More Greek Platitudes As IMF Faces Shortfall and Deflects Back to ECB

Tyler Durden's picture

In speeches by 'Andsome George Papandreou and Evangelos 'Creosote' Venizelos today, the state of Greek, and for that matter global, economic challenges seemed to swing from dire to soluble to dismal within a few small sound-bites. Noting, via Bloomberg, that Greece faces 'huge challenges' and the 'end to the global financial crisis appears more distant', G-Pap admitted (somewhat intriguingly) that there is an urgent need to shield EU members from the crises but was then followed up by his wing-man finance minister who whined that Greece is not the Euro-area's central problem and that the problem of sovereign debt in Euro-area is significant. What was most comforting was Venizelos' expectation that the IMF will extend Greek loan maturities while at the same time BBC News is reporting a growing concern that the IMF will not have enough money to bail out larger European countries if the crisis should spread. It is neither a case of IF or WHEN! It is now, and while this weekend has been marked by a litany of statements, corrections, and re-statements indicating left-hands not knowing what right-hands are doing, we suspect that the simple application of game-theoretical first-mover-advantage is weighing heavy on many politicians (especially Portuguese and German). Just to put one final coffin in the nail of co-operation, IMF's Borges then notes his expectation of the ECB and EFSF as the solution for Europe, once again deflecting, denying, and de-risking?

Notable headlines from G-Pap, via Bloomberg:

*PAPANDREOU SAYS MUCH REMAINS TO BE DONE IN GREECE

*PAPANDREOU: URGENT NEED TO SHIELD EU MEMBERS FROM CRISES

...then followed up with some details from Venizelos (via Bloomberg):

*VENIZELOS: PROBLEM OF SOVEREIGN DEBT IN EURO AREA `SIGNIFICANT'

*VENIZELOS: TARGET TO CUT PUBIC SECTOR JOBS NECESSARY

*VENIZELOS: SMALLER STATE IS `EXISTENTIAL' FOR GREECE

*VENIZELOS: GREEK BANKS `INTEGRAL' PART OF EUROPE SYSTEM - hhmm?

and here are the kickers...

*VENIZELOS: GREECE NEEDS NEW INVESTMENTS

*VENIZELOS: GREECE NEEDS FOREIGN INVESTMENT

*VENIZELOS: GREECE HAS WILLINGNESS TO RECAPITALIZE BANKS

*VENIZELOS: `ABSOLOUTLY NECESSARY TO WIN THIS WAR'

*VENIZELOS SAYS IMF EXPECTED TO EXTEND GREEK LOAN MATURITIES

as we note this story (from BBC News):

IMF warns on funding levels if crisis worsens
The International Monetary Fund (IMF) has warned it may not have enough money to bail out larger eurozone countries if the debt crisis were to spread.

 

IMF chief Christine Lagarde says the global lender can meet its current obligations but this could change if the crisis worsens.

 

Publicly, world leaders have said there is "no plan" for a Greek default.

 

But reports suggest leaders are working on a plan to allow Greece to default on its debts and remain in the euro.

 

Meanwhile, Antonio Borges, the head of the IMF's European department, has urged the ECB to play a bigger role in fighting the crisis.

 

"It is very important that we see a combination of the ECB and the EFSF," said Mr Borges.

 

"The ECB is the only agent that can really scare the markets."