EURO Summit Background: Grexit at 6 am Monday

Several international media have leaked background information of the stormy negotiations between Greek Prime Minister Alexis Tsipras and his euro “partners” during the Euro Leaders Summit on Sunday and the dramatic night that followed.

Talks “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.”

 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. (the details via FT  via zerohedge)

Also Reuters confirms that PM Tsipras was “close to walk out” as Merkel was putting pressure on him to accept that the privatizations Trust Fund to be in Luxembourg.

Alexis Tsipras was “close to walking out”, a source close to the euro zone summit said. The prime minister told other leaders that if he accepted one final bailout condition, fellow Greeks would brand him a sell-out and he “may as well not go home”.

“If I agree to such an escrow, I may as well not go back,” a second source who was present at the summit quoted Tsipras as telling fellow leaders after Merkel demanded that he place 50 billion euros of state assets in Luxembourg, out of reach of his government. Cash generated would then pay off Athens’ creditors.

“I can buy a ticket to fly to any other country,” Tsipras said. “Because back home they’ll think that I sold out Greece.” (full article Reuters)

I heard on Greek TV this morning that other media claimed that Tsipras gave his jacket to Merkel in a symbolic action to say “that’s all I have left to give.”