Following "Very Difficult" Troika Teleconference, Greece Nowhere Near A Deal As Sunday Night Deadline Approaches
It is not shaping up to be a pleasant weekend for Greek finance minister Evangelos Venizelos, who as a reminder until June 17, 2011 was the Greek defense minister and likely the man responsible for buying up all that European military equipment (with whose money nobody knows), or his boss, G-Pap successor and former ECB VP Lucas Papademos. The reason is that Greece is scrambling to reach a deal with the Troika that permits the €130 billion second bailout to be disbursed (unclear how the €15 billion add on would be theater), yet a key precondition of Troika demands is labor reform (a cut of the €750/month minimum wage, and various headcut reductions across the nation), which however as reported yesterday has seen all three coalition cabinet member throw up on. In other words, Greece has about 24 hours to do the impossible, unless of course it simply delays and does nothing once again. Alas, the real issue is that unlike before, there is a hard deadline of a bond maturity cash outflow on March 20, and absent resolution, which especially on the PSI issue should come far in advance as an exchange offer takes at least 6 weeks to finalize, there will be no deal. So while this weekend may come and go, without anything being resolved, the days can kicking, as Zero Hedge said back in January, are ending.
Greece has agreed with euro zone partners on how to recapitalise Greek banks after a planned bond swap, but has yet to resolve issues related to labour reform and spending cuts in talks with lenders, the country's finance minister said on Saturday.
Evangelos Venizelos described a conference call on Saturday with counterparts from fellow euro zone nations as "very difficult" and said talks related to Greece's rescue plan must be concluded by Sunday night.
"The Eurogroup teleconference was very difficult," Venizelos told reporters.
"There is great impatience and great pressure not only from the three institutions that make up the troika but also from euro zone member states, each of whom have their own criteria, their own problems, their own priorities." (
Some more from Kathimerini:
Greece’s official creditors remain will not give in on their demand for changes and wage cuts to the labor status in the private sector, Skai radio said on Saturday afternoon citing an unnamed government official, as talks about the new loan contract continue in Athens.
It followed a broad meeting of ministers who hold key posts in the government, under Deputy Prime Minister and Finance Minister Evangelos Venizelos after his lengthy talks with the mission from the International Monetary Fund, the European Central Bank and the European Commission, known collectively as the troika.
The ministerial meeting heard that there will be no further staff cuts in the health sector, but there will be cuts in expenditure amounting to 1.1 billion euros, out of which 1 billion will concern pharmaceutical spending.
The defense sector is set for cuts amounting to 400 million euros in the next two years.
Finally, this is a translation of Venizelos last ditch attempt to pretend he still has some control left:
After completion of the telephone conference Eurogroup and departing on his meeting with Prime Minister, Deputy Prime Minister and Finance Minister Evangelos Venizelos, made ??the following statement:
The teleconference of Eurogroup was very difficult. There is great anxiety and pressure of three institutions that make up the troika, but also by Member States of the Eurozone, each of which has its own criteria, its own problems, its own priorities.
The distance that separates the successful completion of the procedures by which an impasse may be a coincidence, or due to a misunderstanding, is too small. The line is too thin. We are on the razor's edge. We hold, focusing here the Ministry of Finance, a very tough and delicate negotiations.
Already, we have accomplished many things, we basically agree on issues such as how recapitalization and reorganization of the Greek banking system, privatization, many institutional reforms and structural changes, leading to a characteristic example of the need to finally be in our country a effective monitoring mechanism and pressure on prices, especially prices that make up the basket of the poor and middle households.
Open are two major issues related to each other: industrial relations, and thus their earnings in the private sector and financial measures to be taken to be absolutely objective in 2012, given that we have recorded a good result, in almost Our predictions as to the 2011 budget target. Here, we have managed to reduce the too-trading. But there are still unresolved issues and need to finalize the shape.
Now I go at the Maximos Mansion in order to inform the Prime Minister detail to the point where we are for what was the Eurogroup and the spirit and atmosphere of the discussions with institutional partners and Member States of the Eurozone. It is very likely to take place later meeting with the Prime Minister heads the troika, because now we are at those points on which they must decide and commit political forces and thus the leaders of three parties involved in government and support it.
It's time commitments. It should not just be engagement, but to place all the prerequisite steps that we can stick to the schedule, make a public offer for the PSI and get valuable money the first major installment of the new program, not only for PSI not only to support banks, but also to breathe in terms of market liquidity.
The time is very critical. We all have to be completed by tomorrow evening. We have closed all the issues have been undertaken commitments, have initiated procedures so that we can be on time, given the maturity of bonds in March.