On Tuesday evening, a flood of headlines from Brussels indicated that German Chancellor Angela Merkel was set to tighten the screws on Greek PM Alexis Tsipras by standing firm on debt haircuts and ensuring that any new proposal from the troika would include harsher conditions than those that comprised the pre-referendum deal.
Among the other headlines to hit the wires as Merkel's "nein" comments poured in, was the following rather disconcerting bit from Jean-Claude Juncker:
- JUNCKER: EU COMMISSION HAS HUMANITARIAN PLAN FOR GREECE IF NEED
"Just in case Greece decides to disobey, Europe is ready to treat Greece as an African nation," we quipped.
Minutes ago, the "humanitarian" plan commentary was back:
- EURO AREA, ECB SAID TO DISCUSS GUARANTEE AS HUMANITARIAN ACTION
- EURO AREA SAID TO CONSIDER GUARANTEE PLAN FOR ECB AID TO GREECE
Clearly, Europe is now preparing for an imminent Grexit and if the above is any indication, the fallout will be an economic catastrophe that's orders of magnitude worse than what Greeks have experienced over the last several weeks.
Euro-area officials have informally discussed a contingency arrangement whereby the ECB maintains liquidity to the Greek banking system in return for a guarantee for the loans, people familiar with the matter say
Officials at finance ministries and ECB have exchanged views on need for keeping or increasing liquidity to respond to humanitarian situation in the country
Arrangement would help Greek banks to keep operating if negotiations over the country’s bailout drag on