Euro Leaders agreed to give Greece a chance to submit new proposals by 8:30 a.m. Friday, July 10th. Two days later, a full Summit with all 28 European Union members will take place. A crucial decision will be taken: “to start negotiations for a two-year program,” as Merkel said or “proceed with Grexit” as Juncker threatened. But no worries: the EC President promised also “humanitarian aid”!
Prime Minister Alexis Tsipras committed to present a new request for a programme within the framework set by the ESM Treaty, incl. strict policy conditionality.
There have to be detailed proposals both short & medium term.
EC President Jean-Claude Juncker:
This evening we have not found a solution. Last week I said a NO would weaken the Greeks, they were very much weakened this evening.
Debt restructuring not on the table until October
*ECB commitments will depend on Greek commitments by Friday morning at 0830
We have a Grexit scenario, prepared in detail
Chancellor Angela Merkel
I am not exaggeratedly optimistic of a solution to rescue Greece on Sunday but the summit had been called “because we think the situation is so dangerous”.
Asked if Greece could crash out of the euro zone if it failed to put forward convincing reform proposals, she said Sunday’s summit would decide whether to open negotiations on a two-year programme for Athens.
Countries outside the eurozone want to be in on these discussions, says Merkel, explaining reason for EU-28 summit
if Greek reform proposals are satisfactory and prior actions taken, short-term finance can be provided
Short-Term Mechanisms can be discussed once overhauls agreed, would be yied to implementing prior actions on overhauls
A haircut is not up for debate. That is a bailout under the treaties and that will not happen.
Bridge financing didn’t play any role in our talks tonight. It was whether there can be a 3rd programme
Preconditions for resumption of ESM program still not there at close of summit.
There was no discussion on introduction of alternate currency for Greece.
*ECB to keep Greek banks afloat till Sunday
EUCO President Donald Tusk
Tsipras is committed to present a new request for a programme within the framework set by the ESM Treaty, incl. strict policy conditionality
If can’t find consensus “will mean the end of negotiations with all the possible consequences including the worst case scenario
final deadline for Greece is Sunday
Greek bankruptcy would affect all Europe but Greece most worst. We have only five days left – this is a final deadline
Euro area authorities stand ready to do whatever is necessary to ensure financial stability of whole euro area
* So much for ECB’s independence
ECB – Mario Draghi -Greek banks
“European Central Bank chief Mario Draghi assured euro zone leaders on Tuesday the ECB would do the necessary to keep Greek banks afloat until an EU summit on Sunday that will seek a deal on further aid to Greece, German Chancellor Angela Merkel said.“
PS it’s too early Wednesday for a comment… except: Milk, Sugar or Black?
History is in the making. And here I post my first-ever link (please allow it!):
http://www.thenation.com/article/austerity-has-failed-an-open-letter-from-thomas-piketty-to-angela-merkel/
No, thanks I prefer real coffee
I really hope Tsakalotos and his team manage to save Greece. If not, Greeks will have my deepest sympathy. Still, as it would be inappropriate then, so I state it now: Greeks cannot claim they didn’t know. They were warned and had access to international media. Of course they didn’t want it to happen, but they were informed about the risks. They voted for their leaders and still believed in them, when their lies were already exposed. They cannot get away with arguing to have been innocent victims.
I’m worried. All the best to Greece!
Do u think Greeks are stupid? Off course that even those that did not want to leave the euro know that it was a risk. Thing is, some more explicitly, others deep down, know that between another “Memorandum of submission and misery” or out of the euro nuthouse, out will be better. Even if it will require some though times for a while, but at least it will be on their own terms and for a purpose!
With the added bonus of putting the “European partners” in a very though financial and economic position themselves.
Until now, contrary to German popular belief, the German tax payer has lost ZERO euros with Greece. But if Greece does leave, get ready for the bill! LOL
Until now, contrary to greek popular belief, the German tax payer has lost 16 billion euros through the first hair.cut, as state owned banks held greek bonds.
Well, Germany may loose further 80 billions, but may count that as a part of war reperations. But the rest of the eurozone is ripped off….
Aha, and what is the difference between the Greeks and the Germans? Greeks don’t like to pay taxes and Germans love it and are proud taxpayers?
It’s always interesting with that “haircut” that Greece has to pay for it, be it the Greek banks or the social security funds and in the end she pays 100% for the bonds the ECB got from hedge-funds for 30%.
Btw something in all of this calculations is wrong as Greece already paid back to the IMF 40 billion, and ECB made 6 billion in interest of Greece, I guess Greece paid back much more already.
And as Greece has to pay 150 billion interest until 2030 it can never be 80 billion for Germoney, interest are not debts
Siga, siga, first he must teach’em that “mañana” is not Greek, otherwise he has to resign and Varoufakis comes back.
But no worry, Greece will come back on waves like surfing nuclear, to destroy the whole European economy, may be together with long pissed off Turkey in something like the Anti-EU.
Had access to international media, haha, Goebbels media at the kiosk for 2 euros, who has access to what?
“They were warned!” said the Bundesreichswehr every time they slaughtered 10-100 villagers for one German, what about the other way round?
Sorry, your comments full of nazi phrases are so stupid, so please go together with your brother in mind Panos Kammenos on a Greek island for a sabbatical.
Bonn/Berlin refuses to pay it’s war-debts so the Reich lives on in them and the funniest thing in this is that the Nazis already started to pay back the forced loans that Germany since 1945 refuses to pay and laughs about it when asked to pay.
next time, no editing but —->Trash. these kind of comments exhaust me
The international media referenced by Markus is owned by corporations promoting the issue in a manner which is self servicing to those very corporations.
I am grateful for the skilled and compassionate leadership of Mr. Tsipras, and I know whatever path Greece takes will be a painful one.
Let’s all pray and hope that Greece comes out of this crisis in time with a real recovery and the pride of the Greek people maintained.
No need for alternative currency, just print a trillion Euros. Euro is no legal currency, only states with a constitution have the right to print money and the EU is no state.
I wish all the best for everyone. I think Greek leaders instead of blaming Merkel should have taken an hard look at themselves and figure out how they could reduce spending.
But this is not in mankind DNA.
We usually blame the foreigner.
This is the truth.
That does keep the group – tribe – nation – united , but distorts reality.
The one to blame for Greek woes was not Angela.
Before Angela Greece has declared bankrupcy several times.
But explaining that to a Portuguese, or Greek ?
Its impossible.
He would argue..,and argue..,and his / her final conclusion will be that Angela is to blame.
Both sides were to blame.., but more Tsipras and Company.
Angela is already under fire in Germany for lending so much money to to Greece.
Tsipras did gave voice to XenoFobia, blaming the germans for the Greece problems .
Its sad.
I hope Greek leaders and EU leaders can reach agreement.
( Let us wait ).
What next ?
Thanks for your nice page that has keep us informed.
All the best from a Portuguese
Xenophobia is promoted by the German Goebbels-media frenzy about the lazy Greeks and showing Tsipras in slow motion and other dirty Nazis-tricks to look ugly or Merkel with her lies about the Greek pensioners and not the other way round. 500.000 Greeks live in the German speaking area, just ask your friends to visit Greek restaurants and shops, ask Turks and Jewish about the German demagoguery; all other southern Europeans come next!
It is very simple, and not too hard to understand. NOTHING will be enough, other than total submission and brown-nosing of the neo-liberal gods and goddesses of the EU. And then some more…
Greece will be reduced to nothing but a vassal nation of Europe, and serve as a warning for any others who might just decide that enough is enough…
Everyone in Greece needs to read, over at market-ticker.org, “Dear Frau Merkel, Herr Tusk and Herr Juncker”.
A nice reasonable solution to all of southern EU problems (and France?).
If the Germans want to export, they will have to (and, indeed, have been all along via Euro this-and-that organization) subsidize those that buy their stuff via buying their debt. Rather like the American Import-Export bank (up till last week) that took taxpayer money and gave it to Boeing to subsidize their planes (and Boeing profits).
Analysis of Greeces options by Marc Chandler. Pay attention to his suggestion about Bank of Greece.
“The train to a better destination has already left the Greek station. It can no longer get there from here. What is at stake now is the kind of pain Greece prefers to bear. Is it the kind of pain and humiliation that comes from succumbing to the demands of its creditors for more austerity. Alternatively, is it the pain associated with a retching of the social fabric amid a further lurch lower in the economy and an additional rise in unemployment?
The creditors’choice is whether to try to organize the debt relief for Greece or accept a more freewheeling form of debt relief as its defaults cascade and the banking system lies in ruins. They either risk turning Greece into a failed state or try to manage the process and extract concessions.
Similarly, Greece’s choices are terribly limited as well. The idea suggested by some that the no victory in the Greek referendum is a democratic rejection of austerity will be shown to be unfounded. Whether inside the monetary union or outside of it, Greece’s standard of living is going to fall. The basket of goods they get as citizens are going to be reduced or come at a higher price, and more likely both.
This is unavoidable now. Greece can influence to some extent how the suffering is going to be distributed in Greece. It can be negotiated with the official creditors or it can be left to the disorderly breakdown of civil society, where burden is borne by the elderly, young, poor, and sick,
The many critics of monetary union blame the euro for Greece’s woes. It shaped the crisis and frames the choices, but Greece was a weak link prior to joining the monetary union. It used deception on an audience that wanted to be deceived to meet the requirements. The critics exaggerate the degrees of freedom to conduct the monetary policy of a small economy with Greece’s economic structure.
The main reason to introduce a new currency is to allow the devaluation that being in the union denies Greece. It is advanced as a way to stimulate the economy through exports. However, the root problem is that Greece is relatively closed and does not have an export sector of any note. It is not simply that Greece is not competitive, though that is a big part of the problem. It does not have the capacity. Without export growth, the currency devaluation raises the costs of imports, fueling inflation just as the economic contraction deepens. Domestic demand evaporates and there is no foreign demand.
Greece’s banking system is on the verge of collapse. It will need to be recapitalized whether Greece is part of EMU or not. Depositors are at risk in either event. Business failures are going to increase without economic growth regardless of the particular monetary system.
Outside of the monetary union, Greece’s new money would be immediately suspect. Introducing a currency for the sole purpose of devaluing will not strike investors as a compelling business proposition. Imagine the ruinous consequences of the value of Greek savings and pensions. It is possible that a new currency would not be accepted, and the economy could remain euro-ized.
If Greek officials think they are being choked now, imagine the monetary asphyxiation on the other side of the Rubicon. Would many of those blaming the monetary union for Greece’s woes be willing to buy a new Greek government bond if it introduces its own currency?
The choice that Greece faces is not between happiness and misery. It is between different versions of hardship and how the suffering is to be distributed. Greece may have greater nominal sovereignty outside of the EU and EMU, but it will find that it is difficult to exercise, and comes at steep price. The creditors would force Greece to live within its means. The circumstances Greece will find itself outside of the monetary union will force the same fate onto the Greek people.
Events are moving very quickly in Greece, and every day the combination of capital controls and bank holiday are becoming more disruptive and destructive. Commercial activity is grinding to a halt. Private businesses are already reportedly issuing scrip. In addition to the further souring of loan book, Greek banks will also be hit hard by a sovereign default. The ECB cannot raise the ELA ceiling but may still tighten the rules of access.
In order to preserve its limited options, the Syriza government may have to do two things. First, it needs to challenge the ECB’s ELA authority. It does not arise from the execution of monetary policy. It seems to emanate from its position as a backstop. However, the exposure is not on the ECB’s balance sheet or the Eurosystem as a whole. Only Greece bears the risks.
Second, Syriza may chose to replace the Governor of the Bank of Greece. It will violate the principle of the independence of the central bank, and anger other countries in Europe. However, from a strategic point of view Tsipras needs to control it especially if Greece were to leave the monetary union. It would also give the Syriza government access to the five bln euros of reserves (according to Bank of Greece figures) and the 3.6 bln euros of gold.
These metaphors are always so stupid – if one puts out a link in a chain you can’t put the chain strengthened together afterwards without taking out minimum a second link also and free-wheels are for pussies just like brakes; fixed gear is better, got more traction and it’s easier to run reds
Germany owes Greece 278 billion Euros, French scientists say 550 billion, so there is no money problem.
What are you going to do to get that German money? March Greek army to occupy Bundestag?
Merkel’s gang has to stand trial anyway for the fraud with the loans and ECB stealing Greek bonds through cutting the collateral, not to mention Den Haag for Guernika-like-massmurder in Kundus.
So I guess a normal police operation will be enough
Nice thought. I give it 100% chance of happening.