Puppet Government

The Financial Times reports Memo Reveals Extent of Control Bailout Monitors Will Have on Greece.

The 29-page memo details what Greece will have to do in order to get a third bailout program. The memo covers damn near every aspect of Greek finances, effectively making the Greek parliament a puppet government of Germany.

Devil Details 

A one line preamble note reads “the recovery strategy takes into account the need for social justice and fairness”.

Tsipras also won a “guaranteed minimum income” but the Financial Times revealed details.

I suspect what we are really talking about is some form of minimum unemployment insurance, with lots of restrictions and controls.

Growth Projections 

EU officials believe the Greek economy will contract 2.3 per cent in 2015 and 1.3 per cent in 2016. They also predict Greece will bounce back in 2017 with growth of 2.7 per cent that year, before accelerating to 3.1 per cent in 2018.

In an over-under bet, I will take the “under” on GDP growth in 2017-2018 even though many of the reforms will help Greece over the long haul.

The notion that Greece will have a 3.5 percent primary surplus in 2018 and beyond, is unquestionably absurd.

Germany Wants More Strings

ZeroHedge reports DAX Crashes After Germany Warns Greek Bailout “Insufficient”

ZeroHedge lists some additional demands by Germany, citing the Bild and Bloomberg. As frequently happens, there is no link to Bloomberg or Bild and searches for items in the list all point back to ZeroHedge. 

I suspect this may be a rehash of a report that ties back to the July 11 article Germany Says Greece's Latest Proposal to Creditors “Insufficient” on the English edition of EFE.

EU Guarantees

Reuters reports Germany Examining Whether EU Can Guarantee Greek Debt to IMF