Asia stocks, euro falter as Greek crisis saps confidence

Tue May 12, 2015 1:24am EDT Related: GREECE

TOKYO | BY SHINICHI SAOSHIRO

Reuters

Asian stocks were mostly lower and the euro sagged on Tuesday as barely perctible progress on talks between debt-strapped Greece and its creditors kept investors edgy.

Spreadbetters expected jitters over Greece to continue weighing on Europe, forecasting a slightly lower open for Britain's FTSE, Germany's DAX and France's CAC.

MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.2 percent. Decliners included shares in South Korea, Hong Kong, Malaysia and Thailand, while Chinese equities bucked the trend and rose modestly.

IMF Works With Greece’s Neighbors to Contain Default Risks

Discussions with authorities in southeastern Europe aimed at girding for potential failure of bailout talks

 The Wall Street Journal

By GABRIELE STEINHAUSER

May 10, 2015 6:04 p.m. ET

0 COMMENTS

BRUSSELS—The International Monetary Fund is working with national authorities in southeastern Europe on contingency plans for a Greek default, a senior fund official said—a rare public admission that regulators are preparing for the potential failure to agree on continued aid for Athens.

I.M.F. and Central Bank Loom Large Over Greece’s Debt Talks

By PETER EAVIS, JACK EWING and LANDON THOMAS Jr.MAY 10, 2015

The New York Times

Greek leaders have fought fiercely in recent months with politicians from other European countries over relief on Greece’s vast debt load.

Yet the power to decide the fate of Greece lies not just in the hands of these national governments, but also with unelected officials at two powerful institutions: the European Central Bank and the International Monetary Fund. Each is a creditor to Greece, and each is expecting the country to repay it billions of dollars of debt in the coming weeks.

Merkel Pressed to Give Up on Greece as Germans Urge Strong Euro

Bloomberg 

by Brian ParkinRainer Buergin

4:05 PM EEST

May 10, 2015

German Chancellor Angela Merkel is coming under growing pressure from within the ranks of her own party bloc to give up on Greece for the sake of the euro.

Members of Merkel’s Christian Democratic bloc are openly challenging her stance of keeping Europe’s most-indebted country in the 19-nation currency region. Even some officials in the Finance Ministry are leaning toward the conclusion that the euro area would be better off without Greece, two people familiar with the matter said.

Making Sense of the Options for Greece

 10, 2015

Political Economy

By HUGO DIXON | REUTERS

Greece seems to lack a strategy for extricating itself from its parlous state.

Not only does the government, led by Alexis Tsipras, lack a credible plan for reaching agreement with its eurozone creditors and the International Monetary Fund, it doesn’t seem to have a thought-out fallback plan of how to default while containing the damage.

Greek financial markets have perked up in the past few weeks, largely because Yanis Varoufakis, the combative finance minister, has been sidelined from discussions with the creditors.

Documents Distributed by Greece’s Yanis Varoufakis Baffle Eurozone Officials

Officials say files differ greatly from what has been discussed in technical talks in Brussels

 The Wall Street Journal

By VIKTORIA DENDRINOU

Updated May 8, 2015 3:38 p.m. ET

30 COMMENTS

BRUSSELS—Economic plans and growth estimates distributed by Greek Finance Minister Yanis Varoufakis to some of his eurozone counterparts have baffled officials involved in the talks over its international bailout.

Officials say that the files differ greatly from what has been discussed at the technical level in Brussels in recent days and underline how Mr. Varoufakis continues to complicate progress toward a financing deal.

U.S. Urges Greece to Reject Russian Energy Project

By JAMES KANTERMAY 8, 2015

The New York Times

ATHENS — The United States, wading into the international efforts to shape Greece’s economic and geopolitical orientation, is pushing the leftist government in Athens to resist Russia’s energy overtures.

A State Department envoy in Athens urged Greece on Friday to embrace a Western-backed project that would link Europe to natural gas supplies in Azerbaijan, rather than agree to a gas pipeline project pushed by Moscow.

Greece Needs Some Post-Soviet Medicine

11 MAY 7, 2015 10:12 AM EDT

By Leonid Bershidsky

Bloomberg

The Greek government just pushed a law through parliament to rehire some of the public sector employees dismissed as part of previous creditor-dictated reforms. That's a strange move for a government already struggling to meet the existing public payroll, but to anyone familiar with post-Soviet economies, it's just a flashback.

Greece deal: Seriously, what's holding it up?

Holly Ellyatt   | @HollyEllyatt

5 Hours Ago

CNBC

Since coming to power at the end of January, you'd be forgiven for thinking that Greece's leftwing government had spent all of its time in talks with its international lenders.

Negotiations over the country's bailout program, reform measures and financial needs have seemingly dragged on and Greece has rarely been out of the headlines since Prime Minister Alexis Tsipras and fiery Finance Minister Yanis Varoufakis took the helm in January's election and started trying to steer Greece away from economic disaster.

Greece Will Make Next Debt Payment, Varoufakis Says

By JAMES KANTERMAY 7, 2015

The New York Times

BRUSSELS — Greece’s finance minister said on Thursday that the country would make its next major loan repayment to the International Monetary Fund on time, but there were few signs of an immediate breakthrough in a long-running stalemate between the government in Athens and its international creditors.

The sorry saga of Syriza

In its first hundred days Greece’s government has failed dismally. A crunch looms

May 9th 2015 | From the print edition

Charlemagne

The Economist

IN RECENT months the walls of the B. & M. Theocharakis Foundation in Athens have been lined with mementoes of European support for Greece’s freedom. “Philhellenism”, an exhibition, tells the story of the material and moral backing that Romantics like the English poet Byron gave Greece during its independence fight against the Ottomans. The contemporary resonances are obvious. Showing some children around, Dimitra Varkarakis, who with her husband, Michael, owns the works on display, pointed to a German painting. One girl stopped short. “Aren’t we in a fight with Germany?” she asked. “No,” replied Mrs Varkarakis. “We are all friends.” After recounting this tale she casts Charlemagne an earnest look. “Europeans,” she says, “must love each other.”

Greece Faces Pending Deadline as ECB Eyes Haircut Option

by Karl Stagno Navarra,

Alessandro Speciale Greece needs to show it’s serious about reaching an agreement with international creditors next week or risk tighter liquidity rules being imposed on its banks.

European Central Bank officials want progress at a meeting of euro-region finance ministers on May 11 or they will consider tightening Greek banks’ access to emergency liquidity they need to stay afloat, said two officials who spoke on condition of anonymity as the talks are private. One policy maker said they’re prepared to raise haircuts -- the discounts imposed on collateral pledged by Greek banks in return for funding -- to levels seen last year. An ECB spokesman declined to comment.

The move reflects growing frustration among top decision makers with the game of brinkmanship shown by Greek Prime Minister Alexis Tsipras’s government since it came to power 101 days ago. As talks drag on, Greek bank deposits are shriveling and ECB liquidity has become the country’s chief lifeline.

Greece’s scariest deficit has nothing to do with money

Published: May 7, 2015 2:00 a.m. ET

Market Watch

By ELLIE ISMAILIDOU

MARKETS REPORTER

Ancient Greece was once a magnet for the world’s intellectual elite. Scholarly work out of Athens contributed to everything from logic and philosophy to the politics that formed the basis of modern civilization.

But as the Hellenic Republic struggles to strike an agreement to repay more than €300 billion it owes international creditors, it’s also facing the depletion of its most important asset: human capital.

Greek Banks Are Having Trouble Trading Foreign Currencies

by Vassilis Karamanis

8:43 PM EEST

May 6, 2015

Greek banks are increasingly being hampered from trading currencies, one of most liquid markets, as international dealers cut back credit lines and costs soar, according to people with knowledge of the trades.

International securities firms are curtailing trading with Greece’s major lenders that may expose them to the risk of a default by the nation and the possible use of capital controls to stem outflows from banks, the people said, asking not to be named because they are not authorized to speak publicly.

Those threats are adding to concern that the euro would decline in the event of a default or a Greek exit from the currency region, leaving counterparties exposed to multiple risks, said the people.

E.C.B. Doubts Add to Uncertainties on Greek Debt Lifeline

By JACK EWING and LIZ ALDERMANMAY 6, 2015

The New York Times

FRANKFURT — As Greece mounts an 11th-hour diplomatic offensive across Europe to secure financial aid that it desperately needs to avoid a default, patience with Athens is wearing thin at the European Central Bank.

That could pose big problems for Greece, since the central bank is the country’s biggest creditor and a necessary source of financial support for struggling Greek commercial banks.

ECB Mulls Tighter Greece Rules After 100 Days of Tspiras

Bloomberg

by Karl Stagno NavarraAlessandro Speciale

11:14 AM EEST

May 6, 2015

European Central Bank officials will debate tighter rules for the liquidity that Greek lenders rely on for survival, two people familiar with the matter said, a move that underscores the fragility of the country’s financial system.

The Governing Council will discuss Wednesday whether to raise discounts on the collateral Greek banks pledge in exchange for emergency funding, said the people, who are familiar with the agenda and asked not to be identified. Governors will also review how much more Emergency Liquidity Assistance to offer Greek banks.

Greece Sparks Meltdown in Euro-Area Bonds as Italy, Spain Tumble

Bloomberg

by Anchalee WorrachateEshe Nelson

12:00 PM EEST

May 5, 2015

A slump in euro-area government bonds gathered force on concern Greece’s talks with creditors will fail to clinch a deal in time to prevent a default.

As Greek bonds tumbled, the repercussions spread across the region, with Spain’s 10-year yield rising the most since June 2013 to the highest this year. German bunds, the region’s benchmark sovereign securities, were swept up in the selloff with Treasuries after an unexpected jump in growth for U.S. service industries.

IMF Speaks of More Potential Financing for Greece

Less success in meeting original bailout terms would mean more new money needed

The Wall Street Journal

By IAN TALLEY

May 5, 2015 2:46 p.m. ET

The International Monetary Fund said Tuesday IMF officials didn’t push for large-scale debt relief in recent negotiations for emergency financing for Greece, but rather underscored that more financing would be needed if Athens failed to live up to its original bailout conditions.

“IMF European Department Director Poul Thomsen pointed to the trade-off that needs to be made in reaching agreement in the current discussions,” the IMF said in an emailed statement, referring to the negotiations held in Riga, Latvia, late last month.

Greece blows hot and cold in race to avert cash crunch

Tue May 5, 2015 3:33pm EDT Related: GREECE, IMF

ATHENS/BRUSSELS | BY LEFTERIS PAPADIMAS AND JAN STRUPCZEWSKI

(Reuters) - Greece blew hot and cold with its euro zone partners on Tuesday as it struggled to avert a potentially catastrophic funding crunch this month, when it must make a big debt repayment to the IMF as cash reserves dry up.

Finance Minister Yanis Varoufakis said after talks in Paris and Brussels that he expected euro zone finance ministers to acknowledge next Monday progress towards a cash-for-reform deal, opening the way to easing Athens' liquidity crisis.

Greece Says Compromise Not Possible Under Current Conditions

 Bloomberg

by Marcus BensassonEleni Chrepa

5:25 PM EEST

May 5, 2015

Greece blamed international creditors for the failure to end the impasse over its fiscal crisis, clouding the outlook for talks that some officials had said were making progress.

No deal will be possible until the European Commission and the International Monetary Fund agree to a common set of demands, a government official said on condition of anonymity. Taken together, there are too many red lines and creditors need to better coordinate their message, the official said.

IMF spokeswoman Angela Gaviria said in an e-mail that she had no immediate comment. A European Commission spokesman wasn’t immediately available for comment.