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Eurointelligence Daily Briefing: Legal and financial advisers warns eurogroup that PSI offer may fail
According to a story in the Financial Times, the Greek debt restructuring is now a race against the time; the euro working group has received legal and financial advice according to which the planned strategy might fall; Lazard warns that the delay of parliamentary ratification until after the debt swap is launched creates extreme uncertainty that reduces the success chances of the deal; a law firm warns massive reputational damage that would result from a ratification failure; today's eurogroup meeting about Greece's second bailout was cancelled as the Greek government failed to produce the required documents; Antonis Samaras has yet to hand in his reform commitment letter, though  might do so today; the euro working group rejects Greece's proposal to make up for €325m shortfall by defense spending cuts and ask for pension cuts instead; There is also a widening split over whether Athens should be trusted with a second bail-out; There is a growing belief in Northern Europe that the EU can contain the blowback from a disorderly default; Jens Weidmann says the ECB cannot participate in a debt restructuring as this would amount to monetary financing; he also seems to oppose forgoing on the ECB's profits; also expresses criticism of the expansion of the ECB's balance sheet; Reuters reported that Spain may get penalised for overstating the 2011 deficit figures; The Spanish government and the Commission denied these reports; the OECD criticises Germany over its lack of reform; Italian bond auction was a success despite the downgrade; Claudia Buch is to replace Beatrice Mauro di Weder in Germany's Council of Economic Advisers; the head of Bosch says Greece should be excluded from the eurozone - another sign that German industry loses confidence in the euro project; Nicolas Sarkozy says, if re-elected, he will bypass his parliament and ask for a referendum to back the implementation of the fiscal compact; Martin Wolf, meanwhile, says the eurozone is in a limbo, too integrated to
break up, not integrated enough to work well.

tens of millions of people stand to see their lives ruined because the bureaucrats at the ECB don't understand introductory economics -- Dean Baker
by Migeru (migeru at eurotrib dot com) on Wed Feb 15th, 2012 at 03:16:53 AM EST
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