ECB - Christian Noyer said that Greece's debt cannot be restructured

Chancellor Angela Merkel's spokesman says Germany sees no basis at present for entering negotiations on a new bailout program for Greece. Steffen Seibert said Monday that Germany respects the "clear 'no' vote" by Greeks against austerity measures demanded by creditors and that "the door for talks always remains open." However, he said the conditions are "not there at present to enter negotiations on a new program." He said the "no" vote is a vote against the principle - still supported by Germany - that solidarity requires countries to take responsibility. Seibert says Europe will explore what possibilities there are to help Greek citizens and "a lot will depend on what proposals the Greek government now puts on the table." Regarding requests by Athens to restructure its debt, finance ministry spokesman Martin Jaeger said: "I can see no reason to enter into discussions."  Meanwhile, ECB governing council member Christian Noyer said that Greece's debt cannot be restructured. "Greek debt held by the Eurosystem is debt that cannot by its very nature be restructured because that would be monetary financing of a state," he said...The French advisor went on to say that Merkel had gone out on a limb to reach a compromise with Greece over a credit deal. 

"Merkel was very open to negotiations with Greece, showing patience and even a sort of maternal protection regarding Alexis Tspras," he said. France's Socialist government still hopes to avoid Greece leaving the euro, but France's opposition conservatives are now calling for Greece's orderly exit from the eurozone.  Alain Juppé from Nicolas Sarkozy's centre-right Republicans party, said: "Greece is no longer capable of sticking to the disciplines of the eurozone."

"We must help it to organise its exit without any drama."...Angela Merkel displayed "maternal protection" towards Greece's Leftist prime minsiter Alexis Tsipras who betrayed the trust of the German Chancellor and François Hollande - despite France's more conciliatory line with Athens, according to a French presidential aide. The comment comes as the French and German leaders are to meet in Paris at 6pm local time (5pm BST) to discuss the Greek crisis, followed by a working dinner at 7.30pm at the Elysée Palace.  The Hollande advisor's comment to AFP suggests France is hardening its line as facilitator vis a vis Greece and aligning itself more with Germany in a bid to show a united Franco-German front.  The aide admitted Hollande got his fingers burned after seeking a compromise with Greek PM Tsipras, saying: "It will be difficult with Tsipras. There's a real problem of trust between him and us and us and him."    Brussels to Greece: we're going to make your life much harder That was quite the press briefing from Commission vice-president Dombrovskis. In short, Brussels will not be giving the Greek government anywhere near an easier ride after last night.

Some points:

• "The place of Greece is and remains in Europe", but when pressed, Mr Dombrovskis did not repeat that Greece's place remained in the single currency

• Brussels questions the legality of the referendum and the nature of the question: it is "neither legally nor factually correct"

• The Commission will not carry out any talks with Athens before they get a mandate from the eurozone's finance ministers who are meeting tomorrow

• Greece's vague promise of debt relief as agreed back in 2012 is now no longer on the table after the second bail-out expired last week

• The No vote has made life much more "difficult" for the Greek government, but the ball is in their court to now come up with some credible reforms

No way Reichs Chancellor Merkel was going to allow one of the sub-members of her club to derail her project. Greece is owned lock stock and barrel by the EU. Suckers

Germany is at last bowing to pressure as a chorus of countries and key institutions demand debt relief for Greece, a shift that could break the five-month stalemate and avert a potentially disastrous rupture of monetary union at this Sunday’s last-ditch summit.  In a highly significant move, the European Council has called on both sides to make major concessions, insisting that the creditor powers must do their part as the radical Syriza government puts forward a new raft of proposals on economic reforms before a deadline expires tonight. If Greece stays within €uro this will help to bring down this damned currency within the next 5 years, as it will accelerate drain of liquidity, speed up moral hazard and force the counter measures of Mario "Printy" Draghi. Inflation and big bang sometimes.  If Greece leaves the €uro this will help to bring down this damned currency within 10 years as the other Austerity victims as well as moral hasard victims will learn, that there is a life beyond EU-summits, Brussels, ECB, ESM ESFM, EFSF, TargetII, LTRO and Juncker - a life in proudness and dignity (and a living within ones means, regrettably). At the end, when all nations left €uro, we will be back again in national currencies.

At what point will the EU recognise the futility of continuing with the Euro and their integration projects...by "democratic means"?

The best case scenario is the total collapse of the Euro and the EU.  This scenario is the one the French were banking on, that the Euro would deliver integration. Integration is a core belief and the Eu wont let go of this.  The Euro cannot succeed without integration and this was known at the start.  The problems that would ensue without it were known with uncanny accuracy at the start and they went ahead.  This latest situation is the EU still clinging to the belief that somehow or other they can force regime change (to who? to one of the EU puppet parties that Syrzia displaced?) that the project will continue till everyone agrees to hand over sovereignty. This will then rescue the Euro.  But even though the Euro has caused such problems the PIIGS were not amused by Merkel's 2011 call for integration and hence austerity measures designed not to help but finish the job.  And what success have they had? Ireland is even doing rather well .... but only for so long as they can set their own corporation tax. Italy SPain and Portugal seem to have become accustomed to the austerity measures so no doubt the EU is intending to tighten up. Or it was before Greece elected a "populist" party.  But the EU cannot allow for any country to recover from the damage of the Euro except through integration and they cannot accept any other path unless they give up on the idea. That they will not do if we consider the very timely publication of the new blueprint on integration published by Junkers Dieslbloem Tusk et al. and this surely must make clear to Cameron that his hopes of reforms and repatriated powers are a nonsense even if he were Tsipras which he is not.

The EU will undergo years of painful convulsions, precipitating a new treaty that imposes greater centralisation and restrictions on the fiscal independence of nation states"  Now, this was predicted years ago for the case when the real debt for the EU cluster increased faster than the real growth the debt being the current nuclear glue.  In theory, given the assurance of a cluster of states with very different economies, a single currency can only benefit a few or none a all and many economies cannot tolerate the level of the euro.  Greece and Ireland are hopeless cases where there is no possibility of either generating enough revenue to service and pay down the debt principle in less than several decades. The structural problems of the Greek and Irish economies are rigid and soon Italy will join in with talks and such over debt centered on forgiveness.  The Germans, who have a strong economy and run surpluses, have a fine structure with modest salary rates and are superbly suited to participate in world commerce using the euro. For this, they are unfair and seem to be the ones who should subsidize weaker economies just because they are successful.  This intractable situation persists and grows in the US states as well with California and other states having staggering debts although some 48 are presumed to have some balanced budget laws that prevent excessive debt. The credit ratings of California and Zimbabwe are identical in principle.  No wonder that many are fleeing to Bitcoins and other variants of money to escape the pregnant moment when their banks will close for a few days and then put in capital controls and lose much of their savings. There is really no option for many countries not to do this if Greek and Cypriot cases were handled with minimal blood shed or social unrest... The EU is risking the creditors money to play hardball and force regime change on Greece, to force the PIIGS to surrender sovereignty.   Instead of playing the EU's game and risking huge losses maybe it is for the creditors to stand up to the EU and impose their will.   It seems to me the EU is intent on brinkmanship in the hopes of bring down the Greeks and setting an example to the rest of the PIIGS.   The EU is using economics to play politics of the worst sort. "Economic Genocide" is the bets description I have heard so far of their malignant outlook.

The Eurosceptics were right; the problem now is that in the best case scenario the region will undergo years of painful convulsions, precipitating a new treaty that imposes greater centralisation and restrictions on the fiscal independence of nation states. Such a move would outrage Eurosceptics, needless to say, and could lead to a collapse of the whole project if it is rejected by voters, but it is the only hope for the single currency’s long-term survival. Reopening treaties properly would create a major opportunity for the UK, albeit one that may come too late for David Cameron’s renegotiation. So what are the options after the Greek vote? If they vote No, it’s game over for Greece’s membership of the single currency. The country’s banks don’t have enough money to last for much longer, and there is little reason why the European Central Bank would wish to extend them billions more if it is snubbed by voters. Either the banks would have to stay shut, which means that the country will run out of food and essentials as it becomes impossible to pay for imports, or depositors would have to be bailed in, wiping out a large chunk of their wealth but recapitalising financial institutions.  The only other alternative would be for the Greek state to introduce IOUs and then a new physical currency, while re-denominating all Greek bank accounts into drachmas. The national debt, which is owed in euros, would explicitly be repudiated, triggering a major crisis and inflicting vast losses on the European Central Bank, IMF and other creditors. The new drachmas would, of course, plummet in value, and it would be hard to avoid widespread chaos and hyperinflation if the government is forced to crank up the printing presses to pay for its bills.

WHAT THE BRITISH PRESS REPORTS ....:

There is a way that Greece could agree a bailout programme and avoid defaulting on its payments to the European Central Bank in two weeks, if tonight’s negotiations go well.  If the option of a new bailout through the ESM gets a go-ahead, the best predictions of actual cash disbursements are mid-to end August, way too late to stop Greece defaulting big time on the €3.5bn in bonds it must redeem at the ECB on July 20.  But given a modicum of goodwill, something so far in very short supply (although the general temper today has been a lot better than when Yanis Varoufakis was doing the rounds), there is a fix available to the ECB problem.  When Greece’s 2nd bailout expired last Tuesday, some €3.3bn in ECB profits from its securities markets programme due to Greece also vanished [that’s money that the ECB made from bailing Greece out].  For 2014 the profits amounted to €1.85bn. These are held in an ESM account and could be released to the Greeks if the eurogroup so decided. There is also a further €1.5bn currently held by eurozone governments. This money could also be released to the Greeks -- meaning the ECB problem is effectively solved.  A eurozone source says:  “It’s not an easy solution, but probably the only solution,” The advantage here is that this money could be released without having to wait for any tiresome parliamentary procedures. But the fly in the ointment here is that both wads of cash need to be authorised by the eurogroup unanimously, meaning that a single country could veto the whole show. The German finance ministry, for example, has been sending negative signals on this, indeed it has been demanding back €500m of the money held by the ESM, the 2014 profits.

The EU however is an unelected septic tank.The Common Market (that we were given a vote on but deliberately and criminally lied- to by our own politicians who saw nothing but a huge trough to get their fat faces in) was actually a good idea. What we have actually got is a Fourth Reich....The EU "owns" about 200 billion in EFSF bonds it sold to finance Greece the past few years. The member states will have to pay the principal and interest as it comes due. Fortunately, were Greece to leave the EU, the money to do so is available since Greece is a net drag on the EU budget and the money the EU now sends to Greece through its various programs and agencies would be more than enough to cover the EFSF bonds. That the loss of these revenues would further crush the Greek economy is unfortunate but that is Greece's problem not Europe's!...That the Euro and the EU are a horrible construct is beyond doubt. Roger Bootle made a compelling case a couple of days ago that the EU, even if there were full political and fiscal union, has become a drag on economic growth with its regulatory apparatus and fixation on 'harmonizing' everything. However, the Euro and the EU do exist and they have to be managed as best as can be done. Greece is incompatible with either institution and, if it does not withdraw voluntarily from both the EZ and the EU, it must be expelled.  Greece is going to have revolving door governments for as far as the eye can see simply because the mess it is in is intractable. It is also the case that the EU cannot be ALL Greece ALL the time as it lurches from crisis to crisis and sends an increasingly bizarre cast of characters to EU summits and meetings. Europe needs to turn its back on Greece and deal with its own internal problems....The structural weakness of the EU has been exposed. An even "closer union" will not fix the Problem and a Stalin like strong man will be required to keep the corrupt mess from falling apart. A bloc is a bloc is a bloc.