Closed Live – Greece: the final countdown

Late on Thursday night Greek prime minister Alexis Tsipras submitted a new plan for his country’s economic overhaul to bailout monitors. The clock is now ticking. Will it be accepted, or, come Sunday, will Greece topple into bankruptcy?


Catch up on what to make of last night’s developments by reading what our Brussels bureau chief Peter Spiegel has to say on the latest proposals:

http://blogs.ft.co…c-reform-proposal/


Ok, so before we get too enthusiastic about what appears to be a possibly more palatable (to the EU at any rate) Greek offer, Commerzbank says “time out, guys”:

“Let’s not rush into anything.”


The German bank’s currency analysts, Thu Lan Nguyen and Charlie Lay, say this morning that the Greek government apparently is holding on to its demand for debt relief – which many countries have rejected so far.


They go on:

“Secondly: Even if on important aspects the new proposals contain concessions to the creditors’ demands the reform proposal put forward by the institutions has still not been accepted in total. As the population rejected these proposals with a clear ‘no’ vote in last Sunday’s referendum it would admittedly have been difficult for Prime Minister Alexis Tsipras to sell this to the Greeks. The decisive question is: are the reform proposals sufficient?”


Finally… finally some serious hope for a Greek deal. The markets like it a lot.

Benchmark German Bunds are down heavily, reflecting a much lower perceived need for safe retreats. Yields on the country’s 10-year debt are up by a chunky 0.085 percentage points to 0.804 per cent, writes Katie Martin.

Among Europe’s riskier government debt, Portuguese yields are swooning, having already taken a heavy dent yesterday. 10-year yields are now down by 0.225 percentage points to 2.648. Spanish and Italian yields for debt of the same maturity are down by 0.15 percentage points. Big moves.

The euro is taking good news as good news today, up by 0.7 per cent to $1.115. It’s worth noting that many investors have been waiting for a jump based on a Greek deal as a nice opportunity to sell euros in search of higher-yielding currencies elsewhere, so this pick-up may not last long.

More of that post here.


And Commerzbank concludes:

“It is worth considering that the list of reforms presented by the institutions was the condition for an extension of the second bailout package that would then have run until this autumn. The new proposals submitted by Athens are now however aimed at a third package based on the ESM [European Stability Mechanism] that would run for three years. The German Chancellor Merkel had pointed out after the last Euro summit that the proposals from Athens for a bailout programme running for several years would now ‘have to contain further commitments’. That means that an agreement between Athens and its creditors is far from wrapped up.”


Nice piece by Ian Wishart from Bloomberg on why Sunday’s deadline might actually count. One would hope so, writes Tony Tassell, the FT’s deputy news editor. Wishart lists all the summitry – like how many eurozone finance minister meetings there have been – under Tsipiras’s premiership:

http://www.bloombe…ght-actually-count


Malta certainly giving the Greek proposals an initial thumbs up. Here is the country’s prime minister

https://twitter.com/JosephMuscat_JM/status/619397899579998208


Hang on – not so positive vibes from Germany’s CSU party on the question of a further bailout for Greece:

https://twitter.com/Hugodixon/status/619402705820364800


How the old certainties are collapsing already in Greece. Our Christian Oliver and Eleftheria Kourtali report that – yes, really – the Bulgarian lev currency is being widely accepted in northern Greece:

http://www.ft.com/…-a775d2b173ca.html


So far in the markets:

Germany’s Xetra Dax is up 2.13 per cent, at 11,228.

Italy’s FTSE MIB is up 1.8 per cent at 22,578.

France’s CAC 40 has climbed 2.13 per cent to 4858.

The FTSE 100 is up 1.1 per cent at 6652 points.


Kit Juckes at SocGen – working his “Friday morning head” – sums things up thus:

“If my Friday morning head understands it right, the Greeks had a referendum in which they voted overwhelmingly to reject a set austerity proposals in return for some debt rollovers. Too much austerity and not enough debt relief, they cried. After a week of frantic negotiations the Greek government is (more or less) bringing much the same proposals back to Brussels.”


“How much money do you want to leave the euro?”. This is what German finance minister Wolfgang Schäuble is reported as having told Greek negotiators in recent weeks in a revealing piece from Mediapart, a French investigative site.

It recently sat down with a senior member of Greece’s negotiating team. Speaking on condition of anonymity, the negotiator detailed the history of the protracted and bitter negotiations between the radical-left Syriza government, elected in January, and international lenders for the provision of a new bailout for the debt-ridden country.

More follows …


On Yanis Varoufakis, who resigned this week as Greek finance minister, Mediapart’s source says:

” He is a celebrity and he creates clashing emotions. You hate him or you love him.”

And here is Mediapart’s source on the current state of power play between Greece and its international creditors, after weeks of exhausting negotiations:

“So here we are, having lost all the economic ground of negotiating in real terms, of finding a new agreement, and also lost the credibility to force them to negotiate with us.”

And here is the full Mediapart post:

http://www.mediapa…blackm?onglet=full


Meanwhile we are getting more of a sense of mistrust from the German side, with a senior member of German chancellor Angela Merkel’s party saying he has trouble trusting Greece’s latest proposals to its euro zone creditors given that the country last week rejected austerity measures in a referendum.

“We have to be very careful because honestly, because I have a little bit of a problem to trust it because what is the difference between Sunday and today? … on Sunday the Greek people voted against these measurements,” Michael Fuchs, deputy parliamentary floor leader of Merkel’s Christian Democrats, told BBC Radio in English. “We need to make sure that the debt sustainability is now served, if that is not functioning it doesn’t make sense.”


After snatching a few hours of shut-eye Peter Spiegel, our Brussels bureau chief who must be surviving on double doses of caffeine and Twitter, is back up and running:

https://twitter.com/SpiegelPeter/status/619418289224183808


Guy Verhofstadt, MEP – and former Belgian prime minister – is on CNBC now.

Says he thinks the [latest Greek] proposals are “the same measures that were on the table a few weeks ago”.

But he adds, crucially, that “a number of structural reforms have been added by [Greek prime minister Tsipras] and the creditors “have to accept this” and grant new loans that will tide Greece over for the next the years.


Sound the Marseillaise! French president François Hollande, has just spoken and given the Greek proposals arguable the strongest endorsement so far, saying they are “serious and credible”.

“The Greeks have just shown determination to stay within the eurozone.”


My Paris-based colleague Anne-Sylvaine Chassanay wrote this week of how Mr Hollande is Greece’s best hope of remaining in the eurozone, emerging as a tireless — and lonely — advocate for keeping Athens in the fold:

http://www.ft.com/…html#axzz3fNRRgjxY


And Anne-Sylvaine makes a very good point:

https://twitter.com/ChassNews/status/619423006960525312


The Greek plan ran into immediate criticism in Berlin, with two top MPs in chancellor Angela Merkel’s CDU/CSU bloc questioning the credibility of the Greek government and its proposals, writes Stefan Wagstyl.

Ralph Brinkhaus, a CDU deputy chief whip, told German television on Friday that the plans now put forward were exactly the same as what the Greek government had until recently condemned and what the Greeks rejected in last Sunday’s referendum.

“In this sense, it’s really a question about their credibility.”

Hans Peter Friedrich, a CSU deputy chief whip and known sceptic on Greece, said in a radio interview:

“There are two possibilities. Either the Greek government is tricking its own people. Or it is tricking us.”

But the latest proposals were cautiously welcomed in parts of the SPD, Ms Merkel’s centre-left coalition partner. Axel Schäfer, an SPD member of the parliamentary Europe committee, told SWR radio that the Greek plan was “an important step forward, because the government and the most important opposition parties have agreed on it.” He expressed hope that it would be acceptable to the creditors:

“Greece must come under the European rescue umbrella.”


This is what Merkel, Tsipras & Co have really been saying to each other, courtesy of the UK’s Sun tabloid newspaper:

https://twitter.com/b_judah/status/619425802850017280


International creditors will make a judgment on Greece’s new proposal “probably today”, Eurogroup President Jeroen Djisselbloem said, Bloomberg reports.

Speaking in The Hague, the Dutch finance minister said he had sent the Greek proposals on for consideration.


Logistically, what would introducing a new Greek currency involve? Could the printing presses even produce banknotes fast enough? The FT Graphics team has been pondering this too.







Whoah, bulls to the fore. Beat Siegenthaler of UBS is brushing aside German scepticism and making a bold call that the Eurogroup is “highly likely” to approve Greece’s latest rescue proposals:

“Several red lines appear to have been crossed, which should assure a positive assessment by the creditors later today and tomorrow.”


Mr Siegenthaler goes on – notably referencing the influence of the French in this whole process:

“The Greek government has submitted a proposal that, if anything, seems to contain deeper reform pledges than the proposal so spectacularly refused by the Greek people last Sunday. France seems to have had significant input in the drafting of the document, according to numerous media reports, consistent with the impression that French officials, including president Hollande, have been very active this morning in promoting the new proposal.”


Emoticon Just in from Peter Spiegel: A senior EU official involved in the Greece talks told reporters in Brussels that if eurozone finance ministers agree on Saturday to reopen negotiations for a third bailout there would be no need for a summit for EU leaders on Sunday.


Now for the German reaction that really matters: Angela Merkel. Unfortunately, as FT Berlin bureau chief Stefan Wagstyl reports, thin gruel so far:

She has declined to comment on the latest Greek plan before it is assessed by the bailout monitors. Steffen Seibert, Ms Merkel’s spokesman, on Friday declined to comment on the plan’s contents saying it would first be assessed by the three institutions, the European Commission, the European Central Bank and the International Monetary Fund. However, he did welcome the fact that a concrete proposal had been delivered on time:

“This is good..but this is not an assessment of the contents.”


Wir haben noch mehr aus Deutschland. More from Germany.

Martin Jäger, finance ministry spokesman, emphasised how tough were the hurdles that Athens must jump, my colleague Stefan Wagstyl reports.

Mr Jäger said: “It would not be enough to present the proposals from the end of June in new packaging because we need a full comprehensive because we are not discussing the extension of a programme but a new three-year programme.”

Berlin continues to rule out a straightforward debt write-off for Greece, with officials echoing Ms Merkel’s words on Thursday when she said there would not be “a classic hair cut”. However, her words left open the possibility of debt relief.

Mr Jäger said that the talks could focus on “restructuring or reprofiling or specific measures”. But he said this could only come in the context of Greece agreeing and implementing a reform programme, starting with parliament discussing draft laws right now. Repeating finance minister Wolfgang Schäuble’s words to the Greek government, he said: “Just do it”.

But then Mr Jäger has added: “There is in this area [profiling] very little room for manoeuvre.”


Even as the French are openly optimistic, the Germans really are keeping their counsel for the time being. This just in from my colleague Stefan Wagstyl in Berlin:

Asked if there was optimism in Berlin about a possible deal, Steffen Seibert, Angela Merkel’s spokesman, said: “The question of whether we are optimistic depends on how the assessment of the institutions turns out.”


Meanwhile, in the markets, euro traders have flip-flopped repeatedly of late, struggling to figure out whether to buy or sell the euro on good Greek news, writes Katie Martin. Today, the verdict is clear: buy.

The currency was up by 1.24 per cent against the dollar on Friday at $1.1171. Against the yen, the euro’s jump is even starker: it’s up by 2 per cent.


Bulletin from Greece, where we are monitoring what’s happening with the ruling Syriza party, mindful of divisions within it. Christian Oliver, one of our team on the ground in Athens, reports:

Panayotis Lafazanis, the leader of the radical left in the governing Syriza coalition, is being quoted by Greek media as opposing the deal, raising the spectre of internal divisions in Athens.

“The Greek proposal is not in line with Syriza’s programme. It cannot respond to the problems of the country and deliver positive prospects,” he said.

Yet Euclid Tsakalotos, finance minister, said: “Everything should be concluded tonight”.


BBC reporting that there will be a parliamentary debate in Athens at 1900 – presumably local time


Meanwhile, trawling the continental European press coverage of the Greek drama, Frankfurter Allgemeine Zeitung (FAZ) says that it’s striking that there is a new chapter heading in the latest proposal called “Privatisation”.

Until now, FAZ’s Tobias Piller writes, the communist wing of the Syriza government had been opposed to any kind of privatisation and had already started to put on ice various planned privatisations.

These projects are now to be concluded – “abgeschlossen”, in the German – including the ones for developing regional airports and the sale of the former Hellinikon airport at Athens.


More positive vibes just in from Paris:

French prime minister Manuel Valls has described Greece’s basket of reforms as “balanced, positive”, reports our Anne-Sylvaine Chassany.

The letter sent from Athens outlining immediate and medium-term measures “demonstrates a real willingness to move forwards and to reform,” he told lawmakers, adding it was “an important step that allows dialogue.”

Keeping Greece in the eurozone and in the EU is a geopolitical issue “of the highest importance,” he added.


As we are discovering, this part of Greek crisis game theory appears to be about avoiding “negative waves” and being positive. And the French appear to showing the way.

Perhaps they have been borrowing from the tactics of American tank platoon commander Oddball in the classic 1970 film “Kelly’s Heroes”?


Tony Barber, the FT’s Europe editor, has just posted this blog – entitled Syriza’s empty promises – in which he is scathing of the chances that Athen’s current government will keep to the promises it is making in its latest bailout proposal. But, he argues, that doesn’t mean there won’t be a deal:

It is possible, nonetheless, that the creditor governments will take a deep breath and state that, with some tweaks, the new Greek proposals can serve as a basis for a deal that keeps Greece in the eurozone. This is undoubtedly the wish of the French government and of the European Commission.


Even with the tone sounding a bit more positive across Europe, the FT’s Peter Spiegel reminded his Twitter followers earlier that should the finance ministers give the deal a green light on Saturday there are still other hurdles. A number of national parliaments in the eurozone need to give their approval:

https://twitter.com/SpiegelPeter/status/619438027824345088

For those with no access to Twitter, this is what the message said:

#EU official says 6 eurozone parliaments must approve reopening of #Greece bailout talks: German, Dutch, Finn, Austria, Slovak, Estonia


We are hearing rumours that the FT’s Peter Spiegel might have cloned himself so he can be in more than one place at the same time. He popped up on CNBC a bit earlier to pour a bit of cold water on all the positive spin swirling around the eurozone and markets this morning about the latest Greek bailout proposal.

He suggested that while eurozone finance ministers are likely to give a green light for negotiations to resume tomorrow, that doesn’t guarantee a deal can necessarily be done on the basis of the current offer on the table.

He reminded viewers of two key issues. Firstly, the Greek proposal is similar in substance to a compromise offer made by creditors two weeks ago, which was overwhelmingly rejected in a national referendum at the weekend.

Secondly, the assumptions about Greek primary surplus targets over the next three years, on which that June proposal was based, are no longer valid as the Greek economy has been hit by the escalating crisis in recent weeks. So while those parties that have been more supportive of Greece in recent weeks, such as the French, might be upbeat, others may be less so.

He told viewers:

It think we have to wait from the Germans and the IMF before we can say this is going to be good enough.”


And if you want to watch that full interview with the FT’s Peter Spiegel, follow the link on this Tweet from CNBC:

https://twitter.com/CNBCWorld/status/619484886391521280

alternatively, if you are having access to Twitter blocked at work, click here.


I think we might rename this the Peter Spiegel – Greek crisis Live blog as either he or his clone has been at it again. If you haven’t as yet read this profile of Greek prime minister Alexis Tsipras by our Brussels bureau chief, or the artificially created entity with identical genetic make up, what are you waiting for?

Here’s a taster:

At the start of the present chapter of the five-year-old Greek crisis, many who negotiated with the prime minister found him engaging and pragmatic, coming away convinced he was a man they could do business with. In recent weeks, that has changed. Every time a deal looked closer, one senior eurozone official says, Mr Tsipras would huddle with aides. Things they thought had been agreed would then unravel, leading many to believe he had become captive to those around him. “They [creditors] had just become tired, eventually, of his fickleness,” said the official.

Eurozone leaders had reason to believe he was a dealmaker. Although Syriza has its roots in Greece’s Communist party, Mr Tsipras’s rise to its leadership came at the expense of older, more hardline elements of its founding generation, including Alekos Alavanos, his predecessor and longtime champion, forced out by Mr Tsipras in 2008. Allies insist Mr Tsipras is a man of strong principles. But they acknowledge his greatest strength is not ideological purity so much as an ability to find compromise.


And more from the Brussels bureau chief who has an estimate of what the Greek bailout request adds up to – €53.5bn – and how it breaks down, which suggests the final bill will have to be quite a bit bigger:

https://twitter.com/SpiegelPeter/status/619491265730756608

and for the unfortunates with no Twitter access, here is the text:

#Greece’s €53.5bn bailout estimate seems old tranche (€7.2bn)+IMF/ECB repay (€46bn). No bank recap or deficit financing. Bill will be bigger


Here’s a snap of the man of the moment, Alexis Tsipras from earlier today when the Greek PM arrived for a session of ruling Syriza’s leftist party parliamentary group at the Parliament building in Athens


This just in from Athens on Reuters:

ATHENS, July 10 (Reuters) – Greece’s main opposition conservatives said on Friday they would back the leftist government of Alexis Tsipras to secure a cash-for reforms deal with the country’s international creditors that will keep the country within the euro zone.
Lawmakers are due to vote later on Friday on proposals presented to Greece’s creditors which include measures to raise taxes, introduce a raft of privatisations and cut public spending in areas such as defence.
“The New Democracy party gives the prime minister not only the authorisation to reach an agreement, but also the mandate to avoid the country’s exit from Europe and the euro,” the party said in a statement.


Eleftheria Kourtali and Christian Oliver, the FT’s team on the ground in Athens, have just told us that the dissenting faction within the Syriza party, led by Panagiotis Lafazanis, minister of productive reconstruction, environment and energy, has presented its disagreements with the government’s proposals, which will be sent to the EU institutions in a letter.

The letter, which has also been signed by MPs Kostas Lapavitsas and Thanasis Petrakos, as well as members of the political secretariat Stathis Leotsakos, Antonis Davanelos and Sophi Papadogianni, calls on Alexis Tsipras, the PM, not to yield to “the blackmail of the creditors”.

The faction is critical of Tsipras because they argue he should have prepared an alternative plan in the event of a Grexit. The letter calls on Tsipras to implement a bridging-programme to prepare the country for the adoption of a national currency.


It looks like one person who won’t be turning up for the vote later in the Greek parliament is Yanis Varoufakis, the former finance mininster, who says he won’t be in parliament today due to “family reasons”.

The FT”s Christian Oliver in Athens reports that Varoufakis says that he fully supports Euclid Tsakalotos, his successor, on his battle at the eurogroup “for the Greek debt”, which is an interesting caveat.


In case you were wondering how things are going to play out in Athens later in the Greek parliament, well frankly so am I.

The debate on the bailout package that has gone to the creditors is due to start at 7pm local time, so 5pm BST (16:00GMT), but that could slip I understand. After that the timing of any vote remains unclear


This opinion piece for the FT published earlier today by Slovak finance minister, Peter Kazimir, doesn’t pull any punches. Slovakia has been one of the toughest eurozone members in terms of the Greek bailout. In 2010, it was the only country to withdraw from the eurozone’s original €110bn Greek rescue, and the government nearly failed to support an increase in size in the eurozone’s €440bn bailout fund in 2011.

He says of the Greek government:

Ideology, political grandstanding and patriot games took precedence over the practical need to govern, and to compromise with European partners and the International Monetary Fund. Much trust has been lost. Now, however, the only thing that matters is what comes next.

But argues that “whatever the outcome of talks over the future of Greece, we have to work hard to deepen our currency union in the aftermath.”


As things stand ahead of the Greek parliamentary debate, the eurozone is still split along its traditional lines as our splash says:

A new Greek reform proposal aimed at restarting bailout talks with creditors drew praise from France but a muted reaction from a more sceptical government in Germany.

But Jennifer Blanke, the chief economist of the World Economic Forum, argues in this blog post that debt relief alone will not fix the problem. She argues there are three competitive weakenesses that the country needs to address:

● The education system does not deliver the quality education needed for a dynamic economy.

● Corruption is rife in both the public and private sector

● New business creation continues to be hindered by excessive red tape


The latest we have from the FT’s Eleftheria Kourtali in Athens is that four members of the right-wing Independent Greek party, Anel, which is Syriza’s junior partner in the coalition, have expressed misgivings about the government bailout proposal at the party’s parliamentary group meeting.

Syriza has 149 seats in the Greek parliament out of a total of 300 seats, while its junior partner has 13. The main opposition – New Democracy – has 76 seats and has already indicated it will back Alexis Tsipras’ bailout proposal.

The centrist party, To Potami, with 17 seats, and Pasok, the socialists, with 13 seats are expected to vote in favour, while the Communist KKE, with 15 seats, and the far-right Golden Dawn, with 17 seats, are expected to vote against.


the FT’s Eleftheria Kourtali in Athens sums things up as they stand ahead of the vote in the Greek parliament:

The bill looks likely to pass through parliament with opposition support, however with between 5 and 15 MPs in the ruling coalition expected to vote against it, the government is at risk of losing its parliamentary majority


And here is our new splash, which says it all really. All eyes on the eurozone finance minister on Saturday with the vote in Athens later expected to go through easily. But any loss of parliamentary majority – Alexis Tsipras can’t afford to lose more than 11 votes – could result in a reshuffle of the governing coalition


Greek media is reporting that the Left Platform, the hard left in Syriza, will back Tsipras’ deal in tonight’s vote. That suggests the Greek PM may even avoid a damaging split.

And if you were wondering why the former finance minister, Yanis Varoufakis, couldn’t make the vote tonight, it’s because he has gone to the island of Aegina (or Aigina, just a 45-minute ferry ride from Athens, which as we reported last weekend is suffering along with the rest of the Greek economy.

Here he is disembarking from a ferry in a red Mini Cooper:

https://twitter.com/georgekakousis/status/619545210910023680


Right that’s it, we are going to close the blog down for the day. It’s been unusual in that of all the recent days during the Greek crisis, the tone has been more upbeat. There have been positive around Europe about the Greek’s latest bail out plan albeit mixed with caution, not least in Germany.

The key question now is whether the eurozone finance ministers will be convinced enough from what they hear tomorrow from the three bailout monitors – the European Commission, the European Central Bank and the International Monetary Fund – to give the green light for negotiations to resume between Athens and its creditors. If not, there will be a crisis summit of EU leaders in Brussels on Sunday to prepare for Grexit.

Good evening and thanks for joining us.