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Greek Government "Not Holding Out Much Hope" For Monday Even As Market Signals Deal Imminent

With Greek money, deposits and time all running out ahead of Monday's key Eurogroup meeting, which in turn also marks the end of the Jeroen Dijsselbloem 10 Day ultimatum granted to Greece by which the impoverished nation should agree to extend its current bailout program, the political rhetoric has hit a crescendo, and so has the bluffing by every side as the cards are all about to be revealed. Case in point Greece, which on one hand is signalling that a deal is imminent and is willing to do
"whatever it can" to reach
it, and on the other, its government is posturing that a deal is not likely to come tomorrow.

According to Kathimerini, late last night, Greek PM Tsipras chaired a meeting of his cabinet on Friday night to brief ministers on the state of talks with the eurozone. "With the possibility of the government having to make a compromise with the eurozone over the way forward in the next few days, Tsipras was eager to assess the mood of his cabinet. Some members, such as Energy Minister Panayiotis Lafazanis have been adamant that the government should stick to its pre-election pledges."

Which probably suggests that Greece is if not about to fold, then certainly cave on most, if not all, of its demands.

Still, Greece is hopeful that some deus ex machina will appear in the last minute, and that delaying the inevitable will give it some further leverage. Which explains why, as Kathimerini reported, "the government is not holding out much hope for a solution in Brussels on Monday. There have been some positive steps but there is a lot of ground that has to be covered, said a government source.

Sources cited also insist that the Greek government would not be willing to back down from its position on certain issues such as labor regulations, privatizations and the lowering of the primary surplus target. Athens believes that the two sides can find common ground on issues like public administration reform, improving tax collection and tackling corruption.

“Greeks should understand that this is a critical and difficult negotiation, the pressure is enormous,” said government spokesman Gavriil Sakellaridis. “We will do whatever we can so that a deal is found on Monday,” he told Skai TV. “If we don’t have an agreement on Monday, we believe that there is always time so that there won’t be a problem.”

Maybe, however if the deposit outflows which are said to have hit €1 billion per day continue, Greek time may just run out. And with it, its leverage. Which is also why, as the Guardian reports, not only did Greek risk assets, but the S&P 500 itself, surge on Fruday (with the S&P closing at a new record high, just shy of Goldman's year end price target).

Greek stock markets have rallied on growing confidence that Athens will reach a deal with its international creditors next week.


In the runup to a meeting of eurozone finance ministers on Monday, the new Greek prime minister’s office vowed to do “whatever we can” to come to an agreement over a new support programme for the bailed-out country... On Friday, the new prime minister, Alexis Tsipras, appeared to soften his stance. He agreed that Greek officials would meet representatives of the troika of lenders who supplied the bailout money and imposed and policed the terms that came with it. Previously, Greece’s finance minister, Yanis Varoufakis, said the new government would refuse to engage with representatives of troika, made up of the European Central Bank, the European commission and the International Monetary Fund.

But what if the Troika is called something else? Because increasingly it appears that the only "concessions" Europe will make is to extend the maturity of Greek debt, which is completely irrelvant for a nation that can never repay its debt anyway, although if Varoufakis can call that a "haircut", so be it. That, and replacing the name of the Troika to "The Institutions", something Spiegel mocks as a "symbolic victory."

Unfortunately for Greece, "symbolic" is the only victory it will achieve if in 48 hours it is not prepared to truly exit the Eurozone, an outcome which at least the roaring global stock markets have already decided is not going to happen.

As for what's left of the Greek population, it will simply have to satisfy itself with making angry posters, because as long as it remains in the Eurozone the only thing it has to look forward to is seeing even more of what little Greek wealth remains, transferred over to those who call the shots and print the paper money.