LUXEMBOURG (AP) — Europe was scrambling Friday to pick up the pieces after another failed meeting over Greece's bailout that reinforced fears that the country was heading for bankruptcy and a possible euro exit.  Several European countries said openly they are getting ready for the possibility of Greece leaving the euro. And though there was no sign of panic in the streets of Greece over that prospect, officials say Greeks are taking money out of banks in growing amounts.  As a result, the European Central Bank has scheduled a teleconference of its governing council to discuss emergency credit for Greek banks — just two days after it increased the amounts it was willing to provide. The ECB has been steadily increasing the credit it allows Greek banks to draw on.  The ECB could turn off that support if it thinks Greece is going bust, but that's not expected ahead of Monday's emergency meeting of the eurozone's 19 leaders. The country needs a deal to get more bailout loans from creditors before June 30, when it has the first of a series of debt repayments it cannot afford.

Without a deal, the ECB would be under intense pressure to stop pumping money into a banking system that might collapse.  Relations between the creditors and the Greek government, which was elected in January on a promise to end the crippling austerity cuts demanded since 2010 in return for the bailout money, have soured significantly in recent days, with each side blaming the other in stronger language for the impasse.  In Athens, there were no visible signs of distress, or larger than usual lines at banks or supermarkets, despite reports of large withdrawals and transfers, which can also be made electronically.  An EU official said 2 billion euros ($2.3 billion) had been taken out of Greek banks in the last three days.  "Money is going out of the Greek banks faster than at any time before," said the official, who spoke only on condition of anonymity because of the sensitive nature of the situation.

Syriza ran on an anti-austerity platform, knowing [1] the dates and amounts of repayment of Greek debt, [2] the condition of the Greek economy, and [3] that Greece's creditors had never stated that they would agree with Syriza's anti-austerity platform and [a] change the amount of the loans due, [b] change the dates on which the loans were due, or [c] offer Greece more money even if it did not pay its loans in full and on time. Syriza gambled with the Greek people as its chips and bet that 3a, 3b, or 3c above would occur simply because of the intimidating, bullying, insulting and narcissistic tactics of Varoufakis and Tsipras. In the end, Syriza lost its bet because Greece's creditors refused to be intimidated, and they said: "Fine, Varoufakis and Tsipras, you keep your anti-austerity platform; we'll keep our money. Have a good day." Syriza has what it told Greek voters they would have: anti-austerity. Therefore, about what can Syriza and those who voted for it complain? Syriza has only itself to blame - as do those Greeks who voted for Syriza. They shall have no future loans from creditors, and they shall be responsible for finding the money to run their anti-austerity economy. Where will Syriza find such money to run their anti-austerity economy? Nowhere, because the money does not exist and never existed: Greeks do not and shall not pay taxes, so there is no revenue, and no private or governmental lender will loan Greece money. In the end, and ironically, Greece shall have its anti-austerity, but it shall not have an economy and, therefore, its economy shall be the greatest anti-austerity economy in the world. If any Greek Erinyes are searching for someone to blame for this, they can start with Varoufakis and Tsipras. And what shall happen next? "Let all the poisons, which lurk in the mud, hatch out."

Greece’s international creditors are aiming to strike a deal to stop Athens defaulting on its debt and possibly tumbling out of the euro by extending its bailout by six months and supplying up to €18bn (£12.9bn) in rescue funds.  The Brussels-based negotiating team are also proposing to pledge debt relief for the austerity-battered country – but officials stressed that a breakthrough hinged on a positive response from the Greek prime minister, Alexis Tsipras.  Negotiations were continuing on Sunday night, hours ahead of crucial gatherings of eurozone finance minsters and leaders in Brussels, which Angela Merkel, the German chancellor, François Hollande, the French president, and Tsipras are expected to attend. All three leaders spoke over the weekend, with contributions from European commission head Jean-Claude Juncker.  The crisis meeting was convened in an attempt to ease Greece’s debt crisis before a critical €1.6bn payment to the International Monetary Fund falls due next Tuesday. 

Reuters reported on Sunday that €1bn worth of withdrawal orders had been lodged with Greek banks over the weekend – on top of the €4bn that left the country’s banking system last week. The news agency also said that the European Central Bank was set to discuss extending financial help to the banks this morning, amid fears that Greek banks would be unable to open on Tuesday.

A hectic round of telephone diplomacy took place over the weekend between leaders in Athens, Berlin, Paris and Brussels while technocrats on both sides sought to hammer out the small print of the fiscal arithmetic forming the basis for a last-minute agreement days before Greece’s existing bailout expires.  With time running out, the only way an IMF default could now be avoided is for the ECB to raise the ceiling on the short-term debt Athens is allowed to sell, the officials said. This would need to happen by Monday next week. Brussels sources also signaled moves to address Tsipras’s key demand – that the creditors need to offer debt relief to Greece.  Some form of debt restructuring would be promised to Athens in the future, but it would come with strings attached and not as part of the current bailout package, they said.  Yanis Varoufakis, the outspoken Greek finance minister, said on Sunday that Greece’s fate hinged on Merkel, and told her she faced a stark decision. But his spokesman reacted sceptically to suggestions of creditor promises on eventual debt relief, describing the eurozone as “pathological liars”.

EU council chief Donald Tusk has left his meeting with Mr Tsipras and given a short statement to reporters.  Here's what he had to say: "I have called this summit because time is running out, not only for Greece but all of us. We only have one week before the current programme expires. This means the lets-wait-and-see strategy must end.  "It is my responsibility to ensure we respect all taxpayers in all a countries. If they hadn't borne the burden of austerity, they wouldn't be able to help Greece today.  " I am absolutely convinced that the blame game leads nowhere. I want all cards on the table. This doesn't mean negotiating technical details, but to end the political gambling. Since I called this informal meeting, some promising things have happened, including today's talks. And the latest Greek prosposals are the first real proposals in many weeks, although they still need an assessment from the institutions.  "We must avoid the worst case scenario, which means an incontrollable, chaotic Greixdent." ...George Saravelos of Deutsche Bank highlights that the only thing keeping Greece in the euro is the ECB.   The central bank moved to raise its ceiling on emergency funds today by a further €1.3bn as the country is in the throes of a bank run. Saravelos now thinks the ECB will now be called upon every day to hike its liquidity limit to prevent a banking collapse. But, in order for that to happen, European leaders need to provide some positive signs out of tonight's series of meetings.  Some insights:  Written acknowledgment of progress is likely to be required to maintain ongoing ECB financing of Greek banks, with the central bank approving an additional increase in ELA provision to the Greek banking system this morning given accelerating deposit outflows. Given the scale of deposit outflows and ECB discomfort with rising exposure, ELA approval is likely to take place on a daily basis over the course of the week depending on the evolution of talks.  If progress is achieved over the course of the day, the Euro leaders summit is likely to open discussions for post-programme arrangements, though press reports that a parallel discussion around a "plan B" of a breakdown in talks is also possible.  The Euro leaders summit is likely to address some of the parameters for a third programme, inclusive of the potential for debt relief. We would expect a re-affirmation of the November Eurogroup 2012 commitments on the latter to be the most likely outcome.  Nothing is likely to be finalized unless a full staff-level agreement has been reached between Greece and its creditors over the next few days. There will be a second (and likely last) opportunity for Greece to be discussed at the Euro-area leaders level in Thursday/Friday’s EU leaders’ summit.

The key dates for Greece over the next 2 months, via RBC

    

The banks were not allowed to fail. Greece is not allowed to fail. In our classrooms the children are not allowed to fail. Failure is a necessary part of life. It is essential if capitalism to succeed.
The lenders should not have provided the money and the Greeks should not have borrowed so heavily. Both should lose.Visitors to the Greek islands this year might conceivably begin their holidays with euros in their wallets and go home with drachmas. In between might come a tumultuous period when capital controls lead the cash machines to run dry – and the government suspends all movement in and out of the country.  Travel agents have sought to play down any concerns and reassure British holidaymakers. A spokesman for Thomas Cook said that all contingency plans were in place, adding: “We’re prepared for any scenario."   The Association of British Travel Agents (ABTA) said there was no need for anyone presently heading for Greece to rebook for another destination. “Any switch to a new currency would take time and Euros would likely be accepted in the interim,” said a statement from ABTA. “This is an unusual situation - but the industry is experienced in handling unusual situations.”  The one piece of advice is that travelers should take enough cash in euros to last for their entire holiday – just in case the banks collapse halfway through a summer break.  Meanwhile, frantic efforts are underway to secure a deal between Greece and its creditors before the IMF payment falls due in 10 days’ time. The aim of the talks is to release enough of the €7.2 billion (£5.1 billion) in Greece’s existing bailout fund to allow the country to avoid a default. Popular support for the euro is creaking as the economy is thrown back into turmoil.  More than 210,000 Greek families have applied for meal coupons and free electricity since Syriza launched a humanitarian aid programme in April.  The jobless rate is also creeping up. Over one out of every four Greeks remain out of work.  Of the hordes of unemployed, over 70pc have been without a job for over a year. Athens and its environs hold the ignominious title of the long-term unemployment capital of Europe - worse than the poorest parts of rural Slovakia and Latvia.

Nominal GDP is now set shrink to its lowest level since 2003 this year, the riches of its early euro boom years all but wiped out. It is the deepest depression suffered by any developed economy in the modern era - eclipsing that witnessed in 1930's America.

FINLAND - Faced with a bloated state, below-par growth, and prices and costs that have risen at a much faster pace than the rest of the eurozone, the medicine is a familiar one.  "The key to resolving the serious problems in the economy lies in structural reforms, fiscal consolidation and improved cost competitiveness," the Bank of Finland's latest health check of the economy said last week.

The phrase could have been taken from Greece's own long austerity prescription, but with an ageing population, state spending approaching 60pc of gross domestic product (GDP) and tax revenues far short of this, something has to change, and quickly. Finland, which has become known as one of the eurozone's lead preachers of fiscal prudence, will embark on a €10bn (£7.2bn) round of belt tightening over five years. Well, Finland and Estonia are economically (and culturally) closely wed, Greece and Cyprus like.  Finland and Russia. Well Finland is the only EU member nation to border Russia and not be a NATO member. I suspect they are wary of Russia but have a greater understanding of Russia's somewhat justified paranoia and anger with broken ' influence space' NATO invasions since the 1990's. They seek the old USSR relationship probably which worked well for Finland. Your last sentence captures this. BTW by many polls the most pro-EU Nordic - not members yet (and they were in the list with Denmark, UK and Ireland in the 1960's - is Norway.  Following April's elections, Juha Sipila, the prime minister, Timo Soini, the eurosceptic foreign minister and Alexander Stubb, the finance minister, have pledged to create more jobs, to get the economy moving and avoid a "lost decade" from a lack of reforms.   Finland is out on its own compared to the other Nordic countries in joining the Euro. Norway isn't even in the EU, Sweden has done well keeping the Krona and Denmark has kept their Krona but ties it to the Euro, a tie that could easily be broken if the proverbial hits the fan. Finland is looking rather isolated. Of course the Baltic states are in the Euro but they have all paid a heavy price for membership.  Would I be right in thinking that Finland is being hurt by Russian retaliatory sanctions rather more than other countries? Whilst they must have an historical healthy fear of Russia, I would imagine they are far more scared about the West restarting the Cold war in extreme earnest because of western interference in the internal affairs of Ukraine.