I pointed out several weeks ago, that in the eyes of the market, while there may be some relief rally, in the end Greece will likely have the same deal it had before the negotiations started, which means nothing changed.
After campaign promises by Syriza and PM Tsipras to End cooperation with the Troika, to roll back austerity measures, to hire government workers to ease Greek unemployment and negotiate a new deal that gives Greeks their dignity back, even dismantle the Troika itself and vowed NOT to compromise on these points and that doing so would be like driving the nail in the coffin of Greece, the beginning of the end was very different.
Today ended with what is essentially a 3rd memorandum commitment, in other words, Tsipras and Varourakis ended up with a worse, more humiliating deal than what they walked in to when elected.
After Germany refused every Greek submission, today the very best that the Greek delegation could obtain in the deal was two new phrases replacing bail out and Trookia, that's it.
What it lost?
Euro zone officials said Greece's track record and the combative behavior of its new leaders had undermined their confidence in whether Athens would deliver what it agrees to in talks.
That drove ministers to make Greece hand over custody of nearly 11 billion euros in aid earmarked for stabilizing its banks to the euro zone's rescue fund. Dijsselbloem said."We wanted to make sure that the ... money for Greek bank recapitalization is for that purpose, not for recapitalization of the government,"
Talk about humiliation, a worse deal and in addition, from here until Monday, there's no upside, only pure risk.
Because of the Greek uprising over the bailout, Germany is insisting that Greece come up with a list of additional reforms Greece will take from now until the money is paid back, the end of the program and they only have until Monday to do it.
What you may have not caught is if the Finance Minister's of the EU are not satisfied with the list of new reforms, additional austerity if you will, due by Monday... the deal is dead.
Greek Finance Minister, Varoufakis tried to turn this around in saying that if the Finance Ministers don't agree with the Greek reforms to be submitted, the deal blows up as if Greece were in control, quite the opposite, it's more like Greece is being humiliated in to writing on the blackboard 1000 times, I will never question the Troika again and is being given a writing assignment of new reforms their government will stick to and according to Germany in a leaked memo of what is needed for the deal Thursday:
1) a CLEAR and CREDIBLE request by the Greeks to continue on with the current program , 2) They will agree with the lenders as to any changes the lenders make 3) They will commit to fulfill the terms and conclude the program.
Germany made Greece cry "Uncle" on every single point. Even the 6 month bailout extension was reduced to 4 months.
The list of reforms that Germany expects by Monday were said to have to be "Significant improvements" before extending the bailout. As the Greek party Paosk accused Syriza of not negotiating out of the bailout, but agreeing to a 3rd memorandum, the direct opposite of the stated intensions, it seems Paosk was right.
These "significant reforms" are what Greece must turn over to the Eurogroup Finance Ministers by Monday if they want to even have a shot at keeping the deal they said they'd overturn in "An end of cooperation with the Troika".
All of the will not compromise, will not succumb to blackmail talk was in the end nothing more than talk.
In a parting shot Schaeuble said they, "CERTAINLY WILL HAVE A DIFFICULT TIME TO EXPLAIN THE DEAL TO THEIR VOTERS'".
The 3% surplus the Trokia is demanding, cuts out Syriza's planned 1.5% surplus so they could re-hire government workers. This is non negotiable.
Greece lost, pure and simple and lost big and they still have a humiliating walk of shame to produce by Monday which may or may not be accepted by Germany, if it is not, according to Schaeuble, THERE WILL BE NO PAYOUT.
If it is accepted, then each country in the Eurogroup will have to ratify the deal through their respective parliaments so we are indeed a long way from this being over.
If I were Russia or China, I might be tempted to throw the Greeks a low-ball offer over the weekend and if the Greeks had been smart, they would have taken the printing press used to print $10 euro bills for the ECB and printed a stack of Drachmas.
The point simply is, THERE IS NO UPSIDE BETWEEN NOW AND MONDAY/NEXT WEEK, ONLY PURE RISK FOR A VERY BRUISED COLLECTIVE GREEK EGO.
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