The Can Kicking Is Ending - Key Upcoming Dates For Europe's Patient Zero

Tyler Durden's picture

When it comes to the markets one can easily ignore the fact that the world is one big ponzi and things, as we know them, are coming to an end as long as the can can be kicked down the street at least one more time. In other words, without a hard deadline, there is nothing that can force change upon a system already in motion, no matter how self-destructive. Unfortunately, the clock in Europe is ticking as a deadline approaches, and somewhat poetically, the place where it all started is where it may end. In March Greece faces a redemption cliff: if by then the €130 billion promised to it by the Troika as per the July 21 second bailout, is not delivered, it is game over - first for Greece which will default, then for the ECB, which will be forced to write down holdings of Greek bonds, in effect wiping out its equity and credibility, and lastly, for the Euro, which will see a core member leaving (in)voluntarily.

As the WSJ reported today, "Greece faces the risk of a disorderly default in March if it doesn't complete negotiations for the country's second bailout starting later this month, Prime Minister Lucas Papademos said Wednesday." The problem is that "the stakes are rising as Greece pushes the sensitive issue of reducing private-sector salaries, under pressure from creditors to quicken reforms. Private-sector labor union GSEE said the government has instructed them to start discussions with employers on ways to reduce costs. GSEE General Secretary Nikolaos Kioutsikos said the talks will run until the start of February and cover lowering the minimum salary and reducing annual pay by up two months. As Papademos told us, there are no barriers to these cuts," he told reporters. GSEE rejects any talk of pay cuts and will propose ways to lower other costs and protect jobs." In other words, the dormant Syntagma riot cam will very likely see serious action quite soon, only this time there is no can kicking, something which G-Pap knows too well, and is why he formally resigned from politics earlier today. So while the market drifts ever higher of some blissful "decoupling" from something, here is SocGen with the key events for Europe's Patient Zero, which is almost guaranteed to not be a part of the Eurozone by the end of the year.

Greece: to leave or not to leave? Key dates ahead

 

We have said for some time now that should any country leave the eurozone, it would be a political decision. This is still true. However, Greece faces a crucial agenda over the coming weeks with key dates that could tip the scales.

 

Troika to visit Athens on 16 January. The Troika will make yet another trip to Athens mid-January to start new negotiations on the new funding programme and to review the economic and fiscal situation. It may reiterate that Greece has to speed up its efforts to implement its austerity programme, keeping the pressure on the Greek government. However, should discussions surrounding PSI continue, the Troika is quite unlikely to veto further aid to Greece.

 

PSI agreement by the end of January. First, Greece and the IIF said they must reach an agreement on PSI by the end of the month. The IIF has  been quite optimistic over the past few days, saying that progress has been made. However, no agreement has yet been reached. It must be based on the terms of the 26/27 October EU Summit, which means a 50% haircut on a voluntary basis. This is supposed to reduce public debt  by EUR100bn. Greece would like a bigger haircut, especially as the country is sinking deeper into recession and the economic outlook is not  bright. However, a bigger haircut seems quite unlikely at this point.

 

Big redemptions by the end of March. An agreement over PSI is a key condition for the EU/IMF to deliver the EUR110bn promised in July and confirmed in October.  Greece will need this package if it wants to meet its first large GGB redemption of 2012 at the end of March.

 

Greek elections in April. Lastly the Greeks will go to the polls in April, a tough test for the Greek government against the backdrop of social  pressure and as Greece slips deeper into recession. PM Papademos will have to convince the Greeks that current austerity measures, and perhaps more ahead, are necessary for a brighter outlook at the end of the day...

 

All in all, much like the past two years for Greece, 2012 has shot off at top speed and it will have to clear all the key event hurdles if it wants to  remain a eurozone member. The Greek PM clearly envisages a pessimistic scenario: let’s hope this is meant to keep up the pressure and force key decision-makers to take concrete measures as well as implement them.

 

For now, market participants remain in a wait-and-see stance: 2Y and 10Y GGB yields are trading slightly off recent record levels of 156% and 36%, respectively, (currently at 134% and 34.88%, respectively). A 50% haircut has now been largely priced-in. However, Greece is still not immune to a more severe scenario.

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slaughterer's picture

March is too long to wait.  Can we have an earlier crash?

NotApplicable's picture

Crash or Crush?

I expect this to create the mandate for the EU fiscal union that they've been trying to get forever.

GiantVampireSquid vs OWS UFC 2012's picture

They will get it.  Socialist, Centralist, Bankers rule the world.  Remove all market participants except the banks, ECB, and govts.  Then you can set interest rates wherever you want.  Greece would be fine if interest rates were at 0.01% and they had constant access to new debt to rollover the old debt.  Thats where we are heading.  Money isn't real, so who gives a shit how much is owed.  Interest rates are going down down down.  Holding Greek  debts will be a profitable trade.

AldousHuxley's picture

bankers may rule, but nature dictates.

 

nature says "too much money"

 

soon bush, obama, pelosi, bernanke, banksters will all die of old age. Nature's insurance against tyranny.

 

 

AnAnonymous's picture

Have US citizens not built up on institutional power which endures the death of specific persons?

Have US citizens not built their system around private property which means that ways to power are inherited?

US citizens living on their island of propaganda, US citizens unable to speak of themselves...

US world order.

Rhone_Ranger's picture

Europe can't touch us when it comes to our mastery of innovative capitalism:

http://www.youtube.com/watch?v=5S2p7AiNX9g

 

Stax Edwards's picture

Just to use 'meme' one last time before it is thrown into the dustbin of overused hipster lingo burnout binTM, anybody ready to reveal their meme regardiing the macro outlook for the new year?

Stax Edwards's picture

Lets dig a little deeper

 

YBNguy's picture

We break it, you buy it!

 

And don't worry about 'meme', it will be around until SOPA is enacted...

Jack Napier's picture

All your base are belong to U.S.

Newsboy's picture

2012 theme:

"Broken Tokens"

All your paper and electronic "wealth" are subject to immediate failure.

IndicaTive's picture

Check the Nielson sweeps calendar, I guess.

Buck Johnson's picture

It will happen earlier, there is no way that individuals holding EU and other countries debt want to keep holding it when the spark is set in March.  There will be a run out of all that in Feburary.

UP Forester's picture

You mean like thowing water on a Greece fire?

MarkTwain00's picture

whachu china do, burn the house down?

The trend is your friend's picture

I think this is why their was the 14000 and 15000 call volume on the GLD March 162 and 160 strike prices yesterday.  Very interesting as to timing

Cdad's picture

They are "off their highs".....LOL!

Saxxon's picture

Exactly C-Dad.  How naive (or mealy-mouthed, hard to tell which) of the writer . . . yields "still worrisome..."  ...yah think?

Stockmonger's picture

.. as Greece pushes the sensitive issue of reducing private-sector salaries, under pressure from creditors to quicken reforms.

But wait, Krugman told me this week that government debt is debt that we owe to ourselves.

NotApplicable's picture

So creditors to the sovereigns are using leverage on government bodies to alter private employment contracts?

This austerity thing gets weirder by the second. I thought only the mob operated at that level.

"What do you mean, you don't have my money? Yo, you better get my money by March, or you'll be swimming with the fishes! Steal it if you have to, I don't care. Just get it NOW!"

Meanwhile, the fact that anyone still considers government a legitimate entity just blows my freakin' mind.

Everybodys All American's picture

Organized crime or creative ponzi. 

This system needs a reset.

fredquimby's picture

Reset? Like cancel all debts and redistribute the land? whoop whoop Great idea!

 

 

 

 

OneEyedJack's picture

I thought only the mob operated at that level.

 

Spot On!

ucsbcanuck's picture

I think the problem is that public sector workers have to be paid at least minimum wage, but in order to change the minimum wage both public and private sector unions must agree. If they don't, the minimum wage can't be changed.

And the GSEE is basically saying "Molon labe, bitches"

economics1996's picture

The public sector needs to be reduced to no more than 11% of the GDP.

GeezerGeek's picture

I'd go for 11% here in the US, but Obama seems intent on it being the private sector that ends up at 11% of GDP.

OliverTwist's picture

The government is the crème de la crème of the mob.

GeezerGeek's picture

Obama altered private sector contracts - abolished is a better word - when he took over GM and Chrysler. In fact, he screwed over some states, too, who were holders of Chrysler debt. Why even bother having laws or contracts any longer? The politicians do whatever they want without punishment. The only 'reset' that gets them off our backs is a strong EMP burst. That, of course, would be like having our noses cut off to save our faces.

Osmium's picture

Since you brought up crime and punishment, what ever happened with MF global?  Has that shit been swept under the rug already?

Hephasteus's picture

No. That's the sense of self magic used on you. It's like when someone you hate and you are ripping their guts out all over the floor and you feel all sad and regretful inside. That's not you. That's their sadness and regret being pumped into you as your own. All energy is fungible to the fucktards who run this vampire asylum and they simply cut and paste because they retain ownership of the body you are stuffed in.

This is why they try to confuse the fuck out of you with so many sense of self versions. You're private self your public self your family self your work self your creative self your servant self. And this is why documents take ALL THE PEOPLE of a state or country and put them all in the "hands" of a "court" system. And they use "The People of blah blah blah blah" to "convict" the person of "blah blah blah blah". Because they are goddamn liars but not regular liars. Liars with rotating shifting focus's and mind fuck shredders.

The bold truth is that government debt is debt owed by the people to the servants and masters and rule makers who force these rule systems into you as you go through like a waterfall tunnel that leads to this place. Where you're constantly bombarded by lies to remove whatever power and understanding your real self has by replacing it with a bunch of garbage concepts and bullshit lies within lies.

If you think they are not completely fucking insane and unreasonable simply buy any modern game and have a look at the stupid restrictions and forced rules in them. Because that's all this is to them a game of learning how to control people through shoving them into groups and categories that they are not a part of through force and confusion.  Game set match is not the key to winning here. It's game theory set theory and match theory. As long as you make yourself available to a "labor pool" or "crowd source" or any sort of social sturcture present on this planet you are being abused the fuck out of. If you even call yourself human or say this is "MY" hand or "MY" eyes or this is the way "I" see it.

Because to fucktards who run this plus there is no I in lie.

They'll give personhood to a corporation and then limit it's liability in a manner a person is not allowed to do. Because all they think about night and day is how to fuck with senses of self.

economics1996's picture

Government is the great fiction through which everybody endeavors to live at the expense of everybody else.

People are beginning to realize that the apparatus of government is costly. But what they do not know is that the burden falls inevitably on them.

Law cannot organize labor and industry without organizing injustice.

The plans differ; the planners are all alike...

Now, legal plunder can be committed in an infinite number of ways. Thus we have an infinite number of plans for organizing it: tariffs, protection, benefits, subsidies, encouragements, progressive taxation, public schools, guaranteed jobs, guaranteed profits, minimum wages, a right to relief, a right to the tools of labor, free credit, and so on, and so on. All these plans as a whole—with their common aim of legal plunder—constitute socialism.

But how is this legal plunder to be identified? Quite simply. See if the law takes from some persons what belongs to them, and gives it to other persons to whom it does not belong. See if the law benefits one citizen at the expense of another by doing what the citizen himself cannot do without committing a crime.

Claude Frédéric Bastiat (1801-1850) 

Mr. Lucky's picture
Margaret Thatcher, in a television interview for Thames TV This Week on February 5, 1976. Prime Minister Thatcher said, "...and Socialist governments traditionally do make a financial mess. They [socialists] always run out of other people's money. It's quite a characteristic of them."
the tower's picture

..."other people's money" being the banks, without whom the rich (Thatcher's buddies) could never have become ultra insanely rich... debt creation is the key, and they needed those "socialist overspending governments" to do this... jezus christ, does anyone still have a few brain cells left???

JPM Hater001's picture

Does anyone really believe March is "looming"?  If there is one thing I have learned it is that the can will be kicked until they kick it and it doesnt move- surely to be a painful effort.  Until then...game on.

NotApplicable's picture

As I stated above, I think it's all about the fiscal union. They'll scare everybody (a.k.a. "Do as I say and nobody gets hurt!") in order to further enslave them all. Then, and only then, they'll kick the can again.

smiler03's picture

I'm curious how much of that €130B will go straight back to German banks. A lot I think.

lewy14's picture

Agreed.

Conjecture: On a long enough timeline, sufficiently advanced "can kicking" is indsitinguishable from "solution".

Dcheeth2's picture

Not quite. I think you under-estimate the power and stubborness of the non-elected Euro officials in Brussels.

If the can can't be kicked any further, then they'll just drink a new can of coca cola, bought with US dollars, drop it on the floor, then kick some more.

Nothing, and I mean nothing will disrupt the Euro dream, from the point of politics. The only thing that will disrupt it is a full on revolution and nationalist sentiment in places like Greece, which even the Army would not be able to control.

Good thing is, that Europe has a history of being pretty good concerning revolutions.

lolmao500's picture

Greece needs to default.

NotApplicable's picture

And who would possibly be allowed to do that? Certainly no one within the government, as they are all safely owned. As for the rest, they simply won't be asked for their opinion.

Funny how abstractions work, huh? It's all about maintaining a pretense. In this case, it's the pretense that Greece owes somebody, a concept totally devoid of reality.

AvoidingTaxation's picture

I miss Orly and Gordon Gekko

peekcrackers's picture

How much more road is there for that fucking dented can to be kickk down.... just step on the fucking can and throw it  off bens fucking bold head!

PSEUDOLOGOI's picture

Dimes of March...

MieleBauknecht's picture

Since 1829, when greece fought its independancy war from the ottoman empire, the country was already in a debt situation it could never pay off. Since than it went backrupt a couple of times due to wars with turkey, the second world war etc.  It was never in its modern history able to pay its debt.  it is nothing new. That's why the tax-evasive culture exists in greece untill today. Every attempt to change this culture will fail.  Europe need to understand this culture in order to conclude that greece is hopeless as a member of the eurozone.

Rynak's picture

The entire eurozone has been a "hopeless" experiment from its inception onwards.

If anything, a common currency between 2-3 strong neighbouring nations with similiar stats maybe would have made sense.... and i'm not even sure about that. Probably would have been best to just forget the whole concept of a generic financial and ecnonomic union, and instead just make arrangements individually on a by-nation basis.