Thursday, February 9, 2012

Good Evening ! Something To Ponder on Greece , German Intentions and What Does The Troika Really Want ?

Is A Deal With Greece Truly Sought By Germany and the IMF ?

In what would amount to an extraordinary extension of European Union control over a member state, the new commissioner would have the power to veto budget decisions taken by the Greek government if they were not in line with targets set by international lenders. The new administrator, appointed by other eurozone finance ministers, would take responsibility for overseeing “all major blocks of expenditure” by the Greek government.

Even before Germany circulated its proposal, the EU and International Monetary Fund had presented a 10-page list of “prior actions” Athens must implement before the new bail-out is agreed. According to a copy of the document, also obtained by the FT, Greece must cut an additional 150,000 government jobs within three years.
Then consider this item :

2 )

     European officials are insisting any new Greek bail-out programme specifically earmark funds to pay off remaining holders of Greek debt, giving lenders the freedom to withhold aid to Athens without risking a messy default that could reignite panic in financial markets.
Under a new Franco-German plan that senior European officials said is likely to be included in a new Greek rescue, eurozone officials would create an escrow account to accept new bail-out funding instead of paying it all directly to Athens as in the past.

The new fund would then ensure bondholders are paid off, while additional cash to run the Greek government could still be withheld if Athens did not live up to tough new reform demands.

Eurozone officials said they believed the escrow account would give European Union and International Monetary Fund lenders strong control over Greece’s use of bail-out funds without stripping Athens of its budgetary sovereignty

“This is a better idea than the proposal of a debt commissar,” said the senior French official. “It is more acceptable.”

That was followed by this move :

3 )   In addition to the Spaghetti-O loop, Eurointelligence discusses the "Salami Roadblock".
According to Financial Times Deutschland, Wolfgang Schäuble now wants the Bundestag to vote only on a fraction of €30bn out of the total cost of the second Greek rescue package of €130bn. He is supported by the finance ministers of the Netherlands and Finland who met as part of the secret meeting AAA-rated ministers. The reason for this unexpected move is that the coalition has reason to fear that the general exasperation about the lack of progress in Greece made it uncertain that it would be unable to get the necessary parliamentary for the whole package. Also the coalition wants to keep up maximum pressure on Greece. In Brussels the Berlin, the move was greeted with surprise and irritation, the paper reports.

And then this followed - note this followed items 1-3 above  :

4 )

     (Reuters) - German Chancellor Angela Merkel said on Tuesday she did not want to see Greece being forced out of the euro, warning that this would have "unforeseeable consequences."
"I will have no part in forcing Greece out of the euro," she said in response to a question from a Greek student at a meeting with young people in a Berlin museum.
Talking shortly after feuding Greek political leaders postponed a meeting scheduled for Tuesday on the conditions for a 130 billion euro second bailout package, the chancellor said there was no alternative for Greece to painful reforms.
"We don't do it to make things difficult for people, what would be our interest in doing that? But we want to reach a point where Greece can, with European help, live off its resources," said Merkel.
"Nobody wants to force reforms on them from outside," she said.

To be followed by these moves earlier today by Germany and the IMF working hand in hand  : 
5 )      Greek Deal Done?
Earlier today we heard Greece accepted a deal. Not so fast. The Washington Post reports German FinMin: Greek deal on spending cuts appears to not yet fulfill bailout conditions

That title was the entirety of the article.

IMF Says No Deal

Zero Hedge reports Greek Deal Done? Not So Fast Says IMF


and the pre- coup de grace : 

6 ) :

Eurogroup's turn to make Greece wait for bailout deal

Despite last-minute scrambling to secure a deal between the leaders of the three parties in the coalition government on the terms of a new bailout, Greece was given the cold shoulder on Thursday by its eurozone partners, who said Athens would have to wait to find out if it will receive at least 130 billion euros in new loans.
Prime Minister Lucas Papademos managed to secure an agreement between the party leaders at around 3 p.m. after deciding to bring forward some wage cuts at public enterprises and increase the reduction in defense spending in order to save 625 million euros, which would allow cuts to pensions to be limited to levels that were acceptable for all three leaders.
The agreement came a few hours before the Eurogroup meeting of finance ministers in Brussels by Greece’s representative, Evangelos Venizelos, who soon discovered that the rest of the eurozone was in no mood to give the green light for funding just yet.
“The agreement, as far as I understand, is not at a stage where it can be signed off,” said German Finance Minister Wolfgang Schaeuble. He said the talks were being held to “make clear to Greece and the partners in the negotiations what the conditions for a second agreement are.”
The head of the Eurogroup, Jean-Claude Juncker, said that there were still several points to clear up. “If it is not tonight, it will be done next week,” he said.
The tenuous deal reached in Athens followed a night of tense negotiations on Wednesday. Talks between Papademos and the heads of the three parties in his coalition government - PASOK leader George Papandreou, New Democracy’s Antonis Samaras and right-wing Popular Orthodox Rally (LAOS) chief Giorgos Karatzaferis - started at 5 p.m. on Wednesday and dragged on for seven hours due to objections over proposed cuts to auxiliary pensions. The most vehement in his opposition was Samaras, but it was Karatzaferis’s departure that caused waves as he indicated that he might withdraw from the government.
Papademos resumed talks with creditors, which continued into the early hours, and his office issued a statement in the early hours of Thursday morning, saying that a “broad agreement” had been reached with the exception of one issue, referring to the pensions cuts. Venizelos was forced to travel to Brussels with an incomplete deal but subsequent talks between Papademos and Samaras on Thursday morning fleshed out the agreement.

Followed by the coup de grace - after all of the wrangling , Juncker tells Greece find 325 million more in new spending cuts and find it by next Wednesday  :

European finance ministers held back a rescue package for Greece in a rebuff that left lawmakers in Athens under government pressure to endorse a newly minted austerity plan or exit the euro.
“In short: no disbursement without implementation,” Luxembourg Prime Minister Jean-Claude Juncker said in Brussels late yesterday after chairing emergency talks of euro-area policy makers. He set another extraordinary meeting for Feb. 15.

Greece must pass its latest austerity package into law and identify 325 million euros in spending cuts before euro-area governments endorse a second bailout for the country, Luxembourg Prime Minister Jean-Claude Juncker said.
“Despite the important progress achieved over the last days we didn’t yet have all necessary elements on the table to take decisions today,” Juncker said in Brussels after chairing an emergency meeting of euro-area finance ministers.
Greek politicial leaders must also back the pact and provide assurances it will be carried through after forthcoming elections, Juncker said. European finance ministers will meet again next week.
“In short: no disbursement before implementation,” Juncker said.
The finance ministers will meet again on Feb. 15, he said.

 Reaction from greek pols and the greek street has been swift and predictable   :
1 ) :

         Deputy Employment Minister Yiannis Koutsoukos has resigned over drastic new austerity measures agreed by the coalition government.

2 )  :

       Former New Democracy MP, Yiannis Manolis, and long-time party trade unionist, on Thursday morning tendered his resignation from the post of secretary of the ND division on trade union issues.

3 ) :

Unions call two-day strike, announce protest rallies

Greece’s two main labor unions called a 48-hour strike on Thursday to protest the austerity measures in Greece’s potential loan agreement with the European Union and the International Monetary Fund.
The strike, which will affect public transport today and tomorrow, will be accompanied by three days of demonstrations.
Today and tomorrow, rallies will be held in central Athens from 11 a.m.
On Sunday, there are plans to hold a protest from 5 p.m., possibly to coincide with a vote on the terms of the loan agreement in Parliament.
Greece’s two largest unions -- GSEE, representing the private sector, and ADEDY, representing the public sector -- have backed the action.
There will be no public transport apart from the Kifissia-Piraeus electric railway (ISAP) between 10 a.m. and 5 p.m.
Ferries will also remain in port.

     So I ask , does Germany really want Greece to stay or " Voluntarily " choose to leave ? You decide what seems to be the case......