Eurozone Finance Ministers Contemplate ‘Plan B’ for Greece

Statements by Slovenia and German finance ministers break long-held taboo over possible exit of Greece from eurozone

By GABRIELE STEINHAUSER

April 25, 2015 8:08 a.m. ET

The Wall Street Journal

RIGA, Latvia—Some eurozone finance ministers on Saturday acknowledged for the first time that they are considering plans on what to do if no deal on Greece’s future financing can be reached by the end of June.

The statements by the finance ministers of Slovenia and Germany break a long-held taboo during eurozone crisis talks, where policy makers have been insisting that they are entirely focused on keeping Greece in the currency union with the help of more bailout loans. Yet, with the country’s existing €240 billion ($261 billion) bailout deal expiring at the end of June, and technical discussions on future support all but stuck despite big debt repayments looming in July and August, some politicians are starting to look at alternative scenarios.

Greece, lenders must reach deal by early May, Deputy PM tells paper

Sat Apr 25, 2015 2:25pm EDT Related: GREECE

ATHENS

(Reuters) - Greece and its lenders must reach a reform deal by early May to address Greece's need for cash, Deputy Prime Minister Yannis Dragasakis said in an interview with a Greek newspaper published on Saturday.

Shut out of international markets and locked in talks with its European Union and International Monetary Fund creditors over its proposed reform-for-cash deal, Greece risks running out of cash within weeks. But euro zone finance ministers warned its leftist government on Friday that it would get no fresh aid until it agrees to a complete economic reform plan.

Germany hints at preparations of a Plan B on Greece

RIGA | BY TOM KÖRKEMEIER

 Sat Apr 25, 2015 8:41am EDT Related: GREECE

(Reuters) - German Finance Minister Wolfgang Schaeuble hinted on Saturday that Berlin was preparing for a possible Greek default, drawing a parallel with the secrecy of German reunification plans in 1989.

Varoufakis Chided as EU Shuts Down Shortcut Bid for Aid

by Ian WishartCorina RuheKarl Stagno Navarra

12:52 PM EEST

April 24, 2015

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.

Jeroen Dijsselbloem, the Dutch chairman of the euro-zone finance chiefs’ group, categorically ruled out making a partial aid payment in exchange for a narrower program of reforms after a stormy meeting in Riga, Latvia, in which Varoufakis was heavily criticized by his euro-area colleagues over his failure to deliver economic reforms.

Euro-area finance chiefs said Varoufakis’s handling of the talks was irresponsible and accused him of being a time-waster, a gambler and an amateur, a person familiar with the conversations said, asking not to be named because the discussions were private.

EU Frustration Mounts as Greeks Try to Bypass Aid Process

by Ian WishartRainer Buergin

10:37 AM EEST

April 24, 2015

Euro-area finance ministers voiced their frustration with Greece after Prime Minister Alexis Tsipras tried to bypass their veto on financial aid with an appeal to Angela Merkel.

With Greece running out of money and stalling over commitments to reform, euro-zone finance chiefs meeting in Riga, Latvia, Friday said the country’s authorities still haven’t shown sufficient progress on plans to revamp the economy to justify a loan payout.

Greeks Are Trapped in Financial Vise

by Ben Sills

2:01 AM EEST

April 24, 2015

Bloomberg

http://www.bloomberg.com/news/articles/2015-04-23/greeks-trapped-in-financial-vise-as-euro-region-turns-the-screws

As Greek Prime Minister Alexis Tsipras follows an increasingly perilous financial path, his antagonists are just sitting tight.

Finance ministers from the euro region discuss in Riga on Friday where to go from here as talks on more rescue money for Greece enter a fourth month. Frustrated after fruitless calls on Tsipras to tackle his country’s problems, creditors can only withhold the support that would allow him to shield Greeks from financial reality while keeping the country in the currency.

“This is the next stage of the negotiation,” said James Nixon, chief European economist at Oxford Economics in London. “They’ll see how the political situation develops in Greece if they apply the thumbscrews.”

Greek finance minister tells magazine: Grexit no bluff if more austerity imposed

Markets | Thu Apr 23, 2015 3:39pm EDT Related: WORLD, GREECE

PARIS

(Reuters) - The risk that Greece would have to leave the euro if it has to accept more austerity is no bluff, Greek Finance Minister Yanis Varoufakis told a French magazine, saying that no one could predict what the consequences of such an exit would be.

In a conversation with philosopher Jon Elster conducted at the end of March and published in France's Philosophie Magazine, Varoufakis, a specialist in game theory, said this was not the time to bluff over Greece's debt talks.

"We cannot bluff anymore. When I say that we'll end up leaving the euro, if we have to accept more unsustainable austerity, this is no bluff," Varoufakis is quoted as saying.

Greek Prime Minister Alexis Tsipras called for a speeding up of work to conclude a reform-for-cash deal with euro zone creditors to keep his country afloat after talks with German Chancellor Angela Merkel on Thursday.

The leftist Greek premier met the conservative German leader a day before euro zone finance ministers meet in Riga to review progress - or the lack of it - in slow-moving negotiations between Athens and its international lenders.

The Greek government has insisted it will remain a euro zone member, and its currency bloc partners have said they want it to stay.

However, in contrast to the height of the debt crisis in 2012, when Grexit fears spurred panic selling of other weak euro zone sovereigns, investors now seem relaxed about the fate of Greece, which accounts for just 2 percent of the region's economy.

Asked what would happen if Greece was to leave the euro, Varoufakis mentioned comments made by European policymakers who say any contagion effect could be avoided and added that, on the contrary, he believed the consequences would be unpredictable. ‎

"Anyone who pretends they know what would happen the day we'll be pushed over the cliff is talking nonsense and is working against Europe," he said.

(Reporting by Ingrid Melander; Editing by Toby Chopra)

Merkel: must prevent Greece running out of cash before deal

Markets | Thu Apr 23, 2015 5:58pm EDT Related: WORLD, GREECE

BRUSSELS | BY PAUL TAYLOR

(Reuters) - German Chancellor Angela Merkel said on Thursday everything must be done to prevent Greece running out of money before it reaches a cash-for-reform deal with its international creditors, amid heightened concern that Athens is nearing the brink.

Merkel, Europe's pre-eminent leader, was speaking after a meeting she called "constructive" with Greek Prime Minister Alexis Tsipras on the sidelines of a European Union summit in Brussels. She said they had agreed to keep the contents of their discussion confidential.

On the Gredge

The Economist

A Greek exit from the euro may soon become inevitable

Apr 25th 2015

EVENTUALLY every long-running drama, from “Downton Abbey” to “Dr Who”, feels formulaic. So it is with Greece’s debt saga. For five years it has followed a wearily familiar script of unpayable debts, aborted reforms and 11th-hour compromises that let the country stagger on inside the single currency. That history has lulled many into expecting the usual denouement in the latest wrangling between Greece’s Syriza government and its European creditors. But this is looking ever less likely. Unless Syriza suddenly capitulates—and a meeting of euro-zone finance ministers on April 24th is one of its last chances to do so—Greece will fail to pay its creditors. If that happens, its exit from the euro will be just a step away.

Greece won't present reform list at Riga, top Eurogroup official says

Wed Apr 22, 2015 4:35am EDT Related: GREECE

VIENNA

(Reuters) - Greece will not present a list of economic reforms to euro zone finance ministers on Friday, a senior EU official said, adding the country should be able to stay solvent until June.

Thomas Wieser, who heads the Eurogroup Working Group that prepares the decisions for the ministers' meetings, said Greece would in any case need to provide the list in the coming month.

Why Greece May Be the New Lehman

Here we go again. This time it’s Europe’s fault, and the crisis could be worse than last time, at least politically.

By BILL EMMOTT

April 22, 2015

POLITICO

Remember when in 2008 Hank Paulson’s U.S. Treasury Department decided to let Lehman Brothers go down, pour encourager les autres, and then found that it brought les autres crashing down too? Well, Germany and the other euro-zone members are now trying to repeat that brilliant trick with Greece. If you were looking for where the next big financial meltdown might begin, you need look no further. Chances are, it is about to happen in Europe.

Opinion: The ‘Grexit’ issue and the problem of free trade

Published: Apr 22, 2015 10:55 a.m. ET

Market Watch

By

GEORGE

FRIEDMAN

The Greek crisis is moving toward a climax.

The issue is actually quite simple. The Greek government owes a great deal of money to European institutions and the International Monetary Fund. It has accumulated this debt over time, but it has become increasingly difficult for Greece to meet its payments. If Greece doesn’t meet these payments, the IMF and European institutions have said they will not extend any more loans to Greece. Greece must make a calculation. If it pays the loans on time and receives additional funding, will it be better off than not paying the loans and being cut off from more?

Europe's Collision Course With Greece

17 APR 22, 2015 2:00 AM EDT

By Clive Crook

Bloomberg

The brinkmanship over Greece and its debts continues. A meeting of finance ministers in Riga on Friday is likely to pass, like many previous make-or-break moments, without resolution. The European Union isn't deviating, and neither is Athens. Before much longer, though, something really will have to give -- and it seems ever more probable that, when it does, the news will be bad.

Επικοινωνία και Αλήθεια.

Φοβάμαι ότι όλα όσα προβάλει η κυβέρνηση για να υπερασπίσει το έργο της, δεν είναι επικοινωνιακή μαεστρία. Πιστεύουν στ' αλήθεια στον ΣΥΡΙΖΑ, ότι υπάρχει σχέδιο για την υποταγή της κυβέρνησης, ότι οι Ευρωπαίοι είναι συνεννοημένοι εχθροί και θα στραγγαλίσουν την Αριστερά και ότι η ντόπια ολιγαρχία έχει βάλει το χεράκι της. Το τέλος αυτού του δρόμου οδηγεί στην Δραχμή. Εκτός κι αν περιμένουν να νικήσουν όταν θα είναι ετοιμοθάνατη η οικονομία μετά από τα δανεικά που θα έχει πληρώσει η χώρα συν τρέχουσες δαπάνες του κράτους (μισθοί συντάξεις κλπ). Θα υποχωρήσουν σίγουρα οι Ευρωπαίοι; Το Ευρώ μπορεί να κινδυνεύσει και με την παραμονή της Ελλάδας, αν αυτή γίνει με τους όρους του ΣΥΡΙΖΑ. Τότε μάλιστα εκτός από το Ευρώ θα κινδυνεύσουν και οι συντηρητικές κυβερνήσεις που σήμερα καλούνται να δεχθούν την εκταμίευση της τελευταίας δόσης. Μήπως ο στρατηγικός στόχος του ΣΥΡΙΖΑ είναι, οι υπόλοιπες ευρωπαϊκές κυβερνήσεις να διακινδυνεύσουν την τύχη του Ευρώ και να αυτοκτονήσουν πολιτικά δίνοντας στον ΣΥΡΙΖΑ τα 7,2 δις της τελευταίας δόσης; Όσο για τον κίνδυνο μετάδοσης της κρίσης στην παγκόσμια οικονομία, αυτό σίγουρα θα κινητοποιούσε τις μεγάλες οικονομίες του πλανήτη για να παρέμβουν προς όφελος ενός συμβιβασμού έστω κι αν κάτι τέτοιο θα έβλαπτε πολιτικά κάποιες Ευρωπαϊκές κυβερνήσεις. Και πράγματι (όπως και το 2010) οι ΗΠΑ έπαιξαν αυτό τον ρόλο. Τι έκανε η κυβέρνηση για να επενδύσει σε αυτή την ωφέλιμη στάση των ΗΠΑ; Αποφάσισε ότι η Ελλάδα δεν εκβιάζεται, δεν γονατίζει και απελευθερώνει τον Σ Ξηρό! Ο καλόπιστος πολίτης δεν μπορεί να μην αναρωτηθεί πως αυτό εξυπηρετεί την διαπραγμάτευση και τα συμφέροντα της χώρας. Η αλήθεια είναι πως δεν τα εξυπηρετεί. Η αλήθεια είναι ότι η διαπραγμάτευση του ΣΥΡΙΖΑ δεν εξυπηρετεί κανένα εθνικό συμφέρον. Τα μέτρα που ζητάνε οι δανειστές έχουν κόστος 2-3 δις. Η δόση είναι 7,2 δις. Έχουμε χάσει το 25% του ΑΕΠ μας. Είχαμε άλλα 2-3 δις μέτρα την στιγμή ακριβώς που άρχιζε η οικονομία να αναπτύσσεται η ανεργία να πέφτει, τα κόκκινα δάνεια να μειώνονται. Όταν κάποιος που μόλις ανάρρωσε από ίωση ξαναρρωστήσει κινδυνεύει με πνευμονία. Αυτό παθαίνει η χώρα σήμερα. Βιώνουμε τα πρώτα συμπτώματα. Οι μαέστροι του ΣΥΡΙΖΑ να έχουν υπ’ όψιν τους ότι τα επικοινωνιακά τους χαρίσματα δεν θα βοηθήσουν σε τίποτε όταν η χώρα συντριβεί, γιατί ακριβώς εκεί την πάνε. Αυτοί που τους πιστέψανε δεν είναι μαέστροι και αυτό που θα κρατάνε δεν θα είναι μπαγκέτα…

On Greece, Europe Bluffs Itself

How different is Greece really from France, Italy and Spain?

The Wall Street Journal

By HOLMAN W. JENKINS, JR.

April 21, 2015 7:31 p.m. ET

Greece’s new leader and his ministers are behaving like fools in their debt showdown with the European union. So claims much of the punditry and you won’t find an argument here. They’ve taunted Germany about war reparations, threatened to open their borders to jihadists trying to enter Europe and cozied up to Vladimir Putin.

They also haven’t presented a compelling alternative plan for Greece’s recovery because, as socialists, they must oppose many things that would do the Greek economy long-term good, such as privatization and deregulation. “There will not be the slightest privatization in the country, particularly of strategic sectors of the economy,” says a key member of the government.

Let Greece Stumble Out of the Euro

34 APR 20, 2015 11:19 AM EDT

By Mark Gilbert

Bloomberg 

As the weeks since the Greek election have rolled into months, the government elected in January seems no closer to resolving the dichotomy between its anti-austerity inclinations and the reforms its creditors demand as the cost of handing over more money. Today's news that the government has seized the cash of the nation's local governments, citing "extremely urgent and unforeseen needs," suggests the money really is running out. And none of the likely scenarios for what happens next seems compatible with Greece staying in the euro.

Greece's fate hangs in balance amid contagion fear

Holly Ellyatt   | @HollyEllyatt

20-4-2015

 CNBC

As negotiations between Greece and its international lenders drag on, and the country's much-needed financial aid hangs in the balance, euro zone finance ministers told CNBC that the outcome of ongoing discussions was uncertain.

This tiny European state may trigger a Grexit

Dhara Ranasinghe       | @DharaCNBC

20-4-2015

CNBC

Finland's rigid stance over euro zone bailouts could become even more hardline after the weekend's election, in what would be a further blow to beleaguered Greece as it tries to avert a default.

A parliamentary election on Sunday in the small, northern euro zone state was won by the opposition Centre Party's Juha Sipila.

Euro Area Seeks Greece Roadmap to May Agreement

 Bloomberg

by Rebecca Christie

12:21 AM EEST

April 20, 2015

Greece needs to show euro-area nations what it could deliver by mid-May to unlock new aid payments and avoid default, the European commissioner in charge of euro matters said.

Finance ministry deputies will hold a conference call April 22, followed by the April 24 meeting of ministers from the currency bloc. The gathering in Riga, Latvia’s capital, is a chance to lay out a path to a May agreement, European Commission Vice President Valdis Dombrovskis said in an interview in Washington.

Notes on Greece

 APRIL 19, 2015 5:05 AM

The New York Times

By Paul Krugman

OK, that was intense. I’ll write more about my visit, but right now (from Frankfurt, where I’m laying over for a couple of hours) I want to make a data point. about just how much adjustment Greece has done.