Germany’s Angela Merkel and France’s Nikola Sarkozy finally opened up their cards, and from what it looks like they want a Europe without deficits and an EU without heavyweights. They announced that they now want a new treaty, with automatic penalties for countries which are a little bit “naughty”.
In such a framework, and after reading the telegrams from our embassies in Berlin and Paris, Greek Prime Minister Lucas Papademos and Evangelos Venizelos have decided to draw a new course of action. In two days in Brussels, the Greek Prime Minister and his Minister of Finance minister will ask for “decisions that will effectively erect protective walls for all countries” and the full implementation of the decisions of October 26.
“We must fully implement the decision of October and achieve 100% private sector participation in the PSI. This is the only way to reduce the debt by 100 billion, by 47% GDP. If we do not achieve this, we will have a funding gap and a vacuum at the sustainability of our public debt,” Venizelos warned.
Moreover, the Greek government now says no to:
- a two-speed eurozone
- the overthrow of the institutional parity of member states
- the perpetuation of inequalities within the eurozone
Thus, the Greek government will now insist on the issuing of eurobonds and the need to enhance liquidity for whatever this means for the role of the ECB. The Greek government also said that it is ready to assume the commitment for budget surpluses in exchange for the haircut. Sources also said that in regards to its legal form, instead of the constitutional provision, the process of ratifying the new treaty by the parliament now seems like a more favorable solution
Finally, the same sources added that in order to satisfy lenders and give a chance to the people to express themselves, the possibility of a referendum should not be excluded either.