Spotlight Greece: Tsipras Talks With Putin; Energy Minister Rules Out Deal; Wordsmithing Extraordinaire; 16 Tons

Greek prime minister Alexis Tsipras keeps hinting that a "deal is close" while publicly trashing every deal offer.

One seriously has to wonder if this is purposeful gamesmanship to string the Troika along and encourage the ECB to keep liquidity in place so that Greek citizens can pull their money out of the banks.

The more simple possibility is everyone truly believes the other side is likely to cave in at any moment.

Tsipras Won't Agree to Irrational Proposals

Repeating similar rants of the past, Tsipras said today: Greece will Not Consent to Irrational Proposals.

Greece cannot accept the "irrational" proposal made this week by the institutions overseeing its bailout, Prime Minister Alexis Tsipras said during an emergency Parliament session Friday, adding that any deal must also include some form of debt relief.

His speech came the morning after a surprise announcement that Greece would defer an IMF payment due Friday, and would instead bundle all four installments due in June — a total of 1.6 billion euros — into one payment at the end of the month.

Addressing lawmakers for the first time on the course of his government's troubled four-month negotiations with Greece's international lenders, Tsipras said he was "unpleasantly surprised" by the proposal put forward by the International Monetary Fund, European Central Bank and European Commission during his visit to Brussels for talks with commission head Jean-Claude Juncker.

"I would like to believe that this proposal was an unfortunate moment for Europe, or at least a bad negotiating trick, and will very soon be withdrawn by the same people who thought it up," he said.

Still, he said, he believes a deal is now closer than ever.

Wordsmithing Extraordinaire

Is it remotely possible Tsipras actually believed a better deal was going to be handed to him?

I strongly doubt it.

Please note that Tsipras did not say "he believed the deal will soon be withdrawn". He said he would "like to believe it will soon be withdrawn", a completely different meaning altogether.

What about his statement a "deal is now closer than ever"?

Quite possibly, that's technically true. If the deal was a mile away before, and there was an inch of progress today, the deal could indeed be "closer than ever" but at the same time "not close at all".

I am still amused at yesterday's wordsmanship.

Thursday morning, when asked by reporters whether Friday's installment would be made, the Greek prime minister replied: “Don’t worry about that.”

Thursday afternoon, we learned Athens to Delay IMF Repayment.

Of course "Don’t worry about that" is quite different than "yes".

A skillful politician frequently appears to say something significant without saying anything at all. These last two days prove that Tsipras is a wordsmith master.

There is technically not a single lie in any of the above statements. That's a remarkable achievement for any politician, especially one under the gun, both foreign and domestic.

Energy Minister Rules Out Deal

Lending credence to the theory that a deal is closer, yet not close at all, Greek Energy Minister Rules Out Deal with Creditors Who Want 'Pound of Flesh'.

The divisions within Greece’s government were laid bare on Friday when a senior minister ruled out any agreement with the country’s creditors, accusing them of demanding a “pound of flesh”.

Panagiotis Lafazanis, the minister for energy and the environment, told the Telegraph that Russia might be an alternative source of “substantial financial” benefits to Greece, stressing there was no possible “convergence” between “our government and the institutions”.

Promising to oppose a deal, Mr Lafazanis said: “I do not think that Syriza will accept for the country and its people to be exterminated inside the eurozone. A third consecutive austerity loan programme will be the most destructive option possible for Greece.”

Mr Lafazanis, a former Communist, believes that enough is enough. Any possible agreement would, he argues, force Syriza to break its election promise to end austerity. He wants Mr Tsipras to end the negotiations and, if necessary, default on Greece’s debts – or even leave the euro.

As for the chances of Mr Tsipras reaching a deal, Mr Lafazanis said: “It is obvious that given their demands, there can be no convergence between our government and the institutions.”

Athens Looks to Moscow

Does the above rant sound like a deal is close? I think not. And what about Russia?

Please consider Putin holds phone call with Tsipras, agrees to meet in 2 weeks in Russia.

Russian President Vladimir Putin has held a telephone talk with Greek Prime Minister Alexis Tsipras on Friday. They have discussed Russian gas supplies via Turkish Stream and agreed to meet at the St. Petersburg International Economic Forum in mid-June.

"Practical steps were discussed to implement agreements reached during the recent working visit of Alexis Tsipras to Russia, particularly the planned construction of the gas transport infrastructure across the territory of Turkey and Greece," the press service said.

The talks with the Russian president came hours before the Greek prime minister is due to address the country's parliament about the EU proposal.

Another Day Older and Deeper in Debt

In spite of (or because of) the above wordsmithing, we still do not know whom, if anyone is bluffing.

All we know for sure is that if a deal is worked out, Greece will sell its soul to the "company store" better known as Troika.

I offer this musical tribute.



Link if video does not play: Tennessee Ernie Ford Sings 16 Tons

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com 

Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.