On Monday we got still more bad news for Greece. Around one-third of Angela Merkel’s Christian Democratic bloc opposes further aid [10] for Athens meaning the Chancellor faces an uphill battle in convincing German lawmakers to keep Greece on life support. Meanwhile, a new report from the Hellenic Confederation of Commerce and Enterprises suggests that each day without a deal costs the Greek economy [11] €22.3 million.
Not to put too fine a point on it, but Tuesday’s headlines are even worse.
First, up is parliamentary speaker Nikos Filis confirming what the IMF leaked [12] on Saturday: without a deal, Greece will default on June 5.
Via Reuters [13]:
Greece will not be able to make a payment to the International Monetary Fund that falls due on June 5 without a deal with its international lenders, the government's parliamentary speaker said on Wednesday.
Athens faces several payments totalling about 1.5 billion euros (1 billion pounds) to the IMF next month and is in talks with the European Union and the International Monetary Fund to clinch a cash-for-reforms deal before it runs out of money.
"Now is the moment that negotiations are coming to a head. Now is the moment of truth, on June 5," parliamentary speaker Nikos Filis, from the ruling Syriza party, told ANT1 television.
While everyone should by now be desensitized to the sheer ridiculousness inherent in this circular funding scheme, as you can see from the following, the absurdity never ceases to amaze:
"If there is no deal by then that will address the current funding problem, they won't get any money. There is no money for the foreign (lenders) when they have not given us any funds for a year,” Filis said.
Basically, it’s not clear to Filis why these “foreign lenders” expect to get their money back when they haven’t sent Greece the money to repay them.
Varoufakis is still confused about a few things himself, notably that his superior intellect never seems to trump Schaeuble’s de facto status as EU paymaster when the two discuss billion-euro bailouts for Greece.
Via Bloomberg:
German Finance Minister Wolfgang Schaeuble wrongly views previous Greek govts as “reflecting the character of all Greeks,” German weekly Die Zeit quotes Greek Finance Minister Yanis Varoufakis as saying in interview.
Asked if Schaeuble making mistakes in his analysis of Greece, Varoufakis says yes: Zeit
Varoufakis says regrettable that “relative power” trumps arguments when he and Schaeuble talk: Zeit
While Greek officials leisurely ponder such things, the central bank is begging for another increase in the ELA ceiling...
- GREEK CENTRAL BANK SAID TO REQUEST EU1.1B INCREASE IN ELA
...while the banks themselves mull the imposition of a levy on all transactions above €500…
Via Kathimerini [14]:
Athens is promoting the idea of a special levy on banking transactions at a rate of 0.1-0.2 percent, while the government’s proposal for a two-tier value-added tax – depending on whether the payment is in cash or by card – has met with strong opposition from the country’s creditors.
A senior government official told Kathimerini that among the proposals discussed with the eurozone and the International Monetary Fund is the imposition of a levy on bank transactions, whose exact rate will depend on the exemptions that would apply. The aim is to collect 300-600 million euros on a yearly basis.
Fee won’t include ATM withdrawals, transactions up to EU500; in this case Greek govt projects EU300m-EU600m annual revenue from measure.
It looks like things are about to get a lot worse for Greeks as capital controls may be just around the corner. We wonder if the next shoe to drop will be a good old fashioned 'Cyprus'ing' for depositors.
