by Paul
TugwellNikolaos Chrysoloras
11:34 AM
EET
February 20, 2015
(Bloomberg) -- Germany and its allies are ready to let
Greece leave the euro unless Prime Minister Alexis Tsipras accepts the
conditions required to extend his country’s financial support, according to
Malta’s finance minister, Edward Scicluna.
Greece’s creditors are cranking up the pressure on Tsipras
as he seeks a deal to prevent his country defaulting on its obligations as
early as next month. By bowing to German demands, the premier risks a domestic
backlash from voters and party members whom he’s promised an end to austerity.
“Germany, the Netherlands and others will be hard and they
will insist that Greece repays back the solidarity shown by the member states
by respecting the conditions,” Scicluna said in an interview. “They’ve now
reached a point where they will tell Greece ‘if you really want to leave,
leave.’”
Talks between euro-region finance ministers in Brussels Friday
aimed at agreeing an extension of Greece’s aid program were pushed back by an
hour and a half, the group’s chairman, Dutch Finance Minister Jeroen
Dijsselbloem, said on Twitter. The meeting will begin at 4:30 p.m. Brussels
time and Dijsselbloem will make a statement at 3 p.m.
In a formal request on Thursday to extend Greece’s euro-area
backed rescue beyond its end-of-February expiry for another six months, Greek
Finance Minister Yanis Varoufakis said he would accept the financial and
procedural conditions of the existing deal while asking for negotiations on
other elements.
German
Position
Germany’s
Finance Ministry almost immediately rebuffed the latest Greek formula, saying
the country needs to make a firmer commitment to austerity. A “positive” conversation
between Tsipras and German Chancellor Angela Merkel later on Thursday sparked
investor optimism for a deal.
“We are perfectly prepared to refrain from any moves that
would jeopardize financial stability or Greek competitiveness,” Varoufakis said
in an interview Friday with The Telegraph. “But what we cannot accept is that
the fiscal adjustment, agreed by the last government, be carried through just
because the rules say so.”
Investors are pricing in a positive outcome to the Eurogroup
meeting with Greek bonds and stocks rising for a third day. The yield on the
three-year notes fell 83 basis points to 16.23 percent at 2:23 p.m. in Athens.
That compares with a record 128 percent in March 2012. The Athens Stock
Exchange benchmark index advanced 0.2 percent.
U.S. Pressure
“Hopes for a compromise at today’s Eurogroup have been
raised,” analysts including Nikos Koskoletos at Athens-based Eurobank Equities
wrote in a note to clients on Friday. “The key stumbling block remains the
clearer language regarding the conclusion of the current program, as demanded
by Greece’s creditors, and more details regarding the attainment of fiscal
targets.”
The Bloomberg Greece Sovereign Bond Index shows confidence
remains well above the worst levels of pessimism during the past five years.
The index, a market-value weighted measure of Greece’s bonds, was at 90.89 at
Thursday’s close. That’s more than five times higher than the level reached in
2012.
The U.S. also weighed in to step up pressure on Greece and
its European creditors to reach a debt accord. Treasury Secretary Jacob J. Lew
talked Thursday with Varoufakis, French Finance Minister Michel Sapin and
Dijsselbloem. Lew has also spoken to his German counterparts and officials at
the European Commission and the International Monetary Fund.
To contact the reporters on this story: Karl Stagno Navarra
in Brussels at ksnavarra@bloomberg.net; Nikos Chrysoloras in Athens at
nchrysoloras@bloomberg.net
To contact the editors responsible for this story: Vidya
Root at vroot@bloomberg.net; Jerrold Colten at jcolten@bloomberg.net Ben Sills,
Alan Crawford
No comments:
Post a Comment