Sunday, June 25, 2017

Did Europe just blink, or did Greece just blink? The game of financial chicken is heating up between the EU and Greece

The standoff between Greece and its creditors over the conditions attached to its 240 billion-euro lifeline risks leaving Europe’s most-indebted state without any funding as of the end of this month, when its current bailout expires. European leaders pushed back on Prime Minister Alexis Tsipras’s efforts to get out of austerity imposed by the previous government as a condition for Greece’s bailout, setting the stage for a clash.

Hours after we wrote about Greece’s “Plan B” to secure the necessary bridge funding from Russia, the US, or China…which would effectively make the EU’s bargaining chip of impending Greek state bankruptcy worthless, The Guardian announced this…

EC proposes six-month Greek bailout extension

So did “Plan B” push the EU, and specifically Angela Merkel, to revert to a “Plan A”, European solution, to the Greece crisis. It appeared so, until Bloomberg, moments later announced this…

The European Commission denied reports it will present a compromise proposal at the meeting tomorrow, saying “very intense contacts are ongoing between” Commission President Jean-Claude Juncker, Prime Minister Tsipras and others, and that the plan being worked on is to keep Greece in the euro area. Expectations are “low” for a final pact this week, the commission said.

News wires are now reporting that Greece has offered compromises ahead of an emergency meeting with its official creditors tomorrow.

German Chancellor Angela Merkel remains firm over terms of the country’s bailout conditions and wants to see austerity measures put back in place.

Bloomberg adds that Greece is ready to present a last minute compromise deal to move Merkel towards an EU solution for the country’s debt crisis.

Bloomberg reports…

Greece will seek about 10 billion euros ($11.3 billion) in short-term financing as it tries to stave off a funding crunch while buying time to push its creditors to ease austerity demands.

Greece’s Finance Minister Yanis Varoufakis will present a proposal at a Wednesday meeting of euro area finance ministers in Brussels that will ask for an 8 billion-euro increase in the stock of Treasury Bills the country is allowed, said a government official who asked not to be named as the negotiations are confidential. It will also seek the disbursement of 1.9 billion euros of profits that euro area central banks made on their Greek bonds holdings.

And how about that “Plan B” – $10 billion USD lifeline from one, or all of the three great powers?

Defencenet.gr reports that Greece’s Minister for European Affairs, Nikos Chountis, has confirmed that both China and Russia have made offers to help Greece during this financing crunch.

The Greek Minister for European Affairs, speaking to RealFM 97.8 radio and responding to the question of whether a Plan B involving Russian and China really did exist, had this to say….

“This is not a Plan B. We are seeking a multi-faceted foreign policy. As you are well aware of, there have been proposals, offers I would say, from Russia immediately after the elections for financial assistance, and from China, regarding a package of aid and investment opportunities.”

Given the fact that Russia, has in the past refused to provide financial help to Cyprus, and Greece during the first phase of the memorandum talks, referring Greece to seek assistance from the IMF, Nikos Chountis noted...”I am aware of this, and that is why I said this is an offer from their side.”

Chountis added…

“We have not discussed this offer in detail. In each case, and specifically this one, we will discuss this with them [Russia] in person. Their is lots to discuss on the table. From Russia’s side, their is more they can offer than just economic help that also needs to be considered.

“In no way is economic help or economic cooperation with countries outside the European Union forbidden. Either way, all EU countries have some form of cooperation with not only Russia and Chine but other countries as well. Therefore it [cooperation] is not prohibited.”

“We first need to find a solution with our European partners because we are well aware of our commitments and obligations which reflect upon our presence in Europe and the Eurozone. I think we need to exhaust all possibilities to achieve a solution, while not excluding other types of collaborations, that either way should be done.”

References:

http://www.bloomberg.com/news/articles/2015-02-09/merkel-cool-to-bailout-compromise-as-greece-said-to-seek-bridge

http://www.defencenet.gr

http://www.zerohedge.com/news/2015-02-10/europe-propose-6-month-extension-after-greece-warns-it-may-get-funds-russia-or-china

http://www.bloomberg.com/news/articles/2015-02-09/greece-said-to-seek-10-billion-euro-leeway-in-bridge-agreement

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