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This is another failure that brings a little more of a Greece default at the end of the month. The meeting of the eurozone on the economic situation in Athens ended in the evening of Thursday, June 18 without agreement or decision, after a little less than an hour and a half of discussion.
Visibly lift, director of the International Monetary Fund (IMF), Christine Lagarde, was more scathing, calling its desire for a return to dialogue “with adults in the room” . She said, however, still open to negotiation, saying that “IMF teams remained for weeks in Brussels to wait, they are divided, but they can come back any time and stay as long as necessary. “
The Minister of the Greek economy, Yanis Varoufakis, was nevertheless came to Luxembourg with a 5-page proposal, according to information from the World . But these were very general and focused on the need to renegotiate the Greek debt. An attitude that caused the resentment of other participants, creditors claiming at this stage they did not intend to extend the aid plan for Greece, which would precipitate the EU to a “Grexit”.
Dombrovkis Valdis, Vice-President of the European Commission responsible for the euro, saw in this failure to agree a “strong signal sent to Greece to engage seriously in negotiations . “ However, he announced that ” Eurogroup remains ready to meet at any time, “, leaving the door open to a resumption of negotiations.
In the Output of the meeting, European Commissioner Pierre Moscovici called on the Greek government “to agree to make reasonable compromises to avoid catastrophic fate. Closer to the end of the game, all our teams are loaned to work day and night. This agreement is still possible. “ A scenario that could take place at the eurozone Council, attached to 22 June.
chain Consequences
All day the atmosphere was heavy in Luxembourg at the beginning of a qualified Eurogroup “last chance.” While in the stages of the European Council building, the nineteen finance ministers of the euro zone were beginning their meeting Thursday morning by Cyprus and the European economic situation (the subject Greece was shifted to the end of the discussion), in the press room, the media repeatedly turned the “worst case scenarios”. What will happen if no agreement “reforms against new money” was found before June 30? At that time, Athens has to repay 1.6 billion euros to the IMF when its coffers are empty
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Christine Lagarde, Managing Director of the Fund, said bluntly, arriving in Luxembourg. If Greece does not pay the IMF on 30 June, so she “ will be in default, it will be in a position of IMF vis-à-vis the arrears 1 st July, but I hope this will not be the case, I really hope so, “.
In theory, under the procedure in the IMF, thirty days after the initial payment incident, M me Lagarde must formally inform the board of the institution, representing its 188 member states, the amount of arrears and, two months later, file a “complaint”
But this description to the “board” of the IMF, in addition to an extremely negative signal to financial markets and to Greek investors. – if they have not moved forward – would have a chain effect. The European Financial Stability Facility (EFSF), created in disaster, in 2010, to come to the aid of Greece, which has lent a total about 131 billion euros in the country, provides in-law, a clause “cross default”.
Once IMF management informs the board of default of a country, this information is considered a “default event” by the EFSF. Who then has three options. He may request immediate repayment of amounts owed by Greece … Obviously insane. It can also close your eyes. He can still see that a default in its view, has happened, and to reserve the right subsequently to act (by choosing the first option of repayment, or that close their eyes).
The ECB, which is also one of the debtors of Athens, would not have such a clause, forcing him to take a position on non-payment of Greece to the IMF. But the Frankfurt institution would probably be forced to move. Wednesday, June 17 evening, the Institute of Frankfurt has decided once again to raise the ceiling of its emergency funding to Greek banks, the only source of funding that remains of the Athens government. “As long as the solvency of these banks is not in question, there is no question of moving ,” said a European source.
” Keeping his cool “
Another big question agitated the press room on Thursday in Luxembourg. If there were to be introduced capital controls in Greece to Greek banks to avoid bankruptcy in case of panic investors who would rush at the counters for all withdraw their euros, which would make the decision? This means pessimism. Answer: the Greek government, apparently on the advice of the Governor of the Bank of Greece on Wednesday launched a strong warning to the government Tsipras, saying that without agreement with its creditors, the country was the “Grexit”
Read also: The Bank of Greece increased pressure on Mr Tsipras
It should also, according to European sources, which are indicated on the issue in recent days , an agreed text in the Greek Parliament. Some suggested, in Luxembourg, the European Commission should be consulted, but were not sure …
“In fact, we are still on purely speculative scenarios, it is not clear how all this could happen, we are never faced, “ confessed several European sources Thursday. Are creditors losing the pedals? The Commissioner for Economic Affairs Pierre Moscovici repeated, entering the Eurogroup on Thursday to reach an agreement, “everyone must keep his cool” …
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