07-17-2015, 02:40 AM
Just hours after a deal that saw Greece surrender much of its sovereignty to outside supervision in return for agreeing to talks on an 86 billion euro bailout, doubts were already emerging about whether Tsipras would be able to hold his government together. The terms imposed by international lenders led by Germany in all-night talks at an emergency summit obliged Tsipras to abandon promises of ending austerity. Instead he must pass legislation to cut pensions, increase value added tax, clamp down on collective bargaining agreements and put in place quasi-automatic spending constraints. In addition, he must set 50 billion euros of public sector assets aside to be sold off under the supervision of foreign lenders and get the whole package through parliament by Wednesday.
Greek PM Tsipras faces party revolt over bailout deal | Reuters
There has been an extensive discussion recently regarding the degree to which the limited access to financing facing Greek exporters imposes a constraint on their performance in international markets and, consequently, on the return of the economy to positive rates of growth. In the World Economic Forum’s report on competitiveness in the section entitled “the most problematic factors for doing business in Greece”, the limited access to financing of firms emerges as the second most problematic factor that has worsened due to the ongoing recession
Greece’s last-ditch bailout requires the country to sell 50 billion euros ($55 billion) of assets, an ambition it hasn’t come close to achieving under previous restructuring plans. The government of then-Prime Minister George Papandreou in 2011 set the same financial goal, which it sought to achieve by hawking airports, seaports, and beachside real estate. Since then, such deals have yielded 3.5 billion euros, according to the state privatization authority.
Greek Bailout Rests on Asset Sale Plan That’s Already Failed - Bloomberg Business
They could not go until they had reached a deal, he said. One official joked that he might have threatened to lock them in his office -- only he had no key. Merkel held her ground, anxious to keep the euro zone intact but conscious that many Germans, maybe including her own finance minister Wolfgang Schaeuble, would rather see Greece forced out. So too did Tsipras, pointing to estimates that companies on a list to be privatised may be worth only five billion euros. With the clock ticking, officials said it was Lagarde, with her IMF technical expertise, who broke the deadlock with a design for the fund that offered something for both sides.
Insight - Darkness at dawn: the fragile plan to rescue Greece - Yahoo Finance
So Greek exit from the euro would be hideous for banks. It would also be nightmarish for the European Central Bank (ECB). Here is one reason why. It currently holds €50bn of Greek loans to companies and residential mortgages - as part of the collateral on the €120bn of Emergency Liquidity Assistance it and the Bank of Greece have provided.