Greek cabinet reportedly backs a package of reforms and spending cuts worth €13bn to secure third bailout and modest debt writeoff
The Greek government capitulated on Thursday to demands from its creditors for severe austerity measures in return for a modest debt write-off, raising hopes that a rescue deal could be signed at an emergency meeting of EU leaders on Sunday.
Athens is understood to have put forward a package of reforms and public spending cuts worth €13bn (£9.3bn) to secure a third bailout from creditors that could raise $50bn and allow it to stay inside the currency union. Continue reading
The International Monetary Fund admitted it had failed to realise the damage austerity would do to Greece as the Washington-based organisation catalogued mistakes made during the bailout of the stricken eurozone country.
In an assessment of the rescue conducted jointly with the European Central Bank (ECB) and the European commission, the IMF said it had been forced to override its normal rules for providing financial assistance in order to put money into Greece.
Fund officials had severe doubts about whether Greece’s debt would be sustainable even after the first bailout was provided in May 2010 and only agreed to the plan because of fears of contagion. Continue reading
Greece officially missed a payment to the International Monetary Fund (IMF) and saw its bailout expire on Tuesday (30 June), capping a fortnight of tumultuous politics.rings by the Greek government to get better terms from creditors.
The developments leave Athens without international support for the first time since 2010 and facing a referendum that some EU politicians say will determine its future in the eurozone.
Greece is now in “arrears” on an €1.5 billion bill, the IMF said at midnight Brussels time – a status which sees the EU and Nato member join the ranks of Cuba and Zimbabwe.
(NaturalNews) The bank holidays have begun in Greece as the banks are now shuttered for the entire coming week. As Sky News reports, “The drastic move comes after people rushed to withdraw their cash amid panic ahead of the referendum on bailout terms.”
In a showdown over the fate of Greece, Europe’s most powerful figures have descended on Brussels to make a long overdue decision over a bailout package for Athens in crisis talks this evening.
The move raised hopes that an imminent Greek exit from the euro could be averted by an agreement to continue international bailout funding for a further six months.
In a statement the Eurogroup said: “The Eurogroup broadly welcomed a new version of the reform plan submitted by the Greek authorities this morning, before the Eurogroup meeting, and considered it to be a positive step in the process.”
With a Greek default, shortly followed by a Grexit, a collapse of the “irreversible union” (but… but… “political capital“), and ultimately the end of the latest European monetary union experiment (the latest in a long and illustrious series of prior failures) now seemingly imminent, the blame game has begun. As the NYT noted overnight “the recriminations that would then fly would be so bitter that they would inflict a second round of damage.”
But who is really to blame? Continue reading
The situation in Greece has escalated meaningfully since last week. After the IMF effectively threw in the towel and sent its negotiating team back to Washington on Thursday, EU and Greek officials agreed to meet in Brussels over the weekend in what was billed as a last ditch effort to end a long-running impasse and salvage some manner of deal in time to allow for the disbursement of at least part of the final tranche of aid ‘due’ to Greece under its second bailout program. Talks collapsed on Sunday however as Greek PM Alexis Tsipras, under pressure from the Left Platform, refused (again) to compromise on pension reform and the VAT, which are “red lines” for both the IMF and for Syriza party hardliners. Continue reading
PANIC has descended on Greece as the debt-stricken country careers out the eurozone – with savers pulling millions in cash while investors continue to flee financial markets.
The Greek Prime Minister today blasted Athens’ European Union creditors who he said were trying to “humiliate” and “strangle” Greece into making proposed spending cuts in return for bailout cash.
Alexis Tsipras confirmed that talks have completely stalled, with the two sides in total stalemate over austerity measures. Continue reading
Again, it was known at conception that the Euro would fail.
Joining the euro club was once a badge of political and economic advancement. Now, if Athens is pushed out, others may choose to follow
Finally, the endgame. After weeks of posturing, Greece is running out of time to escape bankruptcy and a forced exit from the European single currency. By Friday, as both sides scrambled to fix up a fresh round of talks for this weekend after the International Monetary Fund’s negotiators flew home in frustration, it appeared that European officials had been discussing how they might manage a Greek default.
It’s hard not to be mesmerised by the day-to-day drama of walkouts, public posturing and political intrigue, which may finally reach its conclusion in the coming days.
Barring a miracle, it won’t be part of the current package, but debt relief is still the big issue that will have to be tackled at some stage
Whatever deal is, or possibly is not, cooked up for Greece, there is an important point to remember: the country’s debts, standing at €320bn (£235bn), or about 180% of GDP, are unsustainable. One way or another, a debt writedown will have to happen at some stage. Barring a miracle, it won’t be part of the current package.
This has been easy to forget as the euro circus has travelled between Athens, Berlin, Brussels and Riga in recent weeks and months. The talks have concentrated on setting the terms for the release of the last €7.2bn tranche of loans from the previous bailout.
Deposits hit their lowest level since 2004
Deposit withdrawals from Greek lenders gathered pace in April, as a standoff between the country’s anti-austerity coalition and its creditors has renewed doubts about the country’s future in the euro area.
Deposits by households and businesses fell to to 133.7 billion euros ($146.7 billion) in April from 138.6 billion euros in March, a 3.6 percent monthly drop, and over €100 billion below the September 2009 peak, the Bank of Greece said today. The drop brings total outflows since the start of an election campaign which catapulted anti-bailout Syriza party to power, to 31 billion euros, or 18.8 percent of total deposits. Continue reading
The Greek tourist board in London said that while it anticipated no immediate problems, visitors should avoid relying solely on credit cards or local ATMs.
Travellers should take “enough money to cover emergencies and any unexpected delays”, the Foreign & Commonwealth Office states. Travel experts recommended taking around three to five days’ worth of spending money in euros, alongside credit and debit cards.
Debt is good, dollar is gold, and stocks only go up—things are getting curiouser and curiouser.
The phrase “mad as a hatter” refers to the 19th-century use of mercuric-nitrate in the making of felt hats. Long-term exposure to mercury caused hatmakers to experience mood swings, tremors and emotional imbalances that made them appear mad.
We live in a world gone mad. Money printing—today’s mercury—has poisoned the whole financial system.
Trusted relationships have broken down. Fundamental truths appear suspect, and economic laws no longer seem to hold true. In America especially, it’s as if the whole economic system fell down a rabbit hole into a world where up is down, debt is good, and people exuberantly celebrate unbirthday parties every day of the year but one.
On Friday, the main catalyst that launched the early ramp in the EURUSD, subsequently sending both the Dax over 12,000, and the US stock market soaring, was speculation and hope that the latest round of Greek talks on late Thursday night ahead of tomorrow key meeting between Tsipras and Merkel in Berlin, had gone well, and there was a reason to be optimistic about the near-term for a Greece which increasingly more see as on the verge of expulsion from the monetary union. We explained as much, although we added the provision that at this point it is likely too late to do much if anything about Greece in “German DAX Surges Over 12,000 On Greek Optimism, But The Money Has Run Out.”
Greece’s day of reckoning may be fast approaching. Athens will have to pony up more than €2 billion in debt payments this Friday to the ECB, the IMF, and (get this) Goldman Sachs, for an interest payment on a derivative and it’s not entirely clear where the money will come from. On Wednesday, the government will vote on a “plan” to boost liquidity which includes tapping public funds and diverting bank bailout money. Here’s Bloomberg:
Greece will begin debating measures to boost liquidity as the cash-starved country braces for more than 2 billion euros ($2.12 billion) in debt payments Friday…
The government’s revenue-boosting plan includes eliminating fines on those who submit overdue taxes by March 27 to encourage payment, helping cover salaries and pensions due at the end of the month. The bill also requires pension funds and public entities to invest reserves held at the Bank of Greece in government securities and repurchase agreements, and transfers 556 million euros from the country’s bank recapitalization fund to the state. A vote on the measures is scheduled for Wednesday… Continue reading