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Juncker Warns Of Greek Default As Europe's Patience With Greece Runs Out

Tyler Durden's picture


Following up on our report from this morning that according to former Greek defense minister, German submarine chief procurer, and not to mention Jenny Twenty repeat offender, Evangelos "Xanax" Venizelos, we learn that the god of Deus Ex Machinae is about to abandon Greece, after an announcement by that most magic unicorn-infatuated of bureaucrats, Eurogroup head Jean-Claude Juncker made it clear that Greece is all but finished. As Reuters reports, "The possibility of a sovereign default by Greece cannot be ruled out, Jean-Claude Juncker, head of the Eurogroup of finance ministers from the single currency zone, said in a German magazine on Saturday." Translation: A Greek default on that €14.5 billion bond maturity D-day of March 20, is now inevitable. In an advance copy of comments to news weekly Der Spiegel, Jean-Claude Juncker was quoted as saying Greece could no longer expect solidarity from other euro zone members if it cannot implement reforms it has agreed. "If we were to establish that everything has gone wrong in Greece, there would be no new programme, and that would mean that in March they have to declare bankruptcy," he said. So after years of delaying the inevitable sovereign Lehman weekend, it is finally here. As a reminder, when Lehman filed, everyone, at least those in charge, thought the fall out could be contained. It couldn't, and the Fed had to step in with roughly $30 trillion in backstops, guarantees, and asset purchases. The same will happen this time.

Curiously, it was none other than Zero Hedge who said back in April of 2010, that Greece should just cut the cord and get on with it, because "Not only will a delay in defaulting do nothing for the economy except bleed it to death slowly, but ever more frequent risk flare episodes culminating in bank runs will intensify the deposit outflows and impair the banking system beyond repair (for depositors to keep their money in Greek banks, they need to be compensated for the risks: double digit rates sound about right), thus dooming any hope for an economic recovery." Funny how correct we were on that assessment, just two years ahead of the Eurozone's kleptocrats. On the other hand, having called Europe's bluff for as long as it did, is also an admirable development, if only instead of recycling the cash mooched out of Germany to pay European banks, it had been injected back into the economy and not into German submarines....

As for next steps, the only question now is what happens in that critical interval between February 29 when the second ECB 3-year LTRO takes place, and March 13, when the next FOMC statement is due, incidentally just after the BLS announce that all the labor numbers in the past few months were really just a joke, and the economic contraction is about to hit the US despite what those who believe that the market, and thus the economy, is really just a reflection of one month's seasonal labor adjustment.

And while in the past imminent deadlines were always promptly forgotten this time around, Greece may have boxed itself into a corner, having said earlier today that all must be set in under 24 hours or else the bailout is off the table. Alas, there will be no resolution tomorrow.

On the brink of bankruptcy, Greece must wrap up talks with foreign lenders on the bailout and quickly get political approval to ensure funds begin flowing in time for it to pay back 14.5 billion euros of bonds falling due in mid-March.


But negotiations with its 'troika' of international lenders have stumbled over their demands that include cutting labour costs by axing holiday bonuses and lowering the minimum wage - proposals strongly opposed by Greek political party leaders.

Some more from Reuters why tomorrow may be finally the day when the foreplay officially ends:

Euro zone finance ministers told Greece on Saturday it could not go ahead with an agreed deal to restructure privately-held debt until it guaranteed it would implement reforms needed to secure a second financing package from the euro zone and the IMF.


Euro zone ministers had hoped to meet on Monday to finalize the second Greek bailout, which has to be in place by mid-March if Athens is to avoid a chaotic default. But the meeting was postponed because of Greek reluctance to commit to reforms.


Instead, the ministers held a conference call on Saturday to take stock of progress on the second financing package, which euro zone leaders set at 130 billion euros back in October.


"There was a very clear message that was conveyed from all participants of the teleconference ... to the Greeks that enough is enough," one euro zone official said. "There is a great sense of frustration that they are dragging their feet.


"They should get their act together and start talking honestly, decisively and speedily with the Troika on the aspects of the programme that remain to be finalized - on fiscal and labor market reforms," the official said.


"There is a great sense of frustration with Minister Venizelos, who is very hard to get hold of because he is very busy campaigning for the leadership of (the Greek party) PASOK, so he is not available to meet with Troika members," the first official said.


"He is preparing his own political future, rather than the future of his country. People are seriously disgruntled about that and have conveyed this very clearly to him this afternoon," the official said.


"There is an increasing sense of frustration that why should we honour our part of the bargain, which we have in the past, while Greece does not seem to care that much, and has not delivered their part of the bargain," the official said.

Alas, if Venixanax is now unreachable, it pretty much seals the deal. Or lack thereof.

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Sat, 02/04/2012 - 21:18 | 2127522 Michael
Michael's picture

Complete and total economic collapse bitches.

Sat, 02/04/2012 - 21:23 | 2127533 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Canned hamz in the backyard bitchez!!!!

Oh shit, signed on on the wrong avatar.

My bad....

Sat, 02/04/2012 - 21:38 | 2127570 Hulk
Hulk's picture

you got the new spelling wrong too, gotz to keep up with the times...

Sat, 02/04/2012 - 21:47 | 2127583 Ahmeexnal
Ahmeexnal's picture

PMs, guns, and lembas bread!

Sat, 02/04/2012 - 21:50 | 2127589 Spastica Rex
Spastica Rex's picture

Cram, for you.

Sat, 02/04/2012 - 22:08 | 2127623 Thomas
Thomas's picture

In a recent Puplava interview, Ralph Acampora waxed on about how "Greece was priced into the markets." I left an email message to Puplava saying that "Lehman was priced into the markets too." That really worked out well, eh? Greece should flip off Europe 100% and move on. Selling assets is for junkies. They need to sober up, but without Europe stuck on their backs.

Sun, 02/05/2012 - 00:20 | 2127727 The Big Ching-aso
The Big Ching-aso's picture



Greeks, debt, riots, idle unemployed horny youth, and ouzo.   It's gonna be one hell of a year.

Sun, 02/05/2012 - 03:08 | 2128098 Manthong
Manthong's picture

Everything is good for Mr. Puplava's market... the Leading Economic Indicators told him so.

But some problems later in the year..

at least he he gets great interviews and likes gold.



Sun, 02/05/2012 - 06:45 | 2128204 _ConanTheLibert...
_ConanTheLibertarian_'s picture

I used to listen to the FS newshour but decided reading is more efficient. Besides two things annoy me now:

1) J-Pup is no longer in the studio. It sounds like he's in his boat (he probably actually is) sending in comments. Sounds a bit forced. Either do the show in the studio or just go sailing!

2) His son has a very inappropriate and outright annoying voice for radio. He sounds like a teenager. This is a classic example of daddy helping his son.

Another great example of this is Aaron Spelling who brought in his very ugly daughter Tori. She would never have made it otherwise.

Sun, 02/05/2012 - 10:11 | 2128329 Stax Edwards
Stax Edwards's picture

Lets hope they make it official this time.  Wife and I been waiting over two years to schedule that half price vacation to the Greek Isles.  Was thinking it might never come.

Sat, 02/04/2012 - 23:10 | 2127743 Ponzi Unit
Ponzi Unit's picture

Hurry up! How much for my radio, man?

Sat, 02/04/2012 - 22:12 | 2127594 greyghost
greyghost's picture

i don't know about anyone else, but i just want to dive for the foxhole everytime i  see junckers name...and yes i know the real one was junkers...for the historically handicapped see ju87....ju88 etc

Sun, 02/05/2012 - 00:59 | 2127962 akak
akak's picture

You can really start to panic when they introduce the new head of the IMF, Herr Stuka.

Sun, 02/05/2012 - 02:40 | 2128073 francis_sawyer
francis_sawyer's picture

Wouldn't you like to be a prepper too?

Sun, 02/05/2012 - 03:33 | 2128112 Manthong
Manthong's picture

Looks like there a lot of that going around.


Sun, 02/05/2012 - 05:56 | 2128174 DaBernank
DaBernank's picture

I like how the woman in Phoenix is preparing for hyperinflation and worried about keeping a low profile, yet chooses to be featured on a television program.

Sun, 02/05/2012 - 06:35 | 2128199 jeff montanye
jeff montanye's picture

the bushobama administration, reality television, the (certainly possible) world envisioned by "preppers", ....

making the acceptance of the inevitability of death easier.  silver linings.

Sat, 02/04/2012 - 22:03 | 2127614 westboundnup
westboundnup's picture

/rhythmic slapping sounds

Sat, 02/04/2012 - 23:18 | 2127767 CrashisOptimistic
CrashisOptimistic's picture

It is my understanding that the ECB and IMF now collectively hold most of the Greek debt.

A default hits THEM more even than the banks.

Europe can't tolerate this.  They'll have to invade and confiscate assets.

Sat, 02/04/2012 - 23:24 | 2127788 LookingWithAmazement
LookingWithAmazement's picture

Market relief rally after Greek default, bitches.

Sat, 02/04/2012 - 23:34 | 2127810 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Is that like makeup sex?  Or an anger fuck?

Sun, 02/05/2012 - 11:57 | 2127821 LookingWithAmazement
LookingWithAmazement's picture

Reality. Recently a sneak preview was given, when a Greek deal was supposed to be at hand. An acute market-orgasm broke loose. The markets are dying for a Greek default. Otherwise the Total Collapse would have happened by now, because for sure Greece cannot pay back its debts.

Sun, 02/05/2012 - 14:05 | 2128889 donsluck
donsluck's picture

I think you are correct, for very short trades, sell on the rumor, buy on the news.

Sun, 02/05/2012 - 06:28 | 2128194 cnx
cnx's picture

Let's see.. when will be the next banking holiday in Greece?

Sat, 02/04/2012 - 21:18 | 2127523 wisefool
wisefool's picture

If at 138 times you dont suceed, setup a conference for 139.

Sat, 02/04/2012 - 21:52 | 2127593 holdbuysell
holdbuysell's picture

The boy who cried 'wolf' would be envious to be able to con people so many times.

Sat, 02/04/2012 - 22:00 | 2127609 Long-John-Silver
Long-John-Silver's picture

All those people wanted the con, believed the con, and lived the con. It's how Bernie Madoff was able to operate his ponzi for so many years before it collapsed. 

Sat, 02/04/2012 - 21:23 | 2127525 lolmao500
lolmao500's picture

What about Hungary?


Hungary is seeking an international credit line of 15 to 20 billion ($20 to $26.3 billion) euros, the secretary of state heading the prime minister's office, Mihaly Varga, was quoted on Saturday as saying.

And don't count on China...


Wen says China has no intention to 'buy Europe'

And Russia is planning the biggest military buildup since the Soviet Union...


Russia will start producing six submarines and one aircraft carrier annually starting in 2013, Deputy Prime Minister Dmitry Rogozin said on Thursday.

“By 2013, production capacity [at Russian shipyards] will allow us to build six submarines and an aircraft carrier every year,”

As a result, the production output will surpass that of the Soviet era when Russia built an average of five submarines annually, he said.

Sat, 02/04/2012 - 21:36 | 2127559 Randall Cabot
Randall Cabot's picture

Now that you mention it, I am getting hungary. I think I have a half of a turkey hoagie in the fridge. Be back in a bit.

Sat, 02/04/2012 - 21:36 | 2127560 T-roll
T-roll's picture

You forgot to metion that Israel is going to attack Iran witihin a few months.

Sat, 02/04/2012 - 21:48 | 2127585 Ahmeexnal
Ahmeexnal's picture

Trolls have been saying that for the last....60 years.

Sat, 02/04/2012 - 21:55 | 2127600 lolmao500
lolmao500's picture

More like 33 years.

Sat, 02/04/2012 - 21:36 | 2127562 navy62802
navy62802's picture

... because the first Cold War didn't bring us close enough to annihilation, now we get another one.

Sat, 02/04/2012 - 22:36 | 2127650 xela2200
xela2200's picture

Life is all about second chances.

Sat, 02/04/2012 - 21:21 | 2127529 Asher88
Asher88's picture

Yeah, THIS time there really IS going to be a default...this isth theriuth sththuff Beavis!!!

Sat, 02/04/2012 - 21:21 | 2127530 Troy Ounce
Troy Ounce's picture

A Drama

Sat, 02/04/2012 - 21:25 | 2127537 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

A Drachma

Sun, 02/05/2012 - 01:08 | 2127982 akak
akak's picture

A dram of Dramamine.

Sun, 02/05/2012 - 02:33 | 2128067 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Drama yo Mama!


Sat, 02/04/2012 - 21:22 | 2127532 The Deleuzian
The Deleuzian's picture

Die Empire Die!!

Sat, 02/04/2012 - 21:24 | 2127536 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

Di, Opus Di!

Sat, 02/04/2012 - 21:29 | 2127546 The Deleuzian
The Deleuzian's picture

Get em' LH!!!

Mon, 02/06/2012 - 01:08 | 2129879 ucsbcanuck
ucsbcanuck's picture

You meant "Die, Opus Dei" right LH?

I wonder - did Blankfein read Da Vinci Code before the infamous "God's work" speech?

Sat, 02/04/2012 - 21:23 | 2127534 Mr.Kowalski
Mr.Kowalski's picture

Scenario Two involves a meltdown in Greece-- riots, protests and strikes reach a point where Greece becomes ungovernable, with the government unable to do anything to help the situation. Should this type of scenario play out, I look for the Greek Army to throw out the (incompetent) civilian government. The military only handed over power back to the civilians in the early 1980's. It could easily happen again. At this point, there begins a chain reaction: depositors will immediately empty out any money they have in Greek banks-- if the Army allowed them to even open for business


Sat, 02/04/2012 - 21:26 | 2127539 lolmao500
lolmao500's picture

That would be neat.

Sat, 02/04/2012 - 21:34 | 2127555 Michael
Michael's picture

Iceland is sending consultants to advise on how to get er done.

Sat, 02/04/2012 - 22:05 | 2127617 HardlyZero
HardlyZero's picture

Maybe a new type of Club Med..."Fire and Ice".  You get to visit either location and pick your own crisis crash pad.  Fully stocked and 24/7 entertainment.

Then take a dip in the icy - volcanic heated waters...or go to the Greek Isles for a dip.

It could be a very tantalizing business...post-Euro. 

Sat, 02/04/2012 - 22:14 | 2127637 kito
kito's picture

Get what done! Greece is the problem. Greece itself can't pay the piper. Totally different than Iceland.

Sat, 02/04/2012 - 22:20 | 2127646 Conrad Murray
Conrad Murray's picture

I think he was referring to luring the piper into a dark alley, beating him mercilessly, hanging him from a lamp post in front of Parliament, and slicing him open from throat to sack to the amusement of on-lookers as he flails about momentarily while his guts plop to the pavement.

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