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Leaked Eurogroup Statement Demands Much More From Greece, Keeps "Temporary Grexit" Option
As we reported earlier, not only are all the finmins and premiers currently in Belgium in a state of shock as the frailty of the entire European project is suddenly laid out bare for all to see, split between the "hard money" Northern States led by Germany and the "debt haircut" axis consisting of France, Italy, the IMF and, recently, the US, but so is a generation of Euro fanatics who even as the signs were all too obvious, clung to hope that "this time" an artificial monetary union may survive because, you know, people who underestimate "political capital" and some such.
Eurogroup Day 2
#Greece pic.twitter.com/iHGskcJQfb
— Derek Gatopoulos (@dgatopoulos) July 12, 2015
And while "there is always hope" in the unforgettable words of France's Moscovici, it is once again up to Greece to convince Europe it really wants to stay in the Union. According to Reuters, the Eurogroup is about to release a statement, whose draft it has seen, which will demand much more from the tiny country caught in a state of permanent depression.
To wit: Greece will not be able to start negotiations on a third bailout until it makes changes to its sales tax and pension systems and strengthens the independence of its statistics office, a draft statement of euro zone finance ministers said on Sunday.
The conditions set out in the draft effectively exclude the Eurogroup ministers taking a decision on a next financing package for Greece during their meeting on Sunday because they all have to be passed by the Greek parliament.
"The Eurogroup... came to the conclusion that there is not yet the basis to start the negotiations on a new programme," the draft statement, seen by Reuters, said.
To begin such talks, the ministers would first want Greece to improve its VAT and pension systems, broaden its tax base to boost revenues and strengthen the independence of ELSTAT, the Greek statistics agency.
"Only subsequent to legal implementation of the above mentioned measures can negotiations on the memorandum of understanding commence, subject to national procedures having been completed," said the draft. It is set to be presented to euro zone leaders meeting later on Sunday in Brussels.
In other words, back to square one in the blame game, where Europe tightens the screws on Greece with even more extreme demands, so that it is Greece that either turns down the proposal (and its sovereignty as well because that's what it boils down to) entirely or requires yet another referendum. In the meantime, with every passing day its bank need an additional €1 billion in bail out funding, money which will likely not come resulting in a matched (and accumulating) haircut to Greek deposits.
Some other details from the leaked Eurogroup statement, with an emphasis on pensions just as we expected las week, as well as undoing all laws passed in 2015 that Germany did not preapprove:
The Eurogroup welcomes the assessment by the institutions that the list of policy commitments of the Greek authorities represents a basis to start the negotiations on a new program. The Eurogroup also agrees with the institutions that the package needs to be significantly strengthened and broadened in order to provide for appropriate conditionality for a possible three-year ESM program. The Eurogroup thus welcomes the additional following commitments of the Greek authorities on the basis of a clear timetable:
- fully comply with the medium-term primary surplus target of 3.5 percent of GDP by 2018, according to a yearly schedule to be agreed with the institutions;
- carry out ambitious pension reforms and specific policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause;
- adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit I recommendations, including Sunday trade, sales periods, over-the-counter pharmaceutical products, pharmacy ownership, milk, bakeries. On the follow-up of the OECD toolkit II, manufacturing needs to be included in the prior action;
- on energy markets, the privatization of the electricity transmission network operator (ADMIE) must proceed, unless replacement measures can be found that have equivalent effect, as agreed by the institutions;
- on labor markets, undertake rigorous reviews of collective bargaining, industrial action and collective dismissals in line with the timetable and the approach suggested by the institutions. Any changes should be based on international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth;
- fully implement the relevant provisions of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, in particular to make the Fiscal Council fully operational;
- adopt the necessary steps to strengthen the financial sector, including decisive action on non-performing loans, transposition of BRRD and measures to strengthen governance of the HFSF and the banks;
- develop a significantly scaled up privatization program with improved governance. A working group with the institutions shall provide proposals for better implementation mechanisms;
- amend or compensate for legislation adopted during 2015 which have not been agreed with the institutions and run counter to the program commitments;
- implement the key remaining elements from the December 2014 state of play of the fifth review of the second economic adjustment program."
All of which, of course, assumes that Europe wants to keep Greece in the Eurozone. Which is a very aggressive assumption if, indeed, as Dow Jones reports the Draft also includes the "Temporary Grexit" clause at Germany's request.
#Greek Time-Out Included in Draft Statement at German Request—Source #Eurogroup #Greece via @WSJ @gksteinhauser
— Nektaria Stamouli (@nstamouli) July 12, 2015
Failing that, Greece can just liquidate its nation, one asset at a time, until it sells some €50 billion worth of sovereign assets to repay Troika debt:
Source: Germany is pushing to include Greek state assets being used as collateral inside Eurogroup statement.
— Simon Marks (@MarksSimon) July 12, 2015
So if we had to summarize the current state of play: Germany and 5 other "northern" states want Greece out, but they generously offer Greece the opportunity to push the "Grexit" button itself (especially since it is only "temporary"). Unless, of course, Greece is willing to cede all of its sovereignty to Germany in which case it can generously stay. Oh, and please remit all Greek left kidneys as part of the deal.
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strengthens the independence of its statistics office
Something that the land of the free desperately needs
Well that plan is full of piss
Schäuble's plan is keeping Greece's debts (his assets) on his balance sheet at par.
If the Greeks say publically they aren't gonna pay and these have to get market down materially -- then this shit is going to hell in a hand basket.
Everyone is playing with fire in a room full of gunpowder.
Source: Germany is pushing to include Greek state assets being used as collateral inside Eurogroup statement.
Germany has lots of gold and apparently they want Greece's also. I would bet my left testicle that Gold is on that asset list. Keep stacking because so are the countries who want more power. Wealth=power. ;)
Bitcoin above $300 resistance and setting new highs for 2015 this morning
Good perspective on the subject on Washington's blog;
http://www.washingtonsblog.com/2015/07/how-fascist-capitalism-functions-...
I'm starting to think the Greek "leadership" is either being blackmailed or is simply totally mentally retarded. I mean really the debt being put on them will suck the life from them economically for ever if they stick with this. They need IMHO to leave the EU and Euro, and start producing everything thing they can under the sun. Be it food, farm equipment, babies, boats, tell the EU quota system to go to hell. A default in the short run will be painful but I would rather lose a finger and be free than have my balls in a vice for eternity with a banker applying pressure when they want me to submit. It won't be rosey and they will have to totally rethink their socialist government programs but at least they can choose what to do on their own land.
Sounds like USA
Thanks, interesting.
What the German's are singing;
https://www.youtube.com/watch?v=azcj749wMIU
Another zero hedge blood libel.
As if missing the greatest bull market of the past 50 years wasnt enough
Let Greece live within its means and pay its bills
All the rest is noise....
That jumped off the page for me too. The type of independence they are looking for could only be achieved by a GS "advisor"..
We'd never again see inflation under 5% or unemployment under 25%.
New kind of IBS Greek?
https://www.youtube.com/watch?v=_VFCQNdgDHE
"Fuck the EUro...let them eat cookies.." - VN
They know this is the end. It's who goes down in history as the one who was mainly responsible is what they care about now. These politicians are always looking out for their self interests.
At this point this is a sell job for Spain, Portugal, Ireland and the rest of the edge crew such that they feel good about staying in the train wreck known as the "Union".
Why do you think they want to put a woman in charge in the U.S.?
Same with Yellen at the FED.
Funny how the U.S. had to have bailouts all around as soon as they knew a black man was gonna be prez.
Yeah, I know, just coincidences.
strengthens the independence of its statistics office
A nice way to say "We are taking over your statistic office"
Leaked statement from Syriza: "Tsipras ready to donate the other Gonad"
Queue Bee Gees song "Staying Alive". Now sing like Barry Gibb, Tsipras!
Opa!
Good luck with more austerity.
This is just a fassade, it's a done deal already. The euro is dead, greece is just having the honors to push the button.
The only thing left is the anus. And if i was greece i would tell Germany to lick mine
A never-ending rectal incontinence is the only option that's on the table.
Trapped.
Until it strengthens the independence of it statistics office? Talk about the pot calling the kettle black.
What? They forgot to mention it's the final Final FINAL deadline!
Either way the greeks end up eating bread, olive oil and water
Can I sprinkle some black pepper on my olive oil? If so I'm in.
What, no garlic?
And I'm sure they've got plenty of Feta and some eggs
Some home made wine...
It's a LOT healthier than McDonalds!
But the big problems will be medical care, heating, electric power, crime.
BTW: Expect a big drop in the pigeon population.
Nobody in these discussions has put a nUMBER to GREXIT !
We all know that crossing that Rubicon scares the SHITS out of Eurogroup all the while Mutti moans "I can't carry Greece on my back anymore."
To keep things in mind: Greece needs 74 billion just to RESTART its economy now moribund; aka kickstart and recapitalise its banks and economy. On top of that it has to "NATIONALISE" some of its rich assets; aka the Rich clergy and the Shipowners; They have to contribute bigtime to future tax revenues.
On top of that we are talking about a write off of greek debt; owed to other nations in EU and their banks; of a sum evaluated at 200 billion (I am not kidding) over 5-10 years with interest moratorium UNTIL Greece's economy goes positive. SO the Greek conundrum will cost Europe around 250 billion Euros over 5/10 years but will generate interest revenues if the economy picks up.
WHat happens if there is GREXIT : the probable amount of financial DIRECT hit is around 300 billion E.
The incidental speculative destruction of wealth in EZ could DOUBLE that figure. So we are talking about a fall out of 600 billion. On top of that we have the ripple effect of a Grexit on the PIIGS.
I leave you to imagine that!
So Mutti now you know and the choice is yours! Never on a Sunday ! Nein, Nein, Nein !
Meanwhile in London.....
"ADD A ZERO TO THAT LEVERAGED BET!"
You think you're the only ones who gamble Las Vegas????!!!!
BWHAHAHAHAHAHAHA
When people have nothing left to lose they lose it. I believe that statement covers the Greek people, shit is going to start to burn.
The EU bankster bullies are dictating how the Greek government is to run its country.
EU?
THIS ONES COMING STRAIGHT FROM WALL STREET!!!
It's the voters of the Northern Eurozone countries (=taxpayers.) This 'banks are behind everything' is a nice phrase but it's very far off the truth.
The banks want no austerity. They like this game of solidarity.
What fucking planet are you from?
The avatar suggests Mars... :>D
A draft statement seen by Reuters? Sounds like Reuters sent in their best hooker to Schäuble's room last night...
Lynn Lemay seems like his type.
Although nasty Druuna seems like a Greek archetype with a back-door option, that might appeal to Schaueble. You never know.
Well - you can survive on one kidney.
Your survival needs are so much fewer without kidneys.
The troika is demanding both kidneys. In return, they promise the Greeks free dialysis forever.
One Kidney? Silly Tyler.
You can survive on NO GONADS. Can Tsipras? Can Greece?
p.s. Varoufakis to Tsipras: "Look, the ONLY person who gets to cut off my balls, is my wife!"
'Leaked' - What about the economic plan 'accidentally e-mailed’ a few weeks back?
It’s all lies.
A "no" vote becomes a "yes" vote. Fascinating.
Orwell blows a gasket.
Fascinating, yes, but it seems that in the world of politics emotions are more important than facts. I guess AT realized that unless he at least PRETENDS to apply for a further 80 billion package with a 'Yes' he will be accused in a few months of shooting himself (Greece) in the head. That's a heavy burdain to carry in a few months, in a collapsed Greece. The stakes are very high for Greece.
Most voters are self absorbed ignorant retards. Facts don't mean shit to over 90% of the population. That is why politicians play off of emotions and just straight up lie. They know no one will do their own research and the ones that do are shouted down by the mindless mob or ignored.
This is a wholesale takeover.
Over the last 5 years, despite all the bailouts, total Greek debt has gone UP! Austerity is not working, but just like QE, let's do MOAR!
Precisely WHY using another credit card to pay off the first one(s) never works!
I read somewhere that July 30 is a hard IMF date. Is there a real deate for the ned of this shit show?
The fact is that Germany + the Northern Countries want Greece out. It's hard for anyone from the North to understand why to pay (donate) to Greece. They have NOTHING in common with them. This whole Germany vs Others and the good old Nazi story obfuscates the truth what is at play. It's the neverending solidarity and borrow-and-beg against the Northern attitude of taking care of yourself, and being responsible for yourself. But at a time when over 70% of the EuroZone countries are in deep fiscal trouble, you cannot enforce austerity. The voices of the 'needy' are stronger than those who take care of a balanced budget and at least some level of responsiblity.
The surprising element is how everyone now seems to follow this play and ploy. This is just a show but the masses follow and yet another convenient 'truth' is written into the history books.
(No, Germany, the Netherlands, Finland, .. they don't have a very balanced budget+ they are themselves in deep trouble, but I'm making a general comparison. The whole world except for Iceland seems to be drifting towards a financial apocalypse.)
"It's hard for anyone from the North to understand why to pay (donate) to Greece."
It may be hard for them to understand this fact, but it doesn't suggest that they understand. Two things 1) the northern states put themselves in this position when they decided to onboard the private sector debt to the sovereigns in order to save their own banks. This was a choice. And the northern european countries are at fault for that, and 2) The northern European countries benefit from the weakness accrued from the south that pushes down the value of the Euro. If all of the southern countries left, their currency would be incredibly strong and their exports would get creamed.
You are very correct on the weak Euro. It's of great benefit. But regarding the Choices you mention, I disagree - the Politicians chose, not the People. That is a very strong sentiment in the North, that is why many countries now have 'populist' (left/right-wing parties) taking over. The people don't back the decisions of their politicians. Many want out of the Eurozone, back to a weaker currency.
OT: Texas repatriation of gold.
They're setting up a gold backed bank with a depository opened for biz.
https://youtu.be/7lpfVVBtPJ0
By expanding the bounds of theoretical lexicography with technological advancements in financial engineering, there exists a space that can temporarily split Greece into a sovereign nation of "good" and "bad" financial entities. Stuck between "in the EU" and "on temporary suspension from the EU", there is the ability to keep the debt in stasis without a default that would trigger derivatives. Just don't open the box ala Schrodinger.
Any debt write off would trigger default and derivitives, the preferred method is for Greece to agree to austerity (even fake austerity) to keep the ponzi alive.
Greece is a political problem whose goal is to prevent losses the EU financial overlords.
Some sort of Nazi-Stasi-Stasis box.
As long as the box stays closed,
Greece can be thought of as both dead and/or alive!
When one, the other, or even both situations is convenient, Viola!
We need to apply this to all countries!
All problems will be solved!
That's it!
You're a Genius!
.
.
The redistribution of wealth away from Germany
was "The Plan" of the Euro from the beginning.
I have a Great Idea that should satisfy everyone's desires!!!
Those countries which want Greece
to stay in the EuroZone and EU
and get oodles and oodles of money
should PAY FOR IT THEMSELVES.
GERMANY should Go Galt and leave the EuroZone and EU.
Bitcoin $309 and the entire planet of Q99x2 is getting rich.
I think $300 could be a turning point if it can stay above that mark. There seems to be some momentum building.
Blythe Masters must be very happy now.
http://www.coindesk.com/former-jp-morgan-exec-blythe-masters-swaps-wall-...
Germans are after Greek gold.
Greece does not have enough gold to pay back the equivalent amount of Euros Germany is lending (donating.) This makes no sense. Germany is better off buying the gold directly.
Well they're not getting their own back from the US so they have to take someone else's.
Already rehypothecated 100x and sitting in Chinese vaults.
In thin layers wrapped aroung tungsten bars.
did Mario "whatever it takes" Draghi also endorse the statement?
and strengthens the independence of its statistics office...
YEAH, THEY SHOULD USE THE USA BLS AS A MODEL BITCHEZ HAHAHAHAHAHAHA!!
CHINEE PEOPLE NEVER SWEAR, AH SO, AH SO...
USA DOT GUBBERMINT NEVER LIE, AH SO, AH SO...
The interesting thing about DEFAULT is that there is nothing to negotiate AFTERWARDS.
It's clear the TROIKA want Greece out but are too cowardly to push the button.
They know this would be suicide for the Greeks. They might as well sell their souls while they are at it.
Ein Zitat aus der Nacht dokumentiert, dass die Nerven bei den Teilnehmern der Eurogruppengespräche blank lagen: "Ich bin doch nicht blöd", hielt Bundesfinanzminister Schäuble nach Angaben aus EU-Kreisen dem Präsidenten der EZB, Mario Draghi, in der Diskussion entgegen. Die griechische Nachrichtenagentur ANA berichtet, der Wortwechsel sei Grund dafür gewesen, dass Eurogruppen-Chef Dijsselbloem das Treffen um kurz nach Mitternacht abbrach.
Documented a quote from the night that the nerves are on edge were among the participants of the Euro group discussions: "I'm not stupid", held Federal Finance Minister Schaeuble according to data from EU circles the ECB President, Mario Draghi, in the debate against. The Greek news agency ANA reported the altercation was reason that Euro group chief Dijsselbloem the meeting broke off shortly after midnight."Permanent Depression" is like saying "Permanently Drunk"
All you have to do is accept that what you are drinking is alcoholic and stop drinking for a while.
Or in this case, accept that all the "free" government stuff is not free, and stop buying it.
If Greece devalued in Drachma to pay, then Greek savers and pensioners would pay, as their savings and pensions would be worth less in terms of real stuff.
If Greece does "austerity" or even outright default, then Greek savers and pensioners pay, as bail-ins reduce the number of Euros in their accounts.
If foreigners forgive the debt, then they pay...if they can. If they can't then their debts go bad too, and we're back to devaluation...where pensioners and savers pay. Except now it is all Europe. What bailout then.
The world has been taught a lie for over a century.
The lie is that when you pay government to buy something for you, it costs less than when you buy it for yourself.
Sorry.
Politicians and bureaucrats are neither Gods nor Magicians. It is con to get your money, and always has been.
Where's the fucking default and the cascade of credit default swaps? Didn't Greece default as clear as day? Obviously the banker shits can cancel financial obligations at will otherwise the house of cards should have already fallen.
The game they are playing is not the one we are watching. Grexit was assured as soon as the German high court approved Draghi's monetization. Greece is no longer needed as a conduit for bailing out the banks, and Germany will no longer fund the partial diversion of bank bailouts into the Greek economy. But they also do not want a "traumatic" transition, so they will have a managed Grexit. Nicely played, now let's see if it works...
The bailouts were always about the banks and socialising the losses, while privatising the gains. The latter part is where the zombified host (Greece) and its zombie serfs come in. Your analysis makes sense.
German tourists won't be welcome in Greece for much longer. They'll have to find some other place to hog the pool side sun loungers all day from 5am.
Tunisia has some bargain vacation packages !
When every asset is stripped (privatised), Greece's new owners will then descend and devour the rest of the spoils. Because the Monetary Union was designed to do just that.
None of us here knows how this will exactly play out, but there is one thing I can guarantee:
There will be no formal default on debt.
These puke politicians and bankers know god damn well the potential risks roiling beneath the surface in the form of trillions of derivatives (and derivatives of derivatives). If they allow a technical default on debt upon a Grexit scenario, they very well could open Pandora's box. It could also just end up being a fizzle and a poof, but I don't think they are willing to take the chance.
They will structure the whole thing to effectively boot out Greece while technically not defaulting, thus saving the banks once more. This whole 5 year Grexit plans wreaks to high hell of a new can getting kicked.
It apears that the Ukraine is going to legalize for profit organ harvesting..The sick get sicker, and you said that the Nazis where bad...
Why stop at organs?
They should be going after pianos and accordians too!
How is the EU going to deal with the Muslim invasion .... if they can't even fix the Grix problem ?