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Greek people, not Syriza, will achieve a breakthrough in the crisis Greek people, not Syriza, will achieve a breakthrough in the crisis
(about 4 hours later)
Greece’s latest “crunch” week – a €300m payment is due by Friday to the International Monetary Fund – started in familiar confused fashion. At the weekend Alexis Tsipras, the Greek prime minister, blamed creditors’ “absurd proposals” for the failure to reach a deal to release bailout cash, arguing that eurozone hardliners want to create a “two speed Europe.” Greece’s latest “crunch” week – a €300m payment is due by Friday to the International Monetary Fund – started in familiar confused fashion. At the weekend, Alexis Tsipras, the Greek prime minister, blamed creditors’ “absurd proposals” for the failure to reach a deal to release bailout cash, arguing that eurozone hardliners wanted to create a “two-speed Europe.”
Then Greece’s new representative at the IMF withdrew from the job under pressure from MPs within the ruling Syriza party. Despite all that, there was brief excitement when it was rumoured that a funding and reform package was set to be announced within hours. Naturally, nothing materialised.Then Greece’s new representative at the IMF withdrew from the job under pressure from MPs within the ruling Syriza party. Despite all that, there was brief excitement when it was rumoured that a funding and reform package was set to be announced within hours. Naturally, nothing materialised.
In theory, the logjam could be broken at any time in coming days. In practice, one suspects the cold-headed argument made by Huw Pill, Goldman Sachs’ chief European economist, is correct: a technical default by Greece, creating even more pressure on its banking system, may be necessary to encourage a deal. Then there is an equally important point: even if a deal is struck, new elections, or a referendum, may be required to provide a new political mandate in Greece. In theory, the logjam could be broken at any time in the coming days. In practice, one suspects the cold-headed argument made by Huw Pill, Goldman Sachs’ chief European economist, is correct: a technical default by Greece, creating even more pressure on its banking system, may be necessary to encourage a deal. Then there is an equally important point: even if a deal is struck, new elections, or a referendum, may be required to provide a new political mandate in Greece.
The thought behind both points is simple. Syriza is not going to get what it was elected to deliver – continued membership of the euro but with no austerity conditions attached and no oversight by lenders. That prize is not on the table.The thought behind both points is simple. Syriza is not going to get what it was elected to deliver – continued membership of the euro but with no austerity conditions attached and no oversight by lenders. That prize is not on the table.
A technical default, intensifying the squeeze on Greek banks, might lead to the Greek government paying pensions in IOUs and wages in cheques drawn on Greek banks that lack funds. At that point, Pill argues, it would be easier to sell a deal within Greece that increases the chances of public sector workers and pensioners being paid in hard euros.A technical default, intensifying the squeeze on Greek banks, might lead to the Greek government paying pensions in IOUs and wages in cheques drawn on Greek banks that lack funds. At that point, Pill argues, it would be easier to sell a deal within Greece that increases the chances of public sector workers and pensioners being paid in hard euros.
Such a process would be brutal, of course, but it may be the reality of the political standoff. It would also mean weeks of delay before elections or a referendum could be held. This week’s supposed make-or-break moment, then, may be less than it appears: the last chapter arrives only when Greek electors have spoken.Such a process would be brutal, of course, but it may be the reality of the political standoff. It would also mean weeks of delay before elections or a referendum could be held. This week’s supposed make-or-break moment, then, may be less than it appears: the last chapter arrives only when Greek electors have spoken.
Lloyds: trading plan beats retail planLloyds: trading plan beats retail plan
It is very sensible for George Osborne to extend until the end of the year the drip-feed of Lloyds Banking Group’s shares into the market. The so-called “trading plan” devised last December is working well. The state’s stake has fallen from 25% to 19% in a little less than four months and the public purse has been receiving progressively better prices for its shares. It is very sensible for George Osborne to extend until the end of the year the dripfeed of Lloyds Banking Group’s shares into the market. The so-called “trading plan” devised last December is working well. The state’s stake has fallen from 25% to 19% in a little less than four months and the public purse has been receiving progressively better prices for its shares.
As argued here previously, the success of the trading plan makes a flashy offer of shares to private investors completely unnecessary. The government is on the hook, of course, because David Cameron made a pre-election promise. But, really, what’s the point?As argued here previously, the success of the trading plan makes a flashy offer of shares to private investors completely unnecessary. The government is on the hook, of course, because David Cameron made a pre-election promise. But, really, what’s the point?
Officially, it is to promote a share-owning democracy and allow the punters to share in the revival of Lloyds. What the government doesn’t mention, though, is that the bells and whistles of a retail offer – the discounts and loyalty bonuses – are a cost to the public purse.Officially, it is to promote a share-owning democracy and allow the punters to share in the revival of Lloyds. What the government doesn’t mention, though, is that the bells and whistles of a retail offer – the discounts and loyalty bonuses – are a cost to the public purse.
The sums aren’t enormous. Depending on how generous Osborne wants to be with other people’s money, they might add up to £200m-£400m, which is not so much in the context of the original £20bn bailout. But it is also money that does not have to be spent. The sums are not enormous. Depending on how generous Osborne wants to be with other people’s money, they might add up to £200m-£400m, which is not so much in the context of the original £20bn bailout. But it is also money that does not have to be spent.
At the current rate of progress, the little-and-often trading plan would find buyers for the remaining shares within a year or so at the keenest prices. A retail offer will take longer (it probably wouldn’t happen until next spring and then the government would have to hang onto the rump loyalty shares for 12 months) and will involve discounts. At the current rate of progress, the little-and-often trading plan would find buyers for the remaining shares within a year or so at the keenest prices. A retail offer will take longer (it probably wouldn’t happen until next spring and then the government would have to hang on to the rump loyalty shares for 12 months) and will involve discounts.
The choice ought to be simple: stick to the trading plan. It is only a rash election pledge that is getting in the way of common sense.The choice ought to be simple: stick to the trading plan. It is only a rash election pledge that is getting in the way of common sense.
A quick deal for Plus500A quick deal for Plus500
After seeing their shares fall rapidly from 750p to 250p, investors in spreadbetting outfit Plus500 may be grateful for small mercies, such as Teddy Sagi’s Playtech gaming firm showing up with a £460m, or 400p-a-share, bid.After seeing their shares fall rapidly from 750p to 250p, investors in spreadbetting outfit Plus500 may be grateful for small mercies, such as Teddy Sagi’s Playtech gaming firm showing up with a £460m, or 400p-a-share, bid.
If the agreed takeover happens, it would indeed represent a happy-ish ending for Plus500, at least for those investors who bought at flotation at 115p in 2013. The company, having grown too quickly for its own good, is currently in a fine pickle, obliged to implement money-laundering checks on customers in a hurry under the orders of regulators.If the agreed takeover happens, it would indeed represent a happy-ish ending for Plus500, at least for those investors who bought at flotation at 115p in 2013. The company, having grown too quickly for its own good, is currently in a fine pickle, obliged to implement money-laundering checks on customers in a hurry under the orders of regulators.
But this deal has been negotiated in the space of a week. Even with everybody working flat-out, there is a limit to how much due diligence Playtech can have done. Material adverse change clauses apply, note. Plus500 shareholders should back the deal – but also cross their fingers.But this deal has been negotiated in the space of a week. Even with everybody working flat-out, there is a limit to how much due diligence Playtech can have done. Material adverse change clauses apply, note. Plus500 shareholders should back the deal – but also cross their fingers.