Why Greece's spillover across euro area will probably be contained this time

[CityFarmer]

Is Greece too big to fail? Other similar countries may follow suit, if Greece succeed...

A week in and Greece's new leftist PM sticks to tough line, for now

ATHENS - While it sent conflicting messages, Greece's new left-wing government spent most of its first week signalling determination to take the hard-line, anti-bailout stance that international investors and European leaders had feared.

In fewer than seven days, Prime Minister Alexis Tsipras's administration in Athens has halted several planned privatisations, started debt relief talks, took European partners to task over Russian sanctions and held a tough line with the first euro zone official to visit the country after last Sunday's elections.
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http://www.todayonline.com/world/week-an...h-line-now

[sgd]

The thing to watch is not the euro but the US Dollar. USD is in a sweet spot for the current forseeable future.

[CityFarmer]

A "tag of war" between Germany and Greece...

Greece asks ECB to keep banks afloat as debt deal sought

PARIS (Feb 2): Greek Prime Minister Alexis Tsipras began the hunt for allies against German demands for austerity as his week-old government appealed to the European Central Bank not to shut off the money tap.

Finance Minister Yanis Varoufakis said his country won’t take any more aid under its existing bailout agreement and wants a new deal with its official creditors by the end of May.

While Greece tries to wring concessions on its debt and spending plans, it needs the ECB’s help to keep its banks afloat, Varoufakis said at a briefing in Paris late Sunday.

“We’re not going to ask for any more loans,” Varoufakis said after meeting his French counterpart, Michel Sapin.

“During this period, it is perfectly possible in conjunction with the ECB to establish the liquidity provisions that are necessary.”

Tsipras, who issued a statement on Saturday promising to stick by Greece’s financial obligations, is seeking to repair damage after a rocky first week.
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http://www.theedgemarkets.com/sg/article...eal-sought

[CityFarmer]

The new government acts more responsibly, after the initial standoff. The standoff may be just part of a negotiation process with ECB, and never intended to pursue, IMO...

Greece outlines debt 'menu' in bid to win over skeptical euro zone

LONDON/ATHENS - Greece's new government dropped calls for a write-off of its foreign debt and proposed ending a standoff with its official creditors by swapping the debt for growth-linked bonds on Monday, a week after its election on an anti-austerity platform.

Finance Minister Yanis Varoufakis, in London to reassure private investors that he was not seeking a showdown with Brussels over a new debt agreement, said the new left-wing government would spare privately held bonds from losses, a source told Reuters.
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http://www.todayonline.com/world/greek-p...russia-aid

[CityFarmer]

It is very interesting to watch the interaction between Greece and Germany during pre-negotiation stage...

Merkel expects Greek funding talks to drag on for months

BERLIN (Feb 4): Germany expects talks with Greece to drag on until after the current round of bailout funding runs out at the end of the month and is prepared to play a waiting game until April or May, when the country approaches a cash crunch, a person familiar with the matter said.

Greece would not immediately go bankrupt at the end of February because it has resources to last beyond that point and Germany is ready to hold off until there is a more urgent need to strengthen its bargaining position, said the person, who asked not to be identified discussing internal talks.
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http://www.theedgemarkets.com/sg/article...rag-months

[specuvestor]

Yup watching events unfolding live is always more intriguing and educational than reading about it years later in a book

[yewkim]

The consequences is serious. If Greece leave now, the very next day, they wake up will find themselves in the toilet for the next 20 years. And their whatever currency will be toilet paper for the next 20 years.

I still don't think they dare. Now we read they back out. Hope they follow. No choice, year of prosperity through borrow money got to follow by many more years of suffering.

Leaving now is even worse, then going through austerity.

[specuvestor]

They had it worse for the past 5 years already. During AFC one year of 1998 already beh tahan before the 99 rebound if you are old enough to remember

I think leaving the Euro is last resort for Greece but I can imagine why eveything is on the table. During AFC the currency adjusted... but no such adjustment for Greece. IMF is a one trick austerity pony that never learn that austerity doesn't work in tough times except through much pain and suffering. Austerity should happen when Mr Market has yet to force your hand.

[sgd]

can russia bailout greece?

if greece joins the "axis" others with similar austerity woes may attempt to follow ask uncle putin for help thereby undermining EU alliance then in exchange for russian help sanctions removed or visibly reduced in size.

[CityFarmer]

Let's see the progress...

Greek, German ministers clash as ECB snub hits Athens' banks

ATHENS/BERLIN - Greece's new leftist finance minister clashed openly with his powerful German counterpart on Thursday as Athens' borrowing costs leapt and bank shares plunged following the European Central Bank's decision to stop funding the country's lenders.

After blunt talks in Berlin, German Finance Minister Wolfgang Schaeuble said he had told Greece's Yanis Varoufakis it was not realistic to make electoral promises that burdened other countries, and they had "agreed to disagree".

A defiant Varoufakis, whose hard left-led government was elected on a platform of scrapping austerity measures and negotiating a debt write-off, contradicted him at a joint news conference, saying: "We didn't even agree to disagree."

Schaueble said he and Varoufakis had been unable to bridge their difference. And while he respected the choice made by Greek voters, it was essential the new government stick to agreements reached with the European Union and work with the IMF, the ECB and the European Commission.

Prime Minister Alexis Tsipras' 10-day-old government has said it will not extend a bailout program due to expire at the end of this month and has refused to cooperate with the so-called troika of international lenders. It has also said it will reverse some unpopular measures imposed by foreign creditors and halt some privatizations, raise the minimum wage, rehire fired public sector workers and restore a bonus for poor pensioners.

"Greece won't take orders any more, especially orders through emails," Tsipras told his left-wing parliamentary group, denying that he had returned empty-handed from a European tour.

"In only a week, we won allies that we haven't won in the last five years of the crisis," he said.

In an apparent reference to the tough stance taken by the ECB and others, Tsipras said: "Greece cannot be blackmailed because democracy in Europe cannot be blackmailed."

The ECB's decision on Wednesday to stop accepting Greek bonds in return for funds shifted the burden onto Athens' central bank to finance its own banks, dealing a big setback to government efforts to buy time to negotiate a new debt deal.

The Athens Stock Exchange FTSE Banks Index <.ftatbnk> plunged 22.6 percent initially and ended 10 percent down. Three-year government borrowing costs leapt to nearly 20 percent, leaving Greece utterly shut out of the capital markets.
Central bank governor Yannis Stournaras said Greek banks were solid and under control.
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http://www.todayonline.com/world/greece-...epage=true