Soros bets against Euro

[Jan Klimkowski]

From AFP - the deal is off:

Germany 'dismisses Greek debt compromise plan'

(AFP) 7 hours ago

BERLIN A German compromise plan to resolve a dispute with the European Central Bank over the Greek rescue that was reported by Der Spiegel magazine is no longer on the table, a government source said Sunday.

Der Spiegel had reported ahead of its Monday issue that the German finance ministry called for a beefed-up version of Europe's temporary bailout mechanism lending to Greek banks to insure they have adequate collateral with the ECB.

It would boost the effective lending capacity of the Emergency Financial Stability Facility (EFSF) to 440 billion euros ($629 billion) and see member states double the amount of guarantees they provide the fund.

Germany's share of guarantees would climb to 246 billion euros from 123 billion euros, according to the report.

But a German official, who spoke on condition of anonymity, said that while "several options" were being debated to involve private creditors in an Athens rescue, the reported proposal was "no longer on the agenda".

The source added that the initial plan had differed from the reported proposal in "key aspects".

German officials say they seek a plan with as few "unwanted side effects" as possible.

The ECB has repeatedly warned that requiring creditors to swap existing Greek debt for new bonds with longer maturities could amount to a default, something which could send shock waves through the European and global financial systems.

German Chancellor Angela Merkel and French President Nicolas Sarkozy agreed Friday to a plan through which private bondholders could volunteer to buy new government bonds to replace ones that matured.

This "rollover" option was favoured by the ECB and France, since it avoids the risk of rating agencies declaring Athens in default.

Germany had previously called for full-scale debt restructuring but Merkel appeared to back down after the meeting with Sarkozy.

Eurozone finance ministers were to meet in Luxembourg later Sunday for talks on saving Athens from default as early as next month.

Merkel said in a separate interview released Sunday that she was upbeat about the eurozone despite the Greek crisis.

"We are already far better equipped now in Europe," Merkel told Super Illu magazine, referring to austerity measures taken by debt-laden member states.

But she said the countries sharing the euro still had to work through "significant failures" and "sins of the past" in terms of fiscal discipline.

Merkel said Greece had "achieved a great deal in the last year -- we should recognise that".

"It has cut new borrowing by five percent -- that is remarkable savings but it is not enough," she said.

The Bloomberg piece below, suggests that this may be brinkmanship to attempt to bully Greece into offering more collateral (eg Greek islands - for those who've been following this thread), more privatisation of state infrastructure (the multinational looting and plundering agenda), and further destruction of Greek wages and pensions (the globalist wage arbitrage and hatred of the welfare state agenda).

The Greek people should take the gag out of their mouths, remove the electrodes from their skulls, stand up and tell the ECB and IMF to get out of their homes and out of their country.

European governments weighed withholding half of Greece's next 12 billion-euro ($17.2 billion) aid payment, seeking to keep the country solvent while maintaining pressure on the government to slash the debt that pitched the euro area into crisis.

Euro-area finance ministers may authorize only a 6 billion- euro loan to tide Greece through bond redemptions in July, while further aid hinges on Greek budget cuts, Belgian Finance Minister Didier Reynders said.

"We will in any case try to release the necessary funds for the short term," Reynders told reporters before a meeting of euro-area finance ministers in Luxembourg tonight.

Europe's financial brinksmanship ran in parallel with Greek Prime Minister George Papandreou's effort to save his government from collapse and win parliamentary backing for spending cuts, tax increases and state-asset sales needed to keep bailout funds flowing.

Tonight's euro-area finance ministers' meeting coincided with the start of a three-day Greek parliamentary debate in Athens over a confidence vote in a new cabinet at what Papandreou called a "critical crossroads." Papandreou has 155 seats in the 300-seat parliament.

Papandreou said he planned to hold a referendum later in the year for changes to the constitution that would reform the political system in the country. The prime minister said his goal was to tackle the root causes of the country's debt and deficits that are "symptoms of the illness, not the cause."