture

I used to think Spain had no chance. They might make it. Growth at 3.2% is in the right direction. Unemployment is still stubbornly high at 20% but it too has been trimmed...if you believe their government's data. They have been and will conticon to be quiet is a baby lamb watching The Great Grecian Political & Financial Debacle. 

Jade Helm starts this week if you care to learn how we would be helped should a civil uprising occur.

knukles's picture

Gracie is a Goddess.  Nuffin' like it, man.
Thank you thank you thank you
        don't bogart....

BTW, China's all fixed too, right?

sodbuster's picture

El Vaquero

Phhhtttt.......Man that is some good shit!!

fukidontknow's picture

What a pots calling kettle black and stone throwing while living in glass-houses fiesta!

Pinto Currency's picture



Grees is on first.

Next up Spain and Italy is on deck.

The Euro is finished.  It will take time but it is finished.

Element's picture

Yes, but thank goodness no one else in Europe is going to have trouble with their banks being flogged-out broken zombies.

two hoots's picture

Stop just throwing money at Greece  and use that money to invest in Greece.  Get your industries to build there, manufacture there, ship to and from their ports, hire their 50+% unemployed youth and train them.   Built a EU Silk road through Greece.  Work with the Greece government to get control of their tax/revenue/expenditures and do so without changing their culture (but a major tweek to their financial culture).  There is much that can be done and Greece will just have to accept the education for a better future.  It will take nothing away from their sovereignty, just a little pride adjustment.

daveO's picture

'Free trade' implies the lowest cost manufacturer gets the factories. Everyone else gets paper money until the paper money dies. I didn't downvote you.

geno-econ's picture

Largest export from Greece is refined crude oil products and largest import is crude oil and other oil products.  Actually Greece has a strategic position in refining oil products and chemicals for the EU with gas and oil from Middle East and Russia.  However investments lacking due to political/economic uncertainty and currupt society, as is entire Middle East.  Tourism also big but is  considered  a small  entprenurial industry not requiring much investment.  Cultural differences also make My Big Fat Greek Nation xenophobic and socialist compared to "the continent"

Lea's picture

"There is much that can be done and Greece will just have to accept the education for a better future.  It will take nothing away from their sovereignty, just a little pride adjustment."

Never lose an opportunity to moralize and feel superior at no intellectual cost, isn't it?

The Greeks are generally way more educated than the average Americans, for starters. Secondly, the idea of EU investments already has been discussed and implicitely refused by Schäuble, who won't activate the process. A 35 billions fund have been alloted precisely to that, but he won't let go of the money.
Of course the Greeks would be more than happy for investments in their country. They've been clamoring for just that. Would YOU be unhappy about countries injecting money in the USA and providing well-paid jobs for Americans? Who in their right minds would see the smallest problem with that?

Paveway IV's picture

The gang is all here.

Hey, they forgot this guy


  • The Greeks clearly need to tell the EU to go pound salt. The Greeks no longer have any demands for a debt haircut - none will suffice. The debt is odius and was handled illegally by EU and former criminal Greek officials. This is a matter between those criminal parties alone and has nothing to do with the Greek people. 
  • Screw the worthless ISDA - the nation of Greece is bankrupt and declaring all its bonds are in default and will no longer be paid. Hope you bondholders got insurance, this is exactly what it's for. 
  • Iceland stands ready to assist the Greek justice system in prosecuting and hanging the bankers involved. Iceland welcomes the newly liberated Greece to the League of Free Nations.
detached.amusement's picture

well we all know damned well GS took out insurance on that fraud!

Marco's picture

EU would blockade them and no one would help them ... Putin isn't really interested in becoming a king pin in an international counterfitting scheme.

Kirk2NCC1701's picture

Wait till they mix in a bunch of Euros with a Y serial number mixed in with the ones with an X serial number. 

The ones with all those Y's is just due to the increase in German tourism, right?

SumTing Wong's picture

So Greece will now be "the wrong side of the tracks"? My guess is more people get smuggled into the EZ through Greece than have been smuggled through Turkey...whatever it takes to make a drachma here and there will be done.

RiverRoad's picture

Greece gone....moar for the rest of the PI(G)S.

Spitzer's picture


The krauts would be loaded up on this debt and bitchibgregardlesss if they were in or not

Kirk2NCC1701's picture

"It will definitely be better off in the long run."

Actually, "In the long run, their chances of survival are zero."

"They're dead, Jim!  They're dead!" - Dr. McCoy 

This is it's picture

These dicks came together today to talk, and told us all they are here to talk.

Wow, my popcorn is worth more than that I'm sure...

BuddyEffed's picture

One big room, full of bad bitches...

pauhana's picture

And one bitch, Greece, is a little bit pregnant.  You can be a little bit preggers, can't you?  (Hint:  Only in Euroland.)

jmc8888's picture

Umm, you might want to read up on how the lack of medical supplies and funding has indeed caused a MAJOR spike in AIDS in Greece the past couple years.  You joke, but the reality is, your joke is already reality.


In that article among other things, showcases there was a 200 percent spike in AIDS cases.


As the Greek healthcare system has come to look less like that of their European neighbours and more like that of a third world nation, so too have the health issues plaguing everyday Greeks.  The slashed budgets of public health programmes have resulted in a huge drop in condoms and needles being supplied to drug users, an intervention designed to cut down on HIV transmission through needle-sharing.

Read: Action needed to halt malaria in Greece

The result of the cuts to this programme? New HIV cases surged 200%, according to David Stuckler, an Oxford researcher who helped produce a paper into the effects of budget cuts on health in Southern Europe. Junkies who need 200 needles a year are now receiving just 3.

The demise of mosquito spraying programs also saw a resurgence of malaria, something Greece had controlled for the past 40 years. “Greece is an example of perhaps the worst case of austerity leading to public health disasters,” he explained in a telephone interview with Quartz.


orez65's picture

"Greece is an example of perhaps the worst case of austerity leading to public health disasters ..."

Total Bull Sh.t!!

It's not "austerity" it's Socialism at its "best"

disabledvet's picture



So....since everyone here AND IN EUROPE are all on board "States with No Banks"....GUESS WHAT!



move along...

disabledvet's picture


mmmmmmkay Children?

If "EUROPA" fails in this its "Handjobs for Crack."

THE FUCKING ECB IS A BANKER'S BANK...."destroy the Country...destroy the Bank. Destroy the Bank...destroy the Country."


If the whole system seizes up THE NEXT PROBLEM WILL BE MILAN.


If that Bourse fails to open "Next up the Spanish Exchange" etc.

God help the place if the German DAX fails to open. ALL EXCHANGES ON THE CONTINENT WILL BE CLOSED.

Good luck "defaulting to London" if that happens. There is NO WAY London could handle such a liquidation.

ThroxxOfVron's picture

"If the whole system seizes up THE NEXT PROBLEM WILL BE MILAN.


If that Bourse fails to open "Next up the Spanish Exchange" etc.

God help the place if the German DAX fails to open. ALL EXCHANGES ON THE CONTINENT WILL BE CLOSED.

Good luck "defaulting to London" if that happens. There is NO WAY London could handle such a liquidation. "


I disagree.

The TBTF Banksters would fucking love flushing a real liquidation of the EU through the desks of The City.

London will punch tickets all fucking day and night while skimming the cream off the top and outright thieving the best assets for themselves via dark pools/offshore/subsidiaries/etc.

booboo's picture

I don't think a lack of "medicine" is the root cause in the spike in AIDS there bubbie.

disabledvet's picture

I thought the goats were the ones with the problem over there...

ThrowAwayYourTV's picture

The money masters just want to put on a "Really Big Show" so everyone will gasp in fear over any change to their monopoly game.

Nothing will work besides "their" plan for "your" future, right?

disabledvet's picture

This is not complicated dude.

Read up on the Knickerbocker Crisis and the creation of the Fed.


JP Morgan BULLIED them into an office and said "OPEN UP YOUR LOAN BOOKS OR YOURE ALL DEAD."

And indeed they did...some of the Banks being VERY solvent actually!

"So JP bought up all the good assets for next to nothing for his Bank and left everyone else to twist in the wind."


That is all the United States Federal Reserve in fact does.


The Federal Government bought hundreds of BILLIONS in assets for mere MILLIONS.

Wall Street is much more reticent in lending indeed.

"Hank Paulson was the Biggest Pool Shark of all."

Needless to say the Federal Government has now unloaded the bulk of its book for a HUGE premium!

The Federal Deficit has come WAY WAY WAY FUCKING DOWN as a consequence.

It is interesting to note of course "there has been ZERO recovery" though.

Everyone here however is about to witness "a world Sans Hank Paulson" in the form of Europa in my view.

We'll find out on Monday.

My guess will be "limit down in Europe"...meaning 10-15%..."and then the exchanges start to close again...

BlueStreet's picture

Way to go Schauble. Don't flush your country's money down the rat hole. 5 years and they haven't done one thing to reform. This is a perfect idea. Make them prove they're going to chance. Brilliant. 

Perimetr's picture

5 minutes would be too long

blueRAP's picture

Was there a subtle white supremacy reference in there? High standards of living is a code to live by, not an inherent property of race.

Let's not forget that white people are also the primary cause of the history-making monstrosity that is the current global economy.