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Saturday, July 11, 2015

German Finance Minister Schauble Has Grexit on the Mind

     In the last post I documented that while there has been a lot of optimism about a deal getting done for Greece-the Syrzia government optimistically suggested 90%, there is still some real doubt as to whether this deal won't sink yet.

     You would think it has a real shot with France full on board-having written much of the proposal for Tripas-along with some strong encouragement from the US, ,Italy and the IMF to the EU to take a deal and to offer some debt restructuring.

    Yet in the last post I looked at the fact that the Eugroup failed to get a deal today and this is now being kicked to a full 28 member EU meeting tomorrow. The EU group also is asking again for more from Greece-again proving you can never have enough austerity to please the EU

    http://diaryofarepublicanhater.blogspot.com/2015/07/not-yet-done-deal-if-they-really-want.html

   Meanwhile, German finance minister is openly throwing around the G-world-Grexit. Ok, supposedly, he means it constructively-he's saying the EU doesn't allow debt restructuring so Grexit and then get the restructuring... But on some level I think he was just finding an excuse to work Grexit into the conversation.

  There really is a passion for Grexit for many in Germany, Finland, Holland, etc. Siegriend Muresan tweeted:

 "Just to clarify: #Schaeuble poposed temporary exit from #Euro to give #Greece chance to restructure debt, which is not allowed within Euro."

  http://www.cnbc.com/2015/07/11/greece-crisis-eurogroup-meets-to-decide-greeces-fate.html

  Just to clarify that we Germans want a Grexit. Meanwhile, what clarity anyone can get from Finland is that they are certainly leaning no against accepting Greece's proposal:

  "Finnish officials have not yet responded to a claim that they are likely to reject Greece’s reform proposals during bailout talks in Brussels."

  "Finland’s Alexander Stubb was among Eurogroup finance ministers convening on Saturday along with IMF officials to negotiate an extension of bailout assistance, in return for a package of austerity promises from the Greek authorities."

  "A source told Yle that the Finnish position on whether to accept the proposals is currently negative."

   http://yle.fi/uutiset/source__finland_will_refuse_greeces_bailout_proposals/8148505

   To be sure, part of it is to 'keep their negotiating strength strong' by keeping their decision secret-or so they say. But I notice that the yes countries like France aren't worried about this.

   "Saturday's extraordinary Eurogroup meeting adjourned without any sort of agreement on Greece's request for a third bailout program."

   "The euro zone finance ministers are slated to meet again on Sunday at 11 a.m. local time (10 a.m. BST) to discuss the issue. Sunday, which some European leaders have described as Greece's final deadline to reach a deal, is also expected to include a meeting of European heads of state and government."

    http://www.cnbc.com/2015/07/11/greece-crisis-eurogroup-meets-to-decide-greeces-fate.html

     So if I'm a forecaster I don't know if I'd want to say it's a 90% chance of success-the chances for this not to happen still seem to be nontrivial. 

     Many at this meeting seem to want to drag this on-if they relent they don't want to make it so easy for Greece and will demand some more hoops first. Just a quick 'Aye' and then it's Monday morning, seems to cut against the grain of many of them. 

    Ed Conway's tweets say it all:

    "Eurogroup over. Nine hours. Zero agreement "

   "Eurogroup still kicking round plan for Greece to legislate various reforms (privatisations, early retirement etc) this wk b4 getting bailout."

   "Acc to those close to negotiations, eurogroup struggling to agree even to disagree on bailout. Leaders will have work cut out tomo."

   

  

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