Greece Capitulates: Tsipras Crosses “Red Line”, Will Accept Bailout Extension

We’ve long said that negotiations between Greece and its creditors are more a matter of politics than they are a matter of economics or finance.

From the troika’s perspective, breaking Greece and forcing PM Alexis Tsipras to concede to pension cuts and a VAT hike is paramount, and not necessarily because anyone believes these measures will put the perpetually indebted periphery country on a sustainable fiscal path, but because of the message such concessions would send to Syriza sympathizers in Spain and Portugal. In short, the troika cannot set a precedent of allowing debtor nations to obtain austerity concessions by threatening to expose the euro as dissoluble. Continue reading

EU preparing for ‘state of emergency’ after Greek talks collapse

https://i0.wp.com/media.zenfs.com/en_us/News/Reuters/2015-06-15T121824Z_1006950001_LYNXMPEB5E0K5_RTROPTP_4_CBUSINESS-US-EUROZONE-GREECE.JPG

Greek Prime Minister Alexis Tsipras arrives at his office in Maximos Mansion for a governmental council in Athens June 15, 2015. REUTERS/Alkis Konstantinidis

 

ATHENS/BERLIN (Reuters) – Germany’s EU commissioner said on Monday it was time to prepare for a “state of emergency” after talks collapsed at the weekend to rescue Greece from default and ejection from the euro.

Prime Minister Alexis Tsipras ignored a litany of pleas from European leaders to act fast and instead blamed creditors for the collapse in aid-for-austerity talks, the biggest setback yet in long-running talks to secure more aid for Greece.

Athens now has just two weeks to find a way out of the impasse before it faces a 1.6 billion euro bill due to the International Monetary Fund, potentially leaving it out of cash, unable to borrow and cast out of the single currency. Continue reading