Confusing Array of Conflicting Same-Day Headlines About Greece, Troika, Defaults

Inquiring minds are amused over headlines regarding the mess in Greece, all from Saturday.

Significant progress recorded on Friday

Saturday October 8, 2011 (13:14)
Finance Minister Evangelos Venizelos is having a new meeting with the troika on Saturday after significant progress was recorded in their talks on Friday evening, according to ministry sources.

The troika criticizes the lack of determination to implement the cuts Greek

8/10/2011 - 17:43
Members of the group of experts to examine the settings of Greece to continue receiving financial assistance have criticized the lack of determination to Athens for the haircuts, today moved the German newspaper Welt am Sonntag.

In an article published in full this morning newspaper, said that members of the "troika" consisting of the International Monetary Fund (IMF), European Commission (EC) and European Central Bank (ECB) Hellenic openly criticize the government before completing his last report.
The head of the IMF delegation in Greece, the Dane Poul Thomsen Mathias believes that Athens should be implemented much more severe adjustment that has already executed.

"It is clear that the program will not succeed unless the authorities decide on the path of structural reforms much more strict than we have seen so far," said Thomsen, who said that "Greece is at the crossroads."

The troika is optimistic about the results of examination of the Greek accounts

8/10/2011 - 20:58
The troika, the creditors of Greece, estimated on Saturday that the outcome of the audit of the accounts of the country will be "positive" but "was more work to do."
"The talks continue (...) there is still work to do, but I think the result will be positive," said Poul Thomsen, head of delegation in Athens International Monetary Fund (IMF), the Greek public TV Net

Thomsen [IMF Representative to Troika] warns rescue plan could fail

Saturday October 8, 2011 (21:57)
“It is clear the program will not work if the authorities do not take the path that requires much stricter structural reforms than those that we have seen so far,” said Poul Thomsen, the representative of the International Monetary Fund to the troika, in an interview to German Sunday paper Welt am Sonntag.

Greece must give up sovereignty to get more help

8 Oct 2011
Greece is near bankruptcy and must give up part of its sovereignty to obtain the large debt forgiveness it needs to survive, a leading conservative member of German parliament was quoted as saying on Saturday.

Michael Fuchs, a deputy parliamentary floor leader for Chancellor Angela Merkel's Christian Democrats (CDU), also told newspaper "Real News" that the debt-laden country might be better off outside the eurozone.

"You are very close to bankruptcy," Real News quoted Fuchs as saying in an interview. "We can not agree to a 'haircut' without terms and conditions and therefore, Greece must give up something, like some of its national sovereignty -- at least temporarily," added Fuchs, who is also the chair of the influential CDU small business group in parliament.

"I am personally not absolutely convinced that this (eurozone membership) is the best long-term solution for Greece to become quickly competitive," he added.

Bigger haircut needed say Schaeuble, El-Erian

8 Oct 2011
Europe perhaps underestimated how much it needed to reduce Greece's debt burden at its July summit, German Finance Minister Wolfgang Schaeuble was cited as saying by Frankfurter Allgemeine Sonntagszeitung.

"It is possible that we assumed in July a level of debt reduction that was too low," Schaeuble was cited as saying.

Eurozone finance ministers are reviewing the size of the private sector's involvement in a second international bailout package for Greece, the chairman of the Eurogroup ministers Jean-Claude Juncker said earlier this week.

The reassessment could undermine Greece's aid program and hasten the threat of a Greek default.

"There is a high risk that this crisis further escalates and broadens," Schaeuble said.

Greece should ask its bondholders to accept bigger losses than the 21 percent write-down currently foreseen in a deal agreed by EU leaders on July 21, Pimco's co-chief investment officer Mohamed El-Erian told a Greek paper on Saturday.

"Greece must seek a much bigger 'haircut' than 21 percent," El-Erian was quoted as saying in an interview in weekly newspaper Kathimerini. Pimco, which manages $1.2 trillion in assets, is home to the world's largest bond fund.

IMF mission chief says Greece is at crossroads

8 Oct 2011
The gloomy comments suggested it was still unsure whether current talks on a vital aid tranche for Athens would conclude positively, given doubts over its willingness to reform and Greek strikes and riots.

"Greece is at a crossroads," Poul Thomsen was cited as saying by Welt am Sonntag. "It is clear the programme will not work if the authorities do not take the path that requires much stricter structural reforms than those that we have seen so far."

The IMF on Friday dismissed a statement by the Greek government that the deal on aid was already completed.

I am sure glad that's cleared up.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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