Greece Draws The Line As Unity Government Leaders Refuse To Cede To Further Troika Austerity Demands

Tyler Durden's picture

It appears that Greece will not even have to wait until the dreaded March 20 funding D-Day. As was earlier reported, Greek PM Lucas Papademos may resign if he is unable to persuade his coalition unity government to agree to further Troika demands for additional austerity. It now appears that there will be no agreement, and thus the primary demand from the Troika for further cash disbursement will not be met. The FT reports: "All three party leaders in Greece’s teetering national unity government have opposed new austerity measures demanded by international lenders, forcing eurozone finance ministers to postpone approval of a new €130bn bail-out and moving the country closer to a full-blown default. Representatives of the so-called “troika” – the European Commission, European Central Bank and International Monetary Fund – have demanded further cuts in government jobs and severe reductions in Greek salaries, including an immediate 25 per cent cut in the €750 minimum monthly wage, before agreeing the new rescue. But representatives of all three coalition partners, including centre-left Pasok of former prime minister George Papandreou and the centre-right New Democracy of likely successor Antonis Samaras, said they were unwilling to back the government layoffs." Now we have been here before, and as a reminder the last time Greece threatened to pull out of Europe with the G-Pap referendum threat back in the fall, G-Pap was promptly replaced with the Trilateral Commission member and former ECB Vice President, Lucas Papademos. The problem is that for him to obtain power, he needed to form a coalition government. Well, that now appears to be in tatters, as not one party is willing to break to the Greeks that the minimum wage of €750 will be cut even further. The question is who will blink first this time, as it is quite likely that neither the Troika nor Greece want an out of control default. Unless, of course, this was Germany's plan B to the imposition of a Greek commissar all along...

More from the FT:

In addition, a Greek government official said the EU and IMF negotiators rejected a counter-proposal that would have frozen Greek wages for three years and cut social security contributions by 10 per cent.


Without approval of the new bail-out within a matter of days, Athens is at risk of defaulting on a €14.5bn bond that comes due on March 20. Many eurozone officials fear such a default could reignite panic in European bond markets, pushing Italy and Spain back into danger.


The standoff in Athens has angered officials in eurozone creditor countries, particularly in those that have retained their triple A credit ratings and will be leant on most heavily to provide new Greek aid.


Finance ministers from the four remaining triple As – Germany, the Netherlands, Finland and Luxembourg – met in Berlin on Friday where they agreed that Athens must move quickly or they would withhold assistance.


“We want no further delays,” Jan Kees de Jager, the Dutch finance minister, said after the meeting.


Eurozone finance ministers had hoped to meet on Monday in Brussels to sign off on the new bail-out, but officials cancelled the gathering on Friday. Jean-Claude Juncker, the Luxembourg prime minister who serves as chairman of the group, issued a statement saying only that the meeting “may be scheduled later in the week”.

Kathimerini with the pre-story:

Papademos is expected to meet PASOK’s George Papandreou, New Democracy’s Antonis Samaras and Giorgos Karatzaferis of the Popular Orthodox Rally (LAOS) on Saturday. The three politicians will have to agree on measures that will satisfy Greece’s lenders and pave the way for a new bailout.


However, a number of sticking points remain. One of the main issues on which the party leaders are finding it difficult to agree is the private sector wage reductions that are being demanded by the troika of the European Commission, European Central Bank and International Monetary Fund.


Sources told Kathimerini that the troika is demanding that the minimum wage of 751 euros per month (gross) be reduced and that labor costs in the private sector drop by 25 percent in a bid to help Greece regain competitiveness.


Labor unions and employers wrote to Papademos on Friday to inform him that they cannot agree on a wage cut.


Papademos needs the agreement of the political leaders so the prospect of Greece receiving a new bailout can be discussed at the meeting of eurozone finance ministers on Monday.


Greece will have to set out the measures it plans to take over the next two years to reform its economy and create a primary budget surplus as well as the framework for the debt restructuring agreement with its bondholders.


Skai TV and radio reported on Friday that should the leaders fail to agree a deal, Papademos will tender his resignation on Monday.

And so on. To say that by now the market may well surge, however briefly, out of pure delight that Greece has finally defaulted, may not be a stretch. Of course, the "however briefly" period will shortly thereafter end, leaving Europe with few things to look forward to aside from complete disintegration of the union and its currency. But at least US banks will be fully insulated to that "contingency" which is increasingly looking like a "certainty."

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Mr Lennon Hendrix's picture

Refuse to lose, bitchez!

doomz78's picture

So will they default..  Credit default swaps.   Bank contagion vs insanity.  Who will win?

bigdumbnugly's picture

insanity is the sensible choice.

thetruth's picture

completely unrelated, but tfmetals has been down for a while now

trav7777's picture

Let the GREEKS pay for it if they want all these benefits.

otherwise, fuckem

VanillAnalyst's picture

You have to admire the fucking balls on these people though. So out of touch.

Dear Greece, your credit is already fucked. If the ECB wants to pour money down a drain, FUCK EM, sign the austerity package, wait 3 months, and do whatever the hell you want. Teach the Troika how sick it is to be a bad borrower.

Calmyourself's picture

Since yesterday afternoon.

battle axe's picture

"But first lets ring fence those banks" Germany/France.

Cdad's picture

Zombie bank mark to pixie dust vs. hedge fund CDS, bitchez!  It all goes down this weekend.

Hat tip, Tyler!

Non Passaran's picture

I hope you're right 'cause I added 50% to my short positions today.

Even if there is some kind of bullshit agreement by Monday, people should sell the news.

economics1996's picture

But, but, but, we have green shoots, look at the employment picture!!!

Mountainview's picture

It hasn't to be war, in Barcelona they are starting by refusing to pay public transport for a first!

crazyjsmith's picture

Greece!! We stand united with you, light that fire and let's get this party started!!

Could it be that Greece becomes the center of the re- birth of civilization?

I am going to have a Gyro today in a show of solidarity.

Totentänzerlied's picture

I'll take the other side of that bet. Greece becomes the center of the birth of financial neofeudalism.

The only fire I see is the 1st Annual Bankers and Bureaucrats Greek Asset Auction Firesale. Bargain-basement prices! Everything must go! We're gonna party like its 999.

battle axe's picture

Greece: "Can I have some Lubrication please kind sir?" Germany: "No Lube for you!"

Buck Johnson's picture

Our stock market is in it's own little world, it truly is.  When Greece goes, it will cascade into Europe and even into the US.

SilverRhino's picture

Greece:   Molon Labe ... our drachmas .... bitchez!!!

GeneMarchbanks's picture

Why the fuck is this news?

cossack55's picture

The SuperBowl pregame shit has not started yet.

GeneMarchbanks's picture

Nice... Sunday at half-time the performer will break the news right after the performance.


Matt's picture

Nah, it will be a scrolling text feed at the bottom during the half-time show.

But seriously, they want to cut minimum wage from around $1000 per month down to around $750 per month? How many hours for that many dollars? What are rent rates like there? Holy crap, at those levels I don't think I could afford to work, might as well go live in the mountains.

kaiten's picture

auf Wiedersehen, Griechenland

ghengis86's picture

Nein, Nein, Nein.  Es ist, "Alle Ihre Akropolis gehort uns"

Quantitative_Appeasing's picture

Ja, Sehr gut! Unsere Panzer haben jetzt ein Platz zu sommern!!!

Irish66's picture

I'm so confused and dazed.  I can't take any more.

The Limerick King's picture



Someone please pass the blue pill

These Kleptos are breaking my will

I need to return

And try to unlearn

The shit that keeps giving me chills!

adr's picture


But the USA "created" 243k jobs in January so everything is fine.

Manthong's picture

Everything's good.. there's a football game on this weekend.

Party hardy.

espirit's picture

Sugar VAT, bitchez.  Tax at will.

CClarity's picture

Fatigue, complacency, and then will come the shock to the system.  And it won't be Greece.  That will be glossed over.  It'll be something "unexpected".  Like WW3 as that is really the way to get out of this economic mess with "everyone" on board.  Iran/Israel?  China/Krzkstan? Russia/Germany?  US/Syria?  Occupied/gated communities?  What do you think?

Jason T's picture

from folks at LaRouche:


Greek Archbishop: Troika's Policies Are Destroying Greek Nation February 3, 2012 • 9:25AM

In an extraordinary move, Archbishop Ieronymos, Greece's highest religious authority, today issued an impassioned denunciation of the austerity policies being forced on Greece by the EU-ECB-IMF Troika. The Archbishop, who up until now has only issued guarded statements in an attempt to avoid controversy, openly stated that these policies are destroying the Greek nation and Greek people.

"Homelessness and even hunger — phenomena seen during the [Second World] war — have reached nightmare levels. ... A sense of patience among Greeks is running out, giving way to a sense of anger, and the danger of a social explosion can no longer be ignored," Ieronymos wrote in a letter to Prime Minister Lucas Papademos. The Archbishop went on, today, that "pensions were cut, while day laborers are in despair and insecurity has found a nest inside every single Greek household....

"It seems clear now that our homeland's drama will not finish here but may take on new, uncontrollable dimensions," he wrote. "We must all understand the feeling of insecurity, desperation and depression in every Greek home. This, unfortunately, is continuing to cause suicide among those who can no longer stand the drama in their family and the suffering of their children.

"There are, at the moment, demands for even tougher, more painful, and even more unfair measures along the same ineffective and unsuccessful lines as in our recent past. There are demands for even bigger doses of a medicine which is proving deadly. ... And what is likely to follow are more painful, more unjust measures in the same hopeless and unsuccessful course of our recent past.

"There are demands for commitments that do not solve the problem but only put off temporarily the foretold death of our economy. Meanwhile, they put our national sovereignty up for collateral. They mortgage our wealth, but also the wealth we could obtain from our land and seas. They mortgage freedom, democracy, and national dignity."

qussl3's picture

How the fuck do Greek bankers and pols sleep at night.


bigdumbnugly's picture

well, i don't know how they do it there but here in the states they do it together.

Zymurguy's picture

With a lot of security details on the grounds.

Eric L. Prentis's picture

Archbishop Ieronymos, screw the banksters, save your county and people.

Totentänzerlied's picture

Congrats Greece, your highest religious stooge is a delusional socialist demagogue. Just like all your other leaders. And your people too.

Sic transit gloria Graeciae.

trav7777's picture

then let the greeks WORK instead of lounging around in cafes collecting their government paychecks!

If Greece doesn't like the euro, let them see how much better their credit is on the drachma which they printed to oblivion repeatedly.

This is a deadbeat nation.

trav7777's picture

flag you as a fuckin moron.

The notion that the greeks should work?  HELL NO, right?  They should lounge around collecting government paychecks paid for by someone else.

WTF is the matter with you?