Thursday, July 16, 2015

Special Greece Report ( July 16 , 2015 ) Thursday Morning Updates ( Greece Parliament passes first round of required measures , next key vote on July 22nd , Bridge loan and 3rd Bailout items , ECB in focus , Debt sustainability related items , Domestic and International politics , odds & ends ! )

Evening Wrap...

Schäuble-IMF won't be part of 1st tranche of planned 3rd Greek bailout. No doubt true but odd for Berlin to announce

Greek dep FinMin Mardas tells state TV banks to open Mon. Legislative decree to be issued Fri w details of restrictions

Dijsselbloem: We agreed w IMF to look at "debt service", not debt level/GDP. This fall we'll make the calculation of debt sustainability.

Dijsselbloem: IMF only involved if 1. IMF is being paid 2. MOU which IMF likes 3. perspective of debt sustain.(IMF will only decide in fall)

increased by EUR 900mln for one week after sources suggested requested EUR 1.5bln

Morning Tweets.....

Euro drops below $1.09

Mr. Market not thrilled with the Greek parliamentary vote. Greece's 2y yields rise to 26.8%.



And of course ECB & IMF were going to be paid .....

Discussions continue on EFSM & collateral guarantees, says official

: FinMin deputies agree to €7bn EFSM bridge funding w SMP guarantees. Written procedure starts tonite

So €35bn from IMF, primary surpluses, privatisations & bond market? Good luck with that!

€50bn ESM + €16bn IMF 2nd bailout + €20~€25bn Investment Fund?

A new IMF €15bn program post-Apr 2016 might just do.

Perhaps, but you read the DSA update. You really think they'll pony up for a new post-April programme?

You really think they're going to get €20bn-€25bn from the privatisation fund in 3 years?

Νο way.

That's my point. IMF thinks €1.5bn at most. And surplus esti is €6bn, which seems optimistic. And IMF hinting it won't disburse.

How Much Austerity Has Europe Actually Endured?

's Draghi returns as face of Euro scarred by Brussels brinkmanship.


: EC now revised real GDP growth to -2%/-4.0% in 2015. It was projected at 2.9% in Autumn '14 forecasts & 0.5% in Spring '15 forecast

At least, all this makes for an interesting meeting today, doesn't it?


I expect to on balance keep ELA limit for banks steady today and until there is a green light for start of negotiations.

The ECB should start fine-tuning ELA now with a calibrated cap lift and/or lower haircuts. If not today, then strong hint for next week.

In other words, the ECB should strengthen forward guidance relative to ELA and haircuts frontloading.

's Schäuble says achieving debt sustainability difficult within the euro.

Quick summary of Greece overnight: (1/3) Austerity package passed w 32 Syriza MPs against.

(2/3) After first big clash outside parliament, rioting sporadic. Traffic moving freely by midnight. Reshuffle on cards today.

(3/3) Action moves to Frankfurt: ELA lifted? Jack Lew in talks w Draghi. EC to firm up EFSM bridge funding for Greece.

's Schäuble in DLF: Greek recovery only w/ haircut BUT debt forgiveness not possible within Euro. Reiterates idea of Euro sabbatical

* Germany's Schaeuble says will not bend a single rule for ESM aid for Greece - RTRS

IMF, Brussels at loggerheads over debt


Deal which "only time will show if economically viable" approved by Greek parliament amid SYRIZA opposition

* Germany's Schaeuble tells German radio after the 'yes' from athens we are a step further, it is an important step - RTRS

* Germany's Schaeuble many economists, including the IMF, doubt whether greece's problems can be solved without a debt haircut - RTRS

* Germany's Schaeuble temporary grexit would perhaps be the better path - RTRS

* Germany's Schaeuble no one knows how it should work without a debt haircut - RTRS

German FinMin Schäuble: , Commission said poses risk to Eurozone so we would not bend the law in activating .

cabinet reshuffling may be delayed until Friday (via )

Greek Parliament Passes Bailout Legislation: The margin of victory, if you can call it that, was 229 out of 300.

Left Platform's Lafazanis, who voted against deal with creditors, insists he continues to support govt but opposes memorandum (austerity).

It's cutting it pretty damn fine. But a big cabinet reshuffle could hold him in there for a bit.

Biggest vote defection in recent Greek history, if I'm not mistaken. Syriza can't afford to let 38 MPs go.

Police arrest 25 for violent clashes outside Parliament


, , 15.07.15: The fight-back against the govt surrender to the starts getting serious.

Franco-German split: French MPs vote in favour of starting negotiations BEFORE Greek MPs adopt reforms. Bundestag to vote on Friday.

How unanimous agreement all 28 EU leaders can be torn up by EC - PM told MPs it was binding when ratifying ESM

Tory 2015 manifesto on EFSM: "We took Britain out of eurozone bailouts - the first ever return of powers from Brussels." Oh dear

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