Lagarde: Greece's withdrawal from the euro zone would be disastrous

[yota691]

GMT 9:07 2015 Thursday, January 22 : Latest Update

Lagarde: Greece's withdrawal from the euro zone would be disastrous

 

 

 Athens : see the head of the International Monetary Fund Christine Lagarde, said that the withdrawal from the euro zone will have an effect «catastrophic» Greece.

 Greek "Syriza" opposition party and is making steady progress on the ruling Conservative Party led by Prime Minister Antonis Samaras, before early elections scheduled for January 25 (January) this month.

 

And feel the financial markets with great concern that the victory "Syriza" could provoke a confrontation with the European Union and the International Monetary Fund, which provide loans to Athens may result in the departure of Greece from the euro zone.

 

She said Lagarde, in an interview with TV «RTI» station Irish, when asked about the implications of a possible withdrawal of Greece from the euro zone: «First and foremost, this is not allowed according to the rules of the euro zone ... and secondly I think it would have implications disastrous for Greece. »

 

The scenario of a Greek exit from the euro zone, which was addressed to him recently, most analysts considered unlikely. But the question of the debt, which amounted to 177.7 percent of gross domestic product in 2014 continued presents itself, even with a possible extension of the aid program.

 

And plans to Alexis Tsipras, the leader of the hardline Left Party "SYRIZA," the completion of the austerity policy in the event of his election and hoped restructuring wide debt raises the concern of many European capitals.

 

It is noteworthy that the United States is the only bright planet in the global economy for the year two thousand and fifteen light.

 

That's what you say the latest IMF forecast, which, not surprisingly, that looks very bleak, in general.

 

President of the International Monetary Fund, Christina Lagarde said "The oil prices and growth in the United States are not a cure for points inherent weakness elsewhere.

 

Where exactly? Let's take a closer look at who will grow weaker this year, and why

 

In the program, Christine Lagarde Snhaor about lessons learned from the Irish experience.

 

As we will go to the Economic Forum in Davos in order to know about the reason for being different this year.

 

[Butifldrm]

First It Refused To Bail Out Its Insolvent Banks; Now Iceland Set To Officially Withdraw European Union Application

 

Submitted by Tyler Durden on 01/18/2015 19:02 -0500

•  

  • Iceland may be a small country, but when it comes to dealing with big problems it is truly the modern equivalent of David in the battle against the status quo Goliath. First, it was Iceland, and only Iceland, refusing to bail out its banks, when every other western nation was being held hostage by those who stood to lose the most from a financial collapse, and even going so far as throwing some of its banking executives in prison. And now, as MBL reports, Iceland's con­ser­v­a­tive In­de­pen­dence Party will sup­port a res­o­lu­tion in par­lia­ment to for­mally with­draw Ice­land's ap­pli­ca­tion to join the Eu­ro­pean Union.

    As MBL further reports, yhis was con­firmed to­day by Bjarni Benedik­ts­son, Min­is­ter of Fi­nance and the par­ty's chair­man, in an in­ter­view with the state broad­caster RÚV.

    So yes, dear Greece: as you prepare for elections whih may result in the first official departure of a European country from the Eurozone, not only has Iceland shown that one can voluntarily not seek to be part of the "greater European good", but in fact voluntarily seek to not be part of said good.

     

     

    The EU ac­ces­sion talks were put on hold af­ter the gen­eral elec­tions in April 2013. The elec­tions re­sulted in the In­de­pen­dence Party and the cen­trist Progress Party form­ing a coali­tion gov­ern­ment backed by 38 MPs out of 63 in to­tal. Prime Min­is­ter Sig­mundur Davíð Gunnlaugs­son said ear­lier this month that he ex­pected a res­o­lu­tion with­draw­ing the EU ap­pli­ca­tion to be put to the par­lia­ment soon and For­eign Min­is­ter Gun­nar Bragi Sveins­son, who as Gunnlaugs­son be­longs to the Progress Party, has said it would be sense­less not to with­draw the ap­pli­ca­tion. If any­thing Sveins­son has said there are more ar­gu­ments for do­ing so now than a year ago.

     

    The gov­ern­ment put such a res­o­lu­tion to the par­lia­ment last year but the mat­ter was not con­cluded be­fore sum­mer re­cess. Mainly be­cause of a fil­i­busted which was staged by the op­po­si­tion call­ing for a ref­er­en­dum on the is­sue. As a con­se­quence the gov­ern­ment de­cided to post­pone the mat­ter as it con­sid­ered more press­ing to get other is­sues ac­cepted. Pri­mar­ily laws paving the way for a gov­ern­ment pro­gram to re­duce house­hold debts.

     

    "This is a res­o­lu­tion which we sup­ported last year," Benedik­ts­son said adding that noth­ing had changed since then. Asked if that meant the con­ser­v­a­tives would sup­port a res­o­lu­tion to with­draw the EU ap­pli­ca­tion he replied: "Yes, we would do that just like we did last time."

    And the cherry on top: as recently as 2013 the country was growing at over 5%: a rate unmatched anywhere in Europe, and on par with the latest annualized US GDP. The one difference, however, is that Iceland does not mandate the "GDP-boosting" and middle-class impoverishing Obamcare.

http://www.zerohedge.com/news/2015-01-18/first-it-refused-bail-out-its-insolvent-banks-now-iceland-set-officially-withdraw-eu

[Butifldrm]

 

The ECB Releases The Details Of Its Debt Monetization And Money Printing Program

 

Submitted by Tyler Durden on 01/22/2015 10:42 -0500

• • Those curious to learn why Greece is the only country excluded form the ECB' QE (for now) as the soon to be former Greek PM Samaras said moments ago...

    • GREEK PM SAMARAS SAYS WITHOUT CLOSING THE CURRENT REVIEW, GREECE WILL BE EXCLUDED FROM ECB BOND-BUY PROGRAMME

    ... will not find any additional information in the ECB's supplement on its asset purchase program. Neither will they learn why something that is in effect monetary financing, and is prohibited by Article 123, is not monetary financing. However, they will learn that the proceeds from the ECB's money printing can be used "to buy other assets and extend credit to the real economy." The ECB adds that "In both cases, this contributes to an easing of financial conditions." Actually the only thing it will contribute to is making the world's billionaires into the world's trillionaires.

    

     

    Finally, anyone wondering if the ECB's purchases are pari passu, here is the answer: "Regarding creditor treatment, the Eurosystem accepts the same (pari passu) treatment as private investors with respect to securities purchased by the Eurosystem, in accordance with the terms of such securities."

    Full details from the ECB:

    ECB announces expanded asset purchase programme

    • ECB expands purchases to include bonds issued by euro area central governments, agencies and European institutions
    • Combined monthly asset purchases to amount to €60 billion
    • Purchases intended to be carried out until at least September 2016
    • Programme designed to fulfil price stability mandate

    The Governing Council of the European Central Bank (ECB) today announced an expanded asset purchase programme. Aimed at fulfilling the ECB’s price stability mandate, this programme will see the ECB add the purchase of sovereign bonds to its existing private sector asset purchase programmes in order to address the risks of a too prolonged period of low inflation.

    The Governing Council took this decision in a situation in which most indicators of actual and expected inflation in the euro area had drifted towards their historical lows. As potential second-round effects on wage and price-setting threatened to adversely affect medium-term price developments, this situation required a forceful monetary policy response.

    Asset purchases provide monetary stimulus to the economy in a context where key ECB interest rates are at their lower bound. They further ease monetary and financial conditions, making access to finance cheaper for firms and households. This tends to support investment and consumption, and ultimately contributes to a return of inflation rates towards 2%.

    The programme will encompass the asset-backed securities purchase programme (ABSPP) and the covered bond purchase programme (CBPP3), which were both launched late last year. Combined monthly purchases will amount to €60 billion. They are intended to be carried out until at least September 2016 and in any case until the Governing Council sees a sustained adjustment in the path of inflation that is consistent with its aim of achieving inflation rates below, but close to, 2% over the medium term.

    The ECB will buy bonds issued by euro area central governments, agencies and European institutions in the secondary market against central bank money, which the institutions that sold the securities can use to buy other assets and extend credit to the real economy. In both cases, this contributes to an easing of financial conditions.

    The programme signals the Governing Council’s resolve to meet its objective of price stability in an unprecedented economic and financial environment. The instruments deployed are appropriate in the current circumstances and in full compliance with the EU Treaties.

    As regards the additional asset purchases, the Governing Council retains control over all the design features of the programme and the ECB will coordinate the purchases, thereby safeguarding the singleness of the Eurosystem’s monetary policy. The Eurosystem will make use of decentralised implementation to mobilise its resources.

    With regard to the sharing of hypothetical losses, the Governing Council decided that purchases of securities of European institutions (which will be 12% of the additional asset purchases, and which will be purchased by NCBs) will be subject to loss sharing. The rest of the NCBs’ additional asset purchases will not be subject to loss sharing. The ECB will hold 8% of the additional asset purchases. This implies that 20% of the additional asset purchases will be subject to a regime of risk sharing.

    For media queries, please contact Stefan Ruhkamp, tel.: +49 69 1344 5057.

    Notes:

    A technical annex is published alongside this press release with further operational details.

    TECHNICAL ANNEX ?ECB ANNOUNCES OPERATIONAL MODALITIES OF THE EXPANDED ASSET PURCHASE PROGRAMME

    The expanded asset purchase programme will comprise the ongoing purchase programmes for asset-backed securities (ABSPP) and covered bonds (CBPP3), and, as a new element, purchases of additional euro-denominated securities that meet the following eligibility criteria:

    1. They fulfil the collateral eligibility criteria for marketable assets in order to participate in Eurosystem monetary policy operations, as specified in Guideline ECB/2011/14, as amended, subject to the fulfilment of the additional criteria listed in points 2-4 below.
    2. They are issued by an entity established in the euro area classified in one of the following categories: central government, certain agencies established in the euro area or certain international or supranational institutions located in the euro area.
    3. They have a first-best credit assessment from an external credit assessment institution of at least CQS3 for the issuer or the guarantor, provided the guarantee is eligible in accordance with Guideline ECB/2011/14, as amended.
    4. Securities that do not achieve the CQS3 rating will be eligible, as long as the Eurosystem’s minimum credit quality threshold is not applied for the purpose of their collateral eligibility. Moreover, during reviews in the context of financial assistance programmes for a euro area Member State, eligibility would be suspended and would resume only in the event of a positive outcome of the review.

    Inflation-linked and floating rate securities issued by central governments, certain agencies established in the euro area and certain international or supranational institutions located in the euro area are eligible for purchase under the expanded asset purchase programme.

    All eligibility criteria and other modalities of the ABSPP and CBPP3 remain unaltered under the programme. In addition it was decided that:

    • Securities purchased under the expanded asset purchase programme that are not covered by the ABSPP or CBPP3 must have a minimum remaining maturity of 2 years and a maximum remaining maturity of 30 years at the time of purchase.
    • Securities purchased under the expanded asset purchase programme that are not covered by the ABSPP or CBPP3 will be subject to an issue limit, an aggregate holding limit and other operational modalities specified, in particular, with the aim of preserving market functioning and allowing the formation of a market price on a given security. Moreover, the limits ensure that the application of collective action clauses for a bondholder decision is not obstructed.
    • Regarding creditor treatment, the Eurosystem accepts the same (pari passu) treatment as private investors with respect to securities purchased by the Eurosystem, in accordance with the terms of such securities.
    • Purchases of securities under the expanded asset purchase programme that are not covered by the ABSPP or CBPP3 will be allocated across issuers from the various euro area countries on the basis of the ECB’s capital key.
    • Holdings of securities issued by central governments, certain agencies established in the euro area and certain international or supranational institutions located in the euro area will be valued at amortised cost, in line with Guideline ECB/2010/20 on the legal framework for accounting and financial reporting in the ESCB, as amended.
    • The eligible counterparties for purchases shall be those eligible for the Eurosystem’s monetary policy instruments, together with any other counterparties used by the Eurosystem for the investment of its euro-denominated portfolios.
    • Holdings of securities issued by central governments, certain agencies established in the euro area and certain international or supranational institutions located in the euro area purchased under the expanded asset purchase programme will be eligible for securities lending.
    • Transactions in securities purchased under the programme will be published in a weekly report which will list holdings at amortised cost by asset type. In addition, for securities purchased under the expanded asset purchase programme that are not covered by the ABSPP or CBPP3, a report of the amounts held, valued at amortised cost, and the weighted average remaining maturity by issuer residence will be released on a monthly basis.

http://www.zerohedge.com/news/2015-01-22/ecb-releases-details-its-debt-monetization-and-money-printing-program

 

Greece out of ECB's QE plan unless bailout review sealed-PM

ATHENS Thu Jan 22, 2015 10:51am EST

 

 

 

Jan 22 (Reuters) - Greek Prime Minister Antonis Samaras hailed the ECB's government bond buying programme but said Athens would not be able to take advantage of it unless it completed a stalled bailout review.

The European Central Bank launched a government bond-buying programme which will pump hundreds of billions of new money into a sagging euro zone economy.

Countries like Greece will be eligible as long as they are under EU/IMF bailout programmes but the eligibility is suspended until any pending review is completed with a positive outcome.

That has raised the possibility of Greece being excluded if the radical leftist Syriza party comes to power in Sunday's general election. The party has said it will not complete the current review and wants to renegotiate debt while cancelling austerity.

"Today's decision by European Central Bank makes it clear that without closing the review with our lenders on the current programme that ends in a month, we will be excluded," Samaras said in a televised statement responding to the ECB's move. (Reporting by Costas Pitas and Angeliki Koutantou, editing by Deepa Babington)

http://www.reuters.com/article/2015/01/22/ecb-policy-greece-idUSA8N0TB02P20150122

Edited January 22, 2015 by Butifldrm

[temperament5]

Greece is in a bad position all around.  The anit-austerity Syriza party is demanding a restructuring of Greece's debt.  They want a portion of the debt to be written off. There will be a vote on January 25 for the parties and if the Syriza party wins this is what they want in order to stay in the eurozone.  The EU does not want Greece to exit, however, Germany doesn't want to grant Greece debt relief if it means leaving the German taxpayers to foot the bill. 

 

If they can't come up with a resolution on their debt that satisfies both sides, Greece will exit.  It has been said that in the short term Greece will have dire consequences, but maybe not so in the long term.  It will however cause ripples in the EU and other global markets.

[TBomb]

 

 

 

Rinci and Merkel stressed the importance of reviving the European project and the survival of Greece inside

 

      Friday   23   January   2015 | 18:38

 

 

 

 

The most prominent in the news

 

 

 

Italian Prime Minister Matteo Rinci "stressed the importance of reviving the European unity project in collaboration with German Chancellor Angela Merkel that supported the Italian reforms wide in this way and to ensure the survival of Greece within the euro zone."

He stressed Rinci "the need to restore enthusiasm for the European project, which is the only way to deal with those who seek to break up the unity of our continent," adding that "recent developments on the economic level and of adopting the European Commission principle of flexibility and the announcement of the European Central Bank's massive program to buy sovereign debt and falling euro the lowest in 11 years against the dollar are all factors compatibility possible despite the different views. "

He acknowledged Rinci "need for Italy to accelerate the payment of unprecedented reforms led by the government, which include reform of the political structure and the electoral law and labor laws and local taxes and administration, as well as education, scientific research and innovation process," stressing that the most important is the "re-optimism and confidence to the Italians." For its part, in turn, Merkel stressed the "importance of the ambitious reforms that have led Rinci in order to initiate a new phase-sensitive balance between cost and benefits," confirmed "their determination to push the European Commission President Jean-Claude Juncker plan useful economic recovery forward and confidence in the possibility of good work with the Italian Prime Minister in this regard ".

And on the implications of the legislative elections scheduled to be held in Greece after tomorrow and win is likely to block opposition leader Alexaz Tsipras, which calls for easing of austerity measures imposed by the euro zone countries, particularly Germany on his country, Merkel pointed out that "solidarity is the basis of the principles on which the Union," European " , I explained, "I want Greece to remain, despite the difficulties experienced by a part of our history."

 

http://www.alqurtasnews.com/news/76590/%D8%B1%D9%8A%D9%86%D8%AA%D8%B3%D9%8A-%D9%88%D9%85%D9%8A%D8%B1%D9%83%D9%84-%D8%A3%D9%83%D8%AF%D8%A7-%D8%A3%D9%87%D9%85%D9%8A%D8%A9-%D8%A7%D9%86%D8%B9%D8%A7%D8%B4-%D8%A7%D9%84%D9%85%D8%B4%D8%B1%D9%88%D8%B9-%D8%A7/ar

Edited January 23, 2015 by TBomb

[Butifldrm]

 

Putin's Unexpected Victory: Europe Furious That Greece Is Now A Russian Sanctions Veto

 

Submitted by Tyler Durden on 01/29/2015 08:57 -0500

• •  

    Two days ago, Zero Hedge first, and shortly thereafter everyone else, pointed out something stunning: the biggest surprise to emerge so far out of the new anti-Troika/austerity Greek government was not so much its intention to proceed with the first test of "Odious Debt" - this was largely known in advance - but its dramatic pivot away from Germany and Europe, and toward Russia.

    As we noted before, not only has Greece already blocked all ongoing privatization processes, a clear snub of Merkel and the Troika which demands the piecemeal blue light special sale of Greece to western buyers as part of the "bailout", but is also looking at plans to reinstate public sector employees and announce increased pensions for those on low incomes: further clear breaches of the Troika's austerity terms.

    But the most important message that Tsipras is sending to Europe is that (after meeting the Russian ambassador first upon his election) Greece is now effectively a veto power when it comes to future Russian sanctions!

    This was first hinted when the Foreign Minister Nikos Kotzias, who arrives in Brussels today to discuss possible additional sanctions on Russia over the conflict in Ukraine, said a few days ago that the Greek government disagreed with an EU statement in which President Donald Tusk raised the prospect of “further restrictive measures” on Russia. As Bloomberg observed before, in recent months, Kotzias wrote on Twitter that sanctions against Russia weren’t in Greece’s interests. He said in a blog that a new foreign policy for Greece should be focused on stopping the ongoing transformation of the EU “into an idiosyncratic empire, under the rule of Germany.”

    And Europe, shocked that one of its own has dared to question its "unanimous" policy toward Russia, a policy driven by the US foreign state department whose opinion of Europe is best captured by the hacked and intercepted "**** the EU" outburst by Victoria Nuland in February 2014, has been forced to backtrack. From DPA:

     

     

    The European Union denied Wednesday that it ignored Greek objections when it issued a statement raising the prospects of new sanctions against Russia.

     

    The row is the first of several clashes expected between Brussels and Greece's new prime minister, Alexis Tsipras, who was elected Sunday on promises to renegotiate the bailout granted to Greece by its European neighbours and the International Monetary Fund.

     

    Tsipras has in the past also spoken out against sanctions on Russia, rejecting the use of "Cold War language.

    "

     

    The EU has imposed several rounds of sanctions on Russia for its role in the Ukraine crisis, notably economic measures restricting Russian access to European credit markets and European exports. On Tuesday morning, EU leaders in a joint statement tasked their foreign ministers with considering "further restrictive measures" when they meet on Thursday.

     

    But Tsipras complained to Greek media that his country had not been consulted on the statement.

     

    "Greece do not consent," a statement by Tsipras' office said on Tuesday evening, adding that the announcement from Brussels violated "proper procedure."

     

    A spokesman for EU President Donald Tusk, who issued the statement on behalf of the leaders, denied that Athens had been sidelined during the preparation of the text.

     

    "We consulted everybody, as we always do, and we didn't ignore or sidestep Greece in any way - quite to the contrary

    ," Preben Aamann told dpa. "We tried to find a special solution that would accommodate them."

    Actually what the EU "always does" is to ignore the voices and interest of everyone but the most powerful. And as for "not ignoring" Greece, apparently the EU failed. Only this time Greece, its government no longer a Eurozone lackey, will no longer let it slide: "Greek broadcaster Skai said newly appointed Foreign Minister Nikos Kotzias would bring up the issue at Thursday's meeting in Brussels. Tsipras is also expected in the Belgian capital on February 12 for an EU summit that will touch upon the situation in Ukraine."

    And here is how Russia just won another completely unexpected victory in Europe: "EU sanctions require unanimity to be implemented, so a Greek veto could block any further measures."And all thanks to the epic blunder by Brussels to allow a European nation to voice its opinion in a democratic fashion.

    It wasn't just Zero Hedge who first suggested the Greek Russian pivot: here is RBS' Greg Gibbs who says that there are now "concerns Greek government may threaten to veto further Russian sanctions in exchange for debt relief fuels fear of conflict."

    To be sure, Germany, whose theatrical opposition to money printing folded like Boehner's lawn chair last week, as it is now all too clear the preservation of German export dominance (and hence aversion to the DEM) and the sanctity of Deutsche Bank is what it is all about no matter the hyperinflationary concerns of the people, is quite furious that the grand ambitions of Europe's economic powerhouse - which as we reported moments ago has now officially entered deflation - have been crushed by tiny, depression-ridden Greece.

    Here is Germany's economy minister Gabriel, who was on the tape earlier, casting fire and brimstone at Greece. From Reuters:

     

     

    Greece should not burden the rest of Europe with its internal political debates,

    German Economy Minister Sigmar Gabriel said on Thursday, adding that Greece's own inequalities were to blame for problems that it tried to blame on its multilateral lenders.

     

    Gabriel told parliament Greece should stay in the euro but the new leftist leader Alexis Tsipras must respect the terms of its bailout. 

    Greece could not blame the "troika" of multilateral lenders for its own unfair distribution of wealth, he said.

     

    "

    All democratic people must respect the democratic decision of voters and a newly-elected government's right to decide its course 

    - but the rest of Europe's citizens should not have to expect changes in Greek politics to burden them," he said.

    Of course, as long as the changes in Greek politics allowed the rest of Europe's citizens to continue to benefit at Greek expense, nobody batted an eyelid. But change the equation and all hell breaks loose.

    And the final confirmation that suddenly tiny Greece may have all the leverage in Europe is that moments ago Germany's Foreign Minister Frank-Walter Steinmeier said that European sanctions on Russia are complicated by the "new Greek government."

    The good news for Greece, of course, is that it now has all the optionality: it can use its veto power as a bargaining chip to unblock US foreign policy in Ukraine (because at the end of the day, Europe is merely losing as a result of the Russian sanctions) and demand a debt haircut in exchange for siding with John Kerry on further Russian "punishment." Or he may simply hold the line and hold off for a competing, better offer from Russia and the BRICs, whose leverage may be nominal  now that crude is plummeting, but if and when the last shale junk bond investor blows up and the US shale renaissance is over sending crude soaring right back to $100, then watch as the oil exporters are back with a bang, and dictating geopolitical terms.

    And whatever happens, please don't remind Brussels that point 40 of Syriza's 40 Point Manifesto, aka the "nuclear option", is "Closure of all foreign bases in Greece and withdrawal from NATO."

    It is so bad that Business New Europe went so far as to ask if the New Greek Government is "Russia's Trojan horse inside the EU?"

    In any event, the European balance of power has just shifted and in a way that nobody anticipated:

    The biggest winners: if only for now: Greece and Russia (and, while it will never be admitted, all those Europeans who desperately need the Russian import market).

    The biggest losers: all the unelected Eurocrats in Brussels who at this moment are scratching their heads how to bring the bad news that there is no longer unanimity on Russian sanctions to John Kerry, and all thanks to a country nobody thought would dare to speak up.

http://www.zerohedge.com/news/2015-01-29/putins-unexpected-victory-germany-furious-greece-now-russian-sanctions-veto

[thegente]

Disastrous for the bankers and elite...good for the common folk of Greece. Their ponzi free-lunch is coming to and end and the parasites are angry...

[temperament5]

Can't wait to see what Greece will do in the coming days now that the new party is in.

[yota691]

Germany, ECB play hard ball with Greece

 

EconomyJan 31, 2015 02:09PM GMT 

 

© Reuters. A man holding an umbrella makes his way in front of the Greek parliament during rainfall in Athens

By Paul Carrel and Jussi Rosendahl

BERLIN/HELSINKI (Reuters) - German Chancellor Angela Merkel ruled out a debt writedown for Greece on Saturday, and a European Central Bank policymaker threatened to cut off funding to Greek banks if Athens does not agree to renew its bailout package.

The euro zone's paymaster and the ECB are both taking a tough line with Greece's new leftist government, whose leader swept to victory last Sunday promising that five years of austerity, "humiliation and suffering" were over.

Alexis Tsipras has also promised to renegotiate agreements with the European Commission, ECB and International Monetary Fund "troika" and write off much of Greece's 320 billion euro ($360 billion) debt, which at more than 175 percent of gross domestic product is the world's second-highest after Japan.

Merkel flatly rejected such a possibility.

"There was already a voluntary waiver by private creditors; Greece has already been exempt from billions by the banks. I don't see a further debt haircut," she told German daily Die Welt in an interview published in its Saturday edition.

"Europe will continue to show solidarity for Greece, as for other countries hit particularly hard by the crisis, if these countries undertake their own reforms and savings efforts," Merkel added in a thinly veiled threat to Athens.

Without the support of international lenders, Greece would soon find itself back in an acute financial crisis.

Unable to tap the markets because of sky-high borrowing costs, Athens has enough cash to meet its funding needs for the next couple of months. But it faces around 10 billion euros of debt repayments over the summer.

"I'M WAITING," MERKEL TELLS ATHENS

Greece's new government opened talks on its bailout with European partners on Friday by refusing to extend the program or to cooperate with the international inspectors overseeing it.

Separately, the French finance ministry said on Saturday that Greek Finance Minister Yanis Varoufakis will meet with his French counterpart Michel Sapin in Paris on Sunday and issue a statement afterwards.

Europe's bailout program for Greece, part of a 240 billion euro rescue package also involving the International Monetary Fund, expires on Feb. 28. A failure to renew it could leave Athens unable to meet its financing needs and cut its banks off from central bank liquidity support.

The ECB does not accept Greek sovereign bonds as collateral in its refinancing operations as they are below investment grade. However, it allows central bank financing to Greek banks as the country is in a bailout program.

Erkki Liikanen, a member of the ECB's policymaking Governing Council, said that funding, too, could dry up if Greece does not remain in a program.

"Greece's program extension will expire in the end of February so some kind of solution must be found, otherwise we can't continue lending," Liikanen, also the governor of Finland's central bank, told public broadcaster YLE.

Merkel said the ECB's Jan. 22 decision to pump billions of euros into the euro zone with a bond-buying program did not mean countries would end efforts to shape up their economies with structural reforms.

She put the onus on the new Greek government to present a credible economic policy.

"The goal of our policy was and is that Greece remains a permanent part of the euro-community," Merkel said.

"To that end, Greece and the European partners make their contribution. Apart from that, I am now waiting to see what concepts the Greek government will present."

 

($1 = 0.8861 euros)

[temperament5]

Interesting article. Russia has offered to help them out. This will be interesting to watch play out. Depending what Greece decides to do can impact the markets globally (if they decide to leave).