Courtesy of Mish.
First Hurdle Cleared
In an emergency Saturday meeting, eurozone finance ministers have concluded that “under certain conditions“, the latest Greek bailout proposal “may provide” a basis for negotiation.
Greece requested another €53.5 billion, but the IMF said that would not be enough. An additional €30 billion or so would be needed to recapitalize Greek banks.
Should the offer go through without haircuts, Greece would then have to pay back over €400 billion counting Target2 liabilities.
Germany and other hard-liners including Ireland remain skeptical. Nonetheless, Greece Clears First Hurdle to Avoid Grexit.
Greece has cleared the first hurdle in its attempt to stay in the eurozone after the bloc’s bailout monitors gave the go-ahead for negotiations over a future rescue programme.
The so-called “institutions”, which consist of the European Commission, European Central Bank and IMF, said that the Greek proposals could be a “basis” for a new bailout programme under “certain conditions”, according to two officials.
These conditions include clearer and more detailed targets on things such as opening up Greek professions, according to EU officials.An EU diplomat said: “Under certain conditions, they jointly see the proposals as a basis for negotiating an ESM programme.” Any proposals must first be examined by the European Commission, the ECB and IMF, formerly known as the troika.
Greece put forward a host of reforms earlier this week as part of a bid to receive a third bailout worth €53.5bn over three years. Greek lawmakers overwhelmingly backed the proposals in a late-night session in Athens on Saturday morning, with pro-EU opposition parties coming to the government’s aid after a rebellion.
EU officials warned on Friday that the Greek proposals did not include the cash needed to recapitalise the country’s struggling banking sector, meaning that the total bill could reach more than €80bn.
Officials in Paris had welcomed the Greek proposals, with French president François Hollande labelling them “serious and credible”.
The Doubters…
