"It's Not Possible To Reach A Deal Today" - EU Summit Canceled As Leaders Scramble To Keep The Dr€am Alive

Tyler Durden's picture

It was a weekend in which, according to traders, Greece facing an "absolutely final" was going to be saved. Instead, it may go down in history as the weekend in which the Eurozone finally split and its long-overdue disintegration began.

After yesterday's dramatic report that Germany, together with 5 other nations, are contemplating a "temporary" 5 year Grexit, it started to become clear that Schauble does indeed want to make an example of Greece (perhaps for France and Madame Frexit, perhaps for the rest of the European periphery where the recovery is so "strong", record youth unemployment still assures landslide anti-austerity and anti-Euro victories) and so he did, when the finmin meeting devolved into a total fiasco which ended in the most acrimonious manner yet, one where not even a statement was forthcoming.

The negotiation spilled over into today, where hours ago leader soundbites made it very clear that nothing would be resolve. Case in point, Finland's FinMin Stubb who said that while he is still hopeful "I think we’re very far away from the types of conditionality that we need. If this was a negotiation from one to 10, I think we’re still standing somewhere between 3 and 4. So making progress but not there yet.  No one is blocking a deal, we’re all constructively trying to find a solution in a very difficult situation."

And just as we warned on Friday, when we said the proposed Greek offer would be nowhere near enough, so it was again confirmed: "The conditionality that has been presented by the Greeks is simply not enough at this stage. We need to have clear commitments, clear conditionality and clear proof that those conditions will be implemented at the end of the day."

Then it was Finland Prime Minister Juha Sipila who explained why Finland alongside many other nations including Germany, now are pushing for a Grexit: "proposals made by the Greek government on reforms it plans to undertake in return for a third bailout are not adequate as a starting point for negotiations with international creditors."

And why Greek hatred, focusing on the Germans for so long, now may have a new target: the pragmatic, efficient country of Finladn: "We don’t consider the Greek proposal at all sufficient for starting negotiations. Much must happen in order to advance. The Finnish government is unanimous on its stance on Greece."

Or as we said yesterday...

Also it is now clear that Tsipras' capitulation was all for nothing.

Even erstwhile Greek supporters Italy were dour: "We continue to work to establish the conditions to start negotiations, which is the real target - it’s not about closing a deal, it’s about starting negotiations,” Italian Finance Minister Pier Carlo Padoan tells reporters in Brussels. "We think that there are conditions to do that but let’s face it, the main obstacle to moving forward is lack of trust."

Italy's conclusion of what is needed: "I would like to see the Greek government to take concrete actions tomorrow in parliament to implement measures that are needed for Greece in the first place and then to rebuild trust and therefore allow concrete negotiations to move forward. We have lost so much time, we cannot afford to lose more time anymore. We’re talking about a very complicated program. ESM is complicated, it deals with structural reforms across the board, it deals with financing."

The only problem is that Greece likely won't have a government much longer, especially not when Tsipras is forced to tell his countrymen that the latest demands by the Eurogroup include at least one kidney. Assuming 79% of the Greeks were against the original Greek debt deal, at this point the only question is just how violent the government overthrow would be if and when Syriza tries to explain to the people just what is going on.

As for what happens today, well as Slovakia FinMin Peter Kazimir said quite simply earlier "it's not possible to reach deal today." What also happens is that all those EU-28members who had hope to meet in Brussels and savor some of that fine Belgium caterer product, were told to stay at home when European Council president Donald Tusk said that he had cancelled a planned meeting of EU heads of state and government this afternoon, even as a summit of euro zone leaders scheduled to continue until talks conclude on Greece. It may go on for a long, long time.

Tusk said in a tweet that the euro zone summit would start at 1600 CET (1400 GMT), an hour later than planned "and last until we conclude talks on Greece". Euro zone leaders were due to meet on Sunday, either to endorse a decision to open talks on a new bailout or, along with other EU leaders, to take steps to contain the fallout from a looming Greek bankruptcy.

Basically, all Europe has left now is hope: hope that Germany will change its mind in the last second and will backtrack on its demands. It got so bad that Luxembourg's foreign minister made a plea for Germany to avoid a Greek exit from the euro, warning Berlin of a catastrophic schism with France if it pushes for Athens to leave the currency union. The comments from Jean Asselborn, released on Sunday, came after Germany argued that Greece could take a five-year "time-out" from the euro zone and have some of its debts written off if Athens fails to improve proposals it has made for a bailout.

"It would be fatal for Germany's reputation in the EU and the world if Berlin does not now seize the chance that there now is with the Greek reform offers," Asselborn told Germany's Sueddeutsche Zeitung newspaper.

"If Germany pushes for a Grexit, it will provoke a profound conflict with France. That would be a catastrophe for Europe," he added in an advance release of an interview to run in the Sueddeutsche's Monday edition.

So there is still hope, although if one looks at their faces...

... it is not much.

 

* * *

So where are we now? Sky News' Ed Conway has prepared a convenient list of "stream of consciousness" bullet points that effecttively summarize the situation:

Here are a few stream-of-consciousness thoughts about where we are, written at lunchtime on Sunday. They may be out-of-date by the time you read them. Then again, in the euro crisis, nothing ever seems to change all that much.

1. Today’s Absolutely Final deadline is no longer final.

There was lots of talk (from the President of the European Council among others) that Sunday’s leaders’ and EU leaders’ summit was the Very Last Opportunity to seal a deal or to throw Greece out of the euro. That seemed to make some sense?—?after all, not only are the Greek banks closed, the entire financial system seems to be about to run out of money. There’s only so long you can run an economy without a fully-functioning banking system.

However, at yesterdays’ eurogroup meeting (that’s the euro finance ministers) it emerged that the decision on a deal may be put off for another few days. Sources said that the financial outflows were not so bad last week, and that the Greek banking system could survive for another few days. Whether this is true or not remains to be seen.

2. One big problem is trust

This is both good news and bad. Good because it signifies that in terms of the proposals for a bailout deal, there is no longer much distance between the two sides. Having persuaded his people to vote in last weekend’s referendum against the deal proposed by the creditors, he has subsequently signed up to the vast majority of its strictures. So the two sides now, finally, largely agree on the kind of austerity that needs to be imposed (cuts to pension bills, liberalising monopolies and nationalised industries, raising VAT and removing exemptions, including on the islands etc). The problem is that no-one believes that Greece will actually go through with the reforms?—?especially after all the surprises, disappointments and broken promises of the past few weeks and months. That is why there is talk of waiting until the Greek parliament has actually passed some of these measures before giving the final go-ahead to new bailout talks.

3. The other big problem is domestic politics

Midway through yesterday’s finance minister’s meeting, it emerged that Finland’s government was close to collapse, as the second-biggest party, the True Finns, were dead set against handing any extra cash to Greece. There were also extremely hawkish comments coming from the German and Slovakian teams. It’s a reminder that around the Eurozone many countries are simply sick and tired of handing money to Greece. The largely centrist leaders in Spain and Italy, who face upsurgent anti-euro parties back home, are desperate to prove to the electorate that voting in a party like Syriza is the worst thing they could do. The more Greece suffers (preferably with wall-to-wall coverage across the European broadcast media) the more likely their voters are to think twice about voting for Podemos or Beppe Grillo.

To put it another way, in order to get a deal, politicians will have to risk losing at least some votes (maybe lots of them) back home. And no politicians like that.

4. Crazy ideas are now mainstream

A few years ago it was forbidden to talk about the possibility that a country could leave the euro. That taboo was overcome a few years ago at the Cannes G20. Now some finance ministers are openly discussing how it would be done. The big story out of yesterday’s eurogroup was that Germany has been throwing around an idea of a temporary Grexit?—?that Greece could leave the single currency for five years, restructure its debt and re-join when it is in better health. The problem with such an idea is that “temporary” changes in currency regimes almost always turn out to be permanent. Take the UK leaving the ERM in 1992, or leaving the gold standard in 1931, or the US closing the gold window in 1971. All were described as temporary. Many might have even believed that at the time. Ultimately, they were nothing of the sort.

Anyway, what seems more likely is that this plan is a mischievous attempt at brinksmanship. And, even if it never comes to pass, it is going down brilliantly back home with the German electorate [see point 3].

5. The cancellation of the full EU leaders’ summit is neither a good nor a bad thing

There was originally supposed to be a euro leaders and then a full EU summit today?—?the idea presumably being that if Grexit was indeed likely, the whole of the EU might need to sign off both on that and the consequent humanitarian aid that might be needed. Now the EU summit has been cancelled?—?mainly because after last night’s nine hour marathon of talks it is clear that there will be no straightforward conclusion from the eurogroup, and hence the leaders won’t simply be coming into town to sign a piece of paper and then leave.

6. Best-case scenario: eurofudge

Of course, the pie-in-the-sky best-case scenario involves Greece getting a deal immediately and going home and successfully implementing it. But a more realistic scenario is probably going to involve a characteristic euro fudge.

The euro finance ministers could agree to begin bailout talks on the pre-condition that Greece implements a number of austerity/reform proposals in the next few days. This would be endorsed by the leaders, unanimously. Then, the European Central Bank confirms that because talks are now ongoing (as opposed to frozen) it can loosen conditions on Greece’s banks (though they won’t open for some time either way). The eurogroup confirms the bailout talks are underway in yet another meeting or teleconference later on this week. Note that there is no longer any hope of getting a full bailout signed off?—?the best that can be done is to begin formal negotiations for another bailout. All because the last deal expired a couple of weeks ago.

7. Worst-case scenario: eurodisaster

The worst-case scenario for both sides involves Greece leaving the euro. Quite how this happens is anyone’s guess, though Germany’s eurosabbatical paper yesterday underlined that despite the fact that the EU Treaties don’t have a clause to allow it, Grexit is absolutely feasible. It would begin with a breakdown of today’s talks, with a complete split in the eurogroup and euro leaders’ meeting between those who believe Greece’s departure is good news for the euro (Germany, Finland etc) and those who think it would be a disaster (France, Italy etc).

Rather than coming out and waving a piece of paper saying Greece is heading back to the drachma, the process might be more subtle and imperceptible: Athens might be allowed to print its own euro-denominated instruments; it might be allowed to print scrip; it might simply not be allowed to get extra liquidity from the ECB and be forced to nationalise its banks.

But though it might not begin with one big moment of fanfare, a departure would be messy, would provoke a further default by Greece on its debts to the IMF, the ECB and other euro nations. They would be pursued in the courts for decades for some sort of payback. Questions would arise over the future of the single currency. If the remaining members do not commit to big-scale further integration (a single Treasury, fiscal union) they will leave the door open for further departures in the coming years. Markets would plunge, not just in the Eurozone but everywhere around the world. Greece would almost certainly be out of the euro forever, however much the move would be branded initially as temporary.

* * *

Good luck Europe, judging by the suddenly surging Bitcoin price, you need it now more than ever.

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Laughinggrizzley's picture

I wonder if the Euro "bureaucrats" can drag this out another 5 years?

cossack55's picture

Is Finladn any relation to BinLaden?

Steve in Greensboro's picture

War is peace.

Freedom is slavery.

Ignorance is strength.

Spending less than your income is austerity.

 

If the Greeks think that staying within the Eurozone and complying with Germany’s requirements means austerity, they are about to find out what austerity really means should they decide not to comply.

 

Deprive the Greeks of that sweet, sweet German Bundesregierungkaese and they will come begging for readmission and it won’t take 5 years for them to figure it out.

Headbanger's picture

None of this latest shit matters.

Greece is broke and will never pay back what it owes

And the Germans won't give any more money to them now should they.

So Grrext already and git'r done!

disabledvet's picture

GREECE HAS THE HIGHEST CREDIT RATING OF ANY COUNTRY IN EUROPE YOU RETARDE FUCK.

GERMANY HAS IN FACT THE LOWEST.

SO SHUT YOUR STUPID FUCKONG MOUTH YOU STUPID FUCKING IDIOT.

Headbanger's picture

Fuck you

Highest credit rating...  You fucking mook...

Oh yeah, THAT'S WHY THEIR BANKS ARE CLOSED YOU STUPID ASS.

THX 1178's picture

Tylers poster "Total Chaos" on twitter yesterday. I don't think anyone knows whats going to happen even one day into the future. The whole system is shattering in a most mysterious way.

J Jason Djfmam's picture

"It's Grrreat!"

-Tony the Tiger from Frosted Flakes the Motion Picture.

two hoots's picture

There is no financial solution so Finance Minister's are the wrong people looking to solve this. This is now an EU structural problem, a Greece structural problem. Finance Minister's now just sort throught the trash and figure out what they did wrong and how best they can recover from it.  Get the right people on the job.

 

Added later:   One thing my post does not consider is that the money, the big money, was already made on this whole charade, whether it be the previous high interest on bonds and/or the sell or transfer of those bonds to taxpayers, mostly German, when they became a known liabilty.  You can thank CBs, IMF (et al) courtesy of Goldman Sax for increasing your tax burden.  All nonelected  players.  Point,  maybe there are no right people for the job as the job is accomplished and the Greek and German citizens left wondering what just happened.

 

WakeUpPeeeeeople's picture

If Greece gets booted, what comes of it membership in NATO? I'm sure that Russia or China would gladly pay a pretty (Euro) penny to have a military base in that neck of the woods.

Vincent.Vega's picture

http://www.hangthebankers.com/how-greece-was-robbed-by-the-bankers/

How Greece was robbed by the bankers  

Every single mainstream media has the following narrative for the economic crisis in Greece: the government spent too much money and went broke; the generous banks gave them money, but Greece still can’t pay the bills because it mismanaged the money that was given. It sounds quite reasonable, right?

Except that it is a big fat lie … not only about Greece, but about other European countries such as Spain, Portugal, Italy and Ireland who are all experiencing various degrees of austerity.

It was also the same big, fat lie that was used by banks and corporations to exploit many Latin American, Asian and African countries for many decades.

Greece did not fail on its own. It was made to fail.

In summary, the banks wrecked the Greek government, and then deliberately pushed it into unsustainable debt … while revenue-generating public assets were sold off to oligarchs and international corporations. The rest of the article is about how and why.

If you are a fan of mafia movies, you know how the mafia would take over a popular restaurant. First, they would do something to disrupt the business – stage a murder at the restaurant or start a fire. When the business starts to suffer, the Godfather would generously offer some money as a token of friendship. In return, Greasy Thumb takes over the restaurant’s accounting, Big Joey is put in charge of procurement, and so on. Needless to say, it’s a journey down a spiral of misery for the owner who will soon be broke and, if lucky, alive.

Now, let’s map the mafia story to international finance in four stages.

Stage 1: The first and foremost reason that Greece got into trouble was the “Great Financial Crisis” of 2008 that was the brainchild of Wall Street and international bankers. If you remember, banks came up with an awesome idea of giving subprime mortgages to anyone who can fog a mirror. They then packaged up all these ticking financial bombs and sold them as “mortgage-backed securities” for a huge profit to various financial entities in countries around the world.

A big enabler of this criminal activity was another branch of the banking system, the group of rating agencies – S&P, Fitch and Moody’s – who gave stellar ratings to these destined-to-fail financial products. Unscrupulous politicians such as Tony Blair joined Goldman Sachs and peddled these dangerous securities to pension funds and municipalities and countries around Europe. Banks and Wall Street gurus made hundreds of billions of dollars in this scheme.

But this was just Stage 1 of their enormous scam. There was much more profit to be made in the next three stages!

 

[...]

Philo Beddoe's picture

You are a funny guy, Vinny. 

WestVillageIdiot's picture

What? Like a clown?  Like I fucking amuse you?  What the fuck is so funny about me?

J Jason Djfmam's picture

"So tell me, when did you see the two yutes robbing the world blind?"

johngaltfla's picture

They'll find somethingn to hang a prayer on before the Asian markets open.

Or not.

WestVillageIdiot's picture

"Frau Merkel has massive bowel movement in Brussels.  Futures are up on the news." 

Vincent.Vega's picture

This "process" is not happening on it's own, like a rain or an earthquake, so there is no one responsible and there is no one to punish.

This process of systemic parasitism is created, controlled and benefited from by the chosenites.

And Perkins only exposes the sympthoms, not the disease -- and he can't be blamed for it, look what happened to John F. Kennedy.

 

Another example and a particular case of parasitims is slavery, which again is not an objective, natural process since it has concrete names behind it:

Jewish Involvement In Black Slave TradeTo The Americas: http://www.rense.com/general69/invo.htm

Name Of Slave Ships And Their Owners:
 
The 'Abigail-Caracoa' - Aaron Lopez, Moses Levy, Jacob Crown
Isaac Levy and Nathan Simpson
 
The'Nassau' - Moses Levy
 
The 'Four Sisters' - Moses Levy
 
The 'Anne' & The 'Eliza' - Justus Bosch and John Abrams
 
The 'Prudent Betty' - Henry Cruger and Jacob Phoenix
 
The 'Hester' - Mordecai and David Gomez
 
The 'Elizabeth' - Mordecai and David Gomez
 
The 'Antigua' - Nathan Marston and Abram Lyell
 
The 'Betsy' - Wm. De Woolf
 
The 'Polly' - James De Woolf
 
The 'White Horse' - Jan de Sweevts
 
The 'Expedition' - John and Jacob Roosevelt
 
The 'Charlotte' - Moses and Sam Levy and Jacob Franks
 
The 'Franks' - Moses and Sam Levy
 

P.S.

Earth is not a planet, it's a place. And this place is a prison for goyim nations.

 

 

Afaerl's picture

At least they've solved the China crisis. No news is good news, yes?

Kirk2NCC1701's picture

The ONLY way to save the Euro and Europeans at this point, is to have a Northern and a Southern Euro. 

The south can then also act as a buffer zone, and keep all the illegals streaming in.  This works (sort of) in other places in the world, with its Hot/Cold divide. 

Wary Hanger's picture
Wary Hanger (not verified) Jul 12, 2015 7:15 AM

I'm confident they'll sort it all out on the back 9 at Caves Valley.

The Magus's picture

Wow. This is really real.

Philo Beddoe's picture

Finland's FinMin Stubb who said that while he is still hopeful "I think we’re very far away from the types of conditionality that we need. If this was a negotiation from one to 10, I think we’re still standing somewhere between 3 and 4. So making progress but not there yet. No one is blocking a deal, we’re all constructively trying to find a solution in a very difficult situation."

.....standing somewhere between 3 and 4.  

That is the clarity we all need to move forward with this shit show. 

WestVillageIdiot's picture

These clowns remind me of the NCAA.  They are a bunch of blowhard hack apparatchiks, pulling down massive salaries for their bloviating.  They speak big, and act like a bunch of tough guys.  But any time they are confronted with taking any kind of real action they back down like a bunch of pussies.  But then to try to convince themselves of how tough they are they find the smallest kid on the playground and spend a couple hours roughing him up, while one of them hides the kid's crutches.  So, they want to be tough on Greece to send a message to France?  What a joke!  Jerry Tarkanian was right.  "The NCAA is so mad at Kentucky they're going to give Cleveland State another year of probation."  We all know that Cleveland State is now the home of the Acropolis. 

omniversling's picture

Bingo...

"If the remaining members do not commit to big-scale further integration (a single Treasury, fiscal union) they will leave the door open for further departures in the coming years." (or months)

D'land has had this one on ice since 2011:

"Dr Pippa Malmgren, a former economic advisor to George W. Bush and a former advisor to Deutsche Bank. According to Malmgren, Germany has already ordered the printing of Deutsche Marks in anticipation of a possible withdrawal from the EU."

http://www.zerohedge.com/contributed/germany-already-printing-money%E2%8...

How the cascading dominoes of derivative defaults plays out could be exciting. Perhaps enough neueDmarken have  been printed to cover DBs 75bn(+) position...

http://www.zerohedge.com/news/2014-04-28/elephant-room-deutsche-banks-75...

 

J Jason Djfmam's picture

So, will the Germans be buying their own stuff with these Douche Marks?

Irish66's picture

Please let this end today!

Salah's picture

"Oh if I only had a brain" (errr, Navy...to repo Crete)

https://www.youtube.com/watch?v=nauLgZISozs

Blopper's picture

There will be NO GREXIT ever.

Tsipras, please stop the acting.

Merkel, please stop the acting.

You people are henchmen of the Rothschilds.

 

I bet you will NEVER officially declare a Grexit.

You may say you're preparing or a Grexit, or getting ready for a Grexit, or bracing for a Grexit, or whatever the bullshit from the asshole of the Rothschilds that is situated in between their heads (no, these are not wisemen, these are charlatans, there were people far wiser and far more intelligent than these bankers), but you will NEVER DARE to officially declare a Grexit and make it real once and for all.

 

So, cut the crap and stop the stupid chase.

conscious being's picture

The 1st step back for the hegemon in decline is always a big deal.

Krumnoltzwitsky's picture
Krumnoltzwitsky (not verified) Blopper Jul 12, 2015 7:55 AM

I beg to differ. The Rothschilds allowed Lehman Brothers (a bank that they controlled) to go bankrupt in order to bring about the TARP program and consolidate the big banks in the US even more than they were before. Why wouldn't they allow Greece (a country that they control) to go bankrupt in order to bring about more consolidation in the banking system worldwide and further their control? Not to mention it would probably mean that they could finally put Deutsche Bank forward as their "sacrificial lamb" like they've been preparing it for the past couple of years.

Kirk2NCC1701's picture

FYI... Last night a Rothschild stayed in a Hilton.  

Not in Paris, but you never know about a 2-for-1 deals with these people.  Theirs is the morality of Rulers, not the Ruled, after all.

There was a wedding/merger some days ago in London, Kensington Palace. 

J Jason Djfmam's picture

I used to think if I wished hard enough that I could make things not happen.

kaiserhoff's picture

Mutti has spoken.  It's over.

On to Italy and Spain.

Blopper's picture

Mutti has spoken of what?

That he's going to start eating chapati for breakfast every day from now on?

Bring it on.

And keep track of the EUR/USD.

I bet with all the talk of -xit of whatever country involved, it will still be trading at a premium to the dollar.

One And Only's picture

Why didn't Greece pull the Pelosi "you have to pass the bailout package to find out what reforms are in it" trick.

Dollarmedes's picture

I want to say "because they still have a sense of shame," but we know that's not true.

disabledvet's picture

BECAUSE NEXT IN LINE IS ITALY YOU FUCKING DOPE!

viator's picture

This is very bullish news. Stocks up 1% tomorrow.

Fukushima Fricassee's picture
Fukushima Fricassee (not verified) viator Jul 12, 2015 7:54 AM

Gold down 30, hammer time

disabledvet's picture

ALL EURO DENOMINATED DEBT PUT ON CREDIT WATCH TO BE DOWNGRADED BY ALL RATINGS AGENCIES.

Move along...

JJdog's picture

So are they going to give another deadline for next Sunday? The absoultly the last day for another propoal? Just to keep this $h1tshow going? The markets will rocket higher again next week? 

the question's picture

Yeah no shit. Last Sunday was supposed to be the end of the line when the referendum went oxi.