29/6/15: Juncker to Greece: "say ‘yes’ regardless of what the question is"

Ok, folks. I never was a fan of Jean Claude Juncker, the [one of oh so many] European President.

But, honestly, where does one go from this:

Jean-Claude Juncker, the [EU] commission’s president: “I love you deeply - You shouldn’t commit suicide because you’re afraid of dying. You should say ‘yes’ regardless of what the question is.” A “no” vote in the referendum “will mean that Greece is saying no to Europe,” Mr. Juncker said.

(source: http://www.zerohedge.com/news/2015-06-29/juncker-greece-dont-commit-suicide-just-because-you-are-afraid-death)

Does anyone in Europe believe this to be a reasonable or functional basis for attempting to resolve the crisis? Irrespective of whether you take Greek side or creditors side (I can spot reasonable points on both ends of the argument), how can the above be construed as anything but a wholesale insult by a hopelessly out-of-touch-with-reality apparatchik?

There is really nothing one can add to this, other than convey a deep sense of basic, human, natural sense of horror...

11/6/15: What Markets Are Pricing in Greece-Troika ex-IMF Standoff

Head on collision warning 1: IMF has now left the 'political dialogue' room where Greece and Troika (pardon, Institutions) have been pretending to negotiate a pretence at a solution: http://uk.reuters.com/article/2015/06/11/uk-eurozone-greece-chance-idUKKBN0OR13020150611

Which brings us to the markets.

CDS-implied probability of default for Greece is now at 82.04%, ahead of Ukraine:

But bond markets seem relatively cool:

Which suggests two things:

1. Markets still anticipate a deal; but
2. Markets also push down expected duration / longevity of the deal and, in case of the deal unraveling, they expect lower recovery rates.

This, amidst continued 'warnings' and 'dire warnings' and 'ultimatums' and 'take-it-or-leave' offers and the rest of warring rhetoric is not a good omen for the crisis resolution.

Even Jean-Claude 'The Rubber Chicken of European Politics' Junker seemed to have given his last push to this: http://uk.reuters.com/article/2015/06/11/uk-eurozone-greece-juncker-attempt-idUKKBN0OR23V20150611?mod=related&channelName=businessNews and failed...

7/6/15: Another 'friend' bites the dust: Juncker on Greece

Despite all the warm and fuzzy feelings for Jean Claude Juncker's allegedly 'humanitarian' view of the Greek crisis, it is now apparent that Athens indeed does not have any friends left in the top echelons of European leadership. Per Reuters reports, Juncker's response to the Greek proposals for dealing with the crisis involved warning that "time was running out to conclude a debt deal to avert a damaging Greek default."

One has to wonder, though, what did Reuters mean (see full report here) by the reference to concluding 'a debt deal', since the Institutions (aka Troika) proposals last week included no deal on debt, as in none, nada, zilch. Only one proposal from last week covered the issue of debt - the Greek Government proposal that Juncker has rejected.

Of course, this is yet another iteration in the crazy game of chicken (or a game of crazy chicken) being played by the Institutions and Greece.

Not surprisingly, the EU dragged out its most 'happy to be seen as doing anything' leader, the EU Council President Donald Tusk, who went on to accuse the government of Greece of not playing fair with the lenders. Note: Poland, from which Tusk hails, did not lend Greece any funds (check the information here: http://www.bloombergbriefs.com/content/uploads/sites/2/2015/01/MS_Greece_WhoHurts.pdf and here: http://www.bruegel.org/nc/blog/detail/article/1557-whos-still-exposed-to-greece/), though of course, Tusk speaks for Europe (or rather the European Council Presidency he holds).

Things are getting dense now, as we head into the second quarter of June and the jumbo payment to the IMF gets closer and closer and closer.

26/11/2014: Juncker Start: Making Sure No Lessons of the Crisis Have Been Learned

More debt, more guarantees, more bureaucrats-administered 'help for the real economy' - it's business as usual in Brussels with the new Commission's plans for a 'EUR300bn investment fund'.

Some details here: http://euobserver.com/economic/126661.

And my comment here:

The problems, as I outlined in the comments on twitter and to EUObserver above, are multiple:

1. The new fund is debt-financed with EU guarantees - and we already have plenty of these schemes which de facto reallocate more and more indirect fiscal power to the Commission extra the normal budgetary procedures;
2. The new fund is going to be extremely leveraged - with a tangible capital base of EIB's EUR5 billion against EUR300-315 billion in disbursable funds (note: the EUR16 billion guarantee is hardly a form of capital). That's leverage levels in excess of Monte dei Paschi di Siena (currently at x54.31) - hardly an image of financial rude health and prudence;
3. The new fund will have to be 'leveraged' against sovereign balancesheets at the time when these are already carrying massive debts. Of course, the EU will concoct an accounting trick to make sure the new debt is not counted as official Government debt, but we all know it will be;
4. The new fund will be run by EBI - which is a de facto bunch of supra-national bureaucrats dressed up as bankers. How real is their concept of 'real economy' is - no one quite knows, but apparently EBI has been around during the crisis and made zero real impact so far. Shoving more money into it is like stuffing an old mare with oats and expecting it to run a race.
5. The new fund priorities for lending will be driven by a combination of the EU Commission dreams of white elephants and national governments grey rhinos. Expect a usual policy prioritisation zoo with buzz words of 'knowledge', 'sustainable', 'green', 'smart', 'R&D intensive' etc flying around.

Signs of the above miracle are already in place. Take the 'investment committee' of the fund. Allegedly it will be composed of 'experts' from the member states appointed by the Commission. That is a double risk - politically appointed domestic experts counter-selected by the politically motivated EU officials. It is a prescription for double vacuum of independence. 

The experts will base their project assessments on the basis of commercial and societal perspectives. Have you ever heard of such criteria for investment in a 'real economy'? No, me neither.

Next, we have the targets. The fund is to focus its efforts on co-funding 'high risk' PPP ventures where private capital has no interest to invest in due to very low risk-adjusted returns.  How on earth can anyone call high risk PPPs a part of the real economy is a philosophical question for the good times. In the middle of a growth crisis, when resources are even more scarce, it is a question of who gets returns and who carries risks. Under  the 'pioneering' idea of Mr. Juncker, the public (EU and sovereigns) will carry risks, private investors will get returns (or higher risk-adjusted returns). It is about as pioneering as suggesting that the banks should be made whole on their losses using public insurance: the entire history of the current crisis is one Junckerian Investment Fund.