EC denies drawing up new Greek breakthrough plan - live updates

Graeme Wearden

from on 2015-05-18 16:06 (#988T)

Commission cannot confirm claims that Jean-Claude Juncker has drawn up a proposal to break Greek deadlock

5.27pm BST

PS: Greece's government spokesman (a reader of this blog, it seems) has got in touch to repudiate any suggestion that Greek savers could face a levy, as part of a new aid deal for Greece.

"I was asked about it and wholeheartedly ruled it out. The stability of the financial sector and banking system is very important to us. Categorically there will be no bail in."

"The Riga summit will see progress on a technical level and perhaps meetings on the sidelines (between Greek prime minister Alexis Tsipras and his counterparts) but we don't expect a deal to be agreed there. That will likely require an emergency eurogroup meeting before the end of May."

5.06pm BST

Greek finance minister Yanis Varoufakis will get the chance to comment on today's developments late night, when he's interviewed by Star TV.

Enikos will be providing a live translation:

#Varoufakis live interview on Monday with simultaneous interpretation #Greece #enikos - http://t.co/2uJoqfyWg6 pic.twitter.com/nP7q7b17wQ

5.01pm BST

Reports that Jean-Claude Juncker has been beavering away on a new Greek rescue plan has not amused the country's other creditors, reports Peter Spiegel, the FT's Brussels bureau chief.

Peter reckons that the proposal is one in a series of ideas being bounced between the Commission and Athens, rather than as concrete plan.

It is now no secret that the Commission views the IMF and Berlin as being unreasonably hard-line in the Greek talks and Commission officials, including Juncker himself, have been trying to bridge differences between Athens and hard-line elements for weeks.

It is also no secret that many others involved in the talks are none-too-pleased with the Commission's freelancing. Jeroen Dijsselbloem, the Dutch finance minister who leads the negotiations on the part of his fellow eurozone ministers, has been quite open about his unhappiness that the Commission tried to intervene without his knowledge back in February, when everyone was desperately trying to convince Athens to seek an extension of the current a172bn bailout before it expired.

Even tho @EU_Commission distancing itself from @tovimagr scoop on #Greece "Juncker Plan", shows troika relations raw http://t.co/KcLnrzRG0j

4.43pm BST

Pierre Moscovici's spokesman, Olivier Bailly, has just declined to confirm those reports of a new proposal to resolve the Greek crisis.

We can't confirm media allegations about @EU_Commission proposal on #Greece. Hard work continue towards deal, with #IMF @ecb & #eurogroup

4.41pm BST

Amid the confusion over Greece, London's stock market has ended the day largely where it started.

The FTSE 100 ended the day up just 8 points, or 0.1%. Silver producer Fresnillo jumped 5%, tracking a rally in the price of silver. Pharmaceuticals company Hikma led the fallers down 1.4% after announcing the death of its cofounder Samih Darwazah (his family own 29% of the firm).

4.15pm BST

Breaking away from Greece..... activist investor Carl Icann has just declared that Apple shares should be worth almost double their current value.

BREAKING: Carl Icahn says Apple is worth $240/share today " http://t.co/0zyCjuOtzM

Apple is poised to enter and in our view dominate two new categories (the television next year and the automobile by 2020) with a combined addressable market of $2.2 trillion, a view investors don't appear to factor into their valuation at all.

New open letter from Carl Icahn to Tim Cook http://t.co/dk45Kbxsl6

3.48pm BST

Now the intrigue starts......

If the #Juncker plan for #Greece is real, who wants to sink it by leaking it?

3.36pm BST

The Greek stock market staged a little rally after To Vima reported that EC president Juncker had proposed a compromise:

Greek stocks not hating the idea of a deal http://t.co/rUQoa79Z2d pic.twitter.com/OM5V4crSK5

#junckerleak denial came late enough to give the people who did this to the ASE a night to have a good think about it pic.twitter.com/MdrwXmuNoY

3.33pm BST

Greek insiders are also downplaying the idea that Jean-Claude Juncker has cracked the crisis:

Govment sources in #Greece deny the existence of a @EU_Commission /Juncker proposal on GR but say a deal is possible the coming days

3.26pm BST

The EC has left itself some wriggle room, points out Danny Kemp, AFP's deputy bureau chief in Brussels:

'Not aware' is a non-denial denial if ever I saw one #junckerleak

3.14pm BST

EU Commission says not aware of any new #Juncker proposal for Greece @A_Breidthardt

3.14pm BST

That semi-denial again:

3.12pm BST

European Commission spokeswoman Annika Breidthardt says she cannot confirm that Jean-Claude Juncker has made a new proposal to break the Greek deadlock.

We're still working towards a comprehensive deal, she adds.

Can't confirm media reports on @EU_Commission /Juncker proposal on GR. Not aware of such proposal. Working towards comprehensive deal.

3.11pm BST

Teneo Intelligence's Wolf Piccoli has his doubts too:

Juncker's emergency rescue plan for #Greece = Juncker's investment plan. Both unlikely to succeed

3.00pm BST

At first glance, it's not clear that Juncker's new proposal contains enough reform measures to satisfy Greece's creditors.

Delaying VAT rises, modifying labour reforms and lowering the primary surplus targets will all make a dent in Greece's budgets. There's no mention of new reforms to make up the gap.

2.38pm BST

Greek newspaper To Vima is reporting that EC president Jean-Claude Juncker has proposed a deal to break the deadlock between Greece and its lenders.

This deal include smaller primary budget surplus targets (just 0.75% this year, down from 3%), and also delay VAT changes until after the summer. A review of the sustainability of the pension system would also be delated until the autumn.

#Greece | Big scoop by @tovimagr: Juncker submits proposal to break Greek impasse. 0.75% surplus in 2015, 2% in 2016 http://t.co/qvmKT6rwK9

My response to @tovimagr #Juncker leak. 1) IMF not likely to fund it. 2) It is a major throw of dice by @JunckerEU (1/5) #junckerleak

Re #Junckerleak (2/5) 3. It funds Greece thru summer but delays debt restructure til autumn. 4. It keeps the ENFIA tax = greeks hate it

#Junckerleak (3/5) as IMF recognieses - it's a clear back loading of austerity, i.e. relaxation in Syriza's favour

#junckerleak (4/5) concedes to Syriza a delay on pension reform and hands them labour market reform because ILO supports Greek position

#junckerleak doc would give Greece a5bn now but also opens up ECB access and ? QE" Syriza will hate some details but its a big relaxation

2.15pm BST

Reuters has now published Pierre Moscovici's comments in Berlin this morning, in which the European Commissioner warned that time is running out:

"Time available to reach an agreement at staff level is now, I would say, very limited," said Moscovici. "We have got to conclude before the end of May."

"The only scenario that we consider in the Commission is Greece in the euro zone," said the commissioner, adding that his political experience had taught him it was best not to discuss a Plan B "because that means you don't believe in Plan A".

2.13pm BST

#Greece's bonds tumble on speculation banks weeks away from failure. 2yr yield jumps by 433bps http://t.co/GiFeaxv9rz pic.twitter.com/HEMIL8K0Bc

1.39pm BST

Another day, another deadline. A quick recap.

"A deal is required immediately, this is why we are talking about the end of May, to resolve these critical liquidity issues."

Many see it as the logical next step and after today's statement we expect the outflows to increase."

"Greece is continuing to remain as a headline attraction in the news and unfortunately it is repeatedly for the wrong reasons.

If it wasn't worrisome enough for investors that the Greek economy has basically allowed itself to slip back into a recession, then the reports that it only avoided a potential default to the IMF by using an emergency reserves account from the IMF, to repay the IMF, will send sentiment to new lows.

12.43pm BST

Over in Athens, bank officials say they now expect more people to remove savings, despite the government promising today that it won't impose a levy on deposits.

"Many see it as the logical next step and after today's statement we expect the outflows to increase."

"It was wrong of the government to even raise it as a possibility and once again speaks more of its inexperience [in office]."

"It has promised everything to everyone and now it is telling lenders that they can't pay [maturing debt], essentially pre-announcing a credit event."

12.24pm BST

Another flurry of newsflashes just landed, from European commissioner for economic affairs, Pierre Moscovici.

He's trying to sound optimistic, saying that Greece and her creditors are closer to a "common understanding", but warns that time is short.

12.18pm BST

Germany's central bank has waded into the debate today, warning that Greece must make "substantial" reforms to avoid falling into insolvency.

"The current Greek government is obliged to make appropriate proposals, to implement those agreements that have been reached and thereby do their part to avoid the insolvency of the state, with strong repercussions for Greece.

A sustainable solution is not possible without substantial reform in Greece....

Financial help should be linked to the relevant preconditions

12.05pm BST

Greek government debt is taking a pummelling today.

The yield (or interest rate) on two-year bonds has jumped from 21.1% to 24%, showing a higher risk that Athens could default on the debt.

Greek 2-year yield now through 24% +300bps today. Ugly. pic.twitter.com/PJHjUKgQBP

11.54am BST

The European Commission has just dampened hopes of a political breakthrough when EU leaders gather in Latvia on Thursday and Friday.

Margaritis Schinas, the EC's top spokesman, told reporters in Brussels that negotiations over Greece's reform programme have still not reached a deal, and are proceeding too slowly.

At midday presser, @MargSchinas being v careful on #Greece at Riga summit, but clearly signalling that's not place for a bailout deal

11.39am BST

The Greek government's promise not to confiscate bank deposits has caused a flurry of concern among commentators and market experts:

No one is suggesting or implying Cyprus-style bail-in of deposits for #Greece and suddenly Sakellaridis needs to deny such a scenario.

Now everyone is talking about the possibility of bail-in. That's a serious gaffe.

#GREECE #SAKELLARIDES: NO BAIL-IN PLAN SUCH AS CYPRUS; NO THIRD BAILOUT

Why did they have to go and say something silly like that? https://t.co/Sn9gxWjVyb

11.25am BST

A snap summary of the Greek government's press briefing:

#Greece govt spox Sakellaridis: "There will be no Cyrpus-like solution! There will be no bail-in alternative. GR govt won't sign new MoU!"

11.18am BST

Greek government spokesman Gabriel Sakellaridis added that Athens won't implement a "Cyprus-style" solution, such as imposing losses on bank depositors.

Govt spokesman Sakellaridis: Government won't sign 3rd bailout or agree to Cyprus-style solution #Greece pic.twitter.com/7uTaxnXEOF

*GREECE WON'T IMPOSE DEPOSITOR BAIL-IN, GOVT SPOKESMAN SAYS

11.08am BST

Newsflashes are coming in from Athens, showing that the Greek government hopes to reach a deal by the end of May.

But spokesman Gabriel Sakellaridis also insisted that Greece is still sticking to its "red lines".

GREECE HOPES FOR POLITICAL AGREEMENT AT RIGA SUMMIT: SPOKESMAN

how do you say "wishful thinking" in Greek? or it is mere day-dreaming? https://t.co/aY0iDgWi01

10.56am BST

The price of gold has hit a three-month high this morning, touching $1,230 per ounce for the first time since mid-February.

Demand for gold has risen after last week's disappointing economic data, showing US consumer confidence and industrial production had dipped.

Gold will take a hit when the Fed eventually raises interest rates later this year."

10.20am BST

Two issues are looming over the UK this morning; Britain's position in Europe, and the new government's fiscal plans.

9.57am BST

A group of influential members of the Syriza coalition have called a meeting tomorrow to discuss whether Greece should split from its creditors, rather than swallow fresh austerity.

Eurocrisis expert @GreekAnalyst reports that the gathering on Tuesday night will be attended by several "prominent" members of the left-wing group which won power in January, including:

Antonis Davellos (SYRIZA Political Secretariat), John Millios (SYRIZA Central Committee), Sofi Papadogianni (SYRIZA Political Secretariat), Panos Lambrou (SYRIZA Political Secretariat), George Sapounas (SYRIZA Central Committee).

We need to choose between the signing of the looming austerity agreement and the rupture with the lenders. SYRIZA cannot be turned into a party of austerity; neither can the government implement the Memorandum. This is the reason why, both domestically and abroad, proposals for the internal "cleansing" of SYRIZA and governmental solutions for "national unity" are put on the table.

For all those reasons, the only way out is the choice of rupture with the lenders.

Call for "rupture now" by the Political Secretariat & Central Committee of #Syriza http://t.co/cGcxZlGExD #Greece

9.39am BST

June is going to be a tense month, unless a deal does come soon.

Here's an update on Greece's repayment schedule h/t @SocieteGenerale pic.twitter.com/6AZFIUF5WX

9.33am BST

Greece's short-dated bonds are also weakening this morning:

Greek yields this morning: 2y +110bps 4y +106bps 10y +26bps

9.26am BST

Robin Bew of the Economist Intelligence Unit reckons a Greek breakthrough will come in time, but it's going to be a nailbiter....

Rumours that #Greece told #IMF it would miss last weeks payment, it was so tight. Think 60% chance of deal by end June. But 40% Grexit

9.15am BST

The Athens stock market has fallen by 1.5% in early trading, as traders fret about the slow pace of progress.

Financial shares are leading the fallers; the main banks are down at least 3%.

Greek 5yr default probability jumps as #Greece gets crunched on two fronts. http://t.co/Y4hTpTtCBr pic.twitter.com/dWowgqiVTI

8.51am BST

Greece's finance minister, Yanis Varouvakis, will give his views on the crisis tonight when he's interviewed on Greek TV.

Enikos will be providing a simultaneous translation into English (they reckon it doesn't start until 11.30pm local time, alas)

#Varoufakis live interview on Monday with simultaneous interpretation #Greece #enikos - http://t.co/2uJoqfyWg6 pic.twitter.com/nP7q7b17wQ

8.41am BST

De Guindos added that Europe does not have a "Plan B" for Greece - it wants the country to stay in the eurozone, and meet its commitments.

Spain's Finmin Guindos: There is no wriggle room in bailout talks for Greece; there is no Plan B

8.35am BST

Spain's finance minister, Luis de Guindos, hasn't given up hope over Greece.

He just told reporters in Madrid that an agreement can be reached in the coming days, despite so much time having been frittered away.

Guindos says he's 'optimistic' about greece, says deal can be achieved within days although a lot of time has been wasted

8.27am BST

Greek fears appear to be weighing on the euro this morning. The single currency has lost half a cent against the US dollar in early trading, to $1.1398.

Greece will be front and centre this week as the country looks to secure a deal with its creditors while avoiding harsh austerity.

8.19am BST

Greece's government remains optimistic of a deal soon, perhaps at a summit meeting of EU leaders in Riga on Thursday and Friday.

Nikos Filis, spokesman for the parliamentary group of Prime Minister Alexis Tsipras's Syriza party, told the Mega TV that:

"We're striving for a mutually beneficial agreement by Friday.

"Our mandate from the Greek people is to reach an agreement where we stay in the euro area without harsh austerity measures."

8.08am BST

Good morning, and welcome to our rolling coverage of the world economy, the financal markets, the eurozone and business.

Leaked #IMF confidential memo on #Greece. /via @paulmasonnews pic.twitter.com/UFeqGKlWah

Greece came so close to defaulting on last week's a750m International Monetary Fund repayment that the prime minister warned IMF chief Christine Lagarde he could not pay it without EU aid.

Athens ultimately made the payment without financial assistance from the bloc but only by tapping a rarely used emergency account Greece holds at the fund - an unorthodox transaction that amounted to borrowing IMF funds to pay the IMF.

How long can #Greece carry on? There's not much left over to make even small(ish) payments due to #IMF in June. (BBG) pic.twitter.com/mDESz6Xoge

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