Europe Edition
The threat of a Grexit is again in the air. Negotiations for a new aid package worth 7.2 billion Euro last Friday yielded no results, thus feeding the speculation machine. Jeroen Dijsselbloem, chairman of the Eurogroup, is not giving up and reiterated that a detailed list of reforms is needed before the funds can be made available. "Too much time has been lost over the past two months, and it is therefore clear that these talks should serve to bring significant progress," said Dijsselbloem. According to the Eurogroup, the responsibility for the delay lies on the Greek side.
After the meeting, in which the Greek Minister met with much resistance, he tweeted a quote from former U.S. President Roosevelt. "FDR, 1936: 'They are unanimous in their hate for me; and I welcome their hatred.' A quotation close to my heart (& reality) these Days."
Greek Prime Minister Tsipras meanwhile made changes to the negotiating team, giving his Finance Minister, Yanis Varoufakis, less responsibility. Before that, the Prime Minister made three decisions: firstly, Varoufakis gets a negotiating team around him, with responsibility ultimately lying with the Secretary of State for Foreign Affairs. In addition to that, a so-called Brussels Group must assist the Greek experts in technical discussions, and the Secretary General of tax planning has been commissioned to design a growth strategy on paper.
The markets reacted to the increasing uncertainty and ended in negative territory. According to a study by the German Sentix, about half of all investors believe that Greece will be leaving the Euro zone in the next 12 months. The German MEP Bernd Lucke, of Alternative für Deutschland (AFD), said the European Fiscal Treaty ensures enough room to leave the Euro without breaking the treaty. He points to a regulation regarding the emission of the European currency, which states that only the ECB and central banks are allowed to issue banknotes. Because there are talks about banknotes and not about the Euro, central banks would therefore be able to issue other currencies, says the MEP.
