Greece Talks Not Going Well , At Least For Greece - What a Shocker ?

http://www.telegraph.co.uk/finance/financialcrisis/9094558/Eurozone-leaders-battle-to-secure-Greek-deal.html

Members of the eurogroup promised a deal would be done but the talks ran into the night in a tug-of-war battle over the yawning gap in Greece's finances.

There were violent protests in Athens as Greek democracy and sovereignty appeared to be being carved up by demands from individual European countries.

Northern European "hardliners" - including Holland, Germany, Austria and Finland - demanded a "permanent representation" of the troika in Athens so that officials from the European Union, the European Central Bank (ECB) and International Monetary Fund (IMF) can run Greek finances.

Dutch finance minister Jan Kees De Jager said: "I'm in favour of more control, more supervision, a more permanent presence of the troika, as well as a kind of escrow mechanism, in order to establish more control in Athens of the money itself."

They also called for the bail-out funds, which are needed to avert a Greek default on March 20, to be placed in an escrow account out of Athens' reach to ensure interest payments take priority over government spending services. Greece pleaded to retain control of its finances, even offering to introduce a new law giving interest payments priority.

On Monday night eurozone officials admitted there was shortfall in funds with the Greek debt ratio hovering at around 124pc, four points above the IMF target. The IMF has insisted the second bail-out must aim to reduce Greek debt to 120pc of GDP by 2020, a target that has slipped by 9pc in just four months as the economy has plunged. Without IMF involvement, eurozone members will have to pay more, which is politically impossible for many.

On Monday night the eurogroup debated three options to reduce the Greek debt burden without boosting the funds. If the ECB waived its profits on its Greek bonds, experts say €15bn could be wiped off the country's debts. Politicians also discussed reducing eurozone interest rates or investigating whether national central banks could participate in a debt swap, though with costs to taxpayers these two are more controversial. Officials also reopened the tortuous private bondholder talks to see if Greece's private creditors would take a bigger than 50pc haircut on €200bn-worth of bonds.

Meanwhile, the latest figures showed the ECB did not invest in any eurozone bonds last week, the first time its bond-buying support programme has stopped since August.

Concerns the Greek bail-out agreement is inadequate overshadowed a rally on European stockmarkets that was triggered by Chinese measures to pump cash into its economy. The Euro Stoxx 50 closed up 1.19pc, Germany's Dax rose 1.46pc and the FTSE 100 climbed 0.68pc.