6 Hour Greek Meeting Ends With No Agreement, Troika Demands Answer By 11am Tomorrow, EURUSD Drifts Lower

The Greek endgame appears to be approaching... or not. After a "marathon" (in Greek terms) session between the Greek coalition cabinet members ended with no definitive agreement, and in fact LAOS president said that more austerity would "contribute to a recession that the country can not afford, and a revolution of misery which will then burn down Europe", while New Democracy's Samaras stated he would "not permit any more austerity", even as Papademos on the other line apparently said that the leaders have agreed on 2012 spending cuts of 1.5% of GDP, the Troika seems to have had enough of being Greek'd around, and demands an answer by 11 am tomorrow. Supposedly, "or else" no more cash. Then again, we have heard all of this before. In fact, the Troika talks are continuing right now as European representatives entered the Greek PM office, following a late night meeting with the IIF. That said, the market is once again quite nonchalant about all of this, with the EURUSD trading down a modest 50 pips to 1.3107 having touched just under 1.3080 earlier. Bottom line: it is likely that nothing will happen tonight.

The following statement was released from the PM office:

PRESS OFFICE OF THE PRIME MINISTER
Athens, 5 February 2012

 

The Prime Minister and the leaders of the three political parties supporting the government met in order to jointly decide on the main elements of the agreement with the troika regarding Greece’s new economic program in the framework of the new loan agreement.

 

The Prime Minister and the political leaders agreed on main issues, including:

 

1) The adoption of measures, in 2012, aiming to reduce public spending by 1.5% of GDP.

 

2) Safeguarding the viability of auxiliary pension funds.

 

3) Addressing the competitiveness deficit by taking measures including the reduction of wage and non-wage labor costs, aimed to support employment and promote economic activity.

 

4) The recapitalization of banks through a combination of measures that safeguard public interest and ensure the banks’ managerial autonomy.

 

The Prime Minister and the political party leaders will meet again tomorrow to conclude their talks on the content of the program.

More from Kathimerini:

"The prime minister and political leaders of three parties supporting the government met to take joint decision on the content of the basic elements of an agreement with the troika on the new economic program in Greece that is a prerequisite for new financial support the country.

 

The prime minister and political leaders will meet again tomorrow (Monday) to complete the consultations on the content of the program. "

 

Meetings and discussions

 

After the meeting it was decided the expanded extraordinary meeting of PASOK Political Council, on late Sunday evening, chaired by George A. Papandreou to discuss what was said at the meeting of political leaders and the course of negotiations with the troika. Extraordinary meeting and LAOS (the executives participating in government and their close associates) convened and the party president George Karatzaferis, concerning the proposals of the Troika of the measures to be taken by our country.

 

Moreover, at the Maximos Mansion went in the afternoon Sunday, the senior executives of the International Institute Chrmatopistotikou (IIF), Charles and Jean Lemier Dalaras - who are in Athens to finalize an agreement to restructure the Greek debt, known as PSI - for a meeting with the prime minister, after the meeting of political leaders. Later, Mr. Papademos would have another meeting with the heads of the troika.

 

Moreover, the state television network in Germany ARD, said that meeting the Prime Minister L. Papademos with the head of Deutsche Bank Josef Ackerman is scheduled for late Sunday evening, an unknown place in Athens. Object process impairment of Greek debt.

Earlier, at noon Sunday, Mr. Papademos met with the heads of the troika, these finance ministers and Labour. On last night negotiations, the troika leaders insisted on their demands to reduce labor costs, despite the remarks of Mr. Koutroumani to cause economic "hole" in pension funds

Finally, since every action has an equal, opposite and, when it comes to labor unions, preempted reaction, we learn that Greece's two largest labor unions are holding a 24 hour strike on Tuesday even before further austerity is finalized. From Reuters:

Greece's two major labor unions plan a 24-hour strike on Tuesday against austerity measures and reforms demanded by international lenders in exchange for a new bailout package, union officials said on Sunday.

 

"We are planning a one-day strike on Tuesday," Ilias Iliopoulos, secretary general of public sector union ADEDY, told Reuters. "Despite our sacrifices and despite admitting that the policy mix is wrong, they still ask for more austerity."

 

ADEDY and its private sector sister union GSEE represent about 2 million workers or roughly half the country's workforce. They have staged repeated strikes since the country first resorted to bailouts from foreign lenders in 2010.

 

A GSEE official said the two unions would on Monday finalize plans to strike