Sunday, April 26, 2015

Greece Talks With Eurogroup Hit “Complete Breakdown”

Euro-Finnace Ministers are now hurling public abuse at Greek officials, especially Yanis Varoufakis.

 From the Guardian:
Eurozone finance ministers have blasted Greece for failing to make more progress towards a bailout deal, at an acrimonious eurogroup meeting in Riga today.
Ministers laid into Greek finance minister Yanis Varoufakis for not having reached agreement with creditors, two months after being given a four month extension to Greece’s loan programme…
Dijsselbloem also warned that it is very hard to consider a new programme for Greece to cover its funding needs beyond June, given the lack of progress recently. And he ruled out giving Greece a slice of the €7.2bn bailout cash that is being held back until reforms are agreed.
ECB president Mario Draghi also showed exasperation over the slow pace, and warned that the ECB could potentially impose tougher conditions in return for keeping Greek banks afloat
 From a Bloomberg report:
Euro-area finance ministers hurled abuse at Greek Finance Minister Yanis Varoufakis behind closed doors as they shut down his bid to find a shortcut to releasing financial aid….
The 19-nation bloc’s finance ministers were riled after Greek Prime Minister Alexis Tsipras tried to bypass their veto on financial aid with an appeal to Angela Merkel on Thursday. Tsipras sought to circumvent the finance ministers’ authority, pleading his case with the German Chancellor and French President Francois Hollande on the sidelines of a summit on immigration in Brussels.
Under euro-area procedures, it’s the finance ministers who have to sign off on any aid disbursement and Merkel said last month she’s not prepared to override those controls.
“I would describe today’s meeting as a complete breakdown in communication with Greece,” Maltese Finance Minister Edward Scicluna said.
I'm not so sure, but Yves Smith thinks its likely over for Greece:
 It is hard to see how Greece squeaks through and makes its two early May debt payments to the IMF. A default may be imminent.

I have not verified it independently but a comment on the Spiegel article (search for “spookk3) said that many local officials were deeply upset that the national government was demanding that they make their funds be deposited at the Greek central bank so the national government could borrow them to make debt payments:

Today’s papers in Greece report that the Tsipras government has received a grand total of 430 million or so in “confiscated” money from local governments to fill the state’s till. Huge sum indeed. Given that the IMF is to receive 750 million on May 7 or thereabouts. Plus a few billion due here and there. A bunch of mayors and other local office holders are going to demonstrate in Athens,refusing to hand over their money to the state unless they receive guarantees that it will be paid back.

Greece has engaged in a game of brinksmanship for months, but it looks as if the wheels are about to come off. It’s too easy to second-guess outcomes, but cooler heads had suggested that if a Grexit looked to be inevitable, the Eurozone could take measures to ameliorate the pain. The relations between the two sides are so sour that this sort of conscience-assuaging sop seems inconceivable, unless Merkel insists on it as a statesman-like gesture.

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