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Troika Threatens Greece with Liquidity Suspension

As reported by German financial review “Handelsblatt,” the Troika of Greece’s lenders has threatened the country to suspend the provision of liquidity, unless an agreement is reached for the completion of the Greek program’s final review. Such a development would put the Greek banks in a difficult spot, as the European Central Bank (ECB) will not accept state bonds for bank refinancing. The report, which made reference to sources in Brussels, Berlin and Athens, underlined that the Eurogroup desires the completion of negotiations before Christmas, something that increases the pressure to Athens. Furthermore, the German financial review suspects that the Troika is intentionally stalling the negotiations by adding new demands.
In contrast, Greek government Vice President and Foreign Minister Evangelos Venizelos appeared confident that a deal would be struck with the country’s creditors before the December 15 deadline.
While addressing a meeting of the Democratic Bloc Secretariat, Venizelos underlined that “We are waiting for the Troika’s return. I believe they will come back; this is the message of yesterday’s Euro Working Group and we will have the opportunity before Christmas, before the scheduled teleconference of December 15 to be exact, to have a technical agreement between the two sides.” In addition, he noted that afterwards “a law for the so-called prior actions will be required, along with the ratification of this law by our partners in order to move to the disbursal. In the mean time, the Greek proposal to move to a precautionary credit line by the EU/IMF, because loan rates are our criterion, will have been submitted and – I am sure of this – approved.”
Once again, Venizelos described the negotiation as “hard and long” and explained they are being held in two levels: with the European Union and the International Monetary Fund, adding that there is also a third level: “It is a negotiation between the EU and the IMF, a tough negotiation, because the IMF wants to remain in the Eurozone.”
Finally, the Greek government Vice President declared that there will not be any additional austerity measures, no wage or pension cuts and no new taxes on citizens, while he ruled out the discussion on a new program, as “we are talking about a technical extension of the disbursal procedures that does not constitute a new Memorandum, a new program or a new Troika.”
Venizelos to visit Berlin on Wednesday
Venizelos will travel to Berlin on Wednesday for two days of talks, it was announced today. According to Greek media, the Greek government Vice President will meet with German Finance Minister Wolfgang Schaeuble, Foreign Minister Frank-Walter Steinmeier and the chairman of the Social Democratic Party (SPD), Sigmar Gabriel.

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