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EU Working On Greek "Plan B" If Austerity Plan Voted Down

Tyler Durden's picture


Just out from Reuters:


But, but, didn't Schaeuble just say there is no "Plan B"... or was that just the now traditional weekend lie to get the EURUSD to spike higher on nothing but an endless barrage of lies. In other news, here comes the (heavily collateralized) Greek Debtor in Possession loan we predicted a month ago.

More from Reuters:

European Union officials are working on a contingency plan for Greece if its parliament rejects an austerity program and the country cannot receive the next instalment of EU/IMF emergency loans, three euro zone sources said on Monday.

The sources said planning had been going on for several weeks and was designed to ensure Greece gets the liquidity needed to avoid default in the absence of the next, 12 billion euro tranche of its emergency loan package, due by mid-July.

As well as preventing default, the aim is to head off any contagion spreading from Greece to Ireland, Portugal and Spain, and the potential knock-on impact on Europe's banking system, with French and German banks large holders of Greek debt.

The plan is distinct from a French proposal for private sector involvement in a second Greek bailout program and is being discussed despite European Commission President Jose Manuel Barroso and other senior EU officials repeatedly saying that "there is no Plan B for Greece."

"There's been thinking about contingency for some time, for several weeks," one senior euro zone finance official involved in the Greek bailout told Reuters. The other sources seconded that line, saying there was "active planning" to step in if the Greek parliament rejects the austerity program.

"In this sort of situation, you can't afford not to think about what might happen next," the first source said.

The sources would not confirm in detail what the current plan involved, but said several options had already been dismissed, including an EU bridging loan to Athens.

"This option was discussed a few days ago, before the Eurogroup meeting in Luxembourg (on June 19-20), but I understand it's now been ruled out," a second source said.


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Mon, 06/27/2011 - 10:56 | 1405427 augie
augie's picture

rally on?

Mon, 06/27/2011 - 11:18 | 1405480 Ahmeexnal
Ahmeexnal's picture

This is turning out to be a very drachmatic crisis.

Mon, 06/27/2011 - 11:25 | 1405508 augie
augie's picture

Seriously...My nipples don't know whether to fall of or rip through my t-shirt. 

Mon, 06/27/2011 - 11:44 | 1405567 Ethics Gradient
Ethics Gradient's picture


If they vote against it and get money, watch the rest of Europe follow suit.

Mon, 06/27/2011 - 11:39 | 1405539 PY-129-20
PY-129-20's picture

Schäuble is the perfect man for the job. A liar and corrupt (ask him where the 100.000 German DM went...the 100.000 DM from the weapon lobbyist...but he won't remember)

Mon, 06/27/2011 - 13:09 | 1405795 redpill
redpill's picture

I hope people are starting to get the picture here.  The Greeks don't get a choice anymore.  The bankers are not going to let parliamentary votes get in the way of making it a nation of indentured servants.

Mon, 06/27/2011 - 11:00 | 1405429 slow_roast
slow_roast's picture

China will probably give them funding if they import some immigrants and let them run the economy.  Installed management. 

Mon, 06/27/2011 - 11:14 | 1405470 Ahmeexnal
Ahmeexnal's picture

Chinatown in every city in bailed out europe.

Eiffel tower does have an oriental look to it.

Mon, 06/27/2011 - 11:52 | 1405591 A Man without Q...
A Man without Qualities's picture

The Greeks will be forced to import Chinese workers for cheap labor and the Chinese will import Greek government workers for stir fried Kung Po...

Mon, 06/27/2011 - 14:51 | 1406177 falak pema
falak pema's picture

The only way to improve greek productivity and to pay back all those loans is to bring in cheap chinese labour that improves "greek" output at competitive prices, for the next thirty years. Go long cheap chinese slave labour in Pigs until the price/productivity trade-off between south eurozone and Asia is back on par. Voilà the chinese have their entry card into Europe. 

Mon, 06/27/2011 - 11:01 | 1405434 SheepDog-One
SheepDog-One's picture

AH if the ONLY possible answer is voted down, that being huge body blows to the Greek people bankrupting and enslaving them....have no fear theres yet ANOTHER answer....GEE what might THAT be?

Uh...someone or other will certainly step forward with new loans'...

No worries, whatever happens, its fixed. Highly bullish for US bubble nosebleed stocks.

Mon, 06/27/2011 - 11:06 | 1405453 augie
augie's picture

It's high time we start handing out chainsaws and mescaline. How else can this level of insanity continue without a gentle nudge in the right direction?

Mon, 06/27/2011 - 11:59 | 1405609 trav7777
trav7777's picture

Austerity is coming for nonproducers no matter what.

The Greeks think they can keep living the good life on the back of Euro strength provided by others- wrong.  This is what Germany knows.

Those who lent the greeks money are idiots and the greeks are idiots.  Their failure is inevitable.  Greece's currency and economy should more resemble a banana republic that would match their work ethic and productive base.

Mon, 06/27/2011 - 10:58 | 1405437 PaperBear
PaperBear's picture

Offering up genuine assets to collateralize paying the fake debt with more debt.

Default, Greece, then issue drachma.

Mon, 06/27/2011 - 11:03 | 1405438 glenlloyd
glenlloyd's picture

Read my lips, no Plan B

Mon, 06/27/2011 - 11:07 | 1405461 Cognitive Dissonance
Cognitive Dissonance's picture

Going straight to Plan DVD.

Then back to Plan Blu-ray

Mon, 06/27/2011 - 22:26 | 1407506 StychoKiller
StychoKiller's picture

"Michael Renny was ill the 'Day the Earth Stood Still',

but he told us they 'had a plan'" -- Rocky Horror Picture Show


Mon, 06/27/2011 - 11:04 | 1405446 qussl3
qussl3's picture

Time to break out the "Ye Olde 200 pip EUR rally" banner.



Mon, 06/27/2011 - 11:01 | 1405447 firstdivision
firstdivision's picture

Third party.......Apple going to move headquarters there, or is Apple going to modify the name of the country to attract more tourists, iGreece?

Mon, 06/27/2011 - 11:01 | 1405449 idea_hamster
idea_hamster's picture

RU-486 for the Euro?

Mon, 06/27/2011 - 11:01 | 1405450 John McCloy
John McCloy's picture

Free money coming at ya Greece. Time to offer 100 year bonds like the U.S. is going to be doing in the next decade.

Mon, 06/27/2011 - 11:01 | 1405452 Newsboy
Newsboy's picture

Riot Dog for Proconsul.

Mon, 06/27/2011 - 11:31 | 1405524 snowball777
snowball777's picture

WWRDD? He'd say, "Hell no!" (and then lift a leg over their bailout plan...).

Mon, 06/27/2011 - 11:02 | 1405454 Cognitive Dissonance
Cognitive Dissonance's picture

Plan "B" for Broken and Beyond Bottoming.

Mon, 06/27/2011 - 11:06 | 1405455 misterc
misterc's picture

They will bring in the Tooth Fairy. Or Santa Clause will guarantee the loan.

Or... Uncle Ben? Jet helmet..ready. Scarf...ready.

Mon, 06/27/2011 - 11:09 | 1405465 Alea Iacta Est
Alea Iacta Est's picture

Just waiting for the China Loans Greece headline......

Mon, 06/27/2011 - 11:15 | 1405474 hungarianboy
hungarianboy's picture

The third party would be the " White Knight " ( China )

Pretty obvious.

Mon, 06/27/2011 - 11:18 | 1405478 101 years and c...
101 years and counting's picture

in all honesty, how much longer can every money manager afford to run the same algo :  if eur up, buy stawks?  at some point, they have to turn that one off....RIGHT?


Mon, 06/27/2011 - 11:32 | 1405504 Re-Discovery
Re-Discovery's picture

Mob psyhcology's a bitch.  Plus you are asking these 20-something Ivys to grow brains and balls at the same time.  Not likely. 

Probably .01% of all market participants actually believe there will be a major system fail and they are all on this site.  I am confident the other 99.9% are wrong but it takes time to move that ship.  Prepare for the panic.

Mon, 06/27/2011 - 11:32 | 1405516 qussl3
qussl3's picture

They will only stop doing it after its blown up.

Then come whining.

No personal downside risk to that strat.

Mon, 06/27/2011 - 11:14 | 1405479 MS7
MS7's picture

I've said it before, but-- Don't these f-ing idiots in Parliament know that default doesn't mean the world will end? That in fact many economists think it is preferable to passing this stupid austerity plan? All I hear is talk about tanks and suicides if Greece defaults, and the opposition counters that by saying they can get a better deal on the austerity plan. Default you idiots! Every protester in Syntagma Square knows that is the answer. Riot Dog knows that is the answer. I am so disgusted with these dishonorable people taking up space in the ruling party in Parliament. I imagine the 2 major parties who have been ruling the country for decades have much to hide, and perhaps some sort of deal was made that it wouldn't be exposed if this plan passed. That's the only explanation I can think of. That, and that they're stupid, oh, and greedy.

Mon, 06/27/2011 - 11:14 | 1405481 Franken_Stein
Franken_Stein's picture


Yeah, looks like Schäuble lied.

Wasn't this the man who in the 1999 CDU donor scandal some 10 years ago couldn't remember the whereabouts of 100000 DM of party donations ?

It was called the "System Helmut Kohl".


Helmut Kohl for years during his chancellery in the 1980s and 1990s received illegal and secret donations for his CDU party paid into secret Swiss bank accounts which he didn't report to tax authorities in Germany and used to finance his reelection campaigns.


It is rumoured that these payments influenced his decisions about for example the privatization of several companies in east Germany after the fall of the Berlin Wall and re-unification, most notably the sale of Leuna-Werke, a chemicals company to the American company Dow Chemical.


Interestingly Helmut Kohl, Henry Kissinger, David Rockefeller and, surprise, surprise, Birgit Breuel, head of the Treuhandanstalt, the agency overseeeing the said sale of GDR formerly state-owned companies to private investors, all met and attended one meeting.


I certainly don't have to tell you what meeting, do I ?


The Bilderberg conference.


Have a look here:



Now I know why Merkel selected Schäuble to be become finance minister.

You always need people in your cabinet who don't blink when lying and are part of the old boys club already, because politics is a dirty business.


Mon, 06/27/2011 - 11:37 | 1405545 PY-129-20
PY-129-20's picture


Mon, 06/27/2011 - 11:37 | 1405546 Ghordius
Ghordius's picture

Of course Schäuble is a liar, he is, after all, a politician.
Still, he is a very good liar. And the only one in the German cabinet with a full brain. And some integrity, vision and character.
Don't underestimate him, when others talk about Plan B he is already preparing Plan C, D, etc.

Mon, 06/27/2011 - 11:24 | 1405495 Re-Discovery
Re-Discovery's picture

I was in the eventual hyperinflationary camp.  But I think the sheep might be catching on to the printing game.  If savings rate jump from here, I dont think QE makes its way into the economy before deflation takes hold.  Banks cant give money away right now.

Mon, 06/27/2011 - 11:25 | 1405497 Cassandra Syndrome
Cassandra Syndrome's picture

Imo, this infers that the Austerity plan will be rejected tomorrow.

Mon, 06/27/2011 - 11:29 | 1405507 qussl3
qussl3's picture

Smells like it.

Pump it while you still can, if the vote fails tmr NO amount of buying is going to prop up this turd.

Mon, 06/27/2011 - 11:26 | 1405511 White.Star.Line
White.Star.Line's picture

Pillage and plunder is plan A.

Talk of any other plan is plan BS.

Mon, 06/27/2011 - 11:28 | 1405518 Bartanist
Bartanist's picture

Maybe the French bankers will need to assault the Greeks with baguettes and (empty) w(h)ine bottles, while the Greeks send volleys of Greek fire made from flaming olive oil and Ouzo?!?

Mon, 06/27/2011 - 11:35 | 1405525 augie
augie's picture

no real greek would waste any Ouzo. 

Mon, 06/27/2011 - 11:34 | 1405531 Racer
Racer's picture

These banksters and elected officials are treating people like 2 years and lying and saying they know best when they are the two year old amoebas

Mon, 06/27/2011 - 11:37 | 1405532 Dreadker
Dreadker's picture

The plot to Plan 9 From Outer Space is more believable than this circus sideshow lol

Mon, 06/27/2011 - 11:35 | 1405540 Edward Beargman
Edward Beargman's picture

We are all part of the same compost heap.

Mon, 06/27/2011 - 11:56 | 1405588 Greeny
Greeny's picture

EZ push Greeks to vote on austerity plan ahead of schedule,

that's because they probably know the outcome. Plan will

pass, too much damage to whole Europe (including UK and

USA at some extend) if it's don't. It's more

damage in $$$, then complete Greece net worth.

So consider that done deal.

Mon, 06/27/2011 - 11:53 | 1405592 Cole Younger
Cole Younger's picture

Well, of coarse they don't want to publicize a plan "B" especially when plan "B" looks better than plan "A"..It matters not though, Greece will still default.

Mon, 06/27/2011 - 11:58 | 1405603 SheepDog-One
SheepDog-One's picture

Then by Wednesday we'll be talking about rumors of a 'Plan C', by Friday 'Plan D', etc.

Mon, 06/27/2011 - 12:00 | 1405600 Cassandra Syndrome
Cassandra Syndrome's picture

Plan C: Let Greece default, break up the Eurozone and the EU, let the banks sink or swim, and let the free market emerge with a voluntary exchange system in a peaceful contractual society.

Mon, 06/27/2011 - 12:06 | 1405619 BandGap
BandGap's picture

Can anyone outline what the average Greek is expected to accept as part of these austerity moves.  I would find it an interesting thought process to take what the Greeks have to swallow and apply it to our current US populace.  Just wondering what I might see on the nightly news in the months to come.

Mon, 06/27/2011 - 13:50 | 1405925 Joe Sixpack
Joe Sixpack's picture

"Third Party" = China, darling of Portugal ?

Mon, 06/27/2011 - 15:47 | 1406357 topcallingtroll
topcallingtroll's picture

Default you pussies.

Mon, 06/27/2011 - 15:53 | 1406370 Overflow-admin
Overflow-admin's picture

Yeah, "Plan B" as in Fukushima... </sarc>
