Greece To Ask For Loan

As per Capital.gr:

"Greece is expected to submit today a request for a 6-month extension of its current loan agreement i.e. not the current bailout programme, along the lines of the so-called Moscovici draft, which was initially presented to the Greek FinMin on Monday (reportedly having also the support of EC’s President Mr. Juncker) but later withdrawn and replaced with another document that the Greek FinMin denied to sign.

In this original draft, the exact phrasing was: “The above forms a basis for an extension of the current loan agreement, which could take the form of a [four-month] intermediate programme, as a transitional stage to a new contract for growth for Greece, that will be deliberated and concluded during this period”.

The first reaction of Berlin was negative with FinMin Schaeuble saying that there is no loan agreement with Greece but a bailout programme and the issue is whether the programme will be concluded or not.

Greece is willing to agree to a moratorium on any steps that could affect the country’s fiscal targets and is ready to discuss other measures but is not willing to adopt the terms of the existing bailout programme. In other words, the request for the extension is designed to be disengaged from the obligation of the current bailout programme as the Greek government already announced yesterday a series of social reform measures which will be tabled to the parliament tomorrow.

The proposal is due to be sent to Eurogroup chief Mr. Dijsselbloem today and he will then decide if it merits calling an extraordinary Eurogroup on Friday, 20 February.

Greece΄s government confirmed it would ask on Wednesday for an extension to its loan agreement with the euro zone, which it distinguishes from its full bailout program.

"Let΄s wait today for the request for an extension of the loan contract to be submitted by Finance Minister (Yanis) Varoufakis," government spokesman Gabriel Sakellaridis told Greece΄s Antenna TV."

Let's see if this has legs or not!

Some in the media are claiming that Greece has "blinked first".

Nonsense!

The Greeks are asking for money but they are not offering to agree to any of the conditions set by the Eurozone wrt lending more money.

Irrespective of whether this headline balloon gains any real traction, Greece is running out of money and will have to impose capital controls.

Eurozone Taxpayers Defrauded By Greek Bailouts

Unsurprisingly yesterday's Eurogroup meeting ended in fractious failure, with the Greek side leaking the proposed draft agreement put forward by Greece's creditors which Greece rejected absolutely.

Like it or not there was no chance of an agreement, given that Greece is now being led by a Communist, Trotskyist, Nazi coalition.

Add to that the fact that Greece hasn't got a cat's chance in hell of paying back its debt, or even servicing it, and it is clear to one and all that no viable agreement can ever be negotiated.

The money is gone, and the taxpayers of the Eurozone have been royally screwed by their governments (who claimed that the bailouts were viable).

A new "deadline" of this Friday has been set. Even if an "agreement" is reached, I can guarantee that it will not be viable; and that the taxpayers of the Eurozone will once again be asked to roll over and divi up more money to be thrown into the financial blackhole that is Greece.

Like it or not, Greece is going to leave the Euro; whether it is now or in a a few months time.

The Eurogroup Clusterfuck

Unsurprisingly there has been no deal agreed at the Eurogroup meeting wrt "solving" the Greek crisis.

Indeed, the meeting was such a clusterfuck that the participants couldn't even agree on a joint statement; hence none was released.

However, The Greek government issued its own statement (as per Zerohedge):

“At this euro group there has been no agreement.”

“An extension of the memorandum cannot be accepted. Negotiations will continue with the goal [of achieving[ a mutually beneficial agreement.”

Greece Welcomes The Bear's Embrace

Ahead of today's Eurogroup meeting, wherein Greece will not be offered an olive branch, by happenstance Greece's Foreign Minister Nikolaos Kotziasis is in Moscow cosying up to the Russian bear and looking for money.

Whether or not he succeeds in finding a Russian backer, Greece's actions and pronouncements on the subject of changing the terms of the bailout have pissed everyone off and ensured that whatever the outcome Greece (a member of Nato) will be treated as a pariah nation by all and sundry in the West.

Given that the newly elected government of Greece is made up of Communists, Marxists and Nazis it is hardly surprising it has come to this state of affairs. The Greek people have elected a government that has turned the country into a pariah state. It is time to lance the boil and expunge Greece from the Eurozone.

Europe Fears Grexit Into Arms of Bear or Panda

Further to my earlier article today about the US fearing a Grexit to Russia. It seems the Eurozone is shitting itself over such a move, combined with a possibility of Greece cosying up with the Chinese.

Hence the Eurozone appears to be caving in over Greece's brinkmanship.

That is until the next next headline anyway!

Whatever the outcome, the Eurozone will never forgive Greece for this.

US Frets About Grexit Into Arms of a Bear

As the ongoing Greek tragedy nears its logical conclusion (capitulation by Syriza or Grexit), the USA is becoming increasingly worried about the consequences of a Grexit.

President Obama has pushed the Eurozone to "lighten up" on Greece, noting that there has to be a plan for growth if Greece is ever to pay down its debts and dig itself out of its own self constructed hole.

Senator Bernard Sanders has gone one better, and suggested that the Fed bail Greece out.

Whilst the concern of the US for the welfare of Greece and the Euro may appear to be altruistic, not all may be as it seems.

The US knows that Russia is waiting in the wings to use this crisis to her advantage. Loans offered by Russia to Greece could be made in exchange for the rights to set up bases etc in the area. In other words Russia would use Greek as a pivot into Europe, something the that US has sleepless nights about.

Grexit Looming

Prime Minister held meeting with Treasury and Bank of England to plan for and protect UK from possible Greek exit from euro, I have learned
— Robert Peston (@Peston) February 9, 2015

It should come as no surprise to anyone that Greece is likely to exit the Euro.

Prime Minister Alexis Tsiprasis is sticking to his commitment not to accept an extension of the bailout, but instead to seek a bridging loan until June. He also insists all election pledges will be adhered to and, for good measure, wants to pursue war reparations against Germany.

All in all he has lit the blue touch paper.

As such the final touches to plans prepared by banks, countries and other interested parties for Grexit are now being made. Once finalised Greece will be allowed to self implode and leave the Eurozone of its own free will; ie no one will be lamed for pushing it out.

No surprises there at all!

In the meantime, it is likely in the dying days of Greece's membership of the eurozone it will run out of cash and impose capital controls.

Schaeuble Varoufakis Meeting Summarised In One Photo

Source Zerohedge

ECB Ups The Ante on Greece

The European Central Bank has announced that it it restricting Greek access to its direct liquidity lines, citing concerns about the country’s commitment to existing bailout pledges. This means that Greek sovereign debt can no longer be used as collateral for lines of credit. Greek lenders must now apply for funding from their national central bank at higher rates.

The ECB is quoted by Bloomberg:

“The ECB today decided to lift the waiver affecting marketable debt instruments issued or fully guaranteed by the Hellenic Republic.

The Governing Council decision is based on the fact that it is currently not possible to assume a successful conclusion of the program review and is in line with existing Eurosystem rules.” 

The Greek government is spinning the line that the ECB action puts pressure on the Eurogroup to quickly strike "a mutually beneficial deal".

This is either naive, or disingenuous. The ECB action is designed solely to pressure Greece to decide as to whether it wishes to honour its debts or leave the Euro.

When Is A Default Not A Default?

When is a default not a default?

When it's a distressed debt exchange under the pseudonym of "smart debt engineering.

The Greek Finance Minister Varoufakis has proposed a debt swap wherein loans from the EU bailout would be replaced by GDP-linked bonds. Money owed to the ECB would be converted into “perpetual bonds”.

Whilst this sounds all very reasonable in theory, if the ECB et al were to agree to it, it would nonetheless represent a "notifiable event" and a breach of the conditions of the bailout; ie Greece will have defaulted.

This despite the fact that Greece is trying to spin the line that it isn't.

Greece Changes Its Tune

As per Reuters, late on Monday, Greek Finance Minister Varoufakis issued a statement saying that earlier comments of his to financial investors had been misinterpreted (ie the new Greek government is backtracking on its statements of last week).

As such the new economic plan is for Greece to swap bonds for growth linked debt or perpetual bonds. This is of course subject to the plan being costed and agreed by Germany et al. 

Next week, doubtless there will be another plan on the table as reality finally dawns that there is no way out of this mess without either paying down the debt or leaving the Euro.

Greece Goes Cold Turkey

Yanis Varoufakis, the Greek finance minister, will meet Chancellor George Osborne in London today.

Doubtless the subject of Greece's debt will come up in conversation.

Varoufakis claims that Greece will honour its debts, but repayment of these debts is subject to Greece's economy growing. 

So far so plausible.

However, he also went on to say that Greece will not take on new debt and will go "cold turkey" wrt its debt addiction.

The trouble with this is that, like it or not, Greek banks are currently underpinned by ECB credit lines that come to and end this month. In order for the banks to survive they will need continued lines of credit.

Given that the ECB are saying that no new lines will be given if Greece reneges on its debt repayments, and Varoufakis is saying that he will take on no new debt, how are the banks and the Greek economy meant to survive beyond 28 February?

Greece Bids Farewell To The Euro

RT @NickMalkoutzis: Skai TV reports @J_Dijsselbloem asked Gr PM if #Greece will ask4bailout extension.PM responded "election ended bailout"

— Efthimia Efthimiou (@EfiEfthimiou) January 30, 2015

Germany Pushes For Grexit

On Monday I wrote the following about Greece:

"The reality facing Greece is that as and when Syriza's attempts to renegotiate/renege on the terms of the bailout fail (and they will), Greece will be faced with the choice of continuing with the terms of the bailout or leaving the Euro.

As regards the latter, there are already plans in place (in the ECB and banks/financial organisations within the Eurozone) for such an exit which Germany will be keen to implement. Greece has, whether it realises it or not, has voted for an eventual exit from the Eurozone."

A mere two days on, and the plans for pushing Greece out of the Euro are being made public and openly discussed.

The Institute of German Economic Research (IW) is quoted by the Telegraph:

"Financial support must be cut off if Greece does not comply with its reform commitments.

If Greece is going to take a tough line, then Europe will take a tough line as well."

In other words the IW wants Greece expelled from the Eurozone.

ZEW research group also added to the calls for Greece, if it won't abide by current agreements, to be pushed out of the Eurozone:

"Europe should clearly signal that it is not susceptible to blackmail."

Germany’s finance minister, Wolfgang Schäuble, said:

“Anybody discussing a haircut just shows they don’t know what they are talking about.

In contrast to 2010, the financial markets have faith in the eurozone. 

We face no risk of contagion, so nobody should think we can be put under pressure easily. 

We are relaxed.”

Let us not be under any illusions, Germany wants Greece out of the Euro. The Greek people have, unwittingly, given the Germans the excuse to push Greece out.   

Greek Bailouts "Money Down The Drain!"

Yanis Varoufakis Greece's new Finance Minister, speaking to Channel 4 News last night, gave a frank and honest view about the bailouts given to Greece over the last few years.

His view?

"Money down the drain."

His solution?

Write off the debts and ask for another bailout!

Brilliant!