Merkel: Still Waiting For a Sustainable Proposal From Athens

merU.S. stock futures are lower on Tuesday after weaker inflation numbers were reported out of China, highlighting global disinflation concerns, along with ongoing worries that Greece’s leaders have not requested a new bailout extension of their €240 billion euro bailout program, that comes loaded with a austerity measures, ahead of an important Eurogroup meeting tomorrow that could help determine the fate of Greece in the 19 member Euro area.

Inflation in China dropped to a five year low in January, prompting economists to call for more stimulus measures from China’s central bank to offset deflation at a time when oil is showing signs of rebounding in February and its move higher may act to counter deflation pressures in the world’s second largest economy.

China’s consumer price index rose 0.8 percent an annualized basis in January, marking the lowest rise since November 2009.

The drop in commodity prices led by a huge decline in the price of oil and weaker global demand are partly to blame.

German Chancellor Angela Merkel met with U.S. President Barack Obama yesterday at the White House.

During a question and answering session with reporters, Chancellor Merkel was asked about comments from Greece’s new prime minister about ending their austerity program.

Merkel said on Wednesday during a Eurogroup meeting in Brussels,  Eurozone finance leaders will closely review proposals and see what plan Greece is willing to put on the table.

The meeting will be a first opportunity for Eurozone finance officials to speak with Greece’s newly elected leftist government that has asked for an end of Greece’s austerity program and would like to see a write off with Greece’s €320 billion ($362 billion) debt load.

“On Wednesday, there’s going to be a Eurogroup meeting.  And I think what counts is what Greece will put on the table at that Eurogroup meeting or perhaps a few days later” Merkel said.

Merkel explained that Germany’s plan since 2010 has been to keep Greece a member of the Eurozone but pointed out that Greece needs to play by the same set of program rules that the country had already pledged to its creditors.

“You put in your own efforts, and on the other side, you’re being shown solidarity as a quid pro quo.  The three institutions of the Troika — the ECB, the European Union Commission, and the IMF — have agreed on programs.  These programs are the basis of any discussion we have” Merkel explained.

Merkel admitted that she is still waiting from Athens to review any serious proposal.

“I’ve always said I will wait for Greece to come with a sustainable proposal and then we’ll talk about this” Merkel said.

-Johnathan Schweitzer

 

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