Greek Prime Minister Alexis Tsipras and finance minister Yanis Varoufakis
Germany and its allies are ready to let Greece leave the euro unless Prime Minister Alexis Tsipras accepts the conditions required to extend his country’s financial support, according to Malta’s finance minister, Edward Scicluna.
Greece’s creditors are cranking up the pressure on Tsipras as he seeks a deal to prevent his country defaulting on its obligations as early as next month. By bowing to German demands, the premier risks a domestic backlash from voters and party members whom he’s promised an end to austerity.
As Greece heads toward 11th-hour funding talks with its euro-area membership on the line, bondholders are surprisingly sanguine about its failure so far to secure a deal.
Forget the strategists at Commerzbank AG who say there’s a 50 percent chance it’ll leave the currency bloc, and those at Barclays Plc who put the exit risk higher even than in the 2012 debt crisis. The Bloomberg Greece Sovereign Bond Index shows those with money at stake aren’t seeing a significant increase in the chances of a euro-zone departure….
The Government is obliged to cut the deficit by €3.1 billion in 2014 and €2 billion in 2015, a total of €5.1 billion. Following the arrangement with the ECB to replace the promissory notes with long-term bonds, the Government believes it has scope to reduce the €5.1 billion by €1 billion in the two years.
Minister for Social Protection Joan Burton made a play in a Dáil debate last week to start using the proceeds from the deal this year, saying there was “a limit beyond which additional austerity becomes counterproductive”. Such remarks were very poorly received in troika circles.
“This doesn’t go down at all well,” said a European source in Brussels familiar with the rescue programme. “It doesn’t send the right signal to the other member states.”
Although Minister for Transport Leo Varadkar took an opposing view to Ms Burton in the Dáil debate, Tánaiste Eamon Gilmore said on Friday the deal will bring “a tangible benefit for people” in the next budget.
Keeping schtum. It was all you had to do. But nooooo….
(Above: The Defend Our Homes League protesting in March outside Ulster bank in support of Lee Wellstead who was evicted from his home in Laois along with his daughter)
The Government has agreed with the EU-IMF troika that it will fix the legal loophole preventing banks seizing the homes of defaulting borrowers, raising fears of a wave of repossessions in the new year.
The commitment was made in the latest review of the State’s bailout programme, published yesterday. The Government has said the Personal Insolvency Bill, which is due to come into effect before the end of the year, will provide “adequate protection” for the family home.
David Hall, director of the Irish Mortgage Holders Organisation, said there was an absence of stringent conditions in the Bill to give adequate protection to the family home. He said that while the personal insolvency arrangement provided for in the Bill was designed to protect the family home, it was subject to the agreement of the bank involved. He said the bank effectively had a veto.
“There’s a lottery there. You can avail of it but the bank controls the process,” he said.
The government has said it is working on a strategy with the European Union to exit Ireland’s rescue programme at the end of next year without a second bailout.
Mr Noonan said he was very confident Ireland would exit the programme by the end of next year “in all circumstances”, irrespective of getting relief on the historic cost of bank recapitalisation.
Mr Howlin pointed out that Ireland had drawn down 80 per cent of the €67 billion loan from the troika and had fulfilled 160 conditions.
“We are the most successful programme country. We have hit all the targets,” he said.
Separately, a highranking member of Germany’s central bank warned against using Europe’s nascent banking union to deal with “past sins”. Andreas Dombret, a Bundesbank executive director, argued in an interview with The Irish Times against the ESM fund taking on legacy banking assets. He insisted he was nottrampling over Irish hopes for debt relief but said people should be “particularly realistic” about what was doable or not.