The day before the UK elections The Times published an article on their frontpage about a speech Jean-Claude Juncker, president of the European Commission, has given in Belgium on the stability of the euro and the impact a Grexit would have on economic stability. According to Juncker the Greece will stay in the euro because the price for stepping out would be to high for the eurozone. The Anglo-Saxon world (Wall Street and the London City) would tear the euro apart when it shows any weakness and is waiting to destroy the single currency if Greece leaves the eurozone.
Jeroen Dijsselbloem, Chair of the Eurogroup and Minister of Finance of the Netherlands, will not be very happy with this speech: not a clever strategy to say something like that while you are negotiating at the same time with Greece! And also not clever to suggest that the English speaking world is the ennemy of the EU while the UK is still in it and having elections which could have high impact on a potential referendum in 2017 on a British exit!
Jeroen Dijsselbloem meets Yanis Varoufakis.
Experts expect Greece, which needs extra money badly, to go bankrupt by next Tuesday. The Ministers of Finance of the Eurozone have planned to meet the day before to decide on this. It will probably become very late before this meeting ends with a new vague compromise and the decision to ask Greece to replace Yanis Varoufakis (it would be clever from Greece to replace him already before Monday.
Strange negotiations tactics from the President of the European Union Jean-Claud Juncker. …
Later this week Dijsselbloem and Varoufakis flew around Europe to convince other Minsters of Finance of their point of view and two things came out:
- The chances of being re-elected as chair of the Eurozone are improving now France is in favour of an extension for Jeroen Dijsselbloem
- No deal with the creditors of Greece is expected before Monday Yanis Varoufakis said Friday 8th May, Greece expects they need at least two more weeks
- Instead of a deal Varoufakis has made a new plan which he wants to present Monday in the Eurozone Meeting. According to an article in the Herald Sun Saterday May 9th this proposal 1) has wrong numbers and growth estimates in it and 2) is not in line with ongoing negotiations and earlier agreed decisions.
Another important development is of course the outcome of the UK elections which brought the UK back as serious party in the negotiations not as member of the Eurozone but as EU member with a referendum planned for 2017 on the EU membership. When the Greece get what they want (again) the UK will hold it against them as a Union with no power over members not delivering. When Greece get into problems because they don’t get the new loans it will be a mess on the financial markets where the Pound and Dollar will profit from.
A big and complicated challenge for the Eurozone Ministers of Finance the coming days. If I were Jeroen Dijsselbloem I would, from an negotiations point of view, cancel the meeting Monday untill there is an agreement on the money before discussing any new plans.
Tuesday May 12th.
Greece has paid and a reform plan is presented by Varoufakis on Monday.What came up new for me is the proposal for a referendum in Greece once the reform plan is agreed within the Eurozone, both Dijsselbloem and Schauble from Germany were positive on this initiative. I’m not sure, will this referendum not complicate things? Overall still a long way to go for Greece…