Germany Speaks: Not So Fast On The Greek "Deal"

Europe's now painfully transparent policy of demanding that Greece decide to default on its own is becoming so glaringly obvious, we truly fear for the intellectual capacity of everyone who ramps the EURUSD on any incremental "europe is saved" rumor. As a reminder, yesterday we said, in parallel with the Greek irrelevant MoU vote: "The only real questions are i) what the Greek population may do in response to this latest selling out of a population "led" by an unelected banker, which if history is any precedent, the answer is not much, and ii) how Germany will subvert this latest event, and put the bail [sic] back in Greece's court once again." We documented on i) earlier today - a couple of burned down buildings, a few vandalized store fronts, lots of tear gas and that's about it, as people still either don't believe or can't grasp the seriousness of the situation. As for ii) we now get the first indication that not all may be well on Wednesday. From the FT: "European officials rushed to finalise details of a €130bn Greek bail-out on Monday amid signs Germany and its eurozone allies may not be prepared to approve the deal at a finance minsters’ meeting on Wednesday, despite Athens backing new austerity measures." And so the bail [sic] is once again back in Greece's court, where however since the last such occurrence, the parliament has 43 MPs less. Quite soon, the only person left in "charge" of the country will be the ECB apparatchick and unelected banker Lucas Papademos.

Germany's ulterior motives are so bright, we gotta wear shares:

One eurozone official said the group had come up with a list of at least a half-dozen items that Greece must accept before the deal will be moved to finance ministers for final approval on Wednesday.


The items on the list include, according to several officials, proof of the €325m in cuts, clarification on how Greece intends to reduce labour costs 15 per cent, and reassurance that all Greek leaders will back the deal – especially after Antonis Samaras, head of the centre-right New Democracy party and Greece’s presumptive next prime minister, indicated that he may try to renegotiate the pact after April elections.

But the biggest weakness? The very item we noted earlier this morning, namely that "Samaras Pledges To "Renegotiate" Bailout Pact After April Elections"

The parliamentary vote is important, but it’s not the be all and end all,” said another eurozone official. “Samaras’s explanations are shifty.”

So what is next up on deck: a "conditional" bailout of Greece.

If the German-led group of creditor countries emerges unconvinced, officials said lenders may turn to a plan B, where the bail-out is given “conditional approval” and is reassessed at the next scheduled meeting of eurozone finance ministers next week.


In that case, ministers would only give the go-ahead for a critical part of the new bail-out, a €200bn restructuring of privately held debt which must begin in a matter of days in order to be completed before Greece’s next bond comes due – a €14.5bn redemption on March 20.


To complete the voluntary restructuring, where private debt holders have agreed to cut their bonds in half, eurozone lenders must approve €30bn in new cash to serve as a “sweetener” for bondholders to participate.

So even as the fallback plan continues to be "baffle them with bullshit" literally every day, and delay, delay, delay, while America's seasonal adjustments somehow make it a self-contained economy in its own right, which no longer needs the benefit of the world's largest economy (and judging by the EURUSD traders out there, this just may pass), while slowly but surely everyone becomes convinced that it will be in everyone best interest just to let Greece go, and that everyone is sufficiently prepared for just that "contingency."

As was the case with Lehman... At least, until the Fed had to step in with a $20 trillion bailout to preserve the Western way of life of course.