Europe Gives Greece 24 Hours To Comply; Germany Draws Up Capital Control Plans
EU officials turned up the heat on Athens Thursday after the IMF withdrew its team and sent its lead negotiators back to Washington.
In what can only be described as a half-hearted effort, Greek PM Alexis Tsipras submitted two three-page proposals earlier this week that were dismissed by creditors as “not serious.” We suggested that perhaps that was intentional as Tsipras, having bought Greece some time by opting for the “Zambian” IMF payment bundle, is simply keeping up appearances while the real negotiating is going on behind the scenes with Syriza party hardliners who Tsipras desperately needs to support any proposal before it goes to parliament in order to avoid what could quickly deteriorate into a political and social crisis.
One has to believe that Brussels understands this, but it could very well be that between Tsipras’ scathing op-ed (published two Sundays ago) and the PM’s fiery speech to parliament last Friday, creditors are becoming concerned that Tsipras might actually be starting to believe that he can effectively blackmail the EMU by threatening to prove, once and for all, that the currency bloc is in fact dissoluble no matter what manner of protestations one might hear in polite company.
So, with the IMF having thrown in the towel, and with German lawmakers set to rally behind the incorrigible FinMin Wolfgang Schaeuble in what amounts to a mutiny on the SS Merkel, Europe appears to have finally had enough because by Thursday evening, reports indicated that EU officials have given Greece 24 hours to come back with a proposal that includes pension reform and VAT increases.
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