• Greeks told they must come up with proposal by this afternoon for Eurogroup meeting
• Juncker: a solution “won’t arrive overnight”
• Capital controls bite as Dixons subsidiary pays staff in cash and pharmacies short of medicines
• European Central Bank tightens noose as creditor powers punish Greece
• Why are the Greeks celebrating, ask baffled Germans
• Greek referendum: fear and trepidation in Athens’ Beverly Hills
Pesky voters getting in the way of real politics
Matthew Holehouse, our man on the front line of European bureaucracy, writes:
Parliament president Martin Schulz is asked by a journalist: “Aren’t you afraid that by accepting the Greek narrative of the referendum, it means that more and more populist politicians will use referendums as a political weapon in budgetary issues.”
Schulz replies that other MEPs have “raised exactly that problem”.
“What will happen if there is a referendum in another country, putting in doubt a possible compromise with Greece? What will then happen? Therefore I think we are in a difficult situation.”
Pesky voters, eh?
Schulz: “Grexit cannot be our aim”
More on Schulz, president of the European Parliament, who is giving a press conference.
He said: “I am in favour of Greece remaining in the euro zone,” despite the fact that last Thursday he said that if there was a ‘no’ vote Greece cannot use the euro. (See previous post.)
“Those people who want to split up the euro zone I think are wrong,” he said. “My personal opinion is that Grexit cannot be our aim.”
In response to a question from a reporter, Schulz said that he had never called for Greek Prime Minister Alexis Tsipras’s resignation.
“I never called for the resignation of Mr Tsipras or the Greek government.”
He also said that both sides need to move in negotiations.
Oops… Schulz caught in a flip flop over Grexit
Matthew Holehouse, our man in Brussels, writes:
Mr Juncker tells the European Parliament he has been texting Tsipras from the chamber floor. He reels against “demagogues and populists”.
Martin Schulz, the European Parliament president, is asked if he regrets saying that Greeks cannot use the Euro if they vote no. “I didn’t say that,” he snaps at a press conference.
Oh really? Because according to Reuters, he said:
“Is Greece still in the euro after this referendum? That is certainly the case, but if they say ‘no’ they will have to introduce another currency after the referendum because the euro is not available as a means of payment,” Schulz told Germany’s Deutschlandfunk radio in an interview broadcast on Sunday and taped on Thursday.
And what of Varoufakis?
He’s been spotted hanging out in Athens, drinking and chilling out – while his former colleagues sweat it out to come up with a deal.
The Daily Mash also reports* that he has “unveiled plans to ride around on his motorbike having martial arts battles with local villains”.
*This is a joke.
Capital controls taking their toll
Restrictions on payments abroad mean that there is difficulty importing goods to Greece – including pharmaceuticals. One pharmacist has listed all the medicines they are missing as a result of not being able to import them.
Last week, Constantine Michalos, president of Athens Chamber of Commerce, said there could be “shortages on the shelves” by early next week and tourists could be left without “basics” including food and medicine.
Meanwhile, Reuters reports that at least three large companies in Greece including its biggest electronic appliances chain have paid staff in cash.
One of these stores includes Kotsovolos, a unit of Britain’s Dixons Carphone.
A spokeswoman from Dixons said Kotsovolos paid staff in cash last week and was waiting to see what happens this week.
Two other big companies operating in Greece have also paid part or their wages in cash, while a third was considering offering its employees such an option for the next scheduled payment at the end of the month, people familiar with the matter told Reuters on condition of anonymity.
Juncker is texting Tsipras
After being heckled in the European Parliament by MEPs, Juncker revealed that he was in text contact with Tsipras.
“Stop all this chatter about me looking at my telephone all the time. I am texting, as they say in Franglais, with the Greek prime minister,” said a clearly irritated Juncker.
“I don’t know if you will have the chance to do the same but I have to do that today. I am doing my work, so stop this stupid banter, for which there is no cause.”
Greece is cutting itself off from the internet
Here’s a great piece from Mic on how methods of online payment in Greece are drying up. First PayPal, then the Apple App Store, iCloud and Dropbox.
Greeks can’t activate new iPhones because it relies on money going out of the country – via the internet.
One developer has created Zero Fund with money from tech investor Marc Andreessen. It is a proxy for transactions, for those Greek companies blocked by capital controls.
Christine Lagarde is staying at home – and there will be no debt relief on the table
Already signs are pointing to a rather unsuccessful Eurogroup meeting today.
Mehreen tweeted yesterday that head of the IMF Christine Lagarde will not be attending today’s Eurogroup.
The FT’s Lex column argues today that “If debt relief had come earlier, the eurozone would not be facing this moment of truth at all”.
It is also one of the points on the statement of unity created by the Greek political parties yesterday – and a sticking point for both Greece and the IMF, which in last week’s debt sustainability report stressed the importance of it in any new package.
Kathimerini: 16 of 18 eurozone countries want Grexit
According to Greek newspaper Kathimerini, Grexit is beginning to sound like a good option for most of the eurozone. They write:
“According to sources in Brussels, 16 of the other 18 countries in the eurozone are in favor of letting Greece leave the eurozone and they will have to weigh up the cost of any agreement to keep Athens in the single currency.”
Check-in with the markets
Ahead of today’s Eurogroup meeting, the European markets have opened quite cautiously – Frankfurt’s DAX gained 0.36 pc, and the CAC in Paris edged up 0.15 pc. London’s FTSE 100 index rose 0.1 pc, but is now down slightly.
The mantle of the Pickelhaube
Our economics reporter Szu Ping Chan has spotted a bizarre theme in all this: the Pickelhaube.
The metal hat, used as armour by the Prussians and others, is now considered a sign of German imperialism. Just for fun, here’s a picture of my favourite ever German Otto von Bismarck wearing one. What a moustache.
Speaking of Bild – the German daily has a solution to this Greek thing. It’s a tad radical, however.
Juncker: let’s turn down the rhetorical volume
Matthew Holehouse writes from Brussels:
We are watching the events in the European Parliament in Strasbourg.
Jean Claude Juncker says the purpose of today’s meeting is to restart talks, “turn down the rhetorical volume”, and offering the Greek government a chance to “explain how it sees us extricating ourselves from this programme.”
A solution “won’t arrive overnight”. “We have to put our little egos, and in my case a very large ego, away,” he says.
He says he does not “understand” the meaning of the Greek vote, saying the deal voted for was not on the table.
“My aim is to prevent Grexit. I am against Grexit.”
He is wounded by the criticism he has received since a speech last week.
“It is time to stop these outbursts, this shooting from the hip. It is unacceptable for the European Commission to be deemed terrorists by the Greek government. That is not the kind of Europe we want. We have tried hard and if only everyone else had tried as hard.”
He gives a lengthy defence of a speech last week, in which he warned Greeks not to “let down the European Union”. He also attacks newspaper reports that he has disappeared.
“I have not disappeared. I come to the European Parliament to talk about the referendum. This is the home of democracy,” he says.
He says it is “extraordinary and unacceptable” that he cannot talk about Greece.
“I am not a technocrat.”
Manfred Weber, a senior German Conservative, says they must respect the demands of all EU states. There are rules “that need to be respected and applied.”
“Sunday was not a good day for Europe. It harmed Europe.”
Jean-Claude Juncker is speaking to the European Parliament.
To give you a flavour of his speech:
Today and beyond
French PM: there’s a basis for a deal
French prime minister Manuel Valls has said that the basis for a deal with Athens was there.
He said: “France is convinced that we can’t take the risk of Greece leaving the eurozone,” a move that would affect economies across the globe, Manuel Valls told French radio. “The basis for a deal exists… There is no taboo subject when it comes to (Greek) debt, on the restructuring.”
A brief timetable for today
(All times BST)
07.30 European Commission president Jean-Claude Juncker to address European Parliament
09.30 European Parliament president Martin Schulz to give press conference
12.00 Eurogroup of eurozone finance ministers to meet
17.00 Eurozone heads of government to meet
All this, plus keeping a watch out for more announcements from the ECB, and on the markets – on which the result of the referendum had surprisingly little effect. If hopes of deal are dashed once again today, expect to see some more movement there and in bonds.
Today marks another Eurogroup meeting with finance ministers and a eurozone summit scheduled for after – the idea being that today will be a day of action, and a deal will be made.
The Greek leaders have been told that they have a deadline of this afternoon to come up with far-reaching proposals. But noises coming out of the ECB, Germany and EU leaders does not indicate total optimism about today’s outcome.
Greek banks remain closed, and will remain so for at least another two days.
Yesterday, the ECB continued its freeze on emergency liquidity assistance (ELA), rather than raise it as Tsipras wanted. But in a highly contentious move, opted to tighten the collateral rules it imposes on lenders to access the lifeline, intensifying the squeeze on the cash-starved banks, which are set to remain closed for another two days.
The ECB said the move was based on the deteriorating quality of the bank collateral, most of which is made up of Greek government bonds. It declined to specify the level of haircut imposed.
Germany’s vice-chancellor Sigmar Gabriel issued a humilitating ultimatum to Greece, and said the landslide rejection of EU austerity demands in the Greek referendum changed nothing, demanding that the Left-wing Syriza government must accept further belt-tightening without any prospect of debt relief if it wishes to remain in the eurozone.
Angela Merkel met with Francois Hollande but the German chancellor failed to heal the rift with her French counterpart, insisting Greece has been offered very “generous” bail-out terms, but that Sunday’s referendum result meant that conditions for a discussion over a new deal were not in place.
Mr Hollande was more conciliatory, saying the “the door is open for discussions”.
In Greece, Yanis Varoufakis was replaced as finance minister with former chief negotiatior Euclid Tsakalotos. Tsipras rallied Greece’s five main political parties behind a national unity declaration.
It called for “substantive talks” on debt relief, an investment blitz to fight mass unemployment and an immediate shot of liquidity for the country’s banking system.
The White House intervened again last night, as President Barack Obama spoke by phone with Francois Hollande and Treasury Secretary Jack Lew spoke with Tsipras and new finance chief Euclid Tsakalotos, urging a constructive outcome.
[“source – telegraph.co.uk”]