Greek Lawmakers Won't Back Deal; Finnish FinMin Says "Can't Agree" To New Greek Loans

Is the Greek "deal" falling apart already?

STUBB SAYS FINLAND CAN'T AGREE TO NEW LOANS FOR GREECE

KAMMENOS: GREEK PM TSIPRAS WAS BLACKMAILED AT EU SUMMIT

Goldman: The Greek Solution "Exposes The Whole System To Collapse"

"In our view, there are two main factors keeping investors sidelined.One is the residual implementation risks involved in the latest arrangements...  The second, of much broader importance, is the accumulated evidence of the inadequacy of the Euro area's present fiscal governance, which takes up too many resources and exposes the whole system to collapse."

Munchau: "The Eurozone As We Know It Is Destroyed"

Despite the euphoria in global equity markets, The FT's Wolfgang Munchau - once one of the keenest euro enthusiasts - warns regime change is coming in Europe. The actions of the creditors has "destroyed the eurozone as we know it and demolished the idea of a monetary union as a step towards a democratic political union," Munchau exclaims, fearing they have "demoted the eurozone into a toxic fixed exchange-rate system, with a shared single currency, run in the interests of Germany, held together by the threat of absolute destitution for those who challenge the prevailing order." He concludes rather ominously, "we will soon be asking ourselves whether this new eurozone, in which the strong push around the weak, can be sustainable."

What Assets Did Greece Just Hand Over To Europe: "Airports, Airplanes, Infrastructure And Most Certainly Banks"

The Simpsons was right all along...

New Government Likely In Greece, Depositor Bail-In Still Possible, Deutsche Bank Says

As outlined exhaustively here over the past 24 hours, the new “deal" for Greece has implications far beyond the Aegean and may well mark the beginning of the end for the EMU experiment. But leaving the bigger picture implications aside for now, the two most important short-term considerations for Greece are: 1) establishing political stability, and 2) stabilizing the banks.

Yanis Varoufakis: "Merkel's Control Over The Eurogroup Is Absolute, They Are Beyond The Law"

The new Greek deal is "absolutely impossible, totally non-viable and toxic …[they were] the kind of proposals you present to another side when you don’t want an agreement." Speaking with The New Statesman, former Greek FinMin Yanis Varoufakis blasts Wolfgang Schaeuble's position which will lead to "a humanitarian crisis" for Greece and warns, regarding this latest creditors' proposal, "if anything it will be worse [for the Greeks]." His conclusion is succinct, "we were set up...," Merkel and Schäuble’s control over the Eurogroup is absolute, and that the group itself is beyond the law.

How German Media See The New Greek 'Deal'

Germany's largest public TV broadcaster's most popular show explains how "Greece was assigned to its place..."

Greece Banks Not Out Of The Woods, May Impose Tougher Capital Controls, Barclays Says

Even with a deal in place and a new program for Greece on the horizon, the country's banks are by no means in the clear as deposit outflows, limited breathing room under ELA, and deteriorating asset quality present formidable stumbling blocks going forward.

Even The Players Are Losing Faith In Their Own Shenanigans

What is on display more brightly and clearly than ever, though, is the utter fakery of international banking. The players have lost faith in their own shenanigans. They simply go through the motions now awaiting the political fallout, which is to say the revolt of the people who can still do arithmetic. The old refrain, “your check is in the mail” may not be so reassuring to folks who haven’t eaten for three days. Personally, I would expect the gasoline bombs to be flying around Syntagma Square before the middle of the week.

After "Deal", Here's What's Next For Greece

Now that Greece has capitulated and offered up its sovereignty in what can only be described as an unconditional surrender to Berlin and Brussels, here's what's next for the country, the government, and the Greek people.

WHAT’S NEXT?

• The Greek govt is set to renew a bank holiday and capital controls decree which expires today
• The ECB’s GC is expected to discuss ELA for Greece’s banks
• Eurogroup meeting later today will work on Greece’s short-term needs and discuss bridge financing
• Greece has accepted to legislate on 4 action points by Thursday July 16, and another two by July 22, according to Malta’s PM Muscat
• Then Greece would come before the Eurogroup and euro- area member states would decide to open or close the needed negotiations that would let the ESM to disburse funds, Muscat says
• Dutch PM Rutte says it could take weeks to negotiate Greek ESM aid deal

WHAT DOES IT MEAN FOR GREECE’S BANKS?

• Greek banks are to be recapitalized by Greek asset fund and Tsipras says the deal protects the stability of the banking system
• ELA will stay in place all the while that another bailout is in the pipeline, Mizuho’s Peter Chatwell says in e-mailed comments
• ECB ELA will most likely stay in place until at least Wednesday, pending Greek ability to legislate the list of prior actions, Oxford Economics says in a note

WHAT ABOUT TSIPRAS AND SYRIZA?

• Support at Wednesday’s vote from Greece’s pro-Europe parties will come at a cost, when the timing is right, Barclays says
• It makes more sense for those parties to let PM Tsipras bear the political cost of capital controls while triggering elections would make default inevitable, plunging the country into a complete paralysis for the next 30 days
• Don’t entirely rule out a coalition partner change (with To Potami), and believe this situation will eventually lead to new elections after the summer
• A new unity govt or an early election very possible, Rabobank says
• Given political fractures in Greece, passage of the proposal through parliament is far from certain, Richard Cochinos, strategist at Citigroup, says in client note
• Decent likelihood of a Greek cabinet reshuffle; govt could possibly fold on reforms
• Tsipras may seek to expel those opposed to a deal with creditors from the party as he no longer commands a majority in parliament, Reuters said, citing people familiar
• “Constructive” centrist parties will likely continue to support the government coalition, Barclays says
• Snap elections necessary but can’t take place now, Greece’s Labor minister Skourletis says

WHAT ABOUT ITS CREDITORS? 

• Germany, the Netherlands, Austria, Slovakia, Estonia and Finland all need parliamentary approval to open negotiations on a new Greek program, an EU official said last week, while France’s Hollande said French National Assembly to vote on the deal on Wednesday
• While Marcel Fratzscher, president of the DIW economic institute, says it will be very difficult to sell the deal to German voters and Germany’s Greens say the deal means Greece will be stuck in a  recession, a govt lawmaker said it is likely the German coalition will approve the deal
• Rutte says he’s unhappy he has to break an electoral promise to Dutch constituents on no further Greece aid
• The deal is so tough there’s a better than even chance that the Finnish parliament will authorize the negotiations, Berenberg’s Holger Schmieding writes in e- mailed comment
• Even if a deal can eventually be reached to keep Greece in the euro area, there will be long-term consequences, the damage done to relations between France and Germany may prove irredeemable while Germany’s suggestion Greece be granted a short term exit from the single currency shatters the principle that euro-area membership is irrevocable, Oxford Economics says

IS THERE ANY AGREEMENT ON RESTRUCTURING GREECE’S DEBT?

• Over the weekend, an IMF source told Reuters said that if other creditors couldn’t agree on a haircut, grace periods on interest payments could be combined with lower rates and extended maturities
• Tsipras said the negotiations had managed to gain restructuring while Merkel confirmed interest-payment grace periods and longer maturities will “be discussed once there is a successful evaluation of the new Greek program”

WHAT ABOUT GREXIT?

• Tsipras says summit outcome averts collapse of banking system
• Risks of a Greek exit have reduced in the very short term as the ECB should remain supportive as long as prior actions are passed in Parliament by Wednesday and talks are headed in the right direction, Barclays says
• The chances of a Grexit have now fallen below 50%, UBS WM write
• The deal and Wednesday’s vote may stretch the Greek govt to breaking point, forcing new elections; the month’s hiatus that would ensue while elections took place would almost certainly see Greece ejected from the euro area, Oxford Economics says

EU Exit Will Now Be "Threat To Those Who Don't Behave The German Way," BofA Says

"Exit from the currency block is now officially something that can be used as a threat to those that don’t behave the German way."

"The last six months' crisis has exposed weaknesses in the Eurozone's governance framework that will likely reverberate for months and years into the future."

Tsipras Releases Statement Following Greek "Deal", Will "Fight To Regain Lost National Sovereignty"

"Greece will continue to fight, and we will continue to fight, so that we can return to growth, regain our lost national sovereignty"

Prime Minister Alexis Tsipras’ statement following the conclusion of the Eurozone Summit

We have been fighting hard for six months now, and we fought until the end to achieve the best possible outcome, an agreement that will enable the country to get back on its feet, and for the Greek people to be able to continue to fight.

We faced tough decisions, tough dilemmas. We assumed responsibility for the decision in order to prevent the most extreme objectives from being implemented—those pushed for by the most extreme conservative forces in the European Union.

The agreement calls for tough measures. However, we prevented the transfer of public property abroad, we prevented the financial asphyxiation and the collapse of the financial system—this was planned to the last detail – having recently been designed to perfection, and in the process of being implemented.

Finally, in this tough battle, we managed to gain the restructuring of the debt and a financing process for the medium-term.

We were aware that it would not be an easy task, but we have created a very important legacy. An important legacy, and a much-needed change throughout Europe. Greece will continue to fight, and we will continue to fight, so that we can return to growth, regain our lost national sovereignty. We earned our popular sovereignty. We sent a message of democracy, a message of dignity throughout Europe and the world. This is the most important legacy.

Finally, I would like to thank all of my colleagues–ministers, colleagues and associates who gave, along with me, a very tough fight. A fight, which at the end of the day, will be vindicated.

Today’s decision will maintain Greece’s financial stability and provide recovery potential. However, as we knew beforehand, the agreement will be difficult to implement. The measures include those that Parliament has voted on. Measures that will inevitably create recessionary trends. However, I am hopeful that the growth package of 35 billion euro that we achieved, debt restructuring, as well as securing funding for the next three years will create market confidence, so that investors realize that fears of a Grexit are a thing of the past—thereby fueling investment, which will offset any recessionary trends.

I believe that a large majority of the Greek people will support the effort to return to growth; they acknowledge that we fought for a just cause, we fought until the end, we have been negotiating through the night, and no matter what the burdens will be, they will be allocated – we guarantee this – with social justice. And it will not be the case that those who have shouldered the burden during the last years will be stuck footing the bill once more.This time, those who avoided paying—many of whom were protected by the previous governments–will pay now, they, too, will shoulder the burden.

Finally, I want to make this commitment: Now, we need to fight just as hard as we fought to achieve the best outcome abroad-in Europe, to rid vested interests in the country. Greece needs radical reforms in favor of social forces, and against the oligarchy that have led to the country’s current state. And this commitment to this new effort begins tomorrow.

Deal Struck Following Total Capitulation By Tsipras: Market Awaits Greek Reaction To Draconian Deal Terms

Just around 9am CET, after a 17-hour mammoth all-night session, Greece did manage to cobble together a "deal" if one may call this latest embarrassing can-kicking that, which was nothing short of total capitulation by Tsipras. As part of the deal, Greece "surrendered to European demands for immediate action to qualify for up to 86 billion euros ($95 billion) of aid Greece needs to stay in the euro" in the words of Bloomberg.

How The Greek Deal Almost Collapsed At 6am In The Morning

"Sorry, but there is no way you are leaving this room"...

The Greek "Choice": Hand Over Sovereignty Or Take Five Year Euro "Time Out"

For those who missed today's festivities in Brussels, here is the 30,000 foot summary: Europe has given Greece a "choice": hand over sovereignty toGermany Europe or undergo a 5 year Grexit "time out", which is a polite euphemism for get the hell out.

 Here are the 12 conditions laid out as a result of the latest Eurogroup meeting, which are far more draconian than anything presented to Greece yet and which effectively require that Greece cede sovereignty to Europe, this time even without the implementation of a technocratic government.

1. Streamlining VAT
2. Broadening the tax base
3. Sustainability of pension system
4. Adopt a code of civil procedure
5. Safeguarding of legal independence for Greece ELSTAT - the statistics office
6. Full implementation of automatic spending cuts
7. Meet bank recovery and resolution directive
8. Privatize electricity transmission grid
9. Take decisive action on non-performing loans
10. Ensure independence of privatization body TAIPED
11. De-Politicize the Greek administration
12. Return of the Troika to Athens (the paper calls them the institutions... for now)

One alternative, generously presented to Greece, is for the country to put some €50 billion of assets - the best ones - in escrow to creditors. A more polite way of putting would be a Greek secured loan.

• Greece would place about €50 billion of state assets into an independent company.
• Those assets could serve as collateral against aid loans.
• Greece is told to set aside a quarter of its GDP for Europe to do as it sees fit, and which can be "seized" if Greece is seen as veering away from its third bailout promises again.

And since Greece has no option but to promise everything and the moon, it will surely comply hoping that it is once again allowed to promptly forget all the promises as soon as it pockets some of that €86 billion in new bailout funds just to unlock the €120 billion in deposits held hostage in Greek banks by the ECB, even if the resulting debt will push Greek debt/GDP well above 200%.

Eurogroup Officially Threatens Greece With 5 Year Grexit "Time Out"

"In case no agreement could be reached, Greece should be offered swift negotiations on a time-out from the euro area with possible debt restructuring."

EU finance ministers have effectively given Greece 24 hours to accept the set of rather draconian conditions outlined in a “draft” term sheet leaked to the press earlier today.

As a reminder, here are the stipulations: 

• fully comply with the medium-term primary surplus target of 3.5 percent of GDP by 2018, according to a yearly schedule to be agreed with the institutions;
• carry out ambitious pension reforms and specific policies to fully compensate for the fiscal impact of the Constitutional Court ruling on the 2012 pension reform and to implement the zero deficit clause;
• adopt more ambitious product market reforms with a clear timetable for implementation of all OECD toolkit I recommendations, including Sunday trade, sales periods, over-the-counter pharmaceutical products, pharmacy ownership, milk, bakeries. On the follow-up of the OECD toolkit II, manufacturing needs to be included in the prior action;
• on energy markets, the privatization of the electricity transmission network operator (ADMIE) must proceed, unless replacement measures can be found that have equivalent effect, as agreed by the institutions;
• on labor markets, undertake rigorous reviews of collective bargaining, industrial action and collective dismissals in line with the timetable and the approach suggested by the institutions. Any changes should be based on international and European best practices, and should not involve a return to past policy settings which are not compatible with the goals of promoting sustainable and inclusive growth;
• fully implement the relevant provisions of the Treaty on Stability, Coordination and Governance in the Economic and Monetary Union, in particular to make the Fiscal Council fully operational;
• adopt the necessary steps to strengthen the financial sector, including decisive action on non-performing loans, transposition of BRRD and measures to strengthen governance of the HFSF and the banks;
• develop a significantly scaled up privatization program with improved governance. A working group with the institutions shall provide proposals for better implementation mechanisms;
• amend or compensate for legislation adopted during 2015 which have not been agreed with the institutions and run counter to the program commitments;
• implement the key remaining elements from the December 2014 state of play of the fifth review of the second economic adjustment program."

Eurogroup Fails To Reach Deal, Gives Greece 24 Hours To Accept Draconian Terms

After a day-long meeting of the Eurogroup, the European FinMins were unable to reach a conclusion on the third Greek bailout and instead once again punted the revised term sheet, this time with absolutely draconian terms, back to Tsipras, and told him he has until tomorrow to agree to the terms, and until Wednesday to pass them into law, for talks to even begin!

A Broken Greek PM Says He Is "Ready For An Honest Compromise"

TSIPRAS: AGREEMENT CAN BE REACHED TONIGHT IF ALL WANT IT

Leaked Eurogroup Statement Demands Much More From Greece, Keeps "Temporary Grexit" Option

While there is "hope" in the unforgettable words of France's Moscovici, it is once again up to Greece to convince Europe it really wants to stay in the Union. According to Reuters, the Eurogroup is about to release a statement, whose draft it has seen, which will demand much more from the tiny country caught in a state of permanent depression. To wit: Greece will not be able to start negotiations on a third bailout until it makes changes to its sales tax and pension systems and strengthens the independence of its statistics office, a draft statement of euro zone finance ministers said on Sunday.

Someone Told Merkel...

€10-14 billion was bad enough, but €25 billion may have been simply too much to bear...

Schauble Proposes "5 Year Grexit With Humanitarian Support"

Here is the punchline from Greek nemesis #1, Schauble: SCHAEUBLE PROPOSES TIME-LIMITED `GREXIT': FAZ; SCHAEUBLE SUGGESTS 5-YR GREXIT, HUMANITARIAN SUPPORT: FAZ

In other words, Germany just said kick Greece out, conditionally, for 5 years (it is not quite clear what Greece would use for currency in the meantime), quarantine it, and treat it as a third-world country until 2020. Somehow we doubt global stocks expected this outcome when they soared on Friday...

Eurogroup Meeting Ends Without Agreement: "Huge Problems", "Issue Of Greek Trust Very Difficult"

Equity markets roared higher Thursday and Friday as they 'knew' a deal was imminent in Greece because Tsipras appeared to backpedal. However, aftersomeone told Merkel the truth, and "everyone knows you can't believe" the Greeks, The Eurorgoup Meeting ends with zero agreement after 9 hours of rumor-mongering and escalating tensions. Local reporters noted the leaders could not even agree on what to disagree about as an increasing number of EU member states pushed for either a Grexit or considerably tougher sanctions austerity on the Greeks. There is no press conference and the meeting will resume tomorrow at 11am... shortly before FX markets 

Finland Echoes Germany, Wants Greece Out; Five Other Nations Back Grexit

Initially it was just an unconfirmed rumor circulating in the German FAS media that the local FinMin had proposed a "temporary Grexit" option. It now appears that this was not only not a rumor, but Schauble's sentiment is contagious: moments ago Finnish broadcaster MTV reported that first Finland, and then the Eurozone's smaller, if somewhat more solvent nations, Estonia, Lithuania, Slovakia, Slovenia and even the Netherlands, support the German position on temporarily suspending Greece' Euro membership.