As had been leaked in advance, earlier today Jeroen Dijsselbloem first reported...
Received Greek request for six months extension.
— Jeroen Dijsselbloem (@J_Dijsselbloem) February 19, 2015 [8]
... that Greece had submitted a request to euro-area creditors to extend the availability of bailout funds for six months, i.e., an extension to the "Master Financial Assistance Facility Agreement" not an extension to the Greek "bailout programme" aka the Memorandum per se...
#Greece [9]: Bailout extension to be monitored by #Troika [10] - sources to Reuters. Greek officials deny they've requested Memorandum extension.
— José Miguel Sardo (@jmsardo) February 19, 2015 [11]
... which has been the sticking point in all Greek government public addresses in recent days. Greece further asked for best use of flexibility in "current arrangement", which supposedly means an unconditional extension with Greece given the liberty to determine what happens in the next 6 months without Troika intervention. But was it a bailout extension or just a loan extension?
It appears not even Greece is certain after Market News reported that:
- GREECE DENIES HAS REQUESTED EXTENSION OF 'BAILOUT'-OFFICIAL: MNI
And furthermore:
Greece hasn't accepted Troika terms: "will stabilise Greece's fiscal position, attain appropriate primary fiscal surpluses".. fight goes on
— A Evans-Pritchard (@AmbroseEP) February 19, 2015 [12]
So what exactly does Greece want, ask or request? As Bloomberg reports, Greek authorities state intention to cooperate with partners in order to avert technical impediments in context of Master Facility Agreement recognized as binding vis-a-vis financial and procedural content, according to draft letter requesting extension obtained by Bloomberg News.
- Greek govt applying for extension of Master Financial Assistance Facility Agreement for 6-month period
- During extension, authorities will make best use of given flexibility in current arrangement, toward its successful conclusion and review on the basis of the proposals of Greek govt and institutions.
- Purpose of 6-month extension to Greek loan facility is to agree on mutually acceptable terms for the stabilization of Greece’s financial position, attainment of fiscal targets, according to draft extension request letter obtained by Bloomberg News.
- Any new measures will be fully funded, Greek authorities will refrain from unilateral action which would undermine fiscal targets
- Extension will allow reintroduction of collateral waiver for Greek banks, extension of availability of EFSF bonds held by the HFSF
- Extension will allow for work to begin on new contract arrangement between Greece, Europe and IMF to follow on existing agreement
- Extension will allow agreement on supervision under EU, ECB framework and IMF during extended agreement
- Extension to allow discussion on means to implement Nov. 2012 commitment on debt relief
Of course, as we first reported two days ago when redlining the original, Moscovici, and final Eurogroup draft proposal, what Greece is requesting is merely a return to the original, "agreed-upon" language formulation. The problem is that now that Europe officially threw up on that language, conceding to the Greek bailout proposal would effectively see the European Goliath bested by the Greek David, something which Germany's Schauble will hardly agree to.
As such the Eurogroup promptly takes a cautious tone:
- EU SAYS GREEK GOVT SENT LETTER REQUESTING EXTENSION
- EU SEES `POSITIVE SIGN' IN LETTER FROM GREECE
- EU SAYS GREEK LETTER MAY PAVE WAY FOR REASONABLE COMPROMISE
- EU SAYS CONTENT OF GREEK LETTER TO BE DISCUSSED BY EUROGROUP
- EU'S JUNCKER SEES GREEK LETTER AS FIRST POSITIVE SIGN -BBG
Still, Yanis Varoufakis would surely not have sent in an extension request without getting a preapproval on the language in advance from Europe, would he? Here is what Keep Talking Greece reported [13]moments ago to clarify some of the confusion:
A little light in the confusion… What is the loan agreement for which Greece requests an extension?
“Greece requested an extension of the Master Financial Assistance Facility Agreement” government sources told several media.
The M-FAFA is the official name of the agreement between Greece and the Eurozone.
The loan agreement was signed between Greece and the European Financial Stability Facility (EFSF) and amended 12. December 2012.
Full 68-page text here in pdf [14]
(sources: To Vima, Left.gr)
The EuroWorkingGroup will take up the Greek request at 4 pm today, an extraordinary Eurogroup meeting with physical presence of the Finance Ministers (no tele-conference) is allegedly scheduled for 3 pm tomorrow Friday.
This could be translated into an agreement between Greece & the Eurogroup
Speaking earlier to To Vima, FinMin Varoufakis said that the extension requested is until 31. August 2015, and that it does not contain “recession measures.”
“There will be a YES or NO at the Eurogroup” on Friday, he added.
So was this it? Has Greece officially folded? Expect to find out shortly when the Eurogroup decides whether to go ahead and give Greece the green light on whatever linguistic acrobatic formulation is being passed around right now.
