It seems instructive to filter the direct quotes uttered by the various ‘officials briefed on preparations’ in this Reuters story on the promised second Greek bailout being delayed….
“There are proposals to delay the Greek package or to split it, so that an immediate default is avoided, but not everything is committed to…They’ll discuss the options…There is pressure from several countries to hold off until there is a concrete commitment from Greece, which may not come until after they’ve held elections…This would mean we have to pay the 14.5 billion euros on March 20, which would be a total waste…But there is still money left from the first program so we could do it…This would mean that the talks on the second program, including PSI, which is part of the package, would be moved until there is a new Greek government in place.”
So here, apparently, is the new plan: 1) hold the Greek electorate directly to account (elect a government on a pro-austerity mandate or we blow you up), 2) then pay-off the bond holders (the PSI involves E30bn of sweeteners for private creditors), and 3) refuse to release further aid until there is clear evidence that the reform timetable is kept.
We’ve speculated that solvent members of the eurozone are goading a Grexit here. But the picture is one of an ugly blend of bullying and bureaucratic farce.
Bailout 2.0 has been under discussion for four months now. Euro zone finance ministers will hold a conference call at 16.00 GMT. We’d love to read a transcript of that.
Simon Jenkins, over at the Guardian, notes that all these contradictory exchanges and half-baked reschedulings….
…show only puny statesmen rearranging beach furniture in a hurricane.
It’s difficult to disagree.
Related link:
More on leaked Greek debt deal documents – FT Brussels Blog