Greece faces pressure to back deal or consider leaving euro

[webfact]

Greece faces pressure to back deal or consider leaving euro
MENELAOS HADJICOSTIS, Associated Press
RAF CASERT, Associated Press

BRUSSELS (AP) — Greek Prime Minister Alexis Tsipras and skeptical European leaders negotiated past a self-imposed deadline into the early hours of Monday, with talks stuck on how Greece would guarantee austerity measures in exchange for a rescue package to prevent its banks from collapsing.

If the talks don't succeed, some of Greece's eurozone partners warned, the country could be temporarily forced out of the euro, the European single currency that Greece has been a part of since 2002. No country has ever left the joint currency, which launched in 1999, and there is no mechanism in place for one to do so.

It wasn't entirely clear what a temporary exit would entail, but the threat put intense pressure on Tsipras to swallow politically unpalatable austerity measures, as his people overwhelmingly want to stay in the eurozone.

The leaders are discussing Greece's request for a three-year, 53.5 billion-euro ($59.5 billion) financial package. But other leaders in Brussels say Greece needs even more than that, and are demanding tough austerity measures in exchange. It would be Greece's third bailout in five years.

Several officials, all of whom spoke on condition of anonymity because they weren't authorized to discuss the negotiations while they were ongoing, said the terms of the austerity package and the timing of its implementation remained serious obstacles.

One of them said the main difference centered on when the European Central Bank could start to increase its emergency liquidity assistance to Greek banks. Greece shut the teetering banks two weeks ago and has limited the amount people can withdraw from their accounts. Without more liquidity from the ECB, the banks can't reopen without collapsing.

Tsipras wants the ECB to help the banks as early as Monday, the official said, but creditors don't want the ECB to act until the Greek Parliament passes certain austerity measures. Even if the banks reopen, it's possible that they could run out of cash even for cash-machine withdrawals this week.

Another of the officials said sticking points included a proposal for Greece to transfer billions of euros worth of state assets to an independent fund in Luxembourg under European supervision. The Greek government is loath to do so.

The 19 leaders of the eurozone countries went into talks Sunday at mid-afternoon and vowed not to emerge without something concrete. They were presented with a set of proposals from the eurozone's top official, Jeroen Dijsselbloem, who said the sides have "come a long way" in two days of talks among finance ministers.

The deal on the table appeared to include commitments from Tsipras to push a drastic austerity program including pension, market and privatization reforms through parliament by Wednesday, and from the 18 other eurozone leaders to start talks on a new bailout program.

A four-page discussion paper put to eurozone leaders and obtained by The Associated Press spoke of a potential "time-out from the euro area" for Greece if no agreement could be found.

It highlighted the increasing frustration of European leaders during five months of fruitless talks with Greece.

"The most important currency has been lost: that is trust and reliability," German Chancellor Angela Merkel said Sunday.

Tsipras insisted his government was ready to clinch a deal.

"We owe that to the peoples of Europe who want Europe united and not divided," he said. "We can reach an agreement tonight if all parties want it."

Divisions appeared to be growing among European leaders.

French President Francois Hollande insisted it was vital to keep Greece in the euro and said in the event of a departure, "it's Europe that would go backward. And that I do not want."

On the other side, Finnish Finance Minister Alexander Stubb said the leaders should talk with Greece about a third bailout only if it passes its austerity measures in parliament.

Traditionally, eurozone ministers agree by mutual consensus, though in exceptional circumstances a unanimous vote may not be needed.

Greece has received two previous bailouts, totaling 240 billion euros ($268 billion), in return for deep spending cuts, tax increases and reforms from successive governments. Although the country's annual budget deficit has come down dramatically, Greece's debt burden has increased as the economy has shrunk by a quarter.

The Greek government has made getting some form of debt relief a priority and hopes that a comprehensive solution will involve European creditors at least agreeing to delayed repayments or lower interest rates.

Greek debt stands at around 320 billion euros ($357 billion) — a staggering 180 percent or so of the country's annual gross domestic product. Few economists think that debt will ever be fully repaid. Last week, the International Monetary Fund said Greece's debt will need to be restructured.
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Pan Pylas and John-Thor Dahlburg in Brussels contributed to this story.


-- (c) Associated Press 2015-07-13

[Usernames]

Greece is like that character from Popeye, Wimpy, always promising to pay in the future so that he can stuff his fat gut with hamburgers today.

[TheAppletons]

So much for that Sunday deadline....the press reports coming out of Brussels are not characterizing anything even close to a "deal". In fact, many of the reports are claiming the Neuros are trying to "humiliate" Greece (as if Greece hasn't done that enough on their own, just sayin'.)

One of the top ten trending hashtags on Twitter right now is #Thisisacoup, referring to the fact that many are seeing this "negotiation" as a struggle for control of the EU.

[Naam]

i lost already count of the many "deadlines" appearing and disappearing during the last four weeks

[Lissos]

Because of all the cry wolf 'deadline'empty threats from the EU it only encouraged Tspiras to keep playing them for a better outcome, because it revealed to him that despite the threats, it was actually the EU begging for Greece to remain due to the effect on the Euro currency and the European project itself, after an exit. It reminds me of the jehova stoning scene in life of brian. In the end, the one who was getting increasingly irate after postponing the stoning several times, was the one ultimately crushed with a slab because he accidentally said jehova.

[SOTIRIOS]

...seems feasible.....

[Mosha]

The Dutch according to BBC were calling for the Greeks to be thrown out of the Euro, a phone call from Merkel shut them up. I didn't know the Dutch had voted her in charge of Dutch affairs.

[Naam]

Because of all the cry wolf 'deadline'empty threats from the EU it only encouraged Tspiras to keep playing them for a better outcome, because it revealed to him that despite the threats, it was actually the EU begging for Greece to remain due to the effect on the Euro currency and the European project itself, after an exit. It reminds me of the jehova stoning scene in life of brian. In the end, the one who was getting increasingly irate after postponing the stoning several times, was the one ultimately crushed with a slab because he accidentally said jehova.

you should do some homework and realise that Tsipras has missed a better outcome. but whatever the outcome will be it won't be fun for the majority of Greek citizens, especially the lower income group.

[TheAppletons]

Because of all the cry wolf 'deadline'empty threats from the EU it only encouraged Tspiras to keep playing them for a better outcome, because it revealed to him that despite the threats, it was actually the EU begging for Greece to remain due to the effect on the Euro currency and the European project itself, after an exit. It reminds me of the jehova stoning scene in life of brian. In the end, the one who was getting increasingly irate after postponing the stoning several times, was the one ultimately crushed with a slab because he accidentally said jehova.

you should do some homework and realise that Tsipras has missed a better outcome. but whatever the outcome will be it won't be fun for the majority of Greek citizens, especially the lower income group.

Yeah, is that ever true. The restrictions the EU is piling on today makes the EU offer that Tsipras rejected (and then resubmitted after the referendum) look a lot better.

[winstonc]

keep strong greece they are desperate for there <deleted> project to remain...the eu will throw billions to keep the pipe dream alive...its ok to call greece corrupt but not the banksters..mmmm

[stevenl]

The Dutch according to BBC were calling for the Greeks to be thrown out of the Euro, a phone call from Merkel shut them up. I didn't know the Dutch had voted her in charge of Dutch affairs.

The only reason to listen to Merkel now would be if she promises she'll support the candidacy of Dijsselbloem to get re-elected as chairman of the Eurogroup.

[Lissos]

Yeah, is that ever true. The restrictions the EU is piling on today makes the EU offer that Tsipras rejected (and then resubmitted after the referendum) look a lot better.

Possibly. We shall see how things pan out. I have no dog in this fight by the way.

[CWMcMurray]

I can understand why Greece staying in the EU may be important to Greece... But why is it so important to the other countries?

Would it really hurt the EU if Greece was no longer a member state?

[Basil B]

I can understand why Greece staying in the EU may be important to Greece... But why is it so important to the other countries?

Would it really hurt the EU if Greece was no longer a member state?

Probably never see another Euro/Drachma of what is owed...

To me the Euro is a dead duck, let all countries revert back to their own currencies and the Euro become a virtual currency, a benchmark, let every country peg their currency to the Virtual Euro, with free borrowing/lending to overcome the day to day short falls, with the national banks and government intervening when required, when adjustments a required these would be announced/done at night hopefully not that often, may be at a review of all every quarter, therefore there would be no currency dealing and no need for banks to impose charges on electronic currency conversions.

[RuamRudy]

Because of all the cry wolf 'deadline'empty threats from the EU it only encouraged Tspiras to keep playing them for a better outcome, because it revealed to him that despite the threats, it was actually the EU begging for Greece to remain due to the effect on the Euro currency and the European project itself, after an exit. It reminds me of the jehova stoning scene in life of brian. In the end, the one who was getting increasingly irate after postponing the stoning several times, was the one ultimately crushed with a slab because he accidentally said jehova.

you should do some homework and realise that Tsipras has missed a better outcome. but whatever the outcome will be it won't be fun for the majority of Greek citizens, especially the lower income group.

Yeah, is that ever true. The restrictions the EU is piling on today makes the EU offer that Tsipras rejected (and then resubmitted after the referendum) look a lot better.

Now it is time for the proles to be punished for daring to stand against the EU elite - they should have known their place but they got uppity with the referendum and now need to be put in their place.

Working class people of Spain, Portugal and Italy, take heed of the consequences of daring to stand up for yourselves.

[NeverSure]

I can understand why Greece staying in the EU may be important to Greece... But why is it so important to the other countries?

Would it really hurt the EU if Greece was no longer a member state?

The EU is freaked out about Greece leaving. It would start an unwinding of the fractional reserve banking and reverberate throughout the Eurozone. The whole thing is a house of cards.

If it was simple, Greece would have been long gone. It is the Eurozone that is most afraid of the dominoes. That's the only reason they are desperate for a deal, apparently told the Dutch to stand down, and keep moving the goal posts of time.

[steve654]

Being half Greek, even though I never lived there and was born elsewhere, I can safely say that Greece is screwed. You can't pile up debt after debt after debt and hope someone is going to bail you out..........unless of course you are a bank! We should start a thread one day about "bail ins" Seems all G20 countries are required to formulate a bail in plan for the next big financial crisis. In other words, banks in most western countries may clear out a huge portion of their depositors accounts, just so they can save themselves. It's a scary but real thought. Banks are not what they once were anymore. Canadian banks have already be downgraded because of the secrecy involved in the bail in plan.

[pmugghc]

I think this is a pretty good analysis from Demetrios Efstathiou of ICBC Standard Bank:

Analyst: It's Merkel 1, Tsipras 0

Demetrios Efstathiou of ICBC Standard Bank says that Greece has been comprehensively routed by Germany in Brussels this weekend:

• Tsipras had to concede on almost every point.
• Merkel comes out as a winner, and should be able to get the deal though the German parliament.
• Germany’s extremely tough position would serve as a warning to other Eurozone nations. There are arguments that she even pushed too far.
• Varoufakis may have gambled, Tsipras and Syriza may have lost, but Greece may be the ultimate winner - Greece has a golden opportunity to implement in record time the drastic reforms that it desperately needed and which successive governments have been unwilling to commit to.
• The formation of a national unity or special purpose government to pass the reforms in the tight time-frame is now required. Elections would have to follow at a later stage.
• The debate will now move on to the reaction of the Greek people. There is no easy answer. Only time will tell. The way I see it is that the Greek people will be relieved to see their banks reopen, their pensions and savings to be still denominated in euros, and the tourist season not destroyed. They should also be celebrating the implementation of structural reforms, but I doubt that.
• Greece must now push through parliament, by Wednesday, July 15th, a series of legislations that include the streamlining of the VAT system, and pension measures.

[Naam]

Because of all the cry wolf 'deadline'empty threats from the EU it only encouraged Tspiras to keep playing them for a better outcome, because it revealed to him that despite the threats, it was actually the EU begging for Greece to remain due to the effect on the Euro currency and the European project itself, after an exit. It reminds me of the jehova stoning scene in life of brian. In the end, the one who was getting increasingly irate after postponing the stoning several times, was the one ultimately crushed with a slab because he accidentally said jehova.

you should do some homework and realise that Tsipras has missed a better outcome. but whatever the outcome will be it won't be fun for the majority of Greek citizens, especially the lower income group.

Yeah, is that ever true. The restrictions the EU is piling on today makes the EU offer that Tsipras rejected (and then resubmitted after the referendum) look a lot better.

Now it is time for the proles to be punished for daring to stand against the EU elite - they should have known their place but they got uppity with the referendum and now need to be put in their place.

Working class people of Spain, Portugal and Italy, take heed of the consequences of daring to stand up for yourselves.

please don't blame the Greek people who were mislead by true commies who made irrational promises which can't be kept.

Tsipras joined the Communist Youth of Greece in the late 1980s.

https://en.wikipedia.org/wiki/Alexis_Tsipras

Varoufakis... He describes himself as a 'libertarian Marxist': "In truth, Karl Marx was responsible for framing my perspective of the world we live in, from my childhood to this day.

https://en.wikipedia.org/wiki/Yanis_Varoufakis

[RuamRudy]

Now it is time for the proles to be punished for daring to stand against the EU elite - they should have known their place but they got uppity with the referendum and now need to be put in their place.

Working class people of Spain, Portugal and Italy, take heed of the consequences of daring to stand up for yourselves.

please don't blame the Greek people who were mislead by true commies who made irrational promises which can't be kept.

Tsipras joined the Communist Youth of Greece in the late 1980s.

https://en.wikipedia.org/wiki/Alexis_Tsipras

Varoufakis... He describes himself as a 'libertarian Marxist': "In truth, Karl Marx was responsible for framing my perspective of the world we live in, from my childhood to this day.

https://en.wikipedia.org/wiki/Yanis_Varoufakis

Sorry, British sarcasm is sometimes a bit too subtle, but I am most certainly not blaming the Greek people - I have nothing but admiration for them. I do wonder, however, what has happened to the days when we proles actually took a stand for ourselves.

I read these quotations from Thomas Jefferson last night - they seem very appropriate to me:

"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around them will deprive the people of all property until their children wake up homeless on the continent their Fathers conquered...I believe that banking institutions are more dangerous to our liberties than standing armies... The issuing power should be taken from the banks and restored to the people, to whom it properly belongs."

[Srikcir]

I can understand why Greece staying in the EU may be important to Greece... But why is it so important to the other countries?

Would it really hurt the EU if Greece was no longer a member state?

Probably never see another Euro/Drachma of what is owed...

To me the Euro is a dead duck, let all countries revert back to their own currencies and the Euro become a virtual currency, a benchmark, let every country peg their currency to the Virtual Euro, with free borrowing/lending to overcome the day to day short falls, with the national banks and government intervening when required, when adjustments a required these would be announced/done at night hopefully not that often, may be at a review of all every quarter, therefore there would be no currency dealing and no need for banks to impose charges on electronic currency conversions.

The concept of the euro was not to avoid currency exchange charges but to provide a broader economic base for capital. Capital is the engine that makes economies grow when applied responsibly.

A country left to only its own currency is limited to access to capital beyond itself without foreign borrowing. A country in the EU has easier and cheaper access to capital (as evidenced by the huge amounts Greece has borrowed).

[melvinmelvin]

The Dutch according to BBC were calling for the Greeks to be thrown out of the Euro, a phone call from Merkel shut them up. I didn't know the Dutch had voted her in charge of Dutch affairs.

Both the Dutch and the BBC should know better, there are no legal means available to throw a member out of the Eurozone.