Courtesy of Mish.
From Frost to Cold Water
Equity markets cling to hopes of agreement with Greece, rhetoric from Germany is anything but encouraging.
Yesterday, the Financial Times reported Merkel Frosty on Greece's Bailout Plans. Today the same story appears with the title of Merkel Pours Cold Water on Greece’s Push to End Bailout.
Chancellor Angela Merkel poured cold water on a push by Greece’s new government to end its bailout and strike a new financing deal with its creditors, saying the current programme was “the basis of any discussions that we have”.
Earlier in the day, Germany’s powerful finance minister hinted darkly that a Greek plan to leave the bailout at the end of the month could draw a harsh reaction from financial markets.
“I wouldn’t know how financial markets will handle it, without a programme — but maybe he knows better,” Wolfgang Schäuble told reporters, referring to Alexis Tsipras, the new Greek premier.
Cold Water, the Theme of the Week
Cold water appears to be the theme of the week. Bloomberg reports German Finance Minister Schaeuble Just Poured Cold Water on Market Expectations for a Greece Deal
Greece offered compromises ahead of an emergency meeting with its official creditors tomorrow as German Chancellor Angela Merkel remained unyielding over terms of the country’s bailout conditions.
Greek Finance Minister Yanis Varoufakis told lawmakers on Monday that the government intends to neither tear up the existing bailout agreement, nor allow the budget to be derailed. He said Greece will implement about 70 percent of reforms already included in the current bailout accord.
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.
Greece sought to drum up support for a 10 billion-euro ($11.3 billion) bridge plan ahead of the euro-area finance ministers’ meeting in Brussels on Wednesday. The country is seeking to stave off a funding crunch, while also buying time to push creditors to ease some austerity demands.
German political leaders have said they will not extend more assistance to Greece without strings attached. Merkel said in Washington on Monday that the existing aid programs are the basis for Greek talks.
“I’m waiting for Greece to come forward with a viable recommendation and then we’ll talk about it,” she said.
The only "viable recommendation" from Greece that Germany seems willing to accept is 100% of what Germany wants.
…
Picture via Pixabay.
