The EuroGroup meeting of finance ministers has ended without a deal today, but there’s at least one more week of frantic meetings ahead that might yet pull a solution out of a hat. Look to Friday’s meeting between Greek Prime Minister Tsipras and Russian President Putin and Monday’s emergency summit of European leaders
One of the puzzles of the Greek debt crisis is why the euro has hung in so strongly even as the crisis threatens the currency’s future. One potential explanation is something that’s being called Grangst.
Maybe the speech was part of an attempt to split the creditor group by attacking the IMF, which has been the most adamant of the creditors in demanding that Greece get specific about its plans for budget cuts and pension reforms. Maybe Prime Minister Tsipras thinks he can get the European Commission, marginally the creditor that seems to be most sympathetic with Greek demands, to broker a political deal without the IMF
Talks between Greece and its creditors collapsed in Brussels last night as Greek negotiators walked out after just 45 minutes. Creditor nations, and the International Monetary Fund, the European Commission, and the European Central Bank said that the newest Greek proposal was not a serious attempt to break the impasse.
After months of saying that there is no Plan B, government representatives preparing for next week’s EuroGroup meeting of EuroZone finance ministers put planning for a Greek default on the agenda for the first time
Today, the International Monetary Fund walked away from negotiations with Greece. Yesterday, Standard & Poor’s cut its credit rating on Greece to CCC just two notches above default.
The most effective pressure looks to be coming from Greek savers who withdrew 4.9 billion euros from Greek banks in April and probably more in May. Deposits last week dropped below 130 billion euros, down from 150 billion in 2112
In May the U.S. economy added a net 280,000 jobs. That was up from a revised 223,000 jobs added in April and above the average monthly gain of 251,000 jobs over the last 12 months
Despite the chaos I’m more optimistic on a deal to release the 7.2 billion euro extension. I just hope that everybody realizes that projections say Greece will need 30 billion euros more by September
There’s been some progress on taxes. But there’s been almost no movement on pensions with creditors—the International Monetary Fund, the European Commission, and the European Central Bank—holding to their position that the system isn’t sustainable without cuts to benefits.
There’s certainly no negotiating going on in the Greek debt crisis. Greece submitted its final proposal last night—before seeing a proposal from its creditors. Those creditors submitted their own proposal this afternoon.
To me the revisions were worse than the headline numbers indicate. Real final sales, which takes volatile changes in inventory levels out of the data, showed a 1.1% decline from the first quarter of 2014. That’s the worst drop in real final sales since the 3.3% decline in the first quarter of 2014 and just edged out the 1% decline in real final sales in the first quarter of 2014.
