How The Greek Deal Almost Collapsed At 6am In The Morning

What began at Saturday's Eurogroup meeting as a contentious exchange between EU finance ministers (who experessed their extreme consternation at the projected size of a Greek ESM package which was suddenly 43% larger than the figure from the Greek proposal thanks to a €25 billion provision for bank recapitalization) nearly ended in a Grexit, both figuratively and literally when, at 6am Monday morning Brussels time, Greek PM Alexis Tsipras headed for the door after discussions with Angela Merkel hit what both leaders deemed to be an intractable stalemate.

Or so the story goes.

For those who enjoy a good narrative, here are the details via FT

The closest Greece has come to leaving the eurozone was at around 6am on Monday morning, just as dawn was breaking over Brussels.

 

Alexis Tsipras of Greece and Angela Merkel, the German chancellor, decided after 14 hours of anguished talks that they had reached a dead end. With no room for compromise, neither saw any reason to carry on. Grexit was the only realistic option.

 

As the two leaders made for the door it was Donald Tusk, the president of the European Council, who moved to prevent the fatigue and frustration from triggering a historic rupture for the eurozone.

 

“Sorry, but there is no way you are leaving this room,” the former Polish prime minister said.

 

The sticking point was the size and purpose of a privatisation fund to be backed by sequestered Greek assets. Ms Merkel wanted the €50bn of sales to be devoted to debt repayments; Mr Tsipras saw that as a national humiliation that would cede control of assets worth almost a third of Greek national income. His alternative was a smaller fund, whose proceeds would be reinvested in Greece.

 

A compromise was ultimately found after more than an hour discussing nearly a dozen different structures. It was to be the coda to a weekend that featured one of the most exhausting and fraught negotiations in a seemingly interminable crisis that has provided the EU’s sternest test.

 


Yes, a "compromise" was found, and one which has undoubtedly left the majority of Greeks wishing Tsipras had ignored Tusk and simply announced to the world that the drachma was about to make its not-so-triumphant return to the global FX markets because by sticking around, the PM who came to Brussels with a clear mandate to lead his country out of the euro "with his head held high" (to quote Nigel Farage) left without €50 billion in airports, planes, and infrastructure and more importantly, without the collective pride of the Greek people.

Thanks Donald Tusk.

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