Thursday, June 18, 2015

Greek debt crisis: ‘last chance’ for a deal to avoid Grexit – live – Telegraph.co.uk

An Orthodox priest holds a Greek flag
An Orthodox priest holds a Greek flag Photo: EPA

• Eurozone finance ministers are meeting now in ‘last chance’ for Greece
• IMF’s Lagarde: Greece faces default if it does not make June 30 payment
• Greece’s chief negotiator Euclid Tsakalotos: “If Greece goes out, the euro might break down”
• Finance minister Varoufakis said he didn’t believe they would reach a deal – and they have no money to pay
• Greek PM Tsipras going to Russia today to meet with Putin tomorrow
• Greeks admit they will default at the end of the month as central bank turns on government
• Desperation forces Greeks back out on to the streets in Athens anti-austerity protests
• Ambrose Evans-Pritchard: Greek central bank is playing with political fire

15.51

£1.7bn

is how much the UK has lent to Greece via the IMF’s £37.8bn share of the Greek bailout package, according to Open Europe. Even if there is Grexit, the UK will very likely be paid back.

15.26

On the agenda for the Eurogroup is not just Greece: they will be discussing Cyprus, Portugal and a works programme. The Stoxx Europe 600 Index slid less than 0.1 pc, and the ASE Index rose 0.4 percent, after Kathimerini reported the European Commission and the ECB are working on a debt relief plan to be used if Greece reaches an agreement with creditors. This reversed a drop of as much as 4.3 percent.

Reuters also reported that between Monday and Wednesday, Greece saw €2bn leave banks.

14.52

And now… we wait.

Finnishfinmin Alex Stubb says the eurozone can weather Grexit.

Meanwhile Moscovici – who is terrible at mixing metaphors (the ball is in the court, not the camp!) – said this, in a dig to Varoufakis.

14.39

Madame Lagarde est arrivée! And she is beaming.

She said that the IMF has a duty to the other members, because it’s their money. She added: “We are flexible – if there are good proposals on the table, we are prepared to examine them, of course.”

14.21

The Irish finance minister Michael Nolan said that “there’s no optimism among the people I have met today.”

He added: “We don’t think there will be a contagion effect if there is a Greek exit… we’re watcing the situation and taking advice.”

“A lot of people will be conscious of the fact that a bad deal might be worse than no deal.”

“I’ve heard Yanis’ proposals before, and they tend to be more macroeconomics than specific and these negotiations are more specific.” Ooh BURN.

14.06

More talk of heavenly intervention: the Slovakian finance minister Peter Kazimir says: “I’m Catholic – I have to believe in miracles.”

13.44

Greece will present “ideas” at Eurogroup meeting

As he entered the meeting, Greek finance minister Varoufakis has said that Greece will present Greek government “ideas”, adding that ” that purpose is to replace costly discord with consensus”.

Yesterday he said that he would not be presenting a proposal.

EU Commissioner Moscovici tweeted this. A subtweet if ever I saw one.

13.31

All smiles as finance ministers go into the Eurogroup meeting

Varoufakis is all smiles (Reuters)

But others are not so happy…

You can watch the livestream here.

13.19

Fancy a flutter? Betting firm William Hill is offering odds of 9-to-4 that Greece will leave the 19-nation bloc this year, implying a 31 percent chance. Odds of it staying in are 1-to-3, reflecting a 75 percent probability.

When William Hill stopped taking bets on ‘Grexit’ earlier this year the odds were 3-to-1, the shortest they had been up to that point. That reflected a 25 percent chance.

Explaining why it decided to start taking bets on Grexit again, Sharpe said: “People want to give us money, so we decided to re-open the book. The book-making spirit came out, and we decided to take a chance.”

Rival bookmaker Paddy Power is offering odds of 2-to-1 on ‘Grexit’, implying a 33 percent likelihood. Ladbrokes has closed its book.

12.36

Grexit – what if…?

The head of the German Bundesbank has said Grexit will not cause the collapse of the euro. “The existence of the euro does not depend on developments in Greece,” Jens Weismann said in an interview published in newspapers in France, Italy and Spain.

“Contagion effects certainly cannot be excluded, at the least Grexit could change the nature of monetary union,” Mr Weidmann said.

He described Tsipras’ warnings that a Greek exit could lead automatically to Italy and Spain following it out the door as “very strange”.

“Everyone can see that the situation in Greece is very different from that in Spain and Italy,” he said. “In these countries, the perception is that the government and people are ready to face the problems.”

Cor, maybe we should move to Greece? (Alamy)

As the Greek situation continues, the German Travel Association has felt the need to calm fears of any backlash against them.

The German Travel Association said “Despite isolated political campaigns against Germany in the past, German tourists do not need to fear hostility or hatred in Greece.”

12.19

FinnishFinMin Alex Stubb is sticking to the talking points:

See also: “Ball is in their court”. I might need to knock up a Greece comment bingo soon.

12.04

Christine Lagarde: IMF payment deadline is definitive – there will be no grace period

Chief of the IMF, Christine Lagarde, has said that Greece’s payment due to the IMF on 30 June is “definitive” and there will be no grace period or possibility to delay.

She also said that the IMF wants Greece to reform its pensions system, but that pensioners must be protected.

What happens if Greece defaults on its International Monetary Fund loans?

12.01

Reuters reports that the Russian deputy finance minister Sergei Storchak says Greece has not asked Russia’s finance ministry for financial aid, and that Greece is in no financial position to ask for sovereign loan.

He also said that Russia has no budgetary resources to help Greece, and that it does not want to escalate tensions.

Tsipras has just arrived in St Petersburg.

11.50

For another reminder of the state of Greece, they have published their revenues for May – missing their target by 24.6pc.

11.46

A great line from EU Commissioner Pierre Moscovici that I missed earlier: “Today is an important date and I have no desire to see us return to the age of Waterloo when the Europeans were all lined up against a single state.”

He’s right, you know. While we wait for the finance ministers to finish their mothers’ meeting, check out the Telegraph’s live blog of the Battle of Waterloo – as it happened. (Kind of as it happened – watches were not made by Apple in those days…)

11.09

11.06

A development:

More on that when it appears. Meanwhile, all the FinMins are arriving for the Eurogroup meeting. European commissioner Pierre Moscovici has said the meeting will be “difficult”. Way to understate the situation, Pierre.

10.42

As Tsipras lands in Russia to meet Putin and attend a conference, Economy Minister Alexei Ulyukaye has said that Russia isn't ready to buy Greece's debt or bonds, but other deals, including loan guarantees, are still possible.

I enjoyed this rather crudely mocked-up Photoshop.

10.30

There will be a brief meeting with the press at 1.15pm BST before the Eurogroup meeting starts in earnest. A post-meeting press conference should be around 5.00pm BST, so stay tuned…

10.20

50 shades of Grexit

Mehreen Khan writes: A Greek debt default at the end of this month does not necessarily mean an ejection from the euro.

Analysts of Bank of America today note that European authorities would likely seek to create a “grey territory” trying to avoid a Grexit after a default.

But should Greece venture into uncharted territory and miss its latest IMF repayment, “this would be a very fragile equilibrium but avoiding irreversibility would be at the centre of the Europeans’ priorities.

“The ECB would play a crucial role to deal with contagion, but a much longer crisis would need a deeper involvement from others.”

They go on to note:

QuoteWe also believe that if the Greek crisis were to linger and that, beyond default, the probability of an outright Grexit would become large, then governments of core Europe would have to "hug" the periphery to strengthen the monetary union as a construct.

Progress on the completion of banking union, with a clearer schedule and commitment for properly "federalized" deposit insurance would be welcome as a signal of trust in the perennial nature of the monetary union.

Ideally, some nods towards a "euro bond" for targeted spending would be another strong sign, but this would be very ambitious. Working towards narrower solutions, such as some form of cross-border fiscal redistribution supporting Eurowide unemployment insurance may be more realistic.

09.52

The markets are not looking good, amid uncertainty in Greece.

The Stoxx Europe 600 Index lost 0.7 pc in early-day trading, taking its June decline to 4.6 percent. It is heading for its worst month in two years, coming after its biggest quarterly advance since 2009.

Here’s the Greek stock market over the last month. It has fallen 18pc in value since last Thursday

(Bloomberg)

09.34

To Russia with love… today

Greek PM Alexis Tsipras is travelling to Russia today – while finance ministers meet in Luxembourg.

The timing is…interesting – but Greek government sources say Tsipras's visit to Russia has been planned since April.

“Go on, lend me a fiver…” (Reuters)

Ekathimerini, a Greek newspaper, reports that they will sign a deal about Russia’s planned extension of the "Turk Stream" gas pipeline through Greek territory.

They are also in talks over Greece joining a BRICS bank, which has obviously led to the suggestion that Greece might be the beneficiary of some loans from it.

When asked by AP if Russian would give Greece some bailout cash, Deputy Prime Minister Arkady Dvorkovich said he “cannot comment on specific decisions.”

09.14

Greek chief negotiator: “If Greece goes out, the euro might break down”

Just listening back to that interview with Greece’s chief negotiator Euclid Tsakalotos on the Today programme on Radio 4 this morning.

He warns that “If Greece goes out, the euro might break down.

“Once one country has left, you change a monetary union into a fixed exchange rate system, where it’s a cost-benefit analysis whether another country leaves.

“My greatest fear is that the break-up of the euro will return [us] to the competitive devaluations, and the nationalisms, and the kind of politics we had in the 1930s.”

He added: “If we have don’t [have a deal], we have to go to the Greek people because we have no mandate to leave the euro, and that would be a very bad eventuality.”

You can listen to the interview here.

09.03

Thomas Oppermann of the German SPD party has spoken after Merkel in the Bundestag, attacking Greece and saying that they won’t be blackmailed.

He also described the Greek situation as “five minutes to midnight”, invoking the Doomsday clock of nuclear apocalypse.

The SPD is politically more inclined to Greece’s Syriza party, though his words suggest that their patience is wearing thin.

08.42

Greece’s chief negotiator Euclid Tsakalotos was on Radio 4’s Today programme this morning,

08.29

German chancellor Angela Merkel just spoke at the Bundestag and said where there’s a will there’s a way – a deal with Greece “is still possible”, and the aim is to keep the country in the euro.

She said that Greece needs to implement the reforms pledged in February, and “self-responsibility and solidarity go hand in hand”.

08.14

They’re just not that into you

So now the Greek debt crisis has really turned into some kind of Hollywood movie-Eastenders hybrid: the Times is reporting that Greek PM Alexis Tsipras’ wife, Betty Batziana, will leave him if he surrenders Europe.

The Times cites French satirical paper Le Canard enchaîné which quotes French President Francois Hollande saying: "He informed me that if he gave in to too many of the troika's demands, he risked not only losing his party but also his partner, who is a fierce militant and is much farther left of him."

Colour me sceptical.

Meanwhile, Tsipras is taking it to the Germans in their own homes – by writing an op-ed in Der Tagesspiegel newspaper. He wrote: “The blind insistence of cuts (in pensions) in a country with a 25 percent unemployment rate and where half of all the young people are unemployed will only cause a further worsening of the already dramatic social situation”.

07.58

Reuters reports that French finance minister Michel Sapin said this morning that it would be a "total catastrophe for Greece" if Athens left the euro zone.

“We will fight till the end to find an agreement with Greece,” Sapin said on France Info radio.

Last night, US Federal Reserve Chair Janet Yellen warned the world economy could see significant turmoil if Greece and its creditors failed to do a deal.

“In the event that there is not agreement I do see the potential for disruptions that could affect the European economic outlook and global financial markets,” Yellen said.

Greek finance minister Yanis Varoufakis told ITN News last night, "This is the 11th hour."

"The only sensible proposals on the table at the moment are those that we have tabled. The other side have not come to the party."

The FT has a good look at the impact of the Greek crisis on the German cabinet, and the rift between chancellor Anglea Merkel and finance minister, Wolfgang Schäuble, who is sceptical Athens can stick to any deal.

Greece’s endgame: timeline of upcoming events

June 18
Eurogroup Meeting in Luxembourg

June 19
IMF loan repayment of €343m due

June 19
Greece owes €85m to the ECB for bonds the central bank bought

June 19
European Union finance ministers meet

June 25 and 26
European Union leaders Summit in Brussels

June 30
Greece due to pay €1.5bn wage and pensions bill by month-end

June 30
Greece's current bail-out deal expires
Greece must also make all its IMF payments by this date or it will be in arrears to the Fund

07.42

Good morning

Today is seen as the last possible day to make a deal which would give Greece enough money to pay its debts to the IMF and not default, as finance ministers meet in Luxembourg to thrash out a deal.

Yesterday, the Greek chief negotiator said they did not have enough money to pay the €1.6bn payment to the IMF, due on June 30.

Hopes of a settlement at today’s meeting of eurozone finance chiefs has rapidly faded. Greek finance minister Yanis Varoufakis has said he will not present any new proposals to his colleagues.

(Reuters)

Greeks took to the streets last night in peaceful anti-austerity protests. It came after a day of warring words between Greek politicians and European officials.

The Bank of Greece warned in a report that “Failure to reach an agreement would mark the beginning of a painful course that would lead initially to a Greek default and ultimately to the country’s exit from the euro area and – most likely – from the European Union.”

The speaker of the Greek parliament refused to accept the central bank’s report and published her own, describing IMF debt as “odious”.

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