– Eurozone Rejects Greek Bailout Extension: All Bailout Programs Expire On June 30, Referendum Moot (ZeroHedge, June 27, 2015):
First thing this morning, when summarizing the flurry of overnight events, we focused on today’s final gambit by Greece:
“… moments ago Varoufakis was quoted as saying he would ask the Eurogroup for a bailout extension of a few weeks to accommodate the referendum.
And the punchline: if the Eurogroup says “Oxi”, then the entire Greek gambit, which has been a bet that to Europe the opportunity cost of a Grexit is higher than folding to Greek demands, collapses.
If the Eurogroup declines Varoufakis’ request, there simply can not be a referendum, as the “institutions proposal” will no longer be on the table. As such, the only question is whether the ECB will also end the ELA at midnight on June 30, adding insult to injury, and causing the collapse of the Greek banking system days ahead of a referendum whose purpose would now be moot.”
And, as expected, with the Eurozone meeting on Greece having just ended after a brief hour of deliberations, AFP reports that the answer, was indeed, no.
#BREAKING: Eurozone ministers reject Greek bailout extension: sources
— Agence France-Presse (@AFP) June 27, 2015
And then this:
- EUROGROUP PRESS CONFERENCE CALLED OFF IN BRUSSELS
- EURO-AREA FIN. MINISTERS TO CONTINUE TALKS WITHOUT GREECE: ANP
- EUROGROUP TO RECONVENE AFTER BRIEFING W/O GREECE: EU OFFICIAL
In effect, and very symbolically, Greece is already out of the Eurogroup. Worse: the referendum is now moot as the programs will expire on Tuesday night and Greece won’t have anything actionable to vote on next Sunday.
What happens next: Eurogroup makes it official that the Greek proposal ends on June 30 making the referendum moot as the institutions proposal will no longer be on the table, the ECB pulls a “Cyprus” on Greek ELA, and a Greek bank system which is put on indefinite hiatus, leading to a “soft” Greek default if not outright Grexit, paving the way for even more ECB QE.
In the meantime, here is the live feed from the Euro-ex-Greece-Group where now only 18 countries are allowed to opine on the future of the costliest, and most artificial monetary experiment in history.
And here is the official Eurogroup Statement on Greece, whose most important line is the footnote:
Since the 20 February 2015 agreement of the Eurogroup on the extension of the current financial assistance arrangement, intensive negotiations have taken place between the institutions and the Greek authorities to achieve a successful conclusion of the review. Given the prolonged deadlock in negotiations and the urgency of the situation, institutions have put forward a comprehensive proposal on policy conditionality, making use of the given flexibility within the current arrangement.
Regrettably, despite efforts at all levels and full support of the Eurogroup, this proposal has been rejected by the Greekauthorities who broke off the programme negotiations late on the 26 June unilaterally. The Eurogroup recalls the significantfinancial transfers and support provided to Greece over the last years. The Eurogroup has been open until the very last momentto further support the Greek people through a continued growth-oriented programme.
The Eurogroup takes note of the decision of the Greek government to put forward a proposal to call for a referendum, which is expected to take place on Sunday July 5, which is after the expiration of the programme period. The current financial assistance arrangement with Greece will expire on 30 June 2015, as well as all agreements related to the current Greek programme including the transfer by euro area Member States of SMP and ANFA equivalent profits.
The euro area authorities stand ready to do whatever is necessary to ensure financial stability of the euro area.
[1] Supported by all members of the Eurogroup except the Greek member.
Presenting the Euro-ex-Greece-Group
This tells me too many Euro leaders are fools, much like most of the US congress, they are corporate owned. Their nonsensical game of Chicken against Greece is financial suicide.
Four of the so-called leading Euro nations hold 98-99% of all Greek debt;Germany, France, Italy and Spain. If Greece defaults or leaves the Euro, the financial weakness of these nations will be exposed, destroying their economies, putting the future of the Euro will be put into jeopardy.
Italy and Spain nearly collapsed less than two years ago; Germany & France both suffer double digit debt to GDP. If they are the strongest economic forces in the Euro????
Once a nation reaches 100% or higher debt to GDP that means every cent that comes in is already owed elsewhere. No money coming in to build anything new to create more income, and nothing grows but debt.
The US is now in the same boat, triple digit debt to GDP. Real economy has been contracting for years….new unemployment claims are in the range of 200K a WEEK.
If one goes to the website: http://www.usdebtclock.org and clicks on “World” in the upper left hand side of the page, one can see for themselves public and external debt of many Euro nations, including the four who are carrying the Greek debt. None of them have the economic stability to sustain a Greek default/exit.
These greedy countries all chomped at the bit for bigger buying power to compete and trade with China produced national financial statements full of Enron Accounting tricks. They hid debt and inflated their financial statements. Greedy guts didn’t look too close, they wanted the power of a big economy immediately, regardless of the long term costs.
When times were good, they all showed growth, and financial folk started speculating the Euro might replace the US dollar as world reserve currency.
The trade deals started by Clinton and sealed with a vengeance with Obama’s deal this week has sealed the miserable fate of 93 million working age Americans into permanent long term unemployment. The trade deal will cost another 40% of working age jobs. Working people were brutally betrayed by this SOB.
These people are not counted as unemployed, they get no more social security…. Out of a population of 325 million, here is a breakdown of our population by age group:
Ages 00-17, pop#87M
Working age people from 18-69 total 233 million. Remove 93 million and 140 remain. Destroy another 40%, we have grim times ahead.
The Euro collapse will affect the US markets, greedy gut banks and millions more services will be eliminated. Couple that with the trade bill, our standard of living will drop like a stone, while our buying power continues to vanish.
I keep thinking of what Edmund Burke said in the 18th century: “For evil to flourish, it is only necessary for good men to do nothing.” Look around us, evil corporations have a choke hold on our economy, strangling any profit to be found out of the hands of the people……..
The Euro is another perfect example of what happens when greedy guts take over. Thanks for posting this story.