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Gov’t sources: Greece rejects creditors’ proposal for 5-month extension & €15.5bn

Greek government rejected on Friday afternoon the creditors’ proposal for a 5-month program extension and  €15.5 billion funding. Citing Greek government sources in Brussels, several Greek media report:

The government rejects the proposal of institutions to extend the existing Greek program, with a funding of 15.5 billion EUR.

The same sources said that no financial arrangement can work within the framework of the institutions’ proposal and furthermore that the proposed financial covering is not enough.

The scenarios on the table are many, said the same sources, stressing the importance of an overall package agreement.

Finally the sources stressed that the agreement should not recycle the vicious circle of austerity.” (via in.gr)

Earlier on Friday, German Chancellor Angela Merkel and French President Francois Hollande  held a 45-minute private meeting with Greek Prime Minister Alexis Tsipras and thus before the final session of a European Union summit. The two leaders of whose countries are Athens’ two biggest lenders, they went through details of immediate funding for Greece if it would sign the deal.

“The creditors laid out terms in a document that went to Greece on Thursday and was seen by Reuters on Friday. It said Greece could have 15.5 billion euros in EU and IMF funding in four installments to see it through to the end of November, including 1.8 billion euros by Tuesday as soon as the Athens parliament approved the plan.”

According to a Reuters dispatch published before Greece rejected the plan, the Eurogroup ministers would move to discuss a Plan B on Saturday.

“If Greece refuses, the ministers will move on to discussing a “Plan B” on preparing to limit the damage from a Greek default to Greek banks and other euro zone countries and markets, the official said.”

Leaving the EUCO Summit, PM Alexis Tsipras said:

“Greece will fight for the European principles of democracy, solidarity, equality and mutual respect.

These principles were not based on blackmail and ultimatums.”

European Council President Donald Tusk pressed the ON button on his iPad and played the same song “Game Over.”

“It is not political blackmail when we repeat day after day that we are very close to this day (June 30) when the game is over,” Tusk said.

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  1. Well, well, Tsipras has out-foxed the foxes. Almost game, set and match to Greece.

    The next question is will the individuals running the EU, initiate a run on the banks in Greece? If they do I suspect they will not be able to contain it exclusively to Greece because its ramifications will explode across all eurozone member states.
    Its also ironic that the actions and policies of the IMF and its bungled attempts to put pressure on Greece to sign up for more asphyxiating debt might lead to a real-life GREXIT. I am sure the IMF would not like to be associated with that because after all it is an American organisation with no political affiliation with the EU?? That would be doubly embarrasing for the EU technocrats.

    • Giaourti Giaourtaki

      Unfortunately all this will become obviously seen much too late as the “Greek bank-run” goes on now for 9 months in a row, not only 5, also most of the money isn’t abroad (as told) but circulating in Greece (45 billion at the moment)
      The main problem is that most important Greek statistics come out every 3 months and then also 3 months later, so still the “lenders” can spin their fairy tales of “recovery”, also the Greek government is not able to show the blind (European) public that this “recovery” already exhausted the last 3 months of 2014.
      At the moment it’s more important what happens to Greek banks in the Balkans, Mr Kotzias tour there might help.

  2. Tusk really is a rather stupid and conformist guy. I would feel rather ashamed of him, if I were Polish.

  3. If Tsipras does not accept 15B and current bailout extension, it probably is “game over”.
    EZ simply does not have any other immediate source of money.
    Current bailout terms need to be used because new terms seem impossible to agree on.
    What “game over” means remains to be seen but end of ECB support for Greek banks is almost certain. Capital controls and return to drachma.
    If I were Tsipras, I’d take the offer. With that breathing space, I’d negotiate 3rd bailout (say, fresh 100B and sizable debt relief). If I like terms and Syriza coalition can live with them, I’m good. If I don’t like terms, I agree to them, then default. This would give me some 100B for my favorite social programs. Sounds like a plan?

  4. ECB is creating 1 trillion digits on the screen out of thin air right now, but god forbid if pensioners could have 3 meals a day. That is so called “European values” in a nutshell.

  5. please convey to Yanis/Alexis:

    Issue Drahma, backed by gold, freely exchangeable for Gold, held by Greece Central Bank.
    Use Drahma inside Greece, but make it NOT convertible to any currency. Print just right amount of Drahmas covered by Gold, no more fiat money. Accept Euros for goods and services, but don’t put Euros into circulation, keep Euros for foreign trade. That way Greeks will run out of Euros, and start using Drahmas.
    People first might rush to exchange Drahmas for Gold, but then they need to cover living expenses, they will sell Gold for Drahmas. Freeze Euro Debt until agreement on Debt.

    • And pray just where do you get all that gold ????
      Beside the whole point of a new drachma would be to devalue it so you strenthen exports and weaken imports, a drachma pegged to gold wont move an inch(since that is the point of it being goldbacked)

      • Giaourti Giaourtaki

        If the BoG would put the missing fleet into account there are no weak exports, the whole situation founds on totally wrong numbers:
        Also the Drachma-impact on tourism is minimal as most tourists pay their all inclusive shit abroad, their food is not Greek and the now booming sector will collapse as nobody will have money to invest in buildings.

      • set One Drachma = 0.000…0001 oz of Gold.
        u can not print ur way into prosperity.
        example: USA in 1995-1999: economy was booming and dollar was going up, b/c everybody wanted piece of US economy.
        moral: economy moves currency, not other way around.
        strong economy -> strong currency. weak economy -> weak currncy

        • But if you set one drachma at 10^-x it wont be worth much. To fully back a new currency for the whole country you would need gold reserves in the tens, possibly hundreds of billion of €.
          And as you say, weak economy=weak currency and that would be the point of a new drachma wouldnt it? It is pointless to get a drachmas and then just have the new currency not flotat against the euro/dollar.

  6. Its pretty much over then. There won’t be any debt relief. Given the political prestige poured into this spectacle from the troika during the last few weeks it is extremely unlikely that they’ll back down. In essence, Syriza is screwed, have fun with the new Drachma 😀

    • Giaourti Giaourtaki

      Debt relief would come (silently) if they gain control, it’s all about control. That’s the reason why they don’t leave it, that’s why they forced to continue the program after Dec 31 2014.
      In the beginning they thought Grexit would result in sell-out to their rich buddies but Greece stayed in the Eurozone, so they tried it with ruin, but still their friends couldn’t get a cheap house at the seaside with the former owner as slave inside and then they figured uh, these Greek families don’t work for 2 bucks an hour because they live on the pensions, so to make’em slaves they decide to cut more.
      An exit from Euro without exit from capitalism makes no sense and the best would be an exit from the money-system and the money-makers import/export-dogma.

  7. My heart bleeds for mr and ms greek. This is horrible for the average citezent and is going to be so for many, many years. But oh, hay – I forgot, Greek BnP has an at least 40% from black market? the biggest corrupsy in europe? the most flawed administration system (great idear – lets take a loan from the state for a two story building and never ever pay back if we dont build the second store?)Let me retire at the age of average 50?then take a another job and continue to applicate for another pension? And btw, since the tax administarators are so corrupt (or stupid) I dont have to pay for my pool or other stuff that are clearly in the open air and should be taxed? But why should I pay, I’m just a publick servant at management level with an income of 5.000 EU plus what ever pr kid?. Who acctually gives a dam about social justes or law?
    Hell, lets just let the rest of the EU workers do that. They have allready payed that once so they must have more and the we can keep the party going on.
    Dam, I forgot to ask how many carloans there was p person in Greez . per person from 3- 100 years. 3?4?
    And how many state banckrupcies there been in the last 1oo years 0? oh no wait 5! but ofc it has nothing to do with the Greeze administration or moral to do.Its Allllll due to the evil evil EU

    Suit your self guys!