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Greek Gambit Succeeds As Germany Said To Ease Bailout Terms

With tax receipts tumbling and ELA funding hitting its limit, the Greeks are up against it. On the other side, the Greek strength in the face of EU's demands (and Eurogroup's realization of the uncertainty this could lead to) has apparently led to the start of compromise. As Bloomberg reports,

  • *GERMAN, GREEK OFFICIALS SIGNAL COMMON GROUND ON AID DEAL
  • *GERMANY SAID NOT TO INSIST ALL PARTS OF CURRENT BAILOUT STAY
  • *GREECE SAID TO BE OPEN TO SURPLUS, PRIVATIZATION DEBATE

As Merkel noted earlier, "Europe is always about finding a compromise," and it appears they are getting closer  - as long as a 'program' continues. Bundesbank's Weidmann has noted that Grexit would not solve either side's longer-term problems.

 

As Bloomberg reports,

Greece and Germany are pursuing a deal on the conditions required to continue the Greek bailout as each side signals a willingness to compromise, according to government officials taking part in the talks.

 

Germany won’t insist that all elements of Greece’s current aid program continue, said two officials in Berlin. As long as the program is prolonged, they said, Germany would be open to talking about the size of Greece’s budget surplus requirement and conditions to sell off government assets.

 

For its part, Greece is prepared to commit to a primary budget surplus, as long as it’s lower than the current 4 percent of gross domestic product, according to Greek government officials. Prime Minister Alexis Tsipras’s coalition also might be willing to compromise on privatizations, one of the officials said.

 

All the officials asked not to be named because the deliberations are private and ongoing.

*  *  *

Merkel added:

“You make compromises when the advantages outweigh the disadvantages. Germany is ready for that, but you also have to say that Europe’s credibility depends on us sticking to the rules and that we deal with each other in a reliable way.”

So to summarize: Greece fails on its 'promise' to uphold one-third of its program's requirements but because it upheld two-thirds, Germany insists that shows commitment and supports Merkele's earlier comments that "Europe’s credibility depends on us sticking to the rules."

Brilliant!