BRUSSELS (Reuters) - Senior EU officials have formally discussed for the first time a possible Greek debt default as negotiations between Athens and its creditors have stalled ahead of an end-month repayment deadline, several officials told Reuters.
ATHENS/BERLIN (Reuters) - German Chancellor Angela Merkel urged Greece and its creditors on Friday to keep pushing for a cash-for-reforms deal after negotiations hit stalemate, while Athens refused to back down and accused the IMF of using pressure tactics.
Months of tense negotiations between Athens and creditors came to a head on Thursday when the IMF (which at this point is just going through the motions after telling the EU it would not participate in a third Greek program) sent its lead negotiators back to Washington.
EU officials, who have long contended that without IMF participation there can be no solution for Greece, followed the Fund's lead, stepping up the pressure on Athens and telling Greek PM Alexis Tsipras that his government has 24 hours to submit a proposal that includes pension reform and VAT hikes.
To be clear, that's tantamount to saying Tsipras has one day to abandon Syriza's electoral mandate and will come as no surprise to those who frequent these pages, as we've said for months now that come hell, high water, or "Grimbo," the EU is going to extract its pension cuts and VAT hikes from Tsipras, and not because anyone seriously thinks it will make a difference in terms of putting the country on a 'sustainable' path, but because the EU simply cannot afford for Syriza sympathizers in more economically consequential countries like Spain to get any ideas about rolling back austerity (of 'fauxsterity' as it were) and using EMU membership as a bargaining chip. Here's a bit of color on the pension issue from Bloomberg:
For creditors, the pension system is still too generous. For the Greek government, it's a system struggling to cope after five years of recession and dwindling contributions in a nation with the European Union's highest unemployment. In the first quarter, th ...
For a sense of what is driving sentiment this morning look no further than the Athens stock market which exploded higher yesterday on a Bloomberg story based on "two sources" that Germany was willing to compromise, only to close just as the IMF pulled a classic bad cop and announced it was halting work on Greece, and before further news from Bild that Germany was preparing for a Greek default while Europe had given Greece 24 hours to submit a final, workable proposal. As a result, it tumbled promptly at the open even as optimism persists and since the opening plunge, Greek stocks have continued to climb and are now back to yesterday's euphoric opening levels.
Then there was Diesel-BOOM, who had the usual batch of headlines of which this one was key:
GREECE REJECTING PROPOSALS `NOT AN OPTION': DIJSSELBLOEM
Which is ironic because Greece can say the same for the Troika's reaction ot its own proposal.
Germany's economy minister was also in the spotlight:
GREECE EURO EXIT WOULD BE 'CATASTROPHE': GERMANY'S GABRIEL
But not before Merkel hit the tape saying that:
STRONG EURO MAKES IT HARDER FOR SPAIN, PORTUGAL, IRELAND: MERKEL
Which in turn sent the Euro tumbling, but only for another comment to send it surging:
IMF HASN'T BROKEN OFF GREECE TALKS, JAEGER SAYS
Needless to say, the algos have had a field day with the kneejerk reactions to all of the above.
One thing is certain: by the end of trading stocks ...
SHANGHAI/BENGALARU (Reuters) - Ride-hailing service Uber Technologies Inc plans to invest more than $1 billion in China this year as the controversial ride-hailing app looks to rev up growth in the world's second largest economy, an executive at the firm said on Friday.
LONDON (Reuters) - World shares saw a muted end to what looks set to be their best week since April on Friday as Greek debt talks took yet another confusing turn and put European markets on the back foot.
TOKYO (Reuters) - Honda Motor Co said on Friday it would restate its financial results for the last business year, to account for about $360 million in additional costs to pay for an expanded recall of cars equipped with air bag parts made by Takata Corp .
PARIS (Reuters) - French engineering group Alstom said on Friday it will continue to provide evidence on the positive impact for Europe of the planned sale of its power business to General Electric Co..
NEW YORK (Reuters) - The sharp bond market selloff is starting to pinch American consumers and companies, causing a mild economic tightening that, if sustained, could raise alarms at the Federal Reserve and even delay a plan to hike interest rates in coming months.
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