Greece wants to have a deal on debt restructuring done by tonight, though technically it won't go into a real chaotic default until March.
Here's the problem though, it's not just about getting its creditors to agree to take a given haircut on their holdings.
Euro zone finance ministers told Greece it could not go ahead with an agreed deal to restructure privately held debt until it guaranteed to implement reforms to secure a second financing package from the euro zone and the IMF.
Euro zone ministers had hoped to meet on Monday to finalize the second Greek bailout, which has to be in place by mid-March if Athens is to avoid a chaotic default, but the meeting was postponed because of Greek reluctance to commit to reforms.
This isn't new, but it's worth repeating... The problem isn't just restructuring, but getting more aid, which will be on the condition of more reforms, which are already tearing apart society.
Tick... tick... tick...
UPDATE: Kathemirini reports on a Jean-Claude Juncker interview in Der Spiegel wherein he apparently says the same thing, that Greece's choice is basically: Default or reform. The key thing here is that Euro leaders just don't seem scared of default anymore. In this post LTRO world, Greece has lost its leverage.
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See Also:
- GREECE: Debt Deal Talks Will Continue Through Monday
- Emergency Meeting Called In Greece, New Sign Bailout May Be In Trouble
- REPORT: ECB Involvement Is Now Make Or Break Condition Of Greece Debt Deal