Leaked report shows that the International Monetary Fund fears Europe hasn’t faced up to the true scale of Greece’s financing needsLatest: IMF warns Greece needs serious debt reliefTsipras likely to reshuffle soonEnergy minister slams “brutal blackmailers and financial assassins”George Osborne: Not a penny for GreeceIntroduction: Now for the politics.... 1.14pm BST Breaking away from Brussels.... a leaked International Monetary Fund report has shown that Greece needs massively more debt relief than the eurozone has admitted.The IMF has updated its debt sustainability analysis to reflect the damage wrecked on the Greek economy since capital controls were imposed more than two weeks ago.“The dramatic deterioration in debt sustainability points to the need for debt relief on a scale that would need to go well beyond what has been under consideration to date - and what has been proposed by the ESM.”IMF finally says what they think about Greece http://t.co/JWH2Mj9Nrm (via @ForexLive) pic.twitter.com/NnshywvgG8 12.56pm BST Eurogroup officials are still looking at solutions to find bridge funding for Greece, says vice-president Dombrovskis.“Concerns were raised by several non-euro states. We need to take that into account.”At post-FinMin meeting presser, @VDombrovskis confirms use of #EU-wide EFSM still on table as possible source of #Greece bridge financing 12.49pm BST Recent developments in Greece shows the need to strengthen European monetary union, EC vice-president Valdis Dombrovskis tells the Ecofin press conference.And the muted market reaction to the crisis shows that progress has been made in creating crisis-fighting tools and avoiding contagion, he adds.Dombrovskis: Recent experience has shown us that respect of commonly agreed rules is of paramount importance. #Greece 12.47pm BST Schäuble has also outlined how Alexis Tsipras should blame himself for the way things worked out:Schäuble: Despite election campaign filled with wild promises - no savings, no reforms, no troika, Greece was confronted with reality 12.42pm BST Schäuble: I don't know if EU budget could be used to provide bridge funding to Greece, I'm not an expert in EU lawI’m not sure the UK would support using the EU budget to fund Greece either; it still puts money from non-eurozone members at stake (but what price European unity, George?) 12.38pm BST Wolfgang Schäuble appears to have agreed with George Osborne, that the EFSM fund should not be used to find a loan to Greece. #Schauble: risk for bridge financing should lie in Greece. If not: moral hazard → maybe EU-budget, but not EFSM. 12.35pm BST European finance ministers have exited ECOFIN and are chatting to the press.Germany’s Wolfgang Schäuble doesn’t sound too optimistic of finding a bridge loan for Athens (to cover repayments to the ECB in July and August)Schäuble: Finding a temporary financing solution for Greece will be tough, this is what will occupy our attention over the next few daysGuindos: "No doubt" there'll be agreement on bridge financing, otherwise it makes no sense not to meet first condition aftr Sunday's deal 12.33pm BST One solution to Greece’s bridging loan problem would be for another country to make a bilateral loan. So who’s going to embrace European unity and dip into their pockets?@dannyctkemp @SpiegelPeter being told France would not go it alone and give Greece loan money...needs others to chip in... 12.26pm BST Greece’s economy minister George Stathakis, has predicted that Alexis Tsipras will reshuffle his cabinet tomorrow night, after the bailout vote.Interviewed on Bloomberg, Stathakis added that he couldn’t rule out changes today, though.Stathakis says Capital Controls will probably last a couple of months."There is no way a bail-in will ever take place" 12.10pm BST Heads-up.... the ECOFIN press conference is about to start.Could there be developments on the Greek bridging loan?.......Press conference #ECOFIN Council starting soon. Watch live: http://t.co/tvzwmx9yKc. #EuropeanSemester #EU2015LU 11.47am BST Back in Athens, there’s a rumour that the secretary of Syriza’s central committee, Tassos Koronakis, isn’t at all happy about the bailout deal.Syriza party secretary Koronakis said to be opposing bailout #agreekment. #Greece 11.23am BST #greece ordered to do reforms never done in italy, france. sunday trading? in germany? in austria? over-counter chemists? anywhere non-uk? 11.21am BST Traders are betting that Greece will remain in the euro until at least the start of next year, even though the deal isn’t in the bag yet.Punters See #Grexit Probability Slide to 9% From 50% http://t.co/3u2yhQufoj via @NateLanxon #Greece pic.twitter.com/7MZRw2zC0N 11.12am BST Here’s a handy breakdown of the Greek bailout plan:Third bailout for #Greece. @FinancialTimes pic.twitter.com/TRPe1AB28r 11.07am BST Mark Carney isn’t alone in worrying that the Greek deal is hard to pull off. Eric Lascelles, chief economist at RBC Global Asset Management, says there is “ample room for error”, as Alexis Tsipras tries to drive through labour market reforms, pension cuts, VAT tax increases, privatizations, higher corporate taxes, a military spending cut and additional IMF involvement in Greece.In exchange, Greece is set to receive an €86bn euro bailout package that should in theory return the country and its banks to liquidity and solvency. Debt relief will apparently be put on the table for discussion once Greek is demonstrably compliant with the initial conditions.This development has sharply reduced the risk of a Greek Eurozone exit by a significant margin, but that risk has not vanished altogether (we put it at around 35%, down from 60% over the next year). 10.47am BST Mark Carney’s deputy, Jon Cunliffe, says the eurozone is under “a lot of strain”.He cites the German suggestion that Greece could get a “time out” from the euro.BoE deputy governor Cunliffe: "The political will to hold the euro together has been pretty tested by this" #GreeceBoE dep gov Cunliffe: msg from weekend was "there is still an awful lot of political capital invested in the euro and will to keep it whole" 10.45am BST Bank of England governor Mark Carney has just warned MPs that it will be very hard to implement the Greek bailout deal. Related: Government shelves fox-hunting vote - Politics live 10.20am BST A nice summary of Athens’ stance today:Govt's 2 lines of argument: They wanted to kick us out of euro so we're staying in & they wanted a coup so we're not going anywhere #Greece 10.10am BST Here’s George Osborne making his views known to Alex Stubb and Jeroen Dijsselbloem: 10.00am BST The UK chancellor is now kicking off in Brussels, over the idea that the short-term loans Greece desperately needs could be partly funded with British cash.Told that inside #EU finmins meeting, @George_Osborne "furious" at suggestion EU-wide EFSM may be used for #Greece bridge financing 9.47am BST The right-wing Independent Greeks party, the government’s junior partner, has just offered Tsipras some support over the hugely controversial deal he brought back from Brussels. Panos Kammenos, the party’s leader, has just declared that:“We will stand by Alexis Tsipras government.”“It is clear to all of Europe that yesterday night a coup happened in the heart of Europe.The PM was blackmailed into signing a very different agreement. And this coup is continuing here in Greece where people want the government to fall.” #now @PanosKammenos (ANEL) "Special purpose national government is what is wanted by the Coup masterminds" #Greece 9.30am BST Over in Athens governing Syriza party sources are not ruling out a reshuffle taking place as early as today, following Tsipras’s meeting with his party. “The preference would be for a reshuffle after the vote but nothing can now be ruled out.”“Social counter-measures must be found which will give hope to people.” 9.22am BST Britain won’t contribute any money to the Greek bailout, declared UK chancellor George Osborne as he arrived at today’s meeting of EU finance ministers in Brussels.Britain is not in the euro, so the idea that British taxpayers will be on the line for this Greek deal is a complete non-starter.The eurozone needs to foot its own bill. 9.12am BST Finland’s finance minister Alex Stubb agrees that bridge financing is a problem, as eurozone countries can’t just hand over funds to Greece without ‘conditionality’But it is probably impossible to back down at this stage, so some kind of agreement will be found, Stubb replies. Perhaps bilateral loans to Greece? 9.10am BST Europe is battling to find a way to provide ‘bridge financing’ to help Greece meet its short-term funding demands, while a third bailout is agreed.Arriving at today’s ECOFIN meeting, Eurogroup president Jeroen Dijsselbloem said officials are still working on a way to help Athens meet its repayments to ECB this summer, starting on July 20. They all seem to have disadvantages or impossibilities or legal objections, so we’re still working on it. 9.06am BST Syriza parliamentary group spokesman Nikos Filis has urged MPs to support Tsipras -- warning that they would otherwise be allying with Greece’s enemies in Brussels.He told reporters:“Wasn’t what happened in Brussels a coup? What happened? Didn’t they say, either this deal or we take Greeks’ deposits and the banks go bankrupt? The government came under threat from economic and political forces that do not forgive the Greek people for making a different choice.I think that, often, we facilitate these plans. We cannot end with a left interregnum with the complicity of people of the left.” 8.56am BST Finland’s finance minister tweets that he’s still hopeful of a happy ending to the crisis:After the @epp meeting time for a short #Ecofin. It's been a tough few weeks, but I remain optimistic that solutions will be found. 8.40am BST European stock markets are lacklustre in early trading.Fresh from his mental ‘crucifixion’ at the EU summit, Alexis Tsipras has another few tortuous days ahead of him as he tries to stem a growing left-wing rebellion in his own party, all in order to pass legislation by Wednesday that will go some way to unlocking a third bailout. Some are already speculating that inter-party issues over the weekend’s Greek deal could lead to a much-touted, and no doubt Germany pleasing, Tsipras resignation. 8.32am BST UK chancellor George Osborne is expected to fight efforts to make Britain contribute to the Greek bailout, at today’s ECOFIN meeting of finance ministers.The British government isn’t impressed that the European Financial Stabilisation Mechanism (EFSM) would underwrite the deal. That would break an agreement that the EFSM (funded by all 28 EU members) wouldn’t fund eurozone bailouts again. Related: Greece crisis: Osborne seeks to block use of British-backed fund in bailout 8.15am BST In a fresh sign of political turmoil in Athens, an influential Greek minister has demanded that Alexis Tsipras withdraws the bailout deal agreed in Brussels.“Our so-called partners led by the German establishment, behaved towards our country as being their colony and they are nothing more than brutal blackmailers and financial assassins.”#Greece EnergyMin Lafazanis says govt should take back agreement with creditors 7.55am BST Syriza’s own parliamentary spokesman has described the deal forced on Greece at the Euro Summit as a “coup”, according to Reuters:#Greece #Syriza parliamentary spokesman: Lawmakers will not overthrow mandate given by voters in Jan; There was a "coup" in #Brussels 1/2#Greece #Syriza parliamentary spokesman: Most important thing is to give response to "coup"; Govt of the left must not fall #EuroSummit 7.50am BST Good morning, and welcome to our rolling coverage of Greece’s financial crisis.syriza political cttee meets at 9am as tsipras's biggest battle starts with opposition w/in the party. #GreekCrisisGrowing rumours that #Tsipras may resign this morning along with the whole SYRIZA party. Technocrat gov to come in. #GreeceCrisis Related: Treasury select committee to question Carney on Greek crisis and interest rates Continue reading...
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