Have you not heard of wonga.com?
Greece Vs EU
- Thread starter Stanley Road
- Start date
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In the latest episode of the United Hour Podcast, Nik (@Rood) was joined by comedian Ali Woods to look back at the best and worst moments of a rollercoaster season with the annual United Hour Awards.
Has Ten Hag been sacked yet? We're not sure and we hope not, but it's looking more likely as the days pass.
Who should replace him and why is it taking so long to make a decision?
If I remember correctly they spent billions on a new train or tram line, the cost of running it was so high they said it would be cheaper to take all its daily passengers by taxi to work.
Greece had to concede a bit yesterday just to get the time to regroup, they hold one card that they should use, the "we quit" card.
Greece had to concede a bit yesterday just to get the time to regroup, they hold one card that they should use, the "we quit" card.
Sounds like Edinburgh.
Interesting read I thought from the guardian today, a 'real people' take on the current situation in Greece. I hadn't realised that Doctors without borders was operating there, how depressing.
http://www.theguardian.com/world/2015/mar/14/greek-election-syriza-voters-voices
http://www.theguardian.com/world/2015/mar/14/greek-election-syriza-voters-voices
Another interesting article on the Greek vs EU situation in the Telegraph http://www.telegraph.co.uk/finance/...Alexis-Tsipras-turns-to-Russia-and-China.html
Here's part of it
Leaked IMF minutes from 2010 confirm what Syriza has always argued: the country was already bankrupt and needed debt relief rather than new loans. This was overruled in order to save the euro and to save Europe’s banking system at a time when EMU had no defences against contagion.
Finance minister Yanis Varoufakis rightly calls it “a cynical transfer of private losses from the banks’ books onto the shoulders of Greece’s most vulnerable citizens”. A small fraction of the €240bn of loans remained in the Greek economy. Some 90% was rotated back to banks and financial creditors. The damage was compounded by austerity overkill. The economy contracted so violently that the debt-ratio rocketed instead of coming down, defeating the purpose.
India’s member on the IMF board warned that such policies could not work without offsetting monetary stimulus. “Even if, arguably, the programme is successfully implemented, it could trigger a deflationary spiral of falling prices, falling employment and falling fiscal revenues that could eventually undermine the programme itself.” He was right in every detail
Here's part of it
Leaked IMF minutes from 2010 confirm what Syriza has always argued: the country was already bankrupt and needed debt relief rather than new loans. This was overruled in order to save the euro and to save Europe’s banking system at a time when EMU had no defences against contagion.
Finance minister Yanis Varoufakis rightly calls it “a cynical transfer of private losses from the banks’ books onto the shoulders of Greece’s most vulnerable citizens”. A small fraction of the €240bn of loans remained in the Greek economy. Some 90% was rotated back to banks and financial creditors. The damage was compounded by austerity overkill. The economy contracted so violently that the debt-ratio rocketed instead of coming down, defeating the purpose.
India’s member on the IMF board warned that such policies could not work without offsetting monetary stimulus. “Even if, arguably, the programme is successfully implemented, it could trigger a deflationary spiral of falling prices, falling employment and falling fiscal revenues that could eventually undermine the programme itself.” He was right in every detail
April 9th... Well let's be honest that leaves very little time for a solution - especially over easter.
I hope they do default as I'm sick of hearing that they are about to...
Plus I fancy a couple of cheap weeks away in the summer.
I hope they do default as I'm sick of hearing that they are about to...
Plus I fancy a couple of cheap weeks away in the summer.
Disgusting if true.
Does feel like it is probably delaying the inevitable, barring some unfeasibly rapid and massive economic turnaround.
They need to invest in the economy but arent being allowed to by the lenders, i find it really bizzare. Whats the point of giving money just to cover maturing debt?
The IMF has been charging an effective interest rate of 3.6% on its loans to Greece. This is far more than the interest rate the institution needs to meet all its costs, currently around 0.9%. If this was the actual interest rate Greece had been paying the IMF since 2010, it would have spent €2.5bn less on payments.
Out of its lending to all countries in debt crisis between 2010 and 2014 the IMF has made a total profit of €8.4bn, over a quarter of which is effectively from Greece. All of this money has been added to the Fund’s reserves, which now total €19bn. These reserves would be used to meet the costs from a country defaulting on repayments. Greece’s total debt to the IMF is currently €24bn.
Tim Jones, economist at the Jubilee Debt Campaign, said the “usurious interest” imposed by the IMF “adds to the unjust debt forced on the people of Greece”.
Out of its lending to all countries in debt crisis between 2010 and 2014 the IMF has made a total profit of €8.4bn, over a quarter of which is effectively from Greece. All of this money has been added to the Fund’s reserves, which now total €19bn. These reserves would be used to meet the costs from a country defaulting on repayments. Greece’s total debt to the IMF is currently €24bn.
Tim Jones, economist at the Jubilee Debt Campaign, said the “usurious interest” imposed by the IMF “adds to the unjust debt forced on the people of Greece”.
Jubilee for Justice - hummm perhaps not the most unbiased of sources
From their own website
"Inspired by the ancient idea of jubilee, a time when debts were cancelled, slaves were freed and land was redistributed, we are calling for a new debt jubilee in response to today’s global economic crisis: a Jubilee for Justice."
Indeed this is actually their mission statement
Jubilee Debt Campaign was created to challenge the enormous and unjust debts which rich countries and their banks created in the developing world, and which still keep the people of many countries locked in a debtor’s prison today.
We work for the cancellation of unjust developing country debts and the creation of a just financial system which puts people first.
Only by the creation of a radically different financial system can we hope to wipe out poverty, encourage strong and democratic societies and foster a more equal and peaceful planet.
They basically want an end to all debt and banks - so yeah not exactly surprising from an ideological standpoint that they say that lending by the IMF is usury.
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Are you saying the figures are wrong?
I too would like to see an end to debt and banks, especially the cnuts that work for them
I too would like to see an end to debt and banks, especially the cnuts that work for them
3.6% is hardly usury. Tim should try getting out in the real world of credit cards and payday loans.
He should speak out against wonga.
There was a jubilee in Iceland recently. Got a suprisingly mixed response.
Interesting Report from Capital Economics on the Guardian site
A research note from Capital Economics just landed, warning that the situation in Greece may finally be escalating into a major crisis.
I’ve taken the liberty of pasting it below. It’s by Jennifer McKeown:
A research note from Capital Economics just landed, warning that the situation in Greece may finally be escalating into a major crisis.
I’ve taken the liberty of pasting it below. It’s by Jennifer McKeown:
- The Greek crisis has reached a new crunch point amid signs that the Eurogroup will not grant desperately needed financial aid after next week’s meeting. Greece might resort to IOUs and/or capital controls to avoid a disorderly default and keep the banks afloat for now. But such measures would offer a temporary solution at best and could be the first steps towards a euro-zone exit.
- Things had gone comparatively quiet on the subject of Greece as the Government worked on a fourth version of its reform list ahead of the Eurogroup meeting on 24th-25th April. It had expressed confidence that this would secure payment of at least part of the final €7.2bn remaining from its second bailout.
- However, yesterday’s statement by German Finance Minister Wolfgang Schäuble that “nobody expects that there will be a solution” at the meeting certainly poured cold water on those hopes. The Vice President of the European Commission, Valdis Dombrovskis, also said yesterday that imminent cash disbursement was highly unlikely and suggested that reforms would have to be implemented first.
- The Greek Government, which had already warned that without more bailout money it might fail to meet its obligations next month, has reportedly now asked the IMF for an extension to loan repayments of almost €1bn due in May. But the Fund has refused, leaving open the possibility of a disorderly default. If Greece failed to make scheduled repayments to the IMF, it would be the first developed economy ever to do so and there is a chance that this would lead to its expulsion from the euro-zone.
- Assuming that a deal is not reached next week, there are a couple of routes that the Greek Government might take to avert disaster in the short term. First, it could issue IOUs to pay public sector workers and pensioners and free up money to repay its debts. But this could cause economic chaos if fears that the IOUs would never be paid sparked riots or public sector employees simply refused to work.
- Even if Greek people accepted IOUs, they could only function for a very short period. Before long, those receiving incomes in IOUs could only afford to pay their taxes through the same medium. And given that the Government’s international creditors would not accept IOUs as repayment, this would still lead to a debt default. Effectively, the IOUs would become a parallel currency whose value was deemed lower than that of a normal euro. This would be akin to a euro-zone exit.
- Another necessary stopgap may be the introduction of capital controls. For now, the Bank of Greece is keeping commercial banks afloat with Emergency Liquidity Assistance (ELA). But the ECB imposes a limit on this which it reviews every week. So far, the limit has been gradually increased and President Draghi said yesterday that there was no specific red line beyond which the ECB would refuse to condone support. But only solvent banks are eligible and the more likely a Greek government default becomes, the more questionable is the solvency of Greek banks.
- And capital controls may be deemed necessary as well as ELA if a deal is not made at next week’s meeting. Such an outcome would heighten speculation of default and exit, threatening to exacerbate greatly deposit outflows and capital controls might be required as damage limitation.
- On the face of it, the Cypriot experience with capital controls is encouraging. Controls implemented there in 2013 halted deposit outflows and were removed entirely last week without much ado. But note that deposits have not yet returned to Cyprus and banks there remain reliant on bailout funds. So capital controls alone will not be enough to save Greek banks: more money will be needed either in the form of bailout funds or the reinstatement of a waiver allowing them access to unlimited ECB loans.
- The upshot is that Greece desperately needs to receive bailout money very soon. If an agreement is not reached next week, the Government might resort to emergency measures to avoid an immediate default and euro-zone exit. But Greece will still need the remaining funds from its current bailout, a new third bailout and ultimately some kind of debt write-off if its future in the currency union is to be assured. And note that any emergency measures put in place to keep the economy afloat in the meantime could conversely put the wheels in motion to facilitate a euro-zone exit.
I was wondering whether they were going to leave the Euro and announce it over the Easter weekend. I think they need to pick the spot rather than have it to collapse at some unknown but inevitable moment. Is there any way this can be turned around now?
Well Greece aren't budging and nor are the Germans which is stupid. I reckon if we see capital controls on greek banks then then that will be the start of the end.
Not really, but it could still go one for quite a while.
Russians coming to the rescue http://www.euronews.com/newswires/3007674-greece-poised-to-sign-gas-deal-with-russia-der-spiegel/
How sleepy Finland could tear apart the euro project
By Mehreen Khan
18 Apr 2015
Finland is the unlikely stage for the latest turn in Greece’s interminable eurozone drama this weekend.
With events having decamped temporarily to Washington DC, Athens will be keeping half an eye on developments in Helsinki, where the Nordic state of just 5.4m people heads for the polls on Sunday.
In the five years since Greece’s financial woes were revealed to the world, it has been sleepy Finland which has emerged as the most trenchant critic of European largesse to the indebted Mediterranean.
The outcome of the country’s general election could now determine Greece’s future in the monetary union
Getting tough on the Greeks
In a leaked memo seen last month, it was revealed that the Finns had already begun drawing up contingency plans in the wake of a Greek exit from the euro.
Although ostensibly a sensible measure for any finance ministry to contemplate, the revelation confirmed the Finns' position as the most uncompromising of the EU’s creditor nations.
The reputation is well-deserved.
At the height of Greece’s bail-out drama in 2011, Helsinki managed to negotiate an unprecedented bilateral arrangement with Athens, where it received €1bn in collateral in return for support for its rescue deal.
A year later, the Finns became prime candidates to become the first dissenters to voluntarily break the sanctity of the monetary union. “We have to be prepared,” the country’s then foreign minister told the Telegraph three years ago.
Greece's current impasse is also thought to be partly a result of Finnish objections.
Helsinki was reportedly the main obstacle to securing a prolonged extension of Greece's bail-out programme under the previous Athens government late last year. The eventual compromise of a three-month, rather than six-month reprieve, has seen Athens scramble desperately for cash since February.
The country's central bank governor, Erkki Liikanen is one of many top officials who has eschewed high-minded rhetoric about European unity, to insist creditors should be ready to pull the plug on the obstinate Greeks.
Strangled by the euro
But unlike its fellow creditor bloc partner Germany, Finland is more economic laggard than European powerhouse.
Having been mired in three consecutive years of recession, the country heads to the polls with economic output still 5pc below its pre-crisis levels.
Finland has suffered an economic downturn of almost Greek proportions. The boon from oil prices and launch of eurozone QE will still only see the economy expand at a paltry 0.8pc this year, worse only to Italy and Cyprus.
Stagnating growth saw Finland stripped of its much coveted Triple-A sovereign debt rating from Standard & Poor’s last year. The International Monetary Fund now recommends a cocktail of structural reforms and fiscal consolidation that would make officials in Athens bristle.
"There is no sympathy for Greece any more, especially because our own economy is struggling," says Jan von Gerich, strategist at Nordea bank in Helsinki.
"If there was a refrerendum on bail-out deal tomorrow, it would fail."
The tale of the Finnish economy proves competitiveness is not merely the plague of the southern European economies.
At the heart of the country's woes are stifling wage costs, which have risen by 20pc as the crisis-hit countries of the south have been forced to slash their labour costs.
Unemployment has shot up to nearly 9pc, while the country’s debt and deficit levels will both fall foul of euro-area limits this year.
Much like its fellow northern counterparts, Finland has also fallen into a demographic trap. It is now the fastest ageing country in the world, topping Japan in the race to get old.
Weak productivity, an ageing population, all trapped in the strictures of a monetary union, make Finland a microcosm for much of Europe' woes, says Karl Whelan, a professor of Economics at University College Dublin.
“The future for growth in Europe appears to be Finnish” says Mr Whelan.
The euro has also robbed the economy of the freedom to devalue its currency - the tried and tested instrument the Finns have used to extricate themselves from the midsts of their deepest depressions.
The Finns were one of the first economies to follow Britain’s lead and abandon the inter-war Gold Standard in 1931. They also moved to a free floating exchange rate at their height of a banking crisis and deep recession in the following the collapse of the Soviet Union in the early 90s. In the aftermath of both episodes, the country was able to get back on its feet through reflationary export-led booms.
Faced with political and economic crisis in its eastern neighbour Russia, the country’s current and likely outgoing premier Alexander Stubb, has bemoaned a “lost decade” under the monetary union.
Blocking another bail-out
The run up to its last elections saw the unprecedented rise of the eurosceptic True Finns, who were ostracised from the coalition-making process for their fierce resistance to Greek aid.
This time round, the party - which has been re-branded as just The Finns - has taken a more subdued approach, refusing to categorically state it would block a new debt deal in a bid to make themselves more palatable to any future coalition partner.
Unprecedented among left-leaning parties in Europe, and a sign of the Finns deep resentment towards euro bail-out, the country’s Social Democrats now lead the charge against a third Greek bail-out.
But it is The Centre Party who are on course to become the largest party in the parliament. The race for second place will be fought over by the Social Democrats and The Finns. Whatever the outcome, the position of finance minister will be occupied by the head of the junior coalition party.
And should Greece need a third bail-out this summer, as the parlous state of its finances suggests, then it is a near certainty that the Finns will stand ready to throw sand in the wheels of a fresh agreement, says Moritz Kraemer, chief rating’s officer at Standard & Poor's.
“The Finns will have a very conservative line as before,” says Mr Kraemer.
“They want stringent conditions attached to any bail-out deal and could be put the test very quickly when the new parliament gathers at the end of the month. They might have something to vote on regarding Greece very soon.”
Any insistence on a preferential 2011-style deal for the Finns could also quickly raise its ugly head.
Unlike its first rescue deals for bankrupt economies at the height of the crisis, the eurozone now as a rescue mechanism in place through its European Stability Fund. Brussels will be far less willing to allow the Finns to be given any kind preferential creditor status over the rest of the eurozone, adds Mr Kraemer.
“The eurozone now has a structured bail-out system with clear rules, and it will be communicated to the Finns that they have to play by the rules,” says Mr Kraemer.
But the nature of rescue mechanisms still gives disproportionate veto power to individual member states, says Mr von Gerich.
"Even the European Stability Mechanism needs unanimity among all member states unless there are really exceptional circumstances," he says.
The only saving grace for the detonation of another political crisis in the eurozone, is that Athens shows no signs of completing its existing bail-out, let alone agreeing a new deal.
"This is all for the day after tomorrow" says Mr Kraemer. "The task at hand is still to get Greece through to June, before anything new can be negotiated."
http://www.telegraph.co.uk/finance/...inland-could-tear-apart-the-euro-project.html
By Mehreen Khan
18 Apr 2015
Finland is the unlikely stage for the latest turn in Greece’s interminable eurozone drama this weekend.
With events having decamped temporarily to Washington DC, Athens will be keeping half an eye on developments in Helsinki, where the Nordic state of just 5.4m people heads for the polls on Sunday.
In the five years since Greece’s financial woes were revealed to the world, it has been sleepy Finland which has emerged as the most trenchant critic of European largesse to the indebted Mediterranean.
The outcome of the country’s general election could now determine Greece’s future in the monetary union
Getting tough on the Greeks
In a leaked memo seen last month, it was revealed that the Finns had already begun drawing up contingency plans in the wake of a Greek exit from the euro.
Although ostensibly a sensible measure for any finance ministry to contemplate, the revelation confirmed the Finns' position as the most uncompromising of the EU’s creditor nations.
The reputation is well-deserved.
At the height of Greece’s bail-out drama in 2011, Helsinki managed to negotiate an unprecedented bilateral arrangement with Athens, where it received €1bn in collateral in return for support for its rescue deal.
A year later, the Finns became prime candidates to become the first dissenters to voluntarily break the sanctity of the monetary union. “We have to be prepared,” the country’s then foreign minister told the Telegraph three years ago.
Greece's current impasse is also thought to be partly a result of Finnish objections.
Helsinki was reportedly the main obstacle to securing a prolonged extension of Greece's bail-out programme under the previous Athens government late last year. The eventual compromise of a three-month, rather than six-month reprieve, has seen Athens scramble desperately for cash since February.
The country's central bank governor, Erkki Liikanen is one of many top officials who has eschewed high-minded rhetoric about European unity, to insist creditors should be ready to pull the plug on the obstinate Greeks.
Strangled by the euro
But unlike its fellow creditor bloc partner Germany, Finland is more economic laggard than European powerhouse.
Having been mired in three consecutive years of recession, the country heads to the polls with economic output still 5pc below its pre-crisis levels.
Finland has suffered an economic downturn of almost Greek proportions. The boon from oil prices and launch of eurozone QE will still only see the economy expand at a paltry 0.8pc this year, worse only to Italy and Cyprus.
Stagnating growth saw Finland stripped of its much coveted Triple-A sovereign debt rating from Standard & Poor’s last year. The International Monetary Fund now recommends a cocktail of structural reforms and fiscal consolidation that would make officials in Athens bristle.
"There is no sympathy for Greece any more, especially because our own economy is struggling," says Jan von Gerich, strategist at Nordea bank in Helsinki.
"If there was a refrerendum on bail-out deal tomorrow, it would fail."
The tale of the Finnish economy proves competitiveness is not merely the plague of the southern European economies.
At the heart of the country's woes are stifling wage costs, which have risen by 20pc as the crisis-hit countries of the south have been forced to slash their labour costs.
Unemployment has shot up to nearly 9pc, while the country’s debt and deficit levels will both fall foul of euro-area limits this year.
Much like its fellow northern counterparts, Finland has also fallen into a demographic trap. It is now the fastest ageing country in the world, topping Japan in the race to get old.
Weak productivity, an ageing population, all trapped in the strictures of a monetary union, make Finland a microcosm for much of Europe' woes, says Karl Whelan, a professor of Economics at University College Dublin.
“The future for growth in Europe appears to be Finnish” says Mr Whelan.
The euro has also robbed the economy of the freedom to devalue its currency - the tried and tested instrument the Finns have used to extricate themselves from the midsts of their deepest depressions.
The Finns were one of the first economies to follow Britain’s lead and abandon the inter-war Gold Standard in 1931. They also moved to a free floating exchange rate at their height of a banking crisis and deep recession in the following the collapse of the Soviet Union in the early 90s. In the aftermath of both episodes, the country was able to get back on its feet through reflationary export-led booms.
Faced with political and economic crisis in its eastern neighbour Russia, the country’s current and likely outgoing premier Alexander Stubb, has bemoaned a “lost decade” under the monetary union.
Blocking another bail-out
The run up to its last elections saw the unprecedented rise of the eurosceptic True Finns, who were ostracised from the coalition-making process for their fierce resistance to Greek aid.
This time round, the party - which has been re-branded as just The Finns - has taken a more subdued approach, refusing to categorically state it would block a new debt deal in a bid to make themselves more palatable to any future coalition partner.
Unprecedented among left-leaning parties in Europe, and a sign of the Finns deep resentment towards euro bail-out, the country’s Social Democrats now lead the charge against a third Greek bail-out.
But it is The Centre Party who are on course to become the largest party in the parliament. The race for second place will be fought over by the Social Democrats and The Finns. Whatever the outcome, the position of finance minister will be occupied by the head of the junior coalition party.
And should Greece need a third bail-out this summer, as the parlous state of its finances suggests, then it is a near certainty that the Finns will stand ready to throw sand in the wheels of a fresh agreement, says Moritz Kraemer, chief rating’s officer at Standard & Poor's.
“The Finns will have a very conservative line as before,” says Mr Kraemer.
“They want stringent conditions attached to any bail-out deal and could be put the test very quickly when the new parliament gathers at the end of the month. They might have something to vote on regarding Greece very soon.”
Any insistence on a preferential 2011-style deal for the Finns could also quickly raise its ugly head.
Unlike its first rescue deals for bankrupt economies at the height of the crisis, the eurozone now as a rescue mechanism in place through its European Stability Fund. Brussels will be far less willing to allow the Finns to be given any kind preferential creditor status over the rest of the eurozone, adds Mr Kraemer.
“The eurozone now has a structured bail-out system with clear rules, and it will be communicated to the Finns that they have to play by the rules,” says Mr Kraemer.
But the nature of rescue mechanisms still gives disproportionate veto power to individual member states, says Mr von Gerich.
"Even the European Stability Mechanism needs unanimity among all member states unless there are really exceptional circumstances," he says.
The only saving grace for the detonation of another political crisis in the eurozone, is that Athens shows no signs of completing its existing bail-out, let alone agreeing a new deal.
"This is all for the day after tomorrow" says Mr Kraemer. "The task at hand is still to get Greece through to June, before anything new can be negotiated."
http://www.telegraph.co.uk/finance/...inland-could-tear-apart-the-euro-project.html
Germany, in shift, says Greek referendum on reform could help
BRUSSELS | By Renee Maltezou and Paul Taylor
EU paymaster
Germany said on Monday it could make sense for Greece to hold a referendum on painful economic reforms under negotiation with its creditors, changing tack as Berlin's own lawmakers bridle at further aid for Athens.
Euro zone governments have previously opposed such a vote, saying there is no time and it could destabilise financial markets
and trigger a run on struggling Greek banks.
When former Prime Minister George Papandreou surprised EU partners by proposing a referendum in 2011 at the height of the euro zone debt crisis, he was summoned to emergency talks with leaders of France and Germany and told bluntly to drop the idea.
But with Greece running out of money and desperate for a deal to avert a possible default and exit from the euro zone, German Finance Minister Wolfgang Schaeuble said securing public backing for the necessary sacrifices might be useful.
A referendum could make it easier for leftist Greek Prime Minister Alexis Tsipras to climb down on election promises that are making a deal on economic reforms hard to achieve.
"If the Greek government thinks it must hold a referendum, then let it hold a referendum," Schaeuble said on arrival at a meeting of euro zone finance ministers.
"That might even be a helpful measure for the Greek people to decide whether it is ready to accept what is necessary, or whether it wants something different."
Hinting at growing difficulties in persuading conservative German lawmakers to go on funding Greece, Schaeuble said it was unrealistic to think any parliament in Europe would agree without the backing of the International Monetary Fund.
Greece's leftist-led government has accused the IMF of setting harder targets than the European creditors on pension and labour reforms and a primary fiscal surplus. The three institutions have denied any internal differences.
Finance Minister Yanis Varoufakis, who was due to hold private talks with Schaeuble before the Eurogroup session, told reporters that Athens would make a crucial 750 million euro (£539.1 million) payment to the IMF on Tuesday as due.
"Greece will always meet its obligations to its creditors and we are obviously going to do that tomorrow again," Varoufakis told Euronews.
Schaeuble said there had been little or no progress in talks between Greece and the IMF, European Commission and European Central Bank.
Greece is demanding that the ministers acknowledge "significant progress" in the negotiations, hoping to unlock short-term borrowing to ease its acute financing crunch.
Italian Economy Minister Pier Carlo Padoan said he did not believe ministers would make such a joint statement, although Eurogroup chairman Jeroen Dijsselbloem would hold his usual news conference after the meeting.
Sources familiar with European Central Bank thinking said there was still too little progress on key issues and too much uncertainty for the bank to allow the Greek government to sell more short-term Treasury bills.
Schaeuble said any release of additional funds depended on representatives of the three creditors certifying actual implementation of the reforms, not just promises.
A senior EU official said there has been no breakthrough on the central sticking points of pension and labour market reforms and budget targets for this year and next.
FRUSTRATION
Slovakian Finance Minister Peter Kazimir summed up many ministers' frustration when he said there had been improvements in the process but no progress in substance, with wide gaps between what Greece says in Brussels and what it does in Athens.
Euro zone officials believe Greece has scraped together enough money, notably by commandeering cash reserves of local authorities and pension funds, to meet its payment obligations until the end of May.
They say the real deadline for a deal is end-May to enable parliamentary approval in some euro zone countries, notably Germany, in time to release the remaining 7.2 billion euros in bailout funds before the programme expires at the end of June.
Elected in January on promises to end austerity and scrap an international bailout, the leftist-led government is refusing to agree to pension cuts, raise the retirement age, or ease layoffs in the private sector. It is also at odds with creditors on the size of the primary budget surplus and on longer-term financing.
Varoufakis was sidelined from the conduct of the talks after he alienated fellow ministers with outspoken interviews and economics lectures, climaxing with a clash last month at a Eurogroup meeting in Riga.
Tsipras shook up the negotiating team and made some concessions on restarting privatisations and harmonising value added tax. But he has so far balked at crossing the "red lines" of what he calls his popular mandate.
Two-year Greek bond yields edged up above 20.8 percent on Monday as nervous investors weighed the risk of a default. Italian, Spanish and Portuguese bond yields also ticked up.
A senior IMF official noted that polls showed three-quarters of Greeks want to remain in the single currency and said the global lender wanted to help Athens make the necessary reforms.
"The IMF is very keen on continuing to support the adjustment and the reforms that are needed to ensure that Greece operates successfully in the euro area," Jord Decressin, deputy director of the IMF's European Department, said in Budapest.
http://uk.reuters.com/article/2015/05/11/uk-eurozone-greece-idUKKBN0NW10G20150511
BRUSSELS | By Renee Maltezou and Paul Taylor
EU paymaster
Germany said on Monday it could make sense for Greece to hold a referendum on painful economic reforms under negotiation with its creditors, changing tack as Berlin's own lawmakers bridle at further aid for Athens.
Euro zone governments have previously opposed such a vote, saying there is no time and it could destabilise financial markets
and trigger a run on struggling Greek banks.When former Prime Minister George Papandreou surprised EU partners by proposing a referendum in 2011 at the height of the euro zone debt crisis, he was summoned to emergency talks with leaders of France and Germany and told bluntly to drop the idea.
But with Greece running out of money and desperate for a deal to avert a possible default and exit from the euro zone, German Finance Minister Wolfgang Schaeuble said securing public backing for the necessary sacrifices might be useful.
A referendum could make it easier for leftist Greek Prime Minister Alexis Tsipras to climb down on election promises that are making a deal on economic reforms hard to achieve.
"If the Greek government thinks it must hold a referendum, then let it hold a referendum," Schaeuble said on arrival at a meeting of euro zone finance ministers.
"That might even be a helpful measure for the Greek people to decide whether it is ready to accept what is necessary, or whether it wants something different."
Hinting at growing difficulties in persuading conservative German lawmakers to go on funding Greece, Schaeuble said it was unrealistic to think any parliament in Europe would agree without the backing of the International Monetary Fund.
Greece's leftist-led government has accused the IMF of setting harder targets than the European creditors on pension and labour reforms and a primary fiscal surplus. The three institutions have denied any internal differences.
Finance Minister Yanis Varoufakis, who was due to hold private talks with Schaeuble before the Eurogroup session, told reporters that Athens would make a crucial 750 million euro (£539.1 million) payment to the IMF on Tuesday as due.
"Greece will always meet its obligations to its creditors and we are obviously going to do that tomorrow again," Varoufakis told Euronews.
Schaeuble said there had been little or no progress in talks between Greece and the IMF, European Commission and European Central Bank.
Greece is demanding that the ministers acknowledge "significant progress" in the negotiations, hoping to unlock short-term borrowing to ease its acute financing crunch.
Italian Economy Minister Pier Carlo Padoan said he did not believe ministers would make such a joint statement, although Eurogroup chairman Jeroen Dijsselbloem would hold his usual news conference after the meeting.
Sources familiar with European Central Bank thinking said there was still too little progress on key issues and too much uncertainty for the bank to allow the Greek government to sell more short-term Treasury bills.
Schaeuble said any release of additional funds depended on representatives of the three creditors certifying actual implementation of the reforms, not just promises.
A senior EU official said there has been no breakthrough on the central sticking points of pension and labour market reforms and budget targets for this year and next.
FRUSTRATION
Slovakian Finance Minister Peter Kazimir summed up many ministers' frustration when he said there had been improvements in the process but no progress in substance, with wide gaps between what Greece says in Brussels and what it does in Athens.
Euro zone officials believe Greece has scraped together enough money, notably by commandeering cash reserves of local authorities and pension funds
, to meet its payment obligations until the end of May.They say the real deadline for a deal is end-May to enable parliamentary approval in some euro zone countries, notably Germany, in time to release the remaining 7.2 billion euros in bailout funds before the programme expires at the end of June.
Elected in January on promises to end austerity and scrap an international bailout, the leftist-led government is refusing to agree to pension cuts, raise the retirement age, or ease layoffs in the private sector. It is also at odds with creditors on the size of the primary budget surplus and on longer-term financing.
Varoufakis was sidelined from the conduct of the talks after he alienated fellow ministers with outspoken interviews and economics lectures, climaxing with a clash last month at a Eurogroup meeting in Riga.
Tsipras shook up the negotiating team and made some concessions on restarting privatisations and harmonising value added tax. But he has so far balked at crossing the "red lines" of what he calls his popular mandate.
Two-year Greek bond yields edged up above 20.8 percent on Monday as nervous investors weighed the risk of a default. Italian, Spanish and Portuguese bond yields also ticked up.
A senior IMF official noted that polls showed three-quarters of Greeks want to remain in the single currency and said the global lender wanted to help Athens make the necessary reforms.
"The IMF is very keen on continuing to support the adjustment and the reforms that are needed to ensure that Greece operates successfully in the euro area," Jord Decressin, deputy director of the IMF's European Department, said in Budapest.
http://uk.reuters.com/article/2015/05/11/uk-eurozone-greece-idUKKBN0NW10G20150511
I believe we are getting close to D day. The can just needs to be kicked a little further. I do feel the EU is shit scared of what might happen next
There was an interview on Radio 4 this morning with a Greek lecturer at East Anglia university who's a member of Syrizia and a German politician/finance type whose name and position I didn't get, but essentially he didn't believe that Greece was making an effort to curb it's spending and that the German taxpayers shouldn't support Greece anymore, but also that Russia wouldn't be interested in bailing out Greece as Putin is only interested in good investments. I can't help think that he couldn't see the geopolitical side of things and was focussed entirely on finance. The greek woman pointed out that the reason for Germany's economic miracle had much to do with it's massive debt being written off in the 50s. I don't see this ending well - an exit from the Euro seems inevitable.
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I don't want to seem flippant but this gets more and more like a Gary Neville injury. It will have to be sorted in two weeks. If the choice in the referendum was massive welfare/pension cuts or leaving the Euro which way would Greece go?
Its a good question and I don't know. this govt was voted in to end austerity and if the people are tired of Syrizia then a new party would bend over to the EU I imagine. I really believe Greece holds all the cards and the EU have admitted that forcing them to take the last bailout was a mistake, in that case, write it off and learn from your mistake. If the EU really let Greece default and carnage ensues, then they have let all the people they claim to represent down. All for the sake of stubbornness.
I think the way Greece would go is what the referendum @Nick 0208 Ldn posted above is about.
It's smart politics from Syriza if they do. They're essentially making a referendum on whether or not they're allowed to fail on promises made before the election. It would be nice to see more of that in more places, that's more democracy. Unless I completely misunderstood the post, which I skimmed past yesterday.
If it does leave the EU and slide into bankruptcy you'd have to ask where the money will come from to avert the massive welfare and pension cuts though.
Apparently a chunk of the repayment to the IMF came from the Greek emergency account at the IMF. States rarely touch this money, because they have to refill this account in 1-2 month anyway. Now there is very little room to maneuver and the clock is ticking faster.
It’s hard to predict, what is going to happen. All options are still on the table. The worst case scenario is another half-baked deal, where Greece pays lip-service to another round of meaningless reforms, while the rest of the EU agree to fund this “plan”. Both sides would hate it and it would drag out the current situation for another 2-3 years.
It’s hard to predict, what is going to happen. All options are still on the table. The worst case scenario is another half-baked deal, where Greece pays lip-service to another round of meaningless reforms, while the rest of the EU agree to fund this “plan”. Both sides would hate it and it would drag out the current situation for another 2-3 years.
True enough, though at least they get a cheaper currency to boost exports and they can print money like the UK and the US did. Whatever the Greek government is doing I hope it works because if it all turns to shit the next government will likely be a far right one.
From what i can recall, support for Greece's continued use of the Euro has remained fairly strong over the years, despite increased animosity toward Germany and BRUSSELS. The calculation on Berlin's part is that the people will shy away from divorce.
Weimar Germany was able to print its own money tbf. Just looking at Greek 10 year bond yields- back in double digit territory. There obviously has to be some degree of debt cancellation, but you can understand investors' reticence to take a second haircut.
Hard to see a viable long-term path unless it does carry out a major reform programme regardless of whether it stays in the EU or not.
Apparently they are saying they can't make the next imf payment due in June...
Please please let it go pop in the next 8 weeks... I have a big payment to make in euros that I priced about a year ago in pounds
Please please let it go pop in the next 8 weeks... I have a big payment to make in euros that I priced about a year ago in pounds
Grexit is already priced into fx and equities.
I'm not sure it fully is... I would expect at least a short term dip in the euro vs £
I'd pay it now, you're making a massive margin v last year and the removal of uncertainty may cause a rebound. Don't be greedy.