The fear of capital controls are likely to keep Greek negotiators in line and the world’s largest bank says default won’t occur
Eurozone representatives say Greek negotiator acting like a “taxi driver”
The JPMorgan analysis of the Greek debt drama comes as Reuters reported the Eurozone was a little more than disappointed in Greece’s most recent attempts to develop financial structural reforms, with one Eurozone official saying a Greek representative behaved like a “taxi driver” in negotiations.
Greece’s initial proposal to Eurozone officials were laughed at and summarily dismissed. As reported in ValueWalk, Greece first submitted as a primary reform proposal using students, housekeepers and tourists as spies to blow the whistle on tax cheaters. “It’s quite hilarious, if it were not so tragic, that this is what a government in an industrialized country comes up with,” a Eurozone official involved in negotiations with the Greek government was quoted as saying in the Financial Times. Eurozone officials were quoted at the time as saying they had hoped the letter would be a strong starting point for talks on Greece receiving bailout funds, but the initial proposal to arm housewives and tourists with audio and video cameras to deter tax evasion seems to have fallen short of expectations.
In some respects the negotiations seem to have moved from the humorous to nervously funny, as the “taxi driver” comparison comes at a time when JP Morgan notes Greece hopes to secure access to additional Eurozone funding in needs to meet payments due by April 24.
JPMorgan says Greece default not likely to occur, as “tone of discussions has improved”
The JPMorgan global data report observes that “although the tone of discussions has improved, progress is reported to be slow.” That “tone” appears to be laughing at a structural reform using housekeepers and tourists to improve tax collection to comparing Greek negotiators to “taxi drivers.”
JPMorgan’s Bruce Kasman, David Hensley and Joseph Lupton, author of the report, say fear not that April 24 date. Their best guess is enough progress will be achieved to allow fund disbursement, with “both sides conceding some ground.” This analysis comes as default is on their mind, with JPMorgan predicting that Greece “does not appear minded to prompt the default on official loans and the move to capital controls that likely would follow.”
April 24 is just the next date in a long succession of coming challenges.