Greece Asks For 2-Year Bailout From ESM, Merkel Shoots It Down

Update 3: Merkel keeps pouring it in. Bloomberg reports tthat German Chancellor Angela Merkel says at event in Berlin that offer from Greek government over bailout program “cannot be clearly identified.”

"Greece has decided that the program will expire at midnight tonight. We have made clear today: There are new offers today which cannot be clearly identified, negotiations which we cannot specify. Before the planned referendum will be held, we will not discuss negotiate anything new."

Update 2: The Greferendum cancellation calls have begun and Greece has now effectively applied for a DIP loan.

  • GREECE MUST CANCEL REFERENDUM TO ALLOW PROPOSAL AIRING: GABRIEL
  • GABRIEL: GREEK TALKS CAN RESUME QUICKLY IF REFERENDUM KILLED
  • GREECE REQUESTS LOAN EXCLUSIVELY FOR MEETING DEBT PAYMENTS: DOC
  • GREECE REQUESTS BAILOUT EXTENSION TO AVERT DEFAULT: DOCUMENT

Update: EU finance ministers will reportedly hold a teleconference shortly to decide on Greece's bid for an ESM loan. "Group of euro-area finance ministers have responsibility to choose whether to approve Greece’s bid for two-year bailout program from European Stability Mechanism," Bloomberg reports, citing an unnamed EU official.

Here's the statement from Tsipras' office:

"The government will fight for a viable deal until the end and within the euro. This will be the message of the No vote. We will say No to a bad deal on Sunday. From the first moment we made clear that the decision to conduct a referendum is not the end but a part of the negotiation for better terms. Greece remains at the negotiating table.”

But once again, German lawmakers aren't having it, as the headline hockey heats up:

  • CAN'T TAKE UP GREEK AID BID NOW, GERMAN CDU OFFICIAL SAYS
  • MUST WAIT FOR RESULT OF GREEK REFERENDUM, CDU OFFICIAL SAYS

and the result: EURUSD plunge (which is odd because everyone said that Europe x Greece would be much stronger, right?)

 

Earlier:

With a sovereign default now just hours away, both Greece and Europe may be starting to second guess the decision to open Pandora's Box with both sides cancelling press events citing "emergency meetings". The latest headlines have Greece requesting an ESM bailout and pressing for debt restructuring.

  • GREECE ASKS FOR 2-YR BAILOUT PROGRAM FROM ESM: PM'S OFFICE
  • GREECE ASKS FOR FINANCING, DEBT RESTRUCTURING: PM'S OFFICE
  • GREEK GOVT WILL SEEK VIABLE AGREEMENT WITHIN EURO: PM'S OFFICE
  • Dijsselbloem Cancels TV Interview Due to Urgent Obligations
  • Greek Govt Cancels Press Briefing Citing Emergency Meetings

More, from Bloomberg:

Greek govt submitted request to European Stability Mechanism today for a two-year agreement, which will fully cover country’s financing needs and includes debt restructuring at the same time, according to an e-mailed statement from the PM’s office.

 

Greek govt will strive for a sustainable agreement within euro area; that will be the message of a No vote to a bad deal in Sunday’s referendum Referendum isn’t the end of negotiations, but the beginning of talks under better terms for the Greek people; Greece remains at the negotiating table

To which we said:

Sure enough:

  • MERKEL SAID TO SEE NO NEW GREECE TALKS, MUST AWAIT REFERENDUM

Meanwhile, German lawmakers — who have grown increasingly frustrated with Chancellor Angela Merkel's lenient negotiating tactics — are aggravated with the stream of headlines emanating from Athens and Brussels (via Bloomberg again):

It’s quite surprising that there are new proposals coming out of Brussels,” says Volker Kauder, parliamentary leader of German Chancellor Angela Merkel’s party.

 

“Things haven’t changed: Greece has broken off negotiations, there will be a referendum and the second aid program is expiring tonight.”

And as usual, the ultimate decision will rest in the hands of the Germans.

Finally, we present the following "spotlight" from the ESM's latest annual report with no comment: