Greece — all the news we didn’t get over the weekend

Monday morning rolls round, and with it the next series of meetings between the Eurogroup and the Greek negotiating team. And looking at the headlines for things that have happened since the last set of talks broke up on Thursday, I’m struck by the number of news stories that we haven’t seen. In many ways, this pack of dogs-which-didn’t-bark is the best news we could have had. What do I mean? Things like:

1. We haven’t had stories of deposit flight and bank runs

In fact, after about EUR10–11bn of outflows in January, the best guesses seem to be that things have stabilised back at the December level of EUR500m/week. In general, reporting on the banking system has been reasonably responsible, despite the ECB collateral rule changes providing a significant incentive to speculate. This is good news, because it means that the timetable is still under the control of the officials — if things accelerate, then deals have to be concluded whether there is agreement or not, as in the case of Ireland, and that’s when bad decisions start being made.

2. There haven’t been any more leaked documents

The Thursday conference was clearly very acrimonious — plenty of people involved thought that Finance Minister Varoufakis had agreed to a communique, but it turned out (after consultation with Tsipras and Dragasakis, the nature of which seems very unclear) that he hadn’t. The Eurogroup were angry enough to leak the draft communique to the Financial Times. Later that same evening, someone also leaked Jean-Claude Juncker’s position paper outlining a vision for a much more federal Eurogroup, presumably in a spirit of wanting to get their own ideas out there because everyone else had. It’s always a bad sign when people try to do their communication through the media, and we haven’t had any more of that over the weekend.

3. The Greek side haven’t been blustering and grandstanding

I almost feel like the Greek parliament should have one of those construction site billboards outside it, saying “It is __ hours since we last mentioned the Nazis”. But in fact, Varoufakis and Tsipras have both managed to last the whole weekend without doing something specifically aimed at annoying the Eurogroup or publicly nailing themselves onto positions which the other side regarded as up for negotiation. This is an absolute prerequisite for any sensible talks to take place — whatever happens, the troika is going to have to compromise on a lot, and if the Greek side gets into a position where every campaign speech is set up as an absolute red line, then people are going to end up saying that the one promise they will have to break is the one that has over 70% polled support in Greece — the commitment to remain in the Euro.

4. The ECB hasn’t put any more pressure on

The overall level of urgency in the troika/Greece talks is controlled by the ECB, via the Risk Control Framework under which it provides liquidity to the Greek banking system. If the ECB wants to push for a decision, it tightens things up and pushes everyone closer to the generalised bank run which would be the main failure mode of Greek Euro membership. If it wants to allow time and space, it keeps things ticking over. There was ample opportunity to tweak the parameters over the weekend — or even for the ECB’s financial supervision authorities to express an opinion on the Greek banking system’s ability to buy T-Bills. But everyone decided to keep their mouth shut.

5. German domestic politicans haven’t started causing trouble

With the exception of Jurgen Stark, former ECB Governing Council member and contributor of an extraordinarily unhelpful op-ed in the FT last week, the usual gang of German anti-bailout hardliners have not had much of a hearing. There have, so far, been no moves to restrict Merkel and Schauble’s own freedom to negotiate by domestic politicians wanting to remind Europe that German governments have democratic accountability too.

The fact that these things haven’t happened over the last three days certainly doesn’t mean that they aren’t going to happen at all — if there’s no progress today, then they all remain quite likely. But it makes it look very much as if what is happening is what was meant to happen — the politicians are taking a back seat and the technical teams are sitting down to see how much common ground there is, and what proportion of the troika reforms can be incorporated into a new agreement. Whisper it, but after a set of performances last week which looked not so much “not ready for prime time” as “not ready for a mid-afternoon slot on public access cable”, it’s looking like all those involved have started taking this situation seriously. We shouldn’t expect a deal today — it is very much a self-imposed deadline, put in place for the convenience of the German and Finnish legislatures, and previous negotiations have taught us that only “hard” deadlines when payments have to be made are the ones that matter. But we ought to get some progress and probably an agreed statement — after all, things can hardly go worse than they did last week.