Greek Referendum on IMF/Troika deal

[RogueBeaver]

Merkel: Greece hasn't done enough yet to start negotiations about a new bailout program.

[Torie]

Merkel: Greece hasn't done enough yet to start negotiations about a new bailout program.

I guess Obama's phone call to Merkel did not have the effect that he desired. I sort of get this feeling that she wants Grexit. She's done.

[RogueBeaver]

Next 48 hours should give us better clues.

[Zanas]

EU ask Greece to put out a plan for several purposes.

1: EU expect the member countries to know best what kind of reforms they can make.

That may be the most hilarious thing I've read all week !

[Antonio the Sixth]

Renzi: all EU leaders will meet on Sunday, waiting for new Greek proposals then.

Sunday? Seriously? Does nobody (and yeah, that includes Tsipras) understand the urgency of the situation?

[jaichind]

"You know, there was a promise for today. Then, they're promising for tomorrow," said Lithuanian President Dalia Grybauskaite. "For the Greek government it's every time 'manana.'"

[RogueBeaver]

Actually: Greece has till 0830 Friday for detailed proposals, per Juncker.

[Antonio the Sixth]

EU ask Greece to put out a plan for several purposes.

1: EU expect the member countries to know best what kind of reforms they can make.

That may be the most hilarious thing I've read all week !

Yeah, it's an especially ludicrous claim considering that they rebuked the first set of (perfectly credible and sound) reforms that Tsipras had proposed because they weren't neoliberal enough for their taste...

[jaichind]

I am not sure the financial system in Greece, especially banks, can last until Sunday.  There are already signs that even the tourist sector is beginning to slide with 20%-30% more cancellations.   That is the only source of cash now and even that is now falling.

[RogueBeaver]

Summit may be cancelled if Greece comes up with an acceptable plan by deadline. Implication is that if no, Sunday would be talking Grexit.

[Antonio the Sixth]

There were talks about Tsipras addressing the EP tomorrow. Is this confirmed?

[Torie]

Renzi: all EU leaders will meet on Sunday, waiting for new Greek proposals then.

Sunday? Seriously? Does nobody (and yeah, that includes Tsipras) understand the urgency of the situation?

All leaders are needed to effect Grexit, and thus the scheduled meeting. So as said above, I think if some deal is cut, there does not need to be a meeting of all 28 members. I assume that Greece understands that the Sunday meeting is a gun pointed at its head, and it was called to put pressure on Greece to cry uncle, and do it now. I would not be surprised if by back channel, Greece has been informed as to what it needs to "propose" to avoid a Sunday Grexit meeting. All of this is mere speculation by me of course.

Addendum: Perhaps not so speculative after all.

[jaichind]

http://www.telegraph.co.uk/finance/economics/11724924/Europe-is-blowing-itself-apart-over-Greece-and-nobody-can-stop-it.html

An interesting, not sure how true it is, account of behind the screens on what Tsipras and Syriza  were up to in the run up to the referendum and afterwards.

[ag]

Maybe the Greeks were trying to find out what would fly first today. Anyway, when the Greeks do put a plan on the table, then what happens? Do the Euros then put some other plan on the table? Is making the Greeks put up something first for cosmetic purposes? Or is the idea that they are being told you need to put up a plan with this or that content, and if you don't we will just say no, because the only plan that will fly is one that you propose yourself, so this chat about bullying you, is put to an end?  None of this makes much sense to me. Maybe part of the answer is that the Euros themselves can't agree on anything, and thus need something concrete to talk about first. But there seems to be quite a bit of agreement (France and Italy perhaps being the exceptions) on one thing:

Well, it would be nicer if Greeks were to propose an acceptable plan, rather having a German-proposed plan imposed on them. It is that, or...

[Torie]

Maybe the Greeks were trying to find out what would fly first today. Anyway, when the Greeks do put a plan on the table, then what happens? Do the Euros then put some other plan on the table? Is making the Greeks put up something first for cosmetic purposes? Or is the idea that they are being told you need to put up a plan with this or that content, and if you don't we will just say no, because the only plan that will fly is one that you propose yourself, so this chat about bullying you, is put to an end?  None of this makes much sense to me. Maybe part of the answer is that the Euros themselves can't agree on anything, and thus need something concrete to talk about first. But there seems to be quite a bit of agreement (France and Italy perhaps being the exceptions) on one thing:

Well, it would be nicer if Greeks were to propose an acceptable plan, rather having a German-proposed plan imposed on them. It is that, or...

So far Greece has proposed nothing, other than to ask for more money.

[ag]

Maybe the Greeks were trying to find out what would fly first today. Anyway, when the Greeks do put a plan on the table, then what happens? Do the Euros then put some other plan on the table? Is making the Greeks put up something first for cosmetic purposes? Or is the idea that they are being told you need to put up a plan with this or that content, and if you don't we will just say no, because the only plan that will fly is one that you propose yourself, so this chat about bullying you, is put to an end?  None of this makes much sense to me. Maybe part of the answer is that the Euros themselves can't agree on anything, and thus need something concrete to talk about first. But there seems to be quite a bit of agreement (France and Italy perhaps being the exceptions) on one thing:

Well, it would be nicer if Greeks were to propose an acceptable plan, rather having a German-proposed plan imposed on them. It is that, or...

So far Greece has proposed nothing, other than to ask for more money.

Well, but would it not be nice?

[Torie]

Maybe the Greeks were trying to find out what would fly first today. Anyway, when the Greeks do put a plan on the table, then what happens? Do the Euros then put some other plan on the table? Is making the Greeks put up something first for cosmetic purposes? Or is the idea that they are being told you need to put up a plan with this or that content, and if you don't we will just say no, because the only plan that will fly is one that you propose yourself, so this chat about bullying you, is put to an end?  None of this makes much sense to me. Maybe part of the answer is that the Euros themselves can't agree on anything, and thus need something concrete to talk about first. But there seems to be quite a bit of agreement (France and Italy perhaps being the exceptions) on one thing:

Well, it would be nicer if Greeks were to propose an acceptable plan, rather having a German-proposed plan imposed on them. It is that, or...

So far Greece has proposed nothing, other than to ask for more money.

Well, but would it not be nice?

More than nice, perhaps the coming of the Jubilee. Well, tomorrow they will propose what they proposed before that was rejected per the Telegraph article, so alas the word "acceptable" is missing from your little equation.

[jaichind]

Give such low level of trust I think the only way to get to a deal is a variation of a double blind single round auction.  EU will be told "if the Greeks came up with a good multi-year austerity plan put the best debt reduction via extension of maturity you can ever agree to and put that plan in a sealed envelope."  The Greeks will be told "if the EU came up with a good debt reduction plan what is the most aggressive austerity you can agree to and put it in a sealed envelope."  Then we open both envelopes at the same time.  EU and Greeks have to agree to a deal where both items are part of a linked deal with no adjustments.  If either side does not agree to the package then the whole thing is off and we go for a Greek exit of the Euro.

 

[Torie]

Give such low level of trust I think the only way to get to a deal is a variation of a double blind single round auction.  EU will be told "if the Greeks came up with a good multi-year austerity plan put the best debt reduction via extension of maturity you can ever agree to and put that plan in a sealed envelope."  The Greeks will be told "if the EU came up with a good debt reduction plan what is the most aggressive austerity you can agree to and put it in a sealed envelope."  Then we open both envelopes at the same time.  EU and Greeks have to agree to a deal where both items are part of a linked deal with no adjustments.  If either side does not agree to the package then the whole thing is off and we go for a Greek exit of the Euro.

 

That's very good, but don't both items have to be in each envelop? Otherwise, the Greeks could say the debt reduction plan is inadequate, and/or the EU could say the austerity plan was inadequate. In other words, what the Greeks considers a "good reduction plan," and what the EU considers a "good multi-year austerity plan," needs to be defined in advance.

[jaichind]

Give such low level of trust I think the only way to get to a deal is a variation of a double blind single round auction.  EU will be told "if the Greeks came up with a good multi-year austerity plan put the best debt reduction via extension of maturity you can ever agree to and put that plan in a sealed envelope."  The Greeks will be told "if the EU came up with a good debt reduction plan what is the most aggressive austerity you can agree to and put it in a sealed envelope."  Then we open both envelopes at the same time.  EU and Greeks have to agree to a deal where both items are part of a linked deal with no adjustments.  If either side does not agree to the package then the whole thing is off and we go for a Greek exit of the Euro.

 

That's very good, but don't both items have to be in each envelop? Otherwise, the Greeks could say the debt reduction plan is inadequate, and/or the EU could say the austerity plan was inadequate. In other words, what the Greeks considers a "good reduction plan," and what the EU considers a "good multi-year austerity plan," needs to be defined in advance.

That is the whole point.  If they sit there and argue what is a "good" plan then it will never end since that is what we have been doing for the last 5 months.  Knowing that if what is in the envelope is not good enough for the other side means the whole thing blows up at least forces both sides to put in their "bottom line" entry.  If any side thinks what the other offers is not good enough then the deal is off.  It has to be a sudden death or else any side feels by giving away too much the other side will take advantage of you.   I am surprised "game theory" Varoufakis did not think of this and propose it.  But I guess this might lead to results one way or another which is not what he seems to be up to.

[Torie]

OK. I am not sure the EU is ready to agree to the details of the debt restructure however. I think they want the austerity in place before going there, and may not have game played all of that out adequately. Just a guess.

[jaichind]

According to

http://www.bloomberg.com/news/videos/2015-07-07/tsipras-says-greece-has-submitted-aid-proposals-greek-

Tsipras Says Greece Has Submitted Aid Proposals.  But then how come on one on the EU side acknowledged getting it or show us a copy of it.  Knowing Tsipras it is mostly some scribble of some random thoughts he has on the topic on a napkin that he handed over to Merkel and he counts that as a proposal.   

[The Other Castro]

According to

http://www.bloomberg.com/news/videos/2015-07-07/tsipras-says-greece-has-submitted-aid-proposals-greek-

Tsipras Says Greece Has Submitted Aid Proposals.  But then how come on one on the EU side acknowledged getting it or show us a copy of it.  Knowing Tsipras it is mostly some scribble of some random thoughts he has on the topic on a napkin that he handed over to Merkel and he counts that as a proposal.   

I guess you could say his proposal is...Merky at best.

[ag]

Jokes aside, all this is simply horrible. And will be worse. People will be jumping out of the windows and hanging themselves. And I do not like any of it.

[ag]

Looks awful.

http://www.bbc.com/news/business-33435602