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Thursday, 12 February 2015

Eurogroup Ministers to Syriza: Drop Dead

by Yves Smith, Naked Capitalism, 11/2/2015
Even though the US has waded into the Greece versus Troika impasse to press Eurozone officials to soften their position on austerity, the battle lines seem only to get harder.
Today, February 11, an emergency meeting of the Eurogroup, a committee of 19 Eurozone finance ministers, officially begins to commence negotiations about a possible bailout for Greece. But keep in mind that “bailout” is a term of art, and is used to refer specifically to the Eurozone bailout that is set to end on February 28. Unless it is extended, Greece will not receive a payment of €7.2 billion of bailout funds plus an additional €1.9bn in income on Greek bonds held by the ECB that most observers think Greece desperately needs. But Syriza continues to reject taking these bailout funds, since the strings attached include austerity measures like labor-crushing “structural reforms”.
On Monday, Greece Finance Minister Yanis Varoufakis briefed the media on his reform proposals. Even though financial markets responded positively to news of US pressure on Germany, and Varoufakis’ efforts to position this draft as making concessions, neither side has budged. As the Financial Times noted, “But several officials at the G20 meeting in Istanbul said that the new compromise appeared to be neither new nor a compromise.”
And despite US entreaties, European officials are even more insistent that Greece must yield. From Bloomberg:
Schaeuble damped any expectations talks were possible on a new accord, saying in Istanbul yesterday after a meeting of finance chiefs from the Group of 20 that if Greece doesn’t want the final tranche of its current aid program, “it’s over.” Creditors “can’t negotiate about something new,” he said. Deutsche Bundesbank President and European Central Bank Governing Council member Jens Weidmann said Greek efforts to get bridge financing through debt instruments was a non-starter.
The EU economics commissioner joined the chorus of nay-sayers and told Greece it has only until February 16 to get a deal done. From Reuters:
Greece will have to ask for an extension of its current bailout to give itself and the euro zone time to hammer out a new agreement, as there is no specific plan for Athens now, the EU’s economics commissioner said on Tuesday…
Greece would have to agree to extend the bailout and apply for it by the next meeting of euro zone finance ministers on Feb. 16, he said, because otherwise there would not be enough time for parliaments in some euro zone countries to approve the extension before the program expires on Feb. 28.
The Financial Times also took note of Eurocrat annoyance with Greece:
EU officials have grown frustrated with what they believe is a misunderstanding of EU procedures by the new Greek government and hope the eurogroup meeting will offer Mr Varoufakis a chance to begin more formal talks over how Athens wants to proceed.
And these media accounts seem to be polite versions of how deep the rifts are. See EU Sources: Eu-Greek Relations Soured by Leaks; Sides Further Apart MNI Euro Insight (hat tip Jim Haygood) for an unvarished version. 

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