Greek finance minister ‘sidelined’ as debt talks grind on – live updates

All the latest economic and financial news, including developments around Greece’s increasingly fraught bailout talks

Introduction: Another week of Greek drama ahead
FT: Varoufakis being sidelined

9.10am BST

Yanis Varoufakis is making headlines today, but not in the way he’d like:

Everything going well then pic.twitter.com/qA5uzhI7Wc

8.46am BST

Greek worries are pushing Europe’s stock markets down in early trading, with France’s CAC index losing 1%:

Proposals from Greece do not include important issues such as pension cuts and labour market reforms and are not something the creditors will be able to stomach.”

8.36am BST

Lots of chatter about Greece this morning:

#EU hopes to sideline #Greece finance minister and deal directly with PM. Little progress made on bailout, some big repayments due in weeks

Greece to find ways to assemble enough cash to pay pensioners and employees, after euro ministers say no more aid until bailout terms met

#Greece | Brussels Group to hold conference call later today in a revived effort to bridge gap in Greek bailout talks.

8.33am BST

A German government spokesman has confirmed reports that chancellor Merkel spoke with the Greek prime minister by phone yesterday.

“expressed their common will for a steady communication throughout the course of negotiations in order to have a mutually beneficial solution soon”

8.21am BST

The Financial Times is also reporting that Yanis Varoufakis is being sidelined, after last Friday’s “highly critical” eurogroup meeting:

Greece’s dire financial position is forcing eurozone authorities to look beyond Mr Varoufakis to Alexis Tsipras, prime minister, much like in February when Jeroen Dijsselbloem, the Dutch finance minister who chairs the eurogroup, brokered an extension of the current bailout programme.

According to two eurozone officials, Mr Dijsselbloem phoned Mr Tsipras from Riga in an effort to mend fences after Friday’s feisty eurogroup meeting, where Mr Varoufakis was rounded on by his eurozone colleagues.

8.18am BST

Good morning, and welcome to our rolling coverage of events around the world economy, the financial markets, the eurozone and business.

It looks like another week dominated by Greece’s debt crisis.

“He is completely isolated,” a senior euro zone official told Reuters on condition of anonymity.

“He didn’t even come to the dinner to represent his country,” the official said of the event where ministers, serenaded by a Latvian choir, ate salmon and sea bass.

FDR, 1936: “They are unanimous in their hate for me; and I welcome their hatred.” A quotation close to my heart (& reality) these days

Related: Greek finance minister hints at strained EU relations: ‘I welcome their hatred’

Greece has moved somewhat closer to a technical default after the weekend’s antics, although it seems the majority of Europe’s finance ministers have had about as much as they can take of the Greek finance minister Yanis Varoufakis and will look to deal directly with top dog Alexis Tsipras from here on in.

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To this we added that “once China, that final quasi-Western nation, proceeds to engage in outright monetization of its debt, then and only then will the terminal phase of the global currency wars start: a phase which will, because global economic growth and that all important lifeblood of a globalized economy – trade – at that point will be zero if not negatve, will see an unprecedented crescendo of money printing by absolutely everyone, before coordinated devaluations mutate into uncoordinated, and when central bank actions morph from “all for one” to “each man for himself.

We may not have long to wait because just hours ago, MarketNews first among the wire services hinted at what we suggested was the endgame.

*PBOC DISCUSSING DIRECT PURCHASES OF LOCAL GOVT BONDS: MNI *PBOC IS DISCUSSING UNCONVENTIONAL POLICIES: MNI

Bloomberg adds more, citing MNI as saying that the Chinese central bank discussing “adopting unconventional policies to rebuild its balance sheet and reinvigorate economy, including making direct purchases of local government bonds from market.”

Of just as we predicted.

MNI continues that “although wide range of possibilities tabled about how PBOC operations could change, common thread of discussion involves need to expand balance sheet to ensure supply of liquidity meets economy’s demands, report says.”

In other words, China is about to engage in the biggest QE of them all, and drown the world with exported deflation as the global supply glut which we explained yesterday, hits unprecedented levels and ultimately leads to the biggest inventory dumping phase in global history which central bankers will have no choice but to offset with Friedman’s infamous “helicopter drop” of money, finally leading to the terminal phase for fiat currencies.

MNI continues:

PBOC discussed quantitative easing, which would tie in with aim of having local governments sell CNY1t in bonds this year to lower interest costs, mitigating systemic risk and boosting economies at local level.

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