Greece and Creditors Head for the Brink

Hardened positions mean the scope for compromise looks vanishingly small

By SIMON NIXON

June 7, 2015 5:27 p.m. ET

14 COMMENTS

No one can be sure how the Greek drama will end, not least because it is no longer clear who, if anyone, is in control. Both sides have been bombarded for months by well-meaning advice to show flexibility and compromise to avoid an economic calamity in Greece and a geopolitical disaster for the eurozone and the world. Instead, positions have hardened to the point where the scope for compromise now looks vanishingly small.

If You Think Greece’s Crisis Will End Soon, Think Again

by Ian WishartNikos ChrysolorasAndrew Mayeda

June 8, 2015 — 1:01 AM EEST Updated on June 8, 2015 — 10:38 AM EEST

Bloomberg

Frustrated by Greece’s cat and mouse game with its creditors? Get used to it.

Even if Prime Minister Alexis Tsipras clinches as much as 7.2 billion euros ($8 billion) from a bailout tranche creditors are withholding, he’s going to need another cash infusion shortly thereafter.

What will ensue is a renewed battle after almost five months of trench warfare. The beleaguered country requires a third bailout of about 30 billion euros, according to Nomura International Plc analysts Lefteris Farmakis and Dimitris Drakopoulos. The final bill will depend on whether fellow euro member states grant Greece any debt relief, and what form that relief would take, they said.

Tsipras says any aid must be on his terms rather than those of governments whose taxpayers have forked out billions in the past five years to keep Greece in the euro. The standoff has triggered an unprecedented liquidity squeeze, pushing the country’s economy back into recession, and thus raising the total sum of additional loans Greece may need after its current euro-area-backed bailout expires this month.

Opinion: Pushing Greece out could be Europe’s final act

 June 6, 2015 9:37 a.m. ET

From MarketWatch.com

By JOSEPH E. STIGLITZ

NEW YORK (Project Syndicate) — European Union leaders continue to play a game of brinkmanship with the Greek government. Greece has met its creditors’ demands far more than halfway. Yet Germany and Greece’s other creditors continue to demand that the country sign on to a program that has proven to be a failure, and that few economists ever thought could, would, or should be implemented.

European Officials Vent Frustration Over Greece’s Debt Before G-7 Summit, Vow to Maintain Sanctions on Russia

Diverse agenda set to be overshadowed by crises in Ukraine and Greece

The Wall Street Journal

By ANTON TROIANOVSKI

Updated June 7, 2015 12:07 p.m. ET

22 COMMENTS

GARMISCH-PARTENKIRCHEN, Germany—European officials vented frustration with Athens and vowed to maintain sanctions on Russia at the outset of a summit in which world leaders are trying to avoid a new trans-Atlantic split over Ukraine and an escalation of Greece’s debt crisis.

European Parliament President Urges Greece to Back Austerity Deal

Martin Schulz says consequences would be ‘dramatic’ if Greece rejects creditors’ proposal

The Wall Street Journal

By EYK HENNING

June 7, 2015 4:35 a.m. ET

FRANKFURT—The President of the European Parliament on Sunday urged Greece to accept the austerity measures creditors have called for in return for relaxing bond-repayment rules.

“I can only warn the Greek government...not to reject [our] extended hand,” Martin Schulz told German weekly Welt am Sonntag. He said the time for striking an agreement was running out and the consequences of a final refusal by Greece would be “dramatic.”

EU's Juncker rebukes Greece's Tsipras, urges swift proposals

Sun Jun 7, 2015 6:07am EDT

KRUEN, GERMANY

Reuters

European Commission President Jean-Claude Juncker accused Greek Prime Minister Alexis Tsipras on Sunday of distorting proposals by international creditors for a cash-for-reform deal to save Athens from default and urged him to put forward alternative proposals swiftly to allow negotiations this week.

Αυτό είναι σοβαρό

Τετάρτη, 03 Ιουνίου 2015

Γράφτηκε από τον  Κ.Π. Αναγνωστόπουλο

Ο κ. Βαρουφάκης τα 'κανε θάλασσα. Στο πιο σημαντικό, στο πιο κρίσιμο έργο της ζωής του προτίμησε να παίξει τον εαυτό του και όχι να ανταποκριθεί στις απαιτήσεις του ρόλου του. Γιατί; Διότι δεν κατάλαβε ότι «Αυτό είναι σοβαρό.» Και μάλιστα ιδιαζόντως σοβαρό, διότι οι αποφάσεις και η συμπεριφορά του είχαν (και έχουν ακόμη) να κάνουν με τη ζωή των άλλων.

Greece Raises Stakes in Showdown as Payment to IMF Deferred

by Nikos ChrysolorasVassilis KaramanisPaul Tugwell

June 5, 2015 — 9:53 AM EEST Updated on June 5, 2015 — 11:22 AM EEST

Bloomberg

Prime Minister Alexis Tsipras raised the stakes in Greece’s showdown with creditors, rejecting demands for more austerity to receive bailout funds and opting for an unconventional deferral of International Monetary Fund payments.

Tsipras told German Chancellor Angela Merkel and French President Francois Hollande during a call Thursday night that a list of demands needed to unlock bailout funds hammered out earlier this week by officials from the IMF and the euro area can’t be a basis for a deal, said a Greek official, who asked not to be identified discussing private talks.

The force assaulting the euro

The Economist

Free exchange

Europe’s ageing population poses a long-term threat to monetary union

Jun 6th 2015 |

THE euro area has been doing better of late: growth of 0.4% in the first quarter (1.6% on an annualised basis) was the strongest in the two-year recovery; unemployment has fallen to 11.1%, its lowest in three years; and inflation is positive again. There has even been a surge of hope that Greece’s membership of the currency may yet be preserved. But even if a deal is stitched together to keep Greece in, the euro will soon face a broader crisis. The slow growth and strained government finances of recent years will soon be dramatically amplified by demography. And the member facing the most severe onslaught is not a small Mediterranean country but Germany, the euro area’s muscleman.

Three Things To Buy After Greece Restructures Or Defaults On Its Debt

JUN 4, 2015 @ 7:51 PM 9,191 VIEWS

Forbes

By Henry To, contributor

 In two recent articles published earlier this year (“Chances of Greek Euro Exit Have Not Diminished” and “What To Buy if Greece Exits the Euro Zone”), I discussed:

1) Why the Greek economy—given its huge debt load (at 317% of GDP), its vast economic differences with its fellow euro zone member countries, as well as Germany’s refusal to directly subsidize its spending—cannot operate efficiently or grow as a member of the European Monetary Union (EMU). As such, Greece is better off in the long-run by exiting the EMU;

Greece delays IMF payment, PM to brief angry parliament

/BRUSSELS | BY RENEE MALTEZOU AND JAN STRUPCZEWSKI

Thu Jun 4, 2015 2:06pm EDT

Reuters

Greece delayed a key debt payment to the International Monetary Fund due on Friday as Prime Minister Alexis Tsipras, facing fury among his leftist supporters, demanded changes to tough terms from international creditors for aid to stave off bankruptcy.

The IMF said Athens had informed the global lender that it plans to bundle four payments due in June into a single 1.6 billion euro lump sum, which is now due on June 30.

Greece and the Troika's 'Grexit' Game Theory

JUN 4, 2015

Forbes

Jon Hartley

CONTRIBUTOR

Following the recent tragic death of the famous mathematician John F. Nash Jr., known for his 2001 biopic, “A Beautiful Mind”, it’s incredibly interesting how much his game theory concepts can describe and make predictions about Greece’s decision to reach a new agreement on bailout terms by Friday’s deadline and whether the rest of Europe would eject Greece from their currency union.

The Nash equilibrium, named after Nash who proved its ubiquitous existence in his 28-page Nobel-prize winning 1951 Ph.D. thesis, was a revolutionary concept that essentially a way to predict the outcome of events in matters of conflict and non-cooperation much like between Greece and Europe in their present stand-off.

Greece and Its Creditors Agree on Some Measures in Bailout Talks

‘Combative’ negotiations resume after ‘some aspects of a financing deal’ agreed overnight

The Wall Street Journal

By GABRIELE STEINHAUSER in Brussels and  NEKTARIA STAMOULI in Athens

Updated June 4, 2015 6:51 a.m. ET

3 COMMENTS

BRUSSELS—Greek Prime Minister Alexis Tsipras and his country’s international creditors were able to agree on some aspects of a financing deal at a meeting Wednesday night, but differences remain on some key issues, European officials said Thursday.

Greece and Eurozone Send Positive Debt-Deal Signals

By LIZ ALDERMAN and JACK EWINGJUNE 3, 2015

The New York Times

ATHENS — As Prime Minister Alexis Tsipras of Greece visited Brussels on Wednesday to discuss a bailout deal, signs emerged that the two sides might be edging closer to a compromise.

Greece and its creditors understand the need for a quick solution to provide relief to the debt-burdened country and have agreed, at least in principle, to move toward a deal. The creditors even appeared ready to make a significant concession that would free up more money to flow to the Greek economy.

Time to talk about capital controls in Greece

Dhara Ranasinghe      

CNBC

Greece's economy and its banking sector are feeling the strain of the reforms-for-rescue deadlock between Athens and its international creditors – and fears are rising that ordinary people's bank accounts could be next to feel the squeeze.

Greek banks are increasingly reliant on emergency funding from the European Central Bank (ECB) to get by and analysts say that if the central bank curbs this lending, Greece may have no option but to impose capital controls.

Europe and Greece: The Damage Is Done

6 JUN 3, 2015 12:01 AM EDT

By Clive Crook

Bloomberg view

First, Greece's economic situation, which was bad to begin with, has deteriorated further.

Second, as a result, the country's bad fiscal situation is now worse.

Third, the world has learned that exit from the euro system is not just thinkable but has actually been advocated,…

ECB to press case for steady QE, may urge Greece to accept deal

Wed Jun 3, 2015 2:35am EDT Related: GREECE

FRANKFURT | BY BALAZS KORANYI AND JOHN O'DONNELL

Reuters

The European Central Bank is set to raise its inflation forecast on Wednesday, saying that its trillion-euro-plus asset buying program is already paying off, and may urge Greece to accept a new deal from its creditors to access fresh aid.

In what could be the bank's least eventful meeting in months, the ECB is set to keep rates on hold, confirm its growth forecasts, make the case for a steady pace in quantitative easing and discuss Greece only briefly, leaving most of the talking to Brussels.

Does Greece Have a Diabolical Plan B?

JUN 2, 2015 9:29 AM EDT

By Leonid Bershidsky

Bloomberg

Perhaps the most baffling thing about the current Greek crisis is the sheer stubbornness of the country's leaders: Don't they understand they are committing economic suicide by refusing to make more concessions to the country's creditors? What are they playing at?

Greece Challenges Creditors With New Proposal to Break Debt Impasse

By LIZ ALDERMANJUNE 2, 2015

The New York Times

ATHENS — Greece elevated the game of brinkmanship with its international lenders on Tuesday, as Prime Minister Alexis Tsipras announced that his government had sent creditors a new proposal, on Greece’s own terms, to unlock financial aid that the struggling nation desperately needs.

But the creditors — the European Commission, the International Monetary Fund and the European Central Bank — were moving on Tuesday toward completing their own proposal to break the monthslong impasse with Athens. That move came after European leaders, including Chancellor Angela Merkel of Germany, held an emergency session in Berlin on Monday night to come up with a blueprint.

Greece’s Creditors Draft Final Offer for Bailout Aid in Bid to Break Stalemate

European officials say plan amounts to a take-it-or-leave-it offer to unlock much-needed aid for Athens

The Wall Street Journal

By MARCUS WALKER

Updated June 2, 2015 4:39 p.m. ET

ATHENS—Greece’s international creditors are poised to present the country with the outlines of a bailout deal that amounts to a take-it-or-leave-it offer, a move aimed at breaking a monthslong stalemate but which risks a political backlash and even a government collapse in Athens.