The PJ Tatler

Greek FM Arrives Empty Handed at EU Summit

Greece’s new finance minister, Euclid Tsakalotos, was expected to enter the summit meeting of EU finance ministers on Tuesday with new proposals for reforms that would unlock bailout money the country desperately needs to stay in the eurozone.

Incredibly, Tsakalotos read from a few notes scribbled on hotel stationery that offered absolutely nothing new that would form the basis for a re-opening of negotiations.

Washington Post:

Greece’s government had been widely expected to present a new plan to finance ministers at the Brussels summit, held just days after a Sunday referendum in which Greek voters emphatically rejected Europe’s latest bailout proposal. One of the key elements in that plan was deeper cuts to state pensions.

But instead of a formal blueprint, Greece’s new finance minister, Euclid Tsakalotos, spoke from hand-written notes about his country’s intentions to rein in costs and prop up its creaky fiscal underpinnings.

Jeroen Dijsselbloem, president of euro zone finance ministers, said it was “too early to say” whether the Greek plans were substantive enough to reopen talks.

“In the eyes of the euro group, the problems in Greece do really need credible reforms,” he said. “And, therefore, we need to hear from the Greek government whether they have such reforms in mind.”

Now, the euro group must wait until Wednesday when finance ministers will convene again via conference call. Greece’s prime minister, Alexis Tsipras, also is due to address the European Parliament on Wednesday morning.

“Time is very short, and more so as we go on,” Dijsselbloem said.

After several hours of closed-doors talks Tuesday, the finance ministers emerged to report disappointment at the lack of progress even as Greek banks struggle just to keep their ATMs stocked with the bare minimum of cash.

No specific details of Tsakalotos’s presentation were made public. But a photo gave a clue of the tone. Tsakalotos held notes, written on hotel stationery, which included the words “no triumphalism” — an apparent reminder not to gloat after the Sunday vote.

Triumphalism? Germany and several other EU countries are ready to throw Greece off a cliff and he thinks he has something to gloat about?

This is just more evidence that the Greek government is operating in a dream world. They actually believe a democratic vote will force the rest of Europe to forgive tens of billions of euros in debt, remove all impediments to their wild spending schemes, and then supply them with more loans and emergency funding for their banks.

Perhaps they should now hold a referendum in the rest of Europe to see if the continent’s taxpayers want to keep funding Greece’s profligacy. I don’t think they’d like the result of that vote.

And what of Greek banks? They were originally supposed to re-open today. But that was put off until tomorrow. Now there are indications they might not re-open for the rest of the week. It hardly matters because Greece is going to run out of cash in the next 48 hours, precipitating the ugliest banking crisis in modern times. The government will either issue IOUs to pensioners and employees, or they could reintroduce the drachma, the currency Greece used before they joined the euro.

Prime Minister Alex Tsipras is scheduled to address a summit of political leaders tomorrow where he may ask for “interim” funding until the end of July. But the Germans especially are tired of kicking the can down the road, and it will be hard for EU hardliners to approve such a request.

Perhaps the harsh reality of a banking collapse will finally bring Tsipras to his senses. Right now, he is feeding his delusions that the referendum vote strengthened his position somehow, when it had exactly the opposite effect. All the “no” vote appeared to do was anger most of the rest of Europe and harden the hearts of Chancellor Merkel and the rest of Greek’s major creditors.